Babs DeLay

Babs DeLay

November 09, 2012

After the Storm

2012

We’ve all seen pictures of the Frankenstorm, “Sandy” that hit the East coast two weeks ago. Disasters like that prompt a myriad of thoughts and discussions about “What would happen if disaster struck HERE? Am I prepared to be without electricity and water for a week? What if my entire home disappears into a crack in the earth during a tremor?” Homeowners are required to carry insurance on the behalf of lenders, to protect the lenders interest on their loan. When disaster strikes, a property owner will likely call their insurance agent immediately and make a claim. But what if you had let your insurance lapse or can’t get insurance on your property? Look for the folks riding in on proverbial white horses to save the day: FEMA!

The Federal Emergency Management Agency is a government agency paid for by your taxes, under the Department of Homeland Security. It was only created recently-in the 1970’s and is called in when a State declares a disaster area due to a man-made or act of God event that overwhelms the abilities of the citizens of that state or states. Before then the government responded to disasters like the great fires of Portsmouth, New Hampshire and New York City in the 1800’s by waiving taxes to merchants to help them recover from loss of property.

FEMA is not the Red Cross, but people in need often confuse the two and think that FEMA brings the food and blankets right after the storm leaves. FEMA helps individuals after disasters who do not have insurance or who have been hit by flooding. They send out inspectors to the area in question, evaluate your situation and make a decision about your case within 10 days of the visit. They may cut you a check immediately for temporary living expenses not covered by flood insurance, and if you’re just a renter, they may give you living expenses for up to 6 months. Landlords can’t get money for lost rents, though.

The agency can give you money up front for emergency purposes, and offers grants. You must use their grants for specific purposes, as in what repairs to make to your current home and the amount of rent assistance you’ll get while you do those repairs. Anyone affected by a huge disaster (like the storm surge and floods back East) can apply for help from FEMA and the State will encourage you to apply because they will get more money from FEMA for infrastructure repairs. FEMA can offer assistance in negotiations with your insurance company, too.

Basically FEMA is there for folks in extreme circumstances after disaster strikes, and especially for people who don’t have insurance. In reading over threads about how effective the agency is, one person wrote, “I wish I didn’t have my car insured-my neighbor got a huge check for his beater that hadn’t run for years.” What does your insurance cover? It’s good to know, whether you’re a property owner or tenant. You never really know until disaster strikes, but call your agent and ask a few basic questions:

  • Am I covered for earthquake? For flood? Fire?
  • Will you pay for my lodging until I can move home, and if so, how much and for how long?
  • What repairs won’t you pay for?

Your insurance carrier can also advise you on additions to your current policy which might cover you better during a total property disaster.

September 13, 2012

Beware the Pirates!

2012

I hate to keep harping on you all, but it’s school time and you’re desperately still looking for a place to rent, right? Once again the Department of Commerce has sent out a media alert, ‘Consumer Protection warns of fake rental scheme targeting real estate ads’. There are FAKE rental ads on Craigslist, KSL-beware the pirates! Yes indeed, there are scammers out there who go onto the interwebs, clip photos of homes for sale and paste them into phony ads. The Francine Giani, the Executive Director and soon to be Liquor Commissioner said recently, “Young people seeking rental properties need to be especially careful when searching housing ads online. Many have grown up with the internet and feel comfortable doing business without face-to-face interaction which can make them more vulnerable to these types of online scams.” WTF? Because you’re interwebs saavy, you’re an easier target?

Generally you can smell a scam from a mile away because you are younger and you are used to scams: 1) the language in the online ad is poor at best, as if ‘Peggy’ used a Russian to English translation website to help her/him write it; 2) for whatever reason, when you call the landlord he or she says that they are out of the country on a mission in Wadiya, or live in Vegas, baby so they can’t meet you there; 3) the phone number to call for the ad always has an out of state number or worse-is an international number; 4) they want you to WIRE a deposit somewhere to hold or rent the property; 5) the rent price is like wow, HALF the normal rent for a two bedroom flat.

Ding, ding, ding, all your alarms are going off. The proper protocol for leasing an apartment or house generally starts with a readable ad written by a landlord or property manager then published on the internet or in a local paper. Sometimes you get to see the property because the landlord has hidden a key, left the door open, or the property manger gave you a code. You then usually fill out a rental application for the landlord. IF you go through a professional leasing company you will also a) have to submit an application fee along with your application; and b) at least have your criminal back ground checked.

Additionally, you are smart enough to find out who the owner of record is of the property. The county you live in has access for you on-line to the owners of property on the records. If you meet a private individual at an apartment touting themselves as the owner, ask for ID? And take a friend? Not only could “Peggy” be a scammer, but “Peggy” could be there to rob and or rape you. Not kidding.

Words to the wise-put on your super scumbag alert headphones and be cautious, not desperate. If you’ve been looking for weeks and weeks for a landlord who will rent to you with your 225LB dog, and FINALLY “Peggy” shows up at a fantastic penthouse downtown and offers it to you for a $1000 cash depost-RUN! It’s too good to be true. If you call the area code/ number listed for Wadiya and “Peggy” tells you there are 7 people interested in the unit and if you WIRE $1000 tonight you’ll get the place know that he/she is a LIAR ! Don’t send money unless you can verify the source. Do not give the stinkin’ rent pirates ANY of your personal account information, SSN numbers or a rental application UNTIL you know where that pirate does his banking and docks his ship at night! And remember: TALK LIKE A PIRATE DAY IS SEPT. 19TH. Arrrrgh!

2012

WasatchThe tables have turned-It’s now a seller’s market”!   Those were happy words on the front page of the Salt Lake Tribune last week, right?  That is not a headline we’ve seen in these parts in FIVE FREAKIN’ YEARS!  Let me take the next few paragraphs here and share with you my slant on the statistics that were just released by the Front Multiple Listing Service (WFRMLS).  FYI: The WFRMLS is a private company owned by the three largest private real estate associations/Boards of Realtors in the state: The Davis County Board of Realtors, the Utah County Board of Realtors and Salt Lake Board of Realtors.

            1) Everyone wants Tooele County. Prices there went up 6.5% in the past year, from $139,900 to $149,000 on average. That is still a screaming deal for folks looking for a more small town living experience and a 30 minute commute to Salt Lake City;

            2) Salt Lake County saw a 5.9% increase, with the highest sales prices in the past year jumping up in the Holladay area-with a change from $280,000 a year ago to $370,000 this past quarter. That’s no surprise to me because that’s an area of very high priced homes.  Surprisingly, Sandy went down by 1.9% in the past year to an average of sales prices of $180,000, Herriman down 5.4% to $244,000 and the 84106 zip code down 1.9% to $211,900.  There were no stats reported for my neighborhood downtown (84101) but that may be related to the fact that the LDS Church hasn’t been reporting most of their sales in the City Creek condo projects or that the Broadway Park auctioned condos by Pioneer Park are only starting to close this month (after a 6+ month wait in escrow).

            3) Davis County is up 3.4% in prices to an average of $196,500, with the highest prices now found in Layton and then Woods Cross. 

            4) Utah County (Provo area) just squeaked by Weber County in popularity: Utah County prices went up from $191,900 to $195,000 where as Weber County went up only 1.3% to an average sales price of $145,000.

            There are still grim statistics out there: Eden properties went down -18.7% in the last year, followed by South Odgen at a drop of -16.6%.  I generalize, but use the rule of thumb “We dropped on average of 30% since the crash 4 years ago. We’ve adjusted back to prices of 2003 now.”

            How can you NOT buy a home when interest rates are at 3.5%?  Rent IS HIGHER, period.  Sure, you have some credit issues.  Fix them!  A good lender will hold your hand and HELP you fix your credit-for free. You don’t have money down? There are totally legit zero down loans out there which a good lender can tell you about.  The apocalypse is soon and zombies will only destroy your house to get to your yummy brains?  Buy a damned high rise condo and pick them off from your balcony!

            One other really obvious fact I want to mention in response to the ‘seller’s market’ headlines:  If you’re a seller you’re only going to sell IF your property is priced correctly.  Otherwise, if you’re priced wrong, you’re going to sit, and sit, and sit on the market and be fodder for the bottom feeders.

2012

            My fellow Realtors are going to be a bit peeved at me when they read this article. Why? It’s college graduation time and I’m going to tell you lucky graduates NOT to run out and buy a home for a few years. I know that seems like crazy advice right now especially since mortgage interest rates are incredibly low and mortgage payments are less than rent payments these days. Please consider some of these points when you approach the biggest financial decision of your new life:

            1) What did it just cost you to get that diploma in your hands?  Just two years ago the Huffington Post reported that the average college student owed @$25,000 in loans once they graduated. President Obama has been lobbying Congress and speaking at universities around the U.S. in the past two weeks explaining that many student loan payments may double starting July 1, 2012 if changes aren’t made immediately to Federal loan programs.  If you’re one of those unlucky kids who’s getting the crap scared out of you because you might not be able to pay back your student loans, then it’s not a good time to buy a home.  Your debt is too high and may be getting higher!

            2) The Associated Press just released a survey this past week that said basically 50% of college graduates this year won’t be able to find jobs or find positions in their field. Generally when you apply for a mortgage loan, you have to be on the job for at least 2 years. If you just got lucky and were offered a guaranteed job in your new field (i.e.- a position with a local law firm for $45,000 a year as starting pay), a lender will have some hoops for you to jump through before you get a home loan.  Basically, you have a 50-50 chance you might not have a job waiting for you after your parents go home after the graduation ceremony.  Certainly it’s not a good time to buy a home without a job. It’s an even worse time to buy a home if you landed a job you know you’re not going to stick with for long, or if you think you’ll be moving out of state later for better employment.

            Congratulations on getting that sheep’s skin. Right about now you’re pretty much done with people telling you what to do, how to do it, and where and when to get it done. I humbly ask that you consider a few last words of wisdom…if you can stand it. Make sure you go over all your options when you decide to buy a home.  Giving your landlord the middle finger is a wonderful feeling, and owning a home can be an even better one. Please WAIT until all your financial and career ducks are in a row.

            And last but not least, use a professional. These days it’s easy to shop for homes on the web. You can download forms and all the books you can possibly read about real estate onto your IPad. Aligning yourself with a full time negotiator (Realtor) will make the same difference in your financial plan as when you stopped having your roommate take notes in class and actually attended in person.

2012

            Utah’s rate of foreclosed homes has dropped 49% in the first three months of 2012. That should be great news for home sellers, right? Maybe property values will stabilize or stop falling?  Hold onto your bootstraps-Salt Lake City is still in the top of the pile of mortgage muck for the nation in foreclosures, according to RealtyTrac, Inc (a national data track service).  Data released last week by RealtyTrac Inc. shows one in 415 Utah housing units saw a foreclosure filing in March. That's still behind the rates of most of our neighboring states but we’re in the top seven in the U.S. Arizona, Nevada and California are all about tied for bad news, in that-1 in 300 homes in those states are in the foreclosure process. In addition, Utah is 1:415, Colorado 1:591 and Idaho 1:839. And the really creepy part to these statistics is that RealtyTrac reported that more U.S. homes in general are entering the foreclosure process this year and “setting the stage for a surge in properties repossessed by lenders this year.” 

            Hear that wet sucking sound as you pull your shoe out of the mortgage mud? That’s the unpleasant noise of more foreclosures, which equals lower home prices. As a seller, that stinks. For buyers, this is great because lower prices means better deals.  Even if Utah may be experiencing a brief respite from foreclosure filings, the nation is up 7% this year in first time foreclosure notices says RealtyTrac, Inc.

            How does a foreclosure work here is Utah? First, we don’t have state laws that usually make your lender take you to court if you’re late on your payments. Most lenders just have to file a notice of default against you after you’ve become late at the County Recorder’s office. The lender can do it in person or on line. They also have to send you a notice of default to the address they have on file on you.  Once that notice is filed, you get three months before the property is sold at public auction…supposedly regardless if you claim you never received the notice.

            You can make up your payments and any late fees within those three months. Be very careful how you make the payments to the lender to insure you get confirmation they’ve received the monies. If you don’t pay up though, 20 days before the ‘sale date’/ auction date a notice is taped up, stapled or nailed onto your property for you and all your neighbors to see. I saw a notice the other day when I was visiting friends at a townhome. The paper was attached with blue tape onto the middle of the front door of a vacant property next door my friends townhome. We walked over to get a look at what the notice said as we were leaving for dinner. By the time we got back from our meal, the notice had been removed. It’s embarrassing as hell to have a foreclosure notice put on your property!  The lender also may run three weeks of ads in the local paper about the sale (per law) to add salt to the wound.

            Foreclosure sales are held as public auctions at the county courthouse with the property going to the highest bidder. If the sale price is above and beyond the amount owed to the lender, the extra monies go first to any junior lien holders and then to the borrower.

2012

   The State of Utah has a pretty terrific non-profit that helps lower and middle income families here own homes. They’ve not necessarily been known as the ‘second time’ loan brokers, but with the economy as such, Utah Housing Corporation  is now providing second mortgages to current and previous home owners as well as first time home buyers, for the down payment and closing costs required to purchase a home.

    This public corporation was created by the State legislature in the mid-1970’s to raise money to assist in creating housing purchase opportunities for low income Utahns.  You have to go to a lender to actually get a UHC loan, as they just raise the funds and oversee them, and sadly foreclose on you if you don’t pay back the funds.  Think of UHC as your friendly local group of folks who want to get you into a home and work with lenders to help you with a down payment to get into that house or condo.

     UHC can help you get 6% of the sales price towards a down and the mortgage closing costs of a home loan. For first timers you have to have a credit score of at least 660 and not make more than $57,300 to buy a home or condo up to $250,000. With the new ‘HomeAgain’ or second time purchase, UHC provides money for a down payment via a 30 year fixed-interest second mortgage loan that is 2% more than the rate on the first mortgage. The HomeAgain loan can be granted to sales prices up to $320,000 to people with an income of no more than $81,000.

     It’s good to mention, too that Utah Housing Corporation is also give out help to folks who have credit scores of 620 or above, with a maximum income of $81,000 and a sales price of no more than $250,000. The down payment /closing cost assistance on this loan is up to 4%.

      The bottom line of this help is that you are going to get a first mortgage at a really good interest rate (under 4% right now) and the second mortgage that’s going to help you get into the house with down/closing cost help is going to be at 2% more, say 6%, for the life of the loan.   When you add it up, it’s still cheaper than rents these days.  Is there any ‘catch’ to this great loan program?  Yes, no part of the property can EVER be rented out. If you all of a sudden have to move and can’t sell your property and must try and rent it, Utah Housing will call your note due immediately if they discover you being a landlord.

      For more information, go to www.utahhousingcorp.org. You must go in person or apply online with one of the 40 mortgage lenders or 300 bank branches around the state to apply for the loan program.  Obviously I can’t list all the lenders here who do Utah Housing loans, but I can guide you enough to say that any lender that offers FHA/VA loans generally does these programs and that I think it’s a really great option for folks who don’t have quite enough money for a down payment.

2012

   “There are a million homes for sale! What do you mean this property has multiple offers on it?!” says the buyer who just lost out on a home that had been for sale on the market for five months.

     Welcome to our world these days.  Yes, there are a ton of homes for sale on the market but the majority of them are being offered as ‘short sales’.  If you’ve heard there’s 15 months of housing inventory on the market right now, take out the number of short sales and foreclosures out of the mix and we only have about 4 months of homes available.  At least that’s my gut feeling lately after talking to fellow agents.  For example, I was to show homes to a buyer who just relocated here from back east this past weekend. I pulled up his price range and area where he wanted to live and got 28 listings that matched.  Of the 28, 19 were short sales-all of which each had at least two offers pending on them. Of the remaining 11, 6 were on main roads like 700 and 900 east. The buyer has a dog and didn’t want to live on a high traffic road.  Of the 5 left to see, 4 were ‘so-so’ and only one kinda rocked his world. So, I wrote an offer for him and submitted it to the listing agent and we waited.

     Within an hour that agent called to say another offer had come over and she was expecting a third offer later that day.  My buyer, a virgin ‘first time buyer’ was a bit miffed when I called to tell him what was going on. He said, ‘I submitted first, so they have to deal with me first!’.  Um, no. The seller can do what they want, really.  The seller is looking to get the most money they can get from the sale of their home so of course they want to look at ALL offers.

            The seller’s agent will most likely recommend to the lucky seller to do one of several things with the three offers:

            1) put all the buyers agents on written notice that there are multiple offers and give them each 24-48 hours to re-write, up their offers or resubmit the same offers;

            2) accept one offer and put the other two offers in back up position( if the back up buyers want to be in that position);

            3) counter just one of the offers, or 4) reject all of the offers (because they were so low).

        I find that most listing agents in a multiple offer situation will advise their seller(s) to put buyers agents on notice and give them time to put their ‘highest and best offer’ on the table before the seller(s) makes a decision.  Its darned exciting for the seller and nerve wracking for the buyer(s) when there are multiple offers on a property.   Recently two large apartment complexes were sold in Utah in the multi-million dollar range, and there were over 40 offers on each property before it sold to the highest bidder.  There is also a way for the buyer to almost guarantee they get the property in a multiple offer situation, by writing in an escalation clause. But that’s a whole other blog!

2012

   No matter what industry you work in, there is always a year end wrap up and January prediction/ forecast available from some industry expert out in the world. Glass blowers and fuzzy sock makers want to know the prices of materials and demand for products each year just as much as home builders and Realtors want to see into the future of housing. Realtors, economists, builders, commercial agents, banks got together last week in Salt Lake to look at the data and see what this year foretells. Basically, the news didn’t suck.

    The bad news isn’t any news at all. New home construction is down 76% from 2005.  That means 76% of any construction industry related jobs also went down the economic toilet during those years.  Many new home developers do not list their product on the local MLS and thus don’t report sales data to the MLS, but James Wood from Utah’s Bureau of Economic and Business Research says that in 2011 existing home sales were seven times higher than new home sales. What’s that mean for you? That means you can probably get a really really good deal on a newly constructed home and I’ll bet the builder will throw in a lot of bells and whistles to make you happy to buy their home…like paying for your loan costs, giving you upgrades on appliances and flooring, redesigning rooms for free, installing sprinklers and sod, etc.

     Wood also reported that there are 480,000 mortgage loans in Utah and that 124,000 of them in 2011 have negative equity or near negative equity.  That doesn’t mean those 25% are delinquent on payments. I take that statistic to mean that it would be hard to sell a home without any equity and that logically people would rather stay put than try and sell a home and walk away with no money. If people can’t move up, down or out, they will possibly remodel, which boosts that industry and potential sales at hardware stores for the DIY crowd.

     Prices on homes fell 22% in Salt Lake County during the past 4 years and 9.5% in 2011.  Pay attention-prices on homes are low and the forecasters predict prices will drop another 3-5% this year. Then prices will STOP falling and bottom out.  This doesn’t mean the value of your home is going to start creeping up this summer or for quite a while. It just means your home won’t be losing much more equity. Phew!

      Mr. Wood was commissioned by the Salt Lake Board of Realtors to interpret the MLS data for the members. The SLBR is a part owner of the MLS, along with two other Boards in the state of Utah. The data shows for 2011 that the average median sales price of a home in Salt Lake County was $199,000 and the average sales price of a foreclosure property in the County was $149,950.  Foreclosures are a great deal but I’m seeing multiple offers on many foreclosures, often cash offers from investors wanting to pick up rental inventory.  Keep a watch on both the number of foreclosures and how asset managers will be packaging them this year to woo investors to more easily pick up multiple properties of different types in different locations under one blanket of one offer.

November 26, 2011

Use Your VA Benefits!

2011

       We just commemorated our service men and women on Veterans Day. Unless you are a Vet, it’s hard to understand the commitment that military service requires. There are over 25 million Vets in this country.  Thanks to President Franklin Roosevelt (in 1944), Vet’s can get assistance in buying homes as a reward for their service to all of us.  Known as the GI Bill of Rights, the VA Loan became law in 1944 and gives Vets who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous during peacetime. There is a two year requirement if the Vet enlisted and began service after Sept. 7th, 1980 or was an officer and began service after Oct. 16th, 1981. There is also a six year requirement for National guards and reservists.

          The G.I. Bill offers education and housing benefits to Vets. The big deal for potential buyers is that Vet’s don’t have to put a single dime down as a down payment in order to purchase a property, whereas the minimum down these days for a non-Vet buyer for an FHA loan is 3.5%.  A VA loan pretty much has the same requirements of all loans: 1) you still have to have a job and good job history; 2) you have to have decent credit; and 3) you have to live in the property. VA loans are made by any licensed bank, credit union or loan/mortgage company.

          It’s really important for any Vet to work with a good lender when applying for a VA loan, as there is another layer of paperwork to the mortgage process-proving your military service and getting the right forms out of the Veterans Administration. A savvy lender will help you track down your discharge paperwork (DD-214 form) if it’s been lost through the Veterans Administration.  I have always found the Veterans Administration willing to go overboard to help get a Vet into a home and expedite any paperwork needed.

          A VA loan can be used to buy a house, a townhome, or a condo, or a farm if there is a residence on the land. You can use the loan to build a home from scratch, buy an existing home and improve it simultaneously, or buy a manufactured home and/or lot (the manufactured home must come with the lot, which is rare in some parts of Utah). The Vet can buy property with a married spouse or with another person they aren’t married to, however there are rules about that: 1) the Vet can buy/co-sign with another Vet; 2) the Vet can buy/co-sign with a non-Vet, but there’s a formula used to figure out how much of the Vet’s benefits can be used in the total transaction.

          My lender friends tell me that most of the VA loans granted in Utah are used in the Ogden/Tooele areas-close to military operations. I’m always surprised at how many Vet’s don’t understand their benefits in how to buy a home, who think they don’t qualify to use benefits or think they have used their benefits up in a previous purchase.  Again, get to a good lender and see how you can buy with no money down.  And, thank you from all of us for your service to this country.

November 08, 2011

Who Slept In Your Bed?

2011

   I’m just about to put a home across the MLS that is rather historic…it is the birthplace of Gordon B. Hinkley, the 15th president of the Church of Jesus Christ of Latter-day Saints.  There’s not a bronze plaque outside the front door noting the significance of the property, but there could be if the owners wanted to get one to display there.  Would President Hinkley recognize the place if he were still alive?  In this example of a historic property, yes, the President would easily recognize his childhood manse as the house is virtually intact on the outside with a wonderfully restored and upgraded interior inside.

               If you own a historic home that may be in need of a makover and would like to find money to rehabilitate it, your ship has come in!  Thanks to the lowest interest rates in history, home owners can get loans from the Utah Heritage Foundation for restoration, rehabilitation and repair at half of the current U.S. Prime Rate.  You have to have good credit and income to apply and receive the money from the UHF and there are a few rules as to what the money can be used for:

First priority for funding is placed on exterior improvements, including: brick, chimneys, doors, foundations, masonry, porches, reconstructing existing additions, roofs, seismic retrofitting, siding repair, and windows.  Second priority for funding is placed on interior systems, including: code compliance, electrical systems, heating, insulation, and plumbing. Third priority for funding is placed on interior finishes. For example, UHF will not fund a kitchen remodel if the roof needs to be repaired. However, a kitchen and/or bathroom remodel can be funded if they are incorporated into a more comprehensive rehabilitation project.

   How do you know if your property is historic?  The UHF can help by having one of their staff come visit your home. The basic criteria would be:  1) is it listed on the National Register of Historic Places? 2) Is it listed on a local register of historic or cultural resources? And 3) Is it eligible to be a contributing building within a local or national historic district?  To quote them, “In general terms, to be eligible, a building must be at least 50 years old AND retain its architectural integrity.”

               The loan cannot be used for concrete pads (parking/patio), fences, incompatible materials (like vinyl windows in a Victorian house), landscaping, new construction (tearing down a home or building one on a vacant lot), refinancing mortgages and putting up retaining walls.  Then again, what you want and need is decided on a case by case basis by the staff.  The terms of the loan are good because of the low interest rates and offer low monthly payments based on a 20-year amortization schedule, but the payment term for the loan is 5 years with a balloon payment of the remaining principal and interest due at the end of the fifth year.

               The Utah Heritage Foundation has been around since the 1960’s grants loans all over Utah and is helping to protect our history and architectural past. You can follow them and their projects on facebook at www.facebook.com/utahheritagefoundation  or go to their site at www.utahheritagefoundation.com and learn more about what they do for all of us Utahns. There’s also a great kids game on their home page - a hunt for the secret silver coins of the Kearns Mansion.