Babs DeLay

Babs DeLay

2011

   Wow-the economy is crazy! The Dow Jones has tanked, the U.S. credit rating got downgraded for the first time in our history and many people think that this may indicate the sky is falling.  I find it an interesting parallel that many home owners out there need a loan modification ( so does the U.S. government with all the countries that have loaned us money) and have seen their credit ratings drop (like the U.S. rating dropping for the first time in history form three stars to two stars). 

     What does this do for the home buyers?  IT MAKES INTEREST RATES on mortages GO DOWN!  You’re hearing radio and TV ads that ‘now is a better time than ever’ to buy a home or refinance one. If you have a stable job and need the tax deduction of annual mortgage interest, then yes, it is a GREAT time to buy a home because it will be cheaper than rent and save you money on your income taxes. 

      If you got a mortgage for $200,000 you’d have a payment at 4.5% interest of @$1300 per month (principal loan payment including interest, property taxes, homeowners insurance and mortgage insurance).  If rates go down to 4% your payment would go down to @$1200 per month-a savings of $100 per month.

     Seriously, have you tried to find a decent rental lately?  A landlord that will allow both your dogs and cats?  A home in a safe feeling neighborhood with a yard and decent parking?  Rent’s are moving UP as more people can’t qualify to get a loan, and landlords are raising rents. I just had a friend desperately search for a three bedroom place to rent, and she was finding that landlords wanted $1500 a month on the average for a nice house in the neighborhood where she wanted to live, plus first and last month’s rent and a huge non-refundable animal deposit.  The amount it would have cost her just to get into a rental would have been the almost the same amount as a down payment for a home. The average loan is 3.5% down and there are legitimate loans out there for 0% down as well (slightly higher interest rate).

     Sit down and look at your living situation and your finances, and even take the time to talk to a good lender to help give you ideas and numbers on how to buy a home or condo. With values at all time lows, and interest rates at all time lows, the planets are aligning that you should stop renting and start the buying process.  Whether you have money invested in the stock and bond markets, it’s not only important to watch those investments but to pay attention to whether the Dow Jones is dropping. The more the Dow drops, the more likely you will see interest rates on home loans drop.

      I always tell potential buyers/renters to make a Xerox of their previous tax return and pencil in an example of a $12,000 mortgage interest deduction and see how that changes what they could have gotten back from Uncle Sam if they had had owned a home that tax year. Do it-look at your taxes and see how owning a home could make your life better in more ways than one!

2011

   How many times have you heard someone shopping for a home to say, “We saw the perfect house, perfect neighborhood, but needed (insert) a) a new kitchen b) another bathroom c) central air d) all new carpets e) all of the above?!

   If you’re getting a bank loan to buy a home for say $200,000 with a 3.5% down FHA insured loan, the bank isn’t going to give immediately give you another loan for $50-100,000 with of upgrades for you to do yourself with or without a contractor. Yes, there is the argument that you can get a second mortgage later, but why not do it all at once?

   There is a loan out there called an FHA 203K which is perfect when you find an almost perfect house. It works basically like this:  You get a contractor(s) to bid out the work you’d like to have done on the property once you get it under contract.  The bank has an appraiser go to the house and determine so see if the $50,000 in improvements will make the house worth $250,000. If it looks like a good plan, then the bank gets you a $250,000 loan at closing (still with the 3.5% down payment) and you close on the home. You have six months to complete the work via the contractor(s) the bank has approved.  The contractor completes each step of the work and the bank sets up a ‘draw’ in order to get him paid each step of the way. 

   This loan is particularly attractive if the home is great but needs say, just a new roof in order to pass FHA standards for a home loan, and where the seller has no equity in the property to make any repairs on behalf of the seller.

    What I’ve found is that this loan takes a few weeks longer to close than a normal transaction because of the work bids that must be reviewed. Also, you must use contractors who have gone through a short process to get approved by FHA and the bank. You can still use your favorite contractor but they must be approved by the bank. It’s very difficult to use an out of town ‘on line’ lender for one of these loans as the ‘draw’ process must be local to get contractors paid quickly during the work. 

     This is a terrific loan to get work done on a home that needs minor or major work done on it. I’ve found it’s a great help when I find a buyer a foreclosure where the AC has been ripped out, the carpets are crappy, and the bathroom needs updating. The bank who took the property back from the seller doesn’t want to do a thing but get rid of the property from its inventory.  The interest rate on an FHA 203K loan is slightly higher than a regular FHA loan, but worth it if you don’t have extra money to do rehabilitation to a property once you’ve put out the 3.5% down payment for the loan. 

2011

It’s been a snowy, rainy year in the State of Utah. The wildflowers are lush, the hills are green. Pretty!... and pretty scary if we get a hot summer. We could get massive wildfires, many which could be started by fireworks and lightening storms. What was Utah’s largest wildfire on record? The ‘Milford Flat Fire’ that started on July 6th, 2007 and ended up burning 567 square miles of Utah before it was finished.  Firefighters said it was the fastest fire they had ever seen take hold and sections of I-15 had to be closed down to protect the public.

 

          Home fires are even scarier. Thousands of people every year die in home fires and or are badly injured by those accidents. A little over 1/3rd of home fires have causes that remain unknown reports the U.S. Fire Administration. They have research that has found that cooking accidents are the number one cause of home fires (26.4%), followed by heaters (11.4%), candles (5.4%), smoking (2.1%) and children playing with matches (.04%).

 

          If you live in an apartment building or condo complex, you should have overhead fire suppressant sprinkler systems and fire sensors in your unit. All new construction multi-unit properties must have these items, but many old, old buildings have not upgraded to a current sprinkler system. When you’re considering renting in a multi-unit complex, do look for safety concerns before you put down a deposit. A friend of mine and her son lived side by side in a big complex by the University of Utah, and both units were lost in a major fire a few years back despite the sprinkler system.  Also, consider renters insurance on your possessions-it’s pretty darned cheap!

 

          Home builders aren’t required (yet) to put in full sprinkler systems in new construction houses, although some are leaning towards that safety feature as an upgrade.  Everyone knows we’re supposed to put in our own fire alarms throughout our homes, but how many of us check them periodically to see if they are working?  Take out your smart phone and just put in a 6 month (repeat forever) date to ‘test fire alarms’ for your own safety.

 

          Most of us never think about our furnaces and air conditioner units until we are using them at full blast. In most Utah homes, the furnace runs the air conditioner some how (I’m so NOT mechanical). Clean out flammable debris from around your live flame areas of your furnace and hot water heater storage room.

 

          Also, this is a big BBQ weekend for many!  Yeah! Celebrate!  And celebrate safely!  DON’T light your charcoal with gasoline. Don’t put your grill under your patio eaves or close to your house. Find that dusty old fire extinguisher you bought a while back, test it and keep it somewhere where you’ll remember it- in case of emergency. Clean the darned grill of old grease that could flame up unexpectedly. If you use propane, check to make sure the connections are tight.  The last thing you want at a holiday party is for the paramedics and fire department to race to your home to put out a house fire or administer burn care to something other than your infamous ‘blackened’ chicken and ribs!

2011

    People often ask me what is the difference between a Realtor and a real estate agent?  Simple answer: a Realtor is a real estate agent, but a real estate agent isn’t necessarily a Realtor.  A Realtor is a member of the National Association of Realtors, is THE largest trade organization in the United States. The Association became the largest trade group in the 1970’s and has over 1.2 million members, 54 State Associations (including Guam, Puerto Rico and the Virgin Islands) and more than 1400 local Associations..  The NAR was founded with 120 members in 1908 at a convention in Chicago, Il., to ‘unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests.’ Soon afterwards (1916) the NAR adopted a Code of Ethics for its members to follow while selling real estate.

 

          To sell real estate on the behalf of others, you must have a real estate license. That license is issued in each and every state in the Union, and the licensing requirements are different in each state.  Basically, you must go to a real estate school (live or on-line) for a specific amount of hours and learn about national and state real estate laws and practices. Then, after passing a state-issued test and paying fees, the new licensee can sell real estate by affiliating with an already licensed real estate broker.

 

          Once you receive your license from the state, you are qualified to join the NAR and its local entities. Here in Utah you would join say the Salt Lake Board of Realtors or the Park City Board of Realtors, and also the Utah Association of Realtors simultaneously.  In joining, you pay more fees and promise to abide by the NAR Code of Ethics. The license here is issued by the Utah State Department of Commerce.

 

          Both the word REALTORS and REALTOR are registered with the United States Patent and Trademark Office and only Realtors in good standing can use both the word ‘Realtor’ and the recognizable ‘R’ trademark in advertising.  The NAR has vigorously defended the ownership of these words and trademark successfully over the years in courts throughout the country.

 

          As the word ‘Xerox’ has come to mean ‘copy’, the word ‘Realtor’ has come to mean ‘real estate agent’ to many people.  Yet it is Realtors who openly stand behind a stated Code of Ethics (see www.realtor.org) and who fight for the property rights of individuals in the U.S.  Realtors lobby Congress and State governments to keep the mortgage deduction on your tax return and also help police the real estate industry by calling out crooks who attempt to scam homeowners into bad mortgages and false loan modifications.

 

          It’s worth a minute to Google the Realtor Code of Ethics and look for yourself as to what Realtors promise to abide by in their day to day practice. All real estate agents must abide by the laws of their state and the U.S.  Realtors have an extra layer of rules and regulations we must try and follow every day in addition to the law, and are proud to say at the end of the day that we take extra steps to do good by our clients and customers.

2011

If you’re one of the unfortunate people who had to sell their home on short sale in 2010 because you owed more than what your house was worth, check your mailbox and see if the previous lender(s) have sent you a 1099 form to file with your tax return next month.  That form is evidence that your lender(s) forgave your debt when you sold the property. If you didn’t get the letter, you may be chewing your nails for years to come.

            Let’s say you sold your home last year for $200,000 but you owed $250,000. The Realtor who helped you sell the property worked with you and the bank to negotiate the mortgage down to a level where the home could be sold and not go to foreclosure.  It worked! You walked out of the closing without any money, but you also got out of $50,000 of debit. Um, maybe not.  Revisit your documents from the closing and the short sale negotiations with the lender.  But, IF the lender forgave the deficiency (of the $50,000 example), you will have a 1099 form that counts the $50,000 towards your ordinary income in the year of your short sale.  Not to panic because a law passed in 2007 allows the owners of primary residences to not pay taxes on that deficiency. Don’t quote me on tax matters though-talk to the IRS or your CPA.

            Here’s the nail biter: IF you didn’t get a 1099 a lender may be coming after you for that $50,000 in years to come.  Most people who are upside down on their home often have a first mortgage and a second mortgage. Lenders can file against you for the deficiency amount for up to six years after you sell your home. Lenders can file within three months to claim that deficient amount after a sale  if they have a first mortgage against you. If they don’t file, they lose the right to file. The second mortgage can take up to six years to file against you if they weren’t the one who initiated the foreclosure proceedings.

            If you think you may be haunted by a lender coming after you once your property was sold, talk to a legal professional. There are plenty of legitimate non-profits out there to help you get the facts.  You may have to consider filing bankruptcy to get rid of that debt. Whatever you do, don’t sit on your laurels and think just because you sold a home on short sale that you may be free of the mortgage debt. There are companies popping up all over the country going out to lenders and saying, “Hey, we’ll go after those former home owners for you!”.  And we all know there’s nothing worse than a debt collector calling you night and day, right?

March 11, 2011

We've Gone GREENER!

 

2011

I’m calling out all the other real estate companies in the state to make a concerted effort to GET GREENER. My firm is now the first real estate brokerage in the state to banish ‘fact sheets’ attached to real estate signs in order to achieve a more greener business practice. Fact sheets or info sheets on listing signs take up an enormous amount of paper as well as staff time to keep them full. Phasing out and fully replacing these boxes with a more permanent option only makes sense to be greener.

In our recent practices a ‘yard arm’ with a brokerage ‘for sale’ sign would go up on a home for sale. Attached to the sign would be a plastic box or tube for 8.5 X 11” flyers about the property. I figure we used 5000 reams of paper on fact sheets for our for sale signs just last year. That’s 300 trees we killed.

Now all our flyers are all being replaced with a ‘semi-permanent’ sign attached to the ‘for sale’ sign. This has the basic information found on any flyer PLUS a QR code.  QR codes are scrambled bar codes that can be read by any smart phone bar code (free) reader.  This way a buyer can walk up to the sign, read the flyer and then download the QR code on the bottom of the sign. Their smart phone will download ALL the photos of the property. The fact sheet itself will (on the sign and in the download) provide contact information, massive photos, pricing, interior and exterior information. This can then be saved in the phone or emailed immediately to anyone.  The new fact sheet sign can then be re-cycled with a new flyer for another listing when the home is sold.

I’ve owned my own brokerage for 10 years now and in that time period I figure over 3000 trees were killed to produce the paper used for real estate flyers just by my firm. That floored me. I went on the web and found in Built Green and Sustainable Living that to built a 2000 sq. foot all-wood home, the construction would required the killing of 100 trees. We don’t build many all-wood homes here in Utah, but we definitely put up wooden frames to support the stucco. If I estimate that framing a home would take say 30 trees, then I could have helped build over 100 homes over those 10 years. I’ve been in business almost 30 years and I’m betting in addition to that 100 home projection I personally contributed to 10 times the loss of trees coming down in order to provide information on houses to get them sold.

I can only imagine how many trees have been killed by the big corporate real estate brokerages in the state in addition to the ones I’ve helped cut. I’m just a single number among the thousands of licensed agents in the state of Utah. I hope other real estate brokerages and agents in the state wide follow my lead and commit to eliminating the practice of paper-eating, environment-killing outside fact sheets on all for ‘sale signs’.” QR codes can be generated for free on any product, property or company from any of a hundred websites and apps. The cost then is zero to generate the code, and the semi-permanent sign can be recycled from house to house with a new flyer/sticker going over the old one.

2011

Real estate sales is a mystery to people buying a home for the first time mainly because there is so much to learn before the move. Buyers get a whole new vocabulary of ‘pre-qualification, home inspection, home warranty, radon, locking or floating interest rates, and closing costs’, not to mention ‘bungalow, rambler, townhome, condo, CCR’s’ and the like!

Over 90% of all buyers begin looking on the web at listings of homes for sale. The term ‘listing’ gets thrown around a lot by Realtors. We assume people know what we’re talking about. In a nutshell, a ‘listing’ is a property that has been registered, cataloged and made public from one main data base that is owned by different entities. In Salt Lake for example, the ‘Wasatch Front Multiple Listing Service’ is the one and only data base used by Realtors along the Wasatch Front to offer homes for sale on behalf of sellers. The WFRMLS is owned mainly by three Boards of Realtors in the State. The website is www.utahrealestate.com and you can find homes for sale virtually state wide, but mainly in Provo, Salt Lake, Ogden and close-by burbs. The information about the home is offered there, including: asking price, size and details about the interior and exterior of the property, things that are included (garage, hot tub, appliances) or not included. Also the ‘listing agent’ contact information and brokerage name should be on the site that you’re looking at on the web.

Buyers and sellers often don’t understand that all the listings of homes come from one data source but will appear on up to 9,000,000 other websites. If a homeowner lists their property with my brokerage, their listing will show up on the Coldwell, Prudential, Re/Max, etc. websites. Their listings will show up on my website as well. There’s really no creditability these days to a brokerage telling you in their marketing plan that they can get you onto more real estate websites than any other brokerage. Everyone’s listings are on everyone’s websites because most of us have a link to the full MLS on our home pages of each brokerage. It may appear that an agent through ABC brokerage might have 30 condo listings downtown, when in fact he doesn’t. If you read the fact sheet of the listing on his website, you will see in tiny print somewhere on that page who the real listing agent is, and the brokerage it’s listed with in the MLS.  It’s a good thing that everyone’s listings are available on everyone’s website for a seller-the more exposure the better, right?!

There are only a few reasons why a home might not show up in a property search: 1) it’s got a sale pending; 2) it’s been taken off the market or 3) the seller has requested that the home not be mass-marketed. Any Realtor can show any other Realtor’s listings through the MLS system (with appointment or instructions).

The MLS is a terrific data source and great way for buyers to initially see what might be available in the areas and price ranges they are wanting to search and live in.  There is nothing to replace a Realtor though because we are the ones ready and able to show you those homes you find!

2011

“Is this a safe neighborhood?” asks my buyer as we look at homes. I really can’t answer that question, but I can send my buyer to a myriad of websites to find out the answer. I might think it’s a safe hood, but I’m not a statistician. Thanks to technology you can find out where all the ‘Chester the Molesters’ live in your potential zip code and check police statistics for type of crimes (robberies, rapes, murders, etc.) in the area.

Recently I was showing homes to a mom and dad with three kids. They had grown out of their home in Rose Park and wanted more space. We hovered around two different neighborhoods and found two homes they liked that were about the same price. After our outing, the mom went home to her computer and went to the State website for sex offenders in Utah and discovered that by one of the homes there were 300 sex offenders, and only 12 offenders registered near the other one. She called me immediately and said ‘we want the home where only 12 creeps live nearby’. After some negotiations, they bought the house.

Apart from the obvious checks of public statistics and data about a neighborhood, there are other simple things both home owners and renters can do to make their property more secure. Remember the story on how Brian David Mitchell broke into the Smart house to abduct Elizabeth Smart? He supposedly cut through a screen in front of an open window. Crime happens in all neighborhoods, and many crimes happen just because people make it easy for criminals to harm them or steal their property. For crime statistics in Utah, go to: http://publicsafety.utah.gov/bci/crimestatistics . 

Here are some good tips to be safer:

  1. Lock your damned house and your damned car. Police friends tell me the number one crime in Salt Lake City is ‘car prowls’-where cars are broken into (locked and unlocked) because people left stuff in them that was visible to the criminal;
  2. If you rent or buy, have your locks re-tumbled. You don’t have to go to the expense of buying all new locks when you take occupancy. Just have a lock smith re-tumble the guts of the locks and make a new key. If you’re a renter, do this with your landlord’s permission of course. You never know who’s had keys to your property before you got there, right?
  3. Consider installing an alarm system. There are several local companies that will come wire your house and put in simple to elaborate alarm systems. I had a home once where the front door lock didn’t always catch. For $30 a month I had an alarm system, and when the door blew open they would call me and tell me ‘your front door is open again’.
  4. When you have the lock smith or alarm company come over, have them take a look at your window locks as well. If you’re in an older home, there are often small basement windows which you might not think of as a potential entry for criminals-because the windows are just too small. That’s foolish because criminals break those windows out, have little kids crawl inside them once they are busted out to go open up doors.
  5. Meet your damned neighbors! I just listed a home where the owners had lived in the home 30 years and they had only met two neighbors during their entire occupancy. You let neighbors know your name, your contact information and watch your property when you aren’t home with a promise to do the same for them. Better yet, get your neighborhood involved in the local neighborhood mobile watch program.

2011

Showing vacant homes to potential buyers is always an adventure, especially in an economy where there are so many foreclosures, short sales and flippers. Because of the huge amount of inventory I drive around and preview properties to save buyers time in seeing homes they wouldn't want. This last week I was doing just that in the Highland Park area of Sugar House.

I always make appointments with listing agents before I show a home, even a vacant home, to find out how to access it and to see if it is still available and not under contact. This particular home is a flipper-a former foreclosure cleaned up and modernized quickly and put back on the market for sale by a new owner. The agent had it staged so there was a minimum of nice furniture in the rooms. I drove up and noticed a truck in the driveway and thought "Oh, someone is parking there to make the house look occupied."

I opened the keybox, and walked in about 6 feet into the front room. I then heard, "Oh shit!" from a male voice, a bedroom door slam, and a female voice start giggling hysterically. Knowing the floorplan of this style home, I knew it was the master bedroom. I yelled, "REALTOR! I won't come in the bedroom, I just need to run downstairs and see the ceiling height!". The giggling girl voice continued, I ran downstairs and came back up through the kitchen. The top of a contractor lock box was sitting on the counter with the house key next to it. "Aha" I thought, "That's how they got into the home and I'll bet the guy in the bedroom was one of the workers that helped fix up the home for resale". As I left, I yelled, "REALTOR leaving now!". The giggling continued.

As I pulled away from the property I called the listing agents office and asked to speak to his secretary. When she answered I asked her, "By any chance are you inside the home at XYZ address?" She said she was sitting at her desk and asked me why I asked. I told her there were people inside the listing having sex and she was aghast. She asked me for the license plate numbers of the truck in the driveway and the car out front, and I told her I would drive back around the block and get them for her. About 30 minutes later the agent himself called me and said, "By any chance, did that truck have a big sticker on the back of it?" I laughed and said yes and he knew exactly which employee was over there. Busted, totally.

It is a good house, albeit overpriced. I emailed my clients that night and told them the story and that it was a home worth looking at and they eagerly said, "Let's go see the sex-staged house!". I showed it to them the next morning and well, bad form on the listing agent behalf-the bed was ruffled and hadn't been remade. The buyers wife commented, "Well this house certainly doesn't smell like fresh baked cookies!"

2011

            Where’s the buyer? Where’s the seller?  These are questions I often get at the closing table when the client is signing their final sales or purchase documents at the title company.  People are very surprised that the other party isn’t sitting with them at the closing table signing papers at the same time.

            Back in the day when we wrote purchase contracts on bark with bloody arrow tips, Realtors who had written an offer on a property would call the other agent to arrange a time to sit down with them and the sellers to present the offer in person. This helped personalize the process-sellers could ask questions about buyers and agents could feel out ‘the other side’ as to the vibe of the parties doing the deal. Then came mobile phones and fax machines. I remember years ago when Georgia Ball was the broker of The Ramsey Group. I called her one day to tell her I had an offer on one of her properties and asked if I could fax it to her. She said, “We’ll never get one of those machines!”. The Ramsey Group got a fax a few months later as did every other real estate brokerage.

            With modern technology ruling all our lives, it is rare that buyers and sellers meet before, during and after a real estate transaction. Nowadays an offer is written, scanned (faxes kill trees), and emailed to the other agent. Sometimes the agent writing the offer doesn’t call the listing agent, just sends an email of the offer with a loan pre-approval letter attached, and hopes for the best. People just don’t sit down and meet anymore-everything is done virtually.  I did five transactions with another agent a few years back and I never met the agent. All the offers, counter offers, inspection responses, questions were done via email and scans.

            Also know that buyers and sellers often work with two different title companies to close a transaction. In the bark days of contracts there was a rule that the seller always chose the title company. Buyers had problems with that and helped changed the rules of business and laws so that now buyers can work with their own title company and sellers can work with theirs.  The advantage to this is that there are two groups watching to make sure the title reports, deeds and final sale paperwork is done correctly and recorded with the County correctly. The disadvantage to this system of choice is that a transaction may be delayed (in some cases) because so many different parties are involved in the final sale.

            If you’re a buyer and the sellers of the home still live in the home, you can arrange for a final walk through before you sign the closing documents on the transaction. This can be a few days before you sign and it’s a great opportunity to find out: when is garbage day? What time does the mail come? Who are your neighbors? Tell me all the nuances of the home the inspector didn’t mention (like, “Sometimes when it rains a lot this back door sticks”)!