"I didn't know." ... Yea, Right!

Adjustable Rate Mortgages

Unfortunately we are all aware of the industry scandal, and the sub-prime loan issues. I get a little upset when they try to hang the blame on mortgage brokers. Personally I think it is the Banking Industries attempt to put the independent broker out of business. The Broker surely didn't write the guidelines but by golly he must conform to them. So,... who's fault is it?

Since all the news is bad and blaming, here is a story of a lady, taking advantage of all the critical news. That really torques me off. Perhaps you will remember the article. I've tried to find it for your reference but have been unsuccessful. Let me know if you remember or can find it.

This sweet hard working woman, single parent of 4 or 5 kids, working in the medical profession, refinanced (or purchased, I can't remember) their loving home. The financing was an adjustable rate mortgage and her payments to start out were around $1700. Then the rate adjusted up and her new payments were about $300 more per month. Then, ... unfortunately she was laid off at work. Woe is me. Now she is about to lose her home and she and her kids will be on the street. In this news article or report she claims she did not know she was in an ARM and did not know how they worked.

Ok, first of all I am really sorry that she is a single parent for whatever the reasons are. And, ... I am really sorry that she lost her job. Sincerely! I'm sorry she is losing her home. BUT to say that she didn't know it was an ARM or how they worked!!! Give me a break!!

This woman is in the medical field and obviously doesn't mop floors if she qualified for a $1700 mtg payment. This woman knew she was in an ARM (there are mandatory disclosures that must be signed on all arms) and there is no doubt in my mind that she understood how adjustable rates ADJUST! The only thing she didn't count on was losing her job.

So, the poor broker get's blamed and stabbed in the back again!

Why For Sale By Owner?

Everyone has their own personal reasons to sell their real estate "by owner" but we all have one major reason in common: The Real Estate Market absolutely sucks today and it doesn't matter if you are a buyer, seller, investor, agent, or some other real estate professional.

Does this mean you can't sell your home? No. Does this mean you can't find financing to buy a home? No. It does mean that you really need to be savy, informed and be watching out for your best interests at all times. Because real estate professionals are loosing their shirts right now they are much more willing to lend a helping hand at no charge. You should take advantage of this when ever you can.

You don't have to be a rocket scientist to sell your real estate "For Sale By Owner".

1. Decide on a selling price. To make sure you don't over price or even worse, under price, you should get an appraisal. Don't trust a real estate agent's market analysis. Agents can and will blow smoke up your skirt and tell you what you want to hear hoping to get your listing. Hire a HUD approved appraiser. The cost varies from state to state but it is well worth your money.
2. Understand closing costs and documentation. It is critical you understand how much your closing cost will be based on the type of loan the buyer procures. Your closing cost will be higher if the buyer gets a FHA or VA loan . This will impact your bottom line, cash out the door/in your pocket. If you think you are going to walk away with $10,000 but only get $8,200 I think you would be slightly upset. Go see a Mortgage Broker. He will sit down with you and run through closing costs based on different loan types. He can also explain what real estate documents and disclosures are required in your state and can probably supply you with them. He can also provide you with a sales contract and teach you how to fill it out. If he has a good fsbo program he could also make your home flyer and financing options flyer for potential buyers. Don't be afraid to talk to a broker. He will do all this for free in hopes of finding buyers that need financing.
3. Advertise. You need a home flyer and a financing flyer. Be really swift and do it all on one sheet. Home flyer on the front and financing flyer on the back. A yard sign is a must and of course place ads in the newspaper. Your ads will be much more effective if you mention the amount of down payment or mortgage payment amount based on different loan types. ($5,000 down will get you into this affordable 4 bedroom 2 bath home in beautiful Newbury Park.) Again, your mortgage broker can help you with this information.
4. List your real estate on the Internet. Wow! This topic makes me crazy. Yes, yes, ... list your home on a for sale by owner web site. BUT DON"T list it on one of those top of the search web sites that charge you a small fortune. You don't need all that stuff. There is so much information I want to give you about this I think I'll make it tomorrows topic. In the mean time, go to fsbobasics.com and list your home free.

See you tomorrow.