It appears that the Fed’s rate cuts may be over for a while.  In fact, it has been rumored that the Fed may raise rates to combat the concern of inflation.  If inflation continues, long term mortgage rates may worsen.

current Fed interest rate policy “well positioned to promote moderate growth and price stability over time.” That language signals the central bank, increasingly worried about inflation, is done cutting rates for now. Bernanke noted that slower U.S. growth, and previous interest rate cuts, have reduced the value of the dollar against other currencies, increasing the potential for inflation.

That equity line of credit you have? You may want to try and lock that rate if you can.  If the Fed raises rates, it will effect the interest rates on shorter term loans, such as credit cards and equity lines.

This article I just read is a prime example of why you should choose your Realtor carefully.  On Oahu, 79% or Realtors did 4 or fewer transactions in 2007.  60% did 2 or fewer. 

That isn’t exactly classified as “Experienced” status.  I don’t know how much expert advice they could offer, especially in a complicated transaction.

Why do I say this?  Now, more than ever, many Realtors aren’t in the business full-time, meaning you may be getting part-time advice.  You are making a huge investment, make sure you choose the right help. 

Last year, the number of Realtors fell 1.5%, to 1.3 million. That number doesn’t reflect the likely thousands of part-timers who maintain ties to the business but earn a living from other jobs… Those in business two years or less earned just $10,000. The drop in membership, the association says, comes almost exclusively from newcomers to the profession.

On real estate-related Web sites such as ActiveRain.com, the chatter now is about brokers who can’t be reached because they are working other jobs, a particular problem now because deals require much more back-and-forth negotiation to close. Ardell DellaLoggia, a broker in Seattle, says she has one agent she’s playing phone tag with who obviously has another job. “He calls me and says he can’t talk now because he’s in a real estate class, but that’s a coverup,” she says. “When a broker is really in class, he mentions the name of the class.

My advice, if you don’t have an agent yet, ask them for testimonials, or references.  Interview them. 

By the way…..Kahala Associates is an agent-owned company, so not only are we full-time Realtors, but we are all owners!

 95% of buyers start the buying process by looking for homes during Open Houses just to see what is on the market before they do research on the buying process. Once that process starts they usually never look back until they have found the property they want to buy.

The problem is, they have skipped many important steps that could have saved them time, money and a lot of headaches. This will likely be the biggest investment you ever make, so taking the time to make sure you do it right the first time can save you time and money. (I have highlighted the most important first step)

Realize that whether the market is fast or slow, “dream” category homes are always hot properties as soon as the for-sale is planted in the yard. When you find THAT home, make your offer fast. Timing is everything. For an undesirable or over-priced home, you might have the luxury of viewing it several times–even dragging your relatives to see it before you actually made an offer. But who wants an ugly or over-priced home!?

1. Want a FREE way to make your offer more attractive to a homeseller, get that home for less, and more importantly make sure you can afford it? Unless you’re paying all cash, make sure you’re financially “Pre-Approved” by a lender and prepared to document this fact to a seller.

Specifically, you’ll need a “pre-approval letter” from a lender. I can arrange this for you-just call me…or email me.

If you are “Pre-Approved” it says a few things.  1. You are serious enough about buying a home because you have taken the necessary time to give your personal information to a lender to have it verified.

2. By giving a “Pre-Approval” letter, the lender is basically saying that they will give you a loan for up to the amount the put on the letter, so long as the property conforms to the loan guidelines.

3. It also says, you already have an idea that you can afford the property, you have a good idea of what your monthly payment will be, and you aren’t going to back-out due to the monthly payment.

If you were a seller, who would you choose to work with? Someone who has their finances in order, is willing to document it, and show you they are ready to make things work, or someone who submits an offer but hasn’t even spoken to a lender yet?

If a seller needs to sell quickly, then price may not be the main reason for accepting your offer!

Simply put, a short-sale is when the homeowner sells their home for less than the mortgage amount they owe on the home.

With a short sale, the homeowner must negotiate with the lender to get approval to sell the property for less than the owner owes.  This can be difficult.  The lender is not going to just give away money.  If the seller can bring the difference between the amount owed and the amount the property will sell for, in cash at closing then the lender will probably be ok with it, since they will get their money back. 

If this isn’t the case, then the lender may either require the seller to pay back the difference over time, or the lender will releave the seller of any debt obligation (not very likely). 

So, the property ends up on the market for sale.  Any contract brought forth on the property will have to have all parties involved agreement on the contract.  This means if there is a first and second mortgage, then the Seller, Lender #1 and Lender #2 all have to agree to the contract.  When there is a first and second mortgage, it WILL take a long time, as the two lenders negotiate over the amount each will get. 

The process to buy a short-sale property is and isn’t different than a normal transaction.  It isn’t different because you preview the property, and right up an offer to buy the property, much the same as you would any other property.

 It is different because you have several different entities that make a decision to accept the contract or not, and it can take a LONG time to get a response.  Heaven forbid you get into escrow and find out something unexpected and ask for a credit or a price reduction. Then it could be another 30 days before you hear back on that issue.

I was just asked the Question: “How long does it take banks to respond to an offer on one of their foreclosures/short-sales?”

The best answer, just came to me from my Countrywide rep, which also explains their process:

A Short Sale Support Team is now available to handle all the inquiries and status calls from our borrowers, their agents or our employees. This team is already handling thousands of short sale requests.Each potential short sale is reviewed on a case-by-case basis. Customers with accounts whose payments are completely up-to-date and current will not be considered unless there is an eminent hardship. The approval of a specific short sale can only be discussed among the homeowner, seller or their agent and our Short Sale Support Team, and the decision can take as much as 30 days from the date the Team receives the purchase contract and preliminary HUD 1. The decisioning time varies based on the ability to obtain access to the property for an appraisal and on the financial situation of a particular customer.  

All time-lines noted herein may vary based on the volume of short sale activity, thoroughness of packages and the particulars of the specific transactions.  They are meant to be utilized as guidelines and as a means to set appropriate and approximate expectations.Short Sale Process