6 Ways to tell if your Realtor is lying.

This is the title of a web article I ran across the other day.  Since I'M a Realtor, you may not be able to believe anything I'm about to say, but if you give me the benefit of the doubt, I'll say why I think the article and its title are baloney.  Or perhaps pose the question, "How do you know when web-writers are lying"?

The title did grab my interest.  Unfortunately the title reinforces an untrue stereotype that Realtor's are liars. The writer seems either very paranoid, or simply very mean-spirited. Either way, her writing becomes suspect from the getgo.  Her article is based on her research as to how to tell when people are lying.  Maybe her research is accurate...I HAVE seen some of her "techniques" on a couple of TV shows about detectives who solve crimes by studying suspected criminals for signs that they are lying.  Maybe this author lives in a fantasy world also.

In the real world, Realtors are easy to pick on.  We are very public people and we put ourselves on the line every day in very complex situations.  One of our prime skills is the ability to guide clients through the real estate purchasing maze.  When our task is to help someone buy a house, we must sort through dozens of potential properties in numerous neighborhoods, make arrangements with listing agents to show the chosen properties, take our clients around to see the properties, help them evaluate each property for price, location and amenities, help them fill out the proper contract and disclosure forms, advise them as to which forms are critical to the process, help them understand how the process works, help them sort out the terms they want to offer an owner, negotiate the offer through the listing agent and owner, help our client understand whether a counter-offer is realistic or not, etc, etc...and then help arrange inspections, financing and settlement, handling the myriad details of all those processes. 

An intimate business relationship is developed.  This is an emotional time for most clients.  There are plenty of things out of the control of either the client or the buyer agent, and as a result, plenty of opportunity for expectations not to be met.  The Realtor is on the front line, and while she gets paid for the work, she also is the handiest and most intimate target for disappointments.

All the above is the truth and nothing but the truth... :)


Home affordability at best level in 10 years

Thanks in part to interest rates continuing at all-time lows, home affordability in the U.S. remains near the most attractive levels in 10 years. In addition, HUD's Neighborhood Stabilization Program (NSP)has spurred local investment and is beginning to make affordably priced homes available to consumers.

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the second edition of the Administration's Housing Scorecard showing:

Historic low rates continue to promote affordability: Families continue to benefit from the lowest rates in history on 30-year fixed mortgages. Since April of 2009, record low rates have helped more than 7.2 million homeowners to refinance, resulting in more stable home prices and $12.9 billion in total borrower savings.

Over twice as many homeowners helped compared to foreclosure completions: Nearly three million borrowers have received restructured mortgages since April 2009, outpacing the 1.24 million foreclosure completions for the same period. As more families are able to remain in their homes, household assets continue to rise with $1.1 trillion in home equity gained since April 2009.

Meanwhile, data in the scorecard show that the recovery of the housing market remains fragile; with some measures suggesting recovery will take place over time. For example, in May, sales of new and existing sales dropped after the expiration of the tax credit, and the supply of homes on and off the market remains near all-time highs; it will take time to work through this large inventory.

Complete Housing Scorecard available by clicking here:


5 Real Estate Scams To Be Aware Of

This is of more immediate interest to Realtors than to non-Realtors, but is a fascinating look into the schemes unscrupulous people are able to come up with....

Don't be duped by mortgage fraud. Here are a few common scams and the red flags you should look for in a transaction.
By Melissa Dittmann Tracey
August 2010

Mortgage fraud is pervasive: An estimated $4 billion to $6 billion in annual losses result from mortgage fraud, according to FBI reports. “An entire community can be damaged by mortgage fraud,” says Rachel Dollar, a lawyer from Santa Rosa, Calif., and editor of the Mortgage Fraud Blog. Mortgage fraud can lead to a spike in foreclosures, home values plummeting, and lenders raising their rates and fees to recover losses.
The crimes are often complex, involving several parties and occurring over multiple transactions. To protect you and your clients, educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. You can start by reviewing these five scams, and then test your knowledge by taking our Mortgage Fraud Quiz.

1. The Foreclosure Rescue Scheme

The Scam: “Rescuers” promise cash-strapped home owners that they can save their home from foreclosure. The rescue, which involves paying upfront fees, can take multiple forms, such as the perpetrator obtaining a new loan on behalf of the owner or by having the owner sign over the home’s deed and then rent the home until they can repurchase it. Eventually, the home owner loses the home, either to foreclosure or the fictitious rescue company.

Red Flags: With foreclosure rescue programs, borrowers are often advised to sign over the title of their house to a third party, become renters of their home, not contact their lender, or send mortgage payments to a third party, according to Fannie Mae, which provides fact sheets on mortgage fraud.

2. Loan Documentation Fraud

The Scam: This fraud involves numerous schemes in which a borrower provides inaccurate financial information — such as about their income, assets, and liabilities — or employment status in order to qualify for a loan with lower rates and more favorable terms. Occupancy fraud is one growing area: Borrowers say they plan to live in the property when they actually intend to rent it.
Red Flags: Documentation may raise suspicion if the employer’s address is shown as a post office box, accumulation of assets compared to the person’s income appears too high or low, the new house is too small to accommodate occupants, the person has no credit history, or the application is unsigned or undated, according to Fannie Mae.

3. Appraisal Fraud

The Scam: A faulty appraisal — saying a property is worth more than what it really is — is connected to many types of mortgage fraud. It entails manipulating or overstating comparables, market values, or property characteristics in order to obtain a higher appraisal. The higher property appraisal, which generates false equity, is done by falsifying an appraisal document or using an appraiser accomplice to obtain the higher value.

Red Flags: Be skeptical of appraisals that are dated prior to the sales contract, list comparable sales that do not contain similarities to the property or are outside the neighborhood, the owner is not the seller listed on the contract or the title, or a third party participating in the transaction orders the appraisal, Freddie Mac warns.

4. Illegal Property Flipping

The Scam: This entails purchasing properties and reselling them at inflated prices. These scams usually involve faulty appraisals and inaccurate loan documents. The property is then refinanced or resold immediately after purchase for an inflated value. The home is purchased at a higher price, often by straw buyers working with the “flipper,” and eventually falls into foreclosure.

Red Flags: Some key things to look for are rapid refinancing of a property; the seller recently having acquired the title or acquiring the title concurrent with the transaction; an appraisal that comes in too high; a property that was recently in foreclosure being purchased at a much lower price than its sales price; or the owner listed on the appraisal and title not matching the seller on the sales contract, according to Fannie Mae.

5. Short Sales Schemes
The Scam: Borrowers owe more than the current value of their home so they fake financial hardship and no longer make their mortgage payments. An accomplice of the borrower then submits a low offer to purchase the property in a short sale agreement. The lender agrees to the short sale, unaware that it was premeditated. The property, after being purchased at the reduced price, is then often resold at the home’s actual value for profit.

Red Flags: The borrower suddenly defaults on the mortgage with no workout discussions with the lender, an immediate offer is made to a lender at a short sale price, the short sale offer is less than current market value, or a cash back is offered at closing to the delinquent borrower (disguised as “repairs” or other payouts, for example) and is not disclosed to the lender, according to Fannie Mae.

You can report instances of suspected mortgage fraud to Stopfraud.gov.

Melissa Dittmann Tracey is the multimedia Web producer of REALTOR® magazine. She can be reached at mtracey@realtors.org.


Georgetown Stats - week of July 12 - 18

According to the MRIS (Multiple Regional Information Systems, Inc), the following real estate transactions have taken place in Georgetown real estate during the week July 12 -18.

7 new listings: 5 Single Family (SF) ($1,425,000 - $5,995,000) and 2 Condo/Co-op (C/C) ($581,000 - $588,885)

2 properties came under contract: 2 SF ($949,000 - $1,495,000) and 0 C/C
5 properties went to closing during this time frame: 3 SF ($1,475,000 - $2,300,000) and 2 C/C ($399,000 - $539,000)


Frugal Tips for Making a Home More Appealing

I just ran across this article from Bankrate.com, and like the suggestions it gives....

Homeowners who want to sell but don’t have a lot of cash to spruce up their properties might consider these tips from Bankrate.com for upgrading a property without spending a fortune.
 Polish up the kitchen. Add new cabinet door handles, replace lighting and update the faucet set. Unless the cabinets are mica, give them a fresh coat of paint. Order new doors for kitchen appliances.

Tidy up the bath. Replace the toilet seat. Clean up the floor with vinyl tiles or sheet vinyl applied over the old floor. Re-grout the tub and, if the tub is dingy, add a new prefabricated tub and shower surround.

Paint the walls.

Add closet systems to all the bedrooms, pantry, and entry closets.

Hire a plumber and an electrician to fix anything that is loose or that leaks.

Clean the carpets or, if they are worn, cover them with area rugs.

Replace ceiling lights with inexpensive but attractive fixtures.

Refinish or repaint the front door and replace the hardware.

Mow the lawn, edge the sidewalks, mulch all the beds and put two big planters at either side of the front door.

Source: Bankrate.com (07/14/2010)


Only Top 2 percent will pay new "Sales Tax" on Homes

A big piece of legislation like the health care reform act understandably sparks a lot of questions. The massive law, officially known as the Patient Protection and Affordable Care Act, was signed into law by President Obama in March but it will take some time for the American public to understand the nature of the changes.

The law includes provisions about how the government will pay for health care services, one of which is a “sales tax” on real estate. It’s important to understand that, while this tax does exist, it’s unlikely to affect most of us. In fact, The Tax Foundation estimates that only the top-earning two percent of families in this country are likely to be impacted at all.

• The 3.8 percent tax on profits from the sale of investments, which includes real estate, applies only to individuals who make more than $200,000 per year, or married couples filing jointly who earn more than $250,000 per year.

• For those who make more than the cut-off, the tax won’t be applied to the first $250,000 in profit from the sale of a personal residence—or $500,000 if a married couple sells their home.

• The exclusion for the first $250,000 in profit (or $500,000 for a married couple) does not, however, apply to vacation homes or rental properties. Those properties—only for those who exceed the income limitations—will be subject to the tax.

• This new rule does not take effect until January 1, 2013.


Georgetown Stats - week of July 5 - 11

According to the MRIS (Multiple Regional Information Systems, Inc), the following real estate transactions have taken place in Georgetown real estate during the week July 5-11.

13 new listings: 8 Single Family (SF) ($949,000 - $2,495,000) and 5 Condo/Co-op (C/C) ($349,000 - $950,000)

3 properties came under contract: 1 SF ($1,045,000) and 2 C/C ($399,000 - $2,100,000)

3 properties went to closing during this time frame: 3 SF ($950,000 - $1,269,000) and 0 C/C


Georgetown Stats - week of June 28 - July 4

According to the MRIS (Multiple Regional Information Systems, Inc), the following real estate transactions have taken place in Georgetown real estate during the week 6/28-July 4.

1 new listing: 0 Single Family (SF) and 1 Condo/Co-op (C/C) ($950,000)

2 properties came under contract: 1 SF ($1,495,000) and 1 C/C ($674,900)

4 properties went to closing during this time frame: 2 SF ($649,000 - $1,299,000) and 2 C/C ($459,000 - $829,000)


Rocking before Rolling

A great deal of the success in selling a property is in the preparation for sale.  If one's eye is on "the sale" rather than the myriad details of preparation, one is likely to overlook necessary details and wind up without a sale, or at a price lower than desired. 

I'm reading a book by Judy Tillman titled "Stroke of Insight".  She is a brain scientest who had a massive stroke, and survived to write this very detailed book about that experience.  In describing the first few days after her stroke, she tells about her desire to recover physically, and on this particular day, her desire to simply sit up.  But before she can even think about sitting up, she has to learn to roll over.  And it takes every ounce of her energy and determination to rock back and forth to gain enough momemtum to roll over. 

Her conclusion is that if her goal had been sitting up, she would have been defeated immediately.  By setting a goal first to rock, and then second to roll, and then third to eventually sit up, she was able to accomplish one goal at a time...leading to sitting up finally.

So focus on "rocking" with your house, before "rolling" with it.


Jobs and Georgetown Housing

Thankfully we live in one of the most stable parts of the world with regard to jobs. That is one of the things which has kept us moving forward in the housing market in general. But the national drag on real estate has been significant as a result of job losses. That, in turn keeps a lid on our Georgetown market. We aren't "hurting" as in the quote below, but it reinforces the concept that while all real estate is local, we are connected globally.

"....many analysts are now predicting that employment won’t revive significantly until 2011. This doesn’t bode well for the immediate recovery of the housing market. "If you're looking for a silver lining in housing, you aren't going to find it here," Mike Larson of Weiss Research said in a report.

"The overall economy is rolling over, consumer confidence is slumping, and, most importantly, we just aren't creating jobs," Larson added. "With so many Americans unemployed or underemployed, the housing market is going to keep hurting."

Source: U.S. News & World Report, Luke Mullins (07/01/2010)

Location, Location, Location.....and Walkability

We all know that location is key to achieving the best possible price for a property. But only recently have we really begun focusing in on the "walkability" of the area in which the property resides. This is good news for DC, including Georgetown. We've always been walkers here, but it's good to know that others are noticing this amenity. Nancy Keates in the WSJ says, "The increasing interest among Americans in walkability is spawning a change in attitude about the desirability of not only urban areas, but also suburbs — both old and new — that have nearby amenities that can be reached on foot.

Having amenities within walking distance can boost the value of a home as much as $3,000, according to one study. Another found that “location efficiency,” a measure of transportation costs, affected the number of foreclosures in a neighborhood. "

Source: The Wall Street Journal, Nancy Keates (07/02/2010)