Tuesday, April 11, 2017

FLIPPING A PROPERTIES - What you NEED to know!



The Department of Housing and Urban Development (HUD) issued new rules for FHA loans and house flipping

The full text of the new guidelines can be found in the new Single Family Housing Policy Handbook,  (page 145-146) which defines flipping as buying and selling a home at a significant profit in a short amount of time. In a nutshell, the rule states that buyers who wish to purchase a flipped property can't do so until 90 days have passed between when the seller purchased the property and when they are reselling. 

Guidelines for Property Flipping With an FHA Loan

Let’s start with a definition. In the new handbook, HUD defines house flipping as “the purchase and subsequent resale of a property in a short period of time.”
Time Restriction on Title Transfer: 90-Day Rule
In order for a home to be eligible for FHA financing, a certain amount of time must pass between (A) the date on which the seller acquired the title and (B) the sales contract execution date that will result in the FHA-backed mortgage loan. In other words, they will look at the length of time the investor or flipper holds the title, before transferring it to a buyer using an FHA loan.
In this context, the initial date of acquisition is when the investor or flipper acquired legal ownership of that home. That’s the first important date. The second important date occurs when the sales contract is signed and executed by “all parties intending to finance the property with an FHA-insured mortgage.”
The time between these two dates will determine whether or not an FHA loan can be used to purchase the flipped property. And this is where the all-important 90-day rule comes into play.
Generally speaking, a home that is resold 90 days or less after the first date of acquisition is not eligible for FHA mortgage financing.

Second Home Appraisal Required in Some Cases

In some flipping or quick-turnover scenarios, HUD will require a second appraisal on the home. Here again, the length of time between purchase and resale determines the course.
If the resale of a home occurs somewhere between 91 and 180 days after the seller acquired the property (and the resale price is 100% or more above the initial price paid), the lender must obtain a second home appraisal to determine the current market value.
According to the 12/30/16 recised handbook, if the second home appraisal shows a value that’s more than 5% higher than the first appraisal, the lesser of the two values will be used for FHA loan purposes.

Special Circumstances: Exceptions to the ‘No-Flip’ Rule

As with most FHA loan guidelines, there are a few exceptions to these flipping rules. For instance, the time restrictions mentioned above may not apply when:
  • The home is being purchased by an employer or relocation agency to relocate an employee.
  • The home is being resold by HUD, as part of its REO program for selling foreclosures.
  • The home is being sold by a government agency, a HUD-approved nonprofit agency, a state or federally-chartered financial institution, or a Government-Sponsored Enterprises (GSE) like Fannie Mae.
  • The home being sold was acquired through an inheritance.
  • The property falls within a Presidentially Declared Major Disaster Areas (PDMDA), and has been issued a notice of exception from HUD.
The exceptions listed above aren’t true house-flipping scenarios. They are unique circumstances. That means the 90-day rule for FHA purchases applies to nearly all home flipping situations.
The more troubling and longstanding rule effecting the warrantability of flipped properties comes from Fannie May's regulation of conventional loans. This rule focuses on the seller's profit: if it's more than 20% from sale price to sale price, the 90 day rule is enacted here too. 

CONVENTIONAL LOAN 90 DAY DEED RESTRICTION

Here what is important is the deed's recording date--as in when the investor's deed was recorded. This date marks the start of the 90 day count. Within the 90 days, the property can be sold for anything less than 120% of the investor's purchase price, and has nothing to do with repairs or improvements. On day 91 and on, the property can be sold for any amount. 

FHA'S 90 DAY FLIP RESTRICTION



The same timing applies here: the 90 day clock starts with the transfer of title/deed record date when they initially purchased the property. From the transfer of title, 90 days must pass in order for a buyer to obtain an FHA loan. 

What does all of this mean? Short of finding the illusive cash buyer, investors will be waiting at least 90 days plus ~30 to 45 days for loans. My advice is to list the property when it's ready, and enter into an agreement with a buyer to execute a contract on day 91. This is really the only way to make the math amount to the 91 + 30 to 45, instead of potentially a whole lot more. 

Wednesday, March 29, 2017

NEW LISTING N BROOKFIELD!!

4725 SHASTA DR.  BROOKFIELD


Beautiful slate foyer entrance with handicapped accessible home. Deck off sunken Familyroom with natural FP & hydrolic lift to raise wheelchair.  PARTIALLY FINISHED BASEMENT.  HARDWOOD FLOORS! CARPET IN LIVINGROOM CAN BE REMOVED EASILY WITH WOOD TILES UNDERNEATH. 1YR old roof & 9YR old furnace. Included all appliances & swingset. Great location in quite subdivision.  COME TAKE A LOOK BEFORE IT'S SOLD!!! MORE INFORMATION CAN BE FOUND AT http://www.kathyknightremax.com
SET UP AN APPOINTMENT WITH KATHY KNIGHT: KKSELLZHOMES@GMAIL.COM




DO you need to sell before you can purchase??


IF YOU ARE ONE OF THE RARE HOMEOWNERS WITH THE FINANCIAL ABILITY TO PAY TWO MORTGAGES AT ONCE, THEN THIS DOES NOT APPLY TO YOU!  BUYING A HOME BEFORE SELLING YOUR CURRENT HOME IS NOT REALLY AN OPTION. GIVEN THE FACT YOU NEED TO SELL YOUR CURRENT HOME TO PAY FOR A NEW ONE, YOU WILL NEED TO PREPARE YOURSELF FOR UNCERTAINTY.   THIS CAN BE A DAUNTING AND STRESSFUL TIME IN YOUR LIFE!  EVEN DOING EVERYTHING RIGHT, YOU MAY FIND YOURSELF IN LIMBO FOR A SHORT PERIOD OF TIME. TAKE HEART, THOUGH. MOST HOMEOWNERS ARE ABLE TO SELL THEIR HOMES, PURCHASE A NEW HOME AND MOVE BEFORE EVER NEEDING TO FIND TEMPORARY HOUSING.  IF YOU WISH TO BUILD A NEW HOME, THEN THIS MAY NOT APPLY.

THE FIRST STEP IS TO SPEAK TO A REALTOR



Find a realtor!  There are so many ways to find a realtor these days!  Looking up

realtors in your area by googling, replying to postccard/flyers received, going to

various local realtor sites like Remax.com, open houses, or buyer sites like
 realtor.com, zillow, trulia, etc..  I would be happy to help anyone in this 

situation if your located in south eastern Wisconsin preferably in waukesha, 

Jefferson or Dodge County.  Be honest with your realtor about your finances!   

You may not be aware of the possibility that you could be facing a short sale!


Knowing your financial situation is pertainent!
For many you still need to finance your home purchase. So your purchase will need to be contingent on your home selling.  Your realtor will explain this process to you.  Contact a lender for a pre-approval.  Make sure your pre-approval states whether it is necessary or not to sell your current home to be able to purchase a new one.  Your loan officer will be able to give you all the options available to you with financing.  

Knowing the process!

Speaking to a realtor about your situation is the key to a smooth transaction.  

WHAT ARE YOUR OPTIONS WHEN SELLING AND BUYING A HOME AT THE SAME TIME

When you are selling and buying a home at the same time there is certainly a balancing act to be achieved.  Of course everybody would love to sell their home and move into a new one on the same day.  Here are some options to consider if you are looking to simultaneously buy and sell a home.

FINANCE BOTH HOMES

For very few carrying two mortgages can certainly provide the easiest route to buy and sell at the same time. This allows you to find your home and close on it, then, sell your home after you have secured new housing.  Of course this means you need to qualify for your new mortgage while carrying the mortgage on your previous home.  This option is only for a select few.
You may also need the cash in your old house for the down payment on your new home. Maybe you have enough equity and enough credit to get a home equity line of credit for you to tap into your current homes equity.  While this is the easiest option it is probably not a reality for many homeowners.  Keep in mind, the home equity loan must be paid off when the house closes!  Not to mention all the closing costs involved.
CONTINGENCIES
This is the reality for most home owners!  Selling and buying a home simultaneously can be done with real estate contingencies written into the purchase contract   When you put a home under agreement it will be contingent on selling your current home.  If the contingencies don”t fall into place you are not obligated to buy or sell with no recourse to you.  This is the only option for most but beware in a seller market, your house could sell before you can find the house you want thus throwing you out to find temporary living arrangements. Same true in a buyer's market but just the opposite.  You may find plenty of houses to buy but your home sale contingency can find you loosing the house as another buyer already wants it and has no home sale contingency.  This is common when you are down sizing and amongst the first time home buyer market. 

 FIND ALTERNATIVE LIVING ARRANGEMENTS FOR THE INTERIM

Another option that is available is to get your home sold first and have alternative living arrangements available for an interim period while you look for and get a home under agreement.  This certainly reduces the stress of getting your home sold and buying a new one on the same day. This may be the best option when you can not find a house on the market that you want to buy.
Living arrangements can be a family member, short term rental or a residence hotel.  Remember if you are motivated to buy it will only be temporary.  Several months at best so don't get locked into a year lease unless you wish to wait another year for the right weather conditions for moving or disrupting the kids schooling options.
This option will allow you to negotiate the best deals on the sale of your home and the purchase of a new home.  The downside is you will most likely have to pay a mover twice and possible storage of most of your items while you search for a new home.

FINAL THOUGHT ON SELLING AND BUYING A HOME AT THE SAME TIME!


Of course it can be stressful, especially when children and pets are involved.  But homeowners do it everyday and as real estate agents we are adept in walking our clients through the process.  Just go into it prepared of what is ahead of you. 

When you are buying and selling simultaneously, it is probably wise to have a plan A and a plan B.  There are so many moving parts and variables it is wise to have a back up option.

Make sure to discuss with your realtor the market.  You need to know if your home is going to sell quickly or perhaps in a slower market in several months.  Your realtor will know based on the price you want to sell it for, if it WILL SELL and how long it may take. Pricing higher then the market analysis is not advisable.

FINALLY make sure your home is ready to sell!  Decluter, paint and rid the home of smells!  Pet smells and smoking smells are the 2 biggest turn offs!  Most people will walk away!

Call/text or email me if your in this predicament and I would be happy to give you a FREE market analysis!

Kathy Knight

Remax Realty Center
kathyknightremax.com
kksellzhomes@gmail.com
920-397-0769

Friday, March 24, 2017

Selling Your House? Better Prepare for the Home Inspection

Selling Your House? Better Prepare for the Home Inspection
| Mar 14, 2017
home-inspector-under-houseSLRadcliffe/iStock
You’ve got a contract on your home for sale—congratulations! But before you pop the cork on the champagne, you’ve got to go through an ordeal that could make or break that sweet deal: a home inspection.
The home inspection is a contingency written into most offers, meaning that if the buyers aren’t happy with the result, they can cancel the sale without losing their earnest money deposit, or reopen negotiations and ask for a price reduction.
So it’s important to prepare yourself and your home for this important step of the process. How? Hey, we’re glad you asked! Let’s start at the beginning.
Related Articles
Will there always be a home inspection?
If your buyers are planning to tear down your home and build their own dream house, you might feel a pang of regret, but at least you won’t need to worry about the quality and condition of your property. These buyers are trying to get the lowest price possible and, if they think a clean contract without an inspection contingency will make them an attractive buyer in a competitive market, they’ll often forgo an inspection contingency.
But most buyers who are planning to live in your home want to know what they’re getting into. They want to know which systems work, and which don’t. They want to know how much money they’ll need to plow into the purchase, and which items you, dear seller, are willing to fix or replace to seal the deal.
The results of home inspections can give buyers peace of mind, or a tool they can use to bargain down the price. In the worst case, people with buyer’s remorse will use results of a home inspection to back out of the deal without penalty.
Sound scary? Don’t fret just yet. That first home inspection will let you know everything that’s wrong with your home. Armed with that information, you can fix problems before the next buyer shows up, adjust the price to reflect necessary repairs, or simply have a ready response when the issue comes up again.
Inspectors will look at everything
A home inspection is no quick once-over. Inspectors have a 1,600-item checklist, according to the National Association of Home Inspectors. Yep, you read that right—1,600.
“If we can get to it, we’ll inspect it,” says Frank Lesh, executive director of the American Society of Home Inspectors.

Here are just some of the areas of the home your inspector is checking, and what a home inspector is looking for:
  • Grounds: Standing water, faulty grading, sick or dying trees and shrubs, crumbling paths and walls
  • Structure: Foundation integrity, rotting or out-of-plumb window and door frames
  • Roof: Defects in shingles, flashing, and fascia; loose and hanging gutters; defects in chimneys and skylights
  • Exterior: Cracks or rot; dents or bowing in vinyl; blistering or flaking paint; adequate clearing between siding and earth
  • Window, doors, trim: Rotting frames, peeling caulk, damaged glass
  • Interior rooms: Water-stained ceilings, adequate insulation, and sufficient heating vents
  • Kitchen: Proper venting, no leaks under the sink, and cabinet doors and drawers operate properly
  • Bathrooms: Toilets flush properly, showers spray, and tubs are securely fastened
  • Plumbing: Drains flow properly; water has proper temperature and pressure
  • Electrical: Proper electrical panels and working light switches and outlets
How can you prepare?
The home inspection isn’t a test that you need to study for. But there are some things you can do before a home inspection to make the process go more smoothly.
  • Clean and de-clutter your home: Yes, inspectors will look way beyond the superficial sparkle of a clean home. But you want to make sure they have easy access to attics, basements, and electrical panels—and aren’t tripping over your kids’ toys while trying to do their job. Think of it as an early start to your packing.
  • Get your paperwork together: You should create a file with documentation of all maintenance and repairs you’ve done on your home. If you’ve had an insurance claim on your house, keep those papers together, too, so you can prove that you took care of the problem.
  • Provide complete access to your home: Make sure you unlock gates and doors to a shed or garage that doesn’t have lockbox access.
You could consider getting a pre-inspection to eliminate any surprises; some sellers choose to hire their own inspector to give the house a once-over and point out any problems, so they can fix them before the buyer’s home inspector arrives on the scene.
But be careful with this tactic.
“It’s not a good idea,” says Bill Golden, an Atlanta-area real estate agent. “If you have five different inspectors inspect the home, you’ll get five different lists of items they’re concerned about. Just because your inspector didn’t have a problem with something doesn’t mean the buyer’s inspector won’t.”
More important, if your inspector points out a problem, you’re obligated to disclose it to buyers.
“This could be a potential turn-off to buyers,” Golden says.
Do yourself a favor, and leave
Unless you’re a glutton for punishment, give the inspector your cellphone number, grab your car keys, and go to a movie or out to lunch when the home inspector shows up. Your anxiety will only make everyone uncomfortable, which isn’t a productive atmosphere during an inspection.
“Inspectors and buyers are not at all comfortable with the seller being present during an inspection,” Golden says. “They need to be able to freely inspect and discuss any and everything they come across. You may think you are being helpful by being present, but you are not; you are impeding the process.”
And don’t play eager hostess. You don’t need to set out cookies and drinks; or provide ladders and other tools the inspector needs. He’ll bring his own.
Check your ego at your own door
Buying and selling a house is a competition: Sellers want to get the highest price, and buyers want the lowest. It’s not personal—it’s business. Remember that when a home inspector presents list of problems with your home as long as your arm.
“A home inspector’s job is to point out each and every deficiency and safety violation they see,” Golden says. “Arguing with the buyers about an inspector’s findings is not helpful.”
Keep your head in the game, and solve the problem with the buyer.
“It may be agreeing to fix an item, it may mean giving them some money toward a repair, or it may simply be providing documentation,” Golden says.
And that’s where an experienced real estate agent earns his or her commission. Agents know how to interpret inspection reports, which issues are vital to address, and which are red herrings designed to reopen price negotiations.
——
Watch: 3 Things That Can Sink Your Home Inspection



Amber Castonguay
Direct: 920.988.0048
Fax: 866.211.2826
www.AmbersHomeFinder.comhttp://www.ambershomefinder.com/blog/
http://ambercastonguay.blogspot.com

Oconomowoc, WI 53066
Office: 262-567-2455
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Thursday, March 2, 2017

NICEEE Waterloo Home- GREAT PRICE!!!

   HOMES ARE SELLING FAST!!  IT'S A GREAT TIME TO BUY WITH LOW INTERET RATES!!  EMAIL KATHY KNIGHT NOW TO FIND OUT MORE!!

LOOKING FOR THE PERFECT HOUSE!!!

      

 Have you been trying to find that affordable house on a cul du sac with a  fenced back yard to keep your kids and pets safe?  Look no further!  Enjoy this beautiful kitchen with plenty of room!


Relaxing by the fire!

Enjoy the hot tub!  This is included in the sale price so come take a look!

Tuesday, February 14, 2017

Read up on Heidi Buchberger w/ our office- What she LOVES about her job!

Happy Valentines Day to you all!!!
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Today I'm writing a blog on "What I love About My Job" as another fun holiday challenge between the agents at our RE/MAX Realty Center office!

It is nice to hear a personal experience in the home buying process that will show you WHY I really do LOVE my job as a Realtor at RE/MAX Realty Center in Oconomowoc, WI! 

Just last month, January 2017 I had the pleasure of helping two of my friends purchase their FIRST home together!! It was such a HAPPY day for them... here's a picture to prove it, look at the smiles on their faces!! 
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It gives a feeling of happiness right?? This is just ONE of the reasons I love my job, seeing people be happy, and making people happy !! That has always been a quality of mine, and I hear it often from others. 

They chose to work with me because of my knowledge of the real estate market, and knowledge of the entire home buying process. They looked to me for answers to their questions, and at one point Heather texted me and said "I am SO SORRY for all the questions..." and my response was "PLEASE don't be sorry, this IS my job, and what I love doing, I am the expert, not you! hehe,  I want you to ask me as many questions as possible so you understand everything!!" This is another reason I love my job, I like helping others understand the home buying process, even when this is not their forte. From a nurse, to a construction worker, both rely on me to teach them and help them with one of the biggest purchases of their life.. and I want to help, teach, and share my knowledge all the time!

These two were WONDERFUL to work with, they were very organized with requests from their mortgage lender, scheduling inspections, signing documents, and making sure they were involved as much as possible. Their communication was 100% on at all times!!! 

Today marks their first Valentines Day in their new home.... DO YOU FEEL THE LOVE!!?!?!


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I hope to help many other friends, family, and strangers, purchase or sell homes this year!!! I promise you won't be disappointed with my services!! 

Contact me for a great experience and knowledge of the process, 

Thanks for reading my blog today!



**photo credit-Heidi Buchberger, thank you for letting me share your story Wes & Heather!!