Richard Foster, RRG, CREN, ABR, ABRM

I think that it is too easy to get a license to sell Real Estate.

Here in Nevada it is simple

• 90 hours of “pre-license” class room training
• State Test (40 questions)
• National Test (80 questions)
• Finger Printing and background check

Once you have your license there is one additional requirement.

• 30 Hours of “post-license” training

So for a total of 120 hours of training you can handle a transaction that is the most important thing that most people will ever do… Let’s think about that, we are talking about 120 hours for what is here an average of $250,000 transaction compared to lets see…

• Cosmetology -1800 hours
  • The study or art of cosmetics and their use
• Hairdesigner-1200 hours
  • The art of cutting hair, Hair Stylists can also be called designers
• Manicuring-500 hours –
  • A cosmetic treatment of the fingernails, including shaping and polishing
• Electrology-500 hours –
  • The practice of hair removal through the use of electrified needles

What does it say to you when someone who can:

· do a bad make up job

· give you a bad hair cut

· cut your nails wrong

· leave some hair on your body

All these people need a minimum of more then four times the training then someone who can take a quarter of a million dollars from you? Does that sound right?

Too a many renters are being evicted with no notice because the home they are in has been foreclosed on. As a renter you need to be educated and you need to stay on top of it each month. It only takes a few months from the first filing of the Breach before you get that knock on the door and told you have three days to get out. As a renter you have little if any legal standing if the home you are renting is foreclosed and you will be kicked out soon.

SO WHAT CAN I DO???

Look up your address at the local tax assessors office to obtain the APN (Assessors Parcel Number) it will be a number that looks like this 176-17-112-028... Once you have that you can go to the county recorder and look at the record of filings against the property. There are a few key words you are looking for:

• Notice of Default
• Breach
• Notice of Trustees Sale

If you see any of these recorded against the property your home is in foreclosure and you need to protect yourself. Now most owners will all say the same thing... "We are working with the bank and will bring it current, don't worry"... If the home is in default you MUST WORRY.

DOES THIS MEAN I CAN STOP PAYING THE RENT???

NO... The owner of the home has the right to collect rent right up until he (or she) are no longer the owner(s). But you can start to look for a new place to live and prepare to move on your schedule, not the banks.

NOTE: If your area does not have web access to these records you can call or visit your local recorders office to get this information, but DO NOT DELAY, time is not on your side.

I just wrote a blog on taking the Short Sale or Not and I got to thinking… Do agents really understand and disclose to their clients what Short Sales are doing to the market???

THEY ARE KILLING IT!!!

Look at this:

• Homes for sale by the average person that can sell it for at least what it is worth and still pay off the loans (if any) are Priced at or above the current market level. Most sellers in this situation still are attempting to maximize the profits and do not care what others think the home s worth and price too high.
• Foreclosed homes are prices at or below market. The banks understand that they need to price it to sell while still maximizing the amount returned and lower the actual amount of the loses.
• Short Sales are for the large part priced well below real market. These sellers are desperate and just want it sold. The problem is that there need to sell does not drive what the home is valued at.

Now consider this, the market is driven by pricing, to compete sellers are all lowering their prices, lower and lower and lower to make the sale. The problem is less then 10% of short sales happen yet they are the bottom of the market. What does it say when the bottom price home, that everyone else is never going to close escrow?

Look at it this way, here are a list of homes in ½ mile of a home that are for sale

• 250,000
• 249,900
• 245,000
• 240,000
• 239,900
• 225,000
• 220,000
• 199,999

Now the next listing comes along and wants to price, where do you think the price is going to be??? What would you recommend to your client? Now do the homework and see what the driving force is behind the sale.

• 250,000 – Regular Sale
• 249,900 – Regular Sale
• 245,000 – Regular Sale
• 240,000 – Foreclosure
• 239,900 – Foreclosure
• 225,000 – Short Sale
• 220,000 – Short Sale
• 199,999 – Short Sale

SHORT SALES ARE DRIVING THE MARKET LOWER

Too many agents focus on your pre-approved loan purchase amount. Most agents see you are approved for up to $250,000 with 20% down payment... Cool...Well, maybe not so cool if you don't take it to the next step. Your agent really needs to know much more:

First a few Terms

• SID = Special Improvement District, an additional tax from bonds sold to build your area's infrastructure.

• LID = Limited Improvement District, an additional tax from bonds sold to build your area's infrastructure.

• DTI = Debt To Income ratio, this is the percent your house payment represents of your gross income.

• P&I = Principle and Interest, This is that actual loan payment to the bank

• PITI = Principle, Interest, Taxes, and Insurance (what some agents consider the full payment

• PITIAS = Principle, Interest, Taxes, Insurance, Association, Special Payments (like SID/LID)...

  In other words the TOTAL PAYMENT

OK, here is the information you need to make sure you can really afford the home purchase

1. What is the maximum approved payment?
   1. The maximum payment is figured using your DTI, it does not matter how cheap or expensive the home is, if the payment is right you ca get the home, if not, forget it and you have just wasted your time.
2. What is the interest rate used to figure the amount.
3. What Down Payment is required?
4. What extras went in to that calculation and do the count against your DTI?
   1. Taxes
   2. Home Owners Association Fees
   3. Insurance (including the need for flood insurance)
   4. SID or LID

5. What bills (if any) need to be paid off to obtain the loan?
   1. If the barrower pays off some bills, will there payment improve with better interest rates or the ability to buy a better home?

Why is all this a big deal? Does your agent have a clue??? Lets look…

Pre Approved for a Purchase of $250,000 with 20% down Payment and a P&I (Principle and Interest) payment of $1264 a month
Example 1		Example 2
Able to Purchase	MAYBE	Able to Purchase	YES
Price P&I PITIA	$250,000 1264.00 Not Known	Price P&I PITIA	$250,000 1264.00 1598.97
Insurance HOA Taxes SID/LID	Not Known Not Known Not Known Not Known	Insurance HOA Taxes SID/LID	50.00 50.00 234.37 None
Example 3		Example 4
Able to Purchase	NO	Able to Purchase	YES
Price P&I PITIA	$250,000 1264.00 1698.97	Price P&I PITIA	$260,000 1314.70 1598.45
Insurance HOA Taxes SID/LID	60.00 65.00 234.37 75.00	Insurance HOA Taxes SID/LID	50.00 50.00 183.75 None

As you can see from the examples above, knowing all the details will make it possible to know if you can get the loan. In fact knowing all the details can make it possible for you to maybe even buy MORE HOUSE (as in example 4 because of a lower tax rate, you were able to buy $10,000 more of a house).

Chose your agent well...

CASH FOR KEYS is a term used by REO companies and agents for the practice of offering money to turn over a foreclosed property in good shape and without the expense of the eviction process. The benefits to the lender is that the departing occupants (either prior owner or renters) tend to leave the home in a much more marketable situation and the appliances are not stolen. The benefit to the occupants is that they get to make the move in a slower more controlled way. So the question is so what’s the catch??? There is none, you just have to make sure that the home is clean (swept and vacuumed) and all trash is removed. Depending on the lender that foreclosed you can even get a couple weeks and be given up to a couple thousand dollars. The secret is tell the agent for the bank NOTHING!!! The rule of thumb for negotiating is he (or she) who speaks first loses. Let the agent tell you what they are willing to do for you and then at least DOUBLE it. Most agents (even me) will make an offer that is best of my client, all you have to do is ask... But once you agree, do not try and change the terms. And sign the agreement or you get NOTHING. If you are in a foreclosure situation, make sure you ask a REALTOR in your area what the normal parctice is before you set a time to talk to the lender's agent.