JIM GAMBLE & RUSS DuPLAIN-SERVICE PLUS TEAM

There's a home waiting for you in Northern Arizona!!

HOW TO PREVENT HOMEOWNER HEADACHES

As the mortgage and real estate industries face unprecedented times, homeowners could very well be left to pay the bills, literally. Mortgage companies are going out of business or declaring bankruptcy every day. When that happens, their assets can be frozen, which means they cannot transfer any funds, including the funds they owe on behalf of homeowners for hazard insurance (and other types of insurance) and real estate taxes.

Most homeowners do not receive confirmation of payment of insurance or real estate property taxes. The assumption among them is that they pay the monthly escrow amount and never need to consider those items. However, recent examples have shown that might not always be the case. There are a few simple steps homeowners can and should take to verify payment of their escrowed items.

The current market circumstances provide real estate professionals an opportunity to contact previous buyers as an advocate with valuable information. A simple phone call explaining the circumstances and proactive steps homeowners should take could seal your customer relationship for years to come.

Below are some specific best practices you can share with your buyers to help them be more knowledgeable homeowners and give them guidance if their mortgage company goes out of business.

Insurance

While the primary purpose of insurance is to protect the interests of the lender, having a lapse in hazard, flood, wind and other types of insurance could have a significant impact on homeowners, especially if they have equity built up in the home. If an insurance payment lapses, carriers will immediately cancel the insurance policy.

Homeowners should proactively monitor their policies. Most insurance companies provide policy information online. If not, the insurance agent should be able to access the information. Either way, it is easiest if homeowners have their policy numbers, but if they do not, insurers have other methods of locating the policy information. Using the Internet or a phone call, in less than five minutes, a homeowner can confirm whether the insurance premium has been paid.

If a homeowner finds out that a premium has not been paid, there are two options. The homeowner can contact the mortgage company directly regarding the payment or can request the insurance agent do it on his/her behalf. It is important to remind your homeowners to keep their policies’ expiration date in mind because once the policy expires, they will have no protection against losses.

If the insurance is not being paid and the mortgage company is not helpful, the individual can also contact the state Insurance Commissioner’s Office or other agencies that govern insurance. Homeowners should contact the office in the state where the property is located, regardless of where the mortgage company is located.

The best advice to give homeowners if the deadline is approaching for the insurance to be paid, and they fear it will not be paid or not paid on time, is that they make the payment, document it and then seek reimbursement from the mortgage company. This prevents the insurance from being cancelled.

In states like Florida and Louisiana that have experienced significant damage from hurricanes in recent years, it has become very difficult to get insurance. If a homeowner’s insurance is cancelled, it will be even more difficult to get a new policy as that person will be moved to a higher risk category due to the lack of payment. This means that if they can get a new policy, they will be paying more for it. This is just one more reason why it is important to remind your homeowners to monitor their insurance payments.

Real Estate Taxes

Real estate taxes are not as critical as insurance from a payment perspective because there is no threat of cancellation; however, if taxes are not paid, the homeowner will be assessed penalty fees as a result of the delinquency. Eventually, a tax certificate can be held against the property, and, as a last resort, the property could be auctioned to cover the delinquent tax bill. While this is a lengthy process, legal fees are incurred throughout each step for which the homeowner could be responsible. This becomes very costly. Plus, the longer the process takes, the more difficult it becomes to unwind.

Most tax authorities provide information online, so a good recommendation to your homeowners is to go online to confirm payment of real estate taxes. However, if the particular taxing authority does not provide this information online, homeowners can contact them via telephone. Suggest that they have their tax folio numbers, parcel numbers and/or legal descriptions available when calling.

Again, if a homeowner fears the taxes are not being paid, it is best to recommend that the individual pay the bill and keep record of the payment to seek reimbursement from the mortgage company. The reimbursement process is a common, well-established process with mortgage companies, and it should be rather painless as long as the homeowner has good documentation.

Principal Balances

It is common practice for mortgage companies to buy and sell loans. A typical 30-year mortgage could be owned by several different companies, and this is even more common today as many mortgage companies go out of business. When a loan is sold, the borrower will receive a letter with the change notification and new information on where to send the payment.

It is critical that the homeowner ensures the principal balance and escrow balance are correct when his/her loan is sold to another mortgage company. Point out to the homeowners that they should have received an amortization schedule with their closing documents. They should compare the outstanding principal balance that the mortgage company has to the principle balance on the amortization schedule to ensure its accuracy.

First-Time Buyers

When you are working with new buyers, it would be beneficial to recommend that they record the following information for their new home:

Tax folio number
Legal description
Homeowners insurance policy number

Also, they should keep copies of all this information. The originals should be kept in a safe spot; the copies should be kept in an easily accessible second location outside the home.

The good news is that due to the seriousness of delinquent payment for taxes and insurance, escrow accounts are governed by state and federal laws. Although very stressful and cumbersome for the homeowner, make your homeowners aware that the government will step in and take over the management of the escrow account if the mortgage company does not.

Acting as an advocate during this time could have lasting benefits for you and your business. This is just one more way for you to maintain contact with your homeowner and establish customer retention strategies for your business.

Sylvia Ponce is senior vice president of operations for Fidelity National Information Services’ Home buyers Financial Network (HFN). With more than 18 years experience in mortgage lending, she is responsible for internal and external management of all loan production operations. HFN enables real estate brokers to own and control their own mortgage companies. HFN manages the set up, staffing and licensing processes and then provides end-to-end mortgage fulfillment services for the in-house mortgage company.

For more information, visit www.fidelityinfoservices.com.

Staging Secrets That Sell

Preparing a home for sale requires a lot more than simply hiring a real estate professional. Staged homes sell faster and for a higher price than non-staged homes, translating to more money in commissions for you, happier clients and more business.

To sell your client’s home fastest and for the highest price, sellers must be prepared to de-clutter, re-light, scrub and neutralize their home.

Your primary goal is to sell a lifestyle. A staged home should allow the buyer to imagine themselves relaxing in the den with his children or entertaining his friends on the patio.

While professional home staging can be costly, it is possible to creatively and strategically stage a home for a minimal price. Here are some considerations:

1. Clutter control. A cluttered home appears smaller and gives the buyer the sense that there is not enough room in the house for all his belongings. If the den is packed with furniture the buyer will most likely not be able to visualize where his own furniture will fit into the room. A good place to begin is to count every item in a particular room and eliminate 50% of them. Storage companies can handle large and bulky furniture that your homeowner wants to keep for his new home. Also get rid of any house plants and depersonalize the rooms by removing pictures, dolls and toys.

Less appliances and accessories on the countertops allows potential buyers to visually expand the kitchen, making the countertops appear large and clean. All of the dishes and appliances should be in their proper places. To add some life to an old kitchen table, buy some beautiful table linens and place fresh flowers in the middle.

2. Lights, camera, action. Many homeowners forget to consider that a lot of the showings are going to be at night around the buyers’ work schedule. An inexpensive way to give an updated look to an older home is to replace older light fixtures with nickel and chrome. Add small lamps and plug-in nightlights to show warm pools of light that will make the home feel comfortable. Focus on the kitchen, dining room and bathrooms. If replacing light fixtures is too expensive for your client, change all of existing light bulbs for the highest wattage allowed. If the home is shown during the day, embrace natural sunlight by opening all of the drapes and blinds.

3. Scrub until it sparkles. The house may be old, but it can still sparkle. Clean the house from top to bottom. Wash the windows inside and out, have the carpet cleaned and remove any sign of pets. Scrub the kitchen and bathrooms until they shine. Clean the stovetop with a degreaser and remove any stains or discoloration on the countertops. Keep the floors immaculate throughout the listing period. Add a new shower curtain, fresh flowers or put your client’s best towels out in all of the bathrooms. If there aren’t attractive containers for the bathroom supplies place them in a drawer.

4. Neutralize the home. If the walls, ceilings or trim of the house are painted in contrasting bold colors, consider having the seller repaint with crisp neutral colors to appeal to the greatest number of buyers. Keep adjoining rooms in the same color palette to make the home appear larger.

Make sure that when you’re staging a home you look at its features as objectively as possible. Maximize what’s structurally attractive and buy, borrow or rent what you need to present the best first impression. The buyer is looking for a home he can imagine living his lifestyle in so highlight the positive selling features of the home to advertise what the house has to offer.

Most Profitable Renovations

Renovation costs are shooting higher and homeowners are getting a lot less bang for their remodeling bucks, according to a report by the National Association of Realtors (NAR) and Remodeling Magazine.

Last year, for example, adding a master bedroom suite to a house cost an average of $75,959 nationwide and boosted the home's resale value by $64,419 - that's 84.8% of the cost recouped. The same job this year cost a lot more - $94,331 - and returned just $68,458, or 72.6%.

The Harvard University Joint Center for Housing Studies estimates that Americans will spend nearly $160 billion for home remodeling projects over the next 12 months.

Many costs associated with remodeling have spiked. Last year, the national average for a midrange kitchen renovation was $43,862, according to NAR. But this year, that average cost had leaped to $54,241. Hard to make up that difference when NAR reported that home prices have actually fallen in the past 12 months.

A year ago, many remodeling jobs returned 80% of their cost or more when the owner sold the house. Some of the most profitable renovations, such as an upscale residing, actually paid off more - 103.6% - than they cost.

Other profitable renovations included midrange kitchen remodelings, which paid off 91.7%, and window replacement, which paid off 89.6%.

This year, an upscale residing only recoups 88% of its average cost of $13,499 (up from $10,393 12 months ago). That still made it the most profitable renovation.

A midrange kitchen remodeling returns 80.4% of its average $54,421 cost and a window replacement earns 85.3% of it $11,040 cost.

The least profitable renovation, again this year, is a home office remodel. It recoups only 63.4% of its cost.

There are lots of regional differences in the benefits of remodeling jobs. A midrange bathroom renovation pays off a lot more on the Pacific Coast (103.2%) than it does in the Plains states (74.8%) or the Great Lakes state (71.8%).

Part of the difference stems from the generally depressed home resale prices in the Midwest compared with the elevated home prices on the Pacific Coast.

In the Middle Atlantic states a vinyl siding replacement returns 92.3% of its cost, well above the national average of 87.2%, while in the Southwest the same job returns just 80.9% of the cost.

Generally, projects done in the Pacific states and the Atlantic South return a greater percentage of their costs than the other regions of the country.

Overall though, NAR president, Pat Vredevoogd Combs cautions homeowners to take the data with a grain of salt.

"Many factors affect a home's value," she said, "and, consequently, the resale value of any given remodeling project.”

Source: CNN.com .

Watch this space. More articles coming soon!

Real Estate Marketing & Listing Syndication By Point2
Search Homes for Sale With Point2