Private Mortgage Insurance Backlash

In the old days if you got approved for a loan at the bank for a home mortgage, the private mortgage insurance was an automatic. The private mortgage insurance (PMI) was a protection policy the banks required if you were putting less than 20% down. It would insure the first 20% of the loan so the banks would feel safe in loaning you the money.

This has worked very well for decades to keep the whole system moving. The PMI companies have been making tons and tons of money from you and me on all our home mortgages which we did not default on.

Suddenly because of the banking industry screw up, the PMI companies have displayed a “knee-jerk” policy. You know the concept of the pendulum swing? Well, they are at the extreme right with over-critiquing every application that crosses their desk! Not only is it adding weeks on to the process, but they are turning down solid deals for insignificant reasons!

I could go on and on about this whole craziness going on in the home mortgage process, but I think I have said enough. If you have had a problem with the PMI companies with your home mortgage process, tell me about it.

How much is your Home Worth?

Whether you are selling or buying or refinancing or paying taxes, it’s important to know how much your home is worth.

Many people will tell me what their tax assessment is and think that it represents their home’s worth. Others will measure their home’s worth by comparing it with homes that are on the market or even worse, homes that have expired on the market.

The value your home has is never a fixed value. It is constantly changing with the economy. The interest rates affect it, the world economy affects it, the local economy affects it, and the real estate market affects.

Fortunately for us that live in Rochester, our home values have increased each year for the past 30 years that I have been in the real estate business until 2008 when they dropped slightly, about 1-3%.

What Realtors do to determine your home’s value is to do a CMA, comparative market analysis, which is a snapshot in time of your home. It is arrived at by a careful review of the recent sold homes that are similar to your home in square footage and features.

Usually we also have to make some additions or subtractions for features present or absent in the sold homes as they are compared to your home. This is a subjective valuation by the Realtor doing the CMA. Because of this subjective value, you could get different values for your home if you were to have several Realtors do a CMA for you.

This is why it is important for sellers who are interviewing several agents for listing their home that you don’t want to make your decision based on the highest price received from an agent, because they could be too high in their subjective additions. You need to look at the agent’s years in the business, experience, credentials, and marketing plan.

So if you would like to know you home’s worth, just call me or a Realtor in your area and we will be happy to meet with you and work up a CMA on your home.

America’s Birthday!

Woke up this morning thinking about the significance of today in the history of our country and wanted to expound on it a little further!

July 4th is a day most Americans stop what they are doing for a day and take time to celebrate with family and friends. I think we all spend some time during the day thinking about the freedoms we have and the great country we live in!

Throughout our 200+ years many people have stepped up to serve, protect and lead our great nation through adversity and strife. Many of my relatives have served in the armed forces in each of the wars and strifes we have been involved in to insure freedom around the world. I am thankful to them for representing our family to keep America strong, safe and secure.

Today as I relax from work, which isn’t very often (just ask my wife), I am going to be thankful to be living in this country and thankful for everyone who has had a part in getting our wonderful nation to this point in history. So as we celebrate this Independence Day today, join with me and reflect on our heritage.

God Bless America!

The Reality of a Short Sale!

Over the past ten days I have been working with a property that is heading towards foreclosure. To sell it, the price will need to be less than the outstanding loan balance. This is called a short sale because it will be short of funds at closing to pay the loan balance and the closing expenses.

It is obvious to everyone that there is tremendous value in this property at the listed price which is below both the assessment value and the market value. So why is it, when we finally got an offer on the property, and we got two offers, that they are another $15,000 under the listed price?

Quite simply, Human Nature!!! The buyers are in the driver’s seat and the banks need to sell the property at the price the market will bear out, however low it is! Unfortunately, they are not helping the property values for the neighborhood that they are moving into by putting a sales comparable on record at that price. But at least, they are taking a vacant property off the market by buying it and moving in.