Tag Archives: FHA

Will my Home Sale close on Schedule?

That’s the million dollar question these days.   Everyone needs to schedule their move.  Sellers have to have the movers and buyers have to have their funds to close.

What happens when the bank can’t get the papers done or there are still conditions to be met?  Closing is delayed.  And how many closings are delayed?  Actually, in the real world, about 50% to 60% of the loans close on time.  Others may be a day late, a week late or even several weeks late.

Who is responsible for charges incurred if a buyer does not close on the home on time?   Well, we’d like to say the buyer because 9 out of 10 times it is the buyer’s mtg company that delays the closing due to various reasons (buyer did not get paperwork to them in time, underwriting came up with new requirements, appraisal wasn’t ordered because buyer and seller were still negotiating repairs, etc.), but that is not always the case and here’s why:

IF a closing goes past the agreed upon date, neither party is obliged to close.  It is wise to get an amendment to the contract immediately upon knowledge that a closing will not take place as scheduled.  IF it is a seller’s market – the seller could demand that the buyer pay for holding costs of the home until the closing date.  IF it is a buyer’s market, the seller would probably not be negotiating from a position of strength in asking the buyer to pay.   In either case, without a signed amendment, the seller is perfectly within his right to sell the home to another party and buyer is perfectly within his right not to close (unless he had something to do with the closing delay such as failure to get documents to the mtg company in a timely fashion, etc.)



Color Psychology for Homes


            I frequently suggest that homeowners paint before placing their homes on the market. Don’t be offended!

I want my customers to understand “color psychology,” which focuses on color’s effect on human behavior and emotion. Since people’s reaction to color is immediate, color has a tremendous influence on the choices they make every day.

            Color choices are very personal and when selling your home, it’s critical to appeal to the greatest number of potential buyers. With so many people beginning their search for a home on the Internet today, your home and listing photos must stand out from your competition. Color is one very simple way to do this.

            Painting your house’s exterior before you put it on the market will give the biggest bang for your fix-up buck, as long as you are using colors that conform to the neighborhood’s decorating tastes.

            Colors affect human beings in many ways, and by using the principles of color psychology, you can make your home stand out from the competition, sell more quickly, and at a higher price. In short, the stimulus and effect of colors normally cross cultures. Blues will feel cool, reds and oranges feel warm. Deeper shades of color imply intimacy and serenity.

Your home’s exterior color is the first thing most potential homebuyers see when they drive up or inspect the property on the Web. The correct color may be the most powerful and cost effective design tool at your disposal.

What is “correct” these days? My research shows that homes painted in pale yellows with cream or beige accents have sold fastest during the past few years.

In general, lighter colors are favored for exterior as they make the property seem larger. Conversely, painting your sideboards with a darker color will make the house seem smaller, though dark colors can draw more attention to home’s details.

            For those painting an older home, you may want to consider historical accuracy, as this could be a big selling point as well.

            When choosing interior colors for the home, consider the purpose of each room. Kitchen and dining areas painted in “food colors” such as coffee browns, celery greens and scrambled-egg yellows will make the rooms feel more natural.

            Hallways are a great place to bring in the exterior colors for overall harmony.

According to Jeanette Fisher’s book Joy to the Home: Secrets of Interior Design Psychology, since, deeper shades of color imply intimacy and serenity, she recommends painting master bedrooms a medium shade of green or blue for warm selling seasons, and rouge red for cooler weather. Other bedrooms can be painted in creamy tones of green, blue, or a pale shell pink.

            For your bedroom and bathroom, cool colors can form a relaxing atmosphere with paint. Consider shades of blue, green or even lavender.

            Of course, common sense should help you with any color choices. You need to match other things in your home and keep a comfortable environment as well.
Call Me for more color tips and to get a no-nonsense review of your home!

Flood Insurance for Coastal and higher risk areas

A little known act which is only now rising to the attention of all of the U.S. coastal cities is now becoming a nightmare to homeowners. The Biggert-Waters flood insurance reform act of 2012 is now set to affect millions of homeowners from the coasts of Maine down to Florida through Texas and then over to the west coast.

This act appears to have the effect of raising insurance rates from $500 to $2500 to $10,000 and higher. In addition, the increased amount of homes drawn into the flood plains by raising the base flood elevation (BFE) in areas means that homes that did not previously require flood insurance may now require it or those that already required it are now placed in even higher risk categories – all of this with just the stroke of a pen – increasing the BFE.

The Biggert-Waters Act is first reforms began Oct. 1 and the first round of people affected are those with subsidized flood insurance.

For years, homeowners with subsidized insurance were allowed to pay lower rates because their homes were built before the original flood maps were adopted decades ago. Now, those with subsidized insurance on businesses, secondary homes, or homes that have flooded multiple times are seeing rates increase substantially.

Rates are also spiking for new purchases, dating back to July 2012. Thus, if you purchased a home prior to July 2012 that is your primary dwelling your rates could be grandfathered in. If you purchased a home in August of 2012, for example, you probably have already received your notice of rate increase. Grandfathering of current rates for those homeowners who purchased before July 2012 is also set to disappear in a future round of the reform act.

Donald Matter, former Mayor of Nassau Bay said that his rates could hit as high as $30,000 per year just for flood insurance on his $685,000 home.

Congress passed and President Obama signed the Biggert-Waters Flood Insurance Reform Act. It extends the National Flood Insurance Program (NFIP) for five years. It also calls for the Federal Emergency Management Agency (FEMA) and other agencies to make changes to the way in which the NFIP operates.

The act makes several major changes. Higher insurance premiums will be charged for homes and businesses below the Base Flood Elevation (BFE). Rates for some homes in high-risk areas will increase 25% of the newly established premium each year over the next four years starting in 2013. No discounts will be given to homeowners for properties below the BFE, even if they met the building code at the time they were built.  Older structures built before a community’s first flood map was issued are known as pre-FIRM buildings. The grandfather rule applies to homes that were built in compliance with the flood map that was in effect at the time the structure was built. Finally, subsidized insurance rates will be phased out for all properties except pre-FIRM primary residences that have not lost their qualification for the rate.

What does this mean to you?  Even more – what does this mean for the country?

If the Biggert-Waters act continued, homeowners would be driven from their homes in (pardon the pun) floods – leaving because they cannot pay the insurance rates. Foreclosures would rise and no one would be there to purchase those properties anywhere near the previous values.  Values along all coastal areas would plummet to land value where people could obtain the land and build structures that are higher than the current BFE.  Biggest losers?  Current homeowners, banks holding those mortgages, cities and businesses wherein those homes are located.

Will this really happen?  Well, this IS a government program and let’s see how the Post Office is doing. How about Social Security?  Freddie MAC? FannieMAE? Now let’s throw Obamacare in the mix – and, well – you see how this is going – all programs that are government run are failing or destined to fail.   FEMA is no different – another failed system.

In all actuality we will see increases in insurance rates for those on the coast.  Will it ultimately be $30,000 as Matter believes will happen for his home in Nassau Bay – leading to devastation across the country?  Very doubtful.  We will finally have some resolution that makes sense and keeps home values virtually intact.

Norman Frenk, M.B.A. is a Realtor at Better Homes & Gardens Real Estate – Gary Greene (www.SellThisPlacenow.com and www.BuyThisPlaceNow.com) and owner of Modern Home Designs (www.RedesignMyPlace.com)


How to Sell a House!

Still a tough market.

Words of wisdom:  Listen to your Realtor.  If he or she isn’t talking – get a new one.

Getting your home sold requires effort.  If you have your home on the market and there are no showings – there could be a number of things wrong. Price, condition (people see the photos online), poor marketing (poor photos), bad location or all of the above.

To get your home sold now for TOP DOLLAR, your home has to have “WOW” factor.  No “wow” factor and you’re just a plain Jane!

Granite, travertine, stainless appliances, iron stair railings, pendant lighting, paint that “pops”, exciting decor all sell homes.  Have one but not the other?  Probably not enough WoW to be considered.  How about your furniture?  Not up to par?  Then get new or vacate.  You’re not selling your furniture but neither are the new home builders.   They’ve got furniture and they didn’t put in the old stuff.

It costs to sell a home.  It may cost you even more if you don’t get everything done.  Reduce the price by $10,000 after 90 or 120 days?  Why not spend that up front and get the home sold NOW!

I can Help you!  We can get estimates for everything. We can install.  You’ll be on your way to selling your home in no time!  Improving your odds to sell is the smartest and best way to outsmart the competition.

Is it time for a Discount Broker?

Why not hire a discount broker?  One who charges less – in some cases, apparently a lot less.

This has been asked time and time again.   All agents are the same, right?  Then why not just put my home up for sale with a discount broker and sell and save?  After all, I’ve seen ads that say “We’ve saved our clients Thousands of $$ over conventional brokers..”

First, let’s show you the break down of how agencies get paid.

Let’s assume a $310,000 home sells for $300,000.00 and there is a 6% commission.   Usually there is the listing broker and the selling broker splitting the 6% (3% + 3%) equally, or $9,000.00 each

Would you want to offer less to the agent that has the buyer?  say just offer $3,000?  Maybe $6,000 or so?   Probably the buyer’s agent would not show your property.  You would lose out.    True – the buyer’s agent works on behalf of the buyer but is going to direct traffic to homes that will pay the “standard amount” of 3%.   Thus, cutting down on the buyer’s agent commission is dangerous.

That leaves the listing agent fee.  Your marketing money.

The discount broker as a listing agent would have to cut the amount of marketing to sell your home.

Is this a good idea?  MAYBE – if we are in a true Seller’s market.  In a true seller’s market “the buyers are going to come anyway” might be the thought.  Few homes for sale –  many buyers.   You may just put a “For Sale By Owner” sign up and you will be flooded with inquiries.

How do you know if you priced your home right?  Are you planning on calling a Realtor to use their “free” services (take advantage of their services without expectation to pay for any of it?).  Are you planning on taking on the risk of doing paperwork and disclosures in this litigious society?     You will probably find that the cost of the Realtor could be beneficial in the long run!

Additionally, a buyer looking to work with you directly may not be qualified.  Are you going to help them become qualified?   Is a buyer who is not working with a Realtor already very motivated? (95% of all buyers use Realtors when purchasing resale homes.  Buyers working with Realtors are usually qualified and are buyers and not lookers).

What about in a Buyer’s Market?   Lots of homes for sale – few buyers.  Should we skimp on the marketing?

We all know what happens to other companies when things are tough. They cut their advertising budgets and then fewer sales.  Cut some more. Even fewer sales.  Finally the company may have to close down.

Does it not make more sense to advertise MORE to attract the most possible buyers?

What does Sell This Place Now and Better Homes & Gardens – Gary Greene offer that discount brokers do not?

1) A large sales force.  City wide we have over 1,000 agents going to work for you.

2) Home in at least 79 different web sites with expanded photo coverage (look at Realtor.com  web site and compare number of photos offered by discount companies and the BH&G brand.

3) Bundled Services:  Mortgage, Sales, Title, Renovations all under one roof

4) Postcard mailers with your home on it mailed to thousands (with the price of postage now, this is quite expensive – but effective)

5) Known name in the industry.  It is important to have the leverage of the name brand when dealing with other agents, mortgage companies and relocation.

6) Worldwide relocation.  The BH&G network is worldwide.  With one of the largest arrays of corporate accounts feeding us sellers and buyers – we may have that right buyer for your home. Now with even more relocation buyers and sellers!  Better Homes & Gardens Real Estate Gary Greene is part of the world’s largest relocation network and works with employees from prestigious firms such as Shell Oil, Exxon-Mobil, the U.S. Military branches and many, many more!

7) Internal marketing departments.  At discount brokers, the one agent takes care of everything from planting the sign to running his/her own copies to carrying mail to the post office.  Additionally, most discount brokers are individuals themselves with no other staff.  We have an entire department dedicated to marketing!

Which one of these items would you like to cut?  The Relocation?  The Advertising?  The large Sales Force?  The Marketing Department?

The  TRUTH is:  More marketing money= more potential buyers attracted = more offers = higher sales price potential!


Norman Frenk and the Sell This Place Now team have the education, expertise, marketing plans and marketing dollars to get your home positioned correctely on the market and exposed to thousands of potential buyers.  Call to get your places sold now!

Short Sale Guidelines are Making a Difference

 The theory behind short sales seems simple enough: If a homeowner owes more money on a house than the house can sell for, and the homeowner is struggling to pay the mortgage, the lender will allow the house to be sold for less than is owed. For obvious reasons, lenders are not big fans of short sales and often make it a complicated process. In April 2010, The Home Affordable Alternatives Program (HAFA) released new guidelines designed to streamline the short-sale process and allow more delinquent homeowners to sell their homes and move on with their lives. In its first year, participating servicers initiated 12,266 HAFA agreements and completed 5,447 transactions. According to the National Association of Realtors, the share of distressed homes—bank-owned properties and pre-foreclosure short sales— in April 2011 dropped to 37% of total sales volume, down from 40% in March and an average of 39% over the first quarter. HAFA complements the Home Affordable Modification Program (HAMP), a loan modification program designed to reduce delinquent and at-risk borrowers’ monthly mortgage payments by providing alternatives for borrowers who don’t qualify for or don’t complete a trial modification. “[HAFA short-sale guidelines] are designed to help people who are unable to keep their home under the HAMP loan modification program,” said Jeff Lischer, managing director for regulatory policy for The National Association of Realtors. “Let’s say you can’t keep your property under HAMP, the next step is a short sale, which is better than a foreclosure.” It’s estimated that lenders lose about 40% of a property’s value on a foreclosure, whereas the figure is reduced to about 19% on a short sale. Moreover, the short sale is a graceful exit from the ownership, which is better for people’s credit scores. New rules also add incentives for the short-sale process. One incentive helps sellers relocate by providing them with $3,000 for moving expenses. A second incentive is for mortgage servicers, who receive $1,500 from the federal government for each completed short sale. Under new guidelines, homeowners can secure a short sale approval in advance from the bank representing a minimum net amount the bank will accept. Lenders participating in the HAFA program maintain the following requirements for homeowners considering short sale: The loan must be less than $729,750, made before Jan. 1, 2009, and the home must be the owner’s primary residence. Also, the homeowner must be delinquent and unable to pay the mortgage, and the homeowner’s mortgage payment must be more than 31% of his or her before-tax income.

Call Norman Frenk at 713.818.0829 today to get more information on short selling your home.

The 203k Mortgage


            Real estate consumers today can find ample value in distressed homes – properties that are under a foreclosure order or up for short sale. In many cases, however, “distressed” speaks more for the condition of the homes than their recent financial histories, as they’ve sat empty for extended periods and have been subject to vandalism and theft.

            Those considering homes in need of repair and renovation should consider a 203k mortgage, which enables homebuyers to finance both the acquisition and rehabilitation of the property with just one loan.

            “FHA 203k purchase loans are the perfect financing vehicle for homeowners seeking the value proposition offered by homes that require rehab,” said Norman Frenk, owner of SellThisPlaceNow.com and Realtor at Prudential Gary Greene Realtors. . “Home buyers’ ‘perfect’ home can be purchased in less than perfect condition with a single-close loan product that allows repairs and remodeling.”

            There are two types of 203k loans: the 203k streamline and the full 203k. The 203k streamline is the most popular among homebuyers and lenders.

            The maximum allowable in repairs is $35,000 under the 203k streamline and it does not allow any structural repairs to be done to the home, unless [the repairs are] a result of an unforeseen circumstance, The full 203k allows structural repairs and will allow the buyer to exceed the $35,000 in home repairs. Both loans allow up to $1,500 in pool repairs.

            Contractors chosen to perform repairs must be licensed, bonded and insured, and they usually must provide the lender with a resume and two client-reference letters.

            After the close of escrow is when all the rehabilitation work begins and funds usually aren’t released immediately so it’s important for the contractor to start work quickly. Typically, if they’ve been in business, they have existing relationships with vendors so they can order materials and begin work. If not, the project may take longer than anticipated.

            Since the 203k mortgage is based on the home’s potential value after repairs — not its existing value — you can be approved for a higher loan amount. The mortgages also carry long-term-fixed rates, are insured as soon as they fund, and include escrow accounts for the scheduled repairs.

            Loan amounts are capped according to local FHA limits. Only owner-occupied properties of one to four units qualify for 203k mortage financing; homes also must be at least one year old.  

Time for an Appraisal?

            One of the most important jobs for your real estate agent is to determine the value of your home by developing a Comparable Market Analysis, which will be used in pricing the home for the right amount.

            If your property isn’t attracting serious shoppers, your agent may recommend that you invest in an appraiser to get a second pricing opinion, as the appraiser will come in with an independent, unbiased opinion to help ensure your price is correct for the market.

            “An appraisal is important in today’s market especially, because it’s an objective and unbiased source of information,” says Michael H. Evans, president of Chico, Calif.-based Evans Appraisal Service Inc. “The appraiser is an independent professional who performs a service for a fee rather than for a commission and is therefore not as invested as others are who are making pricing decisions.”    

Appraisals allow for homeowners and buyers to establish “fair market value.” In addition, an appraisal allows a lender to know how much they can safely lend.

            “Credible opinions of value can help to stabilize the real estate market,” says Norman Frenk, head of SellThisPlaceNow and Realtor at Prudential Gary Greene Realtors in Houston, Tx . “Appraisers today are doing the same thorough, fact-based research and analysis they have always done.”

            A home appraiser will compare the condition of your house in relation to the comparable properties in the neighborhood and will give you a reasonably good idea where your house fits in relation to recent sales.

            According to Frenk, a home appraisal can range in length from two pages to more than 50. It will include details about the house, a description of the neighborhood and side-by-side comparisons of similar properties. It will also contain an evaluation of the area’s real estate market, notations of major problems with the property that will affect its value and an estimate of the expected time it will take to sell the property.

            Earlier this year, the Appraisal Institute released several tips for consumers and guidance for homeowners and buyers seeking to ensure their sales are completed in a timely manner.

  • Make sure the lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute). The lowest-priced appraiser does not necessarily equate with the most qualified. This is a time to get the numbers right.
  • Accompany the appraiser during the inspection of the property if possible. The more active of a participant you are in the process, the more you will understand it, and be able to catch any errors.
  • Request a copy of the appraisal report from the lender. Federal law requires that you receive a copy of the appraisal within 30 days.
  • Appeal the appraisal if appropriate. Market conditions do change, especially in these economic times. If you feel that new information may change the appraisal, be sure to speak up.
  • Have your agent ask the lender to order a second appraisal by a qualified and designated appraiser.
  • File legitimate complaints with appropriate state board or professional appraisal organizations.

            Remember, you needn’t agree with the outcome of an appraisal. You and your agent can work with the figures and determine if you should change the sale price or not. A home appraisal, no matter how scientific, still ends up being the opinion of the appraiser and to some degree is a judgment call.

!!!! Make Your Offer Stand Out !!!!!

            Real estate consumers are realizing that there has rarely been a better time to buy a home. In fact, historically low mortgage rates coupled with lower home prices have even sparked bidding competition in markets around the country.

A good home in a solid location may attract ample attention only hours after being listed. Home buyers can make their offers stand out from the rest through one or more of the following strategies:

            Price. Obviously, price tends to be the primary consideration for sellers. When you’re competing for a home, to get an edge, think about adding a clause stating that you will beat the highest offer by “x” dollars up to “x” amount. Cash offers can be more attractive to sellers as well. Although sellers will receive their money at closing whether buyers pay with cash or take out a loan, cash offers don’t require lender approval.

Financing. It’s not enough to be pre-qualified. Pre-qualification only tells how much you can afford. Pre-approval goes a step further. Your lender will thoroughly evaluate your application—including verifying employment information and financial disposition—then clear you for a loan of a determined amount. Having your loan pre-approved gives you a sizeable advantage by putting you on equal footing with cash buyers.

Good Faith Deposit. Buyers offering a larger-than-customary amount of “earnest money,” a deposit that accompanies an offer, may get a seller’s attention. By committing more money up front, buyers demonstrate greater sincerity and motivation to close the transaction. Your real estate professional can guide you as to the appropriate sum for your specific transaction.

            Contingencies. Consider minimizing contingencies, those clauses that allow buyers to back out of a contract if certain conditions are not met. For example, it’s common for buyers to make the purchase contingent upon their securing satisfactory financing. Obviously, offers with the fewest conditions tend to be more attractive to sellers.

From a contingency standpoint, first-time buyers are often better prospects for a seller’s home than move-up buyers. That’s because first-time buyers’ offers are not contingent upon the sale of a present home. Even if a move-up buyer has an offer in hand, that buyer’s offer may be contingent on another contingency, and so on down the line. If one transaction derails, they all might.

            Relationship. Help the seller get to know and identify with you by looking for ways to connect. Find common interests, such as a shared appreciation of gardening. You can then persuade the seller that her prize roses will be well tended. Share brief family stories. The more the seller gets to know and like you, the better chance your offer will stand out in a competitive environment. 

            Considerations for Short-sale and Foreclosure Transactions – Bank-owned properties represent a significant portion of today’s housing inventory. Competition can be most keen for these homes as their prices can run 10% to 20% below current market value.

            Banks conduct extensive research to set these prices and generally base them on current market value less the cost of required repairs. Make your offer based on your own check of comparable sales and other due diligence. Banks won’t get offended by a low offer, yet a realistic offer will more likely keep you in the running.

            Remember, patience is essential when buying bank-owned property as the process can take up to six months and longer.   


Home Not Selling? It’s Not Personal, It’s Probably Price



 Home sellers face a new reality as they look to move up, down, in or out of their American dream in today’s market. Consumers, particularly those who purchased their homes within the last five years, often find their options limited by a lack of equity. Those who can sell are sometimes numbed by deflated home prices and find it difficult to justify yesterday’s valuations with today’s reality.

            Many home sellers have dug in on price hoping to lose no additional ground. Others seem to have taken this market personally, letting emotions override analysis when setting price. Buyer sentiment has shifted as well, centered on maximum value with abundant amenities – resulting in stalemates and homes languishing on the market.  Both sides should be realistic as comparable sales and local-market dynamics still determine fair-market value.

            And there are compelling reasons to be realistic and make a move now. Sellers, assuming their objective is to buy another home, can capitalize on some of the lowest mortgage interest rates on record and an inventory of homes at attractive prices. So while they will sell for less, they will also buy for less and with significantly cheaper borrowing costs.

  Of course, professional sales representation is essential this transitioning market or any other. The Prudential Real Estate Network, recently recognized for “Highest Overall Satisfaction for Home Sellers Among National Full Service Real Estate Firms” in J.D. Power and Associates’ 2010 Home Buyer/Seller StudySM, is composed of true, local-market experts, like Norman Frenk, whose experience, analysis and consultation generates results in all market conditions.

As the local experts, we help set fair-market prices using factual reference points, such as an appraisal, comparables sales and personal knowledge to help estimate market value. Today, a house priced at or slightly below market value will attract the interest of real estate professionals and buyers, while overpricing chases them away. Even if the sellers adjust their prices later, it’s difficult to recapture buyer interest.

Sales professionals develop comprehensive marketing strategies to sell a home. They generally use open houses, yard signs, Internet exposure, MLS, newspaper ads, brochures and other means to market properties.

Beyond that, I counsel sellers on other conditions that may keep sellers’ homes on the market, including:

  • Condition and appearance. Sellers shouldn’t rely on buyers to use their imagination; they need to capture it. Remember that buyers may see seven or eight homes in a single day. The most memorable home will be the one that seemed the brightest, the most spacious, and the most cheerful. This invariably means rearranging and eliminating furniture, removing excess knickknacks and so on, to create an open, uncluttered look. Outside, do a visual check of the front of the house from across the street. Does it have curb appeal? It should look inviting, with a trimmed lawn and a freshly painted front door. A real estate professional can offer some guidance in this area.
  • Terms/conditions. Even if the home is accurately priced, and the buyer is delighted with what he or she sees, if the buyer can’t live with the terms of the sale, he or she may walk away. Keep an open mind on terms and conditions and evaluate how they may affect a potential sale.
  • Incentives. Offering incentives can be just the impetus a potential buyer needs a buyer needs to choose your property over others. Consider offering a carpet or paint allowance. If the buyer knows up front there is allowance for the worn carpet or paint, then may overlook those cosmetic flaws. You could pay for a professional home inspection or a home warranty, or pay closing costs.

Indeed, real estate opportunities abound for sellers and buyers who can come to terms with today’s market conditions. A qualified real estate professional will help you navigate the market, protect your interests and keep you moving toward your housing dreams.

             Norman Frenk can be reached at (713) 818-0829. Prudential Gary Greene Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.