As a CDPE® serving the communities surrounding Hill AFB UT, I compiled this handbook to aid my active duty, prior service and retired military clients understand their options to overcome obstacles created by the current mortgage and housing crisis. Click Here for a copy of my handbook.Although the primary subject matter relates to Foreclosure Prevention, there is also guidance on how to take advantage of the military benefits of the 2009 ARRA American Recovery & Reinvestment Act (original and enhanced). In particular is the Extended Dept. of Defense HAP Homeowners Assistance Program which provides relief in the event deployment or relocation creates a financial hardship due to the decline in local real estate market values.

If you need assistance, please contact me. I’m a voice for foreclosure prevention … You have options, I can help.

Kim Novak, CDPE: Certified Distressed Property Expert
(801) 726-1443 (800) 977-7835 kimnovak@remax.net
www.UtahHouseandHome.com

Short Sale Strategies, Tips & Resources to Avoid Foreclosure on Facebook

A place for home owners facing mortgage troubles to find the resources & professional insight in to avoiding foreclosure. Both the public & the real estate community are welcomed to share their experiences, start a discussion or ask/answer questions.

NOTE: 18% is almost 1 in 5 properties (read: real live people who are your neighbors, friends, family, co-workers …)

NOTE: 23% is almost 1 in 4 properties

NOTE: “Fewer Homeowners Underwater”? Make sure you read the complete update. Fewer is not fewer in Utah, fewer is fewer compared to the national average. Remember, all politics, and real estate, is local.

NOTE: Like I keep telling my clients, “better” is a relative term. Now I can add “fewer” to the same list.

NOTE: “Utah’s foreclosure rate will not rise as dramatically in the coming year”. TRANSLATION: Utah’s foreclosure rate IS going to rise in the coming year, just not as dramatically as ??? … compared to last year? compared to Nevada’s 65% underwaterness?

This type of “press release” is a terribly misleading disservice to us as dues paying members of the SLBR, our clients and the public at large.

Federal Tax Credits 2008 - 2009 Part I - 2009/2010 Part 2

First, there was the 2008 Housing & Economic Recovery Act $7,500 “tax credit” that is, in fact, an interest free loan that must be re-paid over a 15-year period. This program was effective April 8, 2008 and ended December 31, 2008. Then came the 2009 American Recovery & Reinvestment Act $8,000 tax credit. What I call a “just kidding” moment. If you closed on your home on December 31, 2008, you have to pay your tax credit back, but if you closed on January 1, 2009 you don’t have to … plus you get an extra $500. And then, adding insult to injury, the extended and expanded tax credits of the 2009 Homeownership & Business Assistance Act threw a cold bucket of water on a real estate market just regaining a faint pulse.  Great news for long term homeowners and the expanded $6,500 tax credit that benefits them, as long as they close after November 6, 2009 (too bad for you if it was even one day before that). I’ve had clients who felt ripped off both times. Every extension, every revision of these tax credit programs, creates an undercurrent of discontent for those home buyers who could have benefited from the newest version, but closed one day too late, or early, as the case may be.

Utah’s Contribution: HomeRun Grant edition 1 and 2:

The original HomeRun Grant was a brainstorm. It provided a $6,000 ARRA funded incentive to buyers to purchase a newly constructed home, one that was already completed, and gave builders an opportunity to move their spec homes and close out high cost construction loans. This program had the side benefit of quickly removing the greatest competition to existing home sales - new homes. Then came Utah’s own “just kidding” moment. The introduction of HomeRun2 Grant. Only this time, it was $4,000 and the home could be at any stage of construction. And a buyer could already be under contract on a new build and still take advantage of the program. The end result?  A significant portion of Utah’s HomeRun2 Grants were consumed by home buyers already under contract to purchase a home, doing little to stimulate new sales.

In my opinion, tax credits have become subsidies distorting the real estate market. I believe that any further extension or expansion of this program, with the exception of those benefits due our military, will be counterproductive. I say it’s time to help homeowners. Figure out how to give them $8,000 so that they don’t have to sell as a short sale. There are a lot of well loved homes in excellent condition that would make ideal homes for new buyers, creating move up buyers for other homes, that can’t be sold now because the sellers are upside down in their mortgages. A short sale may benefit a new buyer, but it eliminates another (for two years at least). Why not consider helping sellers with a monetized tax credit so that they can sell their home at market value, stop or minimize short sales and foreclosures eroding property values, get buyers into “non-distressed” homes and turn that seller into another buyer, thus propelling the market forward.

Where do we go on April 30th next year?

I’m very excited to announce that I’ve just received my CDPE designation and am looking forward to working with home owners avoid foreclosure by facilitating their short sale. Not every distressed property is bank-owned, a short sale or in pre-foreclosure, though. In preparing my current clients for the 2010 real estate market in Utah, I sent the following email this morning. One client agreed with an aggressive price reduction. One withdrew her listing from the market. I am waiting to hear back from ten others.

Home-price decline has good side, bad side

… Utah had the fourth-worst percentage drop in home prices among all states over the past year, which has improved affordability but also pushed more homeowners “underwater” on their mortgages …Good Morning, Everyone,

I have had a couple clients tell me that they have heard that the market is getting better (courtesy of news reports on CNN, FOX and MSNBC). Please remember that all real estate is local and “better” is a relative term. It will be 2011 before we see any sustained increase in home values in Northern Utah and that improvement will only be after another year of declining values.

I have additional information to share with you regarding the next round of defaults, short sales and foreclosures on the horizon. With the exception of a “breather” mid-2013, it will be 2015 or later until we achieve pre-2007 home values. I just received my CDPE (Certified Distressed Property Expert) certification and now have access to detailed, specific data regarding the coming tsunami.

If you are serious about selling your property, it must be priced like a distressed property (short sale, foreclosure, bank owned). This is your competition, and it is not going away. I shared the following with one of my clients yesterday:

… The bottom line is that, no matter how many people want to buy a home and/or take advantage of the $8,000/$6,500 tax credit, that they cannot qualify for a loan if they are not employed or are under employed. Even in a move up market home like yours, it is ofter the second or spouse income that is needed to qualify, and if either the primary or secondary wage earner isn’t employed, then the buyers can’t qualify. VA is currently the only 100% financing out there for your home. FHA is now at a 3.5% downpayment and is projected to increase to 4%+ effective January 1, 2010. Unemployment rates in Utah have been steadily increasing (up another 3.3% in October, month over month). There has been decreased relocation (military or civilian) at the base and I have personally had two relo referrals who decided to rent because of re-sale concerns in 3 years. All of this creates a recipe for fewer buyers, longer days on market and more and more decline in home values.

There has been an incredible shift in buyer price point expectations. Buyers used to expect to pay 5-10% more for a non-distressed property (those not short sales, bank repos, abandoned, etc.). Now, buyers expect ALL homes to be priced like distressed properties. They simply won’t buy otherwise …

What is a CDPE?

Excerpt from the Distressed Property Institute, LLC websiteA Certified Distressed Property Expert^® is a real estate professional with specific understanding of the complex issues confronting the real estate industry, and the foreclosure avoidance options available to homeowners. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales.

The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The developers of the CDPE Designation believe that the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools needed to help homeowners find the best solution for their situation. Often, when other options have been exhausted, CDPEs can help homeowners avoid foreclosure through the efficient execution of a short sale.

While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be. Selecting an agent with the CDPE Designation ensures you are dealing with a professional trained to address your specific needs.

CDPEs don’t merely assist in selling properties, they serve and help save their clients in need.

With the big push to sell out the new construction inventory sitting on the market in Utah, through the Homerun Grant Program (358 grants remaining as of today) and various builder incentives, a prudent homebuyer and their agent should familiarize themselves with Utah’s State Construction Registry. This is especially important in light of the high number of contractor/builder bankruptcy filings that our current real estate market is facilitating.

The SCR was enacted in 2004 as House Bill 136, Sixth Substitute, Electronic Filing of Preliminary Lien Documents. It was designed to avoid the complications that frequently arise from Mechanic’s Liens that show up after closing. It is a phenomenal system when used properly. However, the timelines are critical (see below) in order to protect yourself from reverting to the state’s lien rights.

Why should you care? Educational Video for Property Owners

Municipalities in Utah are required to file a Notice of Commencement within 15 days of a building permit being taken out on a property, but don’t rely on the city to do this! Other parties who should or must file are 1) the General (aka Original) Contractor and 2) the Owner. Other interested parties can sign up for notification, as well, such as the lender and the title company.

What the registry does is to require subcontractors to electronically file their “preliminary notice” that they have done work on a particular construction project. The beauty of the system is that whenever one of these “preliminary notices” are filed, all parties who are registered on the project (contractor, owner, lender, title) receive email notification. What a great way to track the subs who have worked on your home, in case you need to contact them after you move in, and avoid dealing with unpaid subcontractor services after closing!

If you are buying a completed “spec” home, then you should check out the Public Search Site to see if you are protected from liens by the SCR. You can also make sure that your owner’s title policy is either a Plain Language Policy or an Eagle Policy.

Excerpt & Overview from Utah’s State Construction Registry Site:

Filing Timeline

Key Dates & Details:

Notices of Commencement

Notices of Commencement must be filed within 15 days of commencement of physical work or the issuance of a building permit. If a Notice of Commencement is not filed within the 15-day window the preliminary notice requirement is voided and lien rights are automatically preserved.

For the majority of projects, Notices of Commencement are automatically filed in the SCR based on permit data received from the issuing municipalities. For projects in which a Notice of Commencement is not automatically filed, owners and original contractors may file a Commencement in order to enforce the preliminary notice requirement. Examples: state projects in which permits are not issued, exempt projects, projects in which a municipality fails to transmit permit data.

Preliminary Notices

Preliminary notices must be filed within 20 days of furnishing labor, service, material and/or equipment OR within 20 days of the filing of the notice of commencement, whichever comes later.

The timeline for filing a preliminary notice is affected by the filing of a Notice of Completion. The window for filing Preliminary Notices is closed 10 days after the filing of a Notice of Completion. Therefore, parties providing goods and services at the end of a project may have less than 20 days to file their Preliminary Notice (a party providing materials 2 days prior to the filing of a Notice of Completion only have 12 days total to file a Preliminary Notice).

A party that misses their initial 20-day window may still file a Preliminary Notice to protect future work and / or materials. If a Preliminary Notice is filed after the initial 20-day period passes, there is a 5-day penalty and any material and / or service provided after the penalty period is protected.

Notices of Completion

Notices of completion may be filed by owners, original contractors, lenders, surety or title companies anytime after one of the following conditions has been met:

• A permanent certificate of occupancy has been issued
• A final inspection has been completed
• All substantial work has been completed

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What’s My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

… Educated & Experienced, Professional & Successful …

Disclaimer: I use an internet feedback service, FeedbackCentral.com, to obtain input from Buyer’s Agents after showing one of my client’s homes. This allows the Buyer’s Agent the option to uninhibitably hit “delete” if they do not wish to respond, and provides a venue that satisfies my clients’ desire to know what potential buyers, and their agents, think about their home in comparison to others that they’ve just seen.

My #1 Policy: I represent the buyer, so I am not going to share anything with the seller’s agent that may negatively affect my client’s negotiating strength (just in case they make an offer on the home). I have used a feedback comment seemingly inane as, “my clients loved the second kitchen because their mother is going to live with them - this is the nicest one they’ve seen” to my seller client’s advantage when an offer from that same buyer was presented.

Policy #2: If you are the listing agent’s assistant calling me for feedback, please don’t bother. Why should I give feedback to someone who has never even seen the home him/herself? You are taking up my valuable time and precious cell phone minutes for naught. I suggest instead that you take a tour of your boss’s listings and provide him/her with your own feedback. If you do this often enough, you may become a more valuable team member because you’ll be experienced enough to assist your boss with CMAs.

Policy #3:  If you ask for price feedback, then I will tell you the same thing that I tell my own seller clients. “Homes are still selling. If your home is not sold yet (read “under contract”), then you are priced too high to sell right now.” In today’s market, it is ALL about price, followed by condition and location (the old mantra of “location, location, location” has been stood on its head). Homebuyers are becoming exponentially price savvy in this current real estate climate and advice from talking heads and those of us in the blogosphere abounds.

Exceptions to the rule (you knew it was coming): I will provide feedback relating to real estate matters. Like, if your keybox is located in the flowerbed with a sprinkler head pointing right at it. Like, if you have listed a home as having four bedrooms, but the 4th bedroom doesn’t have a window, closet or door. Like, if your remarks section says that my client has to use the seller’s title company (but that’s a whole ‘nuther topic).

Pet Peeve #1: Email a copy of the listing to me, don’t call. I show an average of 21 homes to each of my buyer clients. I will not remember yours without a visual aid.

Pet Peeve #2: Leaving me a message like, “Hey Kim, it’s Samantha with Biggs Real Estate. I have a question on a listing” when you want feedback. Yeah, that only works once before I know to screen your calls.

Pet Peeve #3: If you call me for feedback, and it is in my client’s interest to provide it to you, and I do share their and my insight, please don’t become argumentative or get incensed about my opinion - remember that you’re the one that asked for it.

Anyway, you get the drift.

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What’s My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

… Educated & Experienced, Professional & Successful …

Just Announced! HUD Rolls Out Plan To ‘Monetize’ Tax Credit For FHA Loans

Just Published! Mortgagee Letter HUD 09-15ml Using First Time Homebuyer Tax Credits

Here’s the bad news “However, amounts advanced by FHA lenders cannot be used to meet FHA’s minimum 3.5% down payment due to a new federal housing law that bars such lenders from assisting borrowers with their down payment. FHA borrowers may use the money to increase the size of their down payment above the 3.5% minimum or toward closing costs.”

The good news is that it can be used for closing costs, which is often times the make it or break it point in multiple offer situations (yes, these still exist).

Hopefully, Fannie Mae, Freddie Mac and Ginnie Mae will follow suit for VA and Conventional loans.

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What’s My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

… Educated & Experienced, Professional & Successful …

On Tuesday, May 12, 2009 HUD Secretary Shaun Donovan  gave a speech at the National Association of Realtors Real Estate Summit - Advancing the U.S. Economy at which he announced:

…We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to “monetize” the tax credit through short-term bridge loans…

Click here to hear for yourself (fast forward to minutes 4:33 - 5:14)

 Just a few days? We’re still waiting …

In the meantime, what was meant to infuse life into our comatose real estate market has actually placed it in suspended animation while lenders, Realtors(R), sellers, buyers, et al. sit impatiently in the economic waiting room for positive recovery news.

JMHO

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What’s My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

… Educated & Experienced, Professional & Successful …

A fellow Realtor(R) recently told me a very sad tale. He lost a probable Buyer Client because she walked in to a builder’s model home on a Sunday and executed a Real Estate Purchase Contract with the agent on duty. This builder’s agent disclosed his agency relationship with the buyer as a “Limited Agent”, but did not have a corresponding Buyer Agency Agreement with her. Making matters worse (for the Buyer), was that the builder’s agent was actually a co-agent … the “other” listing agent was also the builder! Had the builder’s agent handled the situation correctly, the Buyer would certainly have sought her own representation. The form that should have been reviewed and signed by the buyer was an Unrepresented Buyer Disclosure.

How in the world could anyone believe that builder’s agent would be “neutral” in this situation? Of course the agent represents the builder! PS This buyer paid full, list price for the house, with no upgrades and no assistance with closing costs … in today’s real estate market.

There is a section, paragraph 5. of the UAR Listing Agreement that gives me the opportunity to discuss and counsel my Seller Clients about Agency Relationships and the advantages/disadvantages of Limited Agency. My explanation is simple … I ask if the seller wants me to show their home to potential buyers who are my Buyer Clients (yes or no) and let them know that their answer will not affect our relationship one way or another. At that point they either authorize me, or not, to be a “Limited Agent”. I also explain that if a buyer who does not have a real estate agent representing them contacts me to see their home and decides that they want to make an offer, and I have no pre-existing relationship with that buyer, that I will continue to represent only my Seller Clients’ interests and negotiate only on their behalf. Of course, I remind the seller that I still have the ethical and legal obligation to treat the buyer with honesty, fair dealing, and good faith.

Some information to consider before agreeing to Limited Agency …

Limited Agency:

(Excerpt from the UAR Limited Agency Agreement) A Limited Agent represents both seller and buyer in the same transaction and works to assist in negotiating a mutually acceptable transaction. A Limited Agent has fiduciary duties to both seller and buyer. However, those duties are “limited” because the agent cannot provide to both parties undivided loyalty, full confidentiality and full disclosure of all information known to the agent. For this reason, a Limited Agent must remain neutral in the representation of a seller and buyer, and may not disclose to either party information likely to weaken the bargaining position of the other; such as, the highest price the buyer will pay or the lowest price the seller will accept. A Limited Agent must, however, disclose to both parties material information known to the Limited Agent regarding a defect in the Property and/or the ability of each party to fulfill agreed upon obligations, and must disclose information given to the Limited Agent in confidence, by either party, if the failure to disclose would be a material misrepresentation regarding the Property.

Unrepresented Buyer:

(Excerpt from the UAR Unrepresented Buyer Disclosure) The Property shown above is presently listed for sale through the Company. Consequently, the Company and the Agent are representing the Seller. BY SIGNING THIS UNREPRESENTED BUYER DISCLOSURE THE BUYER ACKNOWLEDGES AND AGREES THAT THE AGENT AND THE COMPANY WILL ONLY REPRESENT THE SELLER IN THIS TRANSACTION AS A SELLER’S AGENT. THE BUYER ACKNOWLEDGES THAT THE COMPANY AND THE AGENT HAVE ADVISED THE BUYER THAT THE BUYER IS ENTITLED TO BE REPRESENTED BY A BUYER’S AGENT WHO WILL REPRESENT ONLY THE BUYER. THE BUYER HAS HOWEVER, ELECTED NOT TO BE REPRESENTED BY A REAL ESTATE AGENT IN THIS TRANSACTION.

From the UAR On-line Legal Library:

May an agent represent a buyer for the purchase of the agent’s own property? Is it legal for a real estate agent, who is the owner/seller, to represent a Buyer (i.e., as a limited agent) who wishes to make an offer and purchase the agent’s property?

Answer: No. Utah Admin Code §162-6.1.11.3.1 indicates that a “licensee may not act or attempt to act as a limited agent in any transaction in which: a) the licensee is a principal in the transaction.” A licensee is considered to be a principal in the transaction if he/she has “any ownership interest in the property.” Utah Admin Code §162-6.1.3. Here, as the owner/seller, the agent has an interest in the transaction, and is therefore the Principal.

I feel strongly that restrictions that Limited Agency creates on the relationship with our clients should be considered very seriously before either the Client or the Agent agrees to it.  Too often I’ve seen agents “give away” their relationship with their clients because they don’t understand Limited Agency or are worried that they will lose the buyer side if they have to give the buyer the opportunity to have their own agent representation.

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What’s My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

… Educated & Experienced, Professional & Successful …