Good Advice

Home Buyers: Stop Searching For Houses!


Yes, It Is The Fun Part!

It is so easy to be mesmerized by the prospect of shopping for your house. It's an exciting time in your life. You've made the decision to finally make the move, down the street, to the Poconos, across the country, or wherever. And these days the availability of information makes it seem like self-service real estate is a no-brainer. Why contact pesky real estate agents when all of the info is right there on your computer? There are home listings available in every corner of the internet, so why do you need to bother with an agent? Many potential home purchasers decide they'll call an agent in after they find the houses they want to see, usually the day before they are ready to make the trip to look, or even the day of.

Stop Looking For Homes

Yes, that's what I said. Stop looking for houses. Despite what you may think as you scour the inventory of property listings for the perfect home, finding 'the house' is the easiest part of the entire process. The hard parts, and there are many of them, are not immediately discernable from your current idealistic vantage point. The home buying process is a complex one and you'll need the guidance of a trusted real estate agent.

Sure, you say, of course I want to promote the importance of using a real estate agent, I am one after all. To that I say this, something I say to every potential home buying client I meet:

"You need an agent you can trust to guide you through the process. Find an agent you are comfortable with, whether it's me or someone else, and hire them to be your Buyer's Agent. If I, as an experience agent who knows her way around a Pocono real estate transaction, were to move to Florida or anywhere else for that matter, I would interview and hire a Buyer's Agent very early on in the process. It's that important!"

Home Buyers Tell Their Stories

Twice in the past couple weeks I had very similar conversations with two different home shoppers. Both of these buyers shopped online for houses and then called an agent when they were ready to 'come up'. Both ended up unhappy, citing mistrust, sales tactics they didn't appreciate, poor service and more, as reasons why they were now calling me. The first experience taught them to take some time to properly vet some real estate agents before committing to an appointment this time around. Fortunately, neither one got too far in before realizing they needed more than just an agent to 'let them in' to houses. One went so far as to make an offer with the agent they called by 'accident', but quickly surmised the need to get out of the contract and find quality representation in order to ensure their interests were served. These people quickly learned that Trust is a major factor in a real estate transaction.

My Best Home Buying Advice?

  1. Find an agent you relate to, one that you feel you can trust, and hire them to be your buyer's agent. The process is too long, involved and stressful to not have confidence in your agent.
  2. Contact your Buyer's Agent well in advance of your anticipated arrival for your home shopping trip. Do not assume they will be able to make themselves available because you are ready, and you don't want to decide which agent to use based on who isn't busy when you happen to be ready. Especially here in our area, certain times (like weekends, for instance) are in high demand for appointment scheduling, and most good agents are not available at the last minute. And even if they are, there is lots of preparation to be done in advance of 'touring a buyer', so please give plenty of notice.
  3. If you have specific concerns or fears about the home buying process, bring them up at your first meeting. Heard rumors about the tricks agents pull on people to get them to buy or other horror stories? Bring them up. A good agent has probably heard it all before and will be able to address them, without being offended. Airing these concerns up front allows you to concentrate on your goal of homeownership and will make you that much more comfortable when issues come up and your agent needs to advise you.

First thing's first. The house will come.

Related Reading

First Time Home Buyer Tax Incentive
5 Biggest Myths of Real Estate
Info on Buying a Pocono Foreclosure


Is The Pocono Real Estate Market Stabilizing?

Pocono_home_sale_prices

Forget an upturn, stabilization is the word of the day. We want the market to find an even keel for awhile, which is the natural progression of a market cycle after a downturn. Once things stabilize, the stage will be set as buyers regain confidence that their real estate investments aren't going to tank and home buying becomes fashionable again. Once we achieve stabilization, normal appreciation can resume.

Market Data Indicates Stability is Imminent

Here are some positive pieces of market data reported by the Pocono Mountains Association of REALTORS and compiled by Dominic Sacci, Senior Vice President/General Manager of Better Homes and Gardens Real Estate Wilkins & Associates:

  • Active Listings (Market Saturation): There were 10% fewer homes on the market in March 2009 than in March 2008. Lower inventory is a good thing!
  • Pending Listings (The Crystal Ball, aka predictor of future actual closings): The number of pending sales reported in March 2008 was down 26% from March 2007. The number of pending sales THIS March are only down 5% from last March. Interestingly, this 5% equates to only 20 sales! Once the percent change is 0, we are stable.

We Still Have Challenges Ahead, Of Course

The average sale price of homes that actually went to closing this March was down 13% from the same time period last year. The reason? Foreclosures. Foreclosure sales have accounted for 35% of the total number of sales in Monroe County so far this year. Since the average sales price of a foreclosure has been 23% less than a non-foreclosure sale, this has a big impact on home values. Home sellers are still competing with the bargain-priced foreclosure offerings out there. 

For more information about real estate issues and market conditions in the Pocono Mountains of Northeastern Pennsylvania, please contact me via email info@lisasanderson.com or by phone 570.421.8950 ext 394


Another Pocono Real Estate Attorney Offers Valuable Advice (Part III)

Attorneys_in_the_poconos_advice

If you missed the previous installments of this series, read Part I and Part II. Go on, I'll wait :)

Attorney Jane Roach Maughan wrapped up the presentation at the REALTOR meeting, focusing her time on the foreclosure issue and how home owners can avoid losing their home. Obviously, having attorney representation from the very beginning stages is something she recommends, and from listening to what she had to say, I agree with her...there are many situations that can be leveraged on a homeowner's behalf.

"Foreclosure is Highly Defensible"

What a great lead in to her discussion! She definitely had the attention of every real estate agent in the room when she said that foreclosures are highly defensible, meaning there are many ways to stave off foreclosure, control the amount of money at issue, and/or buy homeowners time when mortgage default is unavoidable. Additionally, it is feasible to get a better interest rate on your loan and/or lower the principle balance of the mortgage thereby lowering your monthly mortgage payment.

How to Avoid Foreclosure

Attorney Maughan outlined several ways she has helped home owners who face foreclosure avoid losing their property. These include:
  • Equity/Fairness Defense: Advocating for what's fair to you is your attorney's first job
  • Challenges to the calculation of penalties and late fees
  • Challenges to the paperwork of foreclosure: oftentimes, she says, the legally required notices are not filled out properly.
  • Truth in Lending Defense: She advises, read the Truth in Lending Statement provided at your closing and compare it to the foreclosure notices, your mortgage document recorded in the courthouse and other paperwork involved in the orignal transaction. Oftentimes there is conflicting information that can be used to your advantage.

The Ultimate Stall Tactic: Produce the Note

This last bit of advice was the highlight of of the presentation as far as I am concerned. She began with an exercise to illustrate the complicated nature of the whole mortgage mess, passing papers, the 'mortgage notes,' around the room to people representing the lender, the borrower, the securities traders, and the loan servicers. By the end of the exercise, no one knew who had their 'note.' The complicated nature of the secondary mortgage market can be a distressed homeowner's lifeline.

Because the notes associated with most mortgages had been packaged with other loans and sold as a commodity over and over again, the documents are often hard to find. Requesting your lender or loan servicer to 'produce the note,' as proof of the debt, can put the breaks on foreclosure in many instances.

Since the presentation by Attorney Maughan, this tactic has made it to prime time news. You may have seen coverage and explanation of the Produce the Note foreclosure stall:


Other "Produce the Note" Resources

Attorney Jane Roach Maughan
726 Ann Street
Stroudsburg, Pa 18360
570.421.7009

Email Attorney Maughan


The Poconos Real Estate Blog, Lisa Sanderson & Better Homes and Gardens Real Estate Wilkins & Associates are not licensed attorneys and offer this for informational purposes only and not as legal advice. Everyone's situation is different and a consultation with an attorney is recommended to ensure all your legal rights are protected. If you are a homeowner facing foreclosure, short sale or other issues pertaining to your mortgage, please be pro-active by contacting the appropriate advisors early on - it will make you feel better and may even save your home!


Homeowner's Insurance Explained


Check out this quick tutorial explaining homeowners insurance, what it is, why you need it and how to shop for it. Even if you already have homeowner's insurance, you may benefit from a quick look-see at the video as there are quite a few golden tips packed in to three little minutes!

If you are buying a property, you will need a policy in place before closing in order for the mortgage company to fund your loan, so don't wait until the last minute to start shopping for your policy.

Insurance Agents in the Poconos:

Lansdowne Insurance Agency (Nationwide Insurance)
Offices in Mt. Pocono & East Stroudsburg
570.839.7413
Email David Lansdowne

The Whitewood Insurance Agency (Erie Insurance)
Office in Downtown Stroudsburg
570.426.1158
Email Adrian Whitewood

As always, please do not hesitate to contact me via phone 570.421.8950 ext 394 or via email info@lisasanderson.com with any questions, concerns or assistance requests!


More Valuable Advice From Pocono Real Estate Attorneys (Part II)

Attorney_advice_short_sale


As I wrote in Part I of this series, the Attorney Panel that gave this year's presentation to us members of the Pocono Mountains Association of REALTORS was excellent. Attorneys William Cramer, Louis Powlette and Jane Roach Maughan enlightened us on many timely topics. It is always interesting to hear about the real estate business from another point of view, and with all of the hot topics boiling around in our business these days, it's even more riveting. Part I of this series addressed Attorney Cramer's presentation about common pitfalls in real estate transactions. This installment will discuss Attorney Powlette's discussion of Title Insurance Issues and Short Sales:

Seller-Paid Title Insurance

It is very common for bank- and relocation company- sellers to offer a paid title policy to a home buyer in a transaction. This seems, at first glance, to be a pretty good deal...it can save a buyer a substantial amount of money if they don't have to pay for title insurance themselves. The catch is that the seller chooses the title company, which is not standard practice. Buyers have the legal right to choose their own title insurance company, and usually do this based on recommendations by their real estate agent and/or their attorney.

Attorney Powlette says, "Accepting a title policy from the seller is not a good idea," and he gave several reasons why a buyer should say 'no thanks' and purchase their own title search and title insurance.

  • These banks and relocation companies buy their title work in bulk and the overburdened companies that are doing the searches and issuing title policies do a sloppy job. Also, these title insurers are almost never local companies and so they are not well versed in the intricacies of the local public records, closing procedures, etc.
  • There are myriad examples of properties being sold with title defects that were overlooked because of shoddy title work. Large real estate liens and previous owners who have not relinquished their claims to properties are some of the things that could threaten a buyer's standing as the true owner of the property after closing. Attorney Powlette cited a specific example where he did title work that revealed a federal tax lien. The prospective purchaser canceled the sale. After the property was put back on the market, a second buyer tried to buy (coincidentally using Powlette too!) and the same lien was still present. The seller was hoping to sell without a buyer questioning their title policy!
  • Another reason to decline the seller's offer of 'free' title insurance is, a real estate purchaser should have some assurance that the title policy underwriter is sound and stable. Should the underwriter ever go out of business, the title insurance policy becomes worthless. This is a great reason for a buyer to retain control of this aspect of the transaction.

Negotiating a Short Sale

These days many sellers are hoping to negotiate a short sale, that is ask their mortgage holder to accept less than what they are owed in order to allow the seller to sell the home at today's prices. Unfortunately, some owners who have their homes listed for sale through the Pocono Mountains Association of REALTORS MLS owe more than what they can currently get in today's market.

Attorney Powlette's recommendation is that a seller facing a short sale situation retain legal counsel to assist with the process. Yes, it sounds a bit self-serving of him to say that, but that's just not Lou's style :)...AND there are good reasons for his advice. A seller who tries to negotiate a short sale on their own, or a real estate agent who does it on the seller's behalf, assumes a lot of risk and liability. There are tax implications to selling short (shortfall can be considered income and therefore is taxed, for instance), and there are many legal issues surrounding the balance of the mortgage and the mortgagors remedies. A seller pursuing a short sale should have proper representation to be sure that their interests are served in the process.

One other caveat from Attorney Powlette: If you must cancel an Agreement of Sale because of unsuccessful short sale negotiations, a seller could be held liable for the buyer's expenses related to the transaction if the documents for the sale are not drafted properly. Always be sure to include the right contingencies when selling a property.

Contact Attorney Powlette at:

Louis D. Powlette Law Office

Stroudsburg, Pennsylvania 18360
Telephone: 570-424-8037
Fax: 570-424-0920
lpowl2@ptd.net


Please Subscribe to the Poconos Real Estate Blog to ensure that you don't miss the rest of this series. Part III will cover Attorney Maughan's inspiring presentation on avoiding foreclosure.

Related Reading:

Valuable Advice From Pocono Real Estate Attorneys (Part I)