Archive for the 'Important Information' Category
The Growth of Green Commercial Building
Aug
8
2011
Everywhere you turn, you see statements such as “green living” and “sustainable packaging.” There is no debating that the eco-friendly mentality is affecting virtually every aspect of our lives, and real estate is no exception.
Recently, several large corporations have seen the opportunity and taken the plunge into the green real estate space, including IBM, JP Morgan and Toyota Motor. It’s no surprise though, as green construction is currently one of the fastest growing divisions in the commercial building segment.
From sustainable skyscrapers to eco-friendly boutique-like office spaces, 10% of all new commercial construction is green, but new construction isn’t the only segment that is going green – existing construction is also jumping on board and making changes to be in line with LEED Certification (U.S. Green Building Council’s Leadership in Energy and Environmental Design)/ In addition to green commercial space being so well received by the public, owners of the buildings and office space are also seeing substantial savings via increase in rent and savings in energy cost.
It’s obvious that big corporate companies have less barrier to entry in these types of projects, but what about smaller organizations and individual investors get involved? According to a recent article in Fast Company, many opportunities reside in the REIT (Real Estate Investment Trust). Liberty Property Trust currently has 21 eco-friendly buildings in its portfolio.
The Basics of Home Warranty Plans
Jul
25
2011
During a real estate transaction, there are plenty of very important things transpiring that require attention, which may be why the home warranty piece of owning a home is often overlooked and not addressed in detail. Home warranty plans, although fairly straightforward, can cause confusion in the eyes homebuyers if they are buying for the first time or have not bought for an extended period of time.
One important thing to know is that plans can vary drastically based on the provider and the coverage included in the plan. Policies can range for a few hundred dollars to upwards of $1,000. Regardless of the plan, there are items that tend to remain consistent across the board.
Typically if there is a problem with an appliance, the homeowner contacts the home warranty provider. The warranty company then contacts one of its providers to get in touch with the homeowner. Once the provider comes out to the home to look at the appliance, a decision is made as to whether or not the appliance can be fixed or needs to be replaced. Often there is a small deductible (if outlined in the policy).
An important thing to be aware of is that not all appliances are covered in standard policies. Items may include swimming pools, spas, and outdoor plumbing. In addition, the home warranty company may deny a claim if the appliance wasn’t properly installed or it wasn’t taken care of adequately.
A real estate agent can often assist with questions pertaining to a home warranty policy and can provide feedback on what coverage may be needed for the home. In addition, homeowners may be interested in conducting their own research to identify the type of coverage they are interested in.
IRS Announces $0.04 Increase in Mileage Deduction
Jul
5
2011
For those of us who rely on driving to run a business, things have gotten a bit more expensive over the past year, as gas prices are over $1.00 per gallon higher than they were this time last year. Although this amount might sound insignificant, if you add up the additional cost over a month’s or year’s time, you’ve got quite a substantial increase in gas expenses. So, it’s great news to hear that the Internal Revenue Service is doing something to help save those who drive personal vehicles for business purposes a bit of money.
Beginning July 1, drivers will have the ability to deduct an additional $0.04 per mile driven, bringing the number from $0.51 per mile up to $0.55 per mile. Although the IRS typically addresses deductable mileage increases every year, it is not normally done until November and does not go into effect until the next calendar year. Their hope is that in pushing this increase out to the public earlier, Americans will feel less of a hit from higher gas prices.
Of course this is great news, but one common dilemma that still exists is figuring out a way to keep track of mileage. To help, we’ve compiled a short list of applications that were created to solve this challenge.
MileLog: This iPhone application not only allows you to track mileage, but also includes a feature to track parking or tolls associated with a particular trip.
FYI Mileage: This application is only available for iPhone users. It allows you to track mileage, export reports and sync your mileage usage with several popular accounting programs.
My Mileage Tracker: This Android application allows users to enter mileage into a clean and simple interface. There are no bells and whistles, but this app works great for basic needs.
Be Aware of Mortgage Scams That Could Cost You Extra Payments on Your Home
Jun
28
2011
A recent article in The Los Angeles Times examined a mortgage scam that has been taking place across the country over the past few months. According to government documentation, the perpetrators are sending out letters to homeowners explaining that they need to send their payments to a new address. The address listed belongs to a fake company that claims to have taken over the loan. Obviously, this is not the case.
Homeowners who have been victims to the scam only realize that they’ve been taken advantage of when the actual lender calls or sends a letter telling them that their payment is late – sometimes after the homeowner has already sent in 2-3 payments to the con artist. Experts are urging homeowners to be very careful if they receive any type of letter similar in nature.
The good news is that there are a few ways that you can verify that this type of notification is legitimate. If your loan provider changes, you will typically be notified by mail. In addition to a letter, you would also receive a package a week or so later with an outline of your payment structure, principal information and escrow details. Correspondence from a legitimate company will always have your loan number. If it does not, that is a huge sign that the request may be fake.
If you recently received a letter from your loan provider and are unsure about its authenticity, the best advice is to call the company and speak to someone directly about the correspondence you’ve received.
SBA 504 – Refinancing of Commercial Real Estate
Jun
20
2011
Research has shown that a large percentage of commercial mortgages will mature within the next few years. Because real estate values have declined, small businesses that are performing well and making timely payments are having a difficult time refinancing these loans and might need to restructure their debt.
The SBA has implemented a temporary program that will allow small businesses to refinance eligible fixed assets in the 504 program without requirement of an expansion. Small businesses will be given the opportunity to lock in long-term, stable financing in addition to protecting jobs. SBA 504 refi loan will be packaged like a traditional 504 loan, and a bank or third party lender will provide at least half of the amount, while the CDC will provide 40%. The borrower will provide a minimum of 10% equity.
According to SBA, as many as 20,000 small businesses will be able to take advantage of this program. To learn more about SBA 504, visit sba.gov.
*Information provided by sba.gov
Buying 101: A Few Things to Consider When You Begin Your Home Search
Jun
13
2011
Buying your first home can be an exciting journey! However, there are a few things you should keep in mind as you begin the home buying process. This list is by no means all inclusive, but may help you to know the things you should be thinking about early on.
1. Can you Commit?
One thing to keep in mind when buying a home is that you’ll probably be in it for at least a few years. Unlike renting, where you can pick up and move every six months, owning a home requires a level of commitment. Between the cost of moving and the cost of the transaction, you’ll want to be sure to pick a location that you’ll be happy to call home for the next few years.
2. Securing Your Credit.
Poor credit can come back to haunt you when applying for a home loan. As such, you’ll want to ensure that your credit is as clean as possible. Your best bet is to get reports of your credit from the big bureaus months before applying for a loan. This will give you the chance to fix any errors on the report.
3. Have a Budget and Stick To It.
“What’s another $500 a month?” This is a common thought that many homebuyers ponder. The truth is, you should identify a budget and stick to it. Leave yourself enough cash flow for savings and emergency events that may pop up unexpectedly.
4. Get Pre-Approved Early On.
On the same lines as point #3, getting approved early will prohibit you from selecting homes that are out of your price range. The Pre-approval process is also completely different from pre-qualification, as it holds more merit after analyzing your credit history, income and debt. Make sure you understand how these two differ.
5. Have a Capable Inspector.
Most likely your Realtor will have an excellent home inspector that he or she can refer you to. This individual will play a pivotal role in ensuring the structural condition of the home is in good shape. Not working with an experienced home inspector can equate to spending money down the road, so make sure you are working with a professional.
We hope these tips provide you with some initial things to start thinking about. If you have any questions or would like additional information, please feel free to contact us. We’d be happy to help!
Commercial Property Receivers: Who Are They And What Do They Do?
May
26
2011
In a commercial property foreclosure, the lender will usually ask the judge to assign a Receiver to take “control” of the property. Receivers are normally nominated by the lender; however, they are considered agents or officers of the court and are a neutral third party. The Receiver (typically individuals, companies, or attorneys) will “protect, preserve and secure rents” and aid in restoring order to the business after a loan default on the foreclosed property.
Receivers have authority to:
Hire tradesmen to maintain the building
Make decisions about the operation of the property and the business
Notify tenants of the receivership
Execute leases
Collect Rents
Pay Taxes
Pay Utilities
Maintain insurance
Hire a real estate broker to list and sell the property
To learn more about foreclosure and receivership laws, visit: www.receivers.org
Residential Real Estate Statistics for Buyers and Sellers
May
19
2011
Buyers and sellers often find residential real estate statistics confusing. In this blog we will shed some light on these numbers. We’ll take a look at the most widely used statistics and we’ll review each one to better understand them.
What are the some of the more important statistics?
“Existing-Home Sales” is one of the commonly used statistics. This number represents completed resale transactions of single-family, townhomes, and condominiums. New homes are not included. This statistic is prepared and reported monthly by the National Association of REALTORS (NAR) and is considered to be a good indication of trends in residential real estate. NAR’s “Housing Affordability Index” is also an important statistic. NAR develops this index by expressing the typical monthly mortgage principal and interest payment as a fraction of gross household income. A low index indicates very good housing affordability. The “Median Existing Home Price” (reported by NAR) is reported both nationally and by region, and represents the sale price at which half of all homes sold at a higher price and half of all homes sold at a lower price. NAR also reports its “Total Housing Inventory” which is an accounting of existing homes that are available for sale. This number is then divided by the current sales pace (homes being sold per month) to establish the current number of months of supply of homes for sale.
The U.S. Census Bureau and the Department of Housing and Urban Development (HUD) jointly release their monthly estimate of “Sales of New Single-Family Houses” and the “Median Sales Price of New Homes Sold” and “New Houses for Sale.” All of these numbers arseasonally adjusted, and the “New Houses for Sale” statistic is used to develop an estimate of the number of months of supply of new houses in inventory on the market and available for sale.
San Diego-based DataQuick monitors real estate activity nationwide and each month reports “New and Resale Houses and Condos Sold” nationally, statewide, and by metropolitan area. Another important statistic prepared by DataQuick is its monthly-reported “Median Price Paid for a Home.” DataQuick also provides statistics on distressed property sales (foreclosures, short sales) and “Typical Mortgage Payments” by home buyers.
Zillow Inc prepares and reports quarterly its “Home Value Index.” This number is widely used to demonstrate possible trends in improving or deteriorating home prices.
“Inventories of Unsold Homes” is shown in the Wall Street Journal’s quarterly survey of housing market conditions in 28 major metropolitan areas. Inventories are expressed as the number of months of supply of homes listed for sale in each market at the current sales pace.
What should I look for when reading these statistics?
“Existing Home Sales” is a good number to follow to get a good broad sense of the direction and strength of the market. If the month-to-month number is generally rising, this would indicate an improving sales pattern, and if the number is falling it would indicate a deteriorating sales pattern. The same is true for DataQuick’s “New and Resale Houses and Condos Sold.” The rate at which it rises or falls will indicate the relative strength or weakness in the market.
Also watch the “Total Housing Inventory” and the “Inventories of Unsold Homes.” A large inventory would typically indicate a weak real estate market and a small inventory would indicate a strong market. A balanced market typically has a six-month supply. And, for an understanding of price appreciation or depreciation, watch the “Median Existing Home Price” and the “Median Price Paid for a Home” and the “Home Value Index.”
With all of these numbers, always be attentive to local statistics, not to national or even state-wide figures. This is because real estate markets can vary substantially across the nation, across your state, and even across metropolitan areas.
HUD Updates Guidance Regarding Loan Originator Compensation
May
12
2011
On March 18th HUD issued important information pertaining to how mortgage loan originators comply with the Real Estate Settlement Procedures Act (RESPA) with regard to the Federal Reserve Board’s Loan Originator Compensation rule, effective April 1st. This information clarifies RESPA requirements related to proper disclosure on the GFE and HUD-w settlement statement.
The guidance addresses:
(1) mortgage broker transactions where the broker is compensated indirectly from the lender by means other than an amount that is computed based on the interest rate, such as by a flat fee or an amount that is based on any other computation;
(2) no cost transactions where the credit for the interest rate chosen covers third party settlement charges;
(3) using a credit/charge calculation prior to completing Block 2 on the GFE; and
(4) payments by lenders to borrowers to correct tolerance violations in transactions involving a mortgage broker.
Click Here to view the complete guidance.
FHA to Raise Annual Mortgage Insurance Premiums
Apr
21
2011
Effective April 18th 2011, the FHA will raise the annual mortgage insurance premiums by “25 basis points” (or one quarter of a percent of the total value of the loan) for borrowers on primary, 1-4 unit properties. This change will not affect Title 1 loans, the HECM loan, the HOPE loan, and existing FHA mortgages.
Upfront premiums will not be affected, and FHA will continue charging an upfront premium equal to the following percentages of the mortgage:
- Purchase Money Mortgages & Full-Credit Qualifying Refinances – 1%
- Streamline Refinances – 1%
- Home Equity Conversion Mortgages – 2%
With the new changes effective, on a $250,000 sales price, the buyer will end up paying about $50 more in their total monthly mortgage payment. And, when looking at qualifying buyers, this could lower their purchasing power by around $9,000. Meaning, they will only be able to afford a $241,000 home, instead of a $250,000 home.
FHA borrowers will be paying about twice as much for mortgage insurance on a 30-year loan than if they were paying for Private Mortgage Insurance on a non-FHA mortgage. By putting at least 5% down on a 30-year mortgage, borrowers will pay an annual insurance premium of 1.10% of the value of the loan. Any down payments smaller than 5% will end up paying about 1.15%.
The chart below illustrates how much more a mortgage payment will increase based on the new changes:
*Information provided by mortgageloan.com
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