Recently, we have written several posts with information on the short sale process.  With so many details, there is always new information becoming available to help bring understanding to those facing this option.  Not only do we have a website dedicated to short sales, www.avoidbankforeclosurenow.com but we also wanted to provide you with this recent article which helps homeowners facing foreclosure know what steps to take.  It is written from an unbiased stand point to help you make the best decision regarding your situation.

As the article makes clear, getting the advice from an attorney is one of the best steps you can take to make sure your delicate situation is taken care of efficiently.  As a Certified Distressed Property Expert (CDPE), I can help you navigate through this tedious process one step at a time.

The appraisal process often baffles and angers consumers. They may feel that their home is worth a higher dollar amount, and so the appraised value doesn’t always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules.

In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be compared in size and value.

For example, there is no set dollar figure associated with a great view, pool, spa/hot tub, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $25,000, but the local marketplace supports the value of a pool at $8,000, then that item will be compared as [$8,000] on the appraisal.

Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25-40% of the project involves demolition and the fixing of issues that aren’t uncovered until the project has already begun, such as plumbing or wiring that may need updating.

Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months to a year. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of home sales that have actually closed.

New FHA Appraisal Mandate

Value on a home as provided by a certified real estate appraiser in a written report is critical to a mortgage loan.  Effective February 15^th, a change in FHA appraisals takes place.  Essentially FHA has implemented the same rule as FannieMae and FreddieMac, which are conventional loan agencies.  FHA is a government agency.  Prior to this new FHA mandate a lender could order an FHA appraisal from a certified FHA appraiser of their choice, who typically was someone with whom they had an established relationship.  Not anymore.  Beginning Monday the 15^th, all FHA appraisals must be ordered from an entity, an independent company, who maintains a roster of appraisers approved and certified by FHA. This mandate by FHA affects all lenders nationwide.  Failure to adhere and comply with this mandate will result in administrative sanctions, something no lender originating government loans wants to have happen.

HUD, and therefore FHA’s intention, is appraiser independence from any influence pertaining to value, condition of the property, etc. In order to ensure appraiser independence, lenders who are FHA approved are prohibited from compensating, choosing, or even retaining an FHA roster appraiser.  Even substantive communication between the lender and appraiser is no longer acceptable in order to avoid conflict of interest or even the appearance of such. The intent is to prevent a lender’s influence on an appraiser which could have an impact on valuation of a home. Because mortgage lenders are typically compensated based on production, and an appraisal report is essential to loan approval, FHA has begun to use these safeguards in an effort to protect the integrity of the loan collateral.

Those of us in the residential real estate industry have seen significant changes in the last year and a half.  This is yet another change, and while it sounds daunting compared to what we’ve been used to, it remains to be seen if it creates obstacles.  My expectation is we’ll likely be assigned appraisers we already know and who understand how to help us work though any issues, just as they always have.  Some turbulence is to be expected and I will continue to always be here for you to work through any appraisal problems we encounter.

Post submitted by Rena Rogers with Pine State Mortgage, (770) 387-4504

Making your Investment Property more Manageable

Whether you have one rental property or several, we think you can benefit from these cost saving ideas.  We’ve found there are two major components that need to be addressed when tenants move out;  the walls and the floors.

Why not work to get all of your properties up to date with neutral wall colors and laminate wood floors?  This way, you don’t have to necessarily paint each wall but can simply touch them up with the same color.  Additionally, the wood laminate floors provide a great alternative to carpet because you don’t have to replace it and it’s not as easily damaged by pets and other normal wear and tear.

If all of your homes have the same products installed, it makes it much more cost effective to do the minor repairs you need before the next tenants move in.  This saves you both time and money!

Cartersville Neighborhood Spotlight:  North Hampton Subdivision

Located in White, GA, North Hampton subdivision is convenient to I-75 on the north side of Bartow County off of Hwy. 411.  This quiet neighborhood is nestled in beautiful Bartow hills and is a swim/tennis community.

Currently we have 2 homes for sale in North Hampton.  Check out our listings by clicking on the address below.

25 Jamesport Lane

38 North Hampton Dr.

Swheat Market Deli, Cartersville, GA

Are you looking for a great place for lunch that’s in downtown Cartersville and offers a wonderful selection of sandwiches, soups, and salads?  Then look no further than the Swheat Market Deli.  I try to eat here often and every meal is outstanding.  On top of that, the service is terrific!

Check our their menu at www.swheatmarket.com and stop by for a lunch you won’t soon forget!

FHA Increases Upfront Mortgage Insurance Premiums

For those of you interested in purchasing a home in the near future with an FHA loan, you should be aware that FHA has made another change.  Here are the details:

• Effective with case numbers assigned on or after April 5, 2010, FHA has increased the Upfront Mortgage Insurace Premiums (”UFMIP”) for most FHA programs to 2.25%
• Purchase money and full credit qualifying refinance transactions have increased from 1.75% to 2.25%.
• Streamline refinances, with or without an appraisal, have increased from 1.50% to 2.25%

There are no changes to the annual Mortgage Insurance Premium (”MIP”) at this time.  The annual premiums, which are remitted on a monthly basis, are a factor of the loan term and loan-to-value ratio.  For now, these factors continue to be:

                                            Term > 15 Years          Term < 15 Years

Loan to Value  > 95%               0.55%                               0.25%

Loan to Value  < 95%               0.50%                               None

What this means to you as a potential home-buyer is that all loans initiated on or after April 5, 2010 will incur a .5% increase in Mortgage Insurance Premiums.  For example, on a $100,000 loan this will be an increase of $500 for the premium at closing.  Be sure to keep this in mind if you’re thinking of purchasing in the near future.

This information provided by Shane Siniard with WR Starkey Mortgage 125 Town Park Dr. NW, Ste. 200 Kennesaw, GA 30144

31 Grove Park Circle

Check out this wonderful 4 bedroom, 3 bathroom, craftsman style bungalow in Grove Park priced at $249,850.  This home has it all: granite, wood floors, upgraded everything, covered back porch, finished bonus room upstairs, great kids playroom or media room.  This is a great location in the Cartersville City Schools District and the neighborhood has 2 lakes, swimming pool and gazebo and is within walking distance to Dellinger Park, Sam Smith Park, Etowah Indian Mounds and Clash Soccer.  You have to see this beautiful home in the heart of recreation and relaxation!

On Friday, February 19, the Tellus Science Museum will be hosting a lecture entitled “A Grand Tour of the Solar System” by Tellus Astronomer David Dundee.  This will be a guided tour of the 8 planets in our solar system plus Pluto.  All lectures are free for Tellus members and included with the cost of admission for non-members.  The galleries will remain open until the start of the lecture at 7pm.  Check out the Tellus website for more details and to learn more about this great museum in Northwest Georgia!

Bartow County Real Estate Market Conditions-Days on market decreases while number of homes under contract increases

While the verdict is still out on the overall implications of real estate in 2009, for Bartow County we know a few things.

For one, from January 2009 to January 2010, the average number of days a house stayed on the market reduced from 104 days to 98 days which is a 6% drop.  This is good news for those homeowners currently considering listing their homes.  While 6 days may not seem like a huge decline, it is likely the start of a trend that will take the real estate market back to the seller’s corner.

Additionally, although there are 12% fewer homes for sale from January a year ago (1698 in Jan. 2009 to 1501 in Jan. 2010), the number under contract has increased 88% from 50 in Jan. 2009 to 83 in Jan. 2010.  This shows the buyers market we are currently in that will hopefully get those waiting for homes to sell moving.

If you are thinking of buying a home, right now is the perfect time.  With the ever so slowly stabilizing economy we’re in, we never know how long good interest rates and great deals on homes may be around.  Give us a call to see if we can help you with any of your Bartow County real estate needs.