STOP! I Must Review the Consumer Notice with You: Pennsylvania’s First Step in the Real Estate Process

It’s always an exciting time when a first-time buyer decides to make the leap from renter to homeowner, or when a long-time owner decides to upgrade and buy their dream home.  

But as you begin talking to real estate agents about buying or selling, you will be STOPPED and presented the “The Consumer Notice.”  This is not a contract, but an affirmation that you, the consumer, have been advised of your choices and it must be presented by any licensed PA Real Estate Professional before they can have any discussion with you regarding your needs and motivations for seeking real estate services. 

Since it was first required by law in 1999, the Consumer Notice has educated real estate consumers of the various business relationships that exist in a real estate transaction. 

• Seller Agent: the licensee works only for the seller/landlord
• Buyer Agent: the licensee works only for buyer/tenant
• Dual Agent:  the licensee works for both seller/landlord or buyer/tenant
• Designated Agent: the broker may designate one or more licensees from the agency to represent the consumer. This occurs, for example, when your real estate agent and the other party’s real estate agent work for the same company or office.
• Transaction licensee: Licensee performs real estate services without having any relationship to the consumer. This would apply, for example, it you were selling your home to a good friend at a mutually agreed upon price and simply needed someone to complete the paperwork.

By signing the Consumer Notice, you and the agent have not entered into a binding contract, but simply acknowledged the nature of your relationship. For example, if you’re a buyer attending an open house, the agent hosting the open house may identify themselves as the seller’s agent. This means their duty is to their client – the seller.

Because this person represents the seller, you would want to be careful what information you disclose to that agent during what may seem like casual conversation. If you end up pursuing a purchase of that home, you may be sorry you disclosed certain information.   

A copy of the Pennsylvania “Consumer Notice” is available at any real estate brokerage office, from any licensee or if attending an open house. To obtain a copy of the “Consumer Notice” or to gain more information about agency relationships in Pennsylvania, feel free to contact us at 717-364-3000.

For further information about real estate laws and consumer education in the Commonwealth of Pennsylvania, visit the Pennsylvania Association of Realtors.

Deciding on the ideal real estate agent can be daunting, but our services are ideal for buyers interested in beginning their search for the perfect property or for sellers seeking to list their property with a competent and fair brokerage.

Through our partnership with Johnson, Duffie, Stewart and Weidner, we step outside of the conventional broker model by ensuring that an attorney is included in every real estate transaction at no additional cost.

“All we need is the REALTOR® to lower their commission…”

We’ve heard it time and time again; “We are so close to where we need to be on this house. Why can’t the REALTOR® lower their commission to make the sale?”

The reason…

The commission is written into the terms of the Listing Agreement between the seller and the Brokerage. This is a contract which provides compensation to the brokerage for providing a service and is typically based upon the amount of marketing and expertise the seller’s agent brings to the selling party.

Typically, the listing broker will offer a buyer’s agent a percentage of the commission offered by the seller.   There seems to be a thought process by buyers that if they purchase a home using the listing agent and not having their own buyers agent that they will “get a deal”.   What they don’t understand is that the listing agent is still going to earn the commission as per the contract with the seller, and that they may cost themselves more money in the long run by not having their own representation. 

If the buyer is not represented, the REALTOR® would be acting as a dual agent, which in reality can be more difficult for the REALTOR®.  Besides having to make sure that they are being fair to both parties in negotiations, they have to do twice the work with scheduling home inspections, working with the buyer on financing, etc. 

REALTORS® only receive compensation when a home actually settles which can sometimes be a long process.   So when you really think about it, is it really fair to ask someone to reduce their paycheck for your benefit?  This also holds true when negotiations may come to a standstill between a buyer and seller.  Sometimes they look to the REALTORS® to pitch in to make it happen.  Again, as a professional, would you appreciate someone reducing your pay?

Keep your budget in mind when searching for a new home.  If you are looking at houses where you are asking for an agent to reduce their commission, you may be out of your price range.  Remember that a buyer’s agent will help guide you to the houses that fit within your budget.

Home Ownership and Your Income Taxes

We’ve all heard the classic reasons to buy a house; “It’s the American Dream,” or “It is yours to change and decorate to how you like.”

 

Those are some emotional reasons, now for a practical benefit:  

Tax Breaks!

When the beginning of the year rolls around, and it is time to reconcile with Uncle Sam, you will be thankful that you own rather than rent. 

All of the mortgage interest you paid during the year is tax deductible up to a $1,000,000,000 mortgage!  When you itemize your tax return you can deduct the interest paid during the year.

For a loan payment of $1,200 per month you could save somewhere in the neighborhood of $3,700 in taxes for the year. Check out this Alllaw.com article about the Tax Benefits of Owning a Home including some great examples of how a mortgage can help your tax situation.

Did you know that even a home equity loan has tax breaks associated with it? As you begin to pay down your loan and the value of your house increases, you create more equity. You can then borrow against that value to pay down other bills or do home improvements. That loan interest, in addition to your mortgage, is also tax deductible.

If you are currently renting and are in a position to purchase a home, you may want to stop giving away your tax deductions to the landlord. You know he/she is thanking you every year when they are reconciling with Uncle Sam.

If you had extra money coming your way from the IRS after doing your taxes this year, how would you spend it?

Our Holiday Traditions

With the holiday season in full swing and Christmas coming on Sunday, we’ve decided to put together some of our favorite holiday traditions/memories. 

Mary and Gina in the kitchen preparing
their traditional spaghetti dinner.

Mary Sill, a Realtor® at Lawyer’s Realty, and her best friend, Gina, have spent Christmas Eve together since 5^th grade missing only two in the past 47 years. They enjoy a special spaghetti dinner from a family recipe.

John Andrews, an associate broker, has produced an elaborate family Christmas card and letter since about 1995.  It includes family photos and recounts major events in the family. John also comments on major trends in politics and culture and goes a bit over the top on this to serve as a standing joke for the family as well as a family history.

Andrews’ traditions continue on Christmas morning with a breakfast of eggs Benedict and a particularly rich coffee cake followed by beef tenderloin for Christmas dinner. John quips, “It’s an expensive and high calorie food day.”

Megan Duffie Flor with her 2 brothers
which includes Mark, our Broker, in the plaid.

Elizabeth Statler, one of our Realtors® says, “our most favorite family tradition is the Christmas Eve reading of The Night Before Christmas.”

It began as a way to get her young sons to willingly go to bed on Christmas Eve.  By using the last line of the poem, "Merry Christmas to all and to all a good night" its then off to bed!!!  This has become a cherished tradition. As the boys learned to read, they earned their turn.  Oh, how proud they were the first time they got to read it. 

Since the boys have grown, they have read it over the phone with each other when they could not be together. They have recently welcomed a grandchild, but with her son and his young family living very far away they decided to buy a recordable version and sent it to their son to help continue the tradition with their granddaughter. The tradition carries forward with her son’s families.

Finally, myself, Lori Zimmerman, now that my children are in their 20’s I look back, and my fondest memory of Christmas is the magic of it. 

Lori's children, Ami & Zachary with Santa

Back to the years when they believed that there was a jolly man wearing a red suit driving a sleigh pulled by reindeer that cruised around the world delivering presents to good little boys and girls.  And to believe this all happened in one evening. Just the anticipation of it all as they had to wait a whole month as it counted down.

Then Christmas Eve arrives.  Oh, how long that evening was.  First there was Church service which my son couldn’t sit still for because he had to get home and get to bed or Santa would miss our house!  Then we would go to a dear friend’s open house which was always tradition for us to get lost getting too because they live in the middle of the back roads, and this was before GPS.  Then, finally home to bed.  

But with the morning came more anticipation as there was a whole pile of wrapped presents.   What was inside?  They wouldn’t know until they got their hands on each one and opened the magic inside.  

What is your favorite Christmas memory/tradition?

Want Holiday Sales? Only if you are listing.

When it comes to selling a home, many houses are sold in the warmer months of the year. Logically the warmer months usually mean a clear day to move and less risk of a snow storm on your potential moving day. However, don’t count out winter sales.

Top three reasons to keep your house listed throughout the holidays and winter months.

1)      The first reason to keep your house listed is simple. Potential buyers are still looking for homes. No matter the time of year, there are at least a few people still looking for a new home. Even if they aren’t necessarily looking to move in January, you can count on the buyer braving the cold and snow for that right house at that right price.

2)      Second reason - Less Competition.  Many people don’t want to have to “deal” with showing their house throughout the holiday season and may take their house off the market. Being one of the fewer homes kept on the market or listing it during this time will allow you to stand out among the crowd because there is less of a crowd.  

3)      The final reason to list your house through the holiday season and  throughout the end of the calendar year is because of transfers. Many businesses will transfer employees at the end of the calendar year and those buyers and families NEED to find a great house IMMEDIATELY. Take advantage of the lack of homes for sale and leverage that with the demand of the transfer market.

These are just three simple reasons to keep your house on the market during the holiday season. Can you think of any other reasons to put or keep your home on the market during this time?

A Season for Giving

This time of year means many things to many people.  Be it family, friends, football, the Macy’s Thanksgiving Day Parade, or shopping ‘til you drop in the early hours of the morning, there is one thing that Thanksgiving means to the Greater Harrisburg Association of Realtors and that is giving. Lawyer’s Realty is a proud member of the Association.

For the past 25 years your local Realtors and sponsors have donated to help feed those in our community who are less fortunate.  This year was my first year as a member of the committee that facilitates this drive.  This year we raised over $22,000 which allowed us to purchase 725 turkeys plus 725 Giant gift cards.  

On the morning of November 18^th, in the parking lot of the Greater Harrisburg Association of Realtors, the turkeys were organized and ready to be picked up by the various charities that would in turn distribute them to the different families.  Each family would be receiving a turkey and a $20 Giant gift card for them to use towards the remainder of their Thanksgiving feast.  As each van or truck pulled up to be loaded, we received smiles and warm hugs that were worth more than money could buy.   Before this year, the total number of families that the food drive has fed was 8,344; now it is 9,069!

Keep an eye on our blog in the coming weeks as we will be highlighting both a reason to still be listing your house through the holidays and winter as well as our personal family traditions for the holidays. It should be a lot of fun and we look forward to hearing what you and your holiday traditions are.

Lori Zimmerman, Operations Manager/Realtor

Battle in the Spirit of Giving

Recently, the Salvation Army of the Capital Region announced a battle.  No, not a typical Army battle, but one in the spirit of giving. We are all use to seeing the red kettles and bells signify the Salvation Army’s annual fundraising drive outside of various retail stores as we do our holiday shopping, but this year they’ve added a twist.

Beginning November 17 and running until the end of the year, a battle will begin.  Harrisburg-area businesses and organizations will staff 25 Red Kettles positioned at high-traffic locations to compete for the “Battle of the Bells” title by raising the most money at their kettle during the battle.

The Salvation Army is also asking local businesses and corporations to share their Red Kettle experiences via YouTube Videos as well as Twitter and Facebook updates and photos. While Harrisburg has been making international news for many negative reasons, the Salvation Army is hoping to turn the negativity around.

The Red Kettle Campaign is the Salvation Army’s most significant source of annual revenue to help feed, clothe and care for those in need. As the temperatures begin to drop, especially at night, and since we’ve already seen significant snow, remember those who are less fortunate. The Salvation Army aims to help protect those who need help and this battle is one way that you can help your local community.

For more information check out  http://www.salvationarmyharrisburg.org.

Trick or Treat…Lets plan for nothing but Treats.

As the temperatures drop and it begins to get dark earlier, it can mean just one thing…Halloween is just around the corner.  As goblins, witches, football players and cheerleaders, your little ones are likely getting excited for Trick or Treating. Here at Lawyer’s Realty we’re feeling the Halloween spirits and wanted to offer a few quick tips for a safe and fun time for all.

No matter how old your kids are, there are certain “rules” that should always be followed. Make sure your child chooses a safe costume. Reflective materials or blinking lights on their costume is easier to spot for drivers in passing vehicles. 

Masks sometimes make a more exciting costume, but make sure the mask doesn’t impair your child’s vision. Blocked vision can lead to tripping or other injuries. If the costume requires a prop, you want to make sure that the prop has flexible edges and obvious markings to ensure that it’s not mistaken for a real weapon.

It may be hard for them to avoid the temptation to start indulging in the great amount of chocolate treats, but you want to make sure your children know to wait until they get home to eat any of their treats. Once home, inspect the treats for tampering.  If it looks suspicious, throw it out. I’m sure they’ve gotten enough candy from their trip that they won’t notice a few pieces missing. Better safe than sorry.

If your child is older and trick or treating with a parent is just not cool, ensure that you know their planned route and they have a cell phone with them.  Remind them about not cutting through alleys or fields and to  only use the sidewalks that are often well lit and are much safer. Many developments are also patrolled by the police throughout the designated trick or treat times.

They don’t want to hear this, but it makes you feel better to remind them about not getting into a stranger’s car or going into any house other than their own. It may seem redundant, but a simple reminder never hurt anyone.

Finally, ensure your group, or your child’s group, if they are going out without a parent, has several flash lights. It not only helps to brighten any dark area, but also works much the same as headlights on a vehicle. It increases your visibility to passing cars and will help to keep everyone safe.

From the Lawyer’s Realty family we wish you and your family a safe and fun Halloween!

Found a Home, but it is in Need of Work? There’s an App…err, Program for That!

You have been looking and looking for a new home within your price range, but what you are finding are houses that are best described as  “fixer-upper”, “needs TLC”, “has great bones” and houses that are stuck in the 1970’s (lime green?).  What has been your reaction to these houses?  “No way, too much work!” “We won’t have any money left over to bring it to 2011!”  “How did a family survive with one bathroom, we need at least 2!” Sound familiar? 

Well, did you know that the Federal Housing Administration (FHA) has a program for that? The FHA 203k Program allows for the cost of renovations to be included in your mortgage. By considering this program, many more houses may open up to you as possible choices. 

  

There are a few options in the 203k program. For smaller renovations there is the 203k Streamline. Cosmetic work and minor repairs would usually fall under this program. In order to qualify, the renovations must be between $5,000 & $32,000 and can even include the cost of appliances. This program allows up to 110% loan to value of the improved property. Depending on the work needed, this option can convert into the 203k full renovation option.

The 203k Full Renovation option allows for additions, garages and other structural/foundation work needed, but it does not allow luxury items such as an in-ground pool or a spa. While the streamline program has an upper limit of $32,000 this option covers renovations that total over that mark. A HUD consultant is required for the 203k full renovation.

The final option is the 203k Conventional. This option allows for luxury items to be added to the house, and is only limited by the conforming limits. Those limits are 95% loan to value for the improved property if the owner occupies the unit, and 75% LTV if it is a non-owner occupied unit.

For all of these programs, a validated contractor will be required to provide estimates on the renovations as well as complete the work. Home Depot & Lowe’s are both validated contractors.  

The FHA 203k Program is a great option to help improve a potential home, but the process may be slow so be prepared to be patient.  By working with a REALTOR®, you will be guided throughout the process including finding the right mortgage professional who knows the in and out’s of the FHA 203k Program.

I Don’t Have to Have 20% Down Money to Get a Mortgage?

Traditionally, a 20% down payment is ideal for many mortgages to avoid paying private mortgage insurance, aka PMI.  Also, by having more money saved that you initially put into your home rather than borrowing will help to reduce your monthly payments, and provide you instant equity in your new home.  However, thanks to the Federal Housing Administration (FHA), you need much less down money, or with some programs, zero money down.  We’ll briefly discuss several of the programs available.

First, let’s take a look at FHA 203(b). This program allows a qualifying buyer to put down as little as 3.5% of the total purchase price. There are loan limits in this program, but they vary by area so be sure to check with your REALTOR® about your area. Also in this program, the PMI is wrapped into the loan. You can use this loan to purchase one to four unit structures. There are some income and other limits with this and many other FHA programs so be sure to check with your REALTOR® about those as well. Some other FHA programs can be found here.

Another popular program is the 100% USDA Rural Development Program. This is a 100% loan that requires no down payment as well as no PMI. A minimum credit score of 640 is required and the loan can be up to 103.5% of the appraised value of the structure. With no limit to the seller’s contribution toward closing costs this loan is very beneficial to the buyer and may require little to no money at all for closing.

However, there is one “catch” to the USDA program. The property must be in designated rural areas. You can check out http://eligibility.sc.egov.usda.gov to see what areas are approved. Also, there are income eligibility requirements to be met as well. They vary based on county for instance a 1-4 person household can make no more than $81,650 in Dauphin or Cumberland counties but in Lancaster county the limit is $77,500 (as of June 2, 2010 – subject to change).

Are you a veteran?  Don’t forget that as a veteran you are entitled to a VA Loan which is also a 100% loan that requires no money down.  As with all of these programs, your REALTOR® can help you to get in touch with a mortgage broker that will work with you to understand which program will best meet your needs.

Next week, we’ll go into more detail about another FHA program that allows you to include money for improvements to the dwelling in the purchase price. Be sure to stay tuned for a great FHA program that is often overlooked.

Flooding…It happens everywhere, not just along the banks of a river.

With over 10 inches of rain falling on the mid-state recently (13.4 inches reported by Harrisburg International Airport) widespread flooding was expected. The Susquehanna River and other large creeks hit near record flood levels. Even streets became creek and river-like with cars being swept away.

Between the rains of both Hurricanes Irene and Lee, the mid-state is currently in the midst of a massive cleanup and the area has been declared a disaster by President Obama. If you were affected by flood damage you have a few options.

First, check with your homeowner’s insurance policy and see if you’re covered. Depending on where you live, you may need a separate policy or rider, but in the case of one local couple…their homeowner’s policy came through. 

Matt Hannaford, a social media manager and part time DJ in Harrisburg, works from home most days and Wednesday, September 7^th was no different.  After an early morning meeting, he was back home by 10:30 to get to work. 

Knowing that his outdoor drain sometimes gets clogged with leaves during heavy rains, he decided to make sure he wouldn’t have any problems and checked the drain. He noticed that it was covered and that there was about four inches of water at the bottom of the steps. He quickly grabbed a shovel to move the leaves away from the drain. 

Unfortunately, for Hannaford, the drain wasn’t clogged. Rather, it was flowing water in the opposite direction and into the base of the steps. The high water forced its way through the exterior door and into the basement where it had already filled the basement with about two to three inches of water throughout the 1000 square foot space.

Hannaford quickly called his wife, Erin, and then other members of their family for help. They eventually got the situation under control, but it took until Thursday afternoon to rid the basement of standing water. By Friday evening, the five-room, finished basement was gutted and the clean up and rebuilding process could begin.

The young couple called their homeowner’s insurance company Wednesday afternoon while attempting to remove the water and found out that they were covered for at least part of the damage. Lucky for them, the insurance will cover the majority of the damages. Others however, may not be so lucky. 

It’s important to work closely with a REALTOR® to ensure that you have the proper coverage in case of emergency situations such as these.  When the Hannaford’s purchased their home in late 2010, they had been told that the basement only had water in it one other time…in 1972. What are the chances?

Second, you should check out www.fema.gov/assistance and see if you qualify for any additional help. If your homeowner’s coverage doesn’t cover flood or water back up damage, you may be eligible for federal loans to help with the unexpected costs. 

Remember, our team of REALTORS® and legal advisors are here to help you through the purchasing process, including considering the unexpected.

We continue to keep your best interest in mind and we hope you all are safe, dry, and insured!

You Only Have One Chance to Make a First Impression & That Includes the Internet

With more and more people turning to the internet for shopping, it was only a matter of time before people started to do the same when searching homes for sale.  Gone are the days when you relied on a real estate agent for access into a homes interior, and he/she would have to drive you around to show you a variety of homes just to walk in the door, know that it is not what you want, and walk right back out.  Now potential buyers have that power to explore inside, outside and all around houses all by themselves without having to leave the comfort of their home, or with their smart phone as they are out and about.

With this in mind, the demand for quality real estate photographs has never been higher, and yet, we still find home photos on line that are dark, that are of a corner of a room, and are just poor quality.  Heck, there are even photos of laundry thrown about and dishes in the sink.  When searching homes for sale online, you will inevitably come across many potential homes.  However, the only ones that will be given a second look at are those that are presented well in the photos.  After all, if the house does not look good in a picture, what are the odds of it looking good in person? 

There are two main problems that occur in amateur real estate photography that are sure to cause a potential buyer to gloss over the listing online.  The first is perspective and the second is season.

Many real estate agents are content with standing directly in front of a home when taking a front shot.  This provides no depth to the house and makes it look smaller than it is and almost cartoonish.  Instead, the better perspective would be to move off to one side of the house and crouch down.  That way, the building looks bigger by comparison, and you can see how far back it goes.  Even if the house does not go back very far, it at least lets a potential buyer know that there is a home behind that door.

  Second, the issue of seasonal photographs is such an obvious one that it seems everybody should be aware of it.  If I am looking for a house in the summer, it will be hard to picture myself there if the photo was taken under two feet of snow. 

For those agents who do not have an eye for architectural photography or the ability to enhance photos, it is a wise investment in having them taken by a professional.  There is no better way to peak interest in a home than to have quality images on line as soon as the property is listed.  It is all about that 1st Impression. 

The Importance of Credit Scores in Real Estate

The search for a new home can be an exciting one; however, before you begin your quest for that dream home, your Realtor® would require that one of your first steps would be to meet with a mortgage lender.  This individual will help you determine the price range at which you should be looking, and at the end of the meeting, if all goes well, you should find yourself pre-qualified for a mortgage loan. 

What is one of the primary factors that go into a lender’s decision of whether or not to grant a loan?  Credit scores.  It has been estimated that nearly 75% of all mortgage loan decisions are made with the applicant’s credit score in mind.

The importance of credit scores in mortgage decisions and real estate transactions has risen over the past decades, and this is in large part due to what the lenders call risk-based mortgage pricing.  Essentially, the lender will make a decision on a mortgage based on how much risk is involved in the transaction.  If an individual has a credit score below 700 (which I’m sure none of you do), then that tells the lender that they are at higher risk of defaulting on their obligation to pay, and that will be reflected in the loan that they propose.  They may be offered a higher interest rate.

Now before you rush off to a free credit report website in a wave of panic, please keep in mind that a credit score is not a permanent and accurate representation of who you are as a person, and many mortgage lenders understand that.  It is important to find a lender who can see you as an individual with your own story.  That is not to say that you should ask them to completely disregard a credit score of 450 and give you a loan for that million dollar home, but there are some lenders out there who are willing to work with a low credit score, owing to the fact that you are not a number, but a person.  They will take into account things like your rental history.

That being said, it can’t hurt to try and raise your score before meeting with a lender, and there are many ways to do this.  Getting a credit card and keeping up with the payments is a quick and easy way to improve your credit and show lenders that you are serious.  In the end, that is all the lenders want.  They want to know that you are a responsible borrower and understand the value of a positive credit history, and a high credit score will give them a good first impression. 

Mortgage Industry Adjusts as Real Estate Market Fluctuates: An Interview with Robyn Sealover

The following is an interview with Robyn Sealover, a mortgage specialist. Robyn has more than 20 years in the real estate industry including three and half years in the mortgage business.

Once someone has decided on a home to purchase, it’s time to secure a mortgage. Or is it? We often hear that one should be pre-qualified before searching? Is this true or does it vary? Please explain.

It is best to get pre-qualified before the search for a new home begins.  This will determine whether someone may be credit worthy as well as what price range they may be able to afford.  It will save the buyer as well as a realtor’s time ensuring that they are searching for an affordable home and not something that is ‘OUT’ of their price range and comfort zone.

It’s said that most mortgages are 30-year terms, although some are 15 or 21-year options. Do you recommend the 30-year or does it vary based on the individuals seeking a loan and/or the cost of the home and down payment?

While the majority of most loans are for 30 years, with interest rates being at all-time lows, it may make sense for borrowers to examine the possibility of shortening the term of a loan.  Each circumstance will vary depending upon how much a borrower can comfortably afford.   The payment for a 30 year mortgage would be less than a 15 year loan since the payment is condensed.  There are no 21 year mortgages.  There are 30, 25, 20, 15, and 10 year mortgages that are the norm.  The rates for a 30, 25, and 20 are usually very similar.  Most 15 & 10 year rates are lower. 

In “The Money Book for the Young, Fabulous and Broke,” Suze Orman says there are three different types of mortgages: fixed, adjustable and hybrid. She recommends hybrid mortgages for first-time buyers stating they are the best deal. First, can you explain the different types and second, in your opinion, is Orman on target with her recommendation of hybrid mortgages for first-time buyers?

I really value Suze Orman and think that she has done a fabulous job educating people on how to manage their finances and prepare for the future.  I truly recommend reading her books or watching her seminar.  While I value her opinion, I don’t recommend a hybrid mortgage.  This is an adjustable mortgage that may start with lower payments that are fixed but then amortize or adjust to a higher rate.  With the market being the way that it has been and interest rates at all-time lows, it would be wise to grab a low rate without the fear of the rate adjusting to a higher rate and payment. 

Orman also says homeowners typically stay put for only five to seven years. This seems like a short amount of time, especially considering that many have taken out 30-year mortgages. Why is this and what does it mean for mortgage lenders?

Most people do not stay in their first home since this is usually a smaller home or a “starter home.”  By using a 30 year mortgage, the payments would be lower.  When their income/family size increases, most plan on purchasing a larger home.  There is mobility in home purchasing but many have found the right home and will stay there for a lifetime and raise a family following the American dream.  It is a good idea to establish a relationship with a lender to determine when it may be a good time to move up or conversely down-size and help determine the correct payment plan.

Let’s talk interest rates. We’ve been hearing it’s at an “all–time low” for  about two years now along with a bunch of other things such as “now’s the time to buy.” What’s a “good rate” and what are the current rates for a mortgage right now?

We are currently experiencing historically LOW interest rates.  This really is a great time to buy.  Home prices have stabilized somewhat and we haven’t been as severely affected by the prices of homes in Central Pennsylvania.  This will enable a buyer to have more buying power…therefore getting more BANG for the buck!  It is hard to quote a rate though because there are so many variables.  It all depends on what credit score a borrower may have.  What their LTV or loan to value may be.  This means how much they may be investing in a purchase: what type of loan program may be used, where the home may be located, etc.  With so many variables, the rate is really case by case.  If you look at the stock market, you will see how the stocks go up and down constantly!  Any rate that is quoted to someone is like the stock market.  It will change frequently and is only effective when it is quoted.  The rates may change multiple times during the day. 

It used to be that many saved for a home and put 20% down. Is this still the case? If not, what’s the cause of the shift?

It is actually shifting back towards wanting to have more money available for the down payment.  There have been so many foreclosures, which has made making a mortgage purchase with less money down, more of a risk.  The risk factors are determined by looking at someone’s three credit scores.  The lower the credit score, the higher the risk.  There are still programs that you may be able to purchase with little money down, but once again, this is a case by case determination. 

What signs are you looking for that the real estate industry is recovering?

The real estate market is still floundering and trying to recover from some of the toughest years we have had in some time.  The effects of some poor investments may take quite a while before we can say that it has recovered.  The glut of foreclosed homes on the market has affected the price and value of many homes.  We have been fortunate that Central PA has not been as severely affected as some areas since this is a conservative area, but we have still seen some harder times.  People are more cautious before making a purchase and are trying to educate themselves.  This is a great thing.  A more educated purchase will ensure that a home owner is making a wise decision.  Purchasing a home is the biggest investment someone will make in their life so it is important to choose wisely.

Lawyer’s Realty is a one-stop shop for real estate transactions by including both a qualified legal representative and a real estate professional in the transaction.  How does this legal representation trickle down to the mortgage lender? Does it help make the process smoother? Please explain.

It does make things easier to be able to know that all parties involved in the purchase process are able to interact and communicate easily since the title, realtor, and attorneys are all available within one “house.”  A more cohesive transaction will help ensure that a purchase will run smoothly.

Have You Ever Dreamed of a Vacation Home to Escape To?

Its summer and that means vacation!  Nothing says relaxation and fun like a summer home! So why not give your REALTOR® a call about getting yourself one of those “get away homes” while it is a Buyer’s Market.  

Having a REALTOR® is important when making all of the vital decisions.  We will guide you through the process quickly so you can start enjoying your down time! We can assist you in the selection of your new second home by providing objective information about each property. We have access to a variety of informational resources and can provide local community information on utilities, zoning and various other details.  

Obtaining financing for a second home can be challenging without the proper guidance.  This is where your REALTOR® can also be of great importance.  We can help identify qualified lenders that will have the right program for your situation.  

With a negotiated agreement in hand, it is time to complete the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, faulty structure, roof condition, septic tank and well tests, just to name a few.  Your REALTOR® can assist you in locating qualified and professional inspectors to complete these inspections and provide you with written reports. 

When looking at a property, make sure you truly like the community. For that, there's no substitute for spending time in a prospective town.  The more you know an area, the better you can eliminate some of the risks of buying. You may want to consider renting for a season. This way you'll find out about up-and-coming areas and projects that could affect your investment.

According to Forbes, when renting a summer property, you will also want to maximize your purchase around a recreational activity.  Here are some locations you may want to check out:

• The Poconos offers year round recreation and is the ideal spot to rent or buy a vacation home.  The Pocono Mountains offer skiing (winter), horseback riding (spring), sailing (summer), and hiking (fall). There's even a Fall Foliage Hotline to point you to the most spectacular views and scenic driving routes.  There is no limit to your activities here!
• Another hot spot The Wellsboro area, home of the Pennsylvania Grand Canyon, offers hundreds of miles of hiking and biking trails from flat packed surfaces to rugged mountain terrain.
• The village of New Hope is nestled along the banks of the Delaware River. New Hope and its surrounding area offer visitors scenic countryside, romantic hideaways and family fun.  Enjoy the New Hope Renaissance Faire, beautiful wine country, the arts, historic districts, nightlife and of course, shopping!

As soon as you are sure the property is right for you, and you want to make it your home to escape too, it is time to close on your second home. Again, we can guide you through this process and make sure everything flows together smoothly.  Give us a call today to get started!

Customer Loyalty

My daughter who is part of the XYZ, or whatever generation the 20 something crowd is part of, has explained to me that her generation is “non-trusting”.  Now this is the generation of growing up with all their business out there for the world to see:  MTV Real World, You Tube, Facebook, and these are only the beginning. Non-trusting, I ask?  Yes, it seems that they are very skeptical and tend to not trust very easily which makes gaining their loyalty challenging. 

Coming from a Realtor’s standpoint and needing to gain their trust and loyalty so that we can work for them to the best of our ability, how do we obtain buyer loyalty today?  It seems to be harder to do than in the past with this new generation of buyers.  It was always understood that by living and doing business by the Golden Rule: to treat others how you would want to be treated, would gain you loyalty and respect.  Is that still all it takes? I would hope that is still true, but maybe we need to adjust. 

Building rapport and gaining the loyalty has to be accomplished at the very beginning, or these future buyers will be on the internet setting up a showing request with someone else believing that they can just call any agent to show up at a house to let them in to see it, because they are not loyal to anyone in particular. I believe we will be most effective if communication is honest, educational, and coming from a place of listening from the start. 

Today’s Realtors certainly need to be on leading edge of technology and be available to buyers even if it is a quick text message reply at midnight.  Again, they will be on the internet if you are not willing to be available and flexible with your time, as these buyers expect, or should I say, demand instant communication.   

If an agent can build rapport with their client(s) early on, the trust and loyalty will follow.  As Orison Swett Marden said, "The golden rule for every business person is this: Put yourself in your customer's place"

What has a business done for you in the past that lead you to be loyal to their company or brand?

Lori Zimmerman is the Operations Manager and a REALTOR® at Lawyers Realty, LLC in Lemoyne, PA    

Drop the "Fly by Night" - The Importance of Having a Buyer’s Agent Represent You.

So You are Shopping to Buy a Home.  Shopping?  Yes, Shopping. 

You are on the internet and see a house of interest or drive past a home with a For Sale sign, and you have questions on these homes or you want to take a tour.  What do you do? You call the agent on the sign or on the listing, of course.  They show you the house.  It is not really what you wanted, so you continue your search. You do the same thing with the next property that you want to see and so on, and so on, don’t you? 

Good idea?  Not so much, and I will explain why this is not in your best interest.

Buying a home is more complex then just calling a listing agent and asking that agent to show you a house. 

Before you start looking at homes, it would best to do your research to locate a REALTOR® to represent YOU.   By hiring a REALTOR®, you will have representation throughout the entire process.  They will also be objective when showing you a home and point out potential issues. A buyer’s agent will be able to show you any property that is listed for sale no matter which company has it listed.  Brokers co-operate by listing their properties on the multi-listing service.  Keep in mind that a listing agent is looking out for the interests of the seller – they are representing them and in doing so, owe them their loyalty. 

Whether you are a first time home buyer or have gone through the process many times, you should still plan to use a buyer’s agent for the same reasons as listed above.  Upon your initial meeting you would want to discuss the Exclusive Buyer Agency Agreement with your REALTOR® which would spell out the relationship between you both. 

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS® and are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again. To read more about why you should use a REALTOR® visit: http://bit.ly/OPBo5.

The best thing a home buyer can do is to research and gather as much information as possible so they can make an informed decision. Remember that knowledge is power!  Don’t be afraid to ask questions.   

What advice would you give any one buying a house in today’s market?

Avoid These Top Home Selling Mistakes!

We continue our blog from last week about how you can avoid difficult and costly hurdles to selling your home in a tough economy. Remember, home sellers often set unrealistic expectations that can delay the process.   The following list contains the second part in the two-part series of common mistakes to avoid.

6. Thinking you need to be in the home to explain things to a prospective buyer

Being present during a showing may actually harm your chances of selling your home because the prospective buyers and their agent can often feel uncomfortable talking or exploring the house freely while you’re present. 

7. Not being objective about your home

You have to be open and honest with yourself if you want to sell your home.  This means listening to your REALTOR® when he or she offers suggestions on improvements for selling your home quickly.  You may have sold houses before, but today is a different market and your REALTOR® has their “pulse” on it. 

8. Putting the home on the market before it's ready

Don’t overlook the value of hiring a stager. Staging your home before placing it on the market is the packaging which will help you sell.  Also, be sure to remove clutter and begin to pack as much as possible so the house not only looks clean and tidy, but it will also show as spacious as possible.  Once it is on the market, be extra careful if you are still living in the home to keep it neat, clean and tidy in the event of possible showings.

9. Not comparing your home to others in the area / market

A good REALTOR® will pull data (comps) of other homes that are currently on the market (your competition) and recent homes that sold in your area.  These homes will be of comparable age, size and condition. This will help you set realistic expectations on price and save you a considerable amount of time in lowering the price. Remember, it is best to list your home correctly from the beginning and not after it has been sitting on the market. 

10. Getting Emotionally Involved

You have to be prepared to sell your house.  Your home will always have more value to you, than to others. Perhaps it’s the home you grew up in or the home where you raised your children. Whatever the case may be, you cannot let these factors hold you back from selling when you receive a reasonable offer. Remember, your REALTOR® can help you determine the value of your home, without becoming emotionally involved.

We want to hear from you! What other factors should be considered when selling your home?

Avoid These Top Home Selling Mistakes!

Selling a home in a tight economy can been difficult and costly. Additionally, home sellers often set unrealistic expectations that can delay the selling of their home. Don’t be one of them!  The following is the first of a two part series of common mistakes to avoid.

1. Not Hiring a REALTOR®

Believing that you will save money by not hiring a Realtor® may end up costing you more. By hiring a Realtor®, you will be getting a professional that has knowledge of pricing, marketing, pre-qualifying potential buyers, access to the multi-list, knowledge of the legal documents, etc.

2.  Setting an Unrealistic Price

As part of their services, REALTORS® will help you determine a realistic price for your home by pulling comparable market data of other homes in your area that fit the same criteria and specifications as your home.  This will help you determine a competitive price for a house similar to yours in the same area. If your house is put on the market at a price that is felt to be too high, it will not be shown to potential buyers, and you will have missed your opportunity.  It will sit on the market with the rest of the inventory. 

3.  Expecting to Get Your Asking Price 

A REALTOR® will also assist you with having the correct expectations in terms of receiving the appropriate price for your home.  A common misconception is that you should receive your asking price or higher. That may have been the case in the past, but not today in the buyer’s market. Don’t reject an offer because it is not your asking price; that is what negotiations are for. 

4. Not Preparing Your Home for Sale 

An experienced Realtor® can make suggestions on how to make your home marketable and will do so before ever posting your home for sale. Look at your home as a potential buyer pulling up to the curb, walking to the door and into the home. At this point, it becomes necessary not to be defensive, but to listen to your Realtor’s® advise.  In the end, it may help to sell your house faster and at a higher price.    

5. Not Accommodating Potential Buyers 

It is important to know when to accept an offer “as is” and when to accommodate a request from a potential buyer in order to close the deal.  It is important to know when to accommodate a serious buyer and when you will just be wasting your time.  Price isn’t always the reason people don’t buy. Additionally, making too many concessions can leave you spending more than you make. 

Can you add to this list? What have been your experiences with home selling?

Be sure to check back next week for the second part of this blog series!

Navigating the “Minefield” of Real Estate

We have been focusing our blog writings on the necessity of having a lawyer involved in the real estate transaction.

We thought it would be great to talk with Mark Duffie, broker and lawyer for Lawyer’s Realty, about his pursuit in the legal field of real estate. The following is a Q&A on this topic.

What is it that appeals to you about the law, especially as it pertains to real estate?

With respect to the practice of law in general, the sense of problem solving and assisting others with legal matters is what drives me. 

What do you enjoy the most about your job?

The sense of accomplishment is rewarding especially when it is done on someone’s behalf.  In the real estate field, you become a facilitator of transactions.  The structuring of the deal and the documentation often make or break the deal. 

What do you like the most about working with the law and real estate?

Real estate really provides an opportunity for attorneys to become very creative to meet the demands of the client.  The challenges involved with every transaction are unique as are the solutions.   The closing on a complicated well structured deal is what we real estate attorneys work for.  That is what makes real estate law so rewarding.

What are some of the legal “pickles” buyers and sellers  get into by not having a lawyer involved in the real estate transaction?

Legal pickles.  That is an open can of worms.  Most real estate agents and clients are not educated on fundamental contractual principles including breach and remedies. 

Buyers and sellers enter into agreements often times not knowing the implications given the circumstances.   When the transaction warrants, standard agreements need to be amended.  That is often times when the “pickles” occur. 

When a buyer acquires property, they do not just acquire bricks and sticks.  They acquire a bundle of legal rights of which they must become aware.  They need to be educated on restrictions, easements, clean and green as well as other acquired rights. 

The problems arise when these agreements are improperly drafted and these rights are not reviewed or improperly reviewed.   Specifically, I have seen sellers try to sell a property that was already subject to an option or buyers attempting to buy a property under a fictitious name. 

If you had to describe the real estate transaction in one word or one phrase, what would that word or phrase be?

Minefield! 

Click here to find out more about the legal/real estate relationship.