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Category Archives: Homeowner Tips
Oregon Home Seller Alert: Carbon Monoxide Detectors Now Required by Law
Beginning April 1, sellers of one- and two-family dwellings, manufactured dwellings or multifamily housing units in Oregon that have a carbon monoxide source will be required by law to have one or more properly functioning carbon monoxide alarms installed before conveying title or transferring possession of a dwelling. Continue reading
Survey says…Don’t just assume those property boundaries are accurate
A parcel of land in the Northwest Quarter of the Southwest Quarter of the Northwest Quarter (NW¼,SW¼, NW¼) of Section Twelve (12) Township Sixteen (16) South, Range Eleven (11) East of the Willamette Meridian, Deschutes County, Oregon, more particularly described as follows: Beginning at the north Quarter corner to said Section Twelve, the true point of beginning; thence, South 0°03’06” East, 1321.00 feet along the North-South Mid-Section line; thence North 89°48’25”, West, 495.00 feet; thence North 0°03’06” West, 1321.19 feet to the North line of Section Twelve….
The Land Survey: A Homebuyers Best FriendIf you’ve ever tried to read a legal description (like the one above), your eyes probably glazed over before you made it halfway through. I know mine do. That doesn’t mean I don’t appreciate the importance of a land survey. In fact, I think it’s probably one of the most overlooked aspects of home-buying.
The tendency for buyers is to do one of two things — especially if they’re buying a home in a subdivision that’s been platted with similarly (if not identically) sized lots: (1.) assume that the established boundaries are accurate; or (2.) ask their real estate agent to point out the boundaries for them.
Neither of these is a particularly wise move. Just refer to the above-mentioned land description: Is it something that an interested party somewhere along the line –- a homeowner, a contractor, a fence-builder, a landscaper –- might have misinterpreted when making improvements to the property? You bet. Is this formula something a novice can calculate on the fly? Not bloody likely. And since I’m not remotely qualified to survey a property, I’m not going to venture a guess based on a stake or two that may or may not be a product of a survey.
But I am curious about the surveying process and would love to better understand it. So I attended a class yesterday in Bend given by local expert Scott Freshwaters. A surveyor for Deschutes County for 30 years before retiring in 2008, Freshwaters has owned his own Sunriver-based surveying business (Freshwaters Surveying, Inc., (541)420-1822 or (541) 593-1792) since 1987. He’s also a member of the Professional Land Surveyors Of Oregon.
Here are a few interesting bits of surveying trivia that Freshwaters shared during his hour-long class:
* There are several references to land surveying in the Bible.
* Three of the four presidents featured on Mount Rushmore were land surveyors (Washington, Jefferson and Lincoln).
* The country’s official “point of beginning” was established in 1785, on the north side of the Ohio River, on the border separating Ohio and Pennsylvania.
Aside from the fascinating history, what really stuck with me about Freshwaters’ class were several local examples of surveys he has done. These cautionary tales sent shivers down my spine and serve as a stark reminder of how important it is that a homeowner knows the boundaries of his property before he owns it:
Consider the case of the Awbrey Butte homeowner who hired Freshwaters to do a topographical survey because he was planning some extensive hillside landscaping. In the process, he learned that his property line actually went through his living room. (The man was lucky enough to negotiate a lot-line adjustment, at some expense, with his neighbor, who legally could have required him to remove the offending rooms.)
Then there’s the La Pine neighborhood that was developed so haphazardly, it will probably never get straightened out. Apparently, whoever built the fences years ago weren’t all that concerned with following the actual property lines –- fence lines throughout the neighborhood are many, many feet off the mark. His recommendation: Don’t buy there.
And then there’s the rural subdivision east of Bend that has two very different plat plans of the same parcel of land. (Tip: When in doubt, make sure you use the survey that has been recorded with the county clerk. Many times, a plat plan is filed with the surveyor’s office; but only documents recorded with the county clerk are authoritative.
I also learned about a very useful tool I wasn’t aware of: The Deschutes County Survey Research Application. Similar to the county’s DIAL and LAVA property research platforms, it provides a wealth of survey-related information to those who have at least a general understanding of how to read and interpret survey info. Continue reading
FHA Extends its Waiver of the Anti-Flipping Rule
Thanks to mortgage consultant Mitch Wilcox for the following update:
The Federal Housing Administration has extended FHA’s temporary waiver of the agency’s “anti-flipping” rule.’ As a result, lenders will continue to allow the waiver for the 30 Year Fixed FHA program.
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through Jan. 31, 2011.
Earlier this week, FHA posted a notice extending the waiver through the remainder of 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
The extension is effective through Dec. 31, unless otherwise extended or withdrawn by FHA. All other terms of the waiver will remain the same. The waiver contains strict conditions and guidelines to assure that predatory practices are not allowed.
To protect FHA borrowers against predatory practices of “flipping” (where properties are quickly resold at inflated prices to unsuspecting borrowers), this waiver continues to be limited to those sales meeting the following general conditions:
* All transactions must be arms-length (no family-to-family sales, for example), with no identity of interest between the buyer and seller or other parties participating in the sale.
* In cases where the sales price of the property is 20 percent or more above the seller’s acquisition cost, a property inspection report is required.
* In cases where the sales price of the property is 50 percent or more above the seller’s acquisition cost, a property inspection report and second appraisal is required.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Continue reading
Posted in For Buyers, For Sellers, Homeowner Tips, REO Info
Tagged central oregon news, Financing, Homeowner Tips
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Should You Rely on the Zillow Zestimate in Central Oregon?
Last week, several major media outlets (including the Los Angeles Times and the Christian Science Monitor) jumped on the “news” that –- according to Zillow –- the White House has lost nearly one-quarter of its value during the past three years.
Nobody bothered to question how Zillow came up with that number. Frankly, nobody cares how Zillow came up with that number. The info made for a very slick sound bite and, not surprisingly, lots of media types bit. In today’s hyper-speed, media-soaked society, we’re all about the bottom line –- please, spare me the details and just get to the point, already (I’m busy, don’t you know?). So Zillow reported its new number, and nobody questioned it — although a few folks did at least point out the absurdity in quantifying the numerical worth of the White House.
That’s the main problem I have with Zillow and the folks who swear by its increasingly popular “Zestimate.” Although even Zillow acknowledges that the Zestimate is “a starting point in determining a home’s value,” that isn’t how it’s being used by most folks. It’s become gospel –- the commonly accepted equivalent of an appraisal, even though, in many cases, a property’s Zestimate doesn’t even accurately approximate fair market value.
It’s All About the Data
Take Central Oregon, for example. My hometown and the area surrounding it aren’t particularly Zillow-friendly. The tri-county region (Deschutes, Crook and Jefferson counties) is primarily rural, which makes life difficult when it comes to calculating the Zestimate.
Here’s one reason our Zestimates are often off base: Much of Zillow’s information is pulled from county records. So, as Zillow states, “The more data we have, the more accurate the Zestimate.”
To its credit, Zillow actually rates its own accuracy –- assigning each locale from one to four stars and then detailing in chart form how close to the sales price their Zestimates prove to be. Below is one of several charts available; it shows how accurate the Zestimate is in a number of major metropolitan areas. And it’s not bad in some locales, but not so great in others. Actually, even in Philadelphia, the city where Zillow considers itself the most accurate, the Zestimate was within 5 percent of the home’s sales price only 33 percent of the time. Continue reading
All My Things: Handy online tool for homeowners to track personal inventory
Now that we’re in the throes of the Christmas holidays — with all the requisite gift-giving and coming and going that the season entails — it’s a good time to mention a nifty online tool that’s available to homeowners. It’s … Continue reading
Oregon’s New Mortgage Assistance Program Gearing Up to Accept Applications
Struggling homeowners in Central Oregon, take note: Oregon Housing and Community Services (OHCS) is gearing up to accept applications for its new $100 million Mortgage Payment Assistance (MPA) program. As part of the Oregon Homeownership Stabilization Initiative (OHSI, Oregon’s new … Continue reading
Will Your Transaction Close on Time? (Part Two)
Last week I attended a class that focused on why so many Central Oregon real estate transactions are closing late. In Part One of my discussion about the class, we tackled one of the main culprits: appraisals. Today we take a closer look at another frequent cause of delays: the loan underwriting process.
It used to be that the amount of documentation required during the underwriting process varied from lender to lender. Now, however, as mortgage broker/banker Larry Wallace of True North Mortgage explains, “Underwriting guidelines are very defined. Your clients have to fit in a very tight box –- and if one lender can’t make them fit in that box, you probably won’t have the option of moving to another lender because all the lenders use the same box.”
Actually, it isn’t that the box got smaller; it just got thicker walls. In other words, today’s lending guidelines aren’t new; however, during the past 15 years (until the mortgage industry self-destructed), lenders began to interpret the long-held guidelines much more loosely –- a situation we had come to see as normal and reasonable.
Now, however, we’ve returned to an environment of adhering to the old guidelines — and, in many cases, adhering strictly to those guidelines. That means that a buyer must not only qualify for a loan, but must also have good credit, cash to put down (in most cases), income to sufficiently qualify for that loan and proof of that income evidenced on their tax return. Consequently, many folks are being asked to jump through many more hoops to secure their loan. Each hoop adds to the timeline.
As Tom Ferrara, senior mortgage loan officer for Bank of America’s Bend office, explains: “Today underwriters are requiring extensive documentation –- they’re dotting all their I’s and crossing their T’s at least three times to make sure there are no indicators that down the road, there might be a problem with the loan. Credit reports are scanned to see if anything shows up that wasn’t disclosed on the loan application. There’s really no wiggle room anymore.”
In other words, folks with lackluster credit need not apply. Everyone else, be prepared to justify (in the form of extensive written documentation) why your lender’s underwriter should approve your loan.
Eight Steps to a Smoother Closing
So what can you do to speed along the escrow process? The following tips should help streamline transactions that require a loan:
* Most importantly, be proactive. Know what your lender expects from you –- and be willing to provide it — before you make that offer.
* Order your appraisal as soon as escrow is opened.
* Don’t schedule your closing for the end of the month (and, whenever possible, schedule at least a 45-day close).
* If you don’t have a lot of flexibility in your closing date, choose a local lender that funds its own loans; their timelines are typically shorter than the big guys (the ideal scenario: a lender who has its own AMC, which can greatly speed up the appraisal timeline).
* Allow for holidays when choosing your closing date.
* Don’t include any repairs in the contract unless the buyer or seller is prepared to pay for them before closing (typically, the lender now requires that repairs be completed before closing)
* If you have an FHA loan, don’t forget that the utilities must be on during the appraisal (which isn’t always easy, if the property is bank-owned). Also, if the appraiser discovers anything the lender considers a safety or health issue (such as peeling paint, broken windows, a deck in need of repair), those issues will have to be resolved before closing.
* Don’t include personal property on your Purchase Agreement. If you do, that property may have to be appraised and the price of the home reduced accordingly. (Fannie Mae and Freddie Mac can take credit for instigating this change in policy, which more and more banks are adopting.)
Above all, stay calm! Patience and persistence pay off.
Posted in About Central Oregon, For Buyers, For Sellers, Homeowner Tips, Uncategorized
Tagged About Central Oregon, Financing, Homeowner Tips
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Tick-Tock: Will Your Transaction Close on Time? (Part One)
For many folks, trying to close a real estate transaction these days is no simple feat. In fact, Bend-based mortgage broker/banker Larry Wallace of True North Mortgage recently polled a group of real estate agents, escrow officers and appraisers and asked them how many of their 30-day deals that required loans are closing on time. The response? 10 percent.
Not a very encouraging number.
In fact, the problem has become so prevalent that Wallace spearheaded a class last week in Bend on late closings to discuss what’s causing the delays and what to do about it. In many cases, Wallace said, several factors are to blame –- and are often beyond our control.
The problems arise out of changes in both the home appraisal process and the home loan underwriting process -– both of which used to involve fairly straightforward timelines that could be charted pretty simply. But that was then (before the mortgage melt-down), and this is now.
Assessing Appraisals
One of the biggest potential problems in determining your timeline can be attributed to the implementation last May of the new Home Valuation Code of Conduct (HVCC). Created in an effort to “enhance the integrity of the home appraisal process,” the revised HVCC (which applies to conforming loans backed by Fannie Mae and Freddie Mac), instituted a new system that prohibits lenders from ordering appraisals directly. Now, only a lender’s designated third-party, known as an Appraisal Management Company (AMC), is allowed to order an appraisal. The insertion of that step alone has increased the timeline exponentially (because every time anything needs to be done, the AMC must first be contacted and must initiate each new action).
This convoluted new system can complicate the process a little or a lot, depending on a number of issues. If, for example, your lender decides a second “review” appraisal is warranted, you can expect to at least double the time required. Expect further delays if there aren’t good recent sales comps nearby or if the property being appraised is on acreage, has outbuildings, has additional living units and/or includes unpermitted components.
And if by chance the AMC chooses an appraiser who isn’t well-versed in the area where your property is located — and there’s no guarantee the AMC will choose an appraiser from Central Oregon — the turn-around time for that appraisal can be significantly increased because you might need to appeal that appraisal.
The good news: Rumor has it that the HVCC as we now know it may be going away. (Check out this video explaining how the HVCC code has failed miserably at its purported goal: improving the appraisal process for the buyer.
Stay tuned for PART TWO of “Will Your Transaction Close on Time?,” where we discuss how your loan may delay your closing date and provide some tips for closing on time.
Considering purchasing an REO property? Read this first.
Anyone who’s even thinking about buying a bank-owned property should read this New York Times article detailing one woman’s quest to invest in a foreclosed home. It outlines in detail some of the many steps that buyers often skip but … Continue reading
Posted in For Buyers, Homeowner Tips, REO Info, Uncategorized
Tagged Distressed Property Info, Foreclosure information
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How to Appeal Your Central Oregon Property Taxes (and why it might be worth your while)
With the dramatic downtown in property values in Central Oregon, more and more homeowners are concerned about the effect — or lack thereof — on their property taxes. Many, however, don’t even realize that it’s possible to appeal your taxes … Continue reading
