Make up of Tampa real estate market – increase in cost of loans and more – The Duncan Duo Radio Show
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The Duncan Duo Real Estate Show. Now, your host: Andrew Duncan.
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Andrew Duncan: Good morning, Tampa Bay. We’re here for another week to talk about the local real estate market. Hopefully the rain doesn’t have you too down today because we’ve got a lot of positive news to talk about in our Tampa Bay real estate market here, on The Duncan Duo Show. We’re here with you every Sunday at 10:00 on 970WFLA or 105.9FM. If you have a real estate question, we would love to hear it from you and answer your questions or point you in the right direction. Whether it’s about buying a home, selling a home, investing, foreclosures, short sales, you name it. If it’s the real estate related, maybe you’re thinking about getting into real estate business, maybe you’ve had some challenges with a particular real estate transaction or anything about the real estate industry, we’d love the opportunity to help you: 990-9352 in Hillsborough and that’s 990-9352; in Pinellas 461-9352 and toll-free 1-800-969-9352 – all our phone numbers end in ‘9352’ and when we aren’t on air, you can check out the Facebook and YouTube channels by searching for The Duncan Duo.
Excited to have Nate Davis from Plant City Mortgage with us back on the show to talk about the mortgage market and Erin Catron from Erin Catron & Company – a partner of ours down a little further south, so for some of our listeners tuning in today in the Sarasota area she’s going to have some interesting stuff to update you on what’s going on in the real estate market there and how it compares with what we’re seeing in Tampa Bay which is, you know, prices remaining pretty flat, improving a little bit in particular neighborhoods, sales taking up and just overall stabilization.
Erin, is that something that you’re seeing similarly down south?
Erin Catron: Yes, absolutely.
Andrew Duncan: So, as far as your market: how much of the market is made up, for example, of distressed homes: short sales, foreclosures?
Erin Catron: We’re seeing a lot less foreclosures right now. Inventory is almost obsolete as far as the REOs or foreclosures go. Short sales are still standing pretty strong. A lot of people are trying to take the advantage of the time-frame for those short sales as well so we’re seeing still some of the short sales but, really, the inventory is just way down.
Andrew Duncan: And we’re seeing the same thing. Very, very little bank-owned REO inventory hitting the market and it’s discouraging because, you know, I talked about it on the show a few times: there are buyers missing out on homes we need the foreclosure inventory in Tampa Bay. I mean, I know another parts of the country they might want to put it on but we need it. It’s actually: we’re buyers ready to buy, you know.
Erin Catron: Right, right.
Andrew Duncan: So, you mentioned…the things that you mentioned about short sales we’ll talk about this a little later in the show is there’s a provision on the books right in law that says that if you short sale a primary residence – and again, there’s a whole lot of other terms and conditions, but I’m not an attorney, this isn’t legal advice, I have stated it all along. I said that before, too.
Nate Davis: [illegible]
Andrew Duncan: Yeah. But if you’re short selling your property and it closes before the end of the year and it’s your primary residence, you’re not to pay the 1099 consequences to the IRS unless you meet certain criteria. That law is gone off the books at the end of the year unless it gets extended. Now it’s been passed. It’s been passed through one of the – I think it was either The House that got it passed or it has gone to the Senate about some sort of an extension, but a lot of people are very hesitant to think that it will get extended so, again, it looks like if you’re short selling your property you want to get it closed this year, if you can, if you’re looking at the 1099 protection.
Erin Catron: And if I can add to that really quickly because I think sometimes what people don’t understand too is that short sale process does take a little bit longer than a traditional home sale so when you say “at the end of the year” and you’re thinking well, we’re into September, the time-frame is very tight, so…
Andrew Duncan: Yeah. If you call today and say: “I want to short sell my house”, there is no guarantee. There is really a lot of risk because you should have done it sooner.
Erin Catron: Yeah, if you’re on the fence, get off the fence.
Andrew Duncan: We’ll give it everything we’ve got but the time-frame there are a lot things that are out of our control.
Nate Davis: So, you could call Andrew on December 20th and he’ll make sure that [illegible due to everyone talking simultaneously and laughing].
Erin Catron: Yeah, make sure you got Andrew, not me. [laughing]
Andrew Duncan: No, guarantee, I’ll be on vacation December 20th. If you want to give me a call get on the phone before December 20th. So in Tampa Bay – and it sounds like in Sarasota – home sales are taking up, prices are remaining flat and buyers are getting discouraged though, I think, too because they are having a hard time to find inventory.
Erin Catron: It is getting more difficult.
Andrew Duncan: It’s a real challenge. And we’re seeing homes in certain price marks fly off the shelf and buyers are getting discouraged because they’ve been waiting and some of them are just deciding to rent. They’re like: “Forget it, I’ve lost out of three, maybe I’m just not meant to be a home owner.” And that’s really discouraging.
Erin Catron: It is, especially with the interest rates with what they are and the opportunity to buy right now. It’s a shame to not buy just because you feel like you can’t find the right house so it’s…
Andrew Duncan: And for home sellers that’s a celebration, though. They’re happy for that process because they’re getting a better price and, Erin, you guys are doing a guaranteed sale program similar to what we do which is great for us because we get a lot of people who listen to this show and catch our spots and they call and say: “Hey, I’ve got a property in Sarasota and I want to do the guaranteed sale.” And until now we really hadn’t had someone that we had a really great relationship where we could say: “Ok, here you go.” And they do the program. So it’s great to have you on the show and talk to us and, obviously, some of our listeners who may call us directly you can certainly call Erin directly or you can go to Erin C…Catron.
Erin Catron: Catron. [laughing]
Andrew Duncan: Almost! I’ve got it! I called it erincatron.com
Erin Catron: [laughing] It’s a ‘C’ so it throws everybody off. It’s…
Andrew Duncan: And it’s erincatron.com. If you’re looking to do something at Sarasota, you can go directly to her. If you call us, we’re going to refer you to her. But continuing that conversation now: are you guys experiencing same thing? Your buyers are getting frustrated who cannot find homes?
Erin Catron: Yeah. We had a buyer actually this week that one of our buyers specialists was working with and they’ve looking for a property for a few months and even just a change in our inventory and we’ve actually seen a slight tick-up in the prices and so…
Andrew Duncan: We have, too. Same thing. Not a ton, but a few percentage points.
Erin Catron: Right. Well, these particular buyers had a couple of things that had cleaned on their credit to make sure that they were able to buy and it’s been unbelievable four months from when they started the process to right now when they actually got their approval done and we’ve worked with them all through but they came and said: “This is overpriced. This house is overpriced now.” And it’s not – it’s just the market has changed and the inventory is so down.
Andrew Duncan: Well, it’s funny ’cause we talked about the bank-owned inventory and we were with clients who looked to buy distressed homes and fix them up and re-sell them and a whole variety of different clients that we worked with and we’re seeing the REO stuff that a year ago might have sold at a hundred is now at one-twenty, one-thirty.
Erin Catron: Right. Yeah.
Andrew Duncan: And, again, that’s not to say the overall market is increasing the price.
Erin Catron: No, no.
Andrew Duncan: But the REO stuff, I think, they’re pricing it a little higher and they’re getting better prices and you look at something and you are like: “Wow, that’s bank-owned and short sales were usually lower than conventional.
Nate Davis: Yeah, they’re not trying to undercut the market as much as they used to which is a good sign for values.
Erin Catron: It is, it is.
Andrew Duncan: It holds values more strongly but it creates other challenges, too, in that the consumers used to see it at a hundred and now it’s at one-thirty and they think: “Oh, they’re never going to sell it” and in a week it sells.
Erin Catron: Right.
Andrew Duncan: So there is a lot of misconception and confusion out there, I think, for people because the market has started to show some shifting and it is showing the signs of improvement.
Erin Catron: It has and I think it goes back, too, with working with your buyers and making sure that they’re educated and when they do find the right property and it is the right price, not to be afraid to go ahead and make that next step because I think what we are finding is that it may be a little bit more difficult to find the right property two weeks from now. So, it does give a little bit more of a necessity to act.
Andrew Duncan: So, again, if you’re tuned in you have a real estate related question, we’d love the opportunity to talk to you. You can give us a call: toll-free 1-800-969-9352 for those folks in Sarasota and Bradenton, then locally in Hillsborough, 990-9352 and in Pinellas, 461-9352. Again, all our phone numbers end in ‘9352’ or WFLA if you’re looking to dial by letter and we would love to talk to you, whether it’s buying, selling, investing, foreclosures, short sales, real estate business, stuff going on in politics related to real estate. Whatever it is, feel free to give us a call and we’d love the opportunity to talk to you.
And Nate’s on the show with us quite regularly. I noticed this week some news about Fannie and Freddie increasing or there are some provision that sounds like if Fannie and Freddie are going to increase some loan costs for the conventional loans.
Nate Davis: Correct, yes. Fannie and Freddie both they are institutions that guarantee the performance of probably about 60 to 70 percent of the nation’s loans right now. And what happens if your lender makes a loan if they can get it to where it fits in the buck, so to speak, Fannie Mae or Freddie Mac will guarantee it, they will pay Fannie or Freddie a fee for that based on their insurance and that cost is going to be increased. And, as you know, anytime a cost is increased, those lenders are going to say: “OK, we’ll just pay for it what’s on us.” It’s going to get passed to you somehow.
Andrew Duncan: Right.
Nate Davis: So it’s an increase in costs that’s coming. It should not be substantial but it is something that’s to be aware of.
Andrew Duncan: And I think you mentioned too – and this is something unique about like you, for example, owing your own shop – you have the ability to package things and cover costs that there are a lot of the big bucks lenders are having hard time competing with.
Nate Davis: Yeah, we’re a wholesale lender and what that means is, basically, we provide closer to real life market rates. When you’re with a retail institution, majority of the time there’s a lot more overhead that you have to cover. It’s not that they’re trying to get people a bad deal, it’s just they’ve got a lot more expenses involved. So, when things like that come about it’s not seen on our end nowhere near as much.
Andrew Duncan: Understood. So, Nate, we’ve talked on the show about some of the different refinance opportunities. What are some of those that are out there right now for people or like the FHA streamline refinance, I think that’s one you mentioned. There are some unique circumstances where if your spouse or a parent or something like that – all you need to do refinance it with someone off?
Nate Davis: Yeah. Right now there’s a lot more to it. If someone’s got a mortgage in their name outside two years ago or later, it will be in your best interest to really look at your mortgage, give who you feel comfortable with a call to analyze that because there is a substantial amount of savings out there. I mean, these are substantial. We’re seeing people who are refinancing. They’re saving hundreds and hundreds of dollars. They’re paying loans off in fifteen years, whereas before they had twenty-three years left on the mortgage, with the same exact payments.
Andrew Duncan: Right.
Nate Davis: A lot of options out there and the good news is – this is something we desperately needed – there’s a lot of programs that we have right now to where appraisals are not necessarily needed. For example, if you have an FHA loan, we can do an FHA streamline.
Andrew Duncan: VA can do the same thing, I think.
Nate Davis: VA same thing: no appraisal needed, doesn’t matter. We just closed a gentleman with a 280,000 loan and I think the home might have been worth a 150,000 on a good day. The appraise value home is not an issue providing that you have a certain existing type of loan. If your current loan is FHA loan, a VA loan or it’s backed by Fannie or Freddie, there is a program out there for you, regardless of value.
Andrew Duncan: That’s awesome. Sue’s got Steve from Tampa on line one, he’s interested in a bank-owned home but the price isn’t listed. How can we help you, Steve?
Steve: Hi. Yeah. Actually I listen to your show talking about how the bank-owned homes are just destroying each other. Well, I’m looking at a house right now that’s currently for sale. It’s been for sale for about two months but there is no price available. The bank has not released the price on the home and it’s been over two months. I’m just curious how does that work and why it hasn’t been listed?
Andrew Duncan: Let me ask you a question: how do you know that the home is for sale?
Steve: There is a sign in front of it and the guy at the real estate is advertising it. It’s a short sale going; [xx] going.
Andrew Duncan: OK.
Steve: And I spoke to the real estate and I think the bank hasn’t released a price on the home.
Andrew Duncan: Yeah. I’ll tell you again, a lot of this is relatively typical bank stuff. They stall, they delay and, I think, it’s particular because they’re trying to hold off the inventory and there’s a lot of hoops that you have to jump through to get a clear title on the bank-owned home, too. They could have found that there’s an additional [xx], they could have found that the second lender isn’t going away as easily. So, there’s a lot of reasons why it would be owned by the bank and maybe available but not yet priced and some of that is because the bank is attempting to prevent putting it on the market and giving you the price, then not being able to close the deal because there is a title problem or condition problem with the home. And sometimes the…
Steve: Yeah, but…
Andrew Duncan: And sometimes the agent who’s listing it is limited in what he can tell you because he is working with the direction of the bank.
Steve: Right. I’m just curious: why would they put a ‘for sale’ sign in the front yard and not have it available for sale?
Andrew Duncan: That’s a little…That’s pushing the ethics button right there, you know. I’ve seen signs where it says: “Owned by so-and-so bank”, but if it’s got a ‘for sale’ sign, technically it’s supposed to be on MLS and they would have a price available. But there could be some other circumstances.
Erin Catron: One thing that could have happened, too, is when you are an REO agent, a bank-owned agent, they have a certain set of guidelines that they want you to follow. And what could have happened, just like Andrew said, maybe they don’t have a certificate of title or something like that and maybe they’ve gone through the process and one of those processes is sticking the sign in the yard. Now…
Andrew Duncan: And probably they should take that down and
Erin Catron: No, I was going to say that maybe they should take it out of the yard, but you know…
Andrew Duncan: Until it’s ready.
Erin Catron: Exactly.
Nate Davis: If the home’s for sale and they can’t give you a price you should tell them you want to make an offer but you cannot tell them how much.
Steve: I call the agent and say the buyer because I’m doing it as a home but it’s been over two months. You know when I called them back I even talked to my real estate agent he said: “Well, we don’t have a price on it yet.” And I’m like: well, do you want me to buy it? Because you have a ‘for sale’ out there and there’s no price on it.
Andrew Duncan: Yeah. That’s definitely something we wouldn’t do but, again, we cannot control what other agents do. But, yeah, I mean the only thing I can say I would just keep an eye on it and maybe even ask to speak to the agent’s broker at some point. You know ’cause that’s…I mean that’s a little misleading as far as I see it.
Steve: OK. I appreciate the help. Thank you.
Andrew Duncan: Ah, thanks, Steve. I appreciate the call. So, again, you’re tuned in to The Duncan Duo Real Estate Show here on 970WFLA. We’ll be back to answer the questions and to talk about the local real estate market after a quick break here on 970WFLA.
Andrew Duncan: So, we’re back here on the Duncan Duo show talking to you about the local real estate market. Thank you, Glenn, for the intro there. And we’re taking your calls, too, so if you have calls just like the last caller, whether it’s about buying real estate, selling real estate, investing, foreclosures, short sales, home-stage in luxury properties, real estate marketing, whatever it is related, even remotely, in real estate, we’ll take your questions. And mortgage questions as well. We’ve got Nate from Plant City Mortgage with us to answer those questions so you can call us on 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352.
So, Nate, are mortgage rates going to go down to zero? I mean, can they go any lower? [laughing]
Nate Davis: Yeah, I mean, like for example VA loan right now we just have one where there is a thirty years fixed rate at a quarter and I think the fifteen year rate is at zero, so there’s a big difference.
Nate Davis: But it’s out of control now. I mean, it’s so low to where…you’re basically paying back the price of the home and there’s just a little bit of interest [illegible]
Andrew Duncan: So, here is what’s funny: I was talking to a client this week who’s buying a relatively high-end property and getting a sub 300 at a three percent interest rate and when he told me his payment was like right around $1,000.
Nate Davis: Uhm.
Andrew Duncan: I mean, he’s put a lot of money down. I was just like: “Huh?!” I had to stop, you know. I look at this stuff every day but I stopped for a second and thought: “Oh, my goodness. He’s right. That’s remarkable.”
Nate Davis: Yeah. Yeah. We’ve seen fifteens are below three as well and it’s crazy. And this isn’t like a magic mortgages where you have what you have but you have to pile all those points. This is no-point loan. This is just: there’s your market, there is your rate, you know. And it’s just a great opportunity for people. They’re not just buying a house because that’s so affordable but also – like I was saying before – refinancing your loans. I mean, I’m not for people prolonging debt, but if you can take the same payment you’re making now and pay that same payment on a new loan and pay it off faster, then you’ve done if you did nothing at all, how can you go wrong? Paying your home off sooner, you cannot go wrong with that.
Andrew Duncan: It’s a no-brainer.
Nate Davis: No catch enclosed, not increasing your payment, just paying your home off sooner.
Andrew Duncan: Yeah and I’ll tell you: I think a lot of people question whether or not they can qualify, a lot of them are concerned about the appraisal and like you mentioned before, 70 percent of them aren’t going to have to get appraised again.
Nate Davis: And here is another crazy part of what I was saying that I’m seeing people have existing VA loans or FHO loans – those are just streamlined loans. That doesn’t just mean ‘no appraisal’. We take the application – do you know that the programs do not even allow for us to put in the income? There’s none income-qualifying. All you have to do is you make your last 12 months payments as far as your mortgage is concerned, have the minimum credit score requirement and you’re good to go.
Andrew Duncan: So, Mike on our toll-free line has a question about short sales. How can we help you, Mike?
Mike: Hi. I’m looking at refinancing the house soon and take advantage of the low rates but I had a short sale about a year and a half ago and I’m wondering a lot of these places are telling me because of the short sale I cannot do it or I need to put some money down and what are my options to get around the short sale or do I have to wait two years, three years? I mean, what’s the limitation here?
Andrew Duncan: So, you’re looking to do a refinance and have a short sale from a year and a half ago?
Mike: Yeah. Looking at doing refinance my apartment but I had a short sale on an investment property about a year and a half ago.
Andrew Duncan: About a year and a half ago? OK. Now, you want to…In fact, what I am going to do, Mike, is I’m going to put your on hold because we’re up against news-break and we’re going to continue if that’s the completeness of your question, we’ll answer right after news-break. You can hold on line if you wish or we’ll put you back on but we’re going to run into a break in just a second so again we’ll talk about that, answer his question, how long will a short sale stick with him and, Nate, we feel like that a lot and it’s usually going to vary from lender to lender but we’ll address it in more detail, Mike. Just give us a second after a very quick news-break, here on 970WFLA.
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The Duncan Duo Real Estate Show. Now, your host: Andrew Duncan.
Andrew Duncan: We’re back here, talking about the local real estate market and Mike has been waiting patiently with us on line from Tampa. Are you still with us, Mike? Oh, Mike dropped. OK. Well, let’s…
Nate Davis: Key-wording was ‘waiting patiently’.
Andrew Duncan: Right, he was waiting patiently and we, apparently just went too much past his patience. So anyways, the question was: he’s got a short sale a year and a half ago and wants to ‘refi’. What are his options?
Nate Davis: Yes. Basically, what the limitations are and it’s not like…a lot of people think: “Well, if you have a short sale that means you’ve got to wait this long.” And it’s actually dictated by the loan program for which you are applying. So, if you’re going for an FHA loan versus a VA loan or a conventional loan…
Andrew Duncan: So it depends on what type of ‘refi’ he’s trying to do.
Nate Davis: That’s correct. And a lot of times what their prior experience was or their prior credit history, will dictate which type of program he can apply and qualify for. This question comes up so frequently. If you go to plantcitymortgages.com, there’s a gray button in the top-right and it says ‘Prior bankruptcy, foreclosure, short sale’ with a question mark and it enables you to calculate where you just click drop-downs: what did you have, a short sale or bankruptcy or foreclosure? What date it occurred on? And it will spit out the first available date that you can apply for refinancing for every single loan program. So it’s just going to tell you right on the spot: this is your waiting period.
Andrew Duncan: Ah, Mike is back. Mike, are you with us?
Mike: Yeah, I’m here.
Andrew Duncan: OK. So, so he’s basically saying: in your specific situation it’s going to depend on the type of loan product you’re looking to refinance. Nate, if you want to fill it now, go ahead and ask him what you need?
Nate Davis: Yeah. Basically, Mike, the waiting period is dictated by the type of loan program that you’re applying for. So, for example, FHA loans are more liberal and accepting when it comes to prior derogatory situations, such as foreclosures.
Andrew Duncan: Oh, you’re actually forbidden from saying the ‘L’ words on air. On 907WFLA you’re not allowed to say the ‘L’ word. It’s one of those curse words.
Nate Davis: Andrew, it is a government loan program and let’s just
Andrew Duncan: Good boy! OK.
Nate Davis: But long story short: depending what type of program you’re applying for will dictate the waiting period and that’s something I was just mentioning earlier here. If you want to go to plantcitymortgages.com, there’s actually a gray button at the top right of the web page and it says ‘Prior short sale, foreclosure’ and it’s got a question mark. So you click on it, you can type in what event occurred: whether it was deed in lieu of foreclosure or foreclosure of bankruptcy, a short sale and you can type in the date on which it occurred and it will spit out the first available date that you can apply for financing for any loan program.
Andrew Duncan: And I regularly hear two years are a lot.
Nate Davis: Yes.
Andrew Duncan: Two years kind of seems to be a point of a number that is consistent across the programs. So, Mike, if you already had a year and a half, you may just have to wait a little while.
Mike: I mean, does your credit score puts that back a little ’cause, I mean, the only thing affecting me negatively is the short sale in my credit history ever, so with the positive credit score of mid-700 hundred?
Nate Davis: Oh, yeah, you’re fine then.
Mike: Well, that’s my question. Is it the only thing holding me up here is the short sale?
Nate Davis: That’s correct.
Mike: How long do I have to keep playing the gamble if I want to take advantage of the rates?
Nate Davis: Yes, you’re going to need to wait two years from the date of the discharge of that. So, if you said: “Nate, I’ve got an 800 credit score and I make a million dollars a year, can I get an FHA loan if it’s only been a year and a half, the answer is still going to probably be ‘No.’ There’s some exceptions that would apply but not in the case of a short sale.
Andrew Duncan: I’ll say this much: I really don’t think you’re going to see rates that drastically different in six months. I mean so you’re probably just going to have to wait out that extra six months even with the great credit score, just because that’s their guideline, that’s their rigidity.
Nate Davis: What I want recommend to you: don’t wait until that exact anniversary because you can actually buy a home on that date. So what you want to do is, if you want to give us or whoever you feel comfortable with a call, you could probably start planning now. Have someone take a look at your credit, give you some advice and tips on how to best position yourself. That way if there is anything between now and the date when you could or should be working on, it’s a lot easier to fix things every six months versus “Hey, I’ve got a contract, can I close this home now?” and you know there’s something there.
Andrew Duncan: Right.
Mike: Right. Yep.
Andrew Duncan: So we hope that helped to answer your question, Mike?
Mike: Yes, definitely. Hey, one more quick question to Nate. My wife is looking into getting into real estate and she’s taking real estate exams through online. I’m just wondering as she’s starting now we’re wondering what’s the best avenue in your opinion to get her jump-started? You know, working with the RE/MAX
Andrew Duncan: Yeah. Well, obviously, I’d like RE/MAX…I’m going to support RE/MAX out there just ’cause I own a RE/MAX office. You can certainly have her send me an email: firstname.lastname@example.org. I think first and foremost, more than anything that first year as she doesn’t have a lot of real estate background, she’s going to have to get educated on the industry, go and do some training programs and some sales training, too, depending on what kind of background she has if she has a sales background or not.
Mike: Yes, she does. She’s been a retail manager for some years now but she’s worked in retail industry for a long time now. Surely, there’s a problem with real estate.
Andrew Duncan: Yeah and I’ll tell you there’s a lot of good companies out there. Obviously, we have a training program for brand new agents that we put on our real estate team. We have brand new agents joining us to sell homes within a month. So, it’s really going to depend on her own motivation to learn but there’s a ton of material out there that she can learn and obviously our support. You know, give us a call we’d love the opportunity to talk to her and see if there’s some mutual interest. And she can send me an email: email@example.com and I can give her some additional suggestions.
Mike: OK. That’s cool.
Andrew Duncan: Thanks, Mike, appreciate the call.
Andrew Duncan: So, again, when it comes to getting in the real estate business, it’s actually a pretty good time to do it. I mean, there are a lot of people with great sales experience that can do phenomenally in real estate right now, mostly because they haven’t formed bad habits.
Nate Davis: Uhm.
Andrew Duncan: They haven’t gone through some of the cycles of the market where they can come in and they can listen to somebody that knows how to sell a real estate today and it’s a great opportunity. We’ve had and it’s funny I mentioned it on a show two weeks ago, I’ve had more new agents or people that wanted to get a real estate license contact me in the last month that I had, I think, in the last five years combined.
Erin Catron: We love new agents.
Andrew Duncan: Oh, yeah, it’s beautiful. So, if you’re thinking about getting into real estate business, send me an email, go to our website, we’d love the opportunity to see if we’re a match for you and if not, maybe recommend another operation for you if what we do does not align with what you’re looking to do. So, again, if you have questions, feel free to give us a call: 990-9352 in Hillsborough, 461-9352 in Pinellas, toll-free 1-800-969-9352. If you have questions about mortgages, buying, selling, investing, foreclosures, short sales, whatever it is, we would love the opportunity to talk to you.
Nate, one of the things that I want to talk to you about was the appraisal scenarios that we continue to have problems with. I know there is a mortgage under your…you’re always looking at options to be proactive to kind of you know accomplish your client’s goal and to keep a real estate transaction moving forward. One of the things that I think you and I spoke about at a recent meeting was making sure that and double checking the appraisals’ data, looking at the data: is this a valid count; is this too old of a sale; is it a like-type property? And then I think you mentioned like their math at one point you saw the xx or did you just adjust one property even though the square difference with the same was off and they made a mistake. They make mistakes and double-checking it for that.
Nate Davis: Yeah, you know, I’m not an appraiser by any standard but I do consider myself analytical to some extent and just like you know a lot of stuff about financing even though you don’t do financing, that’s a way we have to know appraisals and it’s very important. When we get an appraisal, you just want to double-check for accuracy. A lot of times appraisals do come in and people have these expectations of these huge numbers from a year ago and they may not be there but that doesn’t mean you still shouldn’t double-check it. And we’ve seen times where there might be some data that’s incorrect, maybe a prior sale number is a number that’s off and we just double-check all this stuff. And it helps a lot.
Andrew Duncan: And if you’re a home seller that one thing will encourage people especially for unique-type properties, have your home appraised upfront and then provide that appraisal report to the new appraiser. Now, they’re not obligated or required by any means to use that appraisal report but, at the same time, it’s information that they should at least look over.
Nate Davis: And I would tell them if they did decide to go that way I would tell them if you hiring an appraiser prior to putting your home for sale make sure they give a clear message in their appraisal that they want to be as honest and accurate with current bank guidelines.
Erin Catron: Yes.
Andrew Duncan: Right, ’cause sometimes it’s…sometimes it’s…
Nate Davis: It’s a steal to the industry out there…
Andrew Duncan: Yeah.
Nate Davis: And the appraiser knows that if he gives you those big, fat number and you are going to say: “Oh, wow. That’s such a great appraisal. It’s awesome.”
Erin Catron: That’s right. That’s right.
Andrew Duncan: I’m happy. Yeah, I’m going to send my buddy. Here’s my buddy who’s going to sell his house!
Nate Davis: Yeah. He’ll get appraised all their families homes. And then they go and another appraiser rings them to appraise the home with more realistic, tightened guidelines that lenders are going to want with more recent sales and more strict and that can lead to a huge disappointment. So I always tell folks: if you really think you need to pay for an appraisal prior to, I think the best indication is look up their what you think your home’s worth in the market and see what else is out there and if you’re not the best deal, well you’re out.
Andrew Duncan: Do you run into that, Erin, where people get an appraisal and then you look at the report and you’re like: “I don’t know how they got it. Did they go like back to the future or something?” Cause I don’t see it.
Erin Catron: Right, right! And you’re exactly right because if you not saying them the purpose: “Hey, I want to put my house in the market” and we recommend that – not just for unique properties but, really, across the board for any of our sellers to get an appraisal done…
Andrew Duncan: The only concern is when they get the appraisal done with an appraiser that is just giving them a number they want to hear.
Erin Catron: That’s right. You’ve got to get a recommended appraiser that they know that the reason of them getting that appraisal done ’cause, like you said, you want to make your clients happy.
Nate Davis: Honestly, that’s how you do business sometimes, you know, and that’s kind of what it comes down to.
Andrew Duncan: So, we’ve got Darrell on line one, he’s got a question about refinancing. He’s up to date with his repayments but wants to refinance. How can we help you, Darrell?
Darrell: Hi. How you’re doing?
Andrew Duncan: I’m doing good!
Darrell: Good. I love the show, by the way.
Andrew Duncan: Thank you very much!
Darrell: Good. I wanted to ask: we have a mortgage – a conventional loan. We refinanced it out of an FHA loan some time ago. It’s been a while. But the thing about it is we made payments for thirteen years. Of course, it’s worth now what we owed on it. We did check amount of that probably five or six years ago. Just wanted to know if there are anything out there that we could consider getting into, thinking about how to go about the amount that we owe on it?
Andrew Duncan: And is your loan a conventional loan now?
Andrew Duncan: OK. Nate, do you want to…
Nate Davis: OK. Yeah, basically there are some options out there for you. I’m sure you may be getting a ton of postcards in the mail and all kinds of offers and you’re thinking: “Are these things legitimate? Are they real?” And, if you have a loan that’s guaranteed to be backed by Fannie Mae or Freddie Mac, you would be eligible for a program called HARP that allows you to refinance despite of what you owe. Now, the thing to remember is you wouldn’t really know off-hand if you do have a loan backed by Fannie Mae or Freddie Mac without searching it on the Web. If you want to give us a call, we can search it for you or if you go to our website, it’s plantcitymortgages.com. There is a gray button in the middle saying ‘No equity refinance’, you can click on it, it will take you to the links that you can punch in your address and it’ll tell you…
Andrew Duncan: If you’re a Freddie or Fannie.
Nate Davis: …if you’re a Freddie or Fannie. And if you are, then could qualify into the HARP program, providing your information checks out. And one thing I want to tell you is: a lot of people had their existing lenders offering the refinancing. And we know this is a big trend right now and a lot of people think: “Oh, the only people that could help is my current lender because I am so far upside down.”
Andrew Duncan: Ah-ah, nope.
Nate Davis: And it’s just like any business. If you feel they have capped the market, their mortgages are the highest if anybody…You know they had someone call us – I’m not going to mention the name of the existing lender – our rates that didn’t even go up to what they were being called in.
Erin Catron: Wow.
Nate Davis: And we’re not even their custom…I mean, that’s what the current calls you. And they just seem that people just know they think we’re the only the ones that can help them. Well, we take it out to the market and shop it and there’s a competitive rate market out there so don’t think that that’s your only option. But, go to our website, check it out. If it is Fannie or Freddie, I guess that if you want to give us a call we’d be more than happy to take a look and see if how we can help you save some money.
Andrew Duncan: And, again, with that refinance product, Nate, your credit requirements are relatively late. Isn’t that one where there’s supposed to have 12 months of payments or is that one where…The appraisal doesn’t matter, we know that.
Nate Davis: Right. There are two different programs. One of them is a streamline refinance which only your current lender can offer, however, the offset that would be a substantially higher rate or you can do a qualifying HARP and that’s where it gets really competitive.
Andrew Duncan: OK.
Nate Davis: Because people say these guys are good borrowers. If you’re a good borrower and you don’t do the fully qualifying, you’ve cheated yourself.
Andrew Duncan: Right.
Andrew Duncan: So hopefully that helps you to answer your question, Darrell. We appreciate the call. I’ve got to run into a break though, so thanks for tuning into the show, we appreciate it.
Darrell: OK. Thank you.
Andrew Duncan: You’re welcome. So, we’ll be right back after a quick break on The Duncan Duo Show.
Andrew Duncan: We’re back here on 970, talking about the local real estate market. I want to give a quick reminder to everyone about our smoking-hot deals website. It’s at tampabaysmokingdeals.com [background sound effect]. [laughter] tampabaysmokingdeals.com – all the best bargains in Tampa Bay: foreclosures, short sales, waterfront condos all the way from New Tampa to Apollo Beach, to Tierra Verde and South Tampa – we got the entire Tri County area covered on the website. About 60 to 70 hand-picked bargains every week, we update it. So, if you want to bookmark it and come back and take a look at tampabaysmokingdeals.com, we’re always making sure that it updates about some of the best bargains in Tampa Bay. So, if you’re an investor or you’re someone who’s just out there looking to buy a home and looking for a great bargain, check out tampabaysmokingdeals.com.
So, Nate, I want to ask you real quick: a medical debt Bill could help credit scores if passed. It’s working through Congress right now. It could allow consumers to have bad credit information removed from their score within 45 days of payment of a medical debt collection. What do you think about the Bill and it sounds like it’s got some good steam and might have a chance of passing through.
Nate Davis: Yeah, I’m all for people personal accountability, responsibility and being accountable for your actions, however, with a medical piece, you know whenever we’re doing whether it’s mortgage loan or someone’s trying to buy a car or finance furniture, credit score comes up. And at the most common collection out there is a medical collection and the way that the credit scoring works is oftentimes in a short-run you’re better to leave an old collection open and to pay it off right before you apply for financing. What it does it makes the old collection and turns it into a new pay collection which actually will, typically, give you a worse score than leaving it with collection. So what it’s saying is that if you pay this collection not only will it show ‘paid’, it will actually remove them and that way you actually encourage people to take out small debts ’cause right now it’s kind of like people want to do the right thing, they want to pay all collections but also hurts them.
Andrew Duncan: Hurts them.
Nate Davis: Initially it hurts but over time it will help them. But in a short-run, and that’s what people usually pay attention to it: “Hey I want to buy something now, let me look into this.” And we get advice by people who know and say: “Ooh, might not want to do that. “
Andrew Duncan: So, like you mentioned, if someone’s got a medical collection bill and they’re trying to qualify for a mortgage and, again, if it’s an old one, then the problem is that it makes it ‘new’ again and it causes…it actually decreases the score.
Nate Davis: And I know that a whole lot of people scratch their heads at home because there’s so much misinformation about how credit scoring works. We hear so much bad advice out there. People say: “Oh, I was told to pay off all my collections but my score didn’t improve.” It’s far from the truth.
Andrew Duncan: Long term.
Nate Davis: Long term it will but usually they’ll have this conversation like I’m trying to buy a house next month and I went and did all this.
Andrew Duncan: Right.
Nate Davis: Once it’s important to, not just get pre-approved, but new mortgage planning. This is something you just don’t want to walk into and say: “Here I am. Will I get this because of what my score’s at?” You can plan it out. We told that to some people five months, six months before you have got to buy a house and show them how to get their scores up to give them the best deal for the next thirty years.
Andrew Duncan: So, again, that’s something that’s not yet official, it’s not yet passed, but is in the process and coming soon to theater near you.
Nate Davis: Yeah, no, without making it sound like…I’m selling: if you have medical bills, you should obviously pay them but if you’re asking me about how to get your credit score up maybe you don’t.
Erin Catron: Hey, yeah!
Nate Davis: Nate said: “Don’t pay your bills.”
Erin Catron: Oh, yeah!
Nate Davis: I like this guy already.
Andrew Duncan: So, another recent news update a Chinese Firm – Taishan Gypsum Company, has failed in a law suit and, apparently, Lenore was suing them and it’s a big class action law suit against this company. It was one of the largest producers of Chinese drywall. A lot of people involved in the class action sued against them to get some money and I don’t know how much money this company is going to have left or how big they were but it does appear that the law suit was successful. They were trying to fight claiming that they never sold in the US and they were a US company but they’ve lost. So, people out there with a Chinese drywalls scenarios, I know it’s pretty common in our local communities here, let’s say pretty common but I ran into it from time to time.
Nate Davis: You know, one in every five or six built homes and definitely want to check it out.
Andrew Duncan: Yeah. So it’s something you ran into and it sounds like some of those people will get some relief. No details yet on what or how much or any of that but they did lose law suit and Lenore apparently initiated it because I assume that Lenore probably had a lot of their nasty drywall that makes people cough and lose their hair and all kinds of nasty stuff.
Erin Catron: [illegible]
Nate Davis: If you are in a new home, you might want to check this out.
Erin Catron: Yeah, you might have a problem.
Nate Davis: Yeah, a problem.
Andrew Duncan: And we’ve had our home inspect grounds talking about that before so again, we appreciate you tuning into the Show. We’re here every week talking about the local real estate market. When we aren’t on air, you could check out our website at theduncanduo.com. You can also look for us on YouTube and Facebook by searching for The Duncan Duo or The Duncan Duo Show and, if you have a real estate question and we didn’t get to it this week, you can feel free to email us at firstname.lastname@example.org. You can also post us questions on our Facebook fan page wall and we’ll either address them on there or address them on the Show the following week. Next weekend, we’ll be here answering your questions live and talking about some other updates in the market. We’ll also have the statistics that the monthly real estate statistics – if I can pronounce that word, man I’m bubbling at the idea. We’ll have statistics, the monthly statistics for the Greater Tampa area next week on the Show, as well. So, thanks for tuning in. Have a great rest of Sunday.