COVID-19 Personal Financial FAQ’s for Homebuyer’s

in , , ,

1. My company’s offices are closed, and I am having a hard time providing my final verification of employment within the 10 days prior to loan closing.

FHA and RHS are allowing verbal verification of employment. Specifically, your employer can provide this by phone. RHS is also allowing email verification. If you cannot get either of these, the lender will require higher reserves to cover risk. 

Fannie Mae and Freddie Mac will allow verbal verification when available and an email verification under certain conditions. They have also made other forms of temporary verification available in order to help with verification while social distancing

2.My lender indicated that the IRS has shut down and they cannot process loans without an income verification document that only the IRS can generate. Is this true?

Luckily, there is precedence for an IRS shutdown based on several recent government shutdowns. Some lenders may require this document, but Fannie Mae, Freddie Mac, and FHA do not so this is a lender overlay.

Fannie and Freddie both issued guidance in January 2019 following the previous government shutdown to note that they do not require the 4506T IRS tax transcripts at closing. Rather, they only require a request for the document be signed by the borrower. However, they do require the tax transcript be submitted as part of their post-closing review. NAR has asked both Fannie and Freddie to clarify and publish updated guidance given the unique challenges posed by COVID-19.

Furthermore, the IRS reopened this facility during the shutdown as it was deemed essential. We have reached out to the IRS on this point.
  1. I have heard that the FHA, Fannie Mae, and Freddie Mac have raised rates and fees on borrowers with lower credit scores or smaller down payments?

    These claims are not true. To date, neither the FHA nor Fannie Mae and Freddie Mac have made any changes to credit scoring or down payment requirements. The only change they have made for borrowers is to allow MORE flexibility in how a lender can verify employment.

    However, some individual lenders are adding their own, higher standards on these products. The rational is that the cost of servicing these loans has surged due to the widespread forbearance that is taxing servicers’ resources. Under forbearance, the servicer must continue to pay PITI to the investor, but the sheer volume of forbearance to deal with the COVID-19 response is unprecedented. Since lower-credit borrowers are more likely to take forbearance and servicing is harder to get, lenders are less willing to extend this credit regardless of the FHA or GSEs’ standards.

    NAR sent a letter to the Treasury, Federal Reserve, and the Federal Housing Finance Agency requesting help for servicers dealing with the unprecedented demands on funds due to broad forbearance requests. Improving servicing is one key to improving the flow of funds to borrowers and homeowners.

    Ginnie Mae has announced the creation of a new program, that should help alleviate lender concerns and improve access to mortgage financing. The program will provide cover for lenders by advancing them the money so they can make the required pass- through payments to investors during the forbearance period.

30-Year Mortgage Rate Drops Again, Down to 3.33%

in , ,

“Rates dropped for the second week in a row due to “improvements in market liquidity and sentiment,” says Freddie Mac economist.” – FloridaRealtors.org

MCLEAN, Va. – Freddie Mac’s Primary Mortgage Market Survey for this week found declines for the second week in a row.

This week, the 30-year fixed-rate mortgage (FRM) averaged 3.33%, which is down from last week’s 3.5%. It averaged a 0.7 point for this week; a year ago, the 30-year FRM averaged 4.08%.

“Mortgage rates have drifted down for two weeks in a row and that drop reflects improvements in market liquidity and sentiment,” says Sam Khater, Freddie Mac’s chief economist.

Khater says the “market has stabilized relative to prior weeks (and) homebuyer demand has declined in response to current economic conditions. The good news is that the pending economic stimulus is on the way and will provide support for both consumers and businesses.”

The 15-year fixed-rate mortgage averaged 2.82% with an average 0.6 point, down from last week when it averaged 2.92%. A year ago at this time, the 15-year FRM averaged 3.56%.

Adjustable-rate mortgages (5-year Treasury-indexed hybrid ARM)) averaged 3.40% with an average 0.3 point, up from last week when it averaged 3.34%. A year ago at this time, the 5-year ARM averaged 3.66 percent.

© 2020 Florida Realtors® (All Credit to FloridaRealtors.org for this article)

 

Fed Slashes Interest Rates Near Zero, Eases Lending Rules- Florida Realtors

in , ,

“In addition to a full-percent interest rate cut, the Fed will take other stimulus steps, saying COVID-19 “weighs on economic activity and poses (economic) risks.” The move should benefit adjustable rate mortgages, credit cards and other short-term loans.”

“The Federal Reserve took emergency action Sunday and slashed its benchmark interest rate by a full percentage point to nearly zero (0% to 1/4%) and announced it would purchase more Treasury securities to encourage lending to try to offset the impact of the coronavirus outbreak. The central bank said the effects of the outbreak will weigh on economic activity in the near term and pose risks to the economic outlook. The central bank said it will keep rates at nearly zero until it feels confident the economy has weathered recent events.

The Fed also said it will purchase $500 billion of Treasury securities and $200 billion of mortgage-backed securities to smooth over market disruptions that have made it hard for banks and large investors to sell Treasuries.”

Read more

Has the Single-Family Rental Market Peaked?- Florida Realtors

in ,

“ATTOM: The business of buying single-family homes to rent lost some steam after rents stopped increasing as fast as the purchase cost for those rental properties.

“The business of buying single-family homes for rent has lost a little steam this year across the United States as rents aren’t rising quite as fast as prices for investment rental properties in the majority of the country,” says Todd Teta, chief product officer at ATTOM Data Solutions.

“But from the national perspective, things are generally holding steady for landlords in the single-family home rental market,” he adds. “Also, profit trends are moving in favor of investors in higher-rent counties and against those in lower-rent regions.”

Click Here to Read More: https://www.floridarealtors.org/news-media/news-articles/2020/03/has-single-family-rental-market-peaked

 

 

January 2020 Market Report

in , ,

      As I write this market report, I realize there are two very important aspects of how we are all evaluating the real estate market today.  Certainly the numbers from the most recent market report of January 2020 tell a story but also the recent stock market tumble in light of the corona virus concerns is top of everyone’s minds.

      Let’s start by talking about January results because they are important to decisions we all will be making today to sell or buy in Florida.  First – January was a great month in Florida Real Estate – especially in Palm Beach County. When comparing to January 2019, January 2020 showed an increase in the number of sales, both average and median prices and total dollar volume.  However, new listings were down from January last year as well as December 2019 – for a myriad of reasons.  What does this mean to our Palm Beach County market? – Well, we now have less inventory and as a result for the market from $300,000 to $599,999 – we have a balanced market – so, therefore, buyer’s make realistic offers and seller’s realize that there is no longer an advantage in a balanced market so before you choose not to respond to an offer – maybe consider a counter!  With inventory trending down this balanced market condition may change – stay tuned. The higher end market, however, is a different story – over $600,000 and upwards of the $1,000,000 mark it is still a buyer’s market – a great amount of homes are sitting – over $1 million shows 19 months of inventory  – reminder that 6-9 months is considered a balanced market. If you are holding out for a cash buyer, we would suggest reconsidering – cash sales as a percent of all sales is around 37% – but with the interest rates so low, the cost of borrowing money is even more desirable. What do we recommend? That we as agents, dig deep into the pre-approvals – talk to the lenders who pre-approved the buyer – have they run credit, have they reviewed tax returns or w2s? IN other words how far into the process did they go and do they have any concerns?    Homes are being sold – the process, as always, needs to be properly managed and homes need to be properly marketed!

 As for our recent turn in the financial markets – and how this will impact real estate in Florida – Personally, I believe homes will continue to move in Florida – we may simply have to adjust how we show and how we all work together to get homes sold.  There is even more value in videos and remote showings – photography is critical.   Also – how we interact at face to face showings – for now we simply don’t shake hands – we just need to be smart about how we do business – in any field right now.

PALM BEACH COUNTY REAL ESTATE REPORT – August 2019

in

August is traditionally a slower month for new listings and new sales as people are just coming back from summer vacation, getting their kids back to school and focused on many other priorities.   We had a busy August in closings but of course those would have been under contract earlier in the summer!

It is not a surprise that not much of a significant change relating to whose market it is (seller versus buyer) at varying price points. As we saw in July – $300K to 599,000 remains a sellers’ market, $600K to $999,999 is a balance market with $1,000,000+ remain a buyers’ market in Palm Beach County.

What we do need to look at is who is buying in today’s market – this helps us determine price and strategy for new listings.  

In August, cash sales are down and it is taking longer to get to the closing table. Cash sales down typically reflects fewer investors in the market, so our sellers are having to contend with mortgages which equates to appraisals.  Holding out and not accepting an offer with a mortgage maybe a mistake because the cash offer may not be around the corner.  If you price it right, it should appraise – I would hope, of course, that your listing agent will be at the appraisal with comparables to “assist” the appraiser – the All About Florida Homes Team of Lang Realty is at 100% of our appraisals – it is a non-negotiable!

Again, as mentioned in our opening of this month’s market report – August has many distractions so it is no surprise that as a whole new listings are down.  We would expect to see an increase in September when people are once again focused on selling and buying in Palm Beach County with the same approach as it relates to the number of listings that went under contract in August (this too is down for August 2019 – but not a surprise).

What can you glean from the August market report? Sellers’ appraisals are a big part of our market today.  Price right and be prepared to support the contract price.

Buyers – you have fewer competition from cash buyers but there are other snafus that you need to be cognizant of and the Realtor and Lender you work with need to fully understand the process.   This is even more important when it comes to buying and financing in a condo community.  Guidelines for loans are specific to the percentage of condos that are owned by a single investor as well as percentage of condos that are owner occupied versus rentals.   The lender may not lend or may require you to put down a hefty lump sum.  Do your investigation up front versus waiting into the process.

Selecting the right team of Professionals to help you Buy or Sell is critical.

Contact us at (561) 571-2289 – or via amyandnoreen@allaboutfloridahomes.com – if we can provide you with any additional market data that will help inform your decisions! We are here to help – with no obligation.

August Single Family Florida Real Estate Market Report

August Townhomes and Condos Florida Real Estate Market ReportPalm Beach County Real Estate Market Report August

PALM BEACH COUNTY REAL ESTATE MARKET REPORTS – July 2019

in

The All About Florida Homes Team of Keller Williams Realty has been busy all around from our Sellers and Buyers!

July was a great month across Florida as a whole!  The pace of existing home sales went up, median sales price went up – it was the best month this year for the State of Florida.   Interestingly, Palm Beach County’s results varied from the statewide average results.

Why did Palm Beach vary?   A big component of that is that higher end home sales finally moved.  Personally, I think it is a combination of price reductions and increased sales.  In Palm Beach County the median sales price went down (reminder this is literally the middle number of the list) while the average sales price went up by 11.5%.  The average increasing would be a result of more higher end homes.

Finally – we needed this in Palm Beach County!!

Also for Palm Beach County, the median time to contract and median time to sale went up – 49 days for contract and 94 days for sale.  Inventory is down (no surprise since July sales were up and new listings down as well).   Interestingly cash sales increased as a percentage of total sales – that often helps in the lower end market!

$600,000 and below remains a seller’s market, $600-999,999K a balanced market and $1,000,000+ a buyer’s market – this aspect did not change from last month’s market report.

What does this mean to you as a Seller?   For the under $1,000,000 price point this is great news – cash sale probability increased (slightly), inventory is down (slightly) so if you price right and your home “shows” well – it will sell!   Over $1,000,000 – please, please heed our consistent advice for many months now (because we have such a high inventory of listings) – please price it right!  Do not price on what you need, do not price on what your neighbor tells you your home is worth and do not price solely upon active competition – price on what has SOLD and then fine tune your listing price so you are in the proper place amongst the active competition.
What does this mean to you as a Buyer?   Be smart, be strategic and most of all, be prepared and decisive.    For the under $1,000,000 price point – don’t bother going to look without a lender pre-approval or a bank account that shows you can pay cash!  It is a seller’s market – so you may be in a multiple offer situation or at the very least may need to make a quick decision.   For the over $1,000,000 – we know there are homes out there because we have a large inventory – but focus on the homes that are priced properly.   We know at times there is the “perfect home” that you “have to have” – but right now there are choices so business hats on!!

Contact us at (561) 571-2289 – or via amyandnoreen@allaboutfloridahomes.com – if we can provide you with any additional market data that will help inform your decisions! We are here to help – with no obligation.

PALM BEACH COUNTY REAL ESTATE MARKET REPORTS – June 2019

in

The All About Florida Homes Team of Keller Williams Realty has been busy all around from our Sellers and Buyers!

The Palm Beach market was slow in the  beginning of 2019, then interest rates dropped once again and wow – the market kicked into high gear.  June was no exception!

While June 2019 numbers are down slightly from June 2018, our numbers are still strong as we analyze year-to-date.  Cash sales as a percentage of total sales was down – 30% of all sales for June.  This is no surprise with money so inexpensive to borrow right now!

Buyers: This means there are fewer cash buyers to compete with your financing.   Ensure you offer the right price as homes are being priced more competitively and accurately in most of the market segments.

We are a balanced market from the $600K to $999,999 market.  Under $600K is a  slight seller’s market – it has remained this way for several  months now.

Over $1,000,000 – still a very strong buyer’s market.

Sellers: There is much more inventory now than just a few months ago.  This is also evident in the fact that June’s median sales price went up while the average  went down.  We have a large percentage of high-end homes in Palm Beach County (we knew that) and the lower-end market is moving much faster than the high-end.

Stage your home, make sure the price is right, and be open/flexible with showings.  Be creative to make a deal work – there are more ways to make contracts work other than simply the asking price!

Contact us at (561) 571-2289 – or via amyandnoreen@allaboutfloridahomes.com – if we can provide you with any additional market data that will help inform your decisions! We are here to help – with no obligation.

PALM BEACH COUNTY REAL ESTATE MARKET REPORTS – May 2019

in , ,

The All About Florida Homes Team of Keller Williams Realty has been busy all around from our Sellers and Buyers!

We could have told you the market had picked up before we even analyzed the market report from Florida Realtors.   While the market is behind last year to date – we are finally starting to see traction and the market starting to play catch up.

If you have been reading our market reports monthly,  you will have read (tirelessly I know) my rants about sellers’ and agents’ pricing on active versus sold comps.  Homes can be listed for any amount but what they sell for, and how long it takes, and how many reductions do make a difference.   We are seeing the market price where home sell  – hence the movement in the market.

If you have a good marketing strategy, take pictures strategically to show the attributes of the home, land and community, market to the consumer as well as fellow agents – and analyze the showings, feedback and competition – homes will sell!

The market from $300,000 to $600,000 seems to bounce monthly from a balanced market to a slight buyer or seller market depending upon inventory.  As we always say:

In a balanced market – where you come out of the gate (price, marketing et al) really, really matters.   It is not a race to market – it has to be done right!   

Homes in the $600,000 to $999,999 range remain in a balanced market this month so same rules apply as above.

The $1,000,000+ remains a buyers’ market – there is so much inventory and many are still overpriced.  If you are a seller, it is worth a real analysis of where homes have sold and how you are being marketed – BUT you also need to be patient.  There is a lot of competition, so ensure your home stands out and that you are priced right!

Contact us at (561) 571-2289 – or via amyandnoreen@allaboutfloridahomes.com – if we can provide you with any additional market data that will help inform your decisions! We are here to help – with no obligation.

Palm Beach County Local Market Update for May 2019 Monthly Market Detail May 2019 Townhouses and Condos Monthly Market Detail May 2019 Single Family Homes

PALM BEACH COUNTY REAL ESTATE MARKET REPORTS – April 2019

in

In terms of the Palm Beach County real estate market, April has proven to be the best month of 2019! The year-over-year figures of both sales and median price have improved in comparison to the same stats at this time last year.   

This increase and positive direction was seen across most of the state of Florida – and it’s especially pronounced in Palm Beach County.   

Homes are moving once again –but understanding the market in your specific sale or purchase price point is essential.  Our analysis shows:

Homes under $400,000 are in a seller’s market.

So, buyers: you must have your ducks in a row before you walk in to preview a home!   This means being prepared with either proof of funds or a mortgage pre-approval letter, so you can quickly make an offer if you love a home.    

Remember – one mortgage pre-approval is not the same as another. It is critical that the lender with whom you work has gone deep enough into the preapproval process so they can answer the questions of a savvy listing agent.

When serving as listing agents, we always call the lender before we recommend to our sellers to accept a buyer’s finance offer.  Why do we call? We want to understand exactly what the lender has done to be able to issue a pre-approval (e.g. credit report, tax returns) and how strong the buyer is from a lending perspective.  For our buyers, we work with several lender whom we can recommend. These thorough professionals will ensure you are truly ready – and will likely be able to close – before making an offer.

Homes between $400K and $999,999K continue to experience a balanced market.     

This is where salesmanship and professionalism really make a difference. Agent to Agent relationships – and the ability to get the deal done – are even more essential.

The market for homes over $1,000,000 remains a buyer’s market.  

In Palm Beach County we have a larger inventory of homes in this price point – over 14 months of inventory. (Reminder: A balanced market is generally 6 to 9 months of inventory).  

However… (and Sellers, really listen to this!):

When your home is priced properly, and staged and marketed properly, your home WILL sell.  Your selection of a listing agent is critical here. Because an experienced and savvy guide will be essential, but your home can absolutely sell with the right team on board.

 

Contact us at (561) 571-2289 – or via amyandnoreen@allaboutfloridahomes.com – if we can provide you with any additional market data that will help inform your decisions! We are here to help – with no obligation.