Kim Novak's Utah Real Estate Blog

HUD's PFS (Pre Foreclosure Sale) Program is unexpectedly straightforward. Especially given the myriad of conventional short sale horror stories we've been reading and hearing about over the past three years.

Three, clearly written pages providing guidance on how to achieve a successful FHA/HUD Short Sale. What a great tool for both Seller AND Buyer agents!

HUD's PFS Program is, and has been, FHA's clear cut version of the complicated, non-enforceable, HAFA Program.

If you're the listing agent, you can request a copy of the lender's FHA appraisal and then, simply do the math.

FHA As-Is Fair Market Appraisal = $150,000
Home has been on the market 90 days
Net sale at 84%, with 1% contribution to buyer's FHA loan closing costs, 6% real estate commissions, and another 1.5% in title fees and tax prorations
Results in the homeowner, and their lender, being approved to consider an offer as low as $137,000

If you're a Buyer's agent, think what a great service you can offer your client, especially in today's real estate market where many are hesitant to make the homeownership commitment. You can be showing your clients homes up to 10% above market value (or list price if the listing agent has done their job correctly), and actually achieve an equity position for your client. Plus, generally speaking, homes listed at $150,000 will offer a much better selection for your Buyer client to choose from than the listings at +/- $140,000.

Click Here for more tips on buying in today's real estate market.

Thanks for reading - hope you'll share.

Your CDPE® Certified Distressed Property Expert,
Kim Novak, RE/MAX Masters
kimnovak@remax.net
(801) 726-1443

Lowe's Home Improvement

Streamlining the Streamline (and Standard) 203k Program. Teamwork between the lender (approved by FHA), real estate agent (your 203k Specialist) and Lowe's (as the construction consultant and supplier) creates success for both the seller and buyer of a home that needs TLC. Repairs that the seller can't afford to make and the buyer can't afford NOT to invest in can finally be achieved.

Contact me to find out if a 203k loan is right for you!

Kim Novak, RE/MAX Masters

kimnovak@remax.net

(801) 726-1443

Buy like you'll have to sell tomorrow.
Avoid buying someone else's mess.
Buy with the future in mind.

1. Buy like you'll have to sell tomorrow ... the formula is pretty straight forward.

Part One: The cost of selling a home in today's market is approximately 10.5% of the sales price. 6% real estate commission, .75% title fees, .75% tax proration and 3% seller assistance with the buyer's closing costs.

Part Two: The effect of the previous quarter's appreciation or decline in market value, based on comparable homes in the neighborhood.

Example: If the market value of similar homes in the neighborhood declined 2% in the previous quarter, you would ideally want to negotiate an ultimate sales price 12.5% under the CMA (comparative market analysis) prepared by your Realtor®. On a home where the CMA = $200,000, goal would be to purchase at $175,000 plus whatever you are asking the seller to pay for YOUR closing costs.

Note that I did not refer to "list" price. The homes that are selling today are already priced below the median price of comparable homes actively listed.

2. Avoid buying someone else's mess ... the stains on the carpet are only the tip of the iceberg

I always tell my clients that what happens at the front door sets the tone for what to expect in the rest of the house. Even the "banks" have figured out that they simply cannot sell foreclosed properties as-is. That's why the vast majority of Fannie Mae and Freddie Mac/Homesteps owned homes aren't put back on the market until they have 1) fresh two or three tone paint 2) new floor coverings and 3) new appliances.

Homebuyer's Tip: Budget for three times the amount that you think you will need to get a "fixer upper" to the stage that you would be proud to live in. Trust me, you will discover hidden (expensive) defects in a home that has been, on the surface, neglected. There are very, very few "fixer uppers" that need only "cosmetic" repairs.

3. Buy with the future in mind ... never say never

Yes, you will move again. Or, at least, prudence would dictate that you plan for the day that you may want to or need to. Here is a checklist of features and amenities that cannot be "repaired", but matter for resale:

~ location, location, location ~ situs = view, exposure, street type, lot size ~ schools (even if you don't have kids) ~ master bath - double sinks, private water closet ~ bedroom level laundry ~ square footage (size matters)

JMHO

Price Reduced to $279,000! Eligible for $1,250 Buyer Bonus. Located at 3861 Formby Dr., Syracuse, UT 84075 in the Prestwick Community on the 4th hole fairway at Glen Eagle Golf Course. Fully fenced backyard with covered patio & hot tub. Updated kitchen with granite countertops, new appliances, gas range. Great room with fireplace. Hickory wood floors on main level. Exercise room with matted floor, game room & wet bar downstairs. 5 bedrooms + den or 6 bedrooms, 3 bathrooms, approx. 3391 square feet, fully finished basement, .26 acre corner lot, fenced backyard, built in 1998. Buffalo Point Elementary, North Davis Preparatory Academy Charter School, West Point Jr. High, Syracuse High School. Light Rail Station: 14 minutes, Hill AFB: 17 minutes, Ogden Historic District: 26 minutes, Salt Lake City: 41 minutes, Salt Lake Int'l Airport: 45 minutes, Ski & Snowboarding Resorts: 60 minutes. Contact Kim Novak 801.726.1443 or 800.977.7835 kim@utahhouseandhome.com. MLS 860927

With the big push to sell out the new construction inventory sitting on the market in Utah, through the Homerun Grant Program (358 grants remaining as of today) and various builder incentives, a prudent homebuyer and their agent should familiarize themselves with Utah's State Construction Registry. This is especially important in light of the high number of contractor/builder bankruptcy filings that our current real estate market is facilitating.

The SCR was enacted in 2004 as House Bill 136, Sixth Substitute, Electronic Filing of Preliminary Lien Documents. It was designed to avoid the complications that frequently arise from Mechanic's Liens that show up after closing. It is a phenomenal system when used properly. However, the timelines are critical (see below) in order to protect yourself from reverting to the state's lien rights.

Why should you care? Educational Video for Property Owners

Municipalities in Utah are required to file a Notice of Commencement within 15 days of a building permit being taken out on a property, but don't rely on the city to do this! Other parties who should or must file are 1) the General (aka Original) Contractor and 2) the Owner. Other interested parties can sign up for notification, as well, such as the lender and the title company.

What the registry does is to require subcontractors to electronically file their "preliminary notice" that they have done work on a particular construction project. The beauty of the system is that whenever one of these "preliminary notices" are filed, all parties who are registered on the project (contractor, owner, lender, title) receive email notification. What a great way to track the subs who have worked on your home, in case you need to contact them after you move in, and avoid dealing with unpaid subcontractor services after closing!

If you are buying a completed "spec" home, then you should check out the Public Search Site to see if you are protected from liens by the SCR. You can also make sure that your owner's title policy is either a Plain Language Policy or an Eagle Policy.

Excerpt & Overview from Utah's State Construction Registry Site:

Filing Timeline

Key Dates & Details:

Notices of Commencement

Notices of Commencement must be filed within 15 days of commencement of physical work or the issuance of a building permit. If a Notice of Commencement is not filed within the 15-day window the preliminary notice requirement is voided and lien rights are automatically preserved.

For the majority of projects, Notices of Commencement are automatically filed in the SCR based on permit data received from the issuing municipalities. For projects in which a Notice of Commencement is not automatically filed, owners and original contractors may file a Commencement in order to enforce the preliminary notice requirement. Examples: state projects in which permits are not issued, exempt projects, projects in which a municipality fails to transmit permit data.

Preliminary Notices

Preliminary notices must be filed within 20 days of furnishing labor, service, material and/or equipment OR within 20 days of the filing of the notice of commencement, whichever comes later.

The timeline for filing a preliminary notice is affected by the filing of a Notice of Completion. The window for filing Preliminary Notices is closed 10 days after the filing of a Notice of Completion. Therefore, parties providing goods and services at the end of a project may have less than 20 days to file their Preliminary Notice (a party providing materials 2 days prior to the filing of a Notice of Completion only have 12 days total to file a Preliminary Notice).

A party that misses their initial 20-day window may still file a Preliminary Notice to protect future work and / or materials. If a Preliminary Notice is filed after the initial 20-day period passes, there is a 5-day penalty and any material and / or service provided after the penalty period is protected.

Notices of Completion

Notices of completion may be filed by owners, original contractors, lenders, surety or title companies anytime after one of the following conditions has been met:

• A permanent certificate of occupancy has been issued
• A final inspection has been completed
• All substantial work has been completed

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What's My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

... Educated & Experienced, Professional & Successful ...

Eligible for $500 Buyer Bonus!
Price Reduced … Again! Beautifully maintained and move in ready. Updated kitchen with brand new appliances, new floor coverings & freshly painted throughout. Walk out from dining area to fully fenced backyard with patio. One-car garage plus RV or 2nd vehicle parking. Automatic sprinkler system. Close to Hill AFB and Layton Hills Mall. 3 bedrooms, 1 bathroom, approx. 1526 square feet, .19 acre lot, built in 1969. Crestview Elementary, North Davis Preparatory Academy Charter School, Central Davis Jr. High, Northridge High School. Hill AFB: 5 minutes, Light Rail Station: 7 minutes, Ogden Historic District: 19 minutes, Salt Lake City & Airport: 34-37 minutes, Ski & Snowboarding Resorts: 45 minutes. Contact Kim Novak 801.726.1443 or 800.977.7835 kimnovak@remax.net. MLS 870940

Just Announced! HUD Rolls Out Plan To 'Monetize' Tax Credit For FHA Loans

Just Published! Mortgagee Letter HUD 09-15ml Using First Time Homebuyer Tax Credits

Here's the bad news "However, amounts advanced by FHA lenders cannot be used to meet FHA's minimum 3.5% down payment due to a new federal housing law that bars such lenders from assisting borrowers with their down payment. FHA borrowers may use the money to increase the size of their down payment above the 3.5% minimum or toward closing costs."

The good news is that it can be used for closing costs, which is often times the make it or break it point in multiple offer situations (yes, these still exist).

Hopefully, Fannie Mae, Freddie Mac and Ginnie Mae will follow suit for VA and Conventional loans.

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What's My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

... Educated & Experienced, Professional & Successful ...

Utah Housing Corporation vs Idaho Housing & Finance Association

Can someone please explain to me why the Utah Housing (a public corporation created by the State of Utah) rate, whose charter is to:

...assist low- and moderate-income homebuyers with the purchase of a home. All loan programs offer reasonable interest rates and three of the programs make available down payment and closing cost funds... UHC Brochure

is currently offering a rate 27.5% higher than the 5% FHA and VA rate competitively offered by most lenders in Northern Utah?

The IdaMortgage rate is 4.86% today! In addition, Idaho has already figured out a way to distribute the $8,000 First Time Homebuyer Tax Credit so that it can be used as down-payment funds.

Maybe the distinction is in the organizational structure, Corporation vs Association. Big Business vs Public Service.

The only rational reason for using a Utah Housing loan right now is because you need 100% financing and are not VA eligible. It would be much better to talk with your Realtor(R) and Lender about using the grants available through the individual cities in Utah for your down payment assistance or ask your parents for a "gift of funds", negotiate so that the seller to pay your closing costs and stick with the 5% rate.

Kim Novak is a real estate broker with RE/MAX Masters in Salt Lake City and Layton, Utah. She holds a BSBA with an emphasis in Sales & Marketing and has achieved the designations of ABR: Accredited Buyer Representative, CRS: Certified Residential Specialist, CSP: Certified New Home Sales Professional, GRI: Graduate of the Realtor® Institute, SRES: Seniors Real Estate Specialist and ePRO: Internet Professional. Licensed in 1995, Kim has closed over 500 sales during her full time real estate career. ActiveRain Profile   LinkedIn Profile   Facebook Me!

Direct Phone:    801.726.1443
Direct Toll Free: 800.977.7835
Direct Fax:        866.541.2392

kim@utahhouseandhome.com

www.UtahHouseandHome.com

What's My Home Worth?                www.utahhomevalues.net

Search for Homes                            www.utahhomelistings.net

... Educated & Experienced, Professional & Successful ...