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New “Quality” Guidelines for Fannie Mae Mortgages

I recently received the following doc from William Raveis Mortgage Company* regarding the new guidelines that went into effect on 6/1/20.

As you’ll see there are some new pieces of documentation that will be required for all FNMA loans. These are being adopted by Secondary Market Investors.

This does not necessarily mean that it will be harder to get through the mortgage process.  It does mean that you should be very vigilant in discussing ALL aspects of getting your loan with your lender.   Being prepared lessens the chances of last-minute surprises.

*William Raveis Mortgage Company is an affiliated company owned by the brokerage I work for – William Raveis Real Estate.

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Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

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Video Tour of Bethel CT

If you haven’t had a chance to drive around and see the sights in Bethel CT, here’s your chance.

There are currently 157 single family and condominiums for sale in Bethel.

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Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

How Much Should Rising Interest Rates Influence Home Buyers?

Some of the most common questions that get asked of most Realtors are

  • Will Housing Prices continue to go down?
  • Will the appraised value of my house continue to fall?
  • Are interest rates going to stay low?

Fact is, none of us know if appraised values of houses will continue to fall or if interest rates will go up or if the market has bottomed out.

In today’s NY Times, Nelson Schwartz (no relation) did a column entitled  “Consumers in U.S. Face the End of an Era of Cheap Credit. He talks about how we as American have spent the last 30 years or so watching interest rates basically trend downward. While there certainly have been fluctuations, let’s face it, rates, in all areas of credit have significantly lower than they were in the 1970s

I can remember buying my first home in 1979.  We had a variable rate mortgage that started out at 10.5% and had the potential to go up as much as a point per year.  The lender magnanimously capped the loan so that it would never exceed 17%.   We sold that house a few years later – the rate had climbed to around 13%.

This was the norm and we didn’t really think of it as a bad thing – it was just the way it was.

Today – we’re in a huge crisis, part of which is based on the fact that some variable loans have climbed from 5%  ALL THE WAY UP to 9% or so.

Needless to say, our attitudes about interest rates have changed. Mr. Schwartz indicates that many economists are saying these days are over.   Rates have “nowhere to go but up.”

For the last 3 years mortgage rates have gone up and down between the low 5% and the mid 4% range.   At the same time home buyers have been hesitating to buy homes because they are waiting for home prices to “bottom out”.

As of right now, in most markets, home prices are still dropping a bit, so this “wait and see ” attitude is still prevalent among potential buyers.   As a Realtor, I have a number of clients who have been looking at homes with me for more than a year – or more than two years.

Here’s the thing – if you “do the math”  rising interest rates might offset any continued drop in prices.  Here’s an example.

If you were to buy a home today for $250,000 and put $25,000 down you’d be borrowing $225,000. If that loan is for 30 years at current rates of around 5% your principal an interest payments will be $1207 per month.

If you hesitate on your purchase and wait 9 months, the house might indeed go down in price.  Let’s say it drops another 5% and the you can buy the house for $237,500.   If you put the same $25,000  down, your loan would be for $212,500.   If rates go up by just 1 point – to around 6%, your monthly principal and interest will be $1308.

So – in the end, you be buying at a lower price, but paying $100 more per month – and that additional amount is not adding to your equity – it’s all in interest.

Add to that the fact that if you wait and you also have a house to sell, your home will also likely drop another 5% in price.

So – in the end, you will not only not save money by waiting – you’ll actually be paying more – maybe considerably more.

Now – no one really knows what’s going to happen.  Prices could stabilize and interest rates could drop.  It’s all about educating your self on the market conditions and making the best decision you can.

Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

FAST FACTS #3 – Mortgage Terminology: LTV (Loan to Value), DTI (Debt to Income)

LTV Loan To Value ratio.  This is the ratio of a mortgage expressed as a percentage of the value of home.  For example, if you were to purchase a home valued at $100K and you were borrowing $76K, your LTV would be 76%.

The higher the LTV, the bigger risk for the lender. In other words, should you default on a loan with a 40% LTV the bank would only be losing 40% of the value of the home.  If you should default on a loan with a 95% LTV, the bank would stand to lose all but 5% of the value of a home.

This is of particular importance to lenders in a depreciating market  If, for example, the bank were to loan 95% of the value of a home and the market declines by 6% over the course of a year, the amount of the bank’s risk now exceeds the value of the property.

DTI Debt To Income ratio.  This is the ratio of your monthly expenses expressed as a percentage of your monthly income. This ratio is used, actually to mean two different things.

  • The first is based strictly on the monthly cost of the home (Mortgage payment, taxes and insurance) against your total income.
  • The second meaning includes ALL of your monthly obligations including credit cards, car loans, etc. against your total income.

Most lenders will look at and set limits for both ratios in determining your qualifications to obtain a mortgage.

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Rick Schwartz,   REALTOR

Homes for sale in Danbury, Bethel, Brookfield, Newtown, New Fairfield, New Milford, Ridgefield and Redding CT.

Fairfield County Farmers Markets

Those of you who know me well have to be rolling your eyes at the idea of me talking about places to buyburger and fries and consume fresh produce and farm products.  After all, my idea of trying to eat healthy is to have a diet Coke with my burger and fries.

As the old expression goes – “It’s not what you know but who you know.”  So I asked my friend Alicia Ghio @Aliciaghio on Twitter,  for some help in putting this article together.  Alicia, is a great resource in the area for all things about eating healthy – and local.  She hosts a terrific Web Show called  The Natural Princess where she entertains and educates you about things that grow. It’s not only good information, Alicia has a very cool style and makes learning fun.

I’ve been watching the episodes and I’ve learned so far that there are 7,000 different varieties of Apples, and that Apples can help pregnant women in a few different ways – and the stuff you can use garlic for is really amazing….So check out her shows as well her Blog LOCAL FOOD ROCKS.

Anyway – she put together the list below for us to help find out where in the area we can go to partake of some locally grown, healthy stuff.

FARMERS MARKETS

corn stand

BETHEL FARMERS’ MARKET Saturdays 9 a.m. – 1 p.m. July – October Fairfield County  Cooperative Extension Building Rte. 6, 67 Stony Hill Rd FMNP Authorized

DANBURY FARMERS’ MARKET Fridays 11 a.m. – 4 p.m. J

uly 10 – October 23 Kennedy Park, Main Street FMNP Authorized EBT Available

GEORGETOWN FARMERS’ MARKET Sundays 10 a.m. – 2 p.m. May 24 – November 1 Intersection of Main Street & Rte. 57

NEW MILFORD FARMERS’ MARKET Saturdays 9 a.m. – 12 p.m. May 9 – October 31 Town Green, Main Street FMNP Authorized

RIDGEFIELD FARMERS’ MARKET Fridays 3 p.m. – 7 p.m. June – October 88-90 Danbury Road http://www.ridgefieldfarmersmarket.org

SANDY HOOK FARMERS’ MARKET Sundays 9 a.m. – 1 p.m. June 1 – October 1 5 Glen Road

SANDY HOOK ORGANIC FARMERS’ MARKET Tuesdays 2 p.m. – 6 p.m. June 23 – Oct. 13 St. John’s Church, 5 Washington Avenue EBT Available

FARMS/FARM STANDS

BABBLING BROOK FARM 16 Church Road, Sherman, CT 06784 860-354-2749

Seasons Open: July to October        Hours: 24hrs/7days   Honor System: Yes

Products offered: Vegetables, Pumpkins, gourds, and other fall products

BLOOMINGFIELDS FARM 9 Route 55, Sherman, CT 06784 860-354-6951    Products offered: perennials

Farm stand: Fri., Sat, & Sun. 10am-5pm Memorial Day to Labor Day

BLUE JAY ORCHARDS 125 Plumtrees Rd, Bethel, CT 06801 203-748-0119

Seasons Open: July to October, November and December      Hours: Mid-Aug to Xmas. Market: 10am-5:30pm, PYO: 10am-5pm.

Products offered: Pumpkins, gourds, and other fall products, Fruit, Agritourism activities: pick-your-own, corn mazes, hayrides, etc., Specialty foods including jams, jellies, honey, maple syrup, salsas etc., Specialty products such as CT made soaps, candles, lotions etc.

FORT HILL FARM Bay State Organic Certifiers 18 Fort Hill Rd., New Milford, CT 06776 860 350-3158

Products offered: flowers, fruit, garlic, herbs, salad greens, transplants, vegetables Weston and Westport Farmers’ Markets

GARDEN OF IDEAS 647 North Salem Road, Ridgefield, CT 06877 203-431-9914

Seasons Open: April to June, July to October, November and December

Hours: Daily, 10am-4pm

Honor System: Yes

Products offered: Vegetables, Green products such as annuals, perennials, nursery/landscape stock, potted herbs, cut flowers, etc., Agritourism activities: pick-your-own, corn mazes, hayrides, etc.

HOLBROOK FARM 45 Turkey Plain Rd (Rt. 53), Bethel, CT 06801-2842 203-792-0561

Products offered: bedding plants, cheese, eggs, flowers, fruit, garlic, greenhouse, herbs, honey, milk, on-site bakery, perennials, pork, poultry, salad greens, straw, transplants, vegetables

Farm stand: year round Mon-Sat 10:00am-6:00pm.

ON THE ROCKS FARM 9 Points O’Rocks Road, Newtown, CT 06470 203-426-3868 wpieragostini@yahoo.com Products offered: Eggs, Farm Stand, Poultry, Turkeys Farm Stand: Self-serve, 9am – 5pm, 7 days a week.

SHORTTS FARM & GARDEN CENTER Bay State Organic Certifiers 52-A River Side Rd., Sandy Hook, CT 06482 203-426-9283

Products offered: bedding plants, eggs, flowers, fruit, herbs, perennials, salad greens, transplants, vegetables New Canaan & Sandy Hook Organic farmers’ markets

Farm store at farm: Apr -Oct. 7 days a week

STONE’S THROW FARM, LLC PO Box 76, Bethel, CT 06801-0076 203-798-0151

Products offered: Berries, container plants, fruit, flowers, garlic, herbs, pumpkins, salad greens, vegetables.

SULLIVAN FARM 140 Park Lane, New Milford, CT 06776 860-210-2030

Seasons Open: April to June, July to October, November and December

Hours: Mon-Sat 9:30am-6:30pm, Sun 12pm-6pm

Honor System: No

Products offered: Vegetables, Pumpkins, gourds, and other fall products, Agritourism activities: pick-your-own, corn mazes, hayrides, etc., Specialty foods including jams, jellies, honey, maple syrup, salsas etc.

TAYLOR FAMILY FARM 94 Great Plain Rd., Danbury, CT 06811 203-744-1798

Products offered: bedding plants, flowers, garlic, gourds, greenhouse, hay, herbs, honey, perennials, salad greens, transplants, vegetables Bethel & Georgetown farmer’s markets

VICTORIA TAFT’S GARDEN 94 Rte. 39 North, Sherman, CT 06784 860-350-2711

Seasons Open: April to June, July to October Hours: Open daily starting in May, 9am-6pm

Honor System: Yes

Products offered: Green products such as annuals, perennials, nursery/landscape stock, potted herbs, cut flowers, etc.

WARRUPS FARM Stellar Certification Services 51 John Read Rd., West Redding, CT 06896 203-938-9403

Products offered: Christmas trees, flowers, fruit, garlic, gourds, hay, herbs, maple candy, maple syrup, pumpkins, vegetables.

Weston and Maple Demo’s Farmers’ Market Farm stand: mid August-end of Oct, Tues-Sunday, 10:00am-6:00pm

Retail store and pick your own sales Maple syrup making demonstrations 1st three weekends in March—pick your own pumpkins & hayrides weekends in October and Columbus Day, 11-5. Group visits Tues-Fri by reservation.

WHITE SILO FARM & WINERY 32 Route 37 East, Sherman, CT 06784 860-355-0271

Seasons Open: April to June, July to October, November and December Hours: Call for hours

Honor System: Yes

Products offered: Fruit, Vegetables, Fruit Wines

How To Sell Your House Without a Realtor

October 24, 2009 Leave a comment

So you want to sell your house but do not see the value of Realtor representation. Not an unusual thought – after all, lots of people do lots of things themselves like fix their cars, do handyman jobs in their house, do their own taxes, etc.   If you can do something as well as a professional does I say “Go for it!”

As a Realtor I believe strongly in my own abilities and I do think I’ll do a better job than you will – but that’s not what this article is about.  I’ve already written about the things that you should expect from a Super-Realtor like me to help you sell your home for the highest possible net value in the shortest amount of time with the least amount of inconvenience to you.

If unrepresented selling feels like the right choice for you, here are some tips to help you through.

RESEARCH

While you may not have access to your local Multiple Listing Service which provides Realtors with up to the minute market data on sold, active and withdrawn properties that are comparable to yours, there is a wealth of data out there for you pore over to help determine what your house can sell for.

If you know of a house that sold recently, your town land records should be able to find details on the sale. Some towns are putting their records on line so you won’t have to weave your way through the town hall to  look things up.

Websites like Zillow can help you also to determine the value of your house based on their algorithms which primarily use square footage and proximity of recent sales as their basis.  You will have to temper these based on the unique attributes of the sold homes balanced against your own.   Things like age, condition, type of heating/cooling, parking, water and waste specifics, flooring and many other specifics will be pluses and minuses that impact the right price for your home.

As for currently listed homes, you can get the basics of these from various websites to use as comparison.  I would also recommend going to any open houses you might see advertised in order to check out the competition.

The key in this is to be honest with yourself — check your ego and emotional attachment to your house at the door, so to speak.   Things that have personal value to you might not mean much to prospective buyers.  A wine cellar, for example might add a lot of value to you, but to someone who doesn’t collect wine, it might just be considered storage.

EXPOSURE

One of the most important things about selling anything, whether it’s a toy collection, a house or a football stadium, is that you have to somehow get your product into to the consciousness of your target audience.

First you have to determine who and where your target audience is.  Remember that, as an unrepresented seller, your buyer pool is most likely limited to the people who have decided that they want to purchase from someone who is selling on their own.  If someone has decided to engage a Realtor to help them find homes, they are most likely going to rely on that Realtor to help them find a home.  Most Realtors have user friendly interfaces for their buyer clients to peruse the houses that are available and choose which ones they would like to see.

There are, for sure, buyers who are specifically looking for For Sale By Owner houses. Here’s why.  They know that the seller isn’t paying a commission to a broker and they would like to save some money. Their logic is that they are entitled to some of the money you’ll be saving in the form of a lower purchase price.

You can find those buyers, usually via two methods.

  • Online. There are a ton of individual websites where FSBO buyers and sellers can connect.  Check them all out and post the details of your house on each of them that you like.
  • Signs. The second method of attraction is the FSBO sign in your front yard. Obviously this will only attract people who actually see it, so the exposure will be limited to people who drive down your street.  If you live on a really busy road, many people will drive by and a certain percentage of them will be prospects for you. If you live on a cul-de-sac or dead end street your exposure will be mostly limited to people who visit your neighbors.

If you go with a sign, don’t make the mistake of trying to advertise too much on your sign. Business 101 says that marketing should not be an attempt to sell your product – just a means of getting the prospects to contact you.

Someone I know recently sent me this photo of a FSBO sign.  I don’t know if this sign was real or a joke (probably a joke) but it shows what not to put on the sign.

What you do want to put on the sign will basically be how to contact you.  In good weather you may also want to put some brochures with some of the POSITIVE highlights of the house.

Third possible avenue (this will cost you some money) is to contact Real Estate brokers and offer them a commission if they bring a buyer.  You can set any amount you like.  Simply tell them, that you are not listing your house with a broker but you would be willing to pay a certain amount to a broker who has a buyer.

If you decide to do this, you will be paying less than you would to a listing Realtor who has to account for paying a portion to the buyer broker.  Remember, as I said above, if you are saving money, your FSBO buyer will want to share the wealth with you.

You can reach out to the Realtors by finding out individual email addresses, calling them, printing fliers and bringing them to all the offices, mass faxing – or any other method you choose.

SHOWING POLICY

Decide ahead of time how you will handle requests for showings.  If there is more than one adult living in your house, make a schedule as to who will be responsible to host visitors to your house.  Decide what times you are willing to be available.  Most buyers want to see homes in the evenings or weekends, so be sure someone is available.

Also, never let people wander through your house unescorted.  If there is a large group including relatives, children, friends, etc.  ask them to all stay together as you take them through the house.  Since you don’t know the people, you have no way of really judging if they are honest or not.  Item such as jewelry, small electronics and prescription drugs can be slipped into a pocket very quickly and easily by someone who is skilled.

One urgent safety issue. If you do have a sign in the yard and there are times when minor children will be home alone, have a family discussion and make a plan how to handle unexpected visitors knocking on the door when there is no adult at home.

QUALIFYING

OK – so people start to call you – or they just knock on your door because of the sign – what is your plan?

Is everyone welcome to tour your home or do you feel that you should find a little bit more about them before letting them into your home.

My recommendation is to prepare a little script for people who call.  Something to the effect of:

“We’d love to show you our home but I’m sure you understand that we need a little information about you first. We’ve prepared a little questionnaire which I can fax or email to you.” If they are already standing on your doorstep because they saw your sign, you’ll probably have to address this a little differently.

Some of the things you want to know include the following items:

  • Name,
  • Address
  • Telephone #
  • e-mail
  • Do they own or rent now?
  • Do they have to sell something before moving
  • How many people in the family
  • Where they commute to
  • When are they looking to move

These last couple are critical unless you want to waste your time with people who love to look at houses but cannot afford one.

  • Are they financially qualified to buy your home?
  • Have they seen a lender yet and do they have a letter of pre-qualification or are they buying  cash.

You may want to personally connect with a local bank loan officer that you can refer people to in case they don’t know anyone.

OFFER PROCESS

So if someone does make an offer, what do you do next?

Will you require them to give you a deposit WITH the offer?

If they don’t want to give you any money until after you settle on a price, you can suggest that they give a check to their attorney for, let’s say, 1% of the offered price.  Their attorney can provide you a letter certifying that he is holding the money.  If your buyer is serious he’ll be willing to “put something in the game” before you waste your time negotiating.  An offer with nothing attached to it, is not likely to be serious.

Prepare a sheet in advance stating your terms.

  • How long after the price is set do you want to allow them to perform an inspection?
  • How many days after the inspection will they have to bring up any requested repairs?
  • Do you want to require that the inspection be done only by a licensed home inspector – or can they just bring their cousin who has a tall ladder?
  • Will you accept an offer from someone who has not sold their house yet?
  • How much time will you allow them to obtain a mortgage approval?

To protect yourself on these and similar issues, you probably want to have your attorney prepped for these kinds of issues so he can prepare a contract template for you to use.

NEGOTIATING

Once you and the prospective buyer are on the same page as to the process you can begin negotiating the price.

Expect a low initial offer.   That’s what buyers do today.  They will test the waters to see what your sense of urgency or desperation is.   So decide ahead of time how you will respond.

The second reason for an expected low offer is something I mentioned above.  The buyer wants to share in the savings you will realize from not listing your house with a broker.  He’s shopping in the FSBO market for the same reason you are selling there.

Real estate fees are always completely negotiable – there is no such thing as a standard commission.  If, however your buyer has the perception, for example, that the fee you WOULD HAVE paid is 5% and your house is selling for $400,000, he has it in his head that you are saving $20,000.  That might not be accurate since there is no standard commission, but as we all know, perception becomes reality for many people.

In that scenario he is likely going to expect to pay $10,000 less for your house because you are selling it on your own. You will have a hard time convincing him otherwise.

Remember, you have three options each time an offer is presented:

  • Accept the offer
  • Decline the offer
  • Make a counter offer

Repeat the offer/counter-offer cycle as many times as necessary to come to an agreement with the buyer on price and other terms.  If you do not agree, just hang on for the next prospective buyer and begin the process again.

END GAME

So, you’ve received and accepted an offer. Final steps:

  • The buyer did an inspection and was satisified with the condition of the house.
  • Your attorney and their attorney have created contracts which you both have signed.
  • The buyer has applied for a mortgage.
  • The lender sends an appraiser out to confirm that the sale price does not exceed the current market value.
  • The buyer gets his mortgage approval.
  • The sale of his house get completed.

Somewhere in this process you will look for and be negotiating the purchase of your next home.  It’s always a difficult call to know when to begin because in most cases you won’t be able to complete the purchase of your next home until your current home is sold.  It’s a bit of a juggling act – but this is not exclusive to unrepresented sellers – it’s just a part of the real estate process.

Once all of those things have been accomplished a date is set for closing and you are on the way to your next home.

New Way to Search for Connecticut Home Listings

The process of looking for home listings has changed many times over the last 20 years or so – from the old hard-copy MLS book that the Realtors kept under lock and key to today’s ability to simply go online, put in your parameters and see listings.  With most of the online services you can see all the details of the listing and then, if you choose, contact your Realtor to find out more info or to schedule a showing.

Well  – technology has jumped again and theres’ a new wrinkle to the online search. It is available here in Connecticut – it’s called LISTINGBOOK.  What Listingbook does is give you direct access into our Greater Fairfield County Multiple Listing Service database so you can see everything that’s out there that meets y our criteria.  You will see things the minute they become live- including the most recent updates such as price changes.

There’s more to it than that. What you get is your own Listingbook Account that will enable you to put in your search parameters and receive a daily report right in your email inbox that shows you new or changed listings that fit.

When you look at the listings you can do a number of things – you can save them as favorites, reject them, write youself notes that will stay attached to the listing so when you share the info with your partner you won’t forget anything obvservations you wanted to make.  Your partner can also write notes, commenting on your notes.  If you see a listing that you want to share with someone else – someone who is NOT on Listingbook, you can email them the listing sheet with just a couple of clicks.

Here are some other features:

Payment Calculator –  this is not just  a generic mortgage rate calculator.  Each listing has a separate screen which has the pertinent tax data associated with it.  You can put in several “what-ifs” such as “If I can buy this house for XX and I get a conventional mortgage for XX years at XX percent”.  You’ll then be able to see your total costs for that property.  Compare this to other properties in different communities and you’ll be able to get a bigger picture.

Dialogue with your Realtor –  If you see a property that sound like it might be good but you need a little mor info – you don’t have call your Realtor or even leave the system and send an email. Just use the handy Messaging System to write a question – directly on the specific listing.  Your Realtor will receive notification that he has a new note.  He can then answer your question- directly on the note screen for that listing – where his answer will stay.  You can get all your questions answered quickly and efficiently and never worry about where you wrote down the answer.

Property Watch – If you’re in the early stages of shopping and y ou see something that you like, you can set up a property watch on a specific listing. This will send you an alert if something happens such as the price being changed or other new information being put into the MLS, such as perhaps the seller is now offering a home warranty or they’ve redone the driveway or put in new counters. So you can keep abreast of what’s going on – in real time – with the listings that interest you.

Live Chat with your Realtor.  If you and your Realtor are both on line at the same time, you can use the message function as an IM system to chat about specific properties. You can also have a conference call – you can be on the phone with your Realtor and maybe your partner. You can all be on the Listingbook system simultaneously planning your strategy for properties – together.

There’s much more – in fact there is a whole separate application to help home sellers – not just buyers – keeping track of competitive properties and values in your neighborhoods – a Cyber CMA to help set the right asking price for your house.  It will also let you know if any other consumers or Realtors have viewed your home in the Listingbook system – to keep track of the activity.

This service doesn’t cost you anything at all, BTW.  If you’re interested, you just have to CLICK HERE to set up your free account or just to find out more about it.  If you need any additional info, just give me a shout and I’ll be happy to help.

Once you sign up – you won’t need any other vehicle to search for homes. Listingbook will do it all for you.  This truly is one of those things that after you begin using it, you’ll look back at some point and wonder how anyone can look for a home without it.