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How to Buy a HUD Home

by David Tyler Mills

Here at McNaughton Real Estate, we are asked everyday on how to buy a HUD home.  Rightfully so, HUD homes are the hot topic in terms of getting the most value out of your investment.  Believe it or not, it is surprisingly easy to buy your own.

  1. Get a Pre-Approved letter.
  2. View the Property with a McNaughton Realtor®.
  3. Submit your Bid.
  4. Submit your Contract Package to Asset Manager.

Not only is it that easy, we’ll do steps 3 and 4 for you!  Don’t let the buying process keep you from a great investment.  Check out all the HUD homes in Northwest Arkansas at www.allNWAhomes.com and give us a call!

Home Inspections

by David Tyler Mills

When purchasing a home, one of the most important steps you should take is having a home inspection.  Most home inspections cost about $275, and it well worth the money considering that buying a home is one of the biggest investments most people will make.  Many homeowners that failed to have their home inspected find that their repair bills in the thousands.  If you would like a referral to a home inspector, give us a call!

Homes are selling fast!

by David Tyler Mills

It's a buyer's market!  Homes are selling fast here in Northwest Arkansas.  Give us a call to help you find some amazing deals on any home ranging from HUD homes to short sales to quality homes to much more!


Housing Crisis to End in 2012 as Banks Loosen Credit Standards

by David Tyler Mills

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Source: Krista Franks, dsnews.com, 1/24/2012

It's a Sign of the Times!

by David Tyler Mills

Most of us grew up thinking that if we planned well and played by the rules, we’d never have to stand by as our financial lives unraveled. 

 

But upheaval on Wall Street, unacceptable rates of unemployment and plummeting real estate values have taken their toll.  Since 2007, 7.9 million homeowners have lost their homes to foreclosure. Current estimates are that one in four homeowners owe more on their mortgages than they could get from the sale of their home. Millions more homes will be lost to foreclosure before this real estate crisis runs its course.

 

The sad fact is that foreclosure is not an isolated event. For months leading up to the loss of a home, financially strapped homeowners live under a cloud of uncertainty.  And then for many years afterwards, the blow to credit gets in the way of buying another home or buying anything on credit. Foreclosure even complicates employment prospects.

 

The impact of foreclosure is huge and the sad fact is that it’s often avoidable.

 

As real estate professionals who have earned the Certified Distressed Property Expert (CDPE) designation, our mission is to provide financially strapped homeowners with options to foreclosure, ensure that they steer clear of scams, and help navigate them through the solution that best meets their needs.

 

Among the most important facts to keep in mind: the sooner help is sought, the better the options.

 

These are tough times, but more help is available than ever before. If you or someone you care about is ready to navigate away from the dark cloud of an unmanageable mortgage and realize that hope and blue skies are within reach, contact us today, and let’s get started.

What Loans are Available for You?

by David Tyler Mills

The real estate market has hit the ground running with plenty of signs that this is going to be a good year.  Most people are aware now that it’s a buyer’s market in Northwest Arkansas with historically low interest rates and housing prices.  However, most potential buyers may not be aware of the financial loans that are available to them.  A simple reference chart of all the loans that are available for potential home buyers and investors will be provided below.  

Buyers interested in owner occupied properties have four options: Rural Development (RD), Veterans Administration (VA), Federal Housing Administration (FHA), and Conventional.  Notice the RD, VA, and FHA chart below are listed side-by-side for easy comparison between their set down payments and fico credit score requirements.  The Conventional chart is separated due to the correlation between the fico credit score and the down payment (a better credit score allows a lower down payment.)  

 

 

RD

VA

FHA

Financing

100%

100%

N/A

Down Payment Required

None

None

3.5%

Min. Fico Credit Score Required

620-640

620

640

 

   

 

Conventional

 

Down Payment Required

Min. Fico Credit Score

Number of Units

 

3%

720

1

 

5%

660

1

 

20%

620

1

 

20%

640

2

 

25%

640

3-4

 

Notes:  Conventional bonds do not offer 100% financing. Units refer to the type of property.  For example, a one unit is a typical home; a two unit is a duplex; and a three or four unit is a multiplex.

 

For investors, conventional loans are your only option.  Notice that the loan requirements are different for first time investors and veteran investors.  Two charts are provided for each scenario.

First Time Investors

 

Conventional

Down Payment Required

Min. Fico Credit Score

Number of Units

20%

660

1

25%

660

2

35%

660

3-4

 

Veteran Investors 

Conventional

Down Payment Required

Min. Fico Credit Score

Number of Units

10%

720

1

20%

620

1

 

Do not miss this opportunity to buy at the bottom of the market here in Northwest Arkansas.  For a free list of the listings available in NWA, check out our website.  For more information on loans, call our good friend Kelly Franks at Priority Bank.


CDPE-Designated Agent vs. Real Estate Agent

by David Tyler Mills

What’s the difference between a CDPE-designated agent and a regular real estate agent?

While all agents in the state are educated the same and required to take the same amount of continuing educational hours, a Certified Distressed Property Expert® (CDPE) specializes in saving distressed property owners from foreclosure.

According to the Charfen Institute…

“A Certified Distressed Property Expert® (CDPE) has a thorough understanding of complex issues in today’s turbulent real estate industry and knowledge of foreclosure avoidance options available to homeowners. CDPEs can provide solutions, specifically short sales, for homeowners facing market hardships.

Homeowners regularly proceed without guidance of any kind through the often financially and emotionally devastating prospect of foreclosure. Speaking with a well-informed, licensed real estate professional is the best course of action for a homeowner in distress. Through comprehensive training and experience, CDPEs have the tools to help homeowners find the best solutions for their unique situations and to avoid foreclosure through the efficient execution of a short sale.

Living through financial difficulties poses a challenge for any family, so why make the process of finding a qualified real estate professional difficult too? Select an agent with the CDPE Designation to ensure you have a trained professional to address your specific needs. For more information, contact a CDPE in your area.

CDPEs don’t merely assist in selling properties, they serve and help save their clients in need.”

Our message to homeowners who do not know where to turn: there is hope. Foreclosure is not inevitable and neither the government nor your bank wants to see that happen. No one expected to find themselves on the brink of foreclosure, but we have worked with countless clients who have managed to turn their financial trajectory around and get on a path of financial recovery. 

It CAN be done! And it would be our privilege to help.

5 Reasons to Buy a Smaller Home

by David Tyler Mills

Big things come in small packages.  When talking about buying houses, that aphorism seems unsuited.  However, smaller homes have recently been a hot seller in today’s market.  People are buying smaller square footage homes because of the big benefits that come with it.  Even though prices have declined, is that still enough incentive to own an oversized home?  Here are five reasons you might want to buy small. 

Small homes cost less.  It’s almost as involuntary as your next heart beat that the next statement to follow this illuminating epiphany is “duh.”  However, let’s not focus on the face value of the house, but instead the extra cost that come along with a large home.  Heating and cooling alone can drive a homeowner crazy.  Let’s not forget how most home-improvement projects will inevitably be on a much larger scale and require more time to complete.  A lot more exterior paint for your walls, more shingles for your roof, and more hardwood flooring for your kitchen are required for these major tasks.  In addition, the extra furniture and decorations need to be accounted for in order to furnish all those extra rooms.   

Smaller homes prevent all these problems.  Another benefit is the savings on the utility bills and home maintenance.  You’ll also save money on property tax, since you’ll have less square footage.  Check out this video for ideas to enhance small spaces.

Small houses save time.  As mentioned before, smaller homes can save you a significant amount of time not only on home-improvement projects but also on general household upkeep and cleaning.  Even though leisure time cannot be measured in terms of total value, it’s still a treasured part of being a homeowner.  With less time spending on housecleaning and maintenance, you can use your extra time to play with your kids, create a garden, cook healthier dinners, or enjoy your favorite hobbies.

Smaller homes make it easier to live simply.  Did you know goldfish only grow to the size of their environment?  In the same aspect, living in a home with less area for storage causes you store less junk.  You’ll be less likely to buy superfluous accessories causing you to live simpler and more efficient.  On the other hand, living in a smaller house doesn’t have to stunt your moral growth.  Living leaner causes you to make choices between what you want to keep and what you should donate.  Many support groups such as the Small House Society and the Small House Movement promote the idea of smaller homes being more affordable and ecological.

Smaller homes mean quality splurges.  Get ready to lose an arm and a leg if you’re looking to upgrade your five star, restaurant-sized kitchen.  Luckily for smaller homes, you won’t need as many cabinets or as much granite to get a quality updated kitchen.  You can also use the money you save from living leaner on more quality appliances and furniture.  Just because you give up square footage doesn’t mean you give up luxury.    

Small homes may be easier to sell.  Seriously.  These benefits thus far hold a lot of weight when buyers consider buying a new home.  With energy cost continually rising, smaller energy-efficient homes will continue to be in high demand in the future.  Also, there’s a broader market for smaller homes.  First time homeowners aren’t the only consumers; additionally, investors love adding smaller homes to their portfolio of rental homes, especially in growing college towns.

Don’t let the size of the home be the only factor when choosing the perfect home for your family.  Consider all the extra cost that comes with owning your "dream" mansion.  The size of a house may correspond with financial success or be downright impressive, but it’s the people inside that make that building a home.

*Source:  "5 reasons you should buy a small house" by Heather Levin of U.S. News & World Report

It’s Time to Take Another Look at Short Sales

by David Tyler Mills

As recently as a few months ago, if you would have told a real estate agent who specialized in short sales that they’d be raving about a lender’s stellar service and rapid approval times—not to mention significant cash incentives for financially strapped homeowners for pursuing a short sale—you’d have gotten some strange looks.

That’s all changed.  And it’s changed faster and to a greater extent than most real estate professionals ever could have imagined.

With a glut of bank-owned properties dragging down the recovery of the real estate market, as well as the national economy, major lenders are more eager than ever before to avoid foreclosure. So they’ve sharpened their focus on short sales. Big time.

The biggest lenders in the country have staffed up to ensure rapid processing of short sale applications. They’ve ponied up with cash incentives at closing for homeowners who pursue a short sale. And they’re proactively reaching out to CDPE agents and putting them in touch with delinquent borrowers.

This is big news and the media has not really caught onto it yet. What’s important for you to know is that whatever you’ve read or heard in the past about long lag times and frustrations with short sales is probably no longer the case.

As a member of the CDPEAdvanced community, we’ve tapped into major lenders and on top of major developments affecting short sales and bank-owned properties.  We invite you to visit our website http://www.allnwahomes.com/ to learn more and feel free to contact us any time at 479-442-9099 if you or anyone you know is struggling with an unmanageable mortgage.

10 Mistakes Every For Sale by Owner Should Avoid

by Elizabeth Rodgers

10 Mistakes Every For Sale by Owner Should Avoid

 

1.     Drafting the real estate contract on your own.  Although you maybe tackling the challenge to sale your property on your own regarding the marketing, showing and negotiating details trying to do the legal side of the real estate transaction is something most for sale by owners should avoid. It is always good practice to hire an attorney to help with your real estate contract if a real estate professional is not involved in the transaction.

 2.   Failing to provide the potential buyer with a seller’s disclosure. Normally most real estate transactions involve a detailed disclosure provided by the seller to the buyer outlining minor and major issues regarding the real estate that is being sold.  Things such as: mechanical and structural defects that have occurred over the owner’s ownership. Some courts have determined that if particular items are not disclosed to the buyer that a contract could be resented or monetary damages could result to the previous owner. Naturally only a court of law can make these determinations and it is good practice to provide a sellers disclosure any time you are selling a property. Consult your attorney for this form if you choose not to hire a real estate professional for this transaction.

 3    Failing to provide the federal lead based paint disclosure documentation.  If your property was built before 1978 (in certain circumstances for properties built during the year 1978) then you’re required to provide a lead based paint disclosure to the buyers. Failing to do so could result in legal consequences. Consult your attorney for this form if you choose not to hire a real estate professional for this transaction.

 4.   Neglecting to register all potential buyers who preview your property.  Although ever one that comes to look at your home may appear and seem to be a potential buyer in reality and unfortunately some people previewing you property have more in mind than buying your home. It is always a good idea to make note or register potential buyers along with their license plate numbers and other details incase a problem was to occur after the sale. Such as a theft or loss of personal property.

 5.   Providing too much information.  Although many sellers know how much money they have invested in their property and believe that is a good selling feature to provide potential buyers. Sometimes telling too much information during the showing of the property can make it appear as though you’re desperate or that something is wrong with the real estate.  This mistake is not emphasizing to hide information from the buyer but just to remind for sale by owners not to appear over anxious in selling your real estate.

 6.   Failing to disclose material defects.  As noted earlier with the sellers disclosure which normally does provide for this situation. Failing to disclose a material defect in the property can become a major liability in the future after the sale. If you know any major defects in the property, structural, mechanical or other issues or items that you feel the buyers should know about then it must be disclosed! Always disclose all material defects in the property.

 7.   Pricing your property incorrectly.  Even though most for sale by owners want to sale their property because they can save the marketing fee a real estate brokerage charges. Studies have indicated that most for sale by owners end up selling their property for less monies than what it is actually worth on today’s market. Even though you maybe planning on selling the property on your own it is always a good idea to have an independent appraiser or two or three real estate broker offer you a price opinion so that you can feel confident that your property is priced accurately.

 8.   Neglecting to negotiate.  Most for sale by owners are not used to negotiating price and other terms during the real estate transaction.  Understanding important issues such as earnest money, possession, loan commitment and inspection dates all can play a major role in negotiation in the sales contract. Understanding what items can be negotiated for more or better terms is something the for sale by owner should take into consideration.

 9.   Failing to understanding contingencies. Sometimes it may be easy to get an offer to purchase on your property as a for sale by owner. However, what kind of contingencies have been placed in the verbiage of the contract? How quickly must the buyers get their loan approval? What about building inspections? All of these issues can play a major role in determining whether your real estate will close or not in a timely fashion or at all. Most for sale by owners generally have problems in this area of the sales contract and a good knowledge of all contingencies and how they work is suggested and required for any for sale by owner.

 10.  Choosing an unqualified closing agent.  It is always a good idea to make sure the transaction is closed at a local escrow or title insurance company that handles in a certified and insured to participate with a real estate closing. You could as choose a local attorney to close your real estate transaction. But the bottom line is that you make sure an insured and qualified settlement closing agent is selected. 

 These are only ten mistakes that many for sale by owners make when trying to sell their property on their own.  Although this is not a comprehensive and through list of mistakes that could arise, it is a compellation of mistakes that do occur on a regular basis for many for sale by owners. Naturally as a real estate professional, I encourage all potential home sellers to use the services of a qualified residential real estate agent or an attorney when selling their home or real estate.  However, I understand the need and desire for many people to try to sell their real estate on their own. If you choose in the future to secure the services a real estate professional I would love to have the opportunity to visit with you and share my detailed marketing plan with you. You can reach me at 479-442-9099 or   e-mail me at Elizabeth@McNaughtonRealtors.com

Displaying blog entries 1-10 of 18

Contact Information

Photo of Don McNaughton Real Estate
Don McNaughton
McNaughton Real Estate
4299 W. Persimmon
Fayetteville AR 72704
479-442-9099
Fax: 479-442-0948
       

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