Author: Lew Sichelman

About Lew Sichelman

Here are my most recent posts

Odd Parcels: Schools, Speed, Appraisals

Appraisals are sometimes a big issue for buyers and sellers. Never mind that there’s a shortage of journeymen appraisers, which is why it sometimes takes weeks to obtain a valuation. That alone is a major headache. But the main problem is that no matter what the buyer is willing to pay, it’s the appraisal on which the lender bases its decision about how much to lend. If the valuation comes in too far below what the buyers have offered, they either have to come up with more cash to make up the difference, or the sellers have to lower...

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Obtaining A Fair Insurance Settlement

As too many homeowners have learned after a major loss, obtaining a full and fair settlement from their insurance companies isn’t a given. Too many insurers tend to lowball their damage estimates, hoping the insured will accept their offers and go away. The job of their adjusters is to pay out as little as possible; after all, these are money-making businesses, and the less they pay, the more profitable they are. Consequently, you must take every precaution to protect yourself and make sure you receive what you deserve. “Be vigilant,” says J. Robert Hunter, director of insurance at the...

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Persuading Reluctant Sellers

One of the main reasons for the lack of homes for sale is that people don’t want to give up their low-interest-rate mortgages. Another reason for the low inventory: Folks are leery about being able to find a suitable place to replace the one they have now. Buyers can’t do anything about loan rates, which at this writing were at their highest point in seven years – but still reasonably priced at less than 5 percent. But there are ways to make would-be sellers more comfortable about finding another house. They’re called seller contingencies, a catch-all phrase that covers...

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Lagoons Still The Hot New Amenity

Regular readers of this column may remember a story from a little over a year ago about Crystal Lagoons, a Santiago, Chile-based company which builds huge water features on what are otherwise landlocked properties. The company recently opened its first project in the States, an 8-acre lagoon at the Epperson development in Florida’s Pasco County. A second lagoon, this one of 14 acres, is ready to go in St. Augustine, Florida, and a third is under construction in the Houston area. But that’s not all. Crystal Lagoons, which has its US headquarters in Miami, has some 60 projects either...

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For Some Buyers It’s Full Steam Ahead

Toss a few obstacles in front of Americans, and many will take up the challenge. That appears to be the way some wannabe homebuyers are facing today’s market conditions. Despite a lack of houses for sale, rising mortgage rates, higher prices and strong competition from other would-be owners, not to mention investors, nearly two-thirds of the people responding to Gallup’s annual housing survey still say it’s a good time to buy. This doesn’t exactly square with a couple of other recent studies. One, by secondary mortgage market giant Fannie Mae, found that the share of those who believe it’s...

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Odd Parcels: Taxes, Storage And More

Big wedding or starter house? It’s a question some brides and grooms don’t even consider. But perhaps they should. According to Canadian company RateSupermarket, young lovers spend more than $72,000 from the first date to “I do.” But most of that – around $46,400 – is eaten up by a wedding and honeymoon. That’s one heck of a down payment. The company asked if respondents would rather spend that money on something other than their nuptials, and a surprising 45 percent said they’d use it to buy a house. Only 6 percent said they’d go ahead and have a...

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More Housing Options For Seniors

Seniors who are house-rich but cash-poor, or who fear running out of money in their retirement years, have several options to save the day. One, of course, is the much-ballyhooed Home Equity Conversion Mortgage, otherwise known as a reverse mortgage. But elder owners have other choices, including the financial ones described here last week. There are also a number of other alternatives: Deferred payment loans (DPLs). Unlike the state-sponsored and local grant programs mentioned previously, in DPLs, a lien is placed against your house and the money must be repaid when you sell (or when you convert the property...

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Alternatives To Reverse Mortgages

Home Equity Conversion Mortgages (HECMs) may be a good choice for some seniors who fear they might outlive their retirement funds and will need cash to enjoy their remaining years. But they aren’t the only options elder owners might want to consider. HECMs, aka reverse mortgages, are made to owners 62 years and older who have built up significant wealth in their homes. You borrow against a percentage of that equity, and draw the funds either in one lump sum or in monthly payments. Better yet, nothing has to be paid back until you pass away, or you permanently...

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Factory Homes Making a Comeback

The next time you get behind a slow-moving tractor-trailer hauling what looks like a house, or parts of one, don’t scoff. The end result may be a better-built, less-expensive place than the one you live in. Sure, most people prefer to live in a so-called stick-built home: one that’s put together on the job site, board by board, nail by nail. But it may surprise you to learn that many houses are built, at least to some degree, offsite in a controlled environment – out of the weather and with far less waste. The broad heading for this aspect...

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The More Bathrooms, The Better

For most American homeowners, it’s “the more the merrier.” At least when it comes to the number of bathrooms. Indeed, it’s a good bet that your next home will have at least two bathrooms, and perhaps more. Of all the new houses built in 2016, only a scant 3 percent had one-and-a-half baths or fewer, according to the latest figures from the Census Bureau. Even the number of new places with two-and-a-half baths or fewer fell in 2016. At the same time, the number of new houses with three or more baths has been on the upswing for more...

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Going and Coming

So you’ve sold your house and are about to move into a new one. Other than the physical move itself, you think you’re about done with the process. Well, think again. You still have plenty to do. For starters, notify your utility providers that you will be leaving your current address on the day you close the deal on your old place. Once you close, the utilities are your buyer’s responsibility. At closing, you might give the buyers a list of the house’s utility providers and their phone numbers. This isn’t required, but it is a courtesy, especially if...

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Verbal Offers and IRS Agreements

Cash offers are one thing. But when they are verbal, realty professionals agree that they’re not worth the paper they’re not printed on. A few months ago, Janice Zaltman, an agent with Keller Williams Partners in Hollywood, Florida, received a text from another agent – who should have known better – that he had a client who wanted to make a cash offer on a property Zaltman had listed. Her response: “Please put it in writing and show proof of funds.” She never heard another word, she said in a recent post on real estate site ActiveRain. When she...

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Buyers Need To Jump Three Hurdles

You’re looking for a home and a mortgage to finance it, but you think that since the real estate implosion a decade ago, lenders are looking for a 20 percent down payment. You are resigned to the fact that you still have a lot of saving to do before you can come up with that kind of cash. But in the words of the old song, it ain’t necessarily so. That down payment may be within your reach a lot sooner than you think. The Urban Institute (UI) calls the down payment one of the three biggest barriers to...

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CBTR Celebrating Award Winning Service and 20 Years of Success

CBTR was formed in 1997 when Joyner, Price, and Britt of Greensboro and High Point joined forces with Winston-Salem’s Lambe-Young and the sales division of Hubbard Realty under the national Coldwell Banker banner.  In 2005, CBTR expanded with the addition of Coldwell Banker Alamance.  CBTR is known as one of the most successful real estate companies in the triad – in large part because of their professional and successful agents and brokers. CBTR Chief Executive Officer Beverly Godfrey presided over the awards ceremony, honoring the following:   International President’s  Circle Office: Winston Salem Office   International Sterling Society:  (Top...

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The Higher The Score, The Lower The Rate

Boosting your credit score before you secure a home loan can pay off big-time – in some cases, to the tune of tens of thousands of dollars over the life of your mortgage. The reason: Mortgage borrowers with higher credit scores tend to be offered lower loan rates, and even a small difference in your annual percentage rate, or APR, adds up over time. LendingTree, an online mortgage marketplace, takes a look each month at what lenders on its site are charging for financing a home. The findings are eye-opening. Take the average purchase-money mortgage, which, as its name...

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Feds Make It Easier To Obtain Assistance

The Federal Housing Finance Agency (FHFA) has made it easier for struggling borrowers to complete an application for mortgage help all by themselves: no outside – and expensive – assistance necessary. The FHFA, in conjunction with Fannie Mae and Freddie Mac, two of the secondary mortgage market entities it supervises, has implemented a new Mortgage Assistance Application, or MAAp, to implement some lessons learned during the housing crisis. One of the most important lessons is “ensuring that the application process is straightforward and as easy to navigate as possible,” the FHFA said in a press release. The new MAAp...

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Rising Loan Errors Spell Trouble Ahead

Last year’s two monster hurricanes aside, homeowners were making their mortgage payments at a better clip in 2017 than in any year in nearly two decades. But there are indications that borrower fraud and lender slip-ups could portend an increase in late payments, and possibly even foreclosures. Fortunately, the upward trend in defective home loans is not likely to impact borrowers – at least not directly, says Phil McCall, president of ACES Risk Management (ARMCO), which offers quality control services to lenders. But bad loans could have devastating consequences for mortgage producers, who could be forced to buy them...

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Odd Parcels: Love Hurts, Alexa, Discards

Homebuyers: Write all the love letters you want to sellers, to try to persuade them you’re the right buyer for their home. But leave your heart-wrenching missive out of the package of documents to give to your lender. That’s the word from Rob Spinosa, a loan adviser with Supreme Lending in Mill Valley, California, who says some letters contain not-so-flattering information about the house that you probably don’t want underwriters to know. Such as these three examples: “The repairs in the downstairs kitchen don’t concern us. John is good with his hands, and we plan to fix this upon...

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Practical Steps For Co-Owning And Co-Habitating

With more and more young couples buying houses together before committing to each other in marriage, it’s paramount for them to understand the way they are seen financially. For example, co-habitating is not the same as co-borrowing. Neither is co-borrowing the same as co-owning. Let’s start with that last one, because it trips up lots of people. Borrowing together creates a joint liability. If one of you fails to pay his or her share of the mortgage, the other is responsible for the entire payment. And if the couple eventually splits up, both parties are liable for the full...

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Mortgage Payments Likely To Keep Zooming

It’s the age-old chicken-or-egg story of the housing market: Should you buy that home now, while interest rates are still fairly low? Or wait for rising prices to moderate? Of course, there are many factors that will go into your decision. But here’s one you probably haven’t considered, and it has real “buy now” implications: Mortgage payments zoomed last year and are likely to rise even higher this year, continuing a trend that has persisted for the past six years. CoreLogic, a data analytics company that has been tracking mortgage payments for the past generation, says that while home...

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Sometimes, The Animals Come With The House

When there is a dispute between buyer and seller over what stays with the house and what goes, it’s usually over a prized bathroom mirror, a beautiful sconce in the hallway or some ornate, custom curtain rods. The rule of conveyances is fairly simple: If it is attached to the house, it is considered a fixture and it stays for the next owner. If it isn’t attached, the sellers can take it with them when they move out. In other words, you can take the curtains, but not the rods. But what if the issue involves animals? Now it...

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Adjustable-Rate Mortgages Make a Comeback

Adjustable-rate mortgages (ARMs) are back, especially in the higher price brackets around $453,000 and above. And as loan rates climb, as they are expected to do throughout the year, they probably will become more popular. But wait: Weren’t ARMs responsible, at least in part, for the 2008 housing crash and subsequent mortgage market meltdown? Are homebuyers setting themselves up for another fall? Well, no, ARMs weren’t responsible for the crash. Actually, the loan product itself is quite sound. After a set number of years, the rate you pay adjusts to market conditions at that time. The rate could go...

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Lenders Digging Ever Deeper

The great minds of the mortgage market continue to work overtime, coming up with fresh ideas in an effort to reach more would-be homebuyers. Pilot programs like these don’t always prove worthwhile; in fact, some never make it beyond the testing stage. But they show the lengths to which lenders are willing to go for new buyers. Below are some of the latest offerings from the mortgage world. Mortgage giant Fannie Mae is looking at a way to help people build their own homes. In what’s known as construction-to-permanent (C2P) financing, buyers get a construction loan to build a...

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Beware of Churning in All Its Forms

“Churning” is a four-letter word in the mortgage business. The term refers to aggressive lending practices. The most common churning scenario: Soon after a buyer closes on a home, rival lenders offer to refinance the mortgage. The poachers offer the unsuspecting borrower a lower interest rate, but they have to pay closing costs all over again, and perhaps some additional fees – so there is little or no real savings. In some cases, the new loan could even be more costly than the old one, even with the lower rate. Churning seems to be on the rise lately. With...

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What’s in Store for Homes in 10 Years

What will houses look like, and live like, a decade from now? New Atlas (formerly Gizmag), a science and technology website, recently put that question to Morris Miselowski, a self-described “futurist and transformation provocateur.” As you might expect, Miselowski says technology will be a big driver, permeating practically every corner of our lives. But he sees a number of other trends that will have taken hold a decade from now, including multifunctional furniture, structures designed to accommodate three generations under a single roof and houses that monitor our health. These predictions aren’t exactly off-the-wall. Indeed, some aspects have already...

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By The Numbers

Despite the tragic massacre in Las Vegas where 59 people died during a concert this fall, big money is continuing to flow into the housing market there. Kenneth Lowman, broker/owner of Luxury Homes of Las Vegas, reports that Sin City’s luxury home market is on pace for its best year in the past decade. So far this year, there have been 364 sales of houses at more than $1 million each. That’s a 35 percent jump from last year’s 268 luxury sales. According to another Vegas-area luxury realty broker, Rob Jensen, sales of big-ticket houses in September were up...

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Parental Loans; Tiny Resorts; Avoiding HOAs

Parents who want to help their offspring buy their first houses should make sure the kids fully understand what mom and dad expect in return.  According to a poll this spring, parents and kids don’t always see eye-to-eye on the subject. Consumer lending company loanDepot conducted the online survey, which queried 1,000 millennial adults (aged 18 to 38) and 1,000 of their parents.  According to the survey, 68 percent of the parents view their financial support as purely a gift, but only 29 percent of the children see the money as a no-strings-attached present. Thirty-six percent of the children...

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How To Read Floor Plans

More and more builders are doing away with expensive model homes, instead using artists’ conceptions to show buyers the completed house’s exterior, along with detailed floor plans of the interior.  In light of this trend, it has become incumbent upon would-be buyers to learn how to “read” what they are being shown. Floor plans, or the far more detailed drawings called blueprints, have a language all their own.  With dozens of symbols and lines going hither and yon, they are your road map to exactly how the house you are considering will “live” once you are in it. A...

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Beware Last-Minute Damage

It doesn’t happen often, but when it does, it can cause a seller and buyer big headaches. We’re talking about damage done to a property after a contract is signed but prior to closing. Perhaps the moving company broke the stair spindles when they were carrying the seller’s large dresser down.  Or maybe there was a small kitchen fire – or worse, damage from a major storm.  Or perchance a final walkthrough prior to closing revealed damage that wasn’t noticeable when the house was full of the seller’s belongings. Most standard state and local contracts address this issue.  Unfortunately,...

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For Millennials, Security Tops Speed In Lending Priorities

Millennials, the population cohort whose members were practically born with electronic devices in their hands, are generally considered the most likely to finance a house through a totally automated process.  But even they want some hand-holding, according to a recent survey. Millennials – generally, folks born in 1982 or later – are the most likely to start the mortgage process online.  But many of them still want to talk to a real, live person to seal the deal, according to a study by Ellie Mae, a loan origination system used by numerous lenders. Three out of 10 millennials used...

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Quick Takes: Small Lots, Water Views, Credit Scores

Building sites for single-family houses hit a record high last year, even as lots were the smallest ever, according to data from the Census Bureau’s Survey of Construction. The median lot size sold in 2016 dipped to 8,562 square feet, or just under a fifth of an acre.  That’s a small decline from 2015, when the median fell to under 8,600 square feet for the first time. While lot sizes are shrinking overall, regional differences are major.  For example, the median size of a fully developed building site in New England, which is known for strict, low-density zoning rules,...

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Softening The Blow From A Disaster

If your house is damaged in a fire, hurricane, flood or other disaster, you should call your insurance company first thing.  But after that, call your local appraiser’s office. If you do, the value of your property could be reduced appreciably in the tax man’s eye, and as a result, your property tax could go down significantly.  If you don’t, “your house could be assessed as if it were in normal condition, despite thousands in diminished market value,” says Patrick O’Connor, president of O’Connor and Associates, one of the country’s largest tax consulting firms. For example, in the Houston...

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Canny Ways To Use Reverse Mortgage Money

More than 1 million senior homeowners have now taken out reverse mortgages.  There’s a good chance you might, too, once you reach age 62.  But the question of how to use the money from the loan is just as important as the question of whether or not to get the loan in the first place. A laundry list of celebrity spokespeople have tried to explain how these “backwards” loans work.  Here’s how the most recent one – gravelly voiced actor Tom Selleck – explains it in a commercial for a reverse lender: “A reverse mortgage loan is a simple...

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Celebrities And Mortgages: A Natural Match?

Would you buy a mortgage from Kevin Costner? This isn’t quite a rhetorical question.  The Academy Award-winning actor and director is the lead investor in a new venture in the mortgage space called Lender Price.  The Pasadena, California-based firm doesn’t make loans, but supplies key technology that figures out how much you’ll be charged for a mortgage. And Costner joins a surprisingly long line of celebrities involved in the mortgage business.  The list includes the current president of the United States, who migrated over to the home loan field after making his fortune in real estate.  But there are...

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‘Duty to Serve’ Helps Borrowers

Federal mortgage agencies Fannie Mae and Freddie Mac have long been tasked by Congress with serving areas that don’t get much attention from the private sector.  And that could help you get a home loan. Suppose you live in an underserved rural area – Appalachia, say, or the Mississippi Delta – or you are in the market for manufactured housing.  Getting a home loan in both of those scenarios should be a little easier starting Jan. 1. That’s the date the two giant funders of mortgage lenders have to start implementing their congressionally mandated Duty to Serve Underserved Markets...

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