I used to pass a mortgage company billboard on the freeway every day that read: “Surprises are for birthday parties.” (Implied: surprises are usually unpleasant when they arise in the context of real estate transactions.)  The worst case scenario that looms large in the minds of buyers, refinancers and sellers alike is that they’ll get to the close of escrow and some big glitch will arise, coming between you and your home – or your cash.

Here are 4 key need-to-knows to help you avoid getting a nasty surprise at the closing table…

•  Interest Rates Rise
•  Some Loan Requirements Tighten but More Can Now Get a Loan
•  Housing Sales Increase
•  Distressed Properties Increase Markedly
•  Prices Continue to Soften in Most Markets

Find out more about these latest predictions

Well, yesterday I read an interesting article that I thought some of you might appreciate. It isn’t the best market but the sky is not falling …

Everybody Calm Down. Armageddon Is NOT Upon Us!

by STEVE HARNEY on AUGUST 26, 2010

The new housing numbers have definitely been a major news story over the last 48 hours. The Dow dropped over 100 points on the announcement of July’s existing sales numbers. The cries of a double-dip sound like the screams of Chicken Little: ‘The sky is falling! The sky is falling!’ Pundits are claiming real estate will never be looked at the same again. We asked Steve Harney to comment on what the report actual means to the housing recovery. As always, he was more than willing to share his insights. – The KCM Crew

I want to start by saying that Armageddon is not upon us. Was NAR’s Existing Home Sales Report tough to read? Yes. Were there any surprises in the report? Just one: the fact that prices have remained stable. And that was good news.

All the panic and gut-wrenching revolves around two numbers:

The lack of sales in July

The months’ supply of inventory now available

Neither number was a surprise to anyone truly following the real estate market. Right here in this blog, the KCM Crew has been claiming for the last nine months that sales in 2010 will be approximately what they were in 2009. The tax credit moved many purchases forward as buyers wanted to be in contract before the April 30 deadline. That push forward of demand created a false sense of hope that a major market comeback was taking place in the spring. It also created this current vacuum of demand during the summer.

Just as we should have realized that the great market of the spring could not be sustained, we must now realize that plummeting sales numbers will not continue. It may take one or two months for the impact of the tax credit to fully dissipate. After that, we will see a more normal buyer demand throughout the fall and winter. We must not forget that people decide to move every day. Prices are great, interest rates are at historic lows and the assortment of properties for sale is fabulous. Buyers will buy!!

In regard to the months’ supply of homes for sale, we must remember one basic principle: prices will come down if demand is constant and inventory increases. Houses will sell over the next twelve months, approximately 5 million of them. There may be more than double that amount trying to sell however. Which ones will sell? Those that are priced correctly for the current market. Your price must be compelling in order to make your home attractive to today’s buyers who have a tremendous selection of homes from which to choose.

As the year moves forward, it is my belief that months’ inventory will remain in double digit numbers. That means that prices will continue to soften.

What does this mean to you?

You definitely will be able to sell your home and move on with your life. If that’s the goal, you will do better financially if you do it sooner rather than later.

 There will be an Evanston Township Property Assessment Appeal Seminar sponsored by Cook County Commissioner Larry Suffredin, Cook County Assessor James Houlihan and Evanston Township Assessor Bonnie Wilson. The seminar will be held on Monday, July 19 at 7 p.m at the Fleetwood Jourdain Community Center, 1655 Foster Ave.

The seminar will include general information on the assessment process, avenues for assessment appeals, resources available for verifying an assessed value is fair and accurate and important property tax exemptions that are available to Cook County residents.

The deadline for Evanston Township property owners to submit appeals to the Cook County Assessor’s office is 30 days after reassessment notices are mailed. Taxpayers are encouraged to bring their assessment notices with them to the seminar. Staff from Assessor Houlihan, Township Assessor Wilson and Commissioner Suffredin’s offices will be present to answer individual questions regarding assessment appeals and exemptions. In addition, Commissioner Sufferdin’s district office, 820 Davis Street, Evanston, is open to assist taxpayers in person by appointment, Monday – Friday, 9 a.m. to 5 p.m.

To schedule an appointment or if you have any questions about the seminar, call 847/864-1209. Appointments can also be made at the Evanston Township Assessor’s office, 846 Dodge Avenue, Evanston, by calling 847/332-2465. Questions about the reassessment notice and appeal process can also be directed to Assessor Houlihan’s office at 312/603-5300

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev

read more on Tax Credit Deadline Extended

 This is great news especially for any short sale buyers who have a signed contract but the bank is slow in responding!

My Wells Fargo processing center in the Chicago/Evanston area has prioritized all loans that were eligible for the tax credit so we don’t have that “backlog” but it certainly can help those contracts that are a little sticky!

If you have a short sale contract that could still come together and was signed by the seller prior to April 30th, contact me on how they still might be able to get their $8K credit.

He purchased his home a few years ago at the height of the market with very little down payment and an interest rate above 6.5%. It’s no surprise that he now owes more than his home is worth in today’s market but that’s really the least of his problems with the home. He came to me looking for an option to refinance his mortgage to lower his payments (which can be done through a few government programs if he were eligible), but it really wasn’t his mortgage payments that were the proplem, it was his taxes and insurance.

When he purchased the home, he hired an inexperienced realtor who didn’t notice that the property taxes on the homewere much lower than he would pay because the current owner was receiving a senior discount. When he received his first tax bill (without a senior discount) his property taxes went up significantly.

Now, even though his realtor didn’t catch this upfront, his attorney should have. Unfortunately, his attorney did not practice real estate law so he didn’t recognize it either. His third opportunity to catch this could also have come from his mortgage consultant. As an experienced, thorough consultant, I always sit down with my homebuyers for over an hour before they enter a contract and one of the things I go over is how to determine what your taxes will be and understanding exemptions.

This homeowner’s lender also determined that he was in a flood plain after he purchased and required that he obtain flood insurance on the property which can be very expensive. Due to the expense of this policy and his tax bills increasing, he decided not to add a flood policy to his insurance so the lender purchased it for him at an even higher rate and added the fee to his payments. If he had had an experienced attorney, he would have known that he signed a form at his closing that said the lender had the right to purchase insurance if he didn’t obtain adequate coverage on his own. The lender should also have determined the home was in a flood zone during approval and notified him before he purchased the home.

This is why it is very important to hire experienced professionals when purchasing a home. If your realtor is new to the business, make sure they have an experienced partner or mentor that helps them through your contract and then make sure that your attorney and mortgage consultant are knowlegeable enough to pick up the pieces.

A buyer doesn’t pay anything to hire a realtor. The seller pays a commission to their realtor who, in turn, splits with your agent. If you don’t have an agent, the seller’s realtor can keep the full commission so there still can be no savings to the buyer. Real Estate attorney’s are very inexpensive (typically around $500) and you don’t pay them until you close.

Protect yourself from future increased payments and surprises by interviewing and hiring experienced professionals especially if this is your first home purchase. Lynn Briskin and I work as a team along with Katherine Hart, an experienced attorney who focuses soley on real estate and explains every detail to you. Contact us today so you can enjoy your home purchase, not regret it.

1. Did you have a consultation with the lender?
2. Are you pre-approved for a Conventional or FHA mortgage and do you understand the difference?
3. What will your monthly payments be?
4. Does that amount include taxes and assessments (or insurance for a house)?
5. How much do you need to bring to closing?
6. Did the lender provide you with a written estimate of your payments and closing costs?
7. What are your origination charges?
8. What are the credit charges or points?
9. Did they explain how to finance a short sale or foreclosure?
10. Did they offer renovation financing to you?

Also, did they explain how to shop for the best rate and when you can lock it in? If you plan to shop lenders, shop on the same day because rates change daily and make sure you shop not just the rate but these 3 things:

1. Lender origination charges (you might pay higher fees for a lower rate)

2. Credit Charges or points (points are paid to buy down your rate and some lenders assume you will pay points)

3. How long that rate is good for (15, 30, 45, 60 or 90 days). It is important that your rate lock period cover your contract period so you close before the rate expires. the longer the lock period, the higher the rate or fees might be.

It doesn’t help to shop your rate at the time of pre-approval since the lender or broker knows you don’t have a contract and can quote anything to you. Once you are under contract, ask your favorite lender to quote you a rate then check the competetors to make sure it’s competetive on the same day with the same terms.

I encourage my buyers to meet with me for a consultation after they are pre-approved so you are able to answer all 10 questions and start shopping for the right home right away! Contact me today.

Inventory throughout the Chicagoland area is vast with amazing deals still to be found and record low interest rates prevailing. Below is one of my new listings. It is a fabulous, solid brick ranch on a gorgeous street in a wonderful Evanston location.

3 bedroom/2 baths up plus 2 bedrooms and office down. Clean and contemporary with hardwood throughout, two woodburning fireplaces, marble bath, granite eat-in kitchen and a beautiful landscaped yard. List price: $599,000 Taxes: $7220

I had several buyers that were able to get under contract but I have met with many buyers in the past few months who were not pressured by the money.  It seems that the people who are really interested in buying a home will do it, credit or no credit so I don’t expect the market to slow down much, if any.

HUD was heavily advertising the extension of the tax credit this week and it seemed to confuse some people into thinking it had been extended again but all I know at this point is that the lobbyists are pushing for another extension. I guess time will tell.