FHA Down Payments to Increase

Yesterday, the President signed into effect the Housing and Economic Recovery Act of 2008.  One of the key changes in this act is the immediate increase in down payments from 3% to 3.5% for anyone using FHA financing.  With drastic changes in the mortgage industry and the death of 100% lending, FHA has once again become a very popular way for many home buyers (especially first time home buyers) to finance their home purchases. 

What Does This Mean for Home Buyers?

For the average home sale on the West Bank of about $175,000, the minimum down payment required for FHA financing has increased from $5,250 to $6,125.  Additionally, the new act has done away with seller funded down payment assistance programs such as AmeriDream and Nehemiah as of October 1, 2008.  Down payment gifts will no longer be able to be provided by the seller in any way, but can continue to be provided by family, churches or other non-profits and employers.  As always, saving for a home and having cash reserves for emergencies continues to be the most prudent path for potential buyers.

What Does This Mean for Home Sellers?

Whenever buyers have to come up with more cash to get to closing, some of them will be knocked out of the market for a period of time or will have to purchase a less expensive home.  The pool of qualified buyers for homes falling within FHA guidelines just shrank overnight as it will take time for many of those buyers to save the additional funds needed for the new down payment guidelines.  If you have an accepted offer on your home that includes a seller funded down payment, your agent needs to follow up on the status of the buyers finances right away.

There are other changes legislated by the Act, but in my mind these are the most significant and will have the most immediate impact on our local West Bank housing market.  I’m not sure that the increase in the down payments are necessarily a negative, since many of the foreclosures are a result of buyers with no money to invest in a property getting in over their heads and then going through the trauma of losing their homes.  I’d rather see someone wait a little longer and be financially comfortable with their mortgage payments than to face foreclosure down the road.

For more information on FHA loans, contact Lisa Heindel.  I have a trusted team of mortgage professionals that can explain the ins and out to you.

Copyright 2008.  All rights reserved.  Lisa Heindel/West Bank Living

I’m Sorry, I Can’t Tell You That

Where are the best West Bank neighborhoods?  I’m sorry, I can’t tell you that.

What kind of people live in this neighborhood?  I’m sorry, I can’t tell you that.

Are there a lot of (insert description here) people in this neighborhood?  I’m sorry, I can’t tell you that.

Is this a safe area?  I’m sorry, I can’t tell you that.

I know that buyers relocating to the West Bank can often feel as if they have run up against a brick wall when trying to get answers to what they feel are important questions regarding the location of their new home.  Sometimes they think that their agent is not truly working for them.  I’ve heard complaints like “my last agent sent me nothing but homes in bad neighborhoods”. 

Here is why I can’t tell you that…

From the Housing and Urban Development (HUD) website:

Title VIII of the Civil Rights Act of 1968 (Fair Housing Act), as amended, prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability)….

In the Sale and Rental of Housing: No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:

• Refuse to rent or sell housing
• Refuse to negotiate for housing
• Make housing unavailable
• Deny a dwelling
• Set different terms, conditions or privileges for sale or rental of a dwelling
• Provide different housing services or facilities
• Falsely deny that housing is available for inspection, sale, or rental
• For profit, persuade owners to sell or rent (blockbusting) or
• Deny anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing.

From REALTOR.org:

For the Home Seeker: You have the right to expect that housing will be available to you without discrimination or other limitations based on race, color, religion, sex, handicap, familial status, or national origin

This includes the right to expect:

• Housing in your price range made available to you without discrimination
• Equal professional service
• The opportunity to consider a broad range of housing choices
• No discriminatory limitations on communities or locations of housing
• No discrimination in the financing, appraising, or insuring of housing
• Reasonable accommodations in rules, practices and procedures for persons with disabilities
• Non-discriminatory terms and conditions for the sale, rental, financing, or insuring of a dwelling
• To be free from harassment or intimidation for exercising your fair housing rights.

Recently, the U. S. Department of Justice filed suit against a real estate brokerage in Illinois, alleging that some home buyers were steered to particular areas, while others were advised that the same areas were dumps.  When I counsel you to take the time to drive around, get the lay of the land and find the neighborhood that best suits your needs and your lifestyle, I’m not trying to pass the buck. 

Quite the contrary…I’m following the LAW.

For more information about Fair Housing, visit the HUD website.

Copyright 2008. All rights reserved. Lisa Heindel and West Bank Living

What Lifestyle Are You Looking For?

As part of the decision to purchase a home, buyers usually are armed with a list of must haves.  The number of bedrooms, bathrooms, garage size, and upgrades you want gives your agent a good starting point in finding the perfect home for you.

But, there is another factor that all buyers should consider when determining the possible location of a new home  - what is your lifestyle?  Taking the time to think about your lifestyle can help to avoid buyer’s remorse later on down the road if the home you choose doesn’t fit the way that you actually live.

If you are an avid golfer, buying a home close to or right on the course makes perfect sense.  If you value the privacy of your backyard, a golf course lot (and the golfers driving and walking by throughout the day) may not be your best choice!

Think about how and where you spend not just your days, but your nights and weekends as well.  Outdoor enthusiasts may want to be located near parks, while parents of students may want to be near schools.  Some buyers place a high priority on easy access to major medical facilities while others are more concerned with getting away from the hustle and bustle and want to look out their back window at trees instead of other homes. 

With the cost of gasoline at an all time high, many people are looking for neighborhoods with short commutes to their jobs and amenities such as restaurants and shopping that are within walking or biking distance to reduce their reliance on automobiles.  All of these are lifestyle choices that impact where they will be the happiest. 

When buying your next home, take the time to think about not just what you are looking for in the perfect house, but how that house works with your lifestyle as well.  Finding just the right fit will pay off in many years of happiness in the end.

Other home buying tips

 

Copyright 2008. All rights reserved.  West Bank Living

Do I Need to Have An Inspection on New Construction?

I often hear that since there is a state required builder’s warranty for new construction in Louisiana, that it is not necessary to have a home inspection done when purchasing one of these properties.

 

WRONG!  No home is perfect, even a newly built one, and it is still important to have a thorough home inspection done.

 

I recently had the chance to work with a terrific military couple relocating to the West Bank of New Orleans.  After a whirlwind search, we found the perfect house for them.  Brand new construction that was just the right size, in just the right neighborhood, with the perfect finishes and upgrades they were hoping for.   I recommended that although the builder would be willing to work from a punch list it was in their best interests to hire a professional home inspector to be sure that everything was done correctly.  Boy, am I glad they followed my advice.

 

Most home buyers and their agents don’t have the expertise or the knowledge of structure, mechanical items and building codes to determine whether or not a home was built properly and it’s easy to overlook things that are not obvious defects. 

 

Just a few of the items that the home inspector uncovered:

• Toilets that were loose and not properly secured to the floor
• A leak in the new HVAC unit that caused sheetrock damage and mildew to begin forming
• Loose shower heads
• Bathroom fans that were improperly vented into the attic instead of the exterior
• Improperly installed insulation in the attic
• Scratches on the granite counter top

 

Armed with the inspection report, we were able to have all of the issues resolved before closing, giving my buyers peace of mind that they were moving into the best possible home in the best possible condition. 

 

This is not meant to be negative about any builder.  The particular one we were dealing with is a reputable businessman and has built and sold many homes on the West Bank.  But, he cannot possibly personally inspect every detail in every home as they are constructed and subcontractors (and their subcontractors) often don’t take the same personal pride in their work that the actual builder does.  Given how responsive he was to the buyers requests, I’m sure that he has a long history of satisfied customers and I wouldn’t hesitate to write an offer on another home he built.

 

The bottom line is that spending just a few hundred dollars up front for a professional home inspection can save you plenty of aggravation, time spent waiting for warranty service and even possibly money, after you have settled in and the builder has moved on to other properties.

 

Are you in the market for a newly constructed West Bank home?  Be sure to use a professional, local REALTORR to represent YOUR interests.  For more information about buying a new West Bank home or for a list of available properties, contact Lisa Heindel.

 

    

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Here’s the disclaimer part:  The opinions expressed here are strictly those of the author, but you are free to share yours in the comments.  All information is deemed reliable but not guaranteed.

Copyright 2008.  Lisa Heindel, All rights reserved.

What Does “As Is With a Waiver of Redhibition” Mean?

Tracking how people get to my website allows me to see, in detail, exactly what kind of information consumers are looking for about West Bank real estate.  Recently, I had a website visitor that came to me by way of a search for "louisiana property disclosure vs. as-is".  I figure that if one person asked that question, then there are other folks out there wondering the same thing.

 

FIRST, it is important to point out that under Louisiana law, sellers (with few exceptions) are required to provide a property disclosure, whether they are selling the property "as is" or not.  Disclosing or selling "as is" is not a one or the other decision.   Unless you are one of the few who meet the state mandated exceptions, you MUST provide a disclosure to all purchasers.  The law applies equally to those using a professional REALTOR® and those attempting to sell their property on their own.

• For details on what has to be disclosed when selling your West Bank property, read more about Louisiana property disclosures here.
• For a list of those exempt from providing a property disclosure, contact Lisa Heindel.

 

As a listing agent, I always recommend that my sellers transfer their Louisiana property to the new owners with an As-Is Clause and Waiver of Redhibition.  (For people living in other parts of the country, Redhibition is basically the Louisiana civil version of a lemon law, allowing purchasers to sue for unseen defects.)  The waiver of redhibition is intended to minimize the number of lawsuits brought by purchasers against the sellers of real property in Louisiana.  IMPORTANT NOTE:  This does NOT mean that the purchasers cannot do inspections or that they cannot walk away from the purchase if there are inspection issues that cannot be resolved by negotiating repairs or a price adjustment. 

 

It does mean that after inspections have been completed to the purchaser’s satisfaction the following language will become a critical part of the act of sale documents (the highlights are mine).

 

From the Louisiana Real Estate Commission Website:

 

Do you still have questions about As Is and Waivers of Redhibition?  Please contact Lisa Heindel, REALTOR®.  I’d be happy to refer you to a local real estate attorney who is well versed on this topic.

 

    

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Here’s the disclaimer part:  The opinions expressed here are strictly those of the author, but you are free to share yours in the comments.  All information is deemed reliable but not guaranteed.

Copyright 2008.  Lisa Heindel, All rights reserved.

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