ACCURATE MLS DATA OR???

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Real estate agents in Silicon Valley enter their “for sale” listings into the MLS Listings data base as soon as the Paperwork is signed.

These listings are immediately available for the public to see by signing on to MLS Listings.com. or at Realtor.com.

No paid for advertising or promotions, just 100% real time accurate data

The Zillows and Trulias of this world (and dozens of smaller Portals) buy this data from us and put it out on their flashy web sites in order to pull you in and sell you some of their “(For Profit”) services.

What they don’t tell you is that our MLS Listings data base is continually updated in real time as agents make additions and changes.

They can choose how often to update their sites and typically do so every 7 to 10 days.

This means you cannot assume that the information they provide is accurate.  

The information you get at MLS Listings.com, or Realtor.com is updated in real time and will always be accurate.

Your choice:

Free on a very well designed web site where the critical data is often out of date.

OR

Free on a less flashy but 100% accurate site.

HOME BUYERS QUESTIONS

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Absolute_Mortgage

Absolute_Mortgage (Photo credit: kathleenleavitt)

HOME BUYERS QUESTIONS

A recent study by THE INMAN GROUP showed that 90% of 1st Time Buyers felt they were well prepared when they started the home buying process. By the time they finished 56% said they should have known much more about the financial aspects of home buying.

The top problem areas were:

1. The Mortgage Selection options.

2. The Closing Escrow process, especially loan closing.

3. The Offer and negotiation process.

This supports my personal experience and justifies my firm policy of having a typically 2 hour initial meeting with new buyer clients to discuss these and a few similar areas. This allows us to deal with the probability that many hours spent on the Web has given them a toxic mix of good, wrong, ambiguous, and dangerous data, but no framework in which to analyze it.

The biggest single problem in my experience is the idea that house hunting should start with looking at houses.

WRONG

It should start with finding the optimal Mortgage FOR YOU based on your current circumstances and future plans.

When you have determined (accurately) how much you can afford and which type of mortgage is best suited for you, should you be using your valuable time to start viewing only homes which meet your parameters and pockets.

NOTE: It’s worth remembering that the 30 year fixed rate mortgage is seldom the best choice for the majority of buyers. However it is always the most expensive.

 

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API 2015

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We now know that API will no longer be updated, and will in fact be replaced from next year by a more valuable index.

Question is what will replace it for the missing year?

Latest I hear is that for one year only it will be by an index which will cause considerable misunderstanding in the minds of it’s users.

For one year only the index will be the average of the past 3 years API’s!!!

Because of the way API has always been measured 80% of all schools improved every year. Therefore the new score will be lower than 2014 as the calculation will include previous lower scores.

Home buyers checking out the schools which their children will be attending next year are almost certainly going to see that the “API” has gone down from it’s 2014 number.

We should hope that sanity is restored before this change is implemented but I’m not confident.

 

GOODBYE API

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Say farewell to the API as you know it. Welcome to new era of accountability, with at least a couple years of confusion in between. English: San Elijo Hills Middle School

 

The release Thursday of the results on the state’s Academic Performance Index marks the end of a decade of judging student performance based on test scores alone. Within three years, California will have moved to a very different system in which scores on the newly introduced Common Core assessments and other state standardized tests will be but one spectrum in the prism for evaluating schools and districts. 

 

There will be new, multiple measures that could include high school and middle school graduation rates, rates of absenteeism, reclassification of English learners, passage on Advanced Placement exams or a mix of other indicators.

 

How these measures will fit together, and whether the can even be combined into a single index, will be the State Board of Educations challenge.

 

The law gives them till Oct 2015 to have it in place. 

 

 

 

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CREDIT SCORES and MORTGAGES

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As most of us know our Credit Score (FICO) has a major influence on whether we can get a Mortgage at all. What’s not always understood is that it also has a huge impact on the interest rate we can get. Here’s a simple way of figuring out how big that impact can be for different scoring ranges: 

*    CREDIT SCORE BELOW 620:

A credit score of 620 or lower places you in the “sub-primeborrower category. If you are considered a sub-prime borrower, you will likely pay 3 percent more on a mortgage loan than someone with excellent credit and will likely pay double-digit interest rates on a home equity loan or a line of credit.

*    CREDIT SCORE OF 620 TO 674:

This credit score range is still considered below optimal. If your credit score falls in this range, you will likely pay 2 percent more than borrowers who boast excellent credit ratings.

*    CREDIT SCORE OF 675 TO 719:

If you find yourself in this credit score range, you should find it relatively easy to procure a good loan. You will typically pay up to half a percentage point more than a borrower who has excellent credit in regards to a loan.

*    CREDIT SCORE OF 720 AND ABOVE:

If you possess a credit score at or above 720, you have an excellent credit score. This means you will be able to acquire a lender’s most favorable rates and you are in the position to shop around thus finding the best loan for you in regards to term, interest rates and other factors.”

by the way….

Factors contributing to someone's credit score...

Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)

 

If you are considering getting help with Credit Repair be aware that the vast majority of organizations claiming to do this are scammers and/or crooks.

I can personally recommend Ken Strey for a professional service. His contact info is below. 

Scorewell Inc. | 925-478-4732 | kenstrey@scorewellinc.com | http://www.scorewellinc.com

 

 

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MORTGAGE DELINQUENCY RATE DROPS NEARLY 25% IN LAST YEAR

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Things really are getting better. English: Mortgage debt

The mortgage delinquency rate (the rate of borrowers 60 days or more delinquent on their mortgage) dropped 23.3 percent in the past year, ending the third quarter at 4.09 percent, down from a year earlier when the rate stood at 5.33 percent, according to data gathered from TransUnion’s proprietary Industry Insights Report. The mortgage delinquency rate also dropped on a quarterly basis, down 5.3 percent from 4.32 percent in the second quarter, the seventh straight quarterly decline.

All 50 states and the District of Columbia experienced a decline in their mortgage delinquency rate between third quarter 2012 and third quarter 2013. Five states – California, Arizona, Nevada, Colorado, and Utah – experienced declines of 30 percent or more in their mortgage delinquency rate. Three states – California, Florida, and Nevada – had double-digit percentage drops in the last quarter.

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ADJUSTABLES ARE BACK (and thats GOOD NEWS for smart buyers)

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(and thats GOOD NEWS for smart buyers)

Absolute_Mortgage

Absolute_Mortgage (Photo credit: kathleenleavitt)

FACT: An adjustable Rate Mortgage, used inteligently, will always cost less over the life of any other type of loan.

Question. So why do all the so called experts advise you to only take a Fixed Rate mortgage?

Answer. Because they are at best ill informed, or at worst simply stupid.

The bias toward fixed rate mortgages is the result of settling for the simple but expensive rather than taking the time to understand  the relatively complex but much cheaper.

I’m constantly amazed by the number of home buyers who will give up their weekends for many months searching for the perfect home, yet take just a couple of hours to decide how to pay for it, and end up never knowing what their options were.

Choosing the wrong mortgage can and will cost many thousands of dollars.

Question. HOW TO DECIDE WHAT’S THE BEST MORTGAGE?

Answer.

That which cost the least amount over the life of the loan based on:

1. YOUR BEST ESTIMATE OF HOW LONG YOU EXPECT TO OWN THE HOUSE.

2. YOUR CURRENT FINANCIAL CIRCUMSTANCES.

3. YOUR ANTICIPATED FUTURE FINANCIAL CIRCUMSTANCES. Long and Short term.

REMEMBER. You are UNIQUE.

Your circumstances are UNIQUE.

Your plans are UNIQUE.

YOUR MORTGAGE SHOULD BE UNIQUELY DESIGNED FOR YOU, NOT FOR SOME MYTHICAL AVERAGE PERSON.

You should always know what options are available to you and how each one would work out over time.

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FAREWELL A P I

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What is an API according to Heidi

What is an API according to Heidi (Photo credit: h3idi.harman)

Say farewell to the API as you know it. Welcome to new era of accountability, with at least a couple years of confusion in between.

The release Thursday of the results on the state’s Academic Performance Index marks the end of a decade of judging student performance based on test scores alone. Within three years, California will have moved to a very different system in which scores on the newly introduced Common Core assessments and other state standardized tests will be but one spectrum in the prism for evaluating schools and districts.

There will be new, multiple measures that could include high school and middle school graduation rates, rates of absenteeism, reclassification of English learners, passage on Advanced Placement exams or a mix of other indicators.

How these measures will fit together – and whether they can even be combined coherently in one index ­– will be the State Board of Education’s challenge.

The Legislature gave the board until October 2015 to solve it in the law establishing the Local Control Funding Formula, passed in June. By then, it must approve three sets of evaluation criteria that will replace the sole reliance on various standardized tests, including the California Standards Test and high school exit exam, that currently comprise the API (see accompanying story). These “rubrics” will be used by districts to evaluate their own academic progress and by county offices of education and the state superintendent of public instruction to determine if districts and schools could use support or more serious forms of intervention.

The measurements will be drawn from eight priority areas that legislators cited in passing the funding formula, Some of those – student achievement and student engagement, for instance – can be readily quantified through test scores and rates of attendance and absenteeism, while other areas, such as parent involvement and school climate, will be harder to measure. The law gave the State Board latitude to create other indicators.

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THANKS TO BARBARA BOXER

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Barbara Boxer, United States Senator from Cali...

Barbara Boxer, United States Senator from California (Photo credit: Wikipedia)

As of Dec 1st both the IRS and Franchise Tax Board have put in writing that they no longer consider “Debt Forgiveness” resulting from a Short Sale to be taxable income under either State or Federal tax laws.

This removes a huge potential problem from anyone going through a short sale. Until now It has been common to receive a tax bill in the tens of thousands of dollars many months after the property has been sold.

Thanks are due to Barbara Boxer for her part in fighting this battle for us.

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THE $$$$$$$$’s Per/Sq Foot PUZZLE

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A Recent Buyer client was continually comparing different listed houses on the the basis of ASKING PRICE per SQUARE FOOTAGE of living space. At 1st sight this seems perfectly reasonable. He could not understand why there seemed to be NO evidence of this when looking at SOLD prices. i.e. Bigger houses seemed to sell for FEWER dollars per square foot than smaller ones.

However, once we understand how houses are built it really does make sense.

Assume 2 house built at the same time are both 3 bed 2 bath models and 1,200 sq feet living area.

They were both sold new for $400.000. Therefore, when sold, they cost the Buyers $333 per sq ft.

At this time the $$$$$$$$ per sq footage is a valid indication of comparitive value.

Now consider which parts of a new house are the most expensive to build?

How about the Kitchen and Bathrooms with all the high cost plumbing and electrical systems which are not required in the other parts of the house.

1 year later one of the owners decides to add a 400 Sq Ft extension to his family room. As the new consruction does not include any new plumbing and little electrical work the cost per sq ft of the project will obviously be less than that of the complete house.

From this point on the $$$$$$ per sq foot calculation becomes meaningless

The larger house will have a lower $$$$$$$ per sq footage because a a larger part of it cost less to build.

 

 

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