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Tips for Protecting Real Estate Consumers from Costly Scams and Fraud

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If you were to ask a room full real estate professionals if any of their clients were victims of wire fraud during a real estate transaction, chances are there would be many who might raise their hands.  In fact, according to an article published by Realtor Mag, “The Threat of Wire Fraud is Real”, “Wire fraud topped the list as a sophisticated scam causing consumers to lose millions of dollars each year”.  As alarming as that idea may be, real estate professionals can put some simple safe guards in place to help protect their clients.

In the article, written by Erica Christoffer and Graham Wood, a number of suggestions are touched upon.  For example, “If you or your agents do engage in a wire transfer with a client, call them on the phone immediately prior to the transfer of funds so they know they’re sending money to the legitimate source.”  Additionally, make your clients aware that you do no discuss personal financial information over e-mail and review with them what your communication practices are.  Hopefully, with this mutual understanding between you and your client, if they receive questionable e-mails, a red flag will be raised immediately before any sensitive financial information is shared.

Clients should also be reminded to not only use strong passwords, but update them regularly.  Perhaps even updating a password just before any wire instructions are sent.  As a real estate professional, you should also follow these guidelines for strong and updated passwords.

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Scams Targeting Homeowners: Be Sure You Don’t Fall Victim

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It seems that almost daily we read or hear reports and warnings of scams aimed at consumers which can result in significant financial losses.  It is imperative that consumers remain vigilant in protecting their assets and investments; especially in the age of hacking, privacy breaches, robo-calling and phishing scams.  It can be overwhelming to keep up with the warnings; however, a recent article published by U.S. News and World Report by Devon Thorsby offers some sound and easy to follow advice.

For homeowners and prospective homeowners, down payments sent via wire transfers have ended up in the hands of high tech thieves instead of their mortgage companies.  Emails sent from mortgage brokers to their clients with wire transfer instructions can get intercepted by hackers.  The hackers are then able to change the wire instructions in the e mail prior to the customer receiving the message.  In the end, the customer receives an e mail with modified wire instructions and then ends up wiring the funds meant for a home closing directly to the hackers account.

To avoid this type of scam, one broker indicated “she instructs all of her clients to have the title company and bank communicate directly…and verify where the money is going, what the value number is and what the account number is… in any other situation where you have to authorize your bank or title company to do anything, rather than scanning and emailing any personal information or signed authorization, [she] instructs clients to send it via fax to eliminate the possibility of theft from an email hack.”

Thorsby provides additional advice to avoid telephone phishing scams that can result in financial hardships.

Read the entire article.

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Sound Advice for First Time Home Buyers

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The real estate market has been improving significantly over the past several months.  Home prices are on the rise and homes aren’t sitting on the market for very long before going under contract.  This is great news for home sellers, but challenging for those looking to purchase a home.  First-time homeowners might find the conditions overwhelming and intimidating.

CNN Money published an article written by Beth Braverman which outlines several mistakes first-time home buyers make and tips for avoiding these pitfalls.  Important reminders noted include getting pre-approved for a mortgage early in the home buying process, not maxing out the mortgage limit provided by the lender and keeping emotions out of the decision making process.

It is highly recommended that all prospective home buyers get pre-approved for a mortgage early in the home buying process.  It allows the buyer to have an idea of how much money a bank is willing to lend them for a home.  As Braverman points out, “Second, it shows sellers that you’re serious and gives you slightly more standing if you’re competing for homes with all-cash buyers.”  This can be an important advantage in a competitive market.

However, upon receiving a pre-approval, home buyers maybe anxious to bump their budget up to the maximum amount the bank has approved.  It is wise to review a detailed budget to be sure the monthly budget can handle the mortgage payment, including potential income changes and other unexpected housing expenses.

As the home search continues, there will be bumps in the road, houses lost to other buyers or dream homes priced just outside the budget.  Braverman warns, “In that kind of environment, it’s easy to fall in love with a house that’s out of your budget, or get caught up in the heat of a bidding war and end up paying more than you expected.”  Being level headed and taking emotions out of the decision making process will ensure financially wise decisions are made.

For more details and additional tips, read the entire article.

 

 

 

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Low Inventory is Concerning Real Estate Professionals

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The low inventory of homes for sale is causing some real estate companies to panic a bit.  The number of homes for sale March 2017 compared to March 2016 fell seven percent according to the National Association of Realtors.  In an article published by CNBC by Dian Olick, she quotes Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm, “”The inventory is reaching historic lows. It’s never declined faster than it did last month. It’s freaking us out — it’s affecting our business; it’s limiting our sales.”  

The cause of this low inventory issue can be attributed to a few factors.  To begin, many homeowners are deciding to become landlords.  Instead of selling a home when moving on, homeowners are holding on to their home and renting it out.  Another reason is new home construction is declining.  On average, home builders are building about 18 percent fewer homes than the historic average.

The good news for home owners looking to sell, homes are selling quickly and some are even selling above list price.  Homes in April 2016 went under contract in 50 days, as of April 2017, that number decreased to 40 days.

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What to Consider When Purchasing Homeowner’s Insurance

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You have made the decision to purchase a home!  It is a major commitment and quite a financial investment.  It is important to protect that investment and homeowner’s insurance will provide coverage for a variety of different situations.  In an article published by Yahoo Finance, Jeanie Ahn reviews some basic guidelines for purchasing the correct insurance coverage for your home and belongings.

Obviously, it is important to purchase coverage that provides the funds to repair or rebuild a home that is damaged by disasters such as severe weather and fire.  However, depending on the location of your home, you may need to also consider additional coverage such as flood insurance or earthquake insurance.  It is vital that homeowners understand what types of situations are and are not covered by their homeowner’s insurance policy and secure the appropriate protection

Not only do you need to protect the structure of your home, you also need to have coverage for your personal belongings inside of the home such as furniture and clothing.  According to Ahn, “To estimate how much your policy will cover for your belongings, it’s typically 50-70% of what your home’s structure is insured for.”

Aha goes on to discuss two additional areas of homeowner’s insurance that should considered when purchasing a policy. Liability coverage protects a homeowner in a cases of personal injury that takes place on your property.  The last piece of the homeowner’s insurance policy provides financial assistance when homeowners are displaced from their home and is called Additional Living Expenses.

Read the entire article for more details.

 

 

Photo Credit: Pictures of Money

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Looking for a Bargain on a Home? How to Spot a Motivated Seller

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House hunters looking to purchase their first or next home are, undoubtedly, looking for a good deal on the home and a sales transaction void of big surprises or delays.  It can be exhausting to get into back and forth negotiations over price.  Not to mention potential discoveries in an inspection that need to be agreed upon before the sale moves forward.  It can appear, at times, that the home owner is not in any hurry to sell their home and is not willing to budge on their conditions.

In an article by Stephanie Booth, published by realtor.com, she provides seven signs that a homeowner is anxious to sell their home quickly and willing to work out a good deal with a prospective buyer.  For example, a home that is listed for sale by an estate might be a sign that the home can be purchased for a bargain price and be a candidate for a quick sale; the people who inherited the home might be out of town residents and/or looking to quickly liquidate the assets of the home.

Similarly, homes that appear to need some minor work such as landscaping and basic maintenance and are overall, just not spruced up to attract buyers, may indicate distress for the homeowner.  They may not have the means or resources to make minor repairs or updates to the home and are just looking to move on.  A home buyer might find an offer to be quickly accepted and be able to negotiate a quick close with a homeowner motivated to unload the burden of owning a home they can no longer afford to maintain.

Read the entire article for other signs that a home owner is desperate to sell their home.

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Homes Sales Data So Far This Spring: Good News for Sellers

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As the season of spring begins to bloom all around us, so it goes for the spring real estate market.  Many homeowners see spring as the perfect time to put their homes up for sale.  As prospective home buyers begin their search for their first or next home, they may find that homes aren’t sitting on the market nearly as long as they have been in the past several months.

A recent report provided by a national real estate firm, Redfin, indicates that despite the fact the number of homes for sale has dipped 13 percent from last year at this time, actual home sales has surged 9 percent.  Additionally, the number of days until the average home goes under contract has decreased by 11 days since last March, dropping to just 49 days.  Lower inventory and fast paced home sales has also driven up the prices of home an average of 7.5 percent.

A CNBC article written by Diana Olick, goes on to detail that not only homeowners are benefiting from a spring jump start.  Builders are also tracking a home sales increase of 6.7 percent from last year.  However, new home prices have remained virtually unchanged.  Olick suggests, this “…may indicate builders are trying to keep prices down in order to get more buyers in the door.”

Home buyers are looking to take advantage of the low mortgage rates and their desire to close the deal has resulted in some very favorable news for those looking to sell their homes.

Read the entire article.

 

 

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Thinking of Flipping A House? Review These Helpful Tips

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The home improvement shows make it look so easy.  It appears that as long as you can find an old, run-down house, you can spend a few weeks renovating it and list it for a profit.  Many people realize, however, it is usually not that easy.  Nevertheless, there is a market for flipping renovated homes and flipping these home can be profitable.

It is important, though, to understand the ins and outs of purchasing an old, dilapidated home and attempting to fix it up for resale.  In an article published by Realtor.com, writer Lisa Gordon lists many of common mistakes made by first time home flippers.

For example, it might be tempting to purchase a home “as is” without getting a home inspection since the plan is to fix it up anyway.  However, the home inspection will not only help identify major issues that could turn your flip into a money pit; it might also provide some bargaining power on the purchase price.

Gordon goes on to list additional mistakes such as “Overestimating your renovation skills” and “Underestimating total costs”.  You may feel it will be easy enough to do all of the work on your own, in order to save money; yet, the article warns,  it might be well worth the extra cost to hire professionals for some of the plumbing or carpentry projects.

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Good News About Credit Reporting and Credit Scores

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Come this July, you may see a boost in your credit score.  The three major U.S. personal credit monitoring firms, Experian, TransUnion and Equifax, will be removing some borrowers’ civil judgement and tax lien information from their credit reports.

According to an article published by Fortune.com, written by Kevin Lui, since 2015, these credit reporting firms have been working to correct credit reporting mistakes and removing information unrelated to the borrower’s loan application by omitting information deemed unnecessary to lending.  In fact, according the article, “…in 2011 alone, 8 million complaints about wrong information in credit reports were received by the three major credit-reporting firms, according to the CFPB”.

This latest announcement could result in some borrower’s credit scores increasing by up to 20 points.  An increase in a credit score can increase the likelihood of securing a loan and is also helpful when applying to rent a home and even can affect future employment opportunities.

Read the entire article.

 

 

 

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Will the Fed Rate Increase Affect the Spring Housing Market?

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On Wednesday, the Federal Reserve governors decided to increase the interest rate by .25 percent.  According to an article written by Amber Tuaufen, published by inman.com, “The Federal Reserve sets the rate for the overnight exchange of money by banks; governors adjust the rate to help curb inflation or stimulate growth, depending on their assessment of what would be best for the economy.”

Despite the fact that this move does not directly affect the mortgage rates, it can have an impact on the rates for mortgages.  In fact, an increase in mortgage rates has been anticipated for quite some time now.  Many prospective home buyers have been advised that the historically low interest rates were coming to an end; however, rates continued remain low.  Many buyers may not have felt pressure to move forward with a home purchase, leading to sluggish sales.  It would appear, now, the rates are indeed going to begin to increase.

This potential increase of mortgage rates could have some negative impact on home sales.  Yet, some agents feel that the continued affordability of housing coupled with the steady increase of rates could put pressure on prospective home buyers to make a decision and not delay their home purchase any longer.

Read the entire article.

 

 

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