!!! SECRET AGENT MAN, SECRET AGENT MAN !!!

WHO IS YOUR AGENT WORKING FOR?
    
You are meeting your real estate agent for the first time. You are buying, selling or leasing real  property. The agent hands you a form and ask you to sign it before you begin this new and wonderful (working together) relationship. You just signed a disclosure form on how you are being represented. Did you understand what you were signing?

New York State Disclosure Form for Buyer and Seller.  Reads like this:

THIS IS NOT A CONTRACT

New York State law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates. This disclosure will help you to make informed choices about your relationship with the real estate broker and its sales agents.Throughout the transaction you may receive more than one disclosure form. The law may require each agent assisting in the transaction to present you with this disclosure form. A real estate agent is a person qualified to advise about real estate. If you need legal, tax or other advice, consult with a professional in that field.

Disclosure Regarding Real Estate

Agency Relationships

Seller’s Agent

A seller’s agent is an agent who is engaged by a seller to represent the seller’s interests. The seller’s agent does this by securing a buyer for the seller’s home at a price and on terms acceptable to the seller. A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller’s agent does not represent the interests of the buyer. The obligations of a seller’s agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.

Buyer’s Agent

A buyer’s agent is an agent who is engaged by a buyer to represent the buyer’s interests. The buyer’s agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer’s agent has,without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyer’s agent does not represent the interest of the seller. The obligations of a buyer’s agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the buyer’s ability and/or willingness to perform a contract to acquire seller’s property that are not inconsistent with the agent’s fiduciary duties to the buyer.

Broker’s Agents

A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyer’s agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyer’s agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer agent’s buyer. The broker’s agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker’s agent. The buyer and the seller therefore do not have vicarious liability for the acts of the broker’s agent. The listing agent or buyer’s agent do provide direction and instruction to the broker’s agent and therefore the listing agent or buyer’s agent will have liability for the acts of the broker’s agent.

Dual Agent

A real estate broker may represent both the buyer and seller if both the buyer and seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller. An agent acting as a dual agent must explain both the buyer and seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency by indicating the same on this form.

Dual Agent with Designated Sales Agents

If the buyer and seller provide their informed consent in writing, the principals and the real estate broker who represents both parties as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of real estate. A sales agent works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales agent for the buyer will function as the buyer’s agent representing the interests of and advocating on behalf of the buyer and the designated sales agent for the seller will function as the seller’s agent representing the interests of and advocating on behalf of the seller in the negotiations between the buyer and seller. A designated sales agent cannot provide the full range of fiduciary duties to the buyer or seller. The designated sales agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales agents before agreeing to such representation. A seller or buyer may provide advance informed consent to dual agency with designated sales agents by indicating the same on this form.

This form was provided to me by____________________(print name of licensee) of___________________(print name of company or brokerage), a licensed real estate broker acting in the interest of the:  Seller or Buyer

Remember this. THIS IS NOT A CONTRACT. It is just a disclosure of who is working for whom in a Real Property transaction and how.


                                             BIG QUESTIONS?

Do you know what you’re signing?
Do you know who is working for whom?  
Is the agent working for the seller?
Is the agent working for the buyer?  
Is the agent working for both buyer and the seller?
Is their a SECRET AGENT?

Lets answer some questions.

Q: What is Agency Disclosure?

A:  It's The Law!  As of January 1, 2011 a revised real estate licensees disclosure law went into effect in New York.  As of 1/1/2011 the law requires real estate agents to have clients/customers sign a form stating that they understand whom the agent represents, and to whom the agent will give or won't give "undivided loyalty," when they enter into a relationship.  It also covers advance dual agency disclosure.

The disclosure law is designed to clarify the roles of buyers and sellers agents, in order to help you make informed choices about your relationship with the real estate broker and its sales associates. There are multiple role's the buyer and seller agent can play.

                                                 MORE QUESTIONS?

Q: Are you a Client or Customer?

A: Only you can make that decision when purchasing or leasing real property.

Q: What is a Client?

A: Someone who is paying for a service and being represented as a Principle. Someone who has agency or a legally recognized relationship with the real estate broker and their agents.  

Q: What representation do they get?

A: The Client/Principle gets six Fiduciary Duties.

      1) Confidentiality

      2) Undivided Loyalty

      3) Reasonable Care

      4) Obedience

     5)  Duty to Account

     6)  Full Disclosure
 
These duties are contained in the Code of Ethics for Realtors.

Q: What is a customer?

A: Someone who has no contractual relationship with the real estate broker or its agents. Someone who is not paying for a service.

Q: What representation does the customer get?

A:  1)  They are entitled to fair and honest treatment.
     
     2)   Disclose known material facts.

Q: How do you want to be represented?
    
A: Client or Customer?

You must decide how you want to be represented in a real property transaction. If you don't understand the disclosure, please ask you real estate agent to clarify their role. Do not allow for SECRET AGENTS.

For your entertainment only, please enjoy the music video.  Lyrics by Steve Barri and P.F. Stone. Performed by Johnny Rivers.

    

For any questions concerning New York State Agency Disclose Law. Please contact:

 DEPARTMENT OF STATE

 Division of Licensing Services

 P.O. Box 22001
 Albany, NY 12201-2001
 (518)-474-4429\
  http://www.dos.state.ny.us/
  
If you found this subject to be boring? Please leave a comment on the blog.

Till next time

NY REAL ESTATE NURSE

AFFORDABLE AND MORE AFFORDABLE - NEW YORK CITY

***NEWLY CONSTRUCTED ONE AND TWO BEDROOM APARTMENTS FOR SALE***

Custom-built Cabinets, Energy-Efficient Windows, Dishwashers in every unit.  Private Outdoor Terraces, Patios, and Laundry Room.  Amenities galore, to numerous to type. You get the idea.

Have you ever seen this advertisement?  Will it make you want to read more?  Have you been searching for that home that you can't afford in New York City? Maybe you have not been searching in the right place?

Your income is middle of the road, your credit score and credit history is good. You have the means to  reasonably meet monthly debt obligations, because you have the job. You have a little savings for a small down payment and some closing cost. Then step right up, this may be for you.

Welcome to the land of Affordables. The New York City Department of Housing Preservation and Development (HPD) is the largest municipal developer of affordable housing in the nation. Over the years, HPD and their sister agency the New York City Housing Development Corporation (HDC), have created or preserved the volume of Affordable Housing in the 5 Boroughs. They have a big job to do. They have homes for you.

You can find all this information at www.nyc.gov/. housing and buildings. Also see what is available for buying and renting. Just peruse their website. The city has a ton of information for the person seeking affordable housing. It may just fit you.

Till next time

NY REAL ESTATE NURSE

OMG - MORTGAGE RATES!!! I AM DONE SAYING THAT.

Freddie Mac said Thursday the average rate on a 30-year fixed mortgage rose to 4.83 percent from 4.61 percent in the previous week. Last month, the rate hit a 40-year low of 4.17 percent.


The average rate on the 15-year loan also increased to 4.17 percent from 3.96 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

I will try not to talk about rates much more. They can move up and down fast, depending on which way the economic winds are blowing, and who is in and out of the Bond Market. Did I mention Mr. Bernanke's name? I must of forgot. Always, speak to your mortgage banker concerning mortgage rates.

I just hope some home buyer will be able to close their new rate and have enough purchasing power as they had at a lower rate. Rising rates can be deal killers.  Lock your rate so you know your payment.

Home affordability is dependent on low mortgage rates.  Most median incomes don't provide enough income to produce that median priced home. Uncle Sam we need more help. Can you hear me?


Till next time.

NY REAL ESTATE NURSE

GET TO KNOW YOUR FHA. THATS WHERE THE LOANS ARE.

Want to buy a home?  You don't have the 20% down payment.  Your FICO score is not up to the Buffett's and the Gate's, did I forget the Rockefeller's?  You have come to the right place.  Uncle Sam is the man. He is doing all he can to keep the housing market afloat.  The innovation of programs and ways to help the general public don't stop. I say climb aboard for the ride.  This is the best time to purchase a home. Home price's and mortgage rates are low and Uncle Sam is here to help. Go to the FHA. Go to the VA if you are a Veteran. Just go, the money is there. See your Mortgage Banker soon.

The Federal Housing Administration, generally known as "FHA", is the largest government insurer of mortgages in the world. A part of the United States Department of Housing and Urban Development (HUD), FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories. While borrowers must meet certain requirements established by FHA to qualify for the insurance, lenders bear less risk because FHA will pay the lender if a homeowner defaults on his or her loan. FHA has insured over 38 million home mortgages and 47,205 multifamily project mortgages since 1934.

Get a FHA mortgage, they are the best game in town. They are backing about 40% of all purchase mortgage loans nationally in 2010. The banks do the lending and Uncle Sam does the insuring.

Go for it. They are hot. They will lend you a lot. Because you live in the New York City, Long Island and the Westchester area. You live in a so-called “higher cost” area where the limits will be:

One-Unit — $729,750

Two-Unit — $934,200

Three-Unit — $1,129,250

Four-Unit — $1,403,400

If you can make the payments, collect a little rent; be knighted a Landlord.
You are surely on your way to becoming a Housing Guru. No more staying up late to watch all those real estate infomercials. Side note:  buyer beware.

If your wanting information, be sure to go to the government's website:  http://www.hud.gov/. 

The Federal Housing Administration (FHA) is loaded with information, list of frequently asked questions (FAQ ).  Topics include:

New Construction

Wood Destroying Insects/Termites

Utilities – Well and Septic

Inspections ; Certifications

Cost Approach

Accessory Dwelling Units

Manufactured Housing

Two Unit Properties

HECMs

Lender Concerns

Reconsideration of Value

203(k)

Appraisal Portability

FHA Appraisals

Title Concerns

And much, much more.

Reading government websites can inform you. You can also play "Google That Word", it helps when you don't understand something. You should always call a professional for all your real estate needs.

This is the silver lining of the housing crisis. Thanks to low FHA mortgage interest rates, low down payments and reduced home prices, buying a home is more affordable than ever. This bodes well for the future of working and middle class families. You go America!!!


Till next time.

NY REAL ESTATE NURSE

• 

OMG - MORTGAGE RATES !!! HOW LOW CAN THEY GO?

Freddie Mac reports that rates on fixed mortgages again fell to their lowest levels in decades this past week, with the average interest on 15-year loans dipping to 3.57 percent from 3.63 percent a week earlier, and the average interest for 30-year loans sliding to 4.17 percent from 4.24 percent. That is the lowest since 1971.

Can rates go lower?  Sure they can.  My crystal ball won't tell me.  Maybe the economic winds will blow more towards lower rates. Maybe not.

Can you imagine buying a home for $300,000 at 4% and paying a monthly mortgage payment that includes Interest and Principal for only $1,432.25 in November 2010?  Definitely more affordable today.

Can you imagine buying a home for $300,000 at 6.5% and paying a monthly mortgage payment that includes Interest and Principle for only  $1,896.20 in November 2006?  Not cheaper.

Drum Roll please !!!  Total 30yr payment on the 4% loan = $515,608.52
                              Total 30yr payment on the 6.5% loan = $682.633.47

So which loan do you want?  I have left out many variables that go into getting a mortgage, and I won't cover them at this writing.  Please seek out  a  Mortgage Banking Professional for all your mortgage needs.

Till next time

NY REAL ESTATE NURSE

WHAT IS THE HOUSING AFFORDABILITY INDEX ANYWAY?

The NATIONAL ASSOCIATION OF REALTORS® affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single-family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home.


To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. For example, a composite HAI of 120.0 means a family earning the median family income has 120% of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home.

The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly P&I payment cannot exceed 25 percent of a the median family monthly income.

This is good stuff, because without the HOUSING BUBBLE, this is not happening. See the graph below. One decade long, that's10 years and you don't have to look back any farther. Mortgage rates have fallen to historical lows and the Housing Affordability Index (HAI) has risen to affordable levels.

During most of the decade they were separated by their economic forces. After the fall of  Leman Brothers "Oh Brother" and the unleashing of TARP  "Thank You Mr. Paulson" they now have crossed and the HAI has formed a new ceiling and Mortgage Rates have dug into a new basement. This is a screaming buy signal.  More affordable.

Median Sales Price of Closed Sales  $K
August  year over year

By Property Type:     RESIDENTIAL    CONDO-TOWNHOUSE    CO=OP

Queens County

2008                         523,500                    380,000                                 216,000
2009                         480,000                    325,000                                 210,000
2010                         449,000                    343,000                                 195,000

Nassau County      

2008                        489,000                      460,000                               221,000
2009                        430,000                      365,000                               208,000
2010                        460,000                      562,000 *                             208,500

Suffolk County

2008                        380,000                      260,000                               149,500
2009                        355,000                      259,000                               145,000
2010                        340,000                      267,500                               132,500

* Good Month of August 

Did you think I would leave out the Da Bronx, Brooklyn and Staten Island in this overview?  Not at all, you can form the same picture with median home prices in these Boroughs.  Manhattan is its own island.  Median home prices are down and that is the bottom line from the housing crisis.  More affordable.

Housing affordability is an important issue, especially here in the New York City/Long Island area where median housing prices are far above median housing prices nationally.  Looking at the HAI from NAR is somewhat deceiving because it is a national picture, but it is a tool to track over time whether housing is becoming more or less affordable.

So where are we now and how much earnings are needed to purchase a median priced home in Queens?

HAI = ( Median Family Income / Qualifying Income ) = 100

The HAI has a value of a 100 when the median-income family has sufficient income to purchase a median-priced existing home. Unfortunately, the median-income family in Queens is not producing the qualifying income to afford a median-priced home. Then how much do we need to be buyers of that median-priced home.


With all that said, where are we today?  Lets look at the month of August year over year and compare.  In 2008 you would of needed to earn $127,000/YR and have a down payment of $104,600 to have a HAI = 100.  Today you would only need to earn  $87,400 and have a down payment of $89,800 to buy that same home in Queens County.

                                             2008     vs     2010         

MEDIAN SALE PRICE       30 YR FIXED RATE      QUALIFYING INCOME 

                                          2008

$ 523,000                          6.5%                        $127,000/YR

                                          2010

$ 449,000                          4.5%                        $87,400/YR

The two key factors today are low mortgage rates and reduced home prices. Home buying is more affordable than the last decade and should remain more affordable for time to come. 

Only you can decide when the time is right to purchase a home.


Till next time

AFFORDABLE HOUSING