Monday, June 19, 2017

The Day The Inspector Gave My Buyers A Heart Attack

Pamela Madore
806-290-1920
Keller Williams Realty

The Day The Inspector Gave My Buyers A Heart Attack


Let me rephrase this by saying that just like anything else in the world there
are good, bad and degrees in between.  I am not in any way lumping all inspectors into a group.  I am only going to tell you about my experience.

Well, first, my buyers didn't really have a heart attack.  I was exaggerating there.  They did, however, opt out of the contract based on what the inspector told them.

We somehow got an overzealous inspector.  As Realtors, and other inspectors, we know that inspectors are licensed to do inspections.  They are not licensed roofers, electricians or plumbers.  (Unless they just happen to be one outside of the realm of inspectorhood.)

Unfortunately, not all buyers are aware of that!  

I recently wrote a blog entitled The Five Thousand Dollar Toilet.  I received an email from a man in Houston that had been an insurance adjuster for many years and and was now studying to become a house inspector.  He wanted my advice.  This is what he asked:


If I were to come into your office (obviously I won't as I live in Houston, but just as a hypothetical), what could I offer you and your agents that would entice you to give me a try?
I have inspected thousands of homes and businesses as an insurance adjuster, so that's not particularly the area I'm concerned with, but rather, what would make you want to "try me" as a potential "go to - home inspector"?
Thank you,
Kevin

This is how I answered:

I think that my best advice would be, be thorough, remember that you aren't a licensed roofer, electrician, etc. and don't scare the people to death.  
I just had a first time homebuyer that the inspector scared to death.  The seller agreed to fix every single item on the report and she still wouldn't buy it.

I actually had an inspector one time tell a client that they should not buy the house because it had way too many problems.

You have a lot of power.  Play fair and you will remain on the  "recommended" Realtor list.  Don't play fair and take up another line 
of work!

Good luck and let me know how you do!


The first time homebuyer I referred to in my remark to him was the buyer that I facetiously said had a heart attack.  And it is true that the seller agreed to fix every single item on the report but the inspector had scared her so much that she wouldn't buy the house if the seller had dropped the price $10,000.

As a Realtor it is my job to counsel my buyers in reminding them that inspectors are simply that.  Inspectors.  If there is a problem beyond their expertise that you want checked out then we will hire a licensed professional.

Pamela Madore
Keller Williams Realty
3955 S. Soncy
Amarillo TX 79119
http://iloveamarillo.com
806-290-1920


How Accurate Is Credit Karma?

Pamela Madore
NMLS#289635
Pamela Madore Mortgage
http://pamelamadoremortgage.com


How Accurate Is Credit Karma?








 





I don't know.  I don't think anyone really knows.  All I can tell you is what my experience has been--both as a Realtor and a Mortgage Broker.

First let me tell you just a very little bit about credit scores.  There are different scores for the type of credit that you apply for,  For instance, if you apply for a car loan your score is not going to be the same as if you apply for a credit card.

Mortgage credit scores are the ones that are the most talked about so let's just talk about those.

First, there are 3 "bureaus".  That means that there are 3 different reporting
agencies that creditors report to.  They are Experian, TransUnion, and Equifax.  (Not all creditors report to all 3 bureaus but that is a subject for another blog.)

All the time I  ask people if they have any idea what their credit score is and inevitably they tell me what their Credit Karma score is.  At best, I would say that Credit Karma is a guideline.  If your scores are in the 600's then probably Credit Karma will give you a score somewhere in the 600's.

The problem with that is that when you apply for a mortgage loan all 3 bureaus are pulled.  Mortgage programs are based on what your middle score is.  For instance, if your scores were 680,  650, and 634 the score that the mortgage company will look at is the 650 score.  If your desired mortgage programs requires a 660 score and Credit Karma told you that your score was 660----well you can see what happens.

Recently, I had an applicant that needed a particular score, 620, to get a mortgage program that he needed.  He was a Credit Karma fan.  Credit Karma showed him that his score was over 620.  However, when I pulled his credit his "mid" score was 614.  

Credit scores change every time that a creditor reports to the bureaus.  So we needed his creditors to report again to get that score up.  Every day he watched Credit Karma and finally it said that it had been updated by the creditors.  So we pulled credit again.  Nope.  None of the creditors that Credit Karma said had updated his status had done it.

So let me end by saying this.  If you are thinking about buying a house and you need a mortgage, contact me.  Let's pull your credit and see what your "real" scores are---the scores that will decide what kind of mortgage program you are eligible for.

Pamela Madore
Pamela Madore Mortgage
NMLS #289635
3955 S. Soncy
Amarillo, TX 79119
806-290-1920
http://pamelamadoremortgage.com












Thursday, June 1, 2017

The Five Thousand Dollar Toilet

Pamela Madore
Keller Williams Realty
http://iloveamarillo.com
806-290-1920

The Five Thousand Dollar Toilet

One of our jobs as a Realtor is to try to advise our sellers on what they have to do to get their house ready to sell.  This isn't always an easy job.  Some people get really offended because they are emotionally attached to their house.


The title to this blog may sound a little silly but later on you will see why I named it this.  Oh heck, why wait.  The next scene may be disturbing.   I made that picture small so I wouldn't gross you out  but what the heck.  Let's make it life size----well maybe not that big.

You get the  idea.  So.  As a Realtor if I am showing your house and when we go into the bathroom and see this,  your house just lost $5000 in value.  Don't blame me.  I just interrupt what I see from a buyer's face.  You just flushed $5K down your nasty toilet.  


So what are some other things that we might find that will reduce the price?  How about this?  Broken and dirty ceiling fan.  How much?  $1K off the price?  One of my biggest gripes is burnt out light bulbs.  I mean, really, folks.  You can buy 4 bulbs for a $1 at he Dollar store.  So maybe you have 6 burned out light bulbs in your house.  How much per light bulb?  $500? 


You can laugh all you want but other Realtors will definitely agree with me.  I showed a house the other day that was piled high with stuff and was filthy.  They wanted retail price for it.  The other agent asked for feedback and I didn't sugar coat it.  That house was probably much more well suited for my clients than the one they actually bought but they couldn't see through the stuff.  So how much did that cost the seller?  The whole price of the house.


Sometimes it is in the little things.    You can buy replacements at Home Depot for 30 cents.  Nice freshly textured and painted walls and then this.  What were they thinking?


These kitchen cabinets won't stay closed.  Did you know that at Home Depot for under $5 you can buy little velcro circles that you can put on the bottom of the doors to keep them closed?  Value lost?  I don't know.  You figure it out.  

How about a dead tree.  Looks pretty spindly, doesn't it.  I think my 6 year old grandson could have pulled it out,  yet the owner chose to leave it there  ?????  



 So there you have it.  If all of these things were in the same house (and they were) how much would you want to reduce by?

I am not trying to be mean to sellers.  I am trying to shake you up to the fact that I want you to get the most money for your house in the least amount of time!  You are going to have to step away, remove the emotions and listen to Realtors that look at houses every day!  



Oh, and please, please scrub the floor.    


Pamela Madore
Keller Williams Realty
http://iloveamarillo.com
806-290-1920





Why Brokers Are Better Than Banks

Pamela Madore 
Pamela Madore Mortgage
3955 S. Soncy
Amarillo, TX 79119

Why Brokers Are Better Than Bank



To my knowledge, I am the only Mortgage Broker in Amarillo.  Sounds crazy doesn't it?  When I moved to Amarillo from Florida I left a place where there  were only Mortgage Brokers to a place where the term was foreign.

Let me explain the difference.  Banks and lenders have a limited amount of programs and guidelines they have to follow.  For instance,  one bank may have a minimum credit score of 620.  If your score isn't 620 then you have to try to find another bank or lender that will work with you with a lower score.  

So now you have found a lender that will go with a lower score but since you are self-employed you don't show enough income to qualify.  Now you have to go and try to find another lender. And it can go on and on.

What a mortgage broker does is shop for you.  Sort of like the Amazon of mortgages.  At my disposal I have literally hundreds of programs available.  So instead of going to three banks and a lender, you come to me and I "shop 'til I drop".  I run one credit report instead of 3 or 4 and I stay with you from beginning to end.  Since I have to sort through a number of programs to find one for you,  you may have to give me a day or two to find the best result.

In addition, since I have many lenders that I work with and they all want my business,  I am sometimes able to beat the best bank rates in Amarillo!

So let me do the work for you.  Let me do the shopping.  I am a great shopper!



Pamela Madore
Mortgage Loan Originator
806-290-1920
pamelamadoremortgage@gmail.com
3955 S Soncy  Rd
Amarillo TX 79119
pamelamadoremortgage.com



Pamela Madore - NMLS# 289635 , Pamela Madore Mortgage - NMLS# 1560825

Unconventional Mortgage may require a higher down payment and borrowers must meet certain underwriting guidelines and criteria which may vary per person. Please call Pamela Madore for details.





Pamela Madore of Keller Williams Realty Just Listed 7802 Sombrero in Amarillo, TX

Pamela Madore
Keller Williams Realty
http://iloveamarillo.com
806-290-1920


Pamela Madore of Keller Williams Realty Just Listed 7802 Sombrero in Amarillo, TX 

7802 Sombrero is in River Road north of Amarillo.  It is located among several established streets of brick homes.

This, your new home!, has been newly remodeled with granite in kitchens and baths, new tile shower surrounds and new carpet.  It has a fireplace for those cold winter nights.  Did I mention a brand new roof!

It has 3 good sized bedrooms, one full bath and the master has a walk-in shower.  It also have a full two-car garage.

The back yard is a great size--not too big and not too small.  Just perfect for your dog and a place for those backyard barbecues.  

Take a look at the couple of pictures here and then visit our website 7802 Sombrero to see more pictures and to schedule a showing!
http://www.iloveamarillo.com/property/tx/79108/amarillo/0350---river-road-east/7802-sombrero-dr/592a2c9fbb97520a8b001e26/

http://www.iloveamarillo.com/property/tx/79108/amarillo/0350---river-road-east/7802-sombrero-dr/592a2c9fbb97520a8b001e26/

http://www.iloveamarillo.com/property/tx/79108/amarillo/0350---river-road-east/7802-sombrero-dr/592a2c9fbb97520a8b001e26/



http://www.iloveamarillo.com/property/tx/79108/amarillo/0350---river-road-east/7802-sombrero-dr/592a2c9fbb97520a8b001e26/


Tuesday, March 28, 2017

Adjustable Rate Mortgages Are Back. Good or Bad?

Pamela Madore
Pamela Madore Mortgage
http://pamelamadoremortgage.com

Adjustable Rate Mortgages Are Back.  Good or Bad?

The answer to that question is probably "it depends".  What does it depend on?  I think it depends on the reason you choose to get an ARM loan.

Let me take a minute first and explain how an adjustable rate mortgage works.  Currently you will find that most ARMs are either a 5/1, 7/1, or 10/1 ARM.  Let's use the 5/1 ARM as an example.

On a 5/1 ARM your interest rate is fixed for the first 5 years and then it adjusts every year after that for the life of the loan.  There are limits on how much your loan can adjust called "caps".  Your loan will have an "index" and a "margin".  Common caps on a 5 year ARM might be 2/2/5.  I will explain that in a minute. 

The margin is a fixed number that you get at the beginning of your loan.  A common margin might be 2.25.

The same source of "index" is used over the life of the loan.  Unlike the margin, the index changes.  A common index is the LIBOR as defined below.  

LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate that some of the world's leading banks charge each other for short-term loans. It stands for IntercontinentalExchange London Interbank Offered Rate and serves as the first step to calculating interest rates on various loans throughout the world.

When your interest rate adjusts after the 5 years, the current LIBOR index and your pre-set margin are added together for your new rate.  However, the adjustment is limited to the "caps" you got when you originated the loan.

A 2/2/5 cap means that on the first adjustment period your rate can't increase more than 2%.  The second "2" in the 2/2/5 example means that at each adjustment period (yearly in our example) can't adjust the interest rate more than 2% per year.  The "5" in the 2/2/5 example means that the interest rate can never adjust more the 5% from your beginning rate.

As an example, let's say you chose a 5/1 ARM today and the starting interest rate is 3.5%.  That rate will stay fixed for the first 5 years at 3.5%.  After the 5 years your first adjustment happens.  With a 2% cap that means that at the first adjustment period your rate could potentially go to 5.5%.  Now let's say that worst case scenario happens and over the next few years interest rates continually rise.  At the next adjustment your rate went to 7.5%.  

On your next adjustment period (the 8th year) rates still continue to rise and your interest rate will adjust again.  This time, however, you have reached the "lifetime cap" of your loan which is the "5" in the 2/2/5 example.  Starting with a 3.5% interest rate your rate can never be higher than 8.5%.  So your rate at this adjustment period would go to 8.5%.

There are 2 things to consider here.  Remember that we said "worst case scenario".  Let's say that interest rates at the end of 5 years are about the same or went down from when you took out your loan.  When you add your new "index" to your fixed "margin" it may not equal 2% and may not adjust the full 2%. Since your margin is 2.25%, however, it is likely to adjust the full 2% on the first adjustment.   It is more likely that this could happen after the first adjustment period.  

The next thing to consider is that rates do continually go up and down.    Let's say that after 8 years interest rates are at 10% (yes that does happen).  You are capped at 8.5% so you are ahead of the game.

Since we don't have a crystal ball that will show us what interest rates will be over the next few years, it is wise to consider the "worst case scenario" when deciding whether an ARM is better or if a 15 or 30 year fixed rate is best.

Why choose an ARM over a fixed rate?  

In our example above, when our start rate is 3.5% it is less than the 30 year fixed rate which may be say at 4.5%.  You will start out with a lower payment and for the first 5 years the interest you pay in your payment each month is less.  

Another reason to consider an ARM might be that you plan on being in your house less than 5 years (or 7 years or 10 years depending on which ARM you choose).  It would be very smart to choose the ARM in this example. 

During the market crash of 2007 or 2008 many people were harmed and even lost their homes because they had chosen an ARM for their mortgage.  ARMs during those times were much riskier than the ARMs of today.

During that time many ARMs were 1 or 2 year ARMs.  They started adjusting right away after the low "teaser rate".  You could get an "interest only" ARM which meant that you only had to pay interest for a set time in order to keep your payment lower and then it adjusted with possibly only a lifetime cap in place.  

An adjustable rate mortgage is, of course, riskier than a fixed rate mortgage.  Banks and lenders are much more conservative now than before, however.   They may be requiring higher credit scores and requiring more down payment.  They also may not be offering the 1 or 2 year ARMs but instead only offering 5/1, 7/1, or 10/1 ARMs.

So are Adjustable Rate Mortgages good or bad?  Again, I say "it depends".  When choosing a mortgage be sure to determine which suits you best--a fixed rate or an adjustable rate.  ARMs don't have to be scary if you go in with your eyes wide open and choose it for the right reason.






Pamela Madore
Pamela Madore Mortgage
3955 S. Soncy
Amarillo, TX 79119
http://pamelamadoremortgage.com
806-290-1920