Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'prevention'
New Consumer Article: The 2010 Good Faith Estimate (Page Three)
Today we have the final installment in the series on the new Good Faith Estimate formThe 2010 Good Faith Estimate (Page Three). Your government that should be protecting you from the worst sort of mortgage provider lies is now actively...
New Consumer Article: The 2010 Good Faith Estimate (Page Two)
The second installment in the series The 2010 Good Faith Estimate (Page Two) is now up. Read it and weep - for consumers nationwide who were hoping the government would provide the solution to their troubles. Didn't happen. Instead, it's...
New Consumer Article: The 2010 Good Faith Estimate (Page One)
It's been a while, but the most recent Transaction From Hell (seller's tenants didn't want to move out - or even let inspectors in) is finally over and I've had a little bit of chance to recover. Today's new consumer...
New Consumer Article: The Loan Shopping Koan
The new consumer article for today is The Loan Shopping Koan, talking about the contradiction offered by dueling interests: The fact that while consumers want the best possible loan, against the opposing fact that it's very easy for loan providers...
New Consumer Article: How To Keep Listing Agents From Filtering Out Offers
The new consumer article for today is How To Keep Listing Agents From Filtering Out Offers. This is a real, major, and once again increasing problem within the real estate industry. You need to take steps to prevent it from...
New Consumer Article: Real Estate and "Priced for Perfection"
The new consumer article for today is Real Estate and "Priced for Perfection" talks about the house that is too beautiful to pass up - but that you should....
New Consumer Article: There Is No Fairy Godmother for Loans
The new consumer article for today is There Is No Fairy Godmother for Loans. To avoid becoming a government statistic, ask prospective loan providers the hard questions before you sign on the bottom line - or better yet, before you...
New Consumer Article: "I'm Working With Someone Else, But Could You Just Help Me With..."
The new consumer article for today is "I'm Working With Someone Else, But Could You Just Help Me With..." talking about requests for free work from real estate agents. I'm perfectly happy to give general information to non-clients and...
New Consumer Article: The Sperm Donor Theory of Buyer's Agents
The new consumer article for today is The Sperm Donor Theory of Buyer's Agents. The real estate industry is built around the listing of property. Okay, it's actually built around the care and feeding of real estate brokerages, but...
New Consumer Article: I'm Competing Against Multiple Offers. How Do I Proceed?
The new consumer article for today is I'm Competing Against Multiple Offers. How Do I Proceed?. It's an article directed at consumers, not real estate professionals, so it doesn't go over some things such as alternatives to money that are...
New Consumer Article: Student Loans and Real Estate Loans: Default, Repayment vs. Nonpayment and Consolidation
The new consumer article for today is Student Loans and Real Estate Loans: Default, Repayment vs. Nonpayment and Consolidation. These are the three issues that are most common for loan applicants to run afould of....
New Consumer Article: Buying Real Estate Isn't Simple
The new consumer article for today is Buying Real Estate Isn't Simple. You can pretend it's simple, and hope you get outrageously lucky. Or you can prepare and do the work, and come out reliably enough better to more than...
New Consumer Article: You Want an Agency That Can Pay ENOUGH Attention to YOU
The new consumer article for today is You Want an Agency That Can Pay ENOUGH Attention to YOU. It really doesn't benefit you to list with an agency that is too busy to pay proper attention to your property, nor...
New Consumer Article: Shopping For The Best Loan In The New Lending Environment
The new consumer article for today is Shopping For The Best Loan In The New Lending Environment. There have been changes in the lending environment in the last few months, changes that are practically designed to make loan officers with...
New Consumer Article: Top Twelve Things That Help You Buy a Bargain Property
The new consumer article for today is Top Twelve Things That Help You Buy a Bargain Property. If you're looking to buy a good property at a bargain price, put as many of these on your side as possible....
New Consumer Article: The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter
The new consumer article for today is The Difference Between a Reliable and Unreliable Prequalification or Preapproval Letter. Whether you're a buyer or a seller, having the right lender letter is a good thing. If you're a seller, you know...
New Consumer Article: Why It May Be Costly to Reject Paying Points
The new consumer article for today is Why It May Be Costly to Reject Paying Points. The advice "never pay points" actually started out as misleading advertising intending to keep consumers away from what in fact were better loans, but...
New Consumer Article: Title Deeds And The Form They Should Take
The new consumer article for today is Title Deeds And The Form They Should Take, which discusses the mechanism of the title transfer deed and the form it should take....
New Consumer Article: Finding a Good Buyer's Agent (And Eliminating Bad Ones)
The new consumer article for today is Finding a Good Buyer's Agent (And Eliminating Bad Ones). It really is easy to get yourself a good buyer's agent, but many people don't know how important it is, or won't make the...
New Consumer Article: Transaction Coordinator: For The Agent's Benefit, Not The Consumers
The new consumer article for today is Transaction Coordinator: For The Agent's Benefit, Not The Consumers. Transaction coordinators are mostly a good thing, helping agents ensure compliance and coordinating between various parties to the transaction. But asking consumers to pay...
New Consumer Article: The Qualification Letter I Use for My Buyers and Require For My Listings
The new consumer article for today is The Qualification Letter I Use for My Buyers and Require For My Listings, which talks about how I communicate that my buyers really are qualified, and how I ascertain that potential buyers of...
New Consumer Article: Cash to Close - A Basic Primer
The new consumer article for today is Cash to Close - A Basic Primer. The article discusses how much cash a buyer of real estate has to have in order to make the transaction happen. Proving that you have this...
New Consumer Article: New Good Faith Estimate and HUD 1 Form Approved
The new consumer article for the day is New Good Faith Estimate and HUD 1 Form Approved. The government has come up with new regulations on the Good Faith Estimate (Mortgage Loan Disclosure Statement in California) and HUD 1 Form....
New Consumer Article September 16th, 2008
Today's new consumer article is Wells and Community Water Systems, which talks about some basic issues having to do with one of the classic reasons for real estate fights: Water....
New Consumer Article September 10, 2008
Today's new consumer article is The Are No Schools That Teach What A Good Agent Needs to Know, which directly takes on the canard that since being an agent doesn't require a college degree, therefore there's nothing special about it...
New Consumer Article September 8, 2008
Today's new consumer article is Negotiation Requires More Than Dueling Ultimatums, which discusses and suggests improvements to the common model of faxing over bare offers and counter-offers. I don't understand why anyone who wants a transaction to succeed would do...
New Consumer Article August 28th, 2008
Today's new consumer article is Rent to Own and Lease With Option to Buy, which talks about one alternative to the traditional sale that usually gets a seller a higher price, while not requiring a buyer to come up with...
New Consumer Article August 26th, 2008
Today's new consumer article is What If You Cannot Refinance Later?, which addresses a very real concern that there are many reasons why people may not be able to refinance their property at a later date, so even though the...
New Consumer Article: August 6th, 2008
Today's new consumer article is How Do I Know If I've Been Lowballed on a Mortgage Quote?, which talks about how to nail down lenders on their quotes so that they actually deliver what you expect at loan sign up....
New Consumer Article July 23, 3008
Today's new consumer article is Procuring Cause and Multiple Agents, which talks about multiple agents and which one gets the commission....
New Consumer Article July 22, 2008
Today's new consumer article is What Does It Mean To Fall Out Of Escrow?, which talks about the process of escrow and what really causes escrows to fall apart - and that it is not something to fear....
New Consumer Article July 21, 2008
Today's new consumer article is Buying Teardown Properties and Condemned Buildings, a discussion of the basic issues of buying property with condemned buildings, or ones that you just don't like and want to replace. There's another article set to...
What Happens After You Buy A Vampire Property?
Dear Mr. Melson, I was wondering if you could offer some insight re: the other side of the equation: what to do *after* you've bought a vampire property. We bought one, quite by accident, despite a house inspection by...
Vampire Properties
I just went out doing some general market scouting. Looked at ten properties, and at least three were of a sort that I've started calling "vampire properties." One more reason you want a good buyer's agent. Like a mythical vampire,...
Top Ten Reasons You Bought The Wrong House
About a month ago, I wrote Top Ten Reasons Your Home Isn't Selling. It was well received so I thought I'd take it from the buyer's perspective. Once again, I'll try to inject as much humor as I can....
Agents "Buying" Listings: Promising the Undeliverable and Hurting Their Clients
Quite a lot of the time when I view a property, I get requests for feedback. Usually it's an automated email. Other times, it's some office assistant who wants to fax me a form which will "only take a...
Buying or Selling Subject to Existing Deeds of Trust
This is something that often happens with highly appreciated properties where the owner can no longer keep up the payments, they get hit with a notice of default, and along comes Joe or Jane seemingly riding to the rescue on...
Why Do Purchase Escrows Fall Apart? (And Why Is It Happening More Often?)
There have always been real estate transactions that fall apart. The reasons why they fall apart are as varied as the people who enter into the transaction in the first place. Let's get back to the very basics for...
Why You Want The Lender to Assume Pricing Risk
In the last couple of years a movement has arisen, led by certain well meaning academics, that says negotiating a loan broker's total revenue is sufficient to get consumers a better loan. As far as they go, they are...
Why Is My Rate Higher Than My Lender Promised?
First off, neither the California Mortgage Loan Disclosure Statement nor the Federal Good Faith Estimate are promises, commitments, or anything more than your loan provider wants them to be. Quite often, they're nothing more than a fictional story told...
Protecting My Buyer Clients Good Faith Deposit
As I wrote a few days ago, the buyer's deposit is always at risk. This is just a fact of real estate transactions. I could pretend it's not so, but that wouldn't keep the deposit from being at risk...
Is The Good Faith Deposit At Risk?
Many agents seem to answer this question differently depending upon whether their client is the prospective buyer or seller. When their client is making an offer, "No, your deposit could never possibly be at risk," while when their client...
Can I Afford This Property?
Cold Hard Fact for today: The average Real Estate Agent or Loan Officer is not motivated to tell you that you can't afford your property. For the agent you are trying to talk people out of a property after they...
What Happens When You Over-Price Real Estate?
Short answer: It almost certainly won't sell! The first thing that happens is that when it goes onto the Multiple Listing Service, all the agents who see it know that it's overpriced. Even on the public part of MLS, the...
You Only Need Negative Amortization Disclosures on Negative Amortization Loans
First let me say that I really learned a lot from your postings/articles/website; its awesome that a resource like yourself exists. Now to the problem. I recently refinanced and the mortgage broker lied to me about many, many things....
From How Much You Make to A Payment You Can Afford
I'm clueless about how home loans work. Is there any way to figure out how much I can afford to spend per month on a home. If I were to get a home for $(figure) how much would that...
Consult a Loan Officer to Make a Purchase Offer
I don't know how many people have told me the story of the Purchase Offer That Was Accepted But Couldn't Be Done. They come to me because they lost their deposit or are about to and they want some way...
Why Buyers Should Avoid Short Sales
I've been saying this for a long time: Short sales are poison for buyers. I don't know why people encourage buyers to look at short sales, because there is no advantage for buyers that I am aware of. In...
Real Estate: Giving Someone a Monopoly Does Not Encourage Top Performance
From an e-mail I've been talking to agents lately and I ask them about the things I've learned about from your site. I thought I would say things like "I want to apply for a backup loan" and they would...
Pretending the Service Equation is Simpler Than It Is
Way back when I was just out of high school, I was doing a lot of things with my time. Working, dating, competing on the fencing team, gaming of various sorts. But every once in a while, I dropped...
My Sixty Second Public Service Announcement about Buying Real Estate
Here was an idea I had: Pack a list of the most important things consumers need to know about buying real estate, as packed into the words I can say in sixty seconds without sounding like an over-clocked squirrel. Here...
Another Scam: "Negative Equity? Sell and Get Cash!"
Notice that it doesn't claim that you can do so legally. I saw another of these signs on the way to the office this morning. When things are going sour, there are any number of scam artists who will...
Consumer Due Diligence on Real Estate and Mortgage Loans
Or: Please don't believe everything you read on the internet! Rarely a week passes by that I don't get a request from someone to link to their website or article. I'm happy to link to good sites and good articles...
My Thirty Second Public Service Announcement On Mortgage Loans
I usually write long articles, Part of that is because I've done all of the easy subjects, part because sound bites facilitate sloganeering, not serious thought that's likely to result in a better answer - or the realization that you've...
The Difference Between Note Rate (APY) and APR
I am continually horrified how many people shop their loans by APR, just as I am by people shopping their loan based upon payment. Why? Because in either case, you're setting yourself up to spend a lot of money in...
Finding Bargain Real Estate: Work With the Buyer's Agent Who Actually Finds The Bargain!
Several times a month I get calls and emails. Sometimes, it's even people stopping in. "I've heard you're good at finding bargains." Well, yes I am. "Please tell me the addresses of some bargains so I can drive by."...
What Do I Really Need To Know To Buy a House and Get A Loan?
While I have been reading the site for about a year, I have tended to gloss over or completely ignore the posts regarding real estate and purchasing a home. That is, until about two weeks ago when I had...
Real Estate and the Four Levels of Competence
People who talk about learning skills tend to discuss a model for learning called the conscious competence learning model. It starts with unconscious incompetence. You not only don't know how to do something, you don't realize that it is...
Avoiding Mortgage Prepayment Penalties by Partial Payment
I enjoy your blog very much and figured you would be a good person to ask this prepayment penalty question to. Is there a prepayment penalty if you dont pay down the whole amount? For instance, say I owe 620k...
Changing Rates and Streamline Refinancing - Reasons to Love Zero Cost Loans and Hybrid ARMs
Rates move up and down constantly. This is one of the strongest reasons both Intelligent consumers and intelligent loan officers love zero cost loans. Every time rates drop, I call or send an e-mail to those clients who signed...
Real Estate Liquidation Auctions
With the market turndown, Liquidation auctions are becoming a big thing. They were just advertising one on all the stations around here. The other agents in my office asked if I was going, and I told them, "There will...
The Self-Fulfilling Prophecy of Lender Fear
I knew that people, particularly first time buyers, were going to be forced into condominiums in San Diego, I just didn't know how soon. Most people, particularly first time buyers, want 100% financing. Actually, most first time buyers don't...
Differences Between Loans Look Smaller Than They Are
One of the things I keep getting told by people is that my loans are the same as everybody else's. I quoted a 5.625% with no points a few days ago, and got told, "That's the same rate someone else...
Buyer's Agency, Due Diligence, and the Illusion of Comity
Somebody sent me this story via e-mail: Feeling Misled on Home Price, Buyers Sue Agent Marty Ummel feels she paid too much for her house. So do millions of other people who bought at the peak of the housing...
How Can Buyers Get the Lowest Possible Price on the Best Possible Property?
The first piece of advice I have for buyers who want to get a fantastic bargain is to find a good buyer's agent (this guy is one of the best in San Diego County). Nothing else will make as...
Successful Refinancing - An Example of the Issues, Computations, and Thought Process
With rates having dropped in recent weeks, it seemed a good idea to go over the thought process behind a successful refinance. Other than the two issues, of loan to value and whether you're really able to qualify for a...
Another Refinance Boom - With a Difference
With rates having nose-dived in recent weeks, we're experiencing a refinancing mini-boom. Now that rates have fallen by about a full percent from where they were most of the last year, people are waking up to the fact that...
How to Sell Your Home Quickly and For The Best Possible Price
There's really nothing mysterious about this. There are some subsidiary tricks and issues, but the most important thing is obvious. The economic games theory is crystal clear, as is the research into what really happens. But most people don't like...
Real Estate Agents and Mortgage Loan Officers Don't Want to Compete
It's the same reason the phone company doesn't want to compete, General Motors doesn't want to compete, Wal-Mart doesn't want to compete, Disney doesn't want to compete, and Microsoft will do everything in its power to appear as if it...
Buyer's Markets Are A Great Time For Moving Up
I have said repeatedly that buyer's markets, particularly a buyer's market as strong as this one, is not the time to be selling a property if you have any choice. There is one exception: People looking to turn around and...
Fear and Greed Counterpoint
Quite some time ago, I wrote Fear and Greed, or How Did The Housing Bubble Get So Big?. I re-ran it just a few days ago, to once again illustrate what went wrong. But Fear and Greed can keep the...
Some Free Loan Advice About Real Estate Transactions
Most days I get loan wholesalers coming into my office. I'm always happy to talk with them, providing they want to talk about what I want to talk about. They usually want to talk about this gimmick and that gimmick...
Bundling Agent Services: What Services Do You Want and Need?
There is no such thing as a free lunch, but lots of people will pretend there is. It seems to me that many people consider compensation earned by real estate agents as paying some kind of toll. They think of...
Greed Envy, or the Tale of Aesop's Dog
At a very young age, my parents bought me a book of Aesop's Tales. Aesop has gone out of style, probably because these are stories with a moral lesson, and it seems the modern society is actively averse to moral...
Which Makes More Difference - Buyer's Agent or Listing Agent?
Having done both, there's no question in my mind. For the average person and the average transaction, the buyer's agent makes a lot more difference. In the aggregate, a good buyer's agent has the opportunity to make a lot more...
Nightmare Mortgages and Self-Destructive Behavior
Just got another one of those desperate consumer fishing calls. First off, she said she had to have an Option ARM. I told her I had them available to me, but... She interrupted me to say she had to have...
The Doctrine of Delaying The Moment Of Truth
One of the worst things about the loan process, and indeed, found throughout the whole real estate industry, is the idea that if you can just delay telling the client about something they won't like, it's more likely they'll continue...
Inducements to Use A Particular Lender for a Purchase
One of the things I'm seeing more of in MLS listings and developer advertising, among other places, is the phrase "$X in closing cost credit (or "$X in free builder upgrades" given for using preferred lender" Sounds like a bargain,...
An Apparent Red Flag that Isn't
For all of the rants I post about bad business practices, there are a lot of things the mortgage industry gets right. One of these looks like a red flag not to do business with them, and may seem like...
How to Avoid A Repeat of the Housing Market Mess
HR 3915 is not the answer. We've been here before (in the early 1990s), congress did something remarkably similar except a little bit more sane. It didn't work then. Why would we expect it to work this time? Among many...
The Last Time I'm Going to Write About Blame for the Housing Market Mess
Who is responsible for the sub-prime mortgage failures? There's a lot of blame to go around. Regulators for failing to police existing Federal Reserve regulations on the lenders. This includes both Clinton and Bush era regulators. Bond rating agencies for...
Real Estate: Know What Can Be Fixed and What Can't, What's Profitable and What Isn't
It's a well known fact that not all factors in real estate are equally important, and not all property investments perform equally well. A critical part of successfully choosing the right property, whether it's for investment or personal use, lies...
Looking For Loans In All The Wrong Places
No, I'm not turning into a country western singer. Just got a search for "no closing costs no points loan cheapest rates loan". The visit (to this article) lasted less than a full second. The obvious implication was that it...
Games Lenders Play (Part IV)
I was approached by these folks a few weeks ago via email. I attempted to get them to write up the experience themselves (and I would still like you to if you're reading this), but I wanted to write something...
Translation: Salesgoodspeakian to English
It may not come as a shock to you, but loan officers, along with many other salesfolk, speak a different language than the rest of the population. What will probably annoy you, however, is the number of times they'll say...
The "We'll Keep You In Your Property" Scam
I've been aware of this scam for some time, but with a larger than normal number of people in foreclosure or otherwise at the end of their rope, it's probably past time to cover this. It is a pure scam...
The Seller Always Knows More About the Property Than the Buyer
Real Estate information is asymmetrical. One of the central facts of real estate transactions is that the seller always knows more than the buyer. They've lived in the property for years, and had to deal with any defects first hand....
Title Insurance, or Fifty Ways (not) to Lose Your Money
Yes, I've always kind of liked Paul Simon. But this post was inspired by something I ran across from FATCO. And just to make certain you know, it's fifty ways to lose your money if you don't have title insurance....
Realtor and Loan Officer Responsibility: Can the Client Afford The Property?
Every so often, I write about professional responsibility. Every month I get a couple of magazines because I'm a Realtor. In one of this months, was a letter from someone who was proud of the fact that he had never...
Good Intentions and Over-Extended Homeowners
(I do use one piece of non G-rated language below. I hope you'll agree with me that it was necessary to convey the proper sentiment) USA Today had an oped, "3 ways to help borrowers without bailing them out" Their...
Deposits on Purchases of Real Estate
A search I just noticed asked the question "Who gets the deposit if escrow falls through?" The theory of the deposit is that here is an amount of cash that the buyer is putting up as evidence of their ability...
Why You Want A Buyers Agent To Deal With Developers
Not too long ago I got an email from an ex-prospect who decided to buy a developer's property without a buyer's agent. They persuaded her that she would get a better deal without them having to pay a buyer's agent...
Using the Information Found Here
Yesterday, I checked my referral logs and found an article where somebody was essentially saying "If you want to be depressed, go read this site and then go rent somewhere for the rest of your life". I can understand where...
"My Payment Is Too High and I Can't Make It"
I found you on the Web after doing some research for my parents regarding short sales and foreclosures. I appreciate your straight talk regarding the whole loan and real estate process which I know they find incredibly intimidating. Right...
Whatever the New Trick in Loans is, It's an Attempt to Keep From Competing Based Upon Price
It seems every week I get asked about some new or revived trick that loan providers are pulling. The one thing they all have in common is that they are methods to avoid competing on price. What the basic terms...
Real Estate Loan Pre-Qualification
One of the most useless and overworked items in the real estate industry today is the pre-qualification for a loan. Sellers want buyers to be "pre-qualified", and buyers are seeking "pre-qualification" to convince buyers they are serious. The level of...
Signing Off Loan Conditions
what is a underwriter final "sign off" on the conditions First off, it needs to be mentioned that a good loan officer gathers information and puts a full package, with all of the information an underwriter should need, before...
The Best Way To Create Problems In Real Estate
Have a "looking for cheap" attitude, especially on services meant to protect you. It's great to have a "looking for value" attitude. If I cost more than someone else, it is in your best interest to ask why, and ask...
Don't Allow Yourself To Become A Victim of Bad Real Estate Practice
This woman made herself a victim stayed in a hotel for 7 weeks looking for my "Dream Home." And, when I found it, even though it wasn't in my price range, I knew I would do anything I could to...
Real Estate Numbers: Calculators and Spreadsheets Are Your Friend But They Have Limits
On a fairly regular basis I get email asking what I think of this or that loan calculator on the web, this or that predictive model for real estate prices or loan rates, etcetera. Loan calculators are pretty simple when...
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