Hawaii Randy's Real Estate Opinions: December 2008

Scrooge Real Estate Agent

I was thinking about an experience I had on Christmas a couple years ago. 

I got a call from an agent who wanted to show one of my listings on Christmas.  They not only wanted to show it that day they wanted to show it on short notice.  The same year that happened, I read a similar account from another agent on Active Rain.

What would you do?  I told them I could not make the appointment for them, but could schedule them for another day.  It is Christmas and my clients have guests over.  The seller's asked for no showings for the couple of days while they had guests, which I posted in the listing under showing instructions. 

Not accepting my response he pressed me further, all but demanding I call me clients and interrupt their holiday gathering.  I declined to make the phone call, which made him irritated.  I said it is Christmas and I will not disturb them.  After making some unpleasant remarks about professionalism and religion he hung up.  I never heard of the agent before that day and have never seen or heard of him since.   I am guessing may not still be in the business.

I wonder how many listing agents would have actually called their clients.

51 comments • Randy L. Prothero - Hawaii REALTOR® • December 26 2008 02:48AM

2009 Military Basic Housing Allowance (BAH) for Honolulu County

As we get to the end of another year a few things will change.  One of them is the Basic Housing Allowance for our active duty troops stationed in Honolulu County (Island of Oahu).  The rates had a slight decrease from the 2008 levels.  Those who are already stationed here will be grandfathered in at the previous rate. BAH in Honolulu County is much higher than most parts of the country.  Coupled with VA Mortgages, buying a home is a viable option for our troops in Hawaii.

 

2009 Military Housing Allowance Monthly BAH (Basic Allowance for Housing) for Honolulu County.

The VA mortgage cap for 100% financing in Honolulu County is: $783,750.  (Larger amounts will require some down payment.)

  

RANK

WITH DEPENDANTS

WITHOUT DEPENDANTS

  

  

RANK

WITH DEPENDANTS

WITHOUT DEPENDANTS

E-1

$1,949

$1,555

  

W-4

$2,788

$2,306

E-2

$1,985

$1,555

  

W-5

$2,967

$2,434

E-3

$1,985

$1,555

  

O-1E

$2,431

$2,043

E-4

$1,985

$1,555

  

O-2E

$2,607

$2,144

E-5

$2,043

$1,757

  

O-3E

$2,816

$2,274

E-6

$2,247

$1,868

  

O-1

$2,069

$1,855

E-7

$2,403

$1,955

  

O-2

$2,269

$2,011

E-8

$2,545

$2,088

  

O-3

$2,627

$2,191

E-9

$2,745

$2,160

  

O-4

$3,043

$2,416

W-1

$2,276

$1,913

  

O-5

$3,334

$2,502

W-2

$2,461

$2,087

  

O-6

$3,361

$2,633

W-3

$2,633

$2,167

  

O-7+

$3,401

$2,686

  • E=       enlisted
  • W=       warrant officers
  • O-1E= officers with enlisted experience
  • O-1=   commissioned officers with no prior enlisted experience

If you are active duty or a former member of the military and interested in learning how to buy a home utilizing your VA benefits on Oahu; I would be pleased to help you get started.

If you are civilian and wondering what programs are available for you to buy your first home, please feel free to contact me.

My services are normally free to buyers.

10 comments • Randy L. Prothero - Hawaii REALTOR® • December 25 2008 11:53AM

New mortgage fiasco in the making?

This is an extremely insightful post from one of the respected mortgage industry folks from Las Vegas.  I think Esko hit it on the head.  Those who ran around causing a major part of the sub-prime mortgage problems are using similar tactics today with FHA financing.

Via Esko Kiuru - Las Vegas NV Mortgage Consultant:

The financial system has taken it to the chin repeatedly over the last few years thanks to multiple factors, one of which was the subprime home loan product. Many eager borrowers were able to secure funding for a home purchase using its flexible underwriting criteria although many really didn't have the means to keep making payments in the long term. The loans were structured with the idea that the real estate market would continue to expand and if it somehow tanked, well, that probability wasn't considered much at all. And so the bubble burst and the subsequent damage is severe.

As a result the subprime programs were swept into the trash bin and that was that. For a while anyway.

A host of the subprime lenders and brokers who prospered during the boom years and then for one reason or another exited the scene are now coming back. The niche they are presently involved in is in many ways similar to the subprime one. It's the FHA, or Federal Housing Administration, product that is primarily designed to cater to first-time homebuyers, although all applicants are welcome, has reasonable income standards and requires a down payment as low as 3%. Borrowers pay FHA a fee that insures loans against default but ultimately it is the taxpayer who guarantees these mortgages.

The problem here is that these former subprime mortgage lenders, some of whose background includes bankruptcy filings, civil lawsuits, state disciplinary measures and a few criminal convictions, are using the same high-pressure sales tactics they did before to make loans. And they are supposedly sometimes involved in outright fraud just to get to the closing table. The bottom line is that the paper they write goes bad at a rate much higher than national average. In the big picture, only about 4% of all loans were FHA in the fall of 2007 and a year later, today, it has soared to 26%. And that number is likely to grow even more in the coming months and as it does more of these poorly-underwritten loans will start falling behind and ultimately face foreclose. Sounds familiar? 

To qualify to do these loans a company has to be approved by FHA. Why, then, isn't FHA weeding out the unworthy applicants? For one the agency is way understaffed to handle the surge of applications it's getting nowadays. The systems in place probably are ill-prepared to catch everything they are supposed to catch. Staff training might also need an upgrade. Perhaps pressure from who knows where unduly influences their decision making. It's possibly a little of bit of all of this.

Anyway, FHA is one of the main players in the government's far-reaching plan to rescue the housing industry and to allow it to operate with minimal supervision is irresponsible, to put it mildly. It's clear that there is a power vacuum in Washington right now and from the way things are going at this point it will unnecessarily prolong the real estate market's recovery. Sadly, the word responsibility has a hollow ring to it.    

 

12 comments • Randy L. Prothero - Hawaii REALTOR® • December 05 2008 06:52PM

Keeping Your Cool When Others Are Freaking Out

                                                               Stressed Out

One thing that stands out about a real estate professional is their ability to keep their cool under pressure.  The process of buying or selling real estate can be a very stressful process.  Buyers are sellers in many cases are dealing with the most expensive thing in their life.  Rarely does a real estate transaction happen with a curve ball or two.   When this happens we separate the professionals from the amateurs.

The professionals are those who see these are challenges or just part of the process.  The amateurs are stressed out, acting badly or just shutting down.  As the real estate markets cooled down the chances of a transaction having complications has increased tremendously.

The lenders have tightened their requirements.  Buyers are looking for bigger and better deals and everyone is scrutinizing every document more carefully than ever before.  In many areas new lending and consumer protection laws have been added to further complicate the process.  To throw added stress into the mix there are real estate agents and loan officers who have seen a drop in business, many have taken on other jobs and are doing this part time; many are pushing much too hard to try and get that next commission.

In the last year I have seen:

  1. Real estate agents selling their own properties and breaking rule after rule.
  2. Sellers hiding defects in their properties.
  3. Buyer's agents pushing clients into bad situations, just to close the deal.
  4. Buyers trying to renegotiate the contract after already in escrow.
  5. Lenders changing the requirements in the middle of the transaction.
  6. Tempers flying from all sides when a transaction hits a speed bump.
  7. Loan officers giving bogus loan approval letters to get it in escrow, and then trying to move the buyer to another type of loan or try to get the seller to give additional concessions.

While others are freaking out, you will be able to spot the true professionals.  They will be keeping their cool, playing by the rules and getting the job done.

74 comments • Randy L. Prothero - Hawaii REALTOR® • December 02 2008 03:15PM