Tuesday, April 22, 2014

Private Mortgage Insurance in New Orleans Bridges Risk Gap


Many of New Orleans’s would-be first time home buyers are stopped short when they come up against the need to raise the initial deposit. But just because you don’t have a hefty down payment, it needn’t mean you can’t own your own home. You can still purchase a house with less than a 20% down payment if you are otherwise qualified—that is, if you take advantage of something called private mortgage insurance (“PMI”).
The reason there is a market for private mortgage insurance in New Orleans is because lenders face an increased risk when they issue a loan with a low down payment. The simple fact is that the less money a home buyer invests in a property, the greater the possibility that he or she will choose to simply walk away. Someone with 5% equity in a home has a lot less invested than had they plunked down 20%—so if anything goes wrong, it’s proportionately easier for them to just hand the keys to the bank. Mortgage insurance covers the lender in such a default.
The cost of private mortgage insurance in New Orleans comes in the form of monthly premiums in an amount set by the PMI issuer. The amount charged depends upon the loan-to-value ratio of the property, factored in with the borrower’s credit score. The insurer guarantees the difference between a 20% down payment and the amount put down by the borrower. For instance, if the borrower puts a 15% deposit on a $200,000 home, but then defaults, the PMI provider would cover the lender for $10,000—the difference between a standard 20% down payment (here that would have been $40,000) and the amount actually made as a down payment ($30,000).
The obligation to continue making PMI policy payments ends once the principal balance on the mortgage falls below 78%, since the borrower’s stake in the property will have risen to 22%—a touch above the 20% threshold. Borrowers can reach this benchmark early by choosing pay extra on their home’s principal balance or by making improvements that result in raising the value of the property: another way to improve the LTV. That route requires a request for PMI cancellation and borrower’s payment for an updated property appraisal (the appraiser will be named by the insurer).
For prospective buyers who are otherwise fully qualified — but for one reason or another can’t supply a 20% down payment — private mortgage insurance makes homeownership possible. No matter what your financial profile, starting the pre-qualification process is your first step. Contact me to get the ball rolling this spring!



Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Monday, April 21, 2014

Home for Sale or Not, Spring is Time for Simple Renovation



With spring in the air, you don’t have to have your Metairie home for sale to catch the spring cleaning bug. Whether or not you’ve been cooped up inside for a longer-than-usual siege of the wintertime blues, as soon as the weather turns the corner, there seems to be a natural urge to open the windows and start freshening your place up.
Spring also brings the traditional hot selling season, and if you’re among those getting ready to list your own home for sale to take advantage of it, you’ll want to add extra attention to the traditional cleanup. Home for sale or not, you can channel some of your annual sprucing-up energy with one of these light renovation ideas. Each can add new zest to your living areas without breaking the bank:
·         If you want to liven up your kitchen or bathroom but don’t want to shell out for the full cost of replacing the cabinets or doors, consider what simply changing the hardware would do. Take a trip to the hardware department, pick out a sample knob or pull, then test what the change would look like. Sometimes this simple transformation adds a surprising degree of sparkle!
·         If your lighting fixtures are looking a bit dated and dingy, one simple fix is to buy new lampshades. Replacing a whole lamp is expensive and often unnecessary—and new shades can make a much more resounding impact, anyway. If you are planning to put your home for sale on the Metairie market anytime soon, best opt for white or cream. Keeping the look bright yet neutral gives you a proven selling advantage.
·         In any room where years of wear and tear have created smudges that no amount of elbow grease can remove, think about painting with a change of color.  It may be a bit more ambitious and costly, but whether you hire pros or do it yourself, the result can make you feel like you’re in a whole new home. As with the lampshade selection, resist the temptation to get overly exuberant and creative: choose neutral color combinations. 
·         If new furniture is not yet called for (or beyond this year’s budget), consider calling in the pros for some upholstery cleaning; then adding new accent pillows.  If your existing pillows are in good shape, sometimes just a few new pillow covers can freshen up a room’s whole look. Designers sometimes recommend picking just one bright color and keeping with it throughout the house.

You don’t have to be planning to list your home for sale in Metairie to make 2014’s spring cleaning efforts a self-satisfying success. And if you’re planning to list, I have a host of other preparation tips…and a marketing plan designed to bring top results! 



Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100

Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Friday, April 18, 2014

New Orleans Real Estate Sales Make for True-Life Reality Shows


The slick, entertaining formats of HGTV’s many buying and selling programs makes for great entertainment – but, as anyone who has ever actually bought or sold a house knows, they tend to leave some key information on the cutting room floor. Sure, real estate sales in New Orleans can in fact involve elements of creativity, presentation, personality, all of which make for interesting television viewing. But in real reality, successful real estate sales are largely based on contracts, disclosures, inspections, contingencies, and time. They may be less telegenic, but can be dramatic, especially when you’ve done everything in your power to make sure that a deal works out smoothly, only to be faced with last minute surprises that threaten to prevent you from closing (or cost you a bundle!).
Here are some of the major issues that can impede New Orleans real estate sales—and how to prevent them from happening:
Not Weighing the Comps
When you are in the process of making a major decision, it’s natural to seek the opinions of the people who are closest to you. When it comes to real estate sales, however, personal opinions from well-intentioned non-professionals can create distractions that wind up doing more harm than good. In the realm of contracts and negotiations, it’s important to give weight to the opinions of experienced real estate pros. They know how to provide unbiased guidance based on comps and statistics rather than emotion.  
Verbal Agreements
Whether you are selling or buying, it’s essential to get any agreements about repairs or updates in writing. Parties will often discuss repairs or credits and assume that a verbal agreement will suffice. Not true. Not only can a repair come back to haunt you later, but certain repairs left uncompleted can delay the close of escrow.
Last Minute Changes
Whether it’s taking out a loan on a new car or holding one final goodbye party at the house, last minute actions by buyers and sellers have an uncanny ability to hold up a deal. When you are in contract for a property, keep your eye on the prize: if you’re the seller, don’t do anything that increases the risk of damage to the house. If you’re the buyer, don’t make sudden changes in your financial life until you are the legal owner of that property.
Buying and selling property is more intricate than a 30-minute TV show, but the end of the episode should feature the same broad smiles and satisfied handshakes—particularly if you don’t let an innocent move derail the purchase. Real estate sales in New Orleans are my business; call me anytime!



Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100


Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Thursday, April 17, 2014

Contingency Strategy for Low-Risk Foreclosure Investors


Despite the winter’s chilling effect on all sorts of sales, February saw single family homes, condominiums and townhomes selling nationwide at a full 7% increase over a year earlier. The opposite is true of foreclosures—no surprise, since the health of the market means fewer serious borrower delinquencies, hence fewer foreclosures.
Even so, Metairie foreclosures are still available, possibly because some of the fiercest competition may be tailing off. Real estate watcher RealtyTrac finds that the institutional investor buying spree appears to be losing steam—which could be very good news for individuals interested in purchasing foreclosures.
Typically, Metairie foreclosures are listed on an as-is basis -- and that means exactly what it says. Whatever is wrong with the property will remain unfixed. Unlike a traditional home sale where you can negotiate with the seller to fix problems or provide credits to counterbalance the expense to have them fixed, when you buy a foreclosed home as-is, that option isn’t available.
When you are up against time pressure to submit an offer, you do have other strategies. One is to hire a qualified home inspector to go over the property, then make your offer contingent on the results of the report. That allows you to know what you are getting into before you commit. If it turns out that the repairs needed are minor, you can choose to go forward with your purchase. If there are too many costly problems, or if there are an overabundance of unknowns, it might be in your best interest to pass. A contingency like this gives you the freedom to weigh your options carefully before you make your decision.
One other issue to keep in mind is the insurability factor. If you believe your offer represents good value even though the property has significant maintenance issues, remember that in most cases you will need to have a home insurance policy in place before you can close. Ask your insurance agent to check the property to determine whether it can be insured. If the first answer is no, you can still check with other companies—but keep in mind that in the world of foreclosures, this can become an insurmountable obstacle.
Buying foreclosures in Metairie needn’t be overly risky when your approach includes careful evaluation of the target property. Metairie foreclosures are still out there, and with care and patience, you should be able to find one that is right for you. Interested in discussing further? Contact me today!




Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100


Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Wednesday, April 16, 2014

Responses Quicken with Quality New Orleans Listing Photos


In advertising, they call the photo that glamorizes a product its ‘hero shot.’ In the case of a real estate listing in New Orleans, the pictures that accompany the written description can all be hero shots, if enough care is taken. 
In one Auburn University study (The Relationship between Property Price, Time-on-Market, and Photo Depictions in a Multiple Listing Service), it was found that adding a single photograph to a listing could lift the final sale price by as much as 3.9%. That’s not surprising, but what is noteworthy is that each additional listing photograph added several hundred dollars to the final selling price. In other words, it’s not just the curbside photo at the top of an New Orleans listing that should be given great care—it’s all of ‘em!
Aside from the usual advice to de-clutter, use light appealingly, etc., there are some less well known tips that can help maximize the eye-appeal of an New Orleans listing:
The Exterior  
The exterior photograph is considered by most professional real estate photographers to be by far the most important shot. I’m not sure I agree. Of course, it sets the stage for everything else, and has to be attractive enough to rate a second look, but those second looks of the interior and garden can differentiate the listing from the crowd. A superior exterior can often be achieved by elevating point of view (IOW, shoot from a stepladder)…or sometimes by scheduling the shot in early morning or late afternoon light (to catch the most dramatic light).
Back Against the Wall!
For the majority of your listing interiors, you’ll want wide angle shots which emphasize spaciousness. Most work better when the photograph is taken from a doorway or corner with the widest lens (that’s the one with the lowest focal length number)—as long as it doesn’t overly distort the image.
Funhouse Effect
Always ensure that your camera is completely horizontal. Correct the ‘barrel effect’ on vertical lines to ensure that all of the walls appear straight. When you’re looking through a viewfinder or small digital screen, it’s all too easy to overlook the sides by concentrating on the center of the picture. That’s an amateur mistake (and slanted walls make a room look like a carnival funhouse!)
Flash Extra 
Take at least one extra shot using the on-camera flash or strobe. True, often that will result in an unevenly lit alternative that you will discard…but now and then, the on-camera light will boost clarity and color that’s more pleasing than what natural light provides. 
Great-looking New Orleans listing shots make a significant difference in the degree of response a property draws. I always help my clients with the listing photographs—it’s one of many tools to ensure their listing gets the exposure and results it deserves!


Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100

Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Tuesday, April 15, 2014

New development fills an old space in New Orleans - FOX 8 WVUE New Orleans News, Weather, Sports

New development fills an old space in New Orleans - FOX 8 WVUE New Orleans News, Weather, Sports



NEW ORLEANS - Tractors and workers pump new life into an old piece of property in New Orleans. It's one of a string of development "rebirths" around town.

The grounds of an old church in the 200 block of Academy Road will be changed into a brand new development of high-end homes.

Construction foreman Ronald Dunshee with Kass Bros. Inc. said within the next month, passers-by should be seeing the shells of new homes.

"You'll see beautiful homes in the $400,000 to $600,000 range," he said.

It will be called The Oaks at Lakewood South, a Landcraft Home Development. President Joseph Scontrino said he's excited about being part of redeveloping the city. The development will sit on 7 acres, which is like gold in the city of New Orleans, where finding any new development is tough.

"You always have to have something torn down to build something new and to have enough to land to build several houses at a time is extremely rare," said Terez Harris, of Keller Williams.

With a shortage of land and housing stock, Harris said investors are snapping up opportunities whenever and wherever they can. An example is the new South Market development on Girod between Loyola and O'Keefe. Domain Companies began securing the parking lots in the neutral ground after Katrina. The old area around the new medical complex in Mid-City is suddenly new again.
 
"That's causing people to want to be in that area for the V.A. Hospital coming, and that's causing prices to increase in that neighborhood, as well," Harris said.

For more information contact Terez B Harris



Terez Harris NOLA Real Estate Group
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100

Each office independently owned and operated. All brokers licensed in the state of Louisiana.

Thursday, April 10, 2014

No Longer Scorned, New Orleans Piggyback Loans Find New Favor


It’s another aftereffect of the rise in housing prices: piggyback loans in New Orleans are making a comeback. According to a recent American Bankers Associations Report, the number of piggyback loans originated across the nation more than doubled within the past year.  
A piggyback loan involves taking out two mortgages simultaneously, with a home equity loan (aka “second mortgage”) ‘piggybacking’ on a first mortgage. In New Orleans home purchases, piggyback loans typically come into play when the buyer is unable to provide a full 20% deposit. Normally this would necessitate the buyer having to take out private mortgage insurance (PMI), which can be pricey. By going with the piggyback loan alternative, the Loan to Value (LTV) ratio can be reduced to less than 80%, the threshold below which PMI requirements vanish.
A standard piggy back loan is structured as a “80-10-10”—meaning that 80% of the purchase price comes from the first mortgage, the next 10% from the second loan, and the final 10%, the deposit.
One major downside to piggybacking is cost. The interest rates charged on piggyback loans are significantly higher than those for first mortgages, so it may prove less expensive to pay for PMI for a short period of time. This is more likely in a rising market, since the Loan to Value can shrink below 80% before long. Another problem can crop up when it comes time to refinance. In order to refinance, the second mortgage lender has to agree to remain in a subordinate position. This agreement (known as re-subordination) may, in some cases, be hard to reach.  Lastly, homeowners with a piggyback loan are unlikely to be able to take out a third loan should they want to access their home equity. Nowadays, thirds are rarely granted.
Between 2000 and 2006, it made a lot of sense to take out a piggyback loan. The interest on piggyback loans was tax-deductible, while mortgage insurance premiums were not. When property prices were rising as sharply as they were between 2000 and 2006, lenders also considered piggyback loans a good bet because the growth provided ample equity ‘cushion.’ But when real estate prices dropped in 2007, piggyback loans fell out of favor. By 2010, the percentage of piggyback loans fell to just 1.7%.
Today, with house prices on the rise, lenders are again growing more comfortable granting New Orleans piggyback loans—but with a bit more caution. Lenders usually ask for a FICO score of at least 700 and a debt-to-income ratio that’s below 43%. Increasingly, they want to see that a borrower has cash reserves in case of unforeseen circumstances.
If you are considering a piggyback loan in New Orleans this spring, you will want to run the numbers to see if it’s the solution that makes the most sense. In some circumstances, it can be the best way to get into a home you can afford even though you can’t furnish a full 20% deposit. Call me today to discuss how today’s market meshes with your needs!


Terez Harris NOLA Real Estate Group
(504)297-2619
Harris.Terez@gmail.com









Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100

Each office independently owned and operated. All brokers licensed in the state of Louisiana.