For Buyers

Mortgage Fraud in Dade County Revisited

December 19th, 2007 Categories: For Buyers, Real Estate Chatter

I am not going to make this one long-winded. After yesterday’s news of 31 arrests by the feds in a mortgage scam ring that spanned from one of Florida’s coasts to the other, you would think people would start re-thinking their beliefs about what is right and what is not when it comes to mortgages.

Alas, this is not the case. I think the fact that this has happened so frequently in our area has otherwise law-abiding citizens thinking that certain things are perfectly fine to do, when in fact they are illegal.

As a real estate agent I am frequently asked “how much will the house appraise for?” Even the very first time I heard it I knew what was going to follow: a quick lesson on mortgage fraud from me.

Who is teaching our Miami-Dade residents out there to ask this question? Is there an infomercial guru pushing that a home which appraises for more than the sales price can be used to tap into the equity? Are there coffee buddies discussing this somewhere? Are Miami housewives talking about this at cousin Maritza’s baby shower?

I am asked this question more often than I would like. And it is always by someone who innocently enough thinks it is ok to get a larger mortgage than the sales price simply because the house appraises for more. It isn’t OK. In fact, it is illegal. Not only is it illegal, it is a federal offense, you know, the FBI?

I was asked this question again yesterday. I could tell from the conversation that followed that they had no idea. They simply wanted to be able to pay off some credit cards with the extra equity.

Let’s start spreading the word about this. Here’s today’s homework: a link to the FBI’s publication on mortgage fraud.

hmmmm…maybe I made this a little long-winded after all. Oh well, it’s not as if it’s not merited.

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Palmetto Bay Homes For Sale – Clarification of Bargains

November 17th, 2007 Categories: For Buyers, Market Trends, Palmetto Bay

I read this nbc6.net article today and can go along with most of what’s being said. I have to take issue with one small item there though. Zip code 33157 is touted as being Palmetto Bay and while a part of Palmetto Bay is certainly in zip code 33157, 33157 also encompasses parts of Cutler Bay as well as Miami.

This minor detail will make a difference in the way Palmetto Bay listings are viewed. The article states that there are 758 listings in 33157 which is Palmetto Bay. While there are 758 listings in 33157, only 197 of those are in Palmetto Bay. The rest are in Cutler Bay and Miami. As a matter of fact, the entire Village of Palmetto Bay has only 254 single family homes listed for sale at this very moment, which is considerably less than the 758 attributed in the article.

I’m not denying the overall point of the article. It is a great time to pick up a great home at a great price. And using a knowledgeable REALTOR® to guide you makes sense. Oh, and we are paid by the seller usually, so it doesn’t cost you anything. Now doesn’t that sound sweet?

Spoken by Chris Hotz | Discussion: No Comments »

Do You Not Understand Its Mortgage Fraud?

August 18th, 2007 Categories: Coral Gables, Cutler Bay, For Buyers, For Sellers, Kendall, Palmetto Bay, Pinecrest, Real Estate Chatter, Southwest Dade

I like selling real estate in the Miami Redland. I’ve met some great people in my business. I’ve helped lots of folks and knowing I’ve done a good job is extremely satisfying to me.

Yesterday I didn’t like one of the people who contacted me. I was on my way to a meeting in Aventura and driving on I-95. I’m not that familiar with the area and was keeping an eye on the exits.

My phone rang and I answered, “Hello, this is Maggie!” The gentleman on the phone asked me about some homes in an area of Homestead. I told him that I didn’t have homes available specifically where he said but a little further away I have a development listed with 15 homes still available for sale and affordable.

He asked me for the prices and if there were any incentives. I answered all his questions and he said something about wanting “cash back.” I told him we were not offering cash back at closing. I went even further and told him it was mortgage fraud and illegal.

He said to let him worry about that. He asked me again for the prices. I repeated them. “What will they appraise at?” he asked me. OK, now I see he’s trying to skin the cat a different way. I know where he’s headed with this.

I tried really hard to not sound arrogant when I replied, “they will appraise at what they’re priced at. If they were to appraise higher, we would be selling them for more money.” Now this may seem like common sense, but I did understand where he was headed. He’s familiar with appraisals that come in, magically, at numbers that are inflated. These inflated appraisals are key in being able to commit mortgage fraud. I guess he thinks he knows my business better than I do.

Mr. Cash Back must have realized that my patience was wearing thin. He told me he’d call me back if he decided to look at these homes. I’m happy if he loses my phone number. The only orange I look good in is perhaps an orange scarf. An entire jumpsuit might be a bit much. Besides that, I worked hard for my license and am actually proud of it. I won’t be risking losing it anytime soon.

By the time I hung up I realized I had passed my exit by 5 miles. Dagnabit!

Spoken by Chris Hotz | Discussion: 10 Comments »

What’s A CDD And Why Should I Care?

July 23rd, 2007 Categories: For Buyers, South Florida Living

OK, first of all, you must be wondering what CDD stands for. In real estate, it stands for Community Development District.

Now that we have that out of the way, why should you care what a CDD is? Let me tell you so it doesn’t surprise you 8 months after you purchase your new home.

Some new homes are built in what is known as a Community Development District. The Miami Dade Property Appraiser has his own definition and a darn good one at that. It states… “The Community Development District – CDD” means a local unit of special-purpose government. A community development district may charge separate non-ad valorem special assessments for satisfying the debt obligations of the District related to financing, constructing, maintaining and servicing the District’s improvements and/or services.

If it still isn’t clear, I’ll spell it out real simply…it boils down to a larger tax bill. You will pay more money for property taxes than someone else with a home valued at the same amount but whose home is not within a CDD.

How much more? Well, that depends. It could be in the neighborhood of $800/yr to $1200/yr or more. It is totally based on the types of improvements and/or services that were constructed, financed and maintained and on the budget adopted annually by the CDD.

If you are buying a home that is part of a CDD it must be disclosed to you. However, you may have stars in your eyes as you check out that shiny new townhouse and completely gloss over the fact that this will be an additional expense on top of the mortgage, taxes, insurance and homeowners association, if any.

There are many new developments in Homestead, Cutler Bay and Miami which are in CDD’s and that impacts your monthly payment. Make sure you’re including the additional cost a CDD brings when you’re figuring out your numbers.

For instance a CDD which imposes an assessment of $984 per year is costing you $82 per month. With an extra $82 per month on a 30 year fixed mortgage with 6.5% interest rate you could afford to purchase almost $13,000 worth of extra house in a community without the extra expense of a CDD.

Make sure you’re including all of your monthly expenses when figuring out how much home you can afford.

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Miami-Dade Home Buyers, Realtors Can Help!

July 9th, 2007 Categories: For Buyers, Real Estate Chatter

I snapped this picture of a brand new house in Homestead on one of my many rides through the areas that I specialize in.

They say a picture speaks a thousand words. What does this one tell you? This homeowner is no happy camper, that’s for sure! He might have fared better if he had used a professional. A buyer pays nothing to use the services of a Realtor® in most cases. And the benefits are many.

So leave the plywood and spray paint for hurricane season. Contact a Realtor® and get the service you deserve.

Spoken by Chris Hotz | Discussion: No Comments »

What Does A REALTOR® Do, Anyway?

June 7th, 2007 Categories: For Buyers, For Sellers

Yesterday I was asked by someone if I sold houses. I replied, “Yes. I am a REALTOR®” “Oh, so you do mortgages and stuff?” “No, I am not a mortgage broker. I prefer to wear one hat only and do it really well.” “So then what does a REALTOR® do?” I was surprised to hear the question, as it seems the whole world knows what REALTORS® do: we make obscene amounts of money for selling houses (that is sarcasm people. Don’t call me on it). I started to provide an answer when we were interrupted. So, Alexandra, if you’re reading, this is what a REALTOR® does: For buyers:

• Educates her buyers about the home buying process and what it entails.
• Makes sure the buyer’s financing is in place before he starts looking so he stays within his price range and is ready to rock and roll when the right home is found.
• Scours the MLS database (where all the homes being sold by real estate agents are) for the right match for her buyers.
• Sets up appointments and sees homes with her buyers.
• Once the right home is found, makes sure you don’t offer more than it is worth.
• Structures an offer that is beneficial to you, yet attractive to the seller and his REALTOR®.
• Negotiates on your behalf should the offer not be accepted as is.
• Refers you to competent individuals who can provide financing, title work, legal representation, home inspections, appraisal services, homeowners insurance, and more.
• Makes sure the deal is moving along the way it should. If a deadline on the contract is looming, your REALTOR® is on top of it!
• If a wrench gets thrown into the works, as it often will in this very detailed process of buying a home, your REALTOR® will be there to try and straighten things out with the experience necessary to do so.
• Although not required to do so, most REALTORS® will attend the closing with you, where they can explain things you may not understand about the closing process.
• Adheres to a strict Code of Ethics while engaging in every part of this business.
• 99% of the time, the buyer pays absolutely nothing for the above services!

For sellers a REALTOR® serves equally well:

• Will enter into a listing contract to sell your house.
• Will do a thorough evaluation to determine the correct price to sell the house for.
• Will place the house, it’s features and pictures into the MLS database.
• Will market the house in various ways to gain maximum exposure (the extent of this varies by individual so ask for specifics!) A lot of the ways utilized are not available to the general public and can be quite costly if available. Again, ask for specifics about the marketing plan.
• The bottom line is a REALTOR® will look for a buyer for your house.
• Once a buyer is found, negotiates on your behalf so you don’t sell the house for less than it is worth.
• The work continues after a buyer is found. As with buyers, makes sure the deal is moving along and tries to fix things if it’s not. This is where many pitfalls can be avoided by using the services of a REALTOR®.
• Again, adheres to a strict Code of Ethics.
• Gets paid the agreed upon commission ONLY when the deal closes. That’s right. Up until closing the REALTOR® has been working for free basically, under a promise to be paid only when the deal closes.

The lists above are not meant to be all inclusive, but they cover the highlights. Interview several REALTORS® when you’re ready to use the services of one. And if you’re looking in the Miami, Redlands and Homestead areas, by all means call me as well. I’m a REALTOR® and proud of it.

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