Austin Real Estate Blog

If you’re an agent you should do some research on the proposed RPR or Realtors Property Resource.

You can read about it here.

http://www.inman.com/news/2009/11/12/mls-buy-in-key-nar-database?page=0%2C4
and here
http://www.inman.com/news/2009/11/14/rpr-execs-under-fire-nar

Below is a snippet from the 1000watt blog posted on Inman. If you’d rather a more concise description skip down past the quote.

The NAR has taken over certain technology assets of Cyberhomes from LPS (formerly known as FNRES) in order to bring its RPR (Realtors Property Resource) project, as well as its consumer-facing play, HouseLogic, to market. To do this, they have created Realtors Property Resource LLC — a wholly owned subsidiary of the NAR.

Certain LPS executives, including Cyberhomes GM Marty Frame, will be making the transition over to NAR/RPR (see Inman News article). Frame will serve as the president of the new entity. Dale Ross, who was co-founder of MRIS, the nation’s largest MLS, will be CEO. LPS will also provide call center support and other services as part of the deal.

The RPR database will contain parcel information on nearly 150 million properties through a data license from LPS, which (along with First American) is one of the two major sources of public property data.

This is interesting news, but let’s back up a minute for those of you who have more well-rounded lives than I (my fellow online RE junkies can skip down to my take on what this deal means).

The RPR is the national property database initiative that the NAR has been quietly working on for some time. It has gone by a number of names over the past couple years, including “Gateway,” “The Real Estate Channel,” and the “Library/Archive.” It will aggregate tons of property data, including public records, in one place. This will be a Realtor-only database. The idea is to keep agents and brokers competitive amidst widespread data diffusion and other challenges.

HouseLogic.com is a NAR-owned public destination site that will be unveiled next week at the NAR EXPO. The site is part of the NAR’s long-term strategy to engage consumers on behalf of its members.

RIN is the “Realtors Information Network,” a for-profit arm of the NAR from which the RPR sprung. It was conceived for the purpose of creating an ill-fated online real estate service nearly 15 years ago. It was proprietary, something like a Prodigy or early AOL-type service. It blew up, costing the NAR millions. It was from that failure that the present-day Realtor.com was born, in 1996.

Thanks to Brian Boero and Inman for the above snippet.

If you don’t subscribe to Inman here’s the gist…

Sometimes it feels like this is my relationship with NAR...

REALTORs Property Resource in a Nutshell

Basically, NAR would love to create another cash cow like Realtor.com by taking our MLS data and building a system around it, then selling it to the likes of ANYONE WHO WILL PAY FOR IT including government agencies. Can you say appraisal districts? Hope everyone is ready for their taxes to go up once we expose our complete MLS data (even in aggregate).

A Better Idea

And you folks are Realtors like me…. Why doesn’t our MLS ever agree to give any of us all the data for free so I can sell it to other people? IDX feeds for members are $200 per year now (or thereabouts).

I’ve got an idea. Why don’t all the MLS systems around the country give me the data. Then, you know, I’ll build a website with your images, your listing data, and publicly available records and then I’ll sell the services to you and other entities for a profit? Of course your dues may go up a bit since you’ll have to hire someone at ABOR to handle all this data exchange, help NAR with any issues they have, etc, etc.

Sounds like a good deal, right? Who’s on board?

I’m not a data entry robot working to make NAR and their partners money while paying Realtor.com $50 a listing to “showcase” my data on their website, not to mention a website that is worthless without said data.

Who Wants Higher Property Taxes?

In Texas, we are a non-disclosure state and they want to sell the info to government agencies. Um.. I’m pretty sure that all the appraisal districts will love that. Personally, I think this is the dumbest thing NAR members could do to themselves. If NAR wants said data for their system our MLS should charge them accordingly. I think $100 per listing sounds about right. Then we could automatically get a featured listing in Realtor.com and have $50 profit that could go to reduce or eliminate our MLS fees.

Sounds more fair to me. NAR can go and partner and sell the data, but they need to BUY IT FIRST.

Aside from all this… Why do I, as an agent in central Texas need, or care about accurate valuation or data about property in Montana? I’m not licensed there. I don’t sell there. And NAR Code of Ethics Article 11 says I can’t because I’m not competent in the workings of real estate in Montana.

Why should my dollars go to fund a NAR company that makes profits for LPS Real Estate (an RPR partner) and allows the data that is our lifeblood to go out to whomever?

I’ve only been thinking about this for a few days so I could be wrong. I would love to hear what other folks at our board or at any board across the nation think. If you are for or against the RPR and have an interest in real estate other than being a salesperson please disclose it so we can get a read on where each stakeholder stands.

Joe Cline – REMAX Capital City

Reports suggest that the real estate market is gradually recovering but at a snail’s pace. There are frequent upheavals and this is evident from the RECI or the Real Estate Confidence Index which keeps track of views and opinions of real estate agents as well as brokers and their “forward-looking” sentiment of United States’ real estate market which recorded 5.59 in October as compared to 5.83 in September. As rates are still low, home refinance is an option that majority of the homeowners are turning to. Some are also taking help of loan modification.

Home refinance may be for you

It was observed that properties that ranged in between the low and mid priced ranges kept the real estate as well as the mortgage market active. The mortgage market which is still volatile is yet to recover fully and statistics suggest that about 6.7 million households in the US having mortgages have fallen behind on payments (as per MBA or Mortgage Bankers Association). Every homeowner is striving hard to become current with their payments again so that they don’t lose their home in foreclosure.

One of the best ways to save your home from being foreclosed is to opt for home refinance and that is what majority of the homeowners are doing if it is an appropriate choice for them. What do you mean by an appropriate choice? There are many factors that decide whether or not the time is ripe to opt for home refinance.

When should you refinance your mortgage?

Some of the factors that help you to decide whether you should refinance your mortgage are as follows –

Opt for home refinance when rates are low

Low rates can drive you to opt for home refinance. This is what majority of the homeowners do. This can make your mortgage payments affordable.

Weigh the short term and long term benefits

Find out how refinancing your home will affect your long term as well as short term financial goals.

Do you want lower monthly payments and reduced interest rates?

Home refinancing will allow you to enjoy lower payments and reduced interest rates.

Do you want to switch from adjustable-rate mortgage to fixed-rate mortgage?

Often it is seen that homeowners refinance if they are currently making payments as per adjustable-rate mortgage but want to switch to fixed-rate mortgage that makes their payments predictable. This is advantageous as you can plan out your finances well in advance.

Are you looking forward for some extra cash?

If you have enough equity in your property, you can opt for home refinance to get access to some extra cash that can be used for meeting your other financial obligations.

Build up equity in your property

Home refinance is also a good option if you want to shorten the length of the loan term. Homeowners usually do so in order to pay off mortgage faster so that they can build equity in the property faster.

If you are planning to refinance your mortgage, do so only if it is beneficial for you. It is important that you don’t opt for home refinance only if one of the factors mentioned above match your requirements. This is because whether you refinance your mortgage or take out mortgage for the first time, you are putting your home at stake.

Guest Blogger: Peter Gomes

The process of purchasing a home or property is often confusing enough without the industry jargon. In an effort to alleviate that confusion that comes from some of the jargon, below is a short list of terms and the meanings. In order to help further the understanding of terms associated with the real estate purchase process here are some mortgage specific definitions and explanations.

Two step Mortgage – this is a hybrid home loan that starts as a fixed rate for an agreed upon number of years. When those years have passed the interest rate will become adjustable. Some examples of this kind of mortgage are the 5 and 7 One ARM (adjustable rate mortgage)

Balloon Mortgage – this is a steady monthly mortgage that will amortize over time and will provide a lump sum payment due at the end of the term. This price will cover interest, principle, and in rare cases taxes. Amortization can and does occur over a long period of time, even beyond the loan term.

Budget Loan – the loan payments for this are designed to cover taxes, insurance, interest and principle on the home mortgage loan. This is a convenient method of assuring your homes needs are covered. It is also possible to do the same with an escrow account.

Your Austin real estate agent will be well versed in the industry terms. With that in mind they will be able to help you to understand what applies directly to your situation and what should. Ask questions or refer back to this site for more informative data.

In real estate, as with any investment, the last thing you want to find is that you are on the wrong end of the deal that should have been equal. There are ways to avoid common pitfalls and simple misunderstandings.

The first thing to keep in mind when approaching the investment, regardless if it is a private home or otherwise, is to investigate the terms and options applicable to you. The second is to move through the investment process logically. Lastly double check what information you find against what you know and consult with your real estate agent, or representative. The agent will be able to tell you if there are better options applicable to your needs.
One common problem that homeowner encounter in the investment process is receiving the wrong information.

This can often be attributed to misunderstandings or not asking questions when something appears to be difficult to understand. It is important to make sure you are getting all of the information applicable to your situation. You do not need to sign papers that lock you into a loan with a payment schedule you do not understand, or that turns out to be the wrong form of financing for your needs. Understanding the terms and possibilities associated with your loan is important from the start. Ask questions, and consult often with your representative or lawyer.

The second common pitfall that people encounter is ‘falling in love’ with a property or area before they are aware of all of their options. This creates a sense of urgency instead of a mood of understanding and evaluation. This urgency will often cloud judgment and create an obstacle. Approach each aspect of the investment process with an open mind and rely on your real estate agent to provide you with every suitable option, before you settle on which investment you will make.

Approach this investment with ears, eyes and mind wide open and the possibilities will come. As questions with every aspect related to the investment, and you will obtain the best information. Ask the questions that sound insane to you, because those are easily misunderstood. This can be and often is a lifelong investment, so approaching it correctly the first time will provide the foundation of the future.

Once you have established you are the owner of the foreclosure property, have reviewed it with your agent and lawyer you are faced with a significant choice. Should you evict the current tenants or should you continue with the lease they have already? Do you want to initiate a new lease with the current tenants? Those are crucial choices that must be made.

Rental properties purchased through the foreclosure auction process are often one wrought with choices. Typically, a foreclosure purchased rental does not require the current lease be honored, like when it is sold prior to foreclosure. Generally speaking, the new owner has the opportunity to evict the current tenants. This also allows for the new owner to establish a new lease with the current tenants.

Should you chose to accept even one rental payment while still under the previous agreement; you are, in effect, honoring the lease they are in. This means that you, as the new owner, would be bound by those terms until the lease expires and a new one is drawn up. Eviction after such an accepted payment would be difficult if they do not violate the rules of that lease.

By taking some time to understand the rules of the process, you are protecting yourself and the tenant. Should you desire to purchase a property like this, it is prudent to discuss all of your options with a real estate attorney and a real estate agent prior to purchase.

A new law means there are some caveats! Here is a summary from the Legal Aid Society of Cleveland

Upon a Foreclosure Sale of Residential Rental Property,
the Lease or Tenancy Continues with the New Owner

1. Issue. Upon a foreclosure sale of residential rental property, what is the effect of the sale on the tenant’s lease or month-to-month tenancy?

2. New federal law. Protecting Tenants at Foreclosure Act of 2009. S. 896, Pub. L. No. 111-22, §§ 701-704.

3. Effective date. May 21, 2009 (or, more precisely, May 20, 2009, at the time that the
President signed the bill).

4. Application of effective date. The federal law applies to any existing bona fide lease
or tenancy for residing in a property when the property is sold at a foreclosure sale, if
the sale occurs on or after the law’s effective date.

5. Bona fide lease or tenancy. The federal law applies only to bona fide leases and
tenancies, which means:
• The tenant is not the child, spouse, or parent of the mortgagor (former landlord);
• The lease or tenancy was the result of an arms-length transaction; and
• The rent is not substantially less than the fair market rent (or the rent is reduced
or subsidized due to a Federal, State, or local subsidy).

6. Tenants with a bona fide lease. Upon a foreclosure sale, the lease continues with
the new owner as the landlord and, absent cause for termination, it continues until
either (i) the end of the lease term or (ii) the new owner elects to use the property as
a primary residence and provides the tenant with a 90-day notice of termination.

7. Tenants with a bona fide month-to-month tenancy. Upon a foreclosure sale, the
tenancy continues with the new owner as the landlord and, absent cause for
termination, it continues until either (i) the new owner provides the tenant with a
90-day notice of termination or (ii) the tenant provides the owner with a state law
30-day notice of termination.

8. Tenants with a Housing Choice Voucher (aka Section 8) lease. Upon a
a foreclosure sale, the voucher lease (which may be a written month-to-month
tenancy after the first year) is treated the same as other leases (see item 6, above) and
other month-to-month tenancies (see item 7, above). In addition, upon a foreclosure
sale, the housing assistance payments (“HAP”) contract continues, with the new
owner subject to the terms of the HAP contract. The new owner may not terminate
the voucher lease on the “other good cause” business ground that it will assist in the
sale of the property.

Q:  What’s the difference between a mortgagees policy and a lender’s policy?

A:  There is no difference.  Essentially a policy provided to a lender insures the validity and priority of the lien insured.  In Texas, that is now called a Loan Policy.  Prior to 2008, the Texas form was called a Mortgagee Policy of Title Insurance.  The form and name were changed in 2008 by the Texas Department of Insurance that promulgates all title insurance forms used in Texas, so that the coverage and name more closely tract those forms widely used across the United States called the ALTA (stands for American Land Title Association) policies.  The Loan Policy is often issued simultaneously with an Owner’s Policy when the transaction is a purchase.  Issued simultaneously in the same transaction, the premium (charge) for the Loan Policy and Owner’s Policy is greatly reduced and is always the “best deal” for the consumer.

When offering a home loan, many financial institutions will offer points to lower the interest rate of the loan. This can be helpful to reduce the monthly mortgage payments, but is not always a good idea. The decision to pay points should be made after careful consideration of the home buyer’s specific circumstances. Each loan is different, and it is important to realize what is best for you.

How does paying points up front work? Basically, the buyer would agree to pay a certain amount at the time of closing and the lender agrees to lower the interest rate. Perhaps with no points, the loan is offered at 9%. The bank may then offer a 7% loan based on a payment of a specific number of points. It may be a small amount overall, but remember to consider how long you will need to be in your home to make up for that extra money spent up front. For example, the paying points means $3,000 more at closing, it may take several years to recoup financially that amount. Paying points on a loan is a better idea for homeowner’s that plan to stay in a house for many years. That almost guarantees that the difference will be made up in time. If the buyer is planning to live in the home for only a few years, the money up front may actually cause a loss to the buyer. On an original loan, these points are tax deductible in the same year as the closing. Check with your tax professional to help determine if it’s right for you.