C21AGVoices

Obvious History

Everyone knows most common colonial historical facts about Philadelphia.

• 1766 – The first permanent theater in North America was started here
• 1769 The first life insurance society was started here
• 1773 – The American Medical Society was founded here
• 1776 -The Declaration of Independence was signed at  Independence Hall
• 1777- The first flag for our new nation was sewn at Betsy Ross’s House.
• 1784-  The Pennsylvania Packet or General Advertiser, the first daily newspaper was published here

But there are lots of real estate related first people don;t know about.

We Made the First Mortgage Loans

Did you know that the first mortgage in the U.S. was issued to Comly Rich to build a property at 4726 Orchard Street in Frankford (now a section of Northeast Philadelphia) which is pictured at left. The loan was issued by the first savings and loan in the United States, the Oxford Provident Building Society, founded 1831. Though the loan was never paid off (making this possibly the earliest foreclosure in the US), the property was entered in the Historical Register in 1960.

We Invented Title Insurance

In 1876 , during the Centennial , the first Title Insurance Company in the United States was founded in Philadelphia. In fact, through successor companies, that firm ,known as Commonwealth Land Title (now owned by LandAmerica) still issues title insurance today!

Title Insurance is used to assure buyers that the title of their home is free and clear of liens and encumbrances at the time of purchase. During a re-finance, title insurance will often be required by the lender to protect their interest, assuring that they are the primary lien on the property.

The need for title insurance arose historically from the fact that traditional methods of conveying real property did not provide adequate safety to the parties involved. Until the 19th century, transferring title to real estate was handled primarily by conveyancers, who were responsible for all aspects of the transaction. The conveyancerconducted a title search to determine the ownership rights of the seller and any other rights, interests, liens or encumbrances that might exist with respect to the property, and, based on its search, provide a signed abstract (or description) of the status of the title. Although the conveyancer was generally not a lawyer, that individual was recognized as an authority on real estate law. The conveyancer only provided limited protection to the purchaser of real property.

In 1868, a lawsuit was filed was filed in Pennsylvania that would change the levels of protection the buyer expected in a real estate transaction.. In that case, a conveyancer named Muirhead, had searched and abstracted a title for a buyer named Watson. Muirheadchose to ignore certain recorded judgments (after consulting with an attorney) reporting the title as good and unencumbered. On the basis of that title abstract, Watson bought the property, but was later compelled to pay the liens that Muirhead had concluded were not a problem.

Feeling somewhat ill-used, Watson sued Muirhead , but the Pennsylvania Supreme Court ruled that there was no negligence on the conveyancer’s part and dismissed the case. Watson, an innocent buyer had no protection.

The case of Watson v. Muirhead demonstrated that the conveyancing system could not provide safety to buyers ,so shortly after that court decision, the legislature passed an act “to provide for the incorporation and regulation of title insurance companies.”

Since then, the title insurance industry has grown to become an essential component in the majority of real estate transactions in this country. Title services vary somewhat from one area of the country to the other, but the essential purpose is to assure a buyer that their transaction can be completed with efficiency, security and safety.

And We Helped Start the NAR

That’s the National Association of REALTORS. In 1908 The Philadelphia Real Estate Association was one of the founding members of the National Association of Real Estate Exchanges, Which became the National Association of Real Estate Boards, and in 1970, The National Association of REALTORS.

Those groups were instrumental in creating the REALTORS Code of Ethics in 1913 which was used by many states as the basis for their state regulations of the real estate industry which were not put into effect until years later. In Pennsylvania in fact, our first licensing law wasn’t passed until 1929.

SO as rich as our better know history is, we should , on this Fourth of July, remember how many of the real estate institutions we take for granted started here in Philadelphia! 

In the summer of 2005, sub-prime mortgage lending was at its peak.  Rates were relatively low and lending guidelines were relatively loose.

At the time, the “standard” sub-prime mortgage product was the 3/27 ARM.

The 3/27 had a few basic traits:

• A fixed, 3-year “starter rate”
• Every six months thereafter, the mortgage rate changed
• The formula by which it changed was (4.999 percent + 6-month LIBOR rate)

If the loan was interest only, it usually converted to principal + interest at the first adjustment, too.

Because the summer of 2005 was the peak of sub-prime lending, it makes sense that the summer of 2008 is the peak of sub-prime adjusting.

For homeowners with adjusting sub-prime loans, there is some (relative) good news out there.

Today, the 6-month LIBOR hovers near 3.15 percent, meaning that an adjusted mortgage rate will be in the neighborhood of 8.15 percent.

This is versus the rate of 10.30 percent that sub-prime borrowers faced last summer when LIBOR was much higher than it is today.

Adjustments of any size can strain a household budget, though, so if you’re a sub-prime borrower and your pending adjustment will cause financial strife, be proactive — talk to your lender before you miss a payment. 

Lenders are often more willing to talk with “current” borrowers than with delinquent ones.

(Image courtesy: Washington Post)

Photo by JW_000000

“What are the three most important things in valuing real estate? Location, location, location!”

During the past 20 years, like any other real estate professional I have often asked what increases the the value of my real estate practice . And after a lot of thought, I am clear that the answer to that is also location, location, location.

But what makes a good location for a real estate license is different then what makes a good location for real estate. The components are really very simple but agents are sometimes distracted by the way the components are assembled.

Generally, agents look at a commission structure or “split” thinking that determines where their license will make the most money. But the real measure of a good location for a license is dollars in the agents’ pockets, which is determined by more then percentages.

It’s the same story we tell our seller’s. “Sure you can list with someone that will offer a lower commission rate, but if your house never sells, what good will that do you?”.

Here are the components I looked for as an agent.

1. What type of of management support will I receive?
2. What is the experience of the management and support staff?
3. What support staff and departments are there in the company?
4. Does the company generate leads that will be distributed to me?
5. Does the company charge me for those leads?
6. Are there any other fees that I have to pay?
7. How are expenses allocated between the company and me?
8. Where is the office located?

It is nice to think you are valued because you played the percentage game, but where’s the benefit if your deals don’t settle? Or if you don’t have new buyers and sellers to work with? Too often, monthly desk fees, referral fees and costs billed back to the agent create so many deductions that the “high” commission split results in less money at the end of the year.

Don’t be fooled by smoke and mirrors and promises that don’t get realized. Make sure your license is truly in the best location by asking the questions and doing the math on your own.

Photo from CreativeCommons.org courtesy of Leeno

There is so much to consider when looking for a new home, but the big word in real estate is location, location, etc.  What’s the big deal about location?  I think what it comes down to is that your location is a huge factor in your day-to-day life.  

I’d like to share with you a great example: the Glenside Farmer’s Market.  Every Saturday, the vendors set up their tables by the Glenside train station, displaying locally grown fruits and vegetables, neighborhood bakery goods, dairy and poultry products from nearby farms, and even jewelry.  It is a low-key event.  People from the neighborhood walk casually from table to table, saying hello to people they know and stopping to chat with both neighbors and vendors.  What better way to fill up on wholesome food, support local farmers and merchants, and form community ties? 

Of course it’s not the kind of thing that you’ll find everywhere.  Each area will have its own flavor, whether it’s a farmer’s market, a quaint main street, the center city nightlife, or annual community events.  Often, you will find out about them after you move in…but if you want to get a preview, try picking up a local paper from the neighborhood, or ask your real estate agent what the community has to offer.

As flood waters ran through Iowa and other Midwestern states, the nation’s corn supply was thought to be in danger.

Prices spiked in the wake of the floods, adding to the already-peaking grocery bills that many Americans are now bearing. With shortages of rice, and the unexpected increases in food costs due to transportation expense as gasoline and diesel costs skyrocket, there was concern that a new burden might bed added to the consumer.

But yesterday, in a surprise report, the Agriculture Department said that many farmers had over-planted corn earlier in the season in order to cash in on corn’s rising market value.

The abundance of planting is offsetting a portion of the flood damage and this year’s harvest is now predicted to be the second highest on record.

For Americans in need of a home loan, this is terrific news because more corn supply means lower food prices and that puts a hold on at least one source of inflation.

Inflation is the enemy of mortgage rates, and therefore the housing market.

The revised outlook for this year’s corn supply is now so much better than it was yesterday that the price of a corn bushel fell by 30 cents at the Chicago Board of Trade — the maximum allowable amount by rule.

Now, rapid movements in the price of corn may not seem relevant to everyday life, but even the smallest of details about the economy can trickle down and impact you as a homeowner.

The strength of the housing market may be correlated to consumer confidence and consumer confidence is definitely tied to the Cost of Living.  And the same goes for the mortgage market — it’s all related to inflation. 

With a surprise crop of extra corn, things may look just a little bit better.

Source
Corn Crop Largely Intact, Despite Floods
Scott Kilman
The Wall Street Journal, July 1, 2008

As a local business, Century 21 Advantage Gold feels its important to participate in worthy community based programs to help the people we live and work with. For many years we have been is a supporter of the local Easter Seals chapter in Southeastern PA. We feel their work is important, as is their committment to helping individuals with disabilities and special needs, and their families, live better lives.

Our next  fundraiser for Easter Seals is a Phillies Game night. Last year we sold almost $3,000 worth of tickets to raise money for Easter Seals, and even a little rain and a Phillies’ loss didn;t stop anyone from having a really great time!

This year  Easter Seals game night is Tuesday August 19. The Phillies will be playing the Washington Nationals and it promises to be an exciting game. Maybe we can even see a Phillies’ win this time , but in any case, it will be a terrific evening out. 

For a great summer evening experience for the whole family, and to help people who may not be as fortunate , come and join us at one of the nicest Baseball Parks in the Country. To purchase tickets email me at mary.bauman@c21ag.com. We have wonderful seats for only $30 each in section 107.  Hope to see you therefor a fun summer evening!

In the current mortgage market, there are fewer ways to buy homes with no money down, but it is still possible to buy with none of Your money down. One of them is probably as old as home buying itself. Get a gift of cash (probably from a family member) to be used as part or all of your down payment.

When a home buyer is gifted cash for a downpayment, there is a right way and a wrong way to receive the funds.

The right way includes:

• Completing an acceptable gift letter
• Documenting the withdrawal of funds with receipts
• Documenting the deposit of funds with receipts

The wrong way is to ignore the rules that mortgage lenders clearly spell out for you.

Mortgage lenders watch gifts closely because they want to make sure that the “gift” is not really a loan-in-disguise.  If it’s a loan, the total dollar amount must be counted against the home’s total loan-to-value and higher loan-to-values typically increase lender risk.

If it’s a gift, a signed and dated gift letter should accompany the home loan application.  An example:

I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].

This is a gift — not a loan — and there is no expectation of repayment.

Signed,
[Signature of donor]

For additional evidence that the gift is legitimate, the recipient should make sure that deposited funds are not commingled at the bank.  If the gift is for $12,000, for example, then the recipient’s bank deposit receipt should indicate that a $12,000 deposit was made.

There may be legal and tax liabilities when gifting funds between family members so if you’re unsure about how donating or receiving a gift may impact you, call or email one of our agents.  If they can’t answer your question, We can certainly refer you to somebody that can.

In the future, keep your eye on this Blog for some other  down payment ideas! Happy House Hunting!

Home buyers are often surprised when a “rate quote” from the morning won’t be honored in the afternoon.  Sometimes, the assumption is that the loan officer is just being sneaky.

This couldn’t be less true.

Rate quotes change in the middle of the day because mortgage markets are in constant flux.  All day, every day — just like stocks. 

And like stocks, a mortgage bond’s morning price will likely “expire” before the day ends.

One way to visualize this is to look at today’s Microsoft’s stock price:

• At 9:30 A.M. ET, the price was $28.46
• At 9:38 A.M. ET, the price was $28.72

Over the course of 8 minutes, the stock rose by 26 cents and the “9:30 A.M. quote” was no longer available.  For example, you couldn’t call your stock broker at 9:38 A.M. and place an order for the 9:30 A.M. price because the price had changed.

Mortgage rates behave the same way.

Throughout 2008, mortgage rates have changed mid-day more frequently than in the past.  On more than half the days, morning rate quotes were no longer valid in the afternoon.  And, on at least 5 separate occasions, rates changed 4 times in just one day.

It’s not typical, but it does happen.

So, if you’re talking with your loan officer in the morning about a rate quote, be prepared to do all of your shopping in a compacted amount of time, and then be ready to make a decision.  Remember that the mortgage company is constantly reviewing the financial markets and that the rates may shif as a result of any piece of economic news, as the mortgage company tries to stay profitable in a shifting economic environment.

By the time the afternoon rolls around, after all, that rate quote may well be expired.

Photo by AgentAkit Courtesy of creativecommons.org

Hello and welcome to my first real estate blog for Century 21 Advantage Gold.

So many topics have gone through my mind since I was asked to write about “real estate.”  Oh the many mountains to be climbed in order to be successful in this very unique industry first came to mind. Anyone in this business will know exactly what I am writing about — without going any further — so I nixed that topic, maybe another day …  as thankfully, I don’t have to settle for just one topic today, I will be “blogging” here at least once a week.

Over the years I have met many different people as this industry is always challenging, no matter what the market dictates; always changing; always interesting as every transaction is its own; and (almost) always very rewarding in the end. It’s exciting to meet someone new, hear their dreams and to help turn them into reality.  That’s probably the best part of this career — or should I say “way of life” — the wonderful people who have come into my world!

I am excited about the opportunity for others to get to know me through this blog.  If you would like to read all the fun stuff (gory details) about me, what I do and why I’m a little different … you can always visit my website at:  www.KimSchreiner.com –

Something that I came across recently struck me as something that I would like to share as my first topic and that is the average mortgage interest rate of the 1960’s. 6%. Yes, same as it is today.

One of my clients graciously shared her original mortgage papers (from the 60’s) with me, and I found it amazing that the interest rate of then is what it is now. Gas prices (cough, cough, ahem, gag) are most certainly not the same as they were 40+ years ago, nor is milk, bread, eggs, etc… you get the picture … heck, the cost of going to the movie theater today for my family of 3 is about the same as what it will cost me to fill my Jeep, WAY TOO MUCH.

But yet the interest rate on a mortgage is once again as low as it was over 40 years ago. Why isn’t the media letting you know that? Question the media? How dare I? Ahhhh… the media, that shall be another blog on its own ….

Check out today’s interest rates, compare them to those of the past; with today’s declining home prices and the over abundant housing inventory – it’s truly one of the best buyer’s markets imaginable, in my opinion of course! 

If you have maintained a good credit history, this is the PERFECT time to make a move if you have been waiting! The housing market is cycling back to normalcy, what we have seen in the previous 5-7 years, was anything but “normal” — prices are lower and the rates today are of yesteryear — unlike anything else of modern times!

 Kimberly Schreiner can be reached at    215-671-4700    ext.1113

The Federal Open Market Committee left the Fed Funds Rate unchanged at 2.000 percent yesterday afternoon, as expected. 

In its press release, the Federal Reserve noted the co-existence of inflation and recession. 

On inflation, the Fed said that energy and food prices are contributing to an “elevated state” of inflation, but that it expects price pressures to ease “later this year and next year”. 

On the topic of recession, the Fed seemed a bit more concerned.

Overall, markets reacted favorably to the press release; both stocks and mortgage rates showed signs of improvement in the statement’s wake.

Source
Parsing the Fed Statement
The Wall Street Journal Online
June 25, 2008
http://online.wsj.com/internal/mdc/info-fedparse0806.html