Because

Whose idea was it to call August "the dog days of summer." Obviously this dog is doing quite well, thank you.

The transaction that I am putting together for Dumpster, which involves the commercial property, has taken a leap forward. It appears as though the buyer who had a back up offer and got first offer when we couldn't obtain financing in time may also be having problems with financing because it hasn't closed yet. I had advised my people to continue pursuing their financing and by Jove they got it. So we may yet be able to bump the usurper off the top of the heap, darn him (or her)! Sometimes it is a dog eat dog world (there's that "dog" comparison again) and the one with the milk bone shorts gets the short end of the stick. (I can't seem to get away from all these cliches so I think I'll move on........)

So, the firey dragon of foreclosure is breathing down your neck. How did you get here and how can you get out? Well, if the bank is after you I would place odds that you bought your home sometime within the last 4-5 years. Money was cheap, plentiful and easy to get. And even though previously I stated that the housing "boom" was not the same as inflation, it bears a keen resemblance. Lots of flowing money causes prices to go up.

Here's an example: Because you want to buy a home, you go to the bank of your choosing. While you are sitting there, they pull your credit. Because you had an illness a couple years back and hadn't adequate insurance, you have some outstanding bills. Also, during that illness, because you got behind on your credit card payments, you incurred several late fees. Mr. Banker, "I see you have some credit issues, but if you write down the reasons for me I will submit them with your application. There should be no problems."

"Great!" you say. "Where do I sign!"

"Well, there is something else......."

"You mean I can't get a loan?" you ask.

"Oh, but of course," answers Mr. Banker. "But we have to charge you 8.5% interest instead of the regular 5.85% and the seller will have to give you some money towards closing costs, but I'm sure there should be no problems."

And because you and your wife and baby so desperately need to get out of that tiny apartment, you sign on the dotted line.

So, you walk into the neighborhood real estate office.

"Hello, may I help you?"

"Hello. We would like to buy a new home."

With dollar signs shining in Ms Realtor's eyes, she says, "Please have a seat. Now, Mr. and Mrs. Jones, are you pre-approved for a loan?"

"Why yes!" you both answer in unison, beaming. "Here is our letter right here!"

Ms Realtor glances over it. Everything looks in order but the seller will have to put some money towards closing costs. Mr and Mrs Jones obviously don't have any savings account. And because Ms Realtor needs to pay her own bills, she smiles and says, "There should be no problems. Let's get started!"

And the big day arrives! Mr. and Mrs. Jones close on their new home. They paid $150,000 for it but because the seller had to pay some of the closing costs that would normally be the responsibility of the buyer, they had to add $5000 to the purchase price now making it $155,000. And the high interest rate makes the payment, $1200, a stretch.

Stay tuned.......

I'm Only Sleeping

ZZZZZZZzzzzzzzzzzz!!!!!!!!!!!!!

As the mercury rises outside, people's energy drops. This must be the reason why it has been so quiet today.

I made some follow up phone calls to prospective clients to touch base with them and see what they thought about the last bit of free information I gave them. Sorry, it's amazing how fast you get discouraged after even just one day of "not much happenin'". I spoke to a woman this morning that I have been corresponding with since March; we have never met. I thought I had found her the perfect home; location, price and setting. She was to talk to her banker about taking out a bridge loan since they did not want to put their home on the market until some work was done.

[A bridge loan is a special type of mortgage where your old home and your new home is financed together. Therefore, you do not have 2 mortgage payments. You basically end up with 1 1/2. It is one solution to getting your dream home before it gets away while you sell your current home. Then in the near future after you have sold the old home you can refinance and have just one normal payment. The pitfalls are that you are saddled with a rather large mortgage payment and there is always the chance that the old house will not sell in a comfortable amount of time. Please talk to your banker for specifics.]

Well, she decided that a bridge loan was not for them even though the house was perfect, etc. She was concerned that the amount that they could afford to offer the seller would not be fair to the seller. Boy, you don't meet such nice people too often! Most potential buyers want to get the home for the lowest price possible; that's the name of the game. I will follow up again soon to see if she would want to reconsider since the sellers are very motivated.

I also spoke to a gentleman interested in some new construction he had seen in a new subdivision. Again, the seller who is also the builder is very motivated and is willing to come down quite a bit. Hopefully we can get them together and I can get the buyer pre-qualified quickly. (Yes, I know. I should do this before even getting started, but different situations call for different approaches. As the saying goes, "The definition of insanity is 'doing the same thing over and over again and expecting different results.' ")

The reason I say this is because a young couple came into my office who were looking to buy their first home. I sent them to several banks to get a pre-approval letter and I haven't heard from them in 2 days. First time home buyers can get scared when cold reality sets in. This is a balancing act that takes a bit of discernment and there really are no pat answers as far as I am concerned. You just have to be gentle and understanding and give everyone the amount of space they require. And remember, this is not a contest; so please, no wagering.