Looking for what's new and what's now in the real estate world. The Jersey Group and Bob The Broker have joined forces on this blog dedicated to all aspects of the real estate business.

You recently bought a house or looked into refinancing and now your getting calls and letters daily from people that know way too much about you.  They know how much your mortgage is for, how much debt you have, your credit scores...it's like they live with you. 

Here is some news that not only you, but your friends and family should all take note of!  The “big three” credit companies have found a way to increase their bottom line at your expense! Read on to find out how you can protect yourself. Please spread the word, this could save someone from identity theft!

Having your credit checked is a necessary part of buying a home or refinancing. Very few consumers realize however, that the inquiries that Trans Union, Equifax, and Experian have on file have become saleable. Your Information is being sold to lenders and companies that re-sell the names and personal information!

That’s right, they are selling your name, address, credit score, phone number (even if it is unlisted), current debt, debt history, property info, age, gender, and even wealth code! They are selling your information, your privacy, and your life to the highest bidder! Not just once, but over and over again and making millions!

The cost is high for these types of “Leads” and the lenders that buy them often need to recapture a higher profit margin to pay for the expense. Often the introduction starts out as a lie with such openings as “HI Mr. Borrower, my name is Joe Lender and I work with Big Credit Company and I was asked to give you a call to verify that you where aware of the fact that your credit was run in attempt to acquire a mortgage. Well since you were interested in a mortgage, our affiliation with Big Credit Company gives us access to better rates than anyone else out there.” A complete LIE!

You may think the best answer is to lock away all your personal information and never give it out.  Never run your credit, never apply for a credit card.  This is the wrong answer.  Doing these things is part of life.

The good news? There is a way to protect yourself! The consumer credit reporting industry has provided a way to “opt-out” of this malicious system. Call them at 888.567.8688 or go online to www.optoutprescreen.com and you can opt out for 5 years or for life if you opt out for life there is a form that needs to be signed. It takes up to 48 hours to take effect though. Not only will this protect your information while shopping for a mortgage, but also will stop the pre-approved junk mail that we get on a daily basis! The pre-approved junk mail is one of the leading causes of identity theft in the United States. Protect yourself and tell your friends and family as well.

You have the right to shop for the professional that will meet your needs, but this should be done how and when you want to, not without your consent.

Let me begin by saying if you are trying to sell, buy or refinance a home that requires a "jumbo" loan, be sure to call me. There are still some lenders offering rates as low as those being offered for 30 year conforming loans.

Most lenders are demanding a bigger premium for "jumbo" home loans. The jumbos have probably become a bigger impediment to the real estate market than fear. The term refers to home loans in excess of $417,000. By rule, they cannot be guaranteed by the government-sponsored mortgage finance companies Fannie Mae and Freddie Mac. Of late, if Fannie or Freddie aren't vouching for your loan, there's trouble.

As with most mortgages, jumbos are typically bundled together by lenders and then resold to investors (often mutual or pension funds) as mortgage-backed securities. The problem: The rising number of defaults on subprime mortgages -- particularly among borrowers who took out interest-only or other exotic loans -- has laid bare the, um, less than diligent practices of many lenders.

That has spooked investors and dried up the secondary market for mortgages -- even those of sterling quality -- that aren't guaranteed by Fannie or Freddie.

Unable to resell their jumbo mortgages on Wall Street, lenders are now making far fewer mega-loans, and those they are making charge much more onerous interest.

For years jumbo rates were only 0.25 of a percentage point above those of "conforming" loans -- those below the cutoff (now $417,000). In recent weeks that spread has exploded to 0.75 of a percentage point or more. BankRate.com reports that the average tariff on jumbo loans soared to 7.35% nationally in August, and many mortgage brokers are reporting figures that exceed 8%.

Increased rates on big home loans translate to a substantial decline in buying power. Two years ago a $6,000 monthly payment would support a $1 million, 30-year mortgage at 6%. Today that same $6,000 payment covers only an $870,000 mortgage at 7.35%.

If you fit into the category of someone buying, selling or refinancing a home that may require a jumbo loan call us. A good mortgage broker or realtor is aware of options that will keep your payments lower or keep the value in your home.

By David Cox, Realtor/Sales Associate

Believing that condos and townhouses are “the cornerstone of the market,” Joseph Kerouac and I have designed a selling system that we think will push the overall market forward while improving the selling/buying experience for condo owners. And, oh yeah, did I mention that we’ll save our clients thousands of dollars in commissions, too? What follows are excerpts from the upcoming issue of our real estate newspaper, The Knowsy Neighbor.

But before getting into that, a bit of bookkeeping is in order: “condominium” is a definition of real estate ownership while “townhouse” is a style of building. Townhouses are typically owned as condominiums, but not all condominiums are townhouses. For the purposes of this post, when I refer to “condos,” I am referring to townhouses as well.

A marketing plan that may ‘change the world?’

“..…Kerouac and Cox [have] discovered a great many flaws in the traditional ways properties are bought and sold. They think that real estate is marketed inefficiently and that most Real Estate brokers charge too much in commissions. Kerouac and Cox have also realized that the condo owner is the key driver for the rest of the real estate market.

“What we’ve decided to do,” says Kerouac, “is to focus on the cornerstone – the condo owners – and give them a better way to sell their home, as well as a better way to buy their next place. We’re not trying to ‘change the world’ here, but if what we’re doing starts to trickle through the rest of the market, well that’s fine by us.”

As the owner of a condominium, there is only so much you can do to improve the value of your home. (There is always plenty you can do to de-value your unit - neglect it, basically - but there is only so much upside.) The fact is that similar units in the same building or
development are all going to sell for similar prices. The market establishes a top-end price for, say, a three-bedroom, two-bath end unit. As the owner of one of those units, there isn’t too much you can do to exceed that price point by all that much. Therefore, the only way the seller of that condo can increase the amount of money in his or her pocket is to control their costs when they sell. The Jersey Group has created a commission program that charges their seller clients a maximum commission of only 4.5%, a considerable difference compared to the traditional 6% commission. And that is the maximum commission. Oftentimes, many of their seller clients are able to sign on for a commission of only 4%. “Nothing changes in the representation and marketing that we give to our clients,” says Kerouac. “The difference is based on an analysis of that client’s competition. Based on what’s going on in the rest of the town, or the rest of the development, or the rest of the building, we might tell a client that 4.5% is overpaying and that they can get the job done just as effectively for 4%.” For the seller of a $500,000 unit, the savings range from a minimum of $7,500 to a possible $10,000….”

Keeping your Realtor honest

“.….Kerouac says, “Let’s just say that many Realtors make a lot more money when they sell their listings themselves. A lot more money. And the client can be affected in a couple of different ways. Besides overpaying, sometimes a seller doesn’t really get honest, unbiased counsel from their Realtor. Instead, sometimes the agent is tempted to “knock out” offers from other agents and instead push the seller to accept an offer from a buyer that the agent represents.” He continues, “When an agent is putting her own priorities ahead of her clients’ best interests, that’s when you have a problem.”

Kerouac says that he once represented clients who lost out on a house to buyers that were
represented by the listing agent. It was at that moment that he vowed to improve his industry by creating a commission structure that removes that kind of obscene greed. He is hesitant to give away too many of the details out of concern that other Realtors will begin to copy this idea, but he is more than happy to sit down face-to-face with a seller and tell them how it works. “My concern is that other agents may dilute the concept by implementing it in theory, but not doing it effectively.” And sticking with the example of the $500,000 condo unit, this scenario could save that seller another $10,000…..” For those of you not reading this post with a calculator, we’re up to a total potential savings of $20,0000 in commissions at this point!

21^st Century Realtors

“.….Kerouac and Cox are using technology as effectively as anyone in their industry. And it is their high-tech approach that helps them locate buyers for their clients. “When most people hear ‘technology’ in real estate these days, they think of the internet. They think of websites,” says Kerouac. “And we do that stuff – we own multiple domain names and we post gorgeous Virtual Tours of our listings on at least half a dozen websites – but the most important, money-saving piece of technology we have is our database. Every time we put a condo on the market, we get phone calls from buyers. Even if those buyers choose not to buy the condo we’re selling, we hang onto their name and number. The next time we put a unit on the market, the first thing we do is call back all those other buyers. If we can match them up, guess what…we just saved our clients almost half the expected commission.”…..”

Selling your condo & buying a new place – at the same time

“…..For most people trying to coordinate a buy/sell scenario, the hardest part is finding what they want to purchase in the time frame allotted them after they’ve found a buyer for their home. While Kerouac and Cox certainly have a lot of experience negotiating good situations for their clients, they say they do their best work before the clients are up against a deadline. They create specific marketing plans to try to find exactly the right house for their client without ever losing
leverage in either the sale or the purchase. One approach might be to advertise a client’s needs instead of their house. “Most Realtors think of marketing as a way to find buyers for a house,” says Kerouac. “We sometimes flip it around. We use marketing as a way to find a house for our buyers. If we know what a client is looking for, we go out and find it – even if it’s not even for sale yet. And in the meantime, we’re able to put their house on the market exclusively so that we can take as much time as the client needs. And then once the client is ready, we can flip a switch and get their house sold in the proper time frame.”

And of course, The Jersey Group offers commission incentives for clients who work with them on both sides of the buy/sell. Again hesitant to share too much, Kerouac will let on that they sometimes offer a discounted commission on the second transaction…..’

The perfect storm

“….In a general sense, condos are among the most salable products on the market, so anybody selling a condo right now should be successful if they do it right. And once they get a buyer, they become a buyer themselves, and it’s a good time to be a buyer right now – interest rates are still low and the sellers of the move-up houses are getting more and more motivated every day. We’ve been calling it ‘the perfect storm’ for buyers.”…..”

You can read the complete article before this issue of The Knowsy Neighbor even makes it to print by clicking here: Summer 2007 issue.pdf

Or, you can contact Joe Kerouac or me directly by calling 973-795-9215 or sending an email to savemoney@thejerseygroup.com We’d be happy to go into more details about how we work and how we can get your job done for you.