Wednesday, March 28, 2007

I Wonder if Seller & Buyers Know This About CENTURY 21

The Strength of the CENTURY 21® System
From the Desk of Marci Hodges

System Growth
* Since 1995, the CENTURY 21 System has seen:
· A total increase of approximately 159 percent Adjusted Gross Closed Commissions (AGCC) System-wide, evidence of the growth and success of the CENTURY 21 System as a whole
· An average per-office AGCC increase of 176 percent, another clear indication of our commitment to help increase the productivity and profitability of our System members

Leadership Position

* Century 21 Real Estate LLC is the world’s largest residential real estate sales organization with more than 147,000 “Agents of Change” residing in more than 8,000 offices located in 45 countries and territories worldwide.

* A recent study conducted by Millward Brown shows that CENTURY 21 remains the most recognized brand name in real estate and the real estate company that consumers think of first for both the general market and Spanish-dominant Hispanics*, **

*, the CENTURY 21 System’s Intranet site, provides brokers and sales associates with all necessary brand elements, real estate news and more

· In addition to CENTURY 21 System news and information, it also contains leading technology tools, including eGreetings, Life@Home, Virtual Presentation Library (VPL), Broker Financial Tools (BFT) and the CENTURY 21 PR Studio.

* The CENTURY 21 Learning System® (CLSTM), a Web-based, fully interactive educational platform that enables CENTURY 21 brokers and sales associates to engage in live educational sessions from the convenience of either their homes or offices

* CENTURY 21 LeadRouterSM, is a software-based system that captures leads from home buyers and sellers, and then matches the lead information with the most appropriate sales associate according to business rules established by the local broker/owner. Converting data to voice, the product instantly informs the sales associates of the lead via phone or designated communication vehicle.

* CENTURY 21 SearchrouterSM, also known as IDX (Internet Data Exchange), allows offices to feature not just their listings, but also listings in the surrounding area via their MLS. Thus, giving the online customer exactly what they are looking for along with more qualified leads for our franchisees.

* 21st Century News, the CENTURY 21 System’s bi-annual newsletter, contains information for brokers and sales associates on how to build business, and real estate tips and best practices

* Weekly Wire, the CENTURY 21 System’s award-winning weekly electronic newsletter designed to provide brokers and agents with relevant and timely information and tools in an effort to help them grow their businesses

Awards & Recognition
* Century 21 Real Estate LLC
· Hispanic Trends magazine: Top 25 Franchises for Hispanic Franchisees (2006)
· Entrepreneur magazine Top 10 Global Franchises (#1 in real estate category) (2006)
Hispanic Creative Advertising Awards: Bronze Award in the interactive media category for an online banner advertisement entitled “Signs.” (2005)

* The CENTURY 21 Learning System (CLS)
· Training magazine’s Training Top 100 (2001 through 2006)
· Corporate University Xchange Award for Excellence and Innovation in Corporate Learning (2006)
· Paragon Award (2004)
· InfoWorld 100 Award (2004)

* Weekly Wire
· CENTURY 21 System's weekly e-newsletter is honored with the IRIS communications award for writing excellence. (2005)

· APEX Award for Most Improved Intranet (2004)

· Hit wise United States Online Performance Awards for achieving a top 10 ranking in the Business and Finance - Real Estate category for (2004 – 2006)

For Sellers

12 Tips for Hiring a Remodeling Contractor

From the Desk of Chandersh Shah

1.Get at least three written estimates.

2. Get references and call to check on the work. If possible, go by and visit earlier jobs.

3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.

4. Be sure that the contract states exactly what is to be done and how change orders will be handled.

5. Make as small a downpayment as possible so you won’t lose a lot if the contractor fails to complete the job.

6. Be sure that the contractor has the necessary permits, licenses, and insurance.

7. Be sure that the contract states when the work will be completed and what recourse you have if it isn’t. Also remember that in many instances you can cancel a contract within three business days of signing it.

8. Ask if the contractor’s workers will do the entire job or whether subcontractors will do parts.

9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.

10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.

11. Guarantee that materials used meet your specifications.

12. Don’t make the final payment until you’re satisfied with the work

Tuesday, March 27, 2007

For Buyers

Choices That Will Affect Your Loan

from the Desk of AMR Ibrahiem
Mortgage term. Mortgages are generally available at 15-, 20-, or 30-year terms. The longer the term, the lower the monthly payment if the same amount is borrowed. However, you pay more interest overall if you borrow for a longer term.

Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate for as long as you hold the mortgage and is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that interest rates will rise as interest rates increase; however they usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. ARMs are a good choice when interest rates are high or when you expect your income to grow significantly in the coming years.

Balloon mortgages offer very low interest rates for a short period of time—often three to seven years. Payments usually cover only the interest, so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.

Government-backed loans, sponsored by agencies such as the Federal Housing Administration ( or the Department of Veterans Affairs (, offer special terms, including lower downpayments or reduced interest rates—to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.

For Sellers

5 Ways to Speed Up Your Sale
From the desk of Joe Piizzi

1. Price it right. Set a price at the lower end of your property’s realistic price range

2। Get your house market ready for at least two weeks before you begin showing it.

3. Be flexible about showings. It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.

4. Be ready for the offers. Decide in advance what price and terms you’ll find acceptable.

5. Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.

Monday, March 26, 2007

For Buyers

10 Questions to Ask Your Lender
From the desk of Audra Loccisano

Be sure you find a loan that fits your needs with these comprehensive questions।

1। What are the most popular mortgage loans you make? Why?

2। Which type of mortgage plan do you think would best for us? Why?

3 Are your rates, terms, fees, and closing costs negotiable?

4. Will I have to buy private mortgage insurance? If so how much will it cost and how long will it be required? NOTE: Private mortgage insurance is usually required if you make less than a 20-percent downpayment, but most lenders will let you discontinue the policy when you’ve acquired a certain amount of equity by paying down the loan.

5. Who will service the loan? Your bank or another company?

6. What escrow requirements do you have?

7. How long is your loan lock-in period (the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if they drop during this period?

8. How long will the loan approval process take?

9. How long will it take to close the loan?

10. Are there any charges or penalties for prepaying the loan?

For Sellers

10 Ways to Make Your House More Salable From the desk of Simi D'souza
1. Get rid of clutter. Throw out or file stacks of newspapers and magazines. Pack away most of your small decorative items. Store out-of-season clothing to make closets seem roomier. Clean out the garage.
2. Wash your windows and screens to let more light into the interior.
3. Keep everything extra clean. Wash fingerprints from light switch plates. Mop and wax floors. Clean the stove and refrigerator. A clean house makes a better first impression and convinces buyers that the home has been well cared for.
4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows.
5. Put higher wattage bulbs in light sockets to make rooms seem brighter, especially basements and other dark rooms. Replace any burnt-out bulbs.
6. Make minor repairs that can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house is not well maintained.
7. Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and edge the walks. Put a pot or two of bright flowers near the entryway.
8. Patch holes in your driveway and reapply sealant, if applicable.
9. Clean your gutters.
10. Polish your front doorknob and door numbers.

Sunday, March 25, 2007

For Sellers

5 Things to Do Before You Sell

1. Get estimates from a reliable repair person on items that need to be replaced soon, a roof or worn carpeting, for example. In this way, buyers will have a better sense of how much these needed repairs will affect their costs.

2. Have a termite inspection to prove to buyers that the property is not infested.

3. Get a pre-sale home inspection so you’ll be able to make repairs before buyers become concerned and cancel a contract.

4. Gather together warranties and guarantees on the furnace, appliances, and other items that will remain with the house.

5. Fill out a disclosure form provided by your sales associate. Take the time to be sure that you don’t forget problems, however minor, that might create liability for you after the sale.

If you would like to speak with a CENTURY 21 JRS Realty Sale Associate about this topic or any other questions you may have about selling your home please visit our web site at

For Buyers

10 Things to take the trauma out of your Home Purchase
1. Find a real estate agent that’s simpatico. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.

4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.

7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.

10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

For more information or help directly from a CENTURY 21 JRS Realty Agent visit our web site at

Saturday, March 24, 2007

Homebuyers Market?

How to sell in a Home Buyer's market
A real estate marketing pro shares her tips for selling in tougher conditions। By Marilyn Lewis
Has it been a while since you sold a house? Things have changed in the last six months.
Angela Stamoulos, an education manager for Coldwell Banker Residential Brokerage in Massachusetts and Rhode Island, trains agents to educate sellers about the changed market.
The trick these days, she says, is to distinguish your property from the large number of similar homes in the same price bracket. "These wallflowers are the big problem right now, from the point of view of sellers and real estate agents," she says.
Stamoulos' tips:
Don't let your property languish while new, competitive inventory is building up. Price it right initially to give buyers a sense they are getting a value for their money and to avoid numerous, incremental price reductions that reek of desperation.
If you get a lot of activity -- visits and second showings -- don't respond instantly to an offer. Tell buyers you'll allow a couple of days to give adequate time for multiple house hunters to view your home. Even in this difficult market, Stamoulos says, well-priced properties are bid up over the asking price.
Educate yourself about your local market. Ask agents for these statistics, including comparisons from last year:
Inventory. The number of homes currently on the market.
Days on the market. The length of time properties are staying on the market.
Average sale price. This is helpful information, but it can be skewed by, for example, numerous high-end properties sold. The average price in your market may still be $350,000, just as it was last year, but today $350,000 may buy a lot more house.
Median price. This is the price at which half of the homes sold for more and half sold for less.
List-to-sell ratios. This ratio, expressing the list price of homes over the selling price, will reveal drops in prices. Ratios are given for periods of time -- say, a month or a quarter -- showing the effect of price reductions on time on the market.
Find the agent who can expose your property to the most buyers:
Ask whether the company is part of a larger company or network. How many agents does the company employ to promote your property to buyers? The more the better.
Use Alexa Internet to compare agencies' Web-site traffic. Be sure to compare local -- not national -- Web sites when checking local offices of national companies.
Learn about the agency's overall marketing strategy. Do they use newspaper ads? E-mail? Their Web site? What's their marketing plan for your property?
To screen agents, interview several, asking each for their market data and their interpretation of local trends.

30 under 30

30 under 30

Energizing the Industry
By Robert Sharoff, Robert Freedman, Pamela Geurds Kabati, Stacey Moncrieff, Lucien Salvant, and Christina Hoffmann Spira

He’s a card
J. R. Sangiuliano, 24
Sales associate
Century 21 JRS Realty
Clark, N.J.

In the two-plus years that J.R. Sangiuliano has been in real estate, he’s handed out more than 4,000 business cards. “I give a card to everyone I talk to--in restaurants, shops, everywhere.”

That, together with the 15,000 flyers he distributes each month and the eight hours of cold calls he makes weekly, has paid off.
In 1999 Sangiuliano closed more than $9 million worth of sales and was among the youngest sales associates to ever receive Century 21’s Centurion Award for sales production.

Sangiuliano works 75–90 hours a week in the company his parents have owned for 11 years. He heads its electronic marketing efforts--the company has a Web site,, and posts listings on eight others--and also mentors newer salespeople.

“I wanted a job that would let me work as hard as I wanted to and that would reward me for that,” he says.


2006 Cost vs. Value

Making Home Improvements Pay What’s the return for remodeling? Remodeling magazine’s annual report compares construction costs with resale values for 25 common remodeling projects in 60 U.S. markets.Prices for most remodeling projects continue to climb, while the recoup value of improvements at resale is declining to levels last seen in 2002. These are the findings of Remodeling magazine’s 19th annual Cost vs. Value Report — the eighth prepared in cooperation with REALTOR® Magazine. None of this should come as much of a surprise to you: This year’s recoup values confirm the housing slowdown many parts of the country are experiencing. With both home-sale and remodeling activity at record levels in the last five to six years, some cooling is inevitable. Indications are that the current downturn represents a return to “normal” levels. A number of improvements designed to make the report more reliable and useful has also affected both cost and value data. For starters, Remodeling took a fresh look at the specs for the 25 projects it studies each year. (REALTOR® Magazine, in the past, has limited the number of projects it included in its coverage.) The cost-to-construct figures (which include labor, material, subcontractors, and gross profit) are higher than in previous years, but also more accurate. (Read full project descriptions at The estimates of resale value are also more accurate than ever before (see “Survey confidence is high,” below), thanks to the more than 2,000 members of the NATIONAL ASSOCIATION OF REALTORS® who completed Remodeling’s e-mail survey this past summer. In addition, the report introduces nine regional averages, following the divisions established by the U.S. Census Bureau. This breakdown provides higher confidence levels than could be achieved with the four larger U.S. regions measured in previous years. What the numbers mean when comparing cost estimates for actual projects, remember that averaging tends to have a leveling effect on “Job Cost” data. And, seemingly small differences in size, scope, or quality of finishes can dramatically affect the final project cost. Remember, too, that, even in neighborhoods in the same city, local conditions can affect both the cost and value of a remodeling project, making our numbers appear too high or too low. In an actual real estate transaction, the “cost recouped” for a given remodeling project depends on a variety of factors. These include the condition of the rest of the house, the value of similar homes nearby, and the rate at which property values are changing in the surrounding area. A home’s urban, suburban, or rural setting also affects its value, as does the availability and cost of new and existing homes in the immediate vicinity. Bring value to clients and customers by marrying information from the report with your home pricing expertise and your knowledge of qualified remodelers in your area.View the PDF version of the full report published in REALTOR® MagazineAbout the report Research team Specpan, an Indianapolis-based company, programmed and hosted the Web-based survey, collected and compiled the data, and provided pre- and post-survey consulting. More than 100,000 NATIONAL ASSOCIATION OF REALTORS® members — salespeople, brokers, and appraisers—received e-mail links to the survey. Of those, 2,188 provided value estimates. Hometech Information Systems, the Bethesda, Md.–based estimating software developer, provided cost-to-construct estimates for each of the 60 cities surveyed. Survey confidence is high The statistical accuracy or confidence level of the national averages is 95 percent (+/– 2 percent), which means that 95 percent of the time, national results for this survey will fall within 2 percent to either side of the results published here.No cause for alarm. Should you be concerned about lower recoup values in this year’s Cost vs. Value Report?The unusually strong housing market over the past few years has boosted both remodeling and new-construction activity. For many home owners, the appreciation in house prices significantly added to their net worth. Similarly, home improvement projects often paid for themselves through a comparable increase in the home’s value. But every good thing must come to an end. Eventually, things return to normal. Luckily, today’s “normal” is great news for home owners and real estate practitioners: When you consider its value at resale, a home improvement project costs only 20 cents to 25 cents on the dollar. The other 75 cents to 80 cents spent on a project goes directly back into the home through increased value — not to mention increased owner enjoyment. — By Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University.Replacement projects lead returns Of the top 10 projects nationally measured by cost recouped at resale, seven — including the top three — are replacement projects. An upscale fiber cement siding replacement returned 88 percent of the investment. Mid-range vinyl siding replacement was second at 87.2 percent, and mid-range wood window replacement edged out minor kitchen remodeling for third at 85.2 percent. Only roofing replacement finished outside the top 10 projects, at 73.9 percent for a mid-range job, and 72.9 percent for an upscale one.Energy efficiency in the face of high fuel prices could be a logical reason why replacement projects are high-value performers. But Charlie Gindele, president of Dial One Window Replacement Specialists, in Santa Ana, Calif., calls that a rationalization. “The thing that motivates people, by and large, is the aesthetics,” he says.Amy Mills Siler, a salesperson at Joan Ryder and Associates Real Estate Inc., in Bel Air, Md., agrees that most home buyers are looking for a house with curb appeal. “If they drive up to a house with dingy aluminum siding and old windows, the buyers automatically get a bad taste in their mouth,” she says. “The old saying ‘Don’t judge a book by its cover’ falls on deaf ears with most clients.”Gindele, who works in Orange County, Calif., where median housing prices in the second quarter of 2006 topped $726,000, says the return on investment is just an added bonus to home owners, who undertake remodeling projects for a variety of benefits. Among other things, “they do it because they want the ease of operation, the beauty, the sound-deadening component,” he says. “But it’s nice to recover your expense.”View the PDF version of the full report published in REALTOR® Magazine

Friday, March 23, 2007

Welcome to CENTURY 21 JRS Realty

I would like to welcome everyone to our company BLOG.
This is the blog for CENTURY 21 JRS Realty. We are located in Clark and Rahway NJ. We would like to invite you to ask our agents Real Estate related questions. We are here to serve the Real Estate public in any way possible. Feel free to use our services to help you understand the home selling and buying process better. Also, feel free to visit our web site to preview 1000's of homes listed for sale in New Jersey.

Getting a home loan just got harder

Getting a home loan just got harder
As some lenders collapse under the weight of bad mortgages, others are getting pickier. Now you have to have a real down payment -- and actually be able to afford the house
By Marilyn Lewis
With the news full of stories about the collapse of lenders that sell mortgages to people with less-than-perfect credit, the survivors are clamping down, leaving first-time home buyers to wonder, "Will I still be able to buy a house?" People with loans nearing the end of low-interest introductory periods are asking themselves, "Can I qualify for a refinance I can afford?"
The short answer, of course, is that it depends.
"The prime people will still be able to get loans. You'll just have to have a down payment, documentation and a higher credit rating, (although) I think there will be even some tightening in the prime," says Christopher Cagan, director of research and analytics for First American Real Estate Solutions in Santa Ana, Calif.
"It's the marginal people going for the sub-prime, low-doc loans who'll feel the change," he says. "They're going to be asked, 'Where's your documentation? Let me check that appraisal. What's your income?' "
In a nutshell, here's what the changes are likely to mean to you:
With a FICO score roughly above 620 and a stable income, you're likely to be a "prime" customer, although factors like other debt you're carrying and how much you want to borrow also enter the equation. Experts differ on whether they expect lenders to get fussier in evaluating customers for prime loans. Most say that with a strong record of paying bills on time, a documented, steady income and a loan request no bigger than 80% of the value of a property, you should be able to borrow easily and at a low rate. In fact, if you are in the prime category, now is a great time to refinance, since 30-year fixed rates are dropping to 6%, says Mike Fratantoni, senior economist with the Mortgage Bankers Association.
If your FICO score is below 620, you may still get a loan, but it's likely to be an expensive sub-prime product.
The new environment Until early 2006, the overheated lending market was pumping out money. Brokers competed to sell mortgages, and, in many cities, incentives to sell stoked home prices into double-digit yearly appreciation. Loans covering 100% of a home's purchase price were not uncommon, with no down payment required. Borrowers, even with badly damaged credit, were breezing into lenders' offices and emerging with loans that sometimes even locked them into paying more than they earned.
Now, "it's back to the old-fashioned rules," Cagan says. With less money available, and with fewer buyers and a glut of houses for sale, lenders are requiring detailed application forms and documents detailing finances and income.

Cagan is predicting that 13% of the 8.37 million adjustable-rate mortgages sold from 2004 to 2006 will fall into foreclosure in the next six or seven years, and that certainly will be disastrous for the 1.1 million families involved. But he's adamant that "this will not break the economy."
Still, talks with regulators and mortgage finance experts reveal some major implications for homeowners in the changing lending climate.
The three primary changes are:
A sharp reduction in "no-doc" loans.
A big reduction in 100% financing.
The return to strict, traditional standards in qualifying borrowers.
Most change will be concentrated in the riskier sub-prime market. That affects borrowers who can't document a steady income or an income substantial enough to make payments on the loan they want. People whose bankruptcy was discharged fewer than four -- or even as long as seven -- years ago may have to wait awhile to borrow, experts say.

While interest rates are expected to rise, they'll rise higher on sub-prime loans. For some borrowers, the question won't be "Can I get a loan?" but "Can I get a big enough loan to buy the house I want?"
"Those higher rates are going to be fed through to borrowers immediately," says Fratantoni, the Mortgage Bankers Association economist. "Some portion of the sub-prime market will no longer be able to qualify for loans."
Sub-prime products won't completely disappear, says Dustin Hobbs, spokesman for the California Mortgage Bankers Association, but the range and availability are likely to shrink.
No-doc loans No-documentation or low-documentation loans will be considerably harder to find. "We are going to crack down on the use of these low-documentation products," says Sharon McHale, spokeswoman for Freddie Mac, the congressionally chartered nonprofit corporation that works to create housing affordability.
With no-doc and low-doc loans, lenders waived income documentation requirements, taking a borrowers' word for their income or not asking at all. Such "stated-income" loans are sometimes called "liars' loans," and no doubt plenty of borrowers did overstate their incomes. But stated-income loans are a godsend for self-employed people who have a good, if erratic, income or take a lot of tax deductions, creating a low net number on their income tax returns, the document lenders use to verify income.
"Lenders are going to be doing more to verify incomes as standards tighten," says Hobbs, of the California Mortgage Bankers Association.
100% loans Look for the return of the traditional down payment as it grows harder to find a 100% loan, particularly a sub-prime one. No-down loans "will still be an option for those with good credit but more difficult with imperfect credit," predicts Hobbs.
Nervous lenders are becoming acutely interested in ensuring that borrowers don't over commit. "You still are going to be able to buy (a home)," says Cagan, "but you will be expected to put something down."
Here's how the 100% financing has worked: Lenders sell borrowers two loans -- one, a mortgage for the bulk of the house cost, and another to cover the down payment. The big loan is a first lien on the house, the second takes a subordinate position in case of default, so it goes for a higher interest rate. The loan package is split into two because most lenders require borrowers to buy private mortgage insurance (PMI) -- to cover the payment in case you cannot -- on mortgage loans greater than 80% of the value of the house they're buying.
PMI may be a good idea, but it's expensive. If you borrow the full value of a $300,000 home at 7%, your monthly payment would be $1,995.91 in principal and interest, plus $260 monthly for mortgage insurance. But put in $60,000 cash from savings and your monthly payment drops to $1,596, with zero insurance. (Use this PMI calculator at the site of lender good to run your own numbers.)
Now, not only are lenders (slowly) concluding it was risky to have borrowers overloaded with debt, they are also seeing, in the recent tide of foreclosures, evidence that when homeowners have no own money tied up in a house, it's emotionally and financially easy for them to walk away. They "were homeowners, but they really weren't homeowners," says consumer attorney Ira Rheingold, executive director of the National Association of Consumer Advocates.
A return to tradition A down payment is a good idea for other reasons, too. By increasing the proportion you pay of the purchase price, you lower your loan-to-value ratio, one of the important metrics that lenders use to figure your interest rate.
Another important metric is your debt-to-income ratio. The less you borrow, the better your ratio. This calculator from the nonprofit Credit Counseling Foundation will give you an idea of where you stand and show you how different loan amounts affect your ratio.
A cash down payment "helps throughout the whole (loan) deal," says Hobbs. "The more commitment you show, the better terms you are going to get."
Mark Hicks, a San Jose, Calif., real estate agent and mortgage broker, says he is finding 100% financing, particularly in the sub-prime market, is hard to get. "A lot of first-time buyers, that's how they got their homes," Hicks says. "Usually, it was important (because) a lot of them couldn't qualify. They had good credit scores but couldn't qualify on the income."
Taxes and insurance The return to traditional loan requirements includes ending the practice of removing taxes and insurance from the payment for which a borrower qualifies, says McHale at Freddie Mac. In recent years, some lenders qualified borrowers based just on their ability to cover the monthly mortgage payment. Now, be prepared to demonstrate that you can make not just the monthly mortgage but the entire ball of wax, including taxes and insurance.
For example, to qualify for a 30-year loan of $120,000 at 5.875%, your income must support an $896 monthly payment, including taxes and insurance. But if the taxes and insurance are removed from the formula, you could squeak into the same loan with a smaller income, since the payment would appear to be only $709, although you'd still have to pay the $187 in taxes and insurance each month.
Qualifying standards are tightening If Freddie Mac can help it, purchasers of adjustable-rate loans with cheap introductory periods will have to qualify on the basis of the higher, "fully amortized" interest rate, not the cheap introductory rate.
"We will not buy loans that are underwritten to the teaser rate," says Freddie Mac's McHale. "They have to be fully amortized rate."
That means if you got a loan with an introductory period at 5% that adjusts to 12% after two years, you'll be evaluated on your ability to pay off the loan at the 12% rate, not 5%, as before. For example, if you're borrowing $200,000, you'll have to qualify on the basis of the 12% rate, for a monthly payment of $2,057 (plus taxes and insurance), rather than the 5% rate, with a $1,073 monthly payment -- a difference of $984 a month. (Use the MSN Money mortgage calculator to punch in your own numbers.)
Sub-prime borrowers should prepare to pay at least 1 percentage point more than prime and probably considerably more, says Hobbs of the California Mortgage Brokers.
What to do The key to a new mortgage is to make conservative decisions. Here are five steps you can take to protect yourself as the housing market changes.
If you can't make your mortgage payments, call your lender, says Rheingold, of the National Association of Consumer Advocates. It is not in a bank's best interest to foreclose on your home, so there's an incentive to try to help you by reducing your payment and restructuring your loan.
If you're shopping for a loan, get the safest, most economical product, the 30-year, fixed-rate mortgage, Rheingold advises. Newer 40- and 50-year loans cost too much, and ARMs are risky, and growing riskier, with mortgage rates rising for many borrowers.
Don't buy any loan that you do not thoroughly understand. "If you were buying a used car and you saw some things that were a little bit the matter with it and you didn't understand, would you buy it anyway?" asks Rheingold.
Wait to buy and save for a down payment. House prices could easily go down in many markets, so put off your purchase if you can. Sock your money away so you can get score better terms from the lender when you do buy.
If you do buy, scale back your expectations and buy a less-expensive house. Even if a lender lets you, don't break your personal bank trying to get into a house you really can't afford.
Published March 20, 2007

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10 Reason Top Producers get the Listings

10 reasons top producers get the listing

Ever wonder why that other practitioner gets more listings than you? Steve Stewart, a writer and speaker on real estate sales and marketing and the principal of Steve Stewart Seminars ( in Claremont, Calif., explains why top producers are so successful.
1. They treat real estate like a real job. “They’re always in control of their job,” says Stewart. “And they’re confident enough to say no to clients they think are too demanding or unreasonable.”
2. They’re masterful presenters. “They have a planned listing presentation they could give in a howling windstorm without being distracted,” he says. “They know what they’re going to say and where in the presentation the decision points for sellers are. It’s all because they practice, practice, practice.”
3. They’re terrific at getting others to make decisions. “They never pressure sellers during the listing presentation,” Stewart says, “but every time there’s a decision to be made, they say, ‘Do you want to do this or not?’ They get people in the habit of making decisions.”
4. They’re big thinkers. Top producers think beyond the task in front of them. For instance, one top producer Stewart worked with decided he’d be more likely to get listings if he scheduled more than one presentation for each evening. “The fact that he had several presentations a night made it more likely that he’d get every listing agreement signed, because he was in great demand,” says Stewart.
5. They’re excellent at delegating to their team members. “Top producers make artful use of their assistant teams,” Stewart says, “which helps in marketing, too, because salespeople with teams can market themselves as being able to handle the sale from top to bottom.”
6. They get sellers to understand why pricing is so important. For instance, they keep emphasizing that sellers can price the home to own it or to sell it, Stewart says. They might say, “If you price this home too high, you’ll keep owning this house. Here’s the price that’ll get results.”
7. They look like sellers but slightly better. “People like and trust people who are like them,” says Stewart. “You want sellers to identify with you, but you should dress one notch above them. However, never go in way overdressed.”
8. Their confidence markets them. “You’re your own walking visual aid,” Stewart says. During listing presentations, sellers scrutinize not only what you say but also how you carry yourself. Do you know what you’re talking about? Can sellers trust you to sell their home? Do you appear confident about what you’re doing? Can you think on your feet?
9. They have professional marketing materials. “Thousands of salespeople don’t go to the appointment with presentation materials,” says Stewart. “They think they can wing a listing presentation.” Have visuals that sellers can easily see, whether in a printed presentation book or on a laptop screen.
10. They invest in themselves. The best salespeople spend the money they need to be successful. “If they need new computer equipment, they upgrade,” Stewart says. “If they need more advertising, they get it. They go to conventions and seminars all the time. They’re always looking for new ideas.”