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Suzanne Macdowell's Blog

By Suzanne MacDowell | Agent in 07856
  • You can have it all with an FHA 203K renovation loan!

    Posted Under: Home Buying in New Jersey, Financing in New Jersey, Remodel & Renovate in New Jersey  |  October 25, 2013 12:37 PM  |  426 views  |  No comments
    My client wanted it all!  3 Bedrooms, 2 full updated baths, new kitchen with granite counter tops, hardwood floors and a fireplace on a large, private lot with a commute of 30 minutes, more or less.  And she only wanted to spend about $200,000.  Those of you who are familiar with the Northern New Jersey market are probably saying, 'Yeah, right!" and so was I. 

    We looked at several options but either the price was too high, or the commute too long.  She didn't want to deal with a short sale and she wanted the house to be in 'move in' condition.  We looked and we looked and we looked.  We even made several offers, but to no avail.

    Finally, I said to my client, "Look, either you are going to have to compromise on your wish list, or lengthen your commute, or purchase a short sale, preferably one that needs work."  We had discussed the FHA 203K renovation loan a few times but it was a tough sell.  Then, we found it, the house of her dreams!

    It was a short sale.  And the boiler was not operational.  The home could only be purchased with cash or, maybe, a conventional loan.  UNLESS, of course, we used an FHA 203K renovation loan.  I advised my buyer to make a low offer, based on the worst case scenario, until we could do a home inspection and find out exactly what we were dealing with.  And, it was a good thing we did, because it turned out the house needed not just a new boiler, but a new septic, radon remediation and numerous other repairs, big and small. 

    We then got an estimate from a contractor who was familiar with the loan product and its requirements.  With estimate and inspection in hand we were able to negotiate a good deal with the short selling bank, they would accept $171,000 for the home.  My client would use the FHA loan to do about $40,000 of repairs.  At the end of the day, she would have the home she wanted, in absolutely move-in condition, with a new boiler and a new septic system.   And, as a reward for her patience and extra work, she will have between $30,000 and $40,000 in equity in her home. 

    If you have a home to sell that needs some TLC or even a complete renovation, or if you are a buyer who is willing to go to just a little extra time and trouble to get absolutely everything you want in your new home, call me.  With a little creativity and my FHA 203K renovation loan team, we can make it happen for you, too!
  • FHA/HUD Short Sale Guidance

    Posted Under: Home Buying in Morris County, Home Selling in Morris County, Agent2Agent in Morris County  |  June 11, 2013 6:25 PM  |  405 views  |  1 comment
    If you're going to be a short sale agent these days, you need to be smarter and better educated than the bank you are dealing with.  A perfect example is a situation I was faced with today.  The buyer of my short sale listing was requesting a 1% Seller Concession to defray closing costs.  The Bank negotiator, not knowing the difference between a Seller Concession and a Seller Incentive, told me that was not allowed under the guidelines. I knew he had to be wrong, so this evening I did an exhaustive internet seach and found a document issued by HUD that gave the rules for these types of short sales.  And, you guessed it, I was right and the bank was wrong.

    If you or someone you know is considering short selling their home, make sure you hire an agent who has the tenacity, credentials, education and good old fashioned stick-to-itiveness to get the job done. 

  • Buyers agents, are you leaving money on the table?

    Posted Under: Market Conditions in Morris County, Home Buying in Morris County, Rentals in Morris County  |  December 18, 2012 8:42 AM  |  1,313 views  |  No comments
    This past week I have run into two situations where buyers' agents have, foolishly in my opinion, not only left money on the table, but failed their buyer clients miserably.  In both instances the buyers are ready to close on their new home within a matter of weeks and in both instances the buyers have decided to rent their current home rather than sell.  AND in both instances, their buyers' agents did nothing to assist them in renting their homes.

    Where I live, in Northern New Jersey, rentals can provide a good deal of business and help realtors build their client list.  A lot of homeowners are renting their current homes in order to move up to larger quarters because they are 'upside down' on their mortgage.  They are willing to lose a couple hundred dollars each month while they wait for the market to improve rather stay where they are or risk damage to their credit rating.  These homeowners will be sellers within a few years and their tenants will be buyers.  So, an opportunity exists to make a little money now and a lot of money later by simply doing a couple of rental listings each month.  I prospect for rentals on a regular basis.

    TWICE last week I called owners who were renting their homes only to learn that their buyers' agents were not assisting them with renting their current homes.  In fact, ONE agent went so far as to tell the homeowner to take pictures and room measurements and email them to him.  UNBELIEVABLE!  The homeowner was so unhappy with this agent that they expressed a desire to list their rental with ME instead, as long as there was no conflict of interest.  The other homeowner hadn't even thought about listing their rental with a realtor. 

    Buyers agents, if you don't know whether or not your clients have homes that need to be sold or rented in order for them to purchase the home for which you are representing them as a buyer, you are doing your client a grave disservice.  AND you are leaving money on the table.  But, hey, you know what, if you don't want the business, I do!  So, keep up the (not so) good work and I'll get your back!
  • Bait and Switch in the Mortgage Industry? Borrower Beware!

    Posted Under: Home Buying in Morris County, Financing in Morris County, Agent2Agent in Morris County  |  July 19, 2012 10:38 AM  |  661 views  |  5 comments

    Recently, some of my clients have been experiencing difficulties with the big banks that I call ‘bait and switch’.  It has happened to me now twice.  The scenario goes like this, the borrower is an excellent candidate, good job, excellent credit, no issues with debt to income, nothing.  They are pre-approved for the mortgage and submit all the required paperwork.  In two of the instances I myself experienced, the borrowers were business owners, however and I am not sure if that is the unifying factor or not at this point.

    We get to within 48 hours of our closing date and, low and behold the underwriters find some sort of problem.  The bank agrees to close, but only if the borrower agrees to pay more, a higher interest rate, more points, something that increases the banks' profits and the borrowers' costs.

    In one instance the bank said the comps used by the appraiser they chose did not support the appraised value.  They had the appraisal for weeks but only mentioned the problem less than 48 hours before we were supposed to close.  We bombarded the bank with comps that DID support the appraised value, made mention of ‘bait and switch’ tactics and were able to close but the closing was delayed by one business day.  Unfortunately for my clients, the business day in question came on the Tuesday AFTER Memorial Day week-end so they lost a three day stretch of time during which they could have been moving into their new home and were, for all intents and purposes, homeless for the holiday since they had closed on THIER house the Thursday before.  My clients were not happy to say the least. 

    In the second instance my client was a wealthy business owner and real estate investor.  He owns several rental properties in addition to his current residence. He is also in the process of getting a divorce. which is the reason for his purchase and move. At the eleventh hour the bank said they do not believe for one instant that the property in question will be ‘owner occupied’.   The bank in question did agree to issue the mortgage commitment but at a higher interest rate. 

    As a realtor, my fiduciary duty is to my clients, not to the banks.  I am appalled at these tactics.  I know that interest rates are very low but that is no excuse.  I for one am taking names and the guilty parties will not get MY business if I have anything to say about it.  It's just not right!

  • WOW! It's official, Interest rates are the lowest they have ever been!

    Posted Under: Market Conditions in Morris County, Home Buying in Morris County, Financing in Morris County  |  May 23, 2012 4:21 AM  |  422 views  |  No comments

    Come to my Home Buyer's Seminar tonight at 6:30 pm at the Keller Williams Offices on Madison Avenue in Morristown NJ to find out how you can take advantage of this unprecedented opportunity!  The first 10 people to RSVP will receive a free copy of Gary Keller's book, 'Your First Home'.  RSVP NOW and reserve your free copy!
  • Home Buyer's Seminar Wednesday May 23 2012 7:30 pm - Morristown NJ

    Posted Under: Home Buying in Morris County, Financing in Morris County, Credit Score in Morris County  |  May 22, 2012 6:39 AM  |  458 views  |  No comments
    Did you know that if you work in Morristown New Jersey you might qualify for $5000 to help you buy a home in Morristown as well?  

    Did you know that with the New Jersey Smart Start Program you could receive $3000 in down payment assistance?

    Did you know there are special mortgage programs for civil servants such as nurses, EMTs, teachers, police officers, fire fighters and municipal employees?

    Do you know your credit score?  Do you know how that figures into your ability to purchase a home?  Do you know what other criteria the bank will use to determine whether you qualify for a mortgage?

    Do you know the process for buying a home?  How a home inspection works and what to look for when issues come up during a home inspection?

    Do you know the role of an attorney in closing a real estate transaction? 

    All these quesetions and more will be answered Wednesday evening at 7:30 pm at the offices of Keller Williams Metropolitan Realty 55 Madison Avenue, Morristown NJ 07960.  Please Join Us!  The first 10 people to RSVP will receive a free copy of Gary Keller's book "Your First Home".  RSVP to smacdowell@kw.com.  See you there!
  • Aluminum Wiring -- Bad News for Sellers. A Warning for Buyers.

    Posted Under: Home Buying in Morris County, Home Selling in Morris County, Home Insurance in Morris County  |  March 26, 2012 11:12 AM  |  935 views  |  No comments

    New Jersey insurers are refusing to issue new policies for homes with aluminum electrical wiring.  The only source for insurance is the NJ Fair high risk program and even then the wiring must be updated within 90 days of closing or the policy will be cancelled.  This has huge implications for both buyers and sellers of homes that still have aluminum wiring.


    The only upgrade that is acceptable is to remove 100% of the aluminum wiring from the home and replace it with copper wiring.  Not only that but I was advised by an electrician that the entire home must be brought up to the current code, which means all the switches, receptacles, lighting fixtures and junction boxes will likely need to be replaced with the latest ‘green’ technology, child proof receptacles and so on.   

    The electrical work will likely require damage to the drywall which will then also have to be repaired.  The upgrade to a 2000 square foot home is likely to run at least $20,000 if the home is entirely wired with aluminum.  


    My suggestion to buyers is, make sure the work is done prior to closing if at all possible.  Otherwise buyers could consider reducing their offer and then using an FHA 203K loan to roll the cost of the upgrade into the mortgage and getting it done within 90 days of the closing.


    My suggestion to owners is to start now to upgrade the wiring.  I understand it can be done room by room in order to make the cost and the prospect of living in a construction zone more palatable. 

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