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The letters NOI stand for Notice of Interest or sometimes incorrectly called a Memorandum of Contract or MOC. It is usually a one page document that stipulates that the person submitting the document for recording at the County Clerk’s Office has an equitable interest in a property because of a signed purchase and sale contract.

The NOI is most commonly used when an investor signs a purchase and sale contract with a homeowner/seller and wants to show anyone trying to make another offer on the property that he has a legal interest in the property. This is the case where someone else, usually another investor, comes along and offers the homeowner a higher price.

The practice by investors of up-bidding properties after they are under contract is getting more common in distressed markets but even happens in normal markets. The investors who regularly make statements to homeowners like, “Get your highest offer from those other guys and call me back, I’ll give you more money than any of them – I just need to see it in writing”. The ugly part of that statement is the term “in writing” because that usually means a contract had to be signed by the homeowner.

While I can’t blame the homeowner from wanting more money, what I have seen happen most often is a black-hat investor who is trying to steal the deal, actually gets to the closing table and re-negotiates the price to below what he had originally offered the trusting seller. How do I know? I have been on the other side of his offers and had to fight to keep my sellers.

So occasionally we have to fight for our closings and I have covered this in other articles about how to do this. The ironic part is that it is a criminal offense to “induce” someone to sign a contract when another contract is in place. The Attorney General’s Office will take these cases if you show proof and the seller cooperates – which is usually the case when the homeowner is threatened with a law suit or foreclosure.

So when we sign a contract with a seller, we almost always record a NOI in the public record which is effectively a lien against the property. I want to repeat this because the subtleties of this “lien” are very far reaching. This NOI now has to be released as a lien on the property before the title can be transferred unless there is a foreclosure action to extinguish it, or the lien holder (the original investor/buyer) starts a foreclosure action to take the property. If this sounds harsh, it is just a solution to a problem where one party to a contract won’t hold up his end of the contractual terms – just like a lender does to a homeowner.

The NOI does not need to be signed by the homeowner/seller so anyone can put a NOI on anyone’s property. Just remember, there is usually a sign in the Clerk’s Office that says something to the effect that “If you enter a lien that is not valid, it is a felony”, so think twice about what you are doing before you do it – don’t do it in anger or it could cost you a lot in attorney’s fees.

Having said that, the courts and sometimes the recording clerk treat NOI’s as unruly in-laws. They tolerate them probably for the fees, but they don’t like them much because of historical issues with the seller not knowing these liens have been filed. Many standard real estate contracts specifically forbid filing a notice of interest to be recorded in the public record. This prohibition can be overcome by striking this clause pertaining to it and having both seller and buyer initial it, or adding an over-riding clause or addendum to your contract.

Once a NOI is filed in the public record, the next time the title to the property is transferred, the title agent will have to have a Release of Lien for the NOI signed to write a title policy on the property or note it as an “exception” in the policy. If the NOI is not extinguished by a Release of Lien, the title has been “clouded” and needs to be cleared and a transfer to a new buyer may not properly take place.
This is where you come in to release the lien and it usually happens when you least expect it – just before you were planning on closing yourself! Sometimes the homeowner will call when he gets a copy of the recorded NOI from the Clerk’s Office and he didn’t expect it – either way, the seller is trying to renege on the transaction. Sometimes the seller changed his mind for a valid reason, most often it is not.

You have a couple of choices when the NOI “hits the fan” so to say:

1.) Release the NOI using a Release of Lien document and get paid to release the lien

2.) Honker down and fight the seller to come to closing or get paid to release the lien.

In summary, your choice is personal and determined by the potential lost profit in the deal, the homeowner’s/seller’s real motive for not wanting to sell, how much you can get paid for a release of lien, and your disposition on that day. In the final analysis, the choice is yours to force the seller to come to closing or release the lien.

The sunniest time of the year when sun is shining brightly is surely a great time for exploring new neighborhoods and visualizing future patio parties during viewings. If you are planning to buy home this summer then it is important to understand the housing market prior starting any serious shopping. You must have to know what housing market is like for buyers now and what you can do to end up the best home with best price that fits right in your budget.
Owning a home is an investment in your future and with that in mind you wants to make sure that you are making educated decisions so that you could get the best possible deal. Housing market in 2018 should be just as strong this summer as it’s been all spring. List prices and existing home sales have risen this year but there are perks to house hunting right now, too. We present you some of the facts and tips to help you get the most out of this year’s summer housing market.
SUMMER MARKET FACTS
DURING THE SUMMER PRICES DROP: Although summer is busy home-buying season but still it is not crazy as prices drop from May through October. Anyhow if you hang out until late August then you could find a really great deal-that is when nearly 14 % of listings get a price cut.
Private Mortgage Insurance Is GETTING MORE Reliable: PMI or Private Mortgage Insurance getting cheaper after PMI lenders MGIC and Radian lowered their rates this spring; it is great financing news for homebuyers. That’s going to cause most of these PMI companies to be competitive with each other which in result going to bring them all down. Less than 20 % of down payment makes the home buyers to get PMI. It means it will be cheaper for some buyers to get into homes sooner.

HOMEBUYING TIPS FOR SUMMER 2018

DON’T DISCOUNT OLDER LISTINGS: At the times when homes are flying off the market within days due to strong competition, it is easy to think a listing that’s a week or so old is a red flag. But keep in mind that it is not always the case. It is often because buyer got cold feet and pulled out of a deal on a perfectly good house. But thanks to the assumptions home buyers make about older listings in busy markets, the delay can cause the price to come down.
There are just more of these in market. The number of homes in market is shrinking but still there are 8.3 % more fixer-upper among them than there were six years ago. If you are dead-set against a fixer-upper to be prepared to move quickly then there is only ever going to be a couple of options at a time. And when new listings come up it’s going to be pretty ferocious.
GET TO KNOW THE NEIGHBORHOOD: The plus point of competitive market it gives you temptation to make an offer on any available property that fits your criteria but if it’s in the wrong neighborhood, you may never want to purchase the house. It is better to take some time and do community scouting before making an offer. You can even find out what your future neighbors have to say about the area by communicating with them.
MAKE THE STRONGEST OFFER: To stay in the market make the strongest offer, even your offer is not the highest because now is not the time for low ball-offer. No doubt, coming up with cash offer could be tough for many home buyers but there are some ways to make a strong offer that don’t require gobs of money. Substantial eventualities like a shorter closing or inspection period and writing a great offer letter can help make your offer stand out.

I recently read a really interesting blog article from an appraiser in Philadelphia titled “Zillow vs. The Coyle Group”. In the article, Michael Coyle analyzes over 20 of their most recent appraisals and compares them to what Zillow says they are worth via it’s Zestimate. With sites like these appearing to be gaining popularity with consumers over the last few years, I thought I would do my own analysis.

The results may surprise you, they did me. Of the 20 properties analyzed, many of which were recent sales, Zillow differed from the appraised value by more than 5% on 16 of them and the average difference was 20.16%! And the four that were within 5% were recent sales in the last 6 months. That means on an average $300,000 home Zillow’s value estimate is off by an average of $60,000. Another interesting statistic is that it was high/overvalued 10 properties and low/undervalued 10 properties. To further substantiate my results I compared them to The Coyle Group’s and noted that they found an average difference of 18.95%.

When digging deeper into the individual properties, I was unable to determine what exact factor lead to some of the biggest discrepancies. For example, the Glencoe Colonial property is currently an 1100 sq. ft. split level that is going to be torn down and a new 3200 sq. ft. home built. It is listed for $1,199,000 (the exact Zestimate value) and is under contract for around $1,050,000. This would lead me to believe that Zillow is giving the MLS list price the most weight and ignoring the actual property characteristics. However, the Zestimate was off by 41% on the Portage Park bungalow which was listed for $460,000 and sold for the same price. In this case, why would the Zestimate be $273,265? It must have ignored the list and sale price when it appeared to rely exclusively on list price on the Glencoe proposed construction. Yes, I’m scratching my head as well.

While I am not here to breakdown Zillow’s method or algorithm used for determining values, I do want to caution the prospective homebuyer/seller about relying on Zillow’s values and advise that you hire a certified appraiser to ensure that all factors have been included in the opinion of market value. This will prevent you from listing your home too high which could lead to your house being on the market way longer than is necessary. It will also prevent you from listing your home too low and potentially leaving money on the table.

You can read Zillow vs. The Coyle Group here.

A good mortgage sales letter that produces leads from a cold list or generates new business from your old client list is worth 1000 times it’s weight in gold.

Lets say you have a list of 50 clients and 50 leads that you haven’t converted. If you send one letter at a cost of just .42, and $100 for printing. That’s just $142 in total costs for a basic mortgage sales letter.

One new loan can generate several thousand dollars in commission. If you get just one new loan from a mortgage sales letter, you are going to be profitable (assuming you aren’t mailing to an enormous list).

As a result, it’s important to create an effective mortgage sales letter to maximize your lead generation efforts.

The key is to write an effective mortgage sales letter that people read and respond to. Most mortgage brokers don’t know the power of effective writing and rely upon hype and trickery in their letters.

The good news is you don’t need to hype up your letter, and you don’t need to rely on tricks like the old ‘fake looking check in the window’ letter (by the way, this does work, but only if you do it without fooling the recipient).

If you want leads and referrals here are the three most important parts of a successful mortgage sales letter that will help you boost response rates and build your book of business:

1. A Compelling Headline. Almost every mortgage sales letter must have a headline. Why? I’ll let the late great David Ogilvy explain it to you:

“On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.” -David Ogilvy

The job of a headline is to get people interested and excited about what you have to say. For example, a poor headline might say, “Introducing Your Local Home Loan Specialist!”

A better headline would be, “Susan Johnson Saved $498.95 Per Month On Her Mortgage Payment — Here’ How You Can Save This Much or More!”

That headline needs a little work, but it’s light years ahead of the average mortgage brokers marketing letter.

2. Stories Sell. Nothing gets people more involved and motivated to take action than a good story. Instead of cramming a pitch about your products and services down your prospects throat (which puts them into the defensive mindset), tell them a story about a client who saved money instantly. And as a result of saving this money she could pay for child care or get a mini van, or go on a vacation that she has been putting off for a few years.

They key is to write a story that fits into the mindset of your audience. If you are targeting subprime mortgages, tell a story about how a down and out client with no hope. How he brought his family out of a rental in a bad part of town to owning a nice home in a wonderful school district.

3. Call To Action. The next important area of an effective mortgage sales letter is the call to action. You want your prospect to take action and call you or fill out a return reply card.

For example, a weak call to action would be, “Call me at 555-555-5555 between the hours of 8am and 4pm Monday through Friday.”

A stronger call to action would be, “For a free no obligation consultation to see how much you can save on your mortgage payment call me now: 555-555-5555. We can schedule a time to meet and discus your financial situation, or do it on the phone. You can reach me at 555-555-5555 anytime during normal business hours. Or, you can call my toll-free 24-hour voicemail at 1-800-555-5555 and leave your contact information and I’ll send you more information.”

In addition to a headline, a story, and a strong call to action, your mortgage sales letter should include a Post Script (PS), and testimonials. Studies show that up to 80% of your readers will read the PS first. This is where you restate your benefit in a conversational way. Testimonials are very effective in establish credibility, and they reinforce your claims.

If you follow these simple guidelines to a more effective mortgage sales letter, you will generate more qualified leads and referrals.

Sit down and write a mortgage sales letter tonight instead of watching Fringe or Dancing With The Stars. Send it to your current clients, and old leads. You have nothing to lose and everything to gain.

The commission paid to the Real Estate agent is a serious amount of money and a concern in any transaction involving the sell of Real Estate. Where did this six percent commission come from?

The idea of a 6% Real Estate commission being paid to the agent originated during the 1940’s when local Real Estate Boards openly engaged in price fixing to establish a standard rate. This process was an out and out case of an unfair practice, but the 1940’s was a time when the attention of the country was directed to some serious external matters and the idea took hold and spread quickly through the industry.

In the early 1950’s, the Supreme Court ruled that an established 6% commission was illegal. Rather than open up commissions to a more competitive and free market system, the Real Estate Boards merely shifted gears with a bit of fancy linguistic footwork and began to call the 6% commission the “suggested” amount. During the 1950’s and 1960’s, they managed to get away with this practice without much trouble as the majority of real estate agents complied with the suggestion.

In the 1970’s lawsuits brought against the Real Estate Boards effectively put the skids on this practice. The Real Estate agent’s commissions were opened up to competition without the Boards either being able to mandate or even suggest 6% as the carved into stone rate. However, the rate did not alter very much in the years following these court cases. Although the rate may not have been carved into stone, it was pretty much established in the Real Estate market as a standard.

Generally, competitive markets benefit consumers. As long as someone is willing to offer a discounted rate, it would seem that the consumer stood to save money. However, the proponents of a standard 6% rate commission point to such things as health care to argue that the standard rate may actually be helping the consumer by holding the commission down to 6% rather than propping it up to that level. Although the cost of health care is not regulated, the general trend has been straight up off the charts.

Real Estate agents would be quick to point out that if you were to take a close look at just about any service or product being offered or sold in the 1940’s, you would find a very serious increase in cost to the consumer. Except for Real Estate commissions which are still right around 6%. The amount being paid to the agents has increased greatly merely because the value of the property being sold has increased. Today, the internet has been responsible for a few chips in the rock of the 6% commission by offering some straight fee or reduced rate services that allow the sellers to list their own properties. The results are still mixed and the 6% commission is still the standard.