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Monthly Archives: November 2013

What are HOAs and CCRs?


The acronyms “HOA” and “CCRs,” although they are used daily by real estate agents, may be unfamiliar to the average person. Let’s break down these acronyms and get you up to speed on what homebuyers should know.


HOA stands for homeowner association – a nonprofit organization that is funded by all the association’s members and overseen by an elected board of directors. In some states, HOAs must be registered with the department of real estate or another state regulatory agency.

Most of the country’s HOAs are run by volunteers from within the community, with the remainder run by management companies.

The primary purpose of the HOA is to enforce the policies, procedures, regulations and restrictions agreed to by the members, thereby maintaining property values. Financial support for the HOA comes from each homeowner in the form of monthly dues and occasional assessments.

So, how does one become a member of an HOA? If you purchase a home in a managed community, you don’t have a choice about whether to become a member. It is required and automatic. For this reason, when considering the purchase of a home governed by an HOA, reading the HOA documents before you agree to purchase is of critical importance.


CC&R stands for covenants, conditions and restrictions – the governing documents for the operation of the HOA. These are the rules that homeowners, tenants and guests are obligated to follow.

Want to paint your house psychedelic pink? Check the CC&Rs first. From the number of pets allowed to parking restrictions, the CC&Rs are the laws of the community. Failure to abide by them could mean a hefty fine for the homeowner. Unpaid fines can lead to foreclosure proceedings and the loss of the home to the HOA.

Here are just a few items commonly regulated by CC&Rs, according to the authors of “Nolo’s Essential Guide to Buying Your First Home”:



Roofing material.


Exterior paint color.

Outdoor play equipment such as swing sets and basketball hoops.

Garages and outbuildings.


Window coverings.

Holiday decorations.


Garbage and recycling containers.

Pets (size, breed restrictions, etc.).


Home businesses.

Purchasing a Home in an HOA-Governed Community


Immediately after your offer is accepted on a home governed by an HOA, your agent will go to work to obtain what is typically referred to as the “HOA docs.” This is a large package that contains everything you need to know about the HOA and about life in the community.

Unfortunately, the HOA docs need to be ordered, then compiled by the HOA, and typically don’t reach the buyer until late in the process. By this time the buyer has usually paid for a home inspection, not to mention the HOA doc fee, which can be quite hefty.

This is the most critical part of the process, though, and requires extreme due diligence. If you don’t understand anything in the HOA documents, ask your real estate agent or attorney to explain it. Never close escrow until you’ve read every word on every sheet of paper in the HOA documents package.

What to Look for in HOA Documents


Several documents in the HOA package require even closer scrutiny:


Special Assessments

A HOA will levy a special assessment when there is not enough money in the reserve fund to pay for major repairs or improvements to the community resources, such as roofs and major systems.

Check the documents carefully for the number of special assessments imposed over the life of the HOA and the amount that was imposed. Excessive assessments are a bad sign.

While you’re at it, check for mention of any major projects planned and whether the HOA reserve fund can cover them. You’ll find information about the reserve fund in the HOA’s budget. There should be a minimum of 10 percent of the annual budget amount on reserve.


Your lender will find out about this, so you may as well check to see if there is any ongoing or pending litigation on behalf of or against the HOA. If the litigation is over construction defects, the lender won’t approve your loan until the litigation is complete.

Meeting Minutes

The HOA holds meetings and someone is responsible for keeping track of what occurs during the meetings. Look through the minutes for homeowner complaints, especially repeated complaints. This is an indication of an unresponsive HOA – another red flag. Some associations are striking homeowner comments from their minutes. If you see no comments, ask your real estate agent to find out why.

While other documents, such as the insurance policy, are important, the ones mentioned above are those that the layperson can most easily understand. Again, if you don’t know how to read an insurance policy (and who does?) run it by your attorney.

No matter how much you love that adorable condo, it’s not worth purchasing if the CC&Rs impact your lifestyle and restrict your freedom. Read HOA docs carefully before signing an offer to purchase.

The Advantages of Getting a Mortgage Preapproval


The homebuying process can be exciting, but also stressful. When there are a large number of buyers in the market for real estate, the odds of being able to purchase your desired home can be low. However, getting a mortgage preapproval prior to home shopping can dramatically increase the odds of success.

Make Mortgage Preapproval Your First Step

A mortgage preapproval should be a homebuyer’s first step when purchasing a home. A borrower can choose to meet with a lender or get an initial preapproval via the Internet. The preapproval process is similar to the actual mortgage process and will, in fact, eliminate a lot of time after a home has been chosen.

When obtaining a mortgage preapproval, the borrower will complete a mortgage application and submit the necessary documentation to the lender. The lender will pull a credit report and examine the borrower’s credit.

Based on all of this information, the lender will determine the amount of funds that the borrower qualifies for. The borrower will receive a Conditional Commitment, which states the amount of funds that the lender agrees to lend provided that the conditions are met. While a preapproval is an important first step, it is not the final mortgage approval.

Impress Homesellers With Your Mortgage Preapproval

One of the advantages of having a preapproval is that this letter can be shown to real estate agents and sellers when looking for a home. By doing so, both the agent and the seller know that the borrower can qualify for a certain amount of funds. It is proof of the borrower’s financial standing and ability to proceed with the home purchase.

Another advantage is that some of the work that is involved in obtaining a mortgage is already done. The lender has already examined the borrower’s financial situation, including credit, income and assets. During the preapproval process, the lender will also discuss the most appropriate type of mortgage program that fits the borrower’s needs, whether it is a conventional loan or a government loan.

This is significant because not all sellers will accept a buyer who is using a government loan. Knowing the details of what type of loan is appropriate for the borrower, the agent can then show them homes that will fit their preapproval both for cost and type of funding.

How Mortgage Preapproval is Determined

The preapproval is determined by putting the information given to the lender through automated underwriting. In most cases, the preliminary loan file goes through a preprocessing before the preapproval is given to the borrower. Since there is an actual examination of the borrower’s documentation, the borrower will also receive a list of additional information that may be needed. The borrower can then submit this information while shopping for a home.

Once a home is found and the sales contract is signed, processing the loan is faster since most of the work for the credit file has been done. The final process involves verifications, ordering and receiving the appraisal, ordering title documents, obtaining insurance, etc. The final underwriting is the last step before the loan file is sent for closing.

The preapproval process is an important part of a home purchase. Since there is a lot of information involved in obtaining a mortgage, it eliminates many last minute problems that can arise. Obtaining a mortgage preapproval helps the home purchase process go smoothly.

Factors Affecting Mortgage Interest Rate Changes


There’s more to the cost of owning that dream home than the price the seller is asking for. The interest rate on your mortgage loan affects the price and how much you’ll pay every month to your mortgage company.

Comparing mortgage interest rates is important because they may change daily, and different rates may be associated with different types of loans. With variable-rate or adjustable-rate mortgages, it is understood from the outset that the loan’s interest rate will change over time, becoming higher or lower depending on the current economic climate.

Let’s look at why mortgage interest rates fluctuate so frequently.

The Federal Reserve and Interest Rates

The Federal Reserve System (“The Fed”), although considered our country’s central banking system, is independent of the federal government. In essence, the Fed controls the movement of money throughout the U.S. financial system.

The Federal Reserve System is composed of a Board of Governors and 12 Federal Reserve Banks, spread throughout the country. The seven members of the Board of Governors, the president of the Federal Reserve Bank of New York and four other reserve bank presidents serve on the Federal Open Market Committee (FOMC), the policy-making body that determines, among other things, the interest rate charged to commercial banks.

The FOMC controls inflation by tightening or loosening the country’s money supply. One way they do this is by raising interest rates to control inflation. When borrowing money costs more, consumers tend to shy away from taking out loans, hopefully leading to lower prices.

By the same token, lower interest rates encourage consumers to borrow and spend, which in turn boosts the economy. Overall, the fluctuations in mortgage interest rates reflect an attempt to keep a balance in the economy, and to prevent inflation without bringing the economy into a recession.

Mortgage Investors and Changing Interest Rates

The Federal Reserve is not the only player affecting changing mortgage rates. To create more money to lend, banks often sell their loans on the secondary market, now controlled by the federal government. Banks and other mortgage lenders sell mortgage-backed securities to investors. The return on investment for these investors is generated by interest paid by mortgage holders on their loans. For the investors to realize a return, banks must charge a higher interest rate.

Homebuyers (the mortgage loan borrowers) want low interest rates on their mortgages. This force drives interest rates back down. In addition, when investors know rates are going to drop, they purchase these securities, increasing demand and eventually sending interest rates back down. Banks must balance these two opposing forces, and the resulting push-and-pull drives mortgage interest rates.

The Effect of Changing Mortgage Interest Rates on Loans

Though they are locked-in once the application process is completed, fixed-rate mortgage rates are constantly changing. Interest rates for variable-rate loans fluctuate as well, and continue to change throughout the term of the loan. Another impact on interest rates occurs when lower interest rates attract homeowners wishing to refinance their mortgages.

While all of this may seem complicated to the average homebuyer, an awareness of what drives interest rate changes can help you know when the ideal time has arrived to apply for a loan.

Decoding Mortgage Terms


Ah, the home-buying process. It feels as if someone scooped you up and dropped you in a country where you don’t speak the language. From your real estate agent to the lender, a lot of what you’ll hear may sound like gibberish. Busy real estate professionals who use the acronyms and foreign-sounding terms on a daily basis forget that consumers typically have no idea what they’re talking about.

Let’s start with the basics: What is a mortgage?

Mortgage is a word that has been in the English language since the late 1300s and comes from the French “mort,” which means “dead,” and “gage,” meaning “pledge.” Therefore, a mortgage, in the true sense of the meaning of the word, means that the security pledged to the mortgagee for the debt will be taken from him if he fails to pay the debt, and will therefore be “dead to him upon condition.” If, on the other hand, the mortgagee fulfills the obligation to pay the debt, the pledge is dead. Either way, something dies.

A dictionary definition is much simpler and tells us that a mortgage is a “temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.”

The Players

It may feel as if you need a program to keep track of all the folks who play a part in your mortgage drama, especially if this is your first experience with this type of loan. Let’s take a look at just who these players are and what their roles are.


More commonly known as “the lender,” the mortgagee is the lending institution that provides the mortgage.


The mortgagor is more commonly known as the borrower or debtor – the person who receives the mortgage loan.

Mortgage Broker

A mortgage broker is a person who acts as the middleman, brokering loans on behalf of borrowers. Like a travel agent, the mortgage broker is an intermediary who shops a number of lending institutions, pledging to obtain the best rates and terms for the borrower.

Loan Officer

If you don’t use a mortgage broker, but deal directly with the lender, the loan officer is generally the first person you’ll meet. She is the person who will help you obtain a loan preapproval and compile all the documents you will need to obtain a mortgage. This person is the lender’s point of contact for you, your real estate agent, and the other folks involved in your home purchase.

Loan Processor

After you fill out all the paperwork, the loan officer sends it to the loan processor who then follows your mortgage from preapproval to closing. He checks all your information for accuracy and verifies your credit and income. He then inputs your information into their in-house system, and packages everything for the underwriter.


The underwriter is the one you would wine and dine if you knew who she was. She is the person who determines the lender’s risk in lending to you. She’ll analyze your income to determine if you can pay for the loan. She will look at your payment history to figure out if you’re the type of person who meets his financial obligations. Finally, the underwriter will evaluate the home you want to purchase to ensure that it’s worth the amount you are borrowing.


The appraiser is the underwriter’s tool to determine how much the house is worth. All lenders subcontract or employ licensed appraisers who use a number of methods to determine the home’s market value.

Escrow Company

The escrow company’s primary duty is to receive and disburse funds based on what is mandated in the contract. Escrow companies are independent third parties and can do nothing unless both parties to the transaction are in agreement.

Title Company

Title companies check the chain of title on the home. This is a list of everyone who has ever owned the home – the historical transfers of title. The title officer checks to ensure that the person who is selling the home actually owns it and whether or not there are liens on the property. The title company also orders the survey and reviews it for any problems, verifies that property taxes and HOA fees have been paid, and prepares the title insurance policy.

Now that you’re familiar with the players, let’s take a look at some of the more common mortgage terms you may hear during your home purchase.

The Loan

Amortization – The amount of time you hold the loan, amortization is sometimes called the repayment period.

Principal – The amount you originally borrow.

PITI – An acronym for principal, interest, taxes and insurance. This is your monthly mortgage payment.

The Disclosures

Good Faith Estimate – Also known as the GFE, the “good faith estimate” is a form that the lender is required to provide to borrowers. It itemizes all of the loan fees and miscellaneous charges to make it easier for the borrower to compare different lenders’ offers.

HUD-1 Settlement Statement – An itemized list of services and fees charged to the borrower by the lender. By law, the borrower is given at least 24 hours before closing to inspect the HUD-1.

The Fees

Closing Costs – Expenses incurred in financing the home. Closing costs vary and some are negotiable.

Point – What the lender charges for originating the loan. One point equals 1 percent of the loan amount.

Escrow Impounds – You will be asked to prepay taxes and insurance when escrow closes. This money goes into an escrow account and is used to ensure the timely payment of these bills. The lender may require up to two months of payments to be impounded.

Private Mortgage Insurance – Called PMI for short, this is an insurance policy that the borrower pays for, but it benefits the lender in the event the borrower defaults on the loan. Lenders typically require PMI when the loan-to-value ratio exceeds 80 percent.

Foreclosures in North Idaho


Everyone wants a good deal.  Do you keep running into websites that want you to pay for a list of foreclosures?  No need to pay, simply ask a real estate agent.  If you are looking for foreclosure and bank owned properties in North Idaho, view them all in one place.  Covering Bonner County, Kootenai County and Boundary County find your free list of foreclosed properties.


Foreclosures in North Idaho

Remodeling Your Bathroom on a Budget


Remodeling a bathroom on a budget requires careful thought and more elbow grease, so to speak, than simply going out and buying whatever you want at the first place you see it. Still, it can be done. Certain strategies will help keep you from going over budget.

Here are some tips to keep in mind as you plan your bathroom renovation.

Have a Clear Idea

Know exactly what you want before you start. Indecision can actually cost you more money. Forming a vision of what you want and sticking to the project plan prevents you from overspending on “just one more thing,” purchasing things hastily without considering what you realistically have to spend. Pay attention to other bathrooms, look at area homes on parade or search online for pictures to get ideas.

Work Up a Budget

Perhaps you’ve read that people with written goals are more likely to achieve them. Budgets are much the same. When it’s on paper, it’s more real, and you’re more likely to compare what you’re spending against what your limit is. And be realistic. First, look at your disposable income and determine what you can safely spend to get the job done. Next, add up your costs for each item you will need. Estimate on the high side of costs to ensure you don’t go over budget. Finally, keep a journal documenting your budget and actual purchases.

Do it Yourself

Labor typically costs half – or more – of the total cost for a remodel. Beware of cheap labor as well: Generally, you get what you pay for. Of course, for certain jobs, such as rewiring or complicated structural work, you may need to hire a professional. Check references and investigate the company or individual, and get a written estimate and guarantee before the work is done. Whenever possible, DIY instead.

Comparison Shop

Impulse buying often results in getting something you don’t need and paying more than necessary. Consider your various options before purchasing items, especially high-dollar items. Look at various stores and possibly even online. What you spend in gas or shipping might just be less than what it costs at the local retailer. Also, don’t forget about reclaimed and recycled items or modifying what you already have. Refinishing a bathtub, for instance, costs less than a new one. Re-grouting old tile may give it a new lease on life and allow you to put your money toward other items. Even using reclaimed wood or tiles, for example, or moving an old dresser into the bathroom and setting it up as a vanity, will save a lot of money and provide your bathroom a distinctive touch. Don’t be afraid to try the unusual if it works.


Be realistic about your abilities and prioritize the important things first. Rotten or soft woodwork, flooring, plumbing problems and various safety issues must come first. After that, look at important cosmetic considerations. Is the lighting poor? Are the windows far from energy efficient? Does the room or ceiling honestly need a new coat of paint? These things will detract from the most clever room remodels and make your bathroom look and feel shabby.

Keller Williams agent growth and profit sharing




Keller Williams Realty is expanding across the country for one very powerful
reason: it is the only company truly designed BY and FOR Top Real Estate Agents. It
honors them, supports them, gives them a voice and affords them the freedom to build
and control their own businesses. In addition, it provides the only opportunity for
them to achieve long term income, above and beyond their own commissions.



Keller Williams Industry Highlights


REAL Trends, Inc. – Represented 22 percent of the top 500 brokerages ranked by closed transactions and 23 percent of the top 500 brokerages ranked by closed volume in the annual REAL Trends 500, 2013

REAL Trends, Inc. / Wall Street Journal – Represented 11 percent of the top 1,000 agents and teams in the U.S. in annual ‘The Thousand’ report, including 25 percent of top teams ranked by transaction sides, 2013

Entrepreneur Magazine – Ranked #1 real estate franchise on Franchise 500 list, 2012

Franchise Times – Top Quartile of Franchise Operations in the U.S., 2012

Inman News – Co-Founder and Chairman of the Board Gary Keller named one of the 100 Most Influential Leaders in Real Estate, 2012

Inc. Magazine – One of the Top 5000 Fastest Growing Private Companies in America, 2012

Inman News – eEdge named the Most Innovative Web Service in the real estate industry, 2011

Workplace Dynamics – One of America’s Top 10 Workplaces, 2012 & 2013

Training Magazine – Highest ranked real estate franchise on Training Top 125, 2010

Swanepoel Trends Report – Most Recognizable Real Estate Franchise for 2009, #1 Industry Trendsetter for 2009

American Business Awards – Sales Training/Coaching Program of the Year in 2009

Break down of real estate programs that work.

  • I recently wrote a review for Market Leader and have had quite a few inquiries from agents about the Market Leader program. Without a doubt my marketing system through Keller Williams works extremely well but there are a few different programs at play here.  I will attempt to break down the special qualities of each one, so agents can make an informed choice. Keller Williams uses wolfnet IDX, our own Keller Williams listing system, Market Leader and list hub. I believe it is a combination of all of these programs that lead to such successful results. List Hub essentially takes a feed of all of our listings and syndicates them out to third party websites.  From there many other websites pick up the information.  (We also syndicate out to agent websites on several companies)  Some of the sites (specifically Homescape) then take the feed and send it to their affiliates.  So Homescape, for example, has over 100 local affiliate sites:
  • Here is a short list of the websites that list hub sends listings to.

    Regional Publisher Partners

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