Next Level Executives
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Wednesday, October 28, 2009
Thursday, July 30, 2009
Home Owner Selling Guide
Selling Guide
There are a number of steps to selling any house.. Experience has taught me that every home sale is unique. Yet every sale shares a common process.
For specific answers to your specific situation, I’ll be happy to assist you. After all, I want you to get the best selling price in the shortest time.
Putting Your House On The Market
The first step toward putting your house up for sale is to meet with a real estate agent at your home. What we call the "listing appointment." But beforehand, it's important to understand "who's who" and how brokers may cooperate to sell your house.
Listing Broker or Listing Agent
An individual real estate broker whom the seller hires to represent the seller through a contract called a "listing agreement". The listing agent is associated with the listing broker. The listing broker is directly paid the listing commission and then splits the commission with the listing agent. (Although the broker and agent may be two different individuals, the term "broker" is used throughout the Guide for simplicity.)
Selling Broker or Selling Agent
In a "cooperative" sale, the house is listed by one broker and a buyer is provided by another broker. The selling broker receives the selling side of the commission. If the listing broker also produces the buyer, then the listing broker receives both listing and selling sides of the commission. A selling broker may have a signed buyer representation agreement with a buyer and, therefore, represent the buyer and not the seller. If the buyer's agent is a Long & Foster agent, Long & Foster becomes a disclosed dual agent with the consent of both buyer and seller.
A Little Homework
Before the listing appointment both the home seller and the listing broker are busy While the home seller collects a list of documents requested by the broker, the listing broker studies recent neighborhood sales of homes comparable to yours, and also comparable homes currently for sale.
There's No Place Like Home
At the listing appointment, the listing broker will want to inspect the house and yard to become familiar with its special features.
You have probably enjoyed living in your home and have been pleased with its many unique features. Your listing broker will want to tell prospective buyers about the special features of your home and neighborhood. Be ready to be specific about schools, day-care, nearby Metro, and other desirable community features, as well as home features not readily apparent.
Remember, prospective buyers will be "comparison shopping" and keenly aware of subtle differences in houses for sale in the area. Be sure to tell your listing broker why yours is special--from any home remodeling to afternoon winter sunshine.
Demands Sets Price
After conferring with the listing broker on market conditions, comparable nearby sales and listings, and available financing, the home seller will set the listing or "asking" price for the house.
A common definition of market value is: "What a ready, willing and able buyer will pay, at a price a seller will accept." Metropolitan area buyers are sophisticated. They've already been shopping, and when they see your home they'll be comparing features and financing.
There's a rule of thumb that says: "A house priced more than 5% over market value discourages offers." Buyers who can afford the price can get "more house" for their money elsewhere. Buyers who cannot afford the price simply won't look. This is why we say, "A house priced right is half sold."
A fair market value will be determined by comparing the property with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this "market analysis" approach is more accurate than the "replacement cost" or "potential rental income" methods.
Sample NET SHEET
Based on this sales price, the listing broker will go through a worksheet that estimates the "net cash" from the sale. Simply, this exercise subtracts anticipated charges paid by the seller from the sales price. A copy of the "net sheet" is left with the home seller. (An itemized list of typical selling costs is presented in the "Settlement" chapter, which is the stage when these charges are paid.)
Financing Strategy
No sale can be completed without financing. That is why it is generally to the home seller's advantage to appeal to the greatest number of home buyers by accepting the greatest range of financing plans. The listing broker will explain the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration) and conventional financing, as well as explain "discount points."
What is a Point?
A point is one percent of the amount of the buyer's mortgage loan. For example, if a loan is $100,000, one point is $1,000. Lenders charge points to increase the yield on their loans. On all loans, home buyer and home seller may share the charges by mutual agreement.
Property Profile Folder
To enable the listing broker to prepare a folder of information on the property, the home seller needs to provide a number of documents and information specific to the location and jurisdiction. (This Property Profile is often left in the home for the convenience of prospective selling brokers.) Because the list is long, you can understand why it's best to collect the papers before the listing appointment. These materials may include:
Pay-Off Notice
A letter signed by the home seller and mailed to the lender by the listing broker to notify the lender of the intention to pay off the mortgage in order to minimize prepayment of interest penalties to the seller (Home seller should provide the broker with the lender's address, loan balance, assumability, years remaining on present mortgage, P.I.T.I. and the interest rate, if possible.)
Well and Septic Inspection
If property is on septic/well, current inspections by local health authorities are required while home is occupied. Listing broker will usually arrange after contract is ratified.
Order Lender Appraisal
Lenders usually require an appraisal to assure that the property is adequate collateral for a loan. Appraisal may be ordered before (paid by seller), but is more often done after an "offer to purchase" is accepted (paid by buyer).
Assessments/Easements
Listing broker will ask home seller if any tax assessments or easements exist on property that must be paid or included in purchase contract and passed with the land when sold.
Property Taxes/Condominium Fees
Home seller provides record of property tax or condominium fee payments which buyer will reimburse a pro-rata share to home seller at settlement.
Inspections
VA/FHA and most lenders of new mortgages require a termite inspection certificate that shows house is free of infestation. If home seller does not have a current certificate, then listing or selling broker (depending on area) will arrange inspection at home seller's expense. Sometimes a home inspection and radon testing will be ordered. Home seller should also provide all information as to the physical condition of the property, such as the presence of fire retardant plywood.
Utilities
Home seller should provide record of past 12 months utility bills, including gas, electric, sewer, water, and trash where applicable. Most buyers will want to know history of utility costs.
Helpful Documents
If possible, home seller should provide listing broker with deed, house location survey, condominium bylaws or home owners association documents, subdivision plat map, house floor plan, previous title search abstracts, legal description of property (subdivision, section and lot), home warranties on major systems, if still in effect, and copy of home owners insurance policy for endorsement in purchase contract.
What Conveys?
In anticipation of a buyer's offer, the home seller must be ready to supply listing broker with a specific list of the personal property that is included in the real estate property for sale. Examples of items to "convey" may include: draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, disposal, swimming pool chemicals, awnings, storm doors and windows, screens, Venetian blinds, shutters, window air conditioner, etc. Home seller should tag or remove items which do not convey.
Listing Agreement
When the home seller is ready to put the house on the market, the listing agreement is filled out indicating a specific period of time the agreement is in effect ("listing period"), and signed by the seller You've now hired a listing broker and listing agent.
Questions and Answers
What is a "Lockbox"?
A lockbox is a universal metal container for your house key that is hung on the front door and can only be opened by a special key carried by licensed sales agents. It provides access when the owner is away, thus assuring full exposure to prospective buyers.
Do certain geographical areas have unique home selling requirements?
Yes. Home selling requirements vary from county to county. Investigate special taxes or other requirements applicable to the area in which you live.
There are a number of steps to selling any house.. Experience has taught me that every home sale is unique. Yet every sale shares a common process.
For specific answers to your specific situation, I’ll be happy to assist you. After all, I want you to get the best selling price in the shortest time.
Putting Your House On The Market
The first step toward putting your house up for sale is to meet with a real estate agent at your home. What we call the "listing appointment." But beforehand, it's important to understand "who's who" and how brokers may cooperate to sell your house.
Listing Broker or Listing Agent
An individual real estate broker whom the seller hires to represent the seller through a contract called a "listing agreement". The listing agent is associated with the listing broker. The listing broker is directly paid the listing commission and then splits the commission with the listing agent. (Although the broker and agent may be two different individuals, the term "broker" is used throughout the Guide for simplicity.)
Selling Broker or Selling Agent
In a "cooperative" sale, the house is listed by one broker and a buyer is provided by another broker. The selling broker receives the selling side of the commission. If the listing broker also produces the buyer, then the listing broker receives both listing and selling sides of the commission. A selling broker may have a signed buyer representation agreement with a buyer and, therefore, represent the buyer and not the seller. If the buyer's agent is a Long & Foster agent, Long & Foster becomes a disclosed dual agent with the consent of both buyer and seller.
A Little Homework
Before the listing appointment both the home seller and the listing broker are busy While the home seller collects a list of documents requested by the broker, the listing broker studies recent neighborhood sales of homes comparable to yours, and also comparable homes currently for sale.
There's No Place Like Home
At the listing appointment, the listing broker will want to inspect the house and yard to become familiar with its special features.
You have probably enjoyed living in your home and have been pleased with its many unique features. Your listing broker will want to tell prospective buyers about the special features of your home and neighborhood. Be ready to be specific about schools, day-care, nearby Metro, and other desirable community features, as well as home features not readily apparent.
Remember, prospective buyers will be "comparison shopping" and keenly aware of subtle differences in houses for sale in the area. Be sure to tell your listing broker why yours is special--from any home remodeling to afternoon winter sunshine.
Demands Sets Price
After conferring with the listing broker on market conditions, comparable nearby sales and listings, and available financing, the home seller will set the listing or "asking" price for the house.
A common definition of market value is: "What a ready, willing and able buyer will pay, at a price a seller will accept." Metropolitan area buyers are sophisticated. They've already been shopping, and when they see your home they'll be comparing features and financing.
There's a rule of thumb that says: "A house priced more than 5% over market value discourages offers." Buyers who can afford the price can get "more house" for their money elsewhere. Buyers who cannot afford the price simply won't look. This is why we say, "A house priced right is half sold."
A fair market value will be determined by comparing the property with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this "market analysis" approach is more accurate than the "replacement cost" or "potential rental income" methods.
Sample NET SHEET
Based on this sales price, the listing broker will go through a worksheet that estimates the "net cash" from the sale. Simply, this exercise subtracts anticipated charges paid by the seller from the sales price. A copy of the "net sheet" is left with the home seller. (An itemized list of typical selling costs is presented in the "Settlement" chapter, which is the stage when these charges are paid.)
Financing Strategy
No sale can be completed without financing. That is why it is generally to the home seller's advantage to appeal to the greatest number of home buyers by accepting the greatest range of financing plans. The listing broker will explain the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration) and conventional financing, as well as explain "discount points."
What is a Point?
A point is one percent of the amount of the buyer's mortgage loan. For example, if a loan is $100,000, one point is $1,000. Lenders charge points to increase the yield on their loans. On all loans, home buyer and home seller may share the charges by mutual agreement.
Property Profile Folder
To enable the listing broker to prepare a folder of information on the property, the home seller needs to provide a number of documents and information specific to the location and jurisdiction. (This Property Profile is often left in the home for the convenience of prospective selling brokers.) Because the list is long, you can understand why it's best to collect the papers before the listing appointment. These materials may include:
Pay-Off Notice
A letter signed by the home seller and mailed to the lender by the listing broker to notify the lender of the intention to pay off the mortgage in order to minimize prepayment of interest penalties to the seller (Home seller should provide the broker with the lender's address, loan balance, assumability, years remaining on present mortgage, P.I.T.I. and the interest rate, if possible.)
Well and Septic Inspection
If property is on septic/well, current inspections by local health authorities are required while home is occupied. Listing broker will usually arrange after contract is ratified.
Order Lender Appraisal
Lenders usually require an appraisal to assure that the property is adequate collateral for a loan. Appraisal may be ordered before (paid by seller), but is more often done after an "offer to purchase" is accepted (paid by buyer).
Assessments/Easements
Listing broker will ask home seller if any tax assessments or easements exist on property that must be paid or included in purchase contract and passed with the land when sold.
Property Taxes/Condominium Fees
Home seller provides record of property tax or condominium fee payments which buyer will reimburse a pro-rata share to home seller at settlement.
Inspections
VA/FHA and most lenders of new mortgages require a termite inspection certificate that shows house is free of infestation. If home seller does not have a current certificate, then listing or selling broker (depending on area) will arrange inspection at home seller's expense. Sometimes a home inspection and radon testing will be ordered. Home seller should also provide all information as to the physical condition of the property, such as the presence of fire retardant plywood.
Utilities
Home seller should provide record of past 12 months utility bills, including gas, electric, sewer, water, and trash where applicable. Most buyers will want to know history of utility costs.
Helpful Documents
If possible, home seller should provide listing broker with deed, house location survey, condominium bylaws or home owners association documents, subdivision plat map, house floor plan, previous title search abstracts, legal description of property (subdivision, section and lot), home warranties on major systems, if still in effect, and copy of home owners insurance policy for endorsement in purchase contract.
What Conveys?
In anticipation of a buyer's offer, the home seller must be ready to supply listing broker with a specific list of the personal property that is included in the real estate property for sale. Examples of items to "convey" may include: draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, disposal, swimming pool chemicals, awnings, storm doors and windows, screens, Venetian blinds, shutters, window air conditioner, etc. Home seller should tag or remove items which do not convey.
Listing Agreement
When the home seller is ready to put the house on the market, the listing agreement is filled out indicating a specific period of time the agreement is in effect ("listing period"), and signed by the seller You've now hired a listing broker and listing agent.
Questions and Answers
What is a "Lockbox"?
A lockbox is a universal metal container for your house key that is hung on the front door and can only be opened by a special key carried by licensed sales agents. It provides access when the owner is away, thus assuring full exposure to prospective buyers.
Do certain geographical areas have unique home selling requirements?
Yes. Home selling requirements vary from county to county. Investigate special taxes or other requirements applicable to the area in which you live.
Saturday, June 13, 2009
Why mortgage rates are rising
It’s pretty simple –
The Federal Government is selling more Treasury Securities to finance the economic recovery packages, the bank bailouts, the GM situation, the war, and the buying up of all these mortgages. In addition, as the debt grows, WE have to pay interest to all of these bond holders so even more debt is issued to cover the interest payments.
On the other side, buyers are scarce. China is less affluent and weary of US debt – there is even talk of downgrading US debt by Moody’s (England downgrade possible too). Last week Standard & Poor's raised worries that the United States could lose its "AAA" rating after it warned Britain was at risk for a downgrade. Both the British government and the U.S. government have had their central banks inject billions of dollars into their economies by buying bank assets.
The warning sent the dollar and Treasury prices tumbling last week, because a downgrade would increase borrowing costs and hurt the government's economic stimulus efforts. Moody's on Wednesday did not completely rule out a downgrade.
"Steven Hess, vice president and senior credit officer at Moody's, said that while the U.S. government's debt rating is stable, a reassessment of the economy and the government's debt could put 'negative pressure on the rating in the future.' He added that risks related to Social Security and Medicare could also affect the rating."
The Associated Press - May 27, 2009
In order to sell more debt and attract skittish buyers, the prices of treasuries have fallen in recent auctions – price/yield is adverse in relationship so when the price drops (in order to attract buyers) it means the yields rise. As a result, the 10 year treasure yield has risen from 2.533% on March 18th to 3.695% on May 27th. That is over 100 Basis Points (1%) in yield.
The inverse relationship is easy to see with this simple illustration.
A bond is issued for $10,000 for five years with a 5% coupon or interest rate, paid every six months. Then interest rates rise to 6%.
If you want to sell this bond, who would buy it when it is paying 1% below market rates (5% vs. 6%)? You have to sweeten the deal so the buyer gets a market rate for the bond. You can’t change the interest rate on the bond. That’s fixed at 5%. You can, however change the price you will take for the bond.
The annual payment of $500 ($10,000 x 5%) must equal a 6% payment. Doing the math, you discover that the face value of the bond must be discounted to $8,333 so that the $500 fixed payment equals a 6% yield on the buyer’s investment ($8,333 x 6% = $500).
If interest rates went down instead of up, you could then sell your bond at a premium over face value because the fixed interest rate would be higher than the market rate.
Rates have not risen as much as the Treasury yield because the Federal Government is still buying mortgages out of the market, so the spreads over Treasuries are narrowing despite rising rates. At present we remain in a very abnormal market.
This is why federal debt is actually inflationary …
“Massive quantitative easing by the Fed is pouring trillions of U.S. dollars into the money supply, essentially conjured out of thin air. This is being done without transparency, the rationale being that frozen credit markets require a vast expansion of the money supply in an attempt to get the arteries of commerce flowing again. Similarly, the U.S. government is spending vast amounts of money it does not have, with the Treasury Department selling unprecedented levels of government debt in a frantic effort to fund the wildly expanding U.S. deficit. These two forces, quantitative easing and multi-trillion dollar deficits, are the core ingredients of an explosive fiscal cocktail that I believe will ultimately lead to hyperinflation.
The Federal Government is selling more Treasury Securities to finance the economic recovery packages, the bank bailouts, the GM situation, the war, and the buying up of all these mortgages. In addition, as the debt grows, WE have to pay interest to all of these bond holders so even more debt is issued to cover the interest payments.
On the other side, buyers are scarce. China is less affluent and weary of US debt – there is even talk of downgrading US debt by Moody’s (England downgrade possible too). Last week Standard & Poor's raised worries that the United States could lose its "AAA" rating after it warned Britain was at risk for a downgrade. Both the British government and the U.S. government have had their central banks inject billions of dollars into their economies by buying bank assets.
The warning sent the dollar and Treasury prices tumbling last week, because a downgrade would increase borrowing costs and hurt the government's economic stimulus efforts. Moody's on Wednesday did not completely rule out a downgrade.
"Steven Hess, vice president and senior credit officer at Moody's, said that while the U.S. government's debt rating is stable, a reassessment of the economy and the government's debt could put 'negative pressure on the rating in the future.' He added that risks related to Social Security and Medicare could also affect the rating."
The Associated Press - May 27, 2009
In order to sell more debt and attract skittish buyers, the prices of treasuries have fallen in recent auctions – price/yield is adverse in relationship so when the price drops (in order to attract buyers) it means the yields rise. As a result, the 10 year treasure yield has risen from 2.533% on March 18th to 3.695% on May 27th. That is over 100 Basis Points (1%) in yield.
The inverse relationship is easy to see with this simple illustration.
A bond is issued for $10,000 for five years with a 5% coupon or interest rate, paid every six months. Then interest rates rise to 6%.
If you want to sell this bond, who would buy it when it is paying 1% below market rates (5% vs. 6%)? You have to sweeten the deal so the buyer gets a market rate for the bond. You can’t change the interest rate on the bond. That’s fixed at 5%. You can, however change the price you will take for the bond.
The annual payment of $500 ($10,000 x 5%) must equal a 6% payment. Doing the math, you discover that the face value of the bond must be discounted to $8,333 so that the $500 fixed payment equals a 6% yield on the buyer’s investment ($8,333 x 6% = $500).
If interest rates went down instead of up, you could then sell your bond at a premium over face value because the fixed interest rate would be higher than the market rate.
Rates have not risen as much as the Treasury yield because the Federal Government is still buying mortgages out of the market, so the spreads over Treasuries are narrowing despite rising rates. At present we remain in a very abnormal market.
This is why federal debt is actually inflationary …
“Massive quantitative easing by the Fed is pouring trillions of U.S. dollars into the money supply, essentially conjured out of thin air. This is being done without transparency, the rationale being that frozen credit markets require a vast expansion of the money supply in an attempt to get the arteries of commerce flowing again. Similarly, the U.S. government is spending vast amounts of money it does not have, with the Treasury Department selling unprecedented levels of government debt in a frantic effort to fund the wildly expanding U.S. deficit. These two forces, quantitative easing and multi-trillion dollar deficits, are the core ingredients of an explosive fiscal cocktail that I believe will ultimately lead to hyperinflation.
What exactly is hyperinflation? Economists disagree on a common definition, so I will offer one myself. Double-digit inflation extending over a period of at least two years would arguably be a hyperinflationary period.
… What is most frightening about the policy moves being enacted by the Fed and Treasury is that their actions may not be a reckless gamble after all. They may have come to the conclusion that only hyperinflation will enable the United Sates to avoid national insolvency … If that is their prescription for the dire economic crisis confronting the U.S., then one must conclude that Ben Bernanke, Timothy Geithner and Larry Summers have learned nothing from history.”
Sheldon Filger
Founder of GlobalEconomicCrisis.com
Posted: May 25, 2009 12:36 PM
Huffingtonpost.com
David Stevens, President Obama’s choice to head the Federal Housing Administration (FHA) said in a recent email: “ …but if they weren’t doing what they are doing in the short run, mortgage rates would be in the 6.5% range.
…I do believe rates will rise ultimately here – and this trend will continue unless the international market becomes more supportive of US debt.”
Quick answer – buy now – don’t wait for lower rates.
Sheldon Filger
Founder of GlobalEconomicCrisis.com
Posted: May 25, 2009 12:36 PM
Huffingtonpost.com
David Stevens, President Obama’s choice to head the Federal Housing Administration (FHA) said in a recent email: “ …but if they weren’t doing what they are doing in the short run, mortgage rates would be in the 6.5% range.
…I do believe rates will rise ultimately here – and this trend will continue unless the international market becomes more supportive of US debt.”
Quick answer – buy now – don’t wait for lower rates.
Friday, April 3, 2009
6 Reasons Why It's Still a Good Time to Buy
The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a $100,000 home and its values increases 10 percent, you’ve made $10,000.
4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Source: The Wall Street Journal, June Fletcher (03/27/2009)
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a $100,000 home and its values increases 10 percent, you’ve made $10,000.
4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Source: The Wall Street Journal, June Fletcher (03/27/2009)
Sunday, March 22, 2009
Why use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Monday, March 2, 2009
6 Tips for Home Owners Who Turn Into Landlords
6 Tips for Home Owners Who Turn Into Landlords Home owners who decide to rent out their properties have to stop thinking of themselves as home owners and instead consider themselves as running a small business, experts say.Thinking like a businessperson means focusing on the monthly cost of maintenance, mortgage and taxes, as well as being aware of landlord-tenant regulations and avoiding liabilities.Here are key issues to consider:
- Set a fair rent. Setting the right price will make it more likely that a landlord will be able to keep the place rented.
- Understand landlord-tenant rules. Running afoul of landlord-tenant regulations and rules regarding security deposits can be costly.
- Screen applicants. Eliminating potential tenants who can’t pay or who won’t take care of the property is very important.
- Lay out the rules in a lease. Widely available sample leases can help. If you have questions, ask an attorney.
- Consider a property manager. Despite the expense, turning the job over to experts can help a landlord come out ahead.
- Talk to the condo association. If the property is a condominium, be prepared to deal with a host of regulations.
Thursday, February 19, 2009
Final score: $8,000 for homebuyers
First-time purchasers get a tax credit windfall if they buy before December
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a
lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking: "I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a
lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking: "I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:
Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.
Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll withholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.
Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll withholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
WHAT KIND OF PROPERTY CAN YOU BUY WITH A LOW DOWN PAYMENT LOAN?
There are a few restrictions on the type of home you may buy with a low down payment loan. In addition, low down payment loans may be used with a wide variety of mortgages.
Besides price range, there are many other factors to consider when purchasing a home. It’s in your best interest to take care in selecting a home that will have lasting value as well as provide shelter. Be sure the neighborhood and house meet the needs of your family. If you have children, you may want to know if there are other children in the neighborhood and what schools or playgrounds are nearby. Also consider the availability of public transportation and how far family members will have to commute to work or school.
Check the condition of the plumbing, heating and electrical systems and whether they are up to regulatory codes. The best and easiest way to do this is through a home inspection from a certified inspector.
If you are like most people, a home is the single largest purchase you will ever make. It is important that you select a home that will meet your family’s needs and keep you happy for years to come. And most important, you must be able to afford to remain in that home for as long as you please.
TWO KEY FACTORS IN QUALIFYING FOR A HOME LOAN
In attempting to approve home buyers for the type and amount of mortgage they want, lenders basically look at two key factors: the borrower’s ability and willingness to repay the loan. Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, lenders prefer for you to have been employed at the same place for at least two years, or at least to have been in the same line of work for a few years.
The borrower’s willingness to repay is determined by examining how the property will be used. For instance, will you be living there or just renting it out? Willingness also is closely related to how you have fulfilled previous financial commitments, thus the emphasis on the credit report or rent and utility bills.
It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, perhaps one of your stronger points will make up for the weak one. Everyone involved in real estate is in the business of selling homes, in one way or another. Therefore, if the loan makes sense, lenders and insurers will do their best to see that you qualify.
By its very nature, mortgage insurance is an aid to affordability, because it allows families to buy homes with less cash on hand. The industry plays a central role in helping low- and moderate-income families become homeowners.
More and more borrowers are taking advantage of low down payment mortgages and becoming homeowners with less than 3 percent down. For more information on how you can take advantage of the benefits of a low down payment home loan with mortgage insurance, contact your local lender or real estate agent. For general information on purchasing a home, contact the county extension office of the U.S. Department of Agriculture, listed in the government pages of your telephone book.
Besides price range, there are many other factors to consider when purchasing a home. It’s in your best interest to take care in selecting a home that will have lasting value as well as provide shelter. Be sure the neighborhood and house meet the needs of your family. If you have children, you may want to know if there are other children in the neighborhood and what schools or playgrounds are nearby. Also consider the availability of public transportation and how far family members will have to commute to work or school.
Check the condition of the plumbing, heating and electrical systems and whether they are up to regulatory codes. The best and easiest way to do this is through a home inspection from a certified inspector.
If you are like most people, a home is the single largest purchase you will ever make. It is important that you select a home that will meet your family’s needs and keep you happy for years to come. And most important, you must be able to afford to remain in that home for as long as you please.
TWO KEY FACTORS IN QUALIFYING FOR A HOME LOAN
In attempting to approve home buyers for the type and amount of mortgage they want, lenders basically look at two key factors: the borrower’s ability and willingness to repay the loan. Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, lenders prefer for you to have been employed at the same place for at least two years, or at least to have been in the same line of work for a few years.
The borrower’s willingness to repay is determined by examining how the property will be used. For instance, will you be living there or just renting it out? Willingness also is closely related to how you have fulfilled previous financial commitments, thus the emphasis on the credit report or rent and utility bills.
It is important to remember that there are no rules carved in stone. Each applicant is handled on a case-by-case basis. So even if you come up a little short in one area, perhaps one of your stronger points will make up for the weak one. Everyone involved in real estate is in the business of selling homes, in one way or another. Therefore, if the loan makes sense, lenders and insurers will do their best to see that you qualify.
By its very nature, mortgage insurance is an aid to affordability, because it allows families to buy homes with less cash on hand. The industry plays a central role in helping low- and moderate-income families become homeowners.
More and more borrowers are taking advantage of low down payment mortgages and becoming homeowners with less than 3 percent down. For more information on how you can take advantage of the benefits of a low down payment home loan with mortgage insurance, contact your local lender or real estate agent. For general information on purchasing a home, contact the county extension office of the U.S. Department of Agriculture, listed in the government pages of your telephone book.
Wednesday, February 4, 2009
Survey Finds Grass Is Greener on the Other Side
Daily Real Estate News February 4, 2009
The results of a survey exploring attitudes related to where Americans would like to live show that the grass is definitely greener on the other side of the fence.About 46 percent of people would prefer to live in a different type of community from the one they live in now, the survey by the Pew Research Center's Social & Demographic Trends found. That sentiment was most common among urban dwellers.But the desire to move elsewhere doesn’t stop people from appreciating their current locale. About 80 percent rank their current communities as excellent, very good or good. Both the 63 percent who have moved at least once and the 37 percent who have lived in the same place all their lives are equally satisfied with their current locations.
Other findings include:
Americans are all over the map in their views about their ideal community type: 30 percent say they would most like to live in a small town, 25 percent in a suburb, 23 percent in a city and 21 percent in a rural area.
About 75 percent of Americans say they prefer living where the pace of life is slow, not fast. A similar majority prefers a place where neighbors know each other well to one where neighbors don't generally know each other's business.
About 65 percent say they prefer to live in a hot-weather climate rather than a cold one.
Fast food gets the nod with 43 percent preferring to live in a place with more McDonald's outlets vs. the 35 percent who would rather have more Starbucks shops.
Asked to rank cities where they would live if they could, nearly everyone chose warm weather locations in the South or the West.
Here are their top 15 picks:
1. Denver, 43 percent
2. San Diego, 40 percent
3. Seattle, 38 percent
4. Orlando, 34 percent
5. Tampa, 34 percent
6 San Francisco, 34 percent
7. Phoenix, 33 percent
8. Portland, Ore., 31 percent
9. Sacramento, 29 percent
10 . San Antonio, 29 percent
11. Boston, 28 percent
12. Miami, 28 percent
13. Atlanta, 26 percent
14. Washington, DC, 25 percent
15. New York, 24 percent
The results of a survey exploring attitudes related to where Americans would like to live show that the grass is definitely greener on the other side of the fence.About 46 percent of people would prefer to live in a different type of community from the one they live in now, the survey by the Pew Research Center's Social & Demographic Trends found. That sentiment was most common among urban dwellers.But the desire to move elsewhere doesn’t stop people from appreciating their current locale. About 80 percent rank their current communities as excellent, very good or good. Both the 63 percent who have moved at least once and the 37 percent who have lived in the same place all their lives are equally satisfied with their current locations.
Other findings include:
Americans are all over the map in their views about their ideal community type: 30 percent say they would most like to live in a small town, 25 percent in a suburb, 23 percent in a city and 21 percent in a rural area.
About 75 percent of Americans say they prefer living where the pace of life is slow, not fast. A similar majority prefers a place where neighbors know each other well to one where neighbors don't generally know each other's business.
About 65 percent say they prefer to live in a hot-weather climate rather than a cold one.
Fast food gets the nod with 43 percent preferring to live in a place with more McDonald's outlets vs. the 35 percent who would rather have more Starbucks shops.
Asked to rank cities where they would live if they could, nearly everyone chose warm weather locations in the South or the West.
Here are their top 15 picks:
1. Denver, 43 percent
2. San Diego, 40 percent
3. Seattle, 38 percent
4. Orlando, 34 percent
5. Tampa, 34 percent
6 San Francisco, 34 percent
7. Phoenix, 33 percent
8. Portland, Ore., 31 percent
9. Sacramento, 29 percent
10 . San Antonio, 29 percent
11. Boston, 28 percent
12. Miami, 28 percent
13. Atlanta, 26 percent
14. Washington, DC, 25 percent
15. New York, 24 percent
Monday, January 26, 2009
Existing Home Sales Show Surprising Gain
In an interview on WTOP this morning, the NAR representative named Northern Virginia among the regions showing gains in existing home sales. - John
Existing-Home Sales Show Surprising Gain
Daily Real Estate News January 26, 2009
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is underperforming and hurting the broader economy.
“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
Housing Stats
National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.
Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.
Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.Existing-
Home Sales By Region
Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.
West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
A Good Time to Buy
NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.
“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”
McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.
Source: NAR
Existing-home sales rose unexpectedly while inventory declined, led by a surge of sales in the West, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted annual rate of 4.74 million units in December. The number compares to a downwardly revised pace of 4.45 million units in November, but 3.5 percent below the 4.91 million-unit pace in December 2007.
For all of 2008, there were about 4.9 million existing-home sales -- 13.1 percent below the 5.65 million transactions recorded in 2007. This is the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall significantly.
“It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to 3.68 million existing homes available for sale, which represents a 9.3-month supply at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is underperforming and hurting the broader economy.
“We’ve added 25 million people to our population over the past decade and housing affordability conditions are the best we’ve seen since 1973, but household formation is much lower than expected,” he said. “Consequently, there is a pent-up demand which could be unleashed with the right stimulus, including a non-repayable home buyer tax credit. The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery.”
Housing Stats
National median existing-home price: (for all housing types) was $175,400 in December, which is 15.3 percent below December 2007 when the median was $207,000. There remains a significant downward distortion in the current median from a large number of distress sales at discounted prices, currently 45 percent of transactions; the median is where half of the homes sold for more and half sold for less. For all of 2008, the median price was $198,600, down 9.3 percent from $219,000 in 2007.
Single-family home sales: rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December from a level of 3.98 million in November, but are 1.4 percent below a 4.32 million-unit pace in December 2007. For all of 2008, single-family sales fell 11.9 percent to 4,349,000.Median existing single-family home price: dropped to $174,700 in December, down 14.8 percent from a year ago. For all of 2008, the single-family median was $197,100, which is 9.5 percent below 2007.
Existing condominium and co-op sales: increased 2.1 percent to a seasonally adjusted annual rate of 480,000 units in December from 470,000 in November, but are 18.4 percent below the 588,000-unit level a year ago. For all of 2008, condo sales dropped 21.0 percent to 563,000 units.Median existing condo price: slipped to $181,400 in December, down 18.3 percent from December 2007. For all of 2008, the median condo price was $210,000, which is 7.2 percent below 2007.Existing-
Home Sales By Region
Northeast: slipped 1.4 percent to an annual pace of 720,000 in December, and are 14.3 percent below December 2007. The median price in the Northeast was $235,000, which is 7.8 percent lower than a year ago.
Midwest: increased 4.0 percent in December to a level of 1.04 million but are 10.3 percent below a year ago. The median price in the Midwest was $140,800, down 11.4 percent from December 2007.
South: rose 7.4 percent to an annual pace of 1.74 million in December, but are 11.2 percent lower than December 2007. The median price in the South was $158,600, which is down 8 percent from a year ago.
West: jumped 13.6 percent to an annual rate of 1.25 million in December and are 31.6 percent higher than a year ago. The median price in the West was $213,100, down 31.5 percent from December 2007.
A Good Time to Buy
NAR President Charles McMillan said it’s an excellent time for first-time home buyers with good jobs.
“The typical buyer plans to stay in their home for 10 years, which is the correct approach in today’s market,” he said. “With historically low mortgage interest rates, flexible sellers, a large inventory, and homes that are selling for less than replacement construction costs in much of the country, buyers who’ve been on the fence should take a closer look at today’s market.”
McMillan added that first-time buyers may want to consider an FHA loan, which offers downpayments of 3.5 percent on a safe 30-year fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.29 percent in December from 6.09 percent in November; the rate was 6.10 percent in December 2007. Last week, Freddie Mac reported the 30-year rate was 5.12 percent.
Source: NAR
Thursday, January 22, 2009
Great new FREE resource for Virgnia Homeowners
Virginia Homeowners Alliance
Background
A 2007 public opinion survey found that homeowners in Virginia were eager to join an organization that could look after and represent their best interests. In response to that need, the Virginia Association of REALTORS® and local associations of REALTORS® around Virginia have started the Virginia Homeowners Alliance.
Our Mission
The Virginia Homeowners Alliance (VHA) is an exciting new service provided by REALTORS® to help homeowners protect their most treasured investment, their home. It’s not an organization with boring meetings and a bunch of bureaucracy. It’s an organization residing on this website to provide homeowners with a free online one-stop-shop for improving the value of your home and keeping up with local government decisions that affect your home, your community and your quality of life.
Why you should join
By joining VHA, you can stay informed of all the latest news relating to real estate taxes, property assessments, new residential and commercial developments, transportation, school construction and a host of other issues affecting your home, family and neighborhood. Through the Alliance Web site, you can easily contact local government bodies including your City Council, Board of Supervisors, School Board, Planning Commission and Housing Authority to name a few. Your free membership will also provide you access to a variety of valuable resources ranging from tips on lawn care to report cards on your local schools. There’s even a “Kids’ Room” where children and parents can access practice SOL tests and learn more about the Commonwealth of Virginia.
Just click here to register Virginia Homeowners Alliance
Background
A 2007 public opinion survey found that homeowners in Virginia were eager to join an organization that could look after and represent their best interests. In response to that need, the Virginia Association of REALTORS® and local associations of REALTORS® around Virginia have started the Virginia Homeowners Alliance.
Our Mission
The Virginia Homeowners Alliance (VHA) is an exciting new service provided by REALTORS® to help homeowners protect their most treasured investment, their home. It’s not an organization with boring meetings and a bunch of bureaucracy. It’s an organization residing on this website to provide homeowners with a free online one-stop-shop for improving the value of your home and keeping up with local government decisions that affect your home, your community and your quality of life.
Why you should join
By joining VHA, you can stay informed of all the latest news relating to real estate taxes, property assessments, new residential and commercial developments, transportation, school construction and a host of other issues affecting your home, family and neighborhood. Through the Alliance Web site, you can easily contact local government bodies including your City Council, Board of Supervisors, School Board, Planning Commission and Housing Authority to name a few. Your free membership will also provide you access to a variety of valuable resources ranging from tips on lawn care to report cards on your local schools. There’s even a “Kids’ Room” where children and parents can access practice SOL tests and learn more about the Commonwealth of Virginia.
Just click here to register Virginia Homeowners Alliance
Tuesday, January 20, 2009
Available Inventory of Homes for Sale Lower Than Average
2008 Northern Virginia Absorption Rate Favorable at Year-End The number of Northern Virginia active listings decreased in December to a low of 7,688 for the year, resulting in a lower-than-average 5-month supply of housing for this region.
This represents a marked improvement from the more than 12-month supply that existed in January of 2008. As described in detail below, lower prices are luring buyers, resulting in a 48 percent increase in the number of sales in Greater Northern Virginia in December compared with sales in December of 2007. Inventories typically fall sharply in December from November due to seasonal adjustment.
The housing market is considered roughly in balance between supply and demand when the inventory is around six months. Inventory numbers capture most, but not all of the entire housing supply. Newly constructed housing and homes in the early stages of the foreclosure process aren't always included in Realtors®' multiple-listing services.
This represents a marked improvement from the more than 12-month supply that existed in January of 2008. As described in detail below, lower prices are luring buyers, resulting in a 48 percent increase in the number of sales in Greater Northern Virginia in December compared with sales in December of 2007. Inventories typically fall sharply in December from November due to seasonal adjustment.
The housing market is considered roughly in balance between supply and demand when the inventory is around six months. Inventory numbers capture most, but not all of the entire housing supply. Newly constructed housing and homes in the early stages of the foreclosure process aren't always included in Realtors®' multiple-listing services.
Shop Carefully for Home Warranties
Home warranties can reassure nervous buyers and help a real estate practitioner seal the deal, but if ultimately the buyer feels cheated by the insurer, the policy could be more trouble than it is worth.The key to consumer satisfaction is picking a reputable insurer and reading the fine print."Any industry that deals with the public is going to have complaints," says Art Chartrand, a lawyer for the trade organization, National Home Service Contract Association. "It's important for people to understand these are limited benefit contracts."Home owners who are about to purchase a home warranty contract should consider these issues, says Georgia Insurance commissioner John Oxendine.
Get an opinion from the state insurance commission. While most state insurance commissions don’t police these kinds of policies, they are usually aware of companies that have a poor reputation.
Read the contract carefully before signing. If the company won’t give the customer a contract in advance, don’t buy.
Pre-existing conditions. If the system or appliance wasn’t working when the policy was purchased, the insurer won’t cover it.
Is there proof that required maintenance was done? Most insurers have clauses in their contracts that require specific routine maintenance for the systems or appliances to be covered.
Who will do the work? Find out how many approved contractors there are and where they are located.
Ask about service fees. Fees to determine the extent of the problem and whether it is covered can be high and buyers should know that in advance.
Source: The Atlanta Journal-Constitution, Alison Young (01/11/09)
Get an opinion from the state insurance commission. While most state insurance commissions don’t police these kinds of policies, they are usually aware of companies that have a poor reputation.
Read the contract carefully before signing. If the company won’t give the customer a contract in advance, don’t buy.
Pre-existing conditions. If the system or appliance wasn’t working when the policy was purchased, the insurer won’t cover it.
Is there proof that required maintenance was done? Most insurers have clauses in their contracts that require specific routine maintenance for the systems or appliances to be covered.
Who will do the work? Find out how many approved contractors there are and where they are located.
Ask about service fees. Fees to determine the extent of the problem and whether it is covered can be high and buyers should know that in advance.
Source: The Atlanta Journal-Constitution, Alison Young (01/11/09)
30-Year Rates Fall Below 5 Percent
Daily Real Estate News January 16, 2009
Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Source: Reuters, Julie Haviv (1/15/09)
Mortgage rates dropped to their 11th straight weekly decline, reaching new record lows, according to Freddie Mac. Interest rates on 30-year, fixed rate mortgages averaged 4.96 percent this week, down from a previous week's 5.01 percent.
The low rates have caused a spike in home refinancing loans and a welcome relief to cash-strapped home owners facing a slowing economy and rising unemployment rates.
"The fact that interest rates have dropped to a record low is an important development since more affordable home financing could help bring buyers back to the market and prevent some of these foreclosures," says Lawrence White, professor of economics at New York University's Stern School of Business.
Other rates were mixed for the week:
15 year fixed rates: averaged 4.65 percent, up from 4.62 percent.
1-year adjustable rate mortgages: fell slightly averaging 4.89 percent from 4.95 percent last week.
5/1 ARMs: averaged 5.25 percent compared with 5.49 percent last week. Mortgage rates have continued to drop ever since the Federal Reserve announced a plan in December to buy up $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae—the government-sponsored enterprises.
Freddie Mac started recording mortgages in 1971.
Source: Reuters, Julie Haviv (1/15/09)
Friday, January 16, 2009
10 Cities Boasting Mini Sales Booms
Just received this from Realtor.com
Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country.
"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences. "We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."
Here are the cities where experts say it makes the most sense to buy now.
Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose
Atlanta
Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country.
"There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences. "We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."
Here are the cities where experts say it makes the most sense to buy now.
Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose
Atlanta
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