Existing home sales spike 5%. Realtors group says sales of existing hones rose in February, but prices tumble fore than 15%.
Sales of existing homes unexpectedly rose in February, recovering from a sharp drop in the previous month, according to an industry report released this week.
Realtors who were best informed made sales. Were you informed?
"Information, Information, Information" is the new "Location, Location, Location."
You read that correctly… The National Association of Realtors said that existing home sales rose last month to a seasonally adjusted annual rate of 4.72 million units, up 5.1% from a rate of 4.49 million in January. February sales were down nearly 5% from year ago levels.
Economists surveyed by Briefing.com were expecting existing home sales to decline to 4.45 million.
The report said first-time buyers made up half of all purchases in February, and that sales of distressed properties accounted for about 45% of all transactions.
Sales were unexpectedly strong in the West, with activity increasing more than 30% over last year.
"February wasn't too shabby for the existing-home market," said Mike Larson, real estate analyst at Weiss Research. "The catch? The increase in sales activity is coming at the expense of pricing."
The national median existing-home price was $165,400 in February, down 15.5% from last year, when the median price was $195,800.
Prices were depressed by the large number of foreclosed properties on the market, said NAR chief economist Lawrence Yun in a statement.
"Our analysis shows that distressed homes typically are selling for 20% less than the normal market price, and this naturally is drawing down the overall median price."
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said there's a "good chance" the collapse in home sales that has been going on since September is "now over."
This information was provided by: Real Estate Investment Resources and appeared in the Real Estate Realtor Newsletter.
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Monday, March 30, 2009
Friday, March 27, 2009
It's a Good Time To Remodel
Planning now to get in a contractor's pipeline of work orders for the spring can give a homeowner a negotiating edge for home improvements and remodeling work. If there was ever a time to strike a deal on home improvement, remodeling and alteration services for the home, this is it.
A semi-annual survey of 5,000 U.S. homeowners, the "Spring 2009 Remodeling Sentiment Report", from Sunnyvale, CA-based RemodelOrMove.com, reveals four times as many homeowners answered "probably not" when asked if they will remodel this year, as compared to the 2007 survey.
In this most recent survey, 68 percent of participating homeowners reported that they probably would remodel this year, down from 84 percent in the fall 2008 report and 92 percent in 2007.
Previous Remodeling Sentiment Reports indicate three times more homeowners than two years ago say that the economy is affecting their remodeling plans greatly, and 82 percent report that the cost of the remodel is a major concern.
The report is inline with research from Harvard University's Joint Center for Housing Studies, which says, in most parts of the country, home prices are falling, discouraging discretionary home improvement spending and diminishing the amount of equity owners have in their homes.
"Earlier this decade, the ability to borrow against equity created by rising home prices fueled remodeling activity, as well as broader consumer spending," says Nicolas P. Retsinas, director of the Harvard Joint Center for Housing Studies.
"Now that prices have softened, owners cannot finance home improvement projects as easily. Even those with equity find credit harder to obtain due to tighter standards," Retsinas added.
The good news is that homeowners who choose to remodel their homes could find this is a good time to get the work done. With new home construction at low levels, more materials and labor are available for remodeling than several years ago, resulting in shorter project schedules and often lower project costs.
Planning now to get in a contractor's pipeline of work orders for the spring could also give a homeowner a negotiating edge. What's more, in a market with declining home values, home improvements are a good way to protect the value of your home and position it as a good value when it's time to sell.
The Sentiment Report also found homeowners are:
*Excited about remodeling – 52 percent
*Dreading remodeling – 12 percent
*Planning to hire a general contractor – 65 percent
Homeowners' remodeling plans include:
*Kitchen remodel – 52 percent
*Bathroom addition – 55 percent
*Bathroom remodel – 45 percent
*Addition of one or more bedrooms or den – 35 percent
*Enlarge or add a garage – 19 percent
*Finish a basement – 13 percent
Harvard's Joint Center also suggests the best home improvements can help save money and the planet because they are "green."
If we are going to meet the nation’s energy goals, we have to continuously search for ways to improve the residential built environment. The report demonstrates that maximizing energy-efficiency in existing housing may be one of our greatest challenges, but also one of our greatest opportunities given that homes account for almost a quarter of energy consumption in our economy," says Mohsen Mostafavi, dean of the Harvard Graduate School of Design, where attention to green design is a growing focus in the classrooms and studios.
A semi-annual survey of 5,000 U.S. homeowners, the "Spring 2009 Remodeling Sentiment Report", from Sunnyvale, CA-based RemodelOrMove.com, reveals four times as many homeowners answered "probably not" when asked if they will remodel this year, as compared to the 2007 survey.
In this most recent survey, 68 percent of participating homeowners reported that they probably would remodel this year, down from 84 percent in the fall 2008 report and 92 percent in 2007.
Previous Remodeling Sentiment Reports indicate three times more homeowners than two years ago say that the economy is affecting their remodeling plans greatly, and 82 percent report that the cost of the remodel is a major concern.
The report is inline with research from Harvard University's Joint Center for Housing Studies, which says, in most parts of the country, home prices are falling, discouraging discretionary home improvement spending and diminishing the amount of equity owners have in their homes.
"Earlier this decade, the ability to borrow against equity created by rising home prices fueled remodeling activity, as well as broader consumer spending," says Nicolas P. Retsinas, director of the Harvard Joint Center for Housing Studies.
"Now that prices have softened, owners cannot finance home improvement projects as easily. Even those with equity find credit harder to obtain due to tighter standards," Retsinas added.
The good news is that homeowners who choose to remodel their homes could find this is a good time to get the work done. With new home construction at low levels, more materials and labor are available for remodeling than several years ago, resulting in shorter project schedules and often lower project costs.
Planning now to get in a contractor's pipeline of work orders for the spring could also give a homeowner a negotiating edge. What's more, in a market with declining home values, home improvements are a good way to protect the value of your home and position it as a good value when it's time to sell.
The Sentiment Report also found homeowners are:
*Excited about remodeling – 52 percent
*Dreading remodeling – 12 percent
*Planning to hire a general contractor – 65 percent
Homeowners' remodeling plans include:
*Kitchen remodel – 52 percent
*Bathroom addition – 55 percent
*Bathroom remodel – 45 percent
*Addition of one or more bedrooms or den – 35 percent
*Enlarge or add a garage – 19 percent
*Finish a basement – 13 percent
Harvard's Joint Center also suggests the best home improvements can help save money and the planet because they are "green."
If we are going to meet the nation’s energy goals, we have to continuously search for ways to improve the residential built environment. The report demonstrates that maximizing energy-efficiency in existing housing may be one of our greatest challenges, but also one of our greatest opportunities given that homes account for almost a quarter of energy consumption in our economy," says Mohsen Mostafavi, dean of the Harvard Graduate School of Design, where attention to green design is a growing focus in the classrooms and studios.
"Consumer demand for sustainable design is on the rise," Mostafavi added.
Published in Realty Times March 2009
Written by Broderick Perkins
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Wednesday, March 25, 2009
Washington Report: Federal Reserve
By far the biggest news for housing out of Washington last week had nothing to do with the Obama administration, nothing to do with Congress. Instead it was these very carefully chosen words from the Federal Reserve Board's open markets committee: We "will employ all available tools," the board said, to turn the economy around, and our number one focus will be the housing and mortgage markets.
In this case, the "all available tools" included the equivalent of a massive shot of adrenaline for home real estate: The Fed pledged to essentially flood the mortgage market with so much new capital that loan rates will drop to unprecedented levels - possibly into the mid four percent range for 30 year fixed rate mortgages. Maybe even lower.
How will that happen? The Fed intends to buy $750 billion in new mortgage-backed securities from Fannie Mae and Freddie Mac . That's on top of the $500 billion it previously committed to buy.
Those mortgage securities will then sit on the Fed's balance sheet, providing long-term returns to the central bank.
More importantly, by providing a guaranteed outlet for conventional mortgages, the Fed will encourage lenders across the country to extend loan commitments to home buyers and refinancers immediately.
It should also throw a lifeline to large numbers of current home owners who are on the brink of not being able to make their monthly mortgage payments, and who simply need lower interest rates through refinancings to afford to keep their houses.
Lower mortgage rates through the new program will almost certainly pull buyers off the sidelines this spring and summer, and even put a floor on home prices in the hardest-hit markets.
Everywhere else, rates in the mid-four percent range or lower could even put upward pressure on selling prices. That's because when you lower the monthly cost of borrowing to buy a house, you make it more affordable, even at a slightly higher price.
Is there any downside to all this stimulation of the housing sector? Probably the biggest worry over the long-term is that inexpensive capital may contribute to higher inflationary pressures in the coming years.
But the Fed seems to be saying: Hey, let's tackle one problem at a time. Right now we're trying to help housing out its anemic state. If that eventually spikes inflation's ugly head, we'll deal with that when it comes up.
Written by: Kenneth R. Harney / Realty Times
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
In this case, the "all available tools" included the equivalent of a massive shot of adrenaline for home real estate: The Fed pledged to essentially flood the mortgage market with so much new capital that loan rates will drop to unprecedented levels - possibly into the mid four percent range for 30 year fixed rate mortgages. Maybe even lower.
How will that happen? The Fed intends to buy $750 billion in new mortgage-backed securities from Fannie Mae and Freddie Mac . That's on top of the $500 billion it previously committed to buy.
Those mortgage securities will then sit on the Fed's balance sheet, providing long-term returns to the central bank.
More importantly, by providing a guaranteed outlet for conventional mortgages, the Fed will encourage lenders across the country to extend loan commitments to home buyers and refinancers immediately.
It should also throw a lifeline to large numbers of current home owners who are on the brink of not being able to make their monthly mortgage payments, and who simply need lower interest rates through refinancings to afford to keep their houses.
Lower mortgage rates through the new program will almost certainly pull buyers off the sidelines this spring and summer, and even put a floor on home prices in the hardest-hit markets.
Everywhere else, rates in the mid-four percent range or lower could even put upward pressure on selling prices. That's because when you lower the monthly cost of borrowing to buy a house, you make it more affordable, even at a slightly higher price.
Is there any downside to all this stimulation of the housing sector? Probably the biggest worry over the long-term is that inexpensive capital may contribute to higher inflationary pressures in the coming years.
But the Fed seems to be saying: Hey, let's tackle one problem at a time. Right now we're trying to help housing out its anemic state. If that eventually spikes inflation's ugly head, we'll deal with that when it comes up.
Written by: Kenneth R. Harney / Realty Times
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, March 23, 2009
Traditional Appraisals Important in Determining Home Value
Written by: Phoebe Chongchua / Realty Times
The advancement of technology is meant to ease the burden of everyday living by making things more efficient, accurate and less expensive but when it comes to determining the value of real estate, can technology really be better---or, take the place of a certified appraiser?
In a prepared statement by the Nation’s Professional Appraisal Organizations (the American Society of Appraisers; the Appraisal Institute; the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers-- which represent 35,000 real property appraisers in the U.S.), contend that using only computer-generated Automated Valuation Models (AVM) to determine the value of homes can lead to trouble.
“Inadequate home valuation requirements leave taxpayers exposed to unnecessary losses and homeowners vulnerable to improper exclusion from Treasury’s loan modification plan,” the release states.
It further states, “Our organizations applaud the fact that the plan will allow millions of families to remain in their homes. However, we are deeply troubled that the Treasury Department’s $75 billion government-guaranteed modification program fails to protect taxpayers from avoidable losses when reworked loans default in the future, as some of them inevitably will; and fails to protect homeowners from mistakenly being declared ineligible for modification because they are told, erroneously, that the current market values of their homes do not meet plan underwriting criteria.”
According to the released statement, the reason some may not meet the underwriting criteria is because of the way the valuation of the homes is determined by the use of AVMs or Broker Price Opinions. “For reasons we find inexplicable, Treasury’s plan ignores this invaluable “safety and soundness” human resource and, instead, relies on computer-generated values and the opinions of real estate agents who are not subject to nationally accepted appraisal qualifications and standards to safeguard taxpayers and determine whether homeowners are or are not eligible to decrease their mortgage burden.”
To be most effective and accurate, Michael H. Evans of Evans Appraisal and also a member of the American Society of Appraisers says that certified and designated expert appraisers must be used. “It’s kind of a black box,” says Evans about the information that comes from AVMs. “Unless that valuation is done by an appraiser who understands the data and interprets it, we don’t know if it’s accurate or inaccurate,” says Evans.
The appraisal industry is making an effort to ensure that its voice is heard. Earlier this month industry members testified before congress about what it perceives to be structural weaknesses with regulations in the mortgage industry. Evans says, especially now, relying on AVMs is risky, “In a down market it’s really hard for the AVM to analyze listing data or understand that concessions were made on a particular sale and how much they were,” says Evans.
“An AVM can be an excellent tool in the hands of a professional, the problem is the people who are putting that data in are not appraisers, nor are they looking at the data and interpreting it and saying ‘Yes, that’s okay, that makes sense or no, I need to get something better than that,” he added.
Evans says using a certified and designated appraiser provides you with a report and someone who is responsible for the information in it. “The appraiser is tied by his appraisal to the transaction, pretty much, for the life of the loan. If we do something wrong you can come get us for the life of the loan—we’re tied to it,” says Evans.
But part of the attractiveness of AVMs is that they’re cheaper. A traditional appraisal costs approximately $250 - $300 to pay for several hours of evaluation done by a certified appraiser whereas an AVM can cut the cost to about $50 - $100 for a typical single-family home.
The National Association of Realtors supports the call to protect consumers and is recommending that lenders be required to inform borrowers about how their property value was determined as well as provide them with a copy of the appraisal for no additional cost. The National Association of Realtor, President Charles McMillan, had this to say to the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit, "Realtors believe that a strong and independent appraisal industry is vital to restoring faith in the mortgage origination process.”
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
The advancement of technology is meant to ease the burden of everyday living by making things more efficient, accurate and less expensive but when it comes to determining the value of real estate, can technology really be better---or, take the place of a certified appraiser?
In a prepared statement by the Nation’s Professional Appraisal Organizations (the American Society of Appraisers; the Appraisal Institute; the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers-- which represent 35,000 real property appraisers in the U.S.), contend that using only computer-generated Automated Valuation Models (AVM) to determine the value of homes can lead to trouble.
“Inadequate home valuation requirements leave taxpayers exposed to unnecessary losses and homeowners vulnerable to improper exclusion from Treasury’s loan modification plan,” the release states.
It further states, “Our organizations applaud the fact that the plan will allow millions of families to remain in their homes. However, we are deeply troubled that the Treasury Department’s $75 billion government-guaranteed modification program fails to protect taxpayers from avoidable losses when reworked loans default in the future, as some of them inevitably will; and fails to protect homeowners from mistakenly being declared ineligible for modification because they are told, erroneously, that the current market values of their homes do not meet plan underwriting criteria.”
According to the released statement, the reason some may not meet the underwriting criteria is because of the way the valuation of the homes is determined by the use of AVMs or Broker Price Opinions. “For reasons we find inexplicable, Treasury’s plan ignores this invaluable “safety and soundness” human resource and, instead, relies on computer-generated values and the opinions of real estate agents who are not subject to nationally accepted appraisal qualifications and standards to safeguard taxpayers and determine whether homeowners are or are not eligible to decrease their mortgage burden.”
To be most effective and accurate, Michael H. Evans of Evans Appraisal and also a member of the American Society of Appraisers says that certified and designated expert appraisers must be used. “It’s kind of a black box,” says Evans about the information that comes from AVMs. “Unless that valuation is done by an appraiser who understands the data and interprets it, we don’t know if it’s accurate or inaccurate,” says Evans.
The appraisal industry is making an effort to ensure that its voice is heard. Earlier this month industry members testified before congress about what it perceives to be structural weaknesses with regulations in the mortgage industry. Evans says, especially now, relying on AVMs is risky, “In a down market it’s really hard for the AVM to analyze listing data or understand that concessions were made on a particular sale and how much they were,” says Evans.
“An AVM can be an excellent tool in the hands of a professional, the problem is the people who are putting that data in are not appraisers, nor are they looking at the data and interpreting it and saying ‘Yes, that’s okay, that makes sense or no, I need to get something better than that,” he added.
Evans says using a certified and designated appraiser provides you with a report and someone who is responsible for the information in it. “The appraiser is tied by his appraisal to the transaction, pretty much, for the life of the loan. If we do something wrong you can come get us for the life of the loan—we’re tied to it,” says Evans.
But part of the attractiveness of AVMs is that they’re cheaper. A traditional appraisal costs approximately $250 - $300 to pay for several hours of evaluation done by a certified appraiser whereas an AVM can cut the cost to about $50 - $100 for a typical single-family home.
The National Association of Realtors supports the call to protect consumers and is recommending that lenders be required to inform borrowers about how their property value was determined as well as provide them with a copy of the appraisal for no additional cost. The National Association of Realtor, President Charles McMillan, had this to say to the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit, "Realtors believe that a strong and independent appraisal industry is vital to restoring faith in the mortgage origination process.”
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, March 20, 2009
Fannie Mae: Selling In A Tricky Market
Selling a home in a down market like this one is not a prospect that appeals to many homeowners. But what about selling nearly 65,000 of them?
That is the task Fannie Mae faces as it repossesses houses that have been through foreclosure. As the owner or guarantor on a third of all of the nation's home loans, the mortgage giant has to take over, renovate and sell a growing number of properties.
"Our No. 1 strategy is to sell them one-by-one," says Gabrielle Harrison, Fannie Mae's vice president of foreclosure sales.
But that strategy is both time and cost intensive. Many of the homes are left in disrepair, or have been vandalized as former owners move out.
Selling Foreclosed Houses
On average, Harrison says, the company spends about $10,000 per property to fix it up for sale. Then Fannie Mae has to assess the price and manage the sale. In all, Harrison says, it's taking the company an average of 90 days to sell a home — even in some of the nation's most distressed areas like California, Nevada and Florida.
The real challenge for Fannie Mae, which since last year has operated under government conservatorship, is that it has two mandates that sometimes conflict. On the one hand, it wants a quick sale so it can reduce its exposure to the housing market. On the other hand, it doesn't want to price homes so low that it ends up undercutting the prices of other homes.
"Our main philosophy is to preserve communities and maintain property values," Harrison says. Doing so, she says, means identifying the exact right price for each home.
Arriving at that price, however, can feel like pinning down a moving target.
Since market prices are so low now may just be the "perfect time to buy!"
Part one of this story, "Fannie Mae Specialists Work To Save Troubled Loans" can be found at: http://www.npr.org/templates/story/story.php?storyId=102014309
This article appeared on NPR's
Morning Edition, March 19, 2009 ·
written by: Yuki Noguchi
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
That is the task Fannie Mae faces as it repossesses houses that have been through foreclosure. As the owner or guarantor on a third of all of the nation's home loans, the mortgage giant has to take over, renovate and sell a growing number of properties.
"Our No. 1 strategy is to sell them one-by-one," says Gabrielle Harrison, Fannie Mae's vice president of foreclosure sales.
But that strategy is both time and cost intensive. Many of the homes are left in disrepair, or have been vandalized as former owners move out.
Selling Foreclosed Houses
On average, Harrison says, the company spends about $10,000 per property to fix it up for sale. Then Fannie Mae has to assess the price and manage the sale. In all, Harrison says, it's taking the company an average of 90 days to sell a home — even in some of the nation's most distressed areas like California, Nevada and Florida.
The real challenge for Fannie Mae, which since last year has operated under government conservatorship, is that it has two mandates that sometimes conflict. On the one hand, it wants a quick sale so it can reduce its exposure to the housing market. On the other hand, it doesn't want to price homes so low that it ends up undercutting the prices of other homes.
"Our main philosophy is to preserve communities and maintain property values," Harrison says. Doing so, she says, means identifying the exact right price for each home.
Arriving at that price, however, can feel like pinning down a moving target.
Since market prices are so low now may just be the "perfect time to buy!"
Part one of this story, "Fannie Mae Specialists Work To Save Troubled Loans" can be found at: http://www.npr.org/templates/story/story.php?storyId=102014309
This article appeared on NPR's
Morning Edition, March 19, 2009 ·
written by: Yuki Noguchi
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, March 18, 2009
Five Ways to Wow Buyers
Written by: Phoebe Chongchua / Realty Times
These days, tax credits and high housing inventory make it a buyers’ market. If you’re a seller, don’t despair. There are a variety of renovations that can help make your home stand out. Many buyers look at numerous homes when shopping for a house; so enhancing your home to make it more memorable is vital and increases the chances of a successful sale.
Clearing clutter, taking down personal photos, applying a fresh coat of paint, making minor repairs, and keeping a pleasant aroma are all basic techniques to make your home more appealing. But there are a few other creative enhancements that you can do to wow buyers without emptying your wallet. The results not only attract more attention, but also paint a picture of a well-cared-for home.
While not everyone has the same taste in housing, typically buyers are attracted to larger kitchens, extra storage space, light and bright rooms, and open floor plans. Special finishing touches on a home can be the needed incentive to generate an offer.
Kathy Gerstenberg has owned her home for nearly 20 years. Over the decades she’s made many improvements but now she’s considering selling and wants to make sure she gets top dollar in a down market. So, she’s examining her home the way a buyer would.
“We live in a tract home and I know there are many homes for sale; we don’t want ours to be seen as the same ‘cookie-cutter’ model as the others,” says Gerstenberg.
With that in mind, Gerstenberg has carefully made enhancements that make her home more comfortable and aesthetically pleasing. “I wanted to do improvements that would catch a buyer’s eye and also make it enjoyable for our family,” says Gerstenberg.
As she scouts the market for her next home there are various aspects of a potential home that she notices right away. “I love crown molding and finished doors and windows,” says Gerstenberg. She adds, “So many times builders just don’t complete the look of a home but when you frame a door or window and add some crown molding to a room it gives it a finished look.”
Industry experts agree; Americans are expected to spend $217 billion on remodeling in 2009. Here are five areas where homeowners may spend some of their remodeling money to add the “wow” factor to your home.
1. Go green. Energy efficient products and household goods are attractive to buyers. Renovations or replacements that help make the house more energy efficient are popular. Things such as better insulation, replacing old windows, caulking, and adding skylights can increase value.
2. Crown molding and wider baseboards. Some homeowners are shy to experiment with this, especially if they live in a small home, but it can be very attractive in any size home. Wider baseboard. The measly baseboard that builders often use in tract homes doesn’t draw attention. Adding a wider baseboard and a fresh coat of paint makes the room come to life. Also, framing windows and doors helps complete the look of a room.
3. Textured paint. Faux finishes, accented walls, or even just a little fresh paint on them makes a lasting impression. Choose colors and textures wisely. Don’t get carried away with a color you love (e.g. purple walls—I’ve seen it in a home for sale). Remember, that you want your home to appeal to the masses. You can always paint your new home purple—and then change it when it comes time to sell it!
4. Improved flooring. Wood, tile, and new carpet can be a showstopper. But if the flooring is chipped, torn, or dirty, you’ll get the opposite reaction from buyers. They’ll think your home hasn’t been cared for properly which could result in a lower offer -- or no sale at all.
5. Add a deck. Adding a deck can add value to your home. It’s a nice feature in a yard and many buyers are happy to purchase a home that already has a deck so that they don’t have to take on that home improvement project.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
These days, tax credits and high housing inventory make it a buyers’ market. If you’re a seller, don’t despair. There are a variety of renovations that can help make your home stand out. Many buyers look at numerous homes when shopping for a house; so enhancing your home to make it more memorable is vital and increases the chances of a successful sale.
Clearing clutter, taking down personal photos, applying a fresh coat of paint, making minor repairs, and keeping a pleasant aroma are all basic techniques to make your home more appealing. But there are a few other creative enhancements that you can do to wow buyers without emptying your wallet. The results not only attract more attention, but also paint a picture of a well-cared-for home.
While not everyone has the same taste in housing, typically buyers are attracted to larger kitchens, extra storage space, light and bright rooms, and open floor plans. Special finishing touches on a home can be the needed incentive to generate an offer.
Kathy Gerstenberg has owned her home for nearly 20 years. Over the decades she’s made many improvements but now she’s considering selling and wants to make sure she gets top dollar in a down market. So, she’s examining her home the way a buyer would.
“We live in a tract home and I know there are many homes for sale; we don’t want ours to be seen as the same ‘cookie-cutter’ model as the others,” says Gerstenberg.
With that in mind, Gerstenberg has carefully made enhancements that make her home more comfortable and aesthetically pleasing. “I wanted to do improvements that would catch a buyer’s eye and also make it enjoyable for our family,” says Gerstenberg.
As she scouts the market for her next home there are various aspects of a potential home that she notices right away. “I love crown molding and finished doors and windows,” says Gerstenberg. She adds, “So many times builders just don’t complete the look of a home but when you frame a door or window and add some crown molding to a room it gives it a finished look.”
Industry experts agree; Americans are expected to spend $217 billion on remodeling in 2009. Here are five areas where homeowners may spend some of their remodeling money to add the “wow” factor to your home.
1. Go green. Energy efficient products and household goods are attractive to buyers. Renovations or replacements that help make the house more energy efficient are popular. Things such as better insulation, replacing old windows, caulking, and adding skylights can increase value.
2. Crown molding and wider baseboards. Some homeowners are shy to experiment with this, especially if they live in a small home, but it can be very attractive in any size home. Wider baseboard. The measly baseboard that builders often use in tract homes doesn’t draw attention. Adding a wider baseboard and a fresh coat of paint makes the room come to life. Also, framing windows and doors helps complete the look of a room.
3. Textured paint. Faux finishes, accented walls, or even just a little fresh paint on them makes a lasting impression. Choose colors and textures wisely. Don’t get carried away with a color you love (e.g. purple walls—I’ve seen it in a home for sale). Remember, that you want your home to appeal to the masses. You can always paint your new home purple—and then change it when it comes time to sell it!
4. Improved flooring. Wood, tile, and new carpet can be a showstopper. But if the flooring is chipped, torn, or dirty, you’ll get the opposite reaction from buyers. They’ll think your home hasn’t been cared for properly which could result in a lower offer -- or no sale at all.
5. Add a deck. Adding a deck can add value to your home. It’s a nice feature in a yard and many buyers are happy to purchase a home that already has a deck so that they don’t have to take on that home improvement project.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, March 16, 2009
The Ripple Effect of The Non-Repayable Tax Credit
Written by: Kenneth R. Harney / Realty Times
First time buyers will get an improved, higher, nonrepayable version of last year's repayable $7,500 tax credit under Congress's massive $789 billion economic stimulus package.
That in turn should lead to 500,000 additional home sales this year, according to new estimates prepared by the National Association of Realtors economics staff .
With the credit eligibility period now extended to September 1, instead of the previous cut-off date of June 30, the 500,000 additional transactions will include purchases not only by direct users of the credit, but also replacement home purchases by sellers who are moving out …or moving up.
This year's better tax credit should also generate huge amounts of "ripple effect" bang for the buck -- $62,000 of additional economic activity for every house sold - or roughly $31 billion in incremental economic benefits, according to the Realtors' projections.
Why? Because virtually every home purchase triggers other purchases and payments down the line -- furnishings, appliances, remodeling, real estate commissions, moving expenses and the like.
Not everybody in Washington is happy with the new credit, however. The National Association of Home Builders pushed hard for a $15,000 credit for all purchases during 2009 -- and got it inserted in the Senate version of the stimulus package.
But House and Senate conferees decided that was too costly in a bill that already had $280 billion in other tax benefits, and they cut it back to the smaller version passed earlier by the House.
Though the improved tax credit is drawing most of the attention, the stimulus package has a handful of other incentives and benefits for home owners. For example, it extends or expands all energy-related tax credits -- for everything from energy efficient heating and airconditioning units, doors, windows and insulation - through the year 2010.
And the bill should produce a lot of additional economic activity aimed at "weatherization" of up to one million houses owned by moderate-income families -- $5 billion worth of new subsidies, according to House Speaker Nancy Pelosi.
Still another big program in the package should create economic ripple effects in neighborhoods where there have been heavy numbers of foreclosures. The bill provides two billion dollars to buy up, renovate and either rent out or resell foreclosed and vacant houses.
The money will go to local governments, but the actual rehab, rental and resales work will flow to people in the private sector.
So if you live or work in an area that's seen a lot of foreclosures, check in with your local housing and planning departments to see how you might fit in.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
First time buyers will get an improved, higher, nonrepayable version of last year's repayable $7,500 tax credit under Congress's massive $789 billion economic stimulus package.
That in turn should lead to 500,000 additional home sales this year, according to new estimates prepared by the National Association of Realtors economics staff .
With the credit eligibility period now extended to September 1, instead of the previous cut-off date of June 30, the 500,000 additional transactions will include purchases not only by direct users of the credit, but also replacement home purchases by sellers who are moving out …or moving up.
This year's better tax credit should also generate huge amounts of "ripple effect" bang for the buck -- $62,000 of additional economic activity for every house sold - or roughly $31 billion in incremental economic benefits, according to the Realtors' projections.
Why? Because virtually every home purchase triggers other purchases and payments down the line -- furnishings, appliances, remodeling, real estate commissions, moving expenses and the like.
Not everybody in Washington is happy with the new credit, however. The National Association of Home Builders pushed hard for a $15,000 credit for all purchases during 2009 -- and got it inserted in the Senate version of the stimulus package.
But House and Senate conferees decided that was too costly in a bill that already had $280 billion in other tax benefits, and they cut it back to the smaller version passed earlier by the House.
Though the improved tax credit is drawing most of the attention, the stimulus package has a handful of other incentives and benefits for home owners. For example, it extends or expands all energy-related tax credits -- for everything from energy efficient heating and airconditioning units, doors, windows and insulation - through the year 2010.
And the bill should produce a lot of additional economic activity aimed at "weatherization" of up to one million houses owned by moderate-income families -- $5 billion worth of new subsidies, according to House Speaker Nancy Pelosi.
Still another big program in the package should create economic ripple effects in neighborhoods where there have been heavy numbers of foreclosures. The bill provides two billion dollars to buy up, renovate and either rent out or resell foreclosed and vacant houses.
The money will go to local governments, but the actual rehab, rental and resales work will flow to people in the private sector.
So if you live or work in an area that's seen a lot of foreclosures, check in with your local housing and planning departments to see how you might fit in.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, March 13, 2009
Good News for Coldwell Banker
The Lake Tahoe offices of Dickson Realty, including those in South Lake Tahoe, Zephyr Cove, Tahoe Keys, Incline Village and King’s Beach, will become Coldwell Banker offices effective March 11, according to a joint announcement from Nancy Fennell, CEO of Dickson Realty, and Daniel Jacuzzi, President and CEO of Select Group Real Estate Services.
With the addition of Dickson’s offices, Coldwell will consolidate their three Incline Village offices into two and the two Zepher Cove offices into one. These, however, are the only consolidations and Dickson employees will be staying with the company, Jacuzzi said.
“Our country is in a severe economic contraction and most businesses are contracting accordingly. We at Dickson are no exception,” Fennell said in a statement announcing the merger. “The Lake Tahoe residential market sales activity is off almost 50 percent from 2005 and we had to take a hard look at whether Dickson could maintain the level of presence and devotion in this environment we desire for the markets we serve. It was a difficult decision, but we have chosen to refocus our efforts on our Reno and Sparks core markets.”
Dickson Realty is now the second company to merge with Jacuzzi’s Select Group in the past year. Coldwell Banker Incline Village Realty merged with the Select Group in late October, 2008.
“Challenging real estate markets create opportunity for strong companies to grow and we are pleased to be able to have that opportunity to strengthen our company in this market,” Jacuzzi said.
Dickson Realty is retaining its Reno/Sparks and Truckee office locations.
By Nick Cruit
BONANZA STAFF WRITER
Published in the North Lake Tahoe Bonanza
Wednesday, March 11, 2009
February Round Up: Rates Remain Very Affordable
Written by: Realty Times Staff
In Freddie Mac's results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.07 percent with an average 0.7 point for the week ending February 26, 2009, up from the previous week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.24 percent.
The 15-year FRM this week averaged 4.68 percent with an average 0.7 point, unchanged from the previous week when it averaged 4.68 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.06 percent this week, with an average 0.7 point, up from the previous week when it averaged 5.04 percent. A year ago, the 5-year ARM averaged 5.43 percent.
One-year Treasury-indexed ARMs averaged 4.81 percent this week with an average 0.6 point, up from the previous week when it averaged 4.80 percent. At this time last year, the 1-year ARM averaged 5.11 percent.
"Mortgage rates were little changed this week amid mixed data reports of a slowing economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Both the core Producer Price and Consumer Price Indexes ticked up in January, higher than the market consensus, while consumer confidence in February fell to the lowest reading since records began in January 1967.
Signs of Turnaround?
Are we somewhere near the "tipping point" for real estate, where an accumulation of positive economic and government policy developments starts moving housing toward higher sales and stabilized prices?
There are some recent strong signs that we just might be there.
Tops on the list: The massive stimulus bill signed into law is certain to pull buyers into the market who otherwise would have stayed on the sidelines.
The new tax credit in the legislation goes up to $8,000 and is non-repayable -- unlike last year's ineffective credit program. It' s intended for "first time" purchasers, but under the program definition, you're a first timer as long as you haven't owned or co-owned a house during the previous three years.
You might have sold your long-time home in 2005 or early 2006, and haven't owned a house since, but you still qualify as a first timer for the $8,000 credit this year.
Most economists aren't sure just how many additional home sales the credit will stimulate, but even Mark Zandi of Moody's Economy.com says the "credit is a plus for the housing market." Brian Bethune, an economist with IHS Global Insight, says the $8,000 credit will not only push large numbers of consumers to buy homes, but will also "buffer the rate of decline in home prices" by creating more demand.
A second major government initiative should also be helpful: The government's massive $275 billion relief program to keep three to four million home owners out of foreclosure, and to refinance three to four million mortgages where owners can't otherwise qualify for a new loan because of property value declines.
The giant assistance program has its critics, who say it will reward people who bought pricier homes than they could really afford. But that's not the point here: The fact is that, costly though it may be, the program could prevent foreclosures and price declines in neighborhoods across the country.
Still another positive sign: Home buyers and owners are beating a wide path to their mortgage lenders not only to refinance but to take out new loans to buy houses. Total applications for new mortgages last week exploded -- up by an extraordinary 48 percent, according to the Mortgage Bankers Association. Applications for conventional loans to buy houses were up by 11 percent.
Part of the reason was that rates fell again -- this time to an average of just 5.07 percent for 30 year fixed rates and 4.68 percent for fixed rate 15 year loans.
The opportunities here are pretty tempting ... and it looks like buyers are getting the message.
Garages: Not Just for Cars Anymore
With larger, more luxurious kitchens now the heart of many houses, and first-floor laundry and mud rooms the new activity centers, it was only a matter of time before the garage also underwent a transformation.
Despite the fact that 82 percent of homes have garages, according to the NAR 2007 Profile of Buyers' Home Feature Preferences, the space is often "the largest, most underutilized, most abused, and most often ignored room in the house," wrote Bill West in his book, Your Garagenous Zone.
Many people still struggle to find enough space amid the junk in their garage to park a car. But there's a growing desire to create cleaner, more organized spaces that can contribute to a home's "wow" factor, says West.
It may not raise the price in most markets, but it helps win a beauty contest if the buyer is deciding among a few homes.
Do You Marry The Credit Score?
Some think that lenders average everyone's credit scores together. If Jane has an 800 credit score and John has a 400 credit score, their combined score would be 800 + 400 = 1200 divided by two, giving a not-so-terrible-after-all score of 600. Of course, that's not so.
Good credit doesn't erase bad credit. In fact, bad credit will kill the deal altogether. And scores aren't averaged, they're examined independently and the 400 score would render the 800 score impotent.
If a spouse or joint borrower has bad credit, and the person with good credit can qualify on her own, then leave the person with bad credit off the mortgage and simply include him on the title.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
In Freddie Mac's results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.07 percent with an average 0.7 point for the week ending February 26, 2009, up from the previous week when it averaged 5.04 percent. Last year at this time, the 30-year FRM averaged 6.24 percent.
The 15-year FRM this week averaged 4.68 percent with an average 0.7 point, unchanged from the previous week when it averaged 4.68 percent. A year ago at this time, the 15-year FRM averaged 5.72 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.06 percent this week, with an average 0.7 point, up from the previous week when it averaged 5.04 percent. A year ago, the 5-year ARM averaged 5.43 percent.
One-year Treasury-indexed ARMs averaged 4.81 percent this week with an average 0.6 point, up from the previous week when it averaged 4.80 percent. At this time last year, the 1-year ARM averaged 5.11 percent.
"Mortgage rates were little changed this week amid mixed data reports of a slowing economy," said Frank Nothaft, Freddie Mac vice president and chief economist. "Both the core Producer Price and Consumer Price Indexes ticked up in January, higher than the market consensus, while consumer confidence in February fell to the lowest reading since records began in January 1967.
Signs of Turnaround?
Are we somewhere near the "tipping point" for real estate, where an accumulation of positive economic and government policy developments starts moving housing toward higher sales and stabilized prices?
There are some recent strong signs that we just might be there.
Tops on the list: The massive stimulus bill signed into law is certain to pull buyers into the market who otherwise would have stayed on the sidelines.
The new tax credit in the legislation goes up to $8,000 and is non-repayable -- unlike last year's ineffective credit program. It' s intended for "first time" purchasers, but under the program definition, you're a first timer as long as you haven't owned or co-owned a house during the previous three years.
You might have sold your long-time home in 2005 or early 2006, and haven't owned a house since, but you still qualify as a first timer for the $8,000 credit this year.
Most economists aren't sure just how many additional home sales the credit will stimulate, but even Mark Zandi of Moody's Economy.com says the "credit is a plus for the housing market." Brian Bethune, an economist with IHS Global Insight, says the $8,000 credit will not only push large numbers of consumers to buy homes, but will also "buffer the rate of decline in home prices" by creating more demand.
A second major government initiative should also be helpful: The government's massive $275 billion relief program to keep three to four million home owners out of foreclosure, and to refinance three to four million mortgages where owners can't otherwise qualify for a new loan because of property value declines.
The giant assistance program has its critics, who say it will reward people who bought pricier homes than they could really afford. But that's not the point here: The fact is that, costly though it may be, the program could prevent foreclosures and price declines in neighborhoods across the country.
Still another positive sign: Home buyers and owners are beating a wide path to their mortgage lenders not only to refinance but to take out new loans to buy houses. Total applications for new mortgages last week exploded -- up by an extraordinary 48 percent, according to the Mortgage Bankers Association. Applications for conventional loans to buy houses were up by 11 percent.
Part of the reason was that rates fell again -- this time to an average of just 5.07 percent for 30 year fixed rates and 4.68 percent for fixed rate 15 year loans.
The opportunities here are pretty tempting ... and it looks like buyers are getting the message.
Garages: Not Just for Cars Anymore
With larger, more luxurious kitchens now the heart of many houses, and first-floor laundry and mud rooms the new activity centers, it was only a matter of time before the garage also underwent a transformation.
Despite the fact that 82 percent of homes have garages, according to the NAR 2007 Profile of Buyers' Home Feature Preferences, the space is often "the largest, most underutilized, most abused, and most often ignored room in the house," wrote Bill West in his book, Your Garagenous Zone.
Many people still struggle to find enough space amid the junk in their garage to park a car. But there's a growing desire to create cleaner, more organized spaces that can contribute to a home's "wow" factor, says West.
It may not raise the price in most markets, but it helps win a beauty contest if the buyer is deciding among a few homes.
Do You Marry The Credit Score?
Some think that lenders average everyone's credit scores together. If Jane has an 800 credit score and John has a 400 credit score, their combined score would be 800 + 400 = 1200 divided by two, giving a not-so-terrible-after-all score of 600. Of course, that's not so.
Good credit doesn't erase bad credit. In fact, bad credit will kill the deal altogether. And scores aren't averaged, they're examined independently and the 400 score would render the 800 score impotent.
If a spouse or joint borrower has bad credit, and the person with good credit can qualify on her own, then leave the person with bad credit off the mortgage and simply include him on the title.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Tuesday, March 10, 2009
Questions and Answers for Borrowers about the Homeowner Affordability and Stability Plan
Reprint from Hopenow.com
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing
costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The
criteria for eligibility will include having sufficient income to make the new payment and an
acceptable mortgage payment history. The program is limited to loans held or securitized
by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy
borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with
a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie
Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac
and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10.What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4,
when the refinance program becomes available. This includes:
· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to
month, and
· payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By
providing mortgage lenders with financial incentives to modify existing first mortgages, the
Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless
of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability
and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your
primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly
gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers
avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner
Affordability and Stability Plan provides incentive payments as a borrower makes timely
payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I'm already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in
their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they
will send letters to potentially eligible homeowners, a process that may take several weeks.
If you think you qualify for a modification and do not receive a letter within several weeks,
contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13.What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after
March 4, when the modification program becomes available. This includes:
· information about the monthly gross income of your household including recent pay
stubs if you receive them or documentation of income you receive from other
sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to
month, and
· payments on other loans such as student loans and car loans.
14.My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility. We support this effort.
How do I know if my mortgage is owned by Fannie Mae or Freddie Mac?
Answer: Call your current lender or mortgage servicer. You can find the phone number on your monthly mortgage statement or coupon book.
You can also contact Fannie Mae at 800-7FANNIE and Freddie Mac at 800-FREDDIE from 8 a.m. to 8 p.m. Or, go to http://www.fanniemae.com/ /homeaffordable and http://www.freddiemac.com/avoidforeclosure and fill out the online request forms.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing
costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The
criteria for eligibility will include having sufficient income to make the new payment and an
acceptable mortgage payment history. The program is limited to loans held or securitized
by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy
borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with
a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie
Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac
and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10.What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4,
when the refinance program becomes available. This includes:
· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to
month, and
· payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By
providing mortgage lenders with financial incentives to modify existing first mortgages, the
Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless
of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability
and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your
primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly
gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers
avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner
Affordability and Stability Plan provides incentive payments as a borrower makes timely
payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years can have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from a HUD-approved housing counseling agency or are referred to a counselor as a condition of the modification, you will not be charged a fee. Borrowers should beware of any organization that attempts to charge a fee for housing counseling or modification of a delinquent loan, especially if they require a fee in advance.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I'm already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in
their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they
will send letters to potentially eligible homeowners, a process that may take several weeks.
If you think you qualify for a modification and do not receive a letter within several weeks,
contact your mortgage servicer or a HUD-approved housing counselor. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13.What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after
March 4, when the modification program becomes available. This includes:
· information about the monthly gross income of your household including recent pay
stubs if you receive them or documentation of income you receive from other
sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to
month, and
· payments on other loans such as student loans and car loans.
14.My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility. We support this effort.
How do I know if my mortgage is owned by Fannie Mae or Freddie Mac?
Answer: Call your current lender or mortgage servicer. You can find the phone number on your monthly mortgage statement or coupon book.
You can also contact Fannie Mae at 800-7FANNIE and Freddie Mac at 800-FREDDIE from 8 a.m. to 8 p.m. Or, go to http://www.fanniemae.com/ /homeaffordable and http://www.freddiemac.com/avoidforeclosure and fill out the online request forms.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, March 6, 2009
How to sell your home in a buyer’s market
How to sell your home in a buyer’s market
Published on Consumerreports.org
Competitive pricing can set your place apart from the pack
If you’re trying to sell a home in the current overstocked real-estate market, you already know that the days of white-hot bidding wars and quick-flipped condos are long gone. The National Association of Realtors says that 2008 home sales will be the lowest since 2002. And early numbers are bearing that out. Nationwide, home sales are down 24 percent from last year, while home prices have dropped 8.2 percent. If that weren’t worrisome enough, the U.S. housing inventory remains bloated and the subprime mortgage crisis has made it tougher for buyers to secure loans.
To make a deal in this market, experts say, sellers need to set the right price and hone their negotiating skills. "Pricing is the single most important thing to get right," says Laura B. Kopple, a real-estate broker in Venice, Fla. "There are too many similar properties out there, so you need aggressive pricing, including incentives. If a home is priced where it should be and it’s appealing, it’s only a matter of time before it sells."
How can you make your home stand out from all the others on the market? Real-estate specialists offer the following tips:
Pick the right broker.
Look for local agents who are listing, marketing, and selling in your community even if the market is slow. Ask several of them to make a "listing presentation" to discuss your home’s value, justify their numbers, and how they would market your property.
Peter G. Miller, a syndicated real-estate columnist and creator of OurBroker.com, suggests that you visit open houses held by the brokers you’re considering to see how they handle a listing. Did the broker greet people? Was the home shown to its best advantage? (This includes details like removing pets. Miller recalls one open house where the owner’s roaming dog with "more teeth than a zipper" kept potential buyers from inspecting the backyard.)
Once you decide on a broker, you have three types of listing options. In an open listing, you reserve the right to sell the home yourself and not pay a commission, but you also allow one or more brokers to offer the property. With an exclusive-agency listing, you have one broker but reserve the right to sell the property yourself. An exclusive-right-to-sell listing gives only one broker the right to represent you during the listing term and guarantees the broker a commission. Most Multiple Listing Services will post exclusive-agency and exclusive-right-to-sell listings.
Understand the real marketplace.
To negotiate effectively, you need to know up-to-the-minute sale prices—not just what your neighbor’s house sold for last year—and the deal-making behind them. For example, two homes may each have sold for $400,000, but if one owner gave a 3 percent credit for deck repair and a new furnace, that’s a $12,000 reduction. Your agent should be knowledgeable about the details of sales in your area and be nimble enough to revise the marketing plan for your home to reflect changing conditions.
"People need to price themselves under the market because the competition is so stiff," says Allyson Bernard, the owner of Real Estate Professionals of Connecticut. Tighter credit is also having an impact. "A buyer for one of my listings had pre-approved financing that got yanked because the guidelines changed," she says. The change meant she had to sell her own home before qualifying. "She dropped the price of her residence, which was already aggressively priced at just under $200,000, another $30,000," Bernard says. "She was prepared to go down another $15,000 when she got an offer."
Sweeten the deal.
Sellers are reportedly offering some unusual sales incentives—plasma TVs, cars, boat slips, vacations, and golf carts—but cash may still be king. "I think dollars carry a lot more weight than a free TV," says Kopple. For example, some sellers have agreed to pay condo maintenance fees for the buyer. "If six similar condos are on the market, and a seller offers to pay the first quarter’s maintenance fees—which run from $225 to $250 a month in this area—that $750 can help make a deal," she says. Other ideas include covering moving expenses or a month’s mortgage payment.
In a slow market, offering to pay a "seller contribution" toward the buyer’s closing costs may make more sense than lowering the sales price. The closing costs include such items as the appraisal fee and title search, points to reduce the mortgage, and attorney and recording fees. "If the seller can give a contribution, it’s in many cases going to be smaller than a price reduction on the home but more appealing to buyers who need cash to close," Miller says. Individual mortgage programs often allow seller contributions ranging from 3 to 6 percent. Borrowers need to check with lenders to see what’s allowed.
Offer a warranty against defects.
A home warranty provides protection for mechanical systems and certain appliances against unexpected repairs in the first year. "We use them quite a bit," says Kopple. "If plumbing or kitchen appliances are on their last legs, I recommend the seller replace them and then get warranties. A lot of warranties will cover items while a property is listed and then convert to the buyer." The cost ranges from $250 to around $400, depending on coverage. Companies that sell warranties include American Home Shield and First American Home Buyers Protection Corp.
Be flexible on the deposit.
To "bind" a deal, the buyer should put down a deposit (separate from the down payment), which varies widely depending on the local market. You’d like the biggest deposit you can get, but in a slow market you may have to settle for less. "If the buyer is pre-approved for a loan and has a strong interest in the property, and no better offer is on the horizon, reducing the deposit can help bring in the buyer," Miller says.
Curb your enthusiasm.
Walk down your street, then walk back to your home and try to see what other people see. Tend to any overgrown landscaping, and make sure shrubs are nicely trimmed. "When people look for a house, curb appeal is the most important thing, bar none," says Bernard. "People are already forming an opinion when you drive them up to the curb. If the outside looks overgrown, stark, and hard, I’ve had people say, ‘I don’t even want to get out of the car.’"
Use staging to enhance the home’s appeal.
A professional home stager can make over your home to de-emphasize your personal taste and become more visually appealing to a broader range of buyers. Pros say the key is to clear out clutter and clean, clean, clean. "If you can smell it, you can’t sell it," says Barb Schwarz, a real-estate broker and author of "Home Staging: The Winning Way to Sell Your House for More Money" (John Wiley & Sons, 2006).
Staging can extend from rearranging your furniture to preparing an entire house for sale with rented furniture and accessories. A two-hour consultation with written recommendations for do-it-yourselfers costs around $300. But a full staging of a large home could range from $500 to $5,000, notes Schwarz. Costs average around $1,800 in the Midwest, $2,800 on the West Coast, and $3,800 on the East Coast. Those fees are paid up front to professional stagers, but many real-estate agents include some staging as part of the services they offer that are covered by their commission.
"It’s difficult for people to change a home so it’s functional for them, but arrange it so buyers can imagine themselves in it," says Bernard, who stages homes for her clients. "I had a house listed that had been on the market about three months. The owners had a four-piece sectional in a living room, which was also the entrance to the house. I took apart the sectional and just used two pieces, and stored the other two. It completely changed the room and made it feel twice as big. The house had a deposit within three weeks."
Be ready to negotiate.
Buyers are likely to be demanding in today’s market, so be prepared for hardball negotiating. Some brokers advise that you remove anything you absolutely can’t part with before you show the house. "A mirror on the wall almost broke one deal, and things got a little testy for a while," Kopple recalls. The buyer wanted it because it fit the spot; the seller didn’t want to leave it because of its sentimental value. The seller finally agreed to sell the mirror to the new owners.
Ellen Murphy of Prudential Rand Realty in Nyack, N.Y., tells of a buyer who fell in love with both the home and the owner’s cat. She requested the cat—and got it.
Monitor and update your MLS listing.
If it’s April, you don’t want the photo of your house on the Multiple Listing Service displaying a snowman on the lawn. An out-of-season picture is a dead giveaway that your home has been on the market for awhile. And with many buyers doing their first "look-see" on the Internet, the quality of the photos is paramount, too. "If you have something that sets your property apart—French doors in the living room or a wonderful view—highlight that in a photo," notes Murphy. "Make sure that any unique qualities are emphasized in the write-up, which may not always be apparent, even to a broker." She recalls one co-op owner who had invested in extra "bin space" in her building, where storage was at a premium. The storage bonus helped sell her apartment quickly.
And proofreading the description of your home for the MLS and elsewhere is always a good idea. "I saw a listing recently for a house with a ‘coy pond’ in the back yard," Murphy says. "That must have left buyers scratching their heads."
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Published on Consumerreports.org
Competitive pricing can set your place apart from the pack
If you’re trying to sell a home in the current overstocked real-estate market, you already know that the days of white-hot bidding wars and quick-flipped condos are long gone. The National Association of Realtors says that 2008 home sales will be the lowest since 2002. And early numbers are bearing that out. Nationwide, home sales are down 24 percent from last year, while home prices have dropped 8.2 percent. If that weren’t worrisome enough, the U.S. housing inventory remains bloated and the subprime mortgage crisis has made it tougher for buyers to secure loans.
To make a deal in this market, experts say, sellers need to set the right price and hone their negotiating skills. "Pricing is the single most important thing to get right," says Laura B. Kopple, a real-estate broker in Venice, Fla. "There are too many similar properties out there, so you need aggressive pricing, including incentives. If a home is priced where it should be and it’s appealing, it’s only a matter of time before it sells."
How can you make your home stand out from all the others on the market? Real-estate specialists offer the following tips:
Pick the right broker.
Look for local agents who are listing, marketing, and selling in your community even if the market is slow. Ask several of them to make a "listing presentation" to discuss your home’s value, justify their numbers, and how they would market your property.
Peter G. Miller, a syndicated real-estate columnist and creator of OurBroker.com, suggests that you visit open houses held by the brokers you’re considering to see how they handle a listing. Did the broker greet people? Was the home shown to its best advantage? (This includes details like removing pets. Miller recalls one open house where the owner’s roaming dog with "more teeth than a zipper" kept potential buyers from inspecting the backyard.)
Once you decide on a broker, you have three types of listing options. In an open listing, you reserve the right to sell the home yourself and not pay a commission, but you also allow one or more brokers to offer the property. With an exclusive-agency listing, you have one broker but reserve the right to sell the property yourself. An exclusive-right-to-sell listing gives only one broker the right to represent you during the listing term and guarantees the broker a commission. Most Multiple Listing Services will post exclusive-agency and exclusive-right-to-sell listings.
Understand the real marketplace.
To negotiate effectively, you need to know up-to-the-minute sale prices—not just what your neighbor’s house sold for last year—and the deal-making behind them. For example, two homes may each have sold for $400,000, but if one owner gave a 3 percent credit for deck repair and a new furnace, that’s a $12,000 reduction. Your agent should be knowledgeable about the details of sales in your area and be nimble enough to revise the marketing plan for your home to reflect changing conditions.
"People need to price themselves under the market because the competition is so stiff," says Allyson Bernard, the owner of Real Estate Professionals of Connecticut. Tighter credit is also having an impact. "A buyer for one of my listings had pre-approved financing that got yanked because the guidelines changed," she says. The change meant she had to sell her own home before qualifying. "She dropped the price of her residence, which was already aggressively priced at just under $200,000, another $30,000," Bernard says. "She was prepared to go down another $15,000 when she got an offer."
Sweeten the deal.
Sellers are reportedly offering some unusual sales incentives—plasma TVs, cars, boat slips, vacations, and golf carts—but cash may still be king. "I think dollars carry a lot more weight than a free TV," says Kopple. For example, some sellers have agreed to pay condo maintenance fees for the buyer. "If six similar condos are on the market, and a seller offers to pay the first quarter’s maintenance fees—which run from $225 to $250 a month in this area—that $750 can help make a deal," she says. Other ideas include covering moving expenses or a month’s mortgage payment.
In a slow market, offering to pay a "seller contribution" toward the buyer’s closing costs may make more sense than lowering the sales price. The closing costs include such items as the appraisal fee and title search, points to reduce the mortgage, and attorney and recording fees. "If the seller can give a contribution, it’s in many cases going to be smaller than a price reduction on the home but more appealing to buyers who need cash to close," Miller says. Individual mortgage programs often allow seller contributions ranging from 3 to 6 percent. Borrowers need to check with lenders to see what’s allowed.
Offer a warranty against defects.
A home warranty provides protection for mechanical systems and certain appliances against unexpected repairs in the first year. "We use them quite a bit," says Kopple. "If plumbing or kitchen appliances are on their last legs, I recommend the seller replace them and then get warranties. A lot of warranties will cover items while a property is listed and then convert to the buyer." The cost ranges from $250 to around $400, depending on coverage. Companies that sell warranties include American Home Shield and First American Home Buyers Protection Corp.
Be flexible on the deposit.
To "bind" a deal, the buyer should put down a deposit (separate from the down payment), which varies widely depending on the local market. You’d like the biggest deposit you can get, but in a slow market you may have to settle for less. "If the buyer is pre-approved for a loan and has a strong interest in the property, and no better offer is on the horizon, reducing the deposit can help bring in the buyer," Miller says.
Curb your enthusiasm.
Walk down your street, then walk back to your home and try to see what other people see. Tend to any overgrown landscaping, and make sure shrubs are nicely trimmed. "When people look for a house, curb appeal is the most important thing, bar none," says Bernard. "People are already forming an opinion when you drive them up to the curb. If the outside looks overgrown, stark, and hard, I’ve had people say, ‘I don’t even want to get out of the car.’"
Use staging to enhance the home’s appeal.
A professional home stager can make over your home to de-emphasize your personal taste and become more visually appealing to a broader range of buyers. Pros say the key is to clear out clutter and clean, clean, clean. "If you can smell it, you can’t sell it," says Barb Schwarz, a real-estate broker and author of "Home Staging: The Winning Way to Sell Your House for More Money" (John Wiley & Sons, 2006).
Staging can extend from rearranging your furniture to preparing an entire house for sale with rented furniture and accessories. A two-hour consultation with written recommendations for do-it-yourselfers costs around $300. But a full staging of a large home could range from $500 to $5,000, notes Schwarz. Costs average around $1,800 in the Midwest, $2,800 on the West Coast, and $3,800 on the East Coast. Those fees are paid up front to professional stagers, but many real-estate agents include some staging as part of the services they offer that are covered by their commission.
"It’s difficult for people to change a home so it’s functional for them, but arrange it so buyers can imagine themselves in it," says Bernard, who stages homes for her clients. "I had a house listed that had been on the market about three months. The owners had a four-piece sectional in a living room, which was also the entrance to the house. I took apart the sectional and just used two pieces, and stored the other two. It completely changed the room and made it feel twice as big. The house had a deposit within three weeks."
Be ready to negotiate.
Buyers are likely to be demanding in today’s market, so be prepared for hardball negotiating. Some brokers advise that you remove anything you absolutely can’t part with before you show the house. "A mirror on the wall almost broke one deal, and things got a little testy for a while," Kopple recalls. The buyer wanted it because it fit the spot; the seller didn’t want to leave it because of its sentimental value. The seller finally agreed to sell the mirror to the new owners.
Ellen Murphy of Prudential Rand Realty in Nyack, N.Y., tells of a buyer who fell in love with both the home and the owner’s cat. She requested the cat—and got it.
Monitor and update your MLS listing.
If it’s April, you don’t want the photo of your house on the Multiple Listing Service displaying a snowman on the lawn. An out-of-season picture is a dead giveaway that your home has been on the market for awhile. And with many buyers doing their first "look-see" on the Internet, the quality of the photos is paramount, too. "If you have something that sets your property apart—French doors in the living room or a wonderful view—highlight that in a photo," notes Murphy. "Make sure that any unique qualities are emphasized in the write-up, which may not always be apparent, even to a broker." She recalls one co-op owner who had invested in extra "bin space" in her building, where storage was at a premium. The storage bonus helped sell her apartment quickly.
And proofreading the description of your home for the MLS and elsewhere is always a good idea. "I saw a listing recently for a house with a ‘coy pond’ in the back yard," Murphy says. "That must have left buyers scratching their heads."
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, March 4, 2009
Details Of The Recovery and Reinvestment Act of 2009
Written by: Realty Times Staff
Talk about tax shelters. Your home likely provides more tax relief than any other acquisition, thanks, in part, to new federal laws designed to ease financial suffering in the recessionary economy.
The "American Recovery and Reinvestment Act of 2009," passed the House on February 13, 2009, by a vote of 246 - 184. Later that day, the Senate also passed the bill by a vote of 60 - 38. The President signed the bill on February 17, 2009. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.
The bill includes the following provisions:
Homebuyer Tax Credit - The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. The National Association of Realtors® Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.
Neighborhood Stabilization - Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2008 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.
The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, March 2, 2009
Mortgages That Survived The Credit Crunch
Written by: Broderick Perkins / Realty Times
Today's mortgages are a far cry from boom time home loans, but they do exist and some lenders have money to burn. "People used to qualify with stated income. Now there is more documentation. And they aren't just documenting your income, but looking for assets in addition to your income and low debt-to-income ratios and low loan-to-value ratios," said Asmaa Egal, mortgage broker, Loan Republic Financial in San Francisco.
The new brand of home loan has been customized with tighter controls and fewer defects to replace old mortgage models that crashed and burned when the economy hit the skids. "You have to qualify. You have to prove your income. They have make-sense underwriting," said, Quincy Virgilio, 2009 president of the Santa Clara County Association of Realtors.
FHA-insured Mortgages
The new darling of the homebuyer set, Federal Housing Administration-insured mortgage programs, have been available for decades. especially for low- to moderate-income families who may not meet requirements for conventional loans.
But with new loan limits as high as $625,500, they've become especially attractive in high cost areas. FHA loans are expected to account for 25 percent of the mortgages signed in 2009, according to the National Association of Realtors. Because of previously lower loan limits, FHA loans amounted to less than 4 percent of homes sold from 2003 and 2006.
The new FHA model also comes with low down payments and eased credit requirements.
"They are much more lenient (compared to conforming Fannie Mae and Freddie Mac mortgages) on how they look at credit scores. The score can be in the 600s vs. 700s, said Cheryl O'Connor, a finance expert with O'Connor Consulting in Danville, CA.
FHA features include:
* As little as 3 percent down.
* Financed closing costs.
* A 1 percent (of the mortgage) ceiling on the amount lenders can charge for closing costs.
* No prepayment penalties.
* Relaxed debt-to-income requirements.
* FHA-approved lenders only.
* FHA-approved appraisals only.
Virgilio says buyers who don't have 20 percent or more down will pay an upfront mortgage insurance fee amounting to as much as 1.75 percent (of the loan) and a monthly mortgage insurance premium that effectively tacks on another 0.5 percent to the interest rate.
"But you can structure your loan with participation from the seller paying closing costs. Not down payment assistance, but closing costs, but in this marketplace the seller is going for that," said Virgilio.
The best rates (typically fixed, rather than adjustable) go to those who have financial reserves, savings or investments amounting to at least two months worth of a PITI (principle, interest, taxes and insurance) mortgage payment.
Likewise, the best deals go to buyers with a 30 to 33 percent debt-to-income ratio when the debt includes housing and all other monthly debt payments.
In addition to FHA home-buying loans, the "Housing and Economic Recovery Act of 2008" created "Hope For Homeowners" which allows troubled mortgage holders to avoid foreclosure by refinancing into a more affordable, FHA Secure mortgage, provided Uncle Sam gets a piece of the equity-growth action and provided the existing lender approves.
Members Only
Credit unions largely survived the credit crunch because, as non-profits, the fundamentals apply. They take in deposits. They make loans based on sound underwriting principles. They charge more on those loans than they pay on deposits.
Without the profit motive, there was no incentive to get involved in the subprime racket, no reason to sell and repackage loans as investments and no need to otherwise venture into untried and untrue investment schemes.
Along with fixed-rate 30-year mortgages at rates often lower than banks they also offer conventional adjustable rate mortgages (ARM) and hybrids all with rates typically lower than conventional lenders. "Credit unions have a tendency to be more lenient if you have a bank account with a credit union," O'Connor said.
Credit union originations rose a whopping 10.1 percent during the first half of 2008, according to the industry's federal regulator, the National Credit Union Administration (NCUA). Conventional mortgage lender loan originations took a nose dive, falling 17 percent during the same period.
Rural Home Loans
Don't get your knickers in a knot over the term "rural." Loans backed by the United States Department of Agriculture's (USDA) Rural Development Housing and Community Facilities Programs are limited, but you don't have to grow corn or raise chickens.
The loans are for:
* People living in designated rural areas where the population is less than 20,000.
* People with incomes under 115 percent of household median income for the area. In most areas, the upper income limit for borrowers will be $60,000 to $70,000 per year.
* People buying homes, not refinancing or taking out equity loans.
USDA Programs include no-money down loans, home improvement and rehabilitation loans and grants, construction loans, loans for minorities and true to the work-ethic of rural life, sweat-equity loans that require buyers to help build their own homes.
Local, State Agencies
O'Connor says don't overlook local -- city, county and state -- housing assistance programs that often cater to first-time and or low- to moderate-income home buyers as well as government and service workers including teachers, police officers and fire fighters.
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Today's mortgages are a far cry from boom time home loans, but they do exist and some lenders have money to burn. "People used to qualify with stated income. Now there is more documentation. And they aren't just documenting your income, but looking for assets in addition to your income and low debt-to-income ratios and low loan-to-value ratios," said Asmaa Egal, mortgage broker, Loan Republic Financial in San Francisco.
The new brand of home loan has been customized with tighter controls and fewer defects to replace old mortgage models that crashed and burned when the economy hit the skids. "You have to qualify. You have to prove your income. They have make-sense underwriting," said, Quincy Virgilio, 2009 president of the Santa Clara County Association of Realtors.
FHA-insured Mortgages
The new darling of the homebuyer set, Federal Housing Administration-insured mortgage programs, have been available for decades. especially for low- to moderate-income families who may not meet requirements for conventional loans.
But with new loan limits as high as $625,500, they've become especially attractive in high cost areas. FHA loans are expected to account for 25 percent of the mortgages signed in 2009, according to the National Association of Realtors. Because of previously lower loan limits, FHA loans amounted to less than 4 percent of homes sold from 2003 and 2006.
The new FHA model also comes with low down payments and eased credit requirements.
"They are much more lenient (compared to conforming Fannie Mae and Freddie Mac mortgages) on how they look at credit scores. The score can be in the 600s vs. 700s, said Cheryl O'Connor, a finance expert with O'Connor Consulting in Danville, CA.
FHA features include:
* As little as 3 percent down.
* Financed closing costs.
* A 1 percent (of the mortgage) ceiling on the amount lenders can charge for closing costs.
* No prepayment penalties.
* Relaxed debt-to-income requirements.
* FHA-approved lenders only.
* FHA-approved appraisals only.
Virgilio says buyers who don't have 20 percent or more down will pay an upfront mortgage insurance fee amounting to as much as 1.75 percent (of the loan) and a monthly mortgage insurance premium that effectively tacks on another 0.5 percent to the interest rate.
"But you can structure your loan with participation from the seller paying closing costs. Not down payment assistance, but closing costs, but in this marketplace the seller is going for that," said Virgilio.
The best rates (typically fixed, rather than adjustable) go to those who have financial reserves, savings or investments amounting to at least two months worth of a PITI (principle, interest, taxes and insurance) mortgage payment.
Likewise, the best deals go to buyers with a 30 to 33 percent debt-to-income ratio when the debt includes housing and all other monthly debt payments.
In addition to FHA home-buying loans, the "Housing and Economic Recovery Act of 2008" created "Hope For Homeowners" which allows troubled mortgage holders to avoid foreclosure by refinancing into a more affordable, FHA Secure mortgage, provided Uncle Sam gets a piece of the equity-growth action and provided the existing lender approves.
Members Only
Credit unions largely survived the credit crunch because, as non-profits, the fundamentals apply. They take in deposits. They make loans based on sound underwriting principles. They charge more on those loans than they pay on deposits.
Without the profit motive, there was no incentive to get involved in the subprime racket, no reason to sell and repackage loans as investments and no need to otherwise venture into untried and untrue investment schemes.
Along with fixed-rate 30-year mortgages at rates often lower than banks they also offer conventional adjustable rate mortgages (ARM) and hybrids all with rates typically lower than conventional lenders. "Credit unions have a tendency to be more lenient if you have a bank account with a credit union," O'Connor said.
Credit union originations rose a whopping 10.1 percent during the first half of 2008, according to the industry's federal regulator, the National Credit Union Administration (NCUA). Conventional mortgage lender loan originations took a nose dive, falling 17 percent during the same period.
Rural Home Loans
Don't get your knickers in a knot over the term "rural." Loans backed by the United States Department of Agriculture's (USDA) Rural Development Housing and Community Facilities Programs are limited, but you don't have to grow corn or raise chickens.
The loans are for:
* People living in designated rural areas where the population is less than 20,000.
* People with incomes under 115 percent of household median income for the area. In most areas, the upper income limit for borrowers will be $60,000 to $70,000 per year.
* People buying homes, not refinancing or taking out equity loans.
USDA Programs include no-money down loans, home improvement and rehabilitation loans and grants, construction loans, loans for minorities and true to the work-ethic of rural life, sweat-equity loans that require buyers to help build their own homes.
Local, State Agencies
O'Connor says don't overlook local -- city, county and state -- housing assistance programs that often cater to first-time and or low- to moderate-income home buyers as well as government and service workers including teachers, police officers and fire fighters.
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
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