There's a movement away from the McMansions toward smaller homes for convenience and cost-savings. It seems an attitude of “less is more,” is prevailing in the housing industry; whether it will remain short-lived may depend on the economy.
An article by James Wentling of Wentling/Architects was published this month in Nation's Building News, the weekly online newspaper of the National Association of Homebuilders. According to the article, the median size of a new single-family house sold in the United States actually increased 42 percent over the past two decades. The increase rose from 1,650 square feet in 1978 to 2,335 square feet in 2007. However, Wentling writes, that when this trend is closely examined, it's revealed that there were decreases in square footage during several periods including 1981-1982, 1995, 2003, and 2007-2008. Wentling predicts house sizes will continue to shrink in an ailing economy.
So, if you have a smaller home, now may be a better-than-ever time to market its cozy, less maintenance, and lower-utilities-cost benefits. Here's a look at a few ways to give your small home a big appeal to buyers by creating multi-purpose usage.
Hidden storage: smaller can be better, if you can somehow squeeze all the things you need into it. Think of the electronic devices that are rapidly becoming smaller and smaller. Decreased size is welcome provided that you don't lose functionality and compromise your usage of the device. The same goes for homes. Smaller homes can be exactly what buyers are looking for but the key is to have them well planned to accommodate buyers' everyday needs. Built-in furniture: can provide dual purpose, and if it has convenient hidden storage, that's an extra value. Some homeowners steer clear of this type of furniture mistakenly thinking that it will look too utilitarian and unbecoming. However, it can be beautifully designed and still be highly functional.
Office niche: these days home offices are prevalent in housing. Nearly everyone, regardless of whether going to an office or working from home, finds a home office useful. In smaller homes, finding that space can be difficult, but if you can create even a small space to showcase where a computer/office has its own niche it may influence buyers. You can create this space even without adding partition walls by using a decorative screen or tucking away a small desk beneath a staircase are just two examples.
Take appliances off the counters: in really tight spaces, some extra-creative homeowners mount appliances under the counters to free clutter from countertops and cabinets. Kitchen tables can double as a work surface for food preparation. Living rooms: the traditional sofa may not be the best furniture for a small living room. Sometimes, depending on the size, shape, and wall space in the room, a few simple chairs may fit better along with a small coffee table with storage underneath.
Built-In Floor-to-ceiling bookcases: I'm a writer and a book lover, so I had to include this one. Those who read and hold onto their books often find space is an issue. But bookcases with adjustable shelves can be custom-built surrounding a doorway or fireplace, providing easy access to the books and also saving space. Some homes have sliding bookcases that resemble pocket doors, tucking away the books and keeping the room clutter-free.
This article appeared in Realty Times
Written by: Phoebe Chongchua
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, August 31, 2009
Friday, August 28, 2009
Investor Report: Bank REO
Real estate investors are playing a key role in the housing recovery now underway, buying up bank REO property, wading into distressed neighborhoods to turn around boarded-up foreclosures into rentals.
But how much of the fast-rising pace of home sales this summer is attributable to small-scale investors?
You can ask Rick Weinberg of REDC's Auction.com, a company that's already sold more than 19,000 foreclosed and REO houses this year for a total of $4.3 billion, and he'll tell you point blank: Investors are HUGE; they've accounted for 48 percent of all his company's volume in 2009.
"There's absolutely no question," Weinberg told Realty Times last week, "investors are responding to the deep discounts in the market on distressed real estate. They are playing a central role."
Realty Times put the same question to Lawrence Yun, chief economist for the National Association of Realtors, and got a different perspective. Yun believes investors went overboard during the boom years - buying properties for unsustainably high prices and using risky mortgages.
At their peak in the 2004-2005 period, investors accounted for almost 40 percent of all sales.
In the current recovery, on the other hand, says Yun, "investors are playing a very beneficial role," acquiring real estate more prudently. They're looking for prices at the rock bottom end of the cycle, and buying not for future appreciation, but for solid, positive rental cash flows.
With first time buyers now flooding the market, investors' share is more restrained, said Yun, but still important.
Though no one has precise figures, there are two indicators that the National Association of Realtors checks to roughly gauge investor participation in the market: Numbers of Realtor members in a periodic survey who identify purchasers as investors as opposed to owner-occupants, and the number of total sales that are "all cash."
The most recent member survey suggested investors account for roughly one of every eleven sales. Sixteen percent of recent transactions were all cash, one of every six, but that number could include owner-occupant purchasers who have the money and choose to avoid taking out a mortgage.
None of the Realtors' statistics from members include sales from auctions, and that may understate the percentage of investors involved.
But Auction.com's Weinberg says whatever the current market share of investors, "the fact is they are essential" to the recovery. In fact, he said, "Every REO or foreclosure they buy is a boost for the economy. They are creating jobs" -- contractors, carpenters, roofers and the like -- for an economy that badly needs them.
Written by Kenneth R. Harney
Published on Realty Times
August 28, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
But how much of the fast-rising pace of home sales this summer is attributable to small-scale investors?
You can ask Rick Weinberg of REDC's Auction.com, a company that's already sold more than 19,000 foreclosed and REO houses this year for a total of $4.3 billion, and he'll tell you point blank: Investors are HUGE; they've accounted for 48 percent of all his company's volume in 2009.
"There's absolutely no question," Weinberg told Realty Times last week, "investors are responding to the deep discounts in the market on distressed real estate. They are playing a central role."
Realty Times put the same question to Lawrence Yun, chief economist for the National Association of Realtors, and got a different perspective. Yun believes investors went overboard during the boom years - buying properties for unsustainably high prices and using risky mortgages.
At their peak in the 2004-2005 period, investors accounted for almost 40 percent of all sales.
In the current recovery, on the other hand, says Yun, "investors are playing a very beneficial role," acquiring real estate more prudently. They're looking for prices at the rock bottom end of the cycle, and buying not for future appreciation, but for solid, positive rental cash flows.
With first time buyers now flooding the market, investors' share is more restrained, said Yun, but still important.
Though no one has precise figures, there are two indicators that the National Association of Realtors checks to roughly gauge investor participation in the market: Numbers of Realtor members in a periodic survey who identify purchasers as investors as opposed to owner-occupants, and the number of total sales that are "all cash."
The most recent member survey suggested investors account for roughly one of every eleven sales. Sixteen percent of recent transactions were all cash, one of every six, but that number could include owner-occupant purchasers who have the money and choose to avoid taking out a mortgage.
None of the Realtors' statistics from members include sales from auctions, and that may understate the percentage of investors involved.
But Auction.com's Weinberg says whatever the current market share of investors, "the fact is they are essential" to the recovery. In fact, he said, "Every REO or foreclosure they buy is a boost for the economy. They are creating jobs" -- contractors, carpenters, roofers and the like -- for an economy that badly needs them.
Written by Kenneth R. Harney
Published on Realty Times
August 28, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, August 26, 2009
Know Your Buyers; Better Their Lives
There's some new research that sheds light on why real estate consumers pick up and move. Not surprisingly, most do so to better their lives. According to Relocation.com, the a leading online consumer resource for moving services, 50 percent of people who recently moved did so to improve their living situation, whether to move into a bigger home or move to a better neighborhood. The results of Relocation.com's most recent survey, conducted in June, is a dramatic reversal from a similar Relocation.com survey in March 2009 that found the recession played a much larger role in the decision to move.
As the primary reason for moving, No. 1 on the list was to live in a bigger/better home (26 percent), followed by living in a better neighborhood or area (24 percent); to be closer to family/friends (12 percent); living in an area with a lower cost of living (9 percent); or a move that was sparked by a change in marital status (6 percent). Moving because of school, job loss, retirement or foreclosure each garnered 3 percent or less.
The change between the March and July surveys point to evidence that consumer attitudes are shifting. With more people taking advantage of favorable real estate deals and falling rents, even as the recession continues to pinch most Americans, they are demonstrating a boost in consumer confidence.
“Even in the midst of the toughest economy in years, people who are moving are still motivated by the same things that motivated them in the past: to make a better life,” said Sharon Asher, founder and chairman of Relocation.com. "Despite the drumbeat of bad news, our survey indicates that consumers are starting to return to actively making positive moving choices, and fewer reactive moves due to the down economy.” While finances still factor into the moving decisions, fewer people were feeling the need to move due to job losses, foreclosures or downsizing to cut costs. The people who looked to improve their living situation were a mix of those buying a home or renting that were seeking to take advantage of lower rents and home prices to move smart.
“We did get a much better price on our house due to the recession,” said Mari Boor Tonn, a survey respondent who purchased a home. "[The house] sat on the market for a long time. We were able to purchase it for well below appraised value.” Government incentives to buy a home, coupled with market forces lowering housing prices, have helped boost home sales in recent months.
The overall slowing of demand for housing has also produced lower rents in many major metropolitan areas, benefitting renters. Of the people who indicated they were looking to improve their housing situation in the survey, 54 percent were renters who moved into a new rental.
Nearly 42 percent were people buying a home or planning to buy one: either renters who became homeowners (15 percent), homeowners who moved to a new home (16 percent), or homeowners who moved into a temporary rental as they continued their search for a home to buy (11 percent).
A similar survey in March found that people were more likely to list symptoms of the economic downturn as reasons for their move: 41 percent said that the recession had a moderate to strong influence on their decision to move.
Family reasons also played a larger role in the earlier survey: 23 percent said their primary motivation was moving closer to family or friends, while 13 percent cited looking for work or starting a new job. Only 14 percent listed moving to a bigger home or moving to a better neighborhood as a reason for their move.
The March survey also found that people were more likely to move long distances - 60 percent said their move was between 800 and 3,000 miles. Respondents in the July survey were much more likely to move shorter distances - only 31 percent made a move greater than 800 miles - further indicating that "trading up" in their current community for a more favorable living situation was more of a motivation than the poor economy.
This article appeared in Realty Times
Written by: Peter L. Mosca
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
As the primary reason for moving, No. 1 on the list was to live in a bigger/better home (26 percent), followed by living in a better neighborhood or area (24 percent); to be closer to family/friends (12 percent); living in an area with a lower cost of living (9 percent); or a move that was sparked by a change in marital status (6 percent). Moving because of school, job loss, retirement or foreclosure each garnered 3 percent or less.
The change between the March and July surveys point to evidence that consumer attitudes are shifting. With more people taking advantage of favorable real estate deals and falling rents, even as the recession continues to pinch most Americans, they are demonstrating a boost in consumer confidence.
“Even in the midst of the toughest economy in years, people who are moving are still motivated by the same things that motivated them in the past: to make a better life,” said Sharon Asher, founder and chairman of Relocation.com. "Despite the drumbeat of bad news, our survey indicates that consumers are starting to return to actively making positive moving choices, and fewer reactive moves due to the down economy.” While finances still factor into the moving decisions, fewer people were feeling the need to move due to job losses, foreclosures or downsizing to cut costs. The people who looked to improve their living situation were a mix of those buying a home or renting that were seeking to take advantage of lower rents and home prices to move smart.
“We did get a much better price on our house due to the recession,” said Mari Boor Tonn, a survey respondent who purchased a home. "[The house] sat on the market for a long time. We were able to purchase it for well below appraised value.” Government incentives to buy a home, coupled with market forces lowering housing prices, have helped boost home sales in recent months.
The overall slowing of demand for housing has also produced lower rents in many major metropolitan areas, benefitting renters. Of the people who indicated they were looking to improve their housing situation in the survey, 54 percent were renters who moved into a new rental.
Nearly 42 percent were people buying a home or planning to buy one: either renters who became homeowners (15 percent), homeowners who moved to a new home (16 percent), or homeowners who moved into a temporary rental as they continued their search for a home to buy (11 percent).
A similar survey in March found that people were more likely to list symptoms of the economic downturn as reasons for their move: 41 percent said that the recession had a moderate to strong influence on their decision to move.
Family reasons also played a larger role in the earlier survey: 23 percent said their primary motivation was moving closer to family or friends, while 13 percent cited looking for work or starting a new job. Only 14 percent listed moving to a bigger home or moving to a better neighborhood as a reason for their move.
The March survey also found that people were more likely to move long distances - 60 percent said their move was between 800 and 3,000 miles. Respondents in the July survey were much more likely to move shorter distances - only 31 percent made a move greater than 800 miles - further indicating that "trading up" in their current community for a more favorable living situation was more of a motivation than the poor economy.
This article appeared in Realty Times
Written by: Peter L. Mosca
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, August 24, 2009
Moving Made Easy, Keep It Simple
The moving industry is complicated.
It uses a lot of lingo that most consumers don't understand: You get your estimates as "binding" or "non-binding"; movers use a "tariff" to determine rates; when the mover ships your goods, you receive a "bill of lading."
And when you go to check out your mover, you run into a mass of regulations. If you're moving within your state, your state government regulates your move; if you're moving across the country, the Federal Motor Carrier Safety Administration does. Finding (and understanding) information about your mover on either of these agencies' Web sites can be hard, too.
It's understandable, then, that most people don't put in this kind of gumshoe work. However, there are three basic moving pitfalls that, if avoided, can help save you from a lousy experience with poor moving companies.
1. Not getting an in-home estimate.
The moving company needs to see exactly what they need to move. If they don't, it's near impossible to derive accurate moving quotes for your move.
Have them come to your home to see exactly what you need moved; otherwise, you could be in for a nasty surprise on moving day if they claim you have more belongings than you indicated on your inventory.
Don't give an inventory over the phone or complete one online. You will have a hard time putting together an accurate inventory on your own, and it also gives unscrupulous moving companies the opportunity to claim that your inventory was incorrect and void the estimate – on moving day, no less.
While on the subject of unscrupulous moving companies, one easy way to decrease your chances of hiring one is to start your search using a database of pre-screened, pre-qualified movers. Check out Web sites such as MovingQuotes.com, which matches consumers with pre-screened, competent movers.
2. Not choosing a mover with a local presence.
There are many reasons for this.
First, it's a good idea to visit the moving company offices to ensure they're a legitimate mover and not just a broker that's going to give your move to someone else.
Second, it will put your mind at ease to see the moving company's facilities, its names on the trucks, etcetera.
Third, logistically, it's just easier. If you're moving from Texas to Seattle, how can a moving company in Ohio do your move? Will that moving company really be handling your move?
Finally, if you must follow up with the moving company for a damage claim or something else after the move, having them nearby makes that process much easier.
3. Going with a low-ball bid.
Beware of an offer that sounds too good to be true. You will almost certainly pay for it in some other way.
True, some companies might offer a lower price, but make sure it's a reasonable discount. First, you should get at least three moving quotes for your move. If two of the movers are priced around the same level, and the third comes in with a price that's 30 percent less, you need to be skeptical.
All moving companies face the same costs, so if someone is telling you they can do your move for a lot less, it's probably because they will make up the difference by larding on a bunch of ridiculous charges later, such as excess packing charges, or claims that you added stuff to be moved after you got your estimate.
Packing up and moving – whether across town or across the country – is always a nerve-racking experience. The thought of dealing with a potentially disreputable moving company adds another layer of unnecessary complexity. By avoiding these three common mistakes, you will increase your chances of having an easier, less stressful moving experience, and move on to enjoying your new home.
This article appeared in Realty Times
Written by: Tim Johnson
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
It uses a lot of lingo that most consumers don't understand: You get your estimates as "binding" or "non-binding"; movers use a "tariff" to determine rates; when the mover ships your goods, you receive a "bill of lading."
And when you go to check out your mover, you run into a mass of regulations. If you're moving within your state, your state government regulates your move; if you're moving across the country, the Federal Motor Carrier Safety Administration does. Finding (and understanding) information about your mover on either of these agencies' Web sites can be hard, too.
It's understandable, then, that most people don't put in this kind of gumshoe work. However, there are three basic moving pitfalls that, if avoided, can help save you from a lousy experience with poor moving companies.
1. Not getting an in-home estimate.
The moving company needs to see exactly what they need to move. If they don't, it's near impossible to derive accurate moving quotes for your move.
Have them come to your home to see exactly what you need moved; otherwise, you could be in for a nasty surprise on moving day if they claim you have more belongings than you indicated on your inventory.
Don't give an inventory over the phone or complete one online. You will have a hard time putting together an accurate inventory on your own, and it also gives unscrupulous moving companies the opportunity to claim that your inventory was incorrect and void the estimate – on moving day, no less.
While on the subject of unscrupulous moving companies, one easy way to decrease your chances of hiring one is to start your search using a database of pre-screened, pre-qualified movers. Check out Web sites such as MovingQuotes.com, which matches consumers with pre-screened, competent movers.
2. Not choosing a mover with a local presence.
There are many reasons for this.
First, it's a good idea to visit the moving company offices to ensure they're a legitimate mover and not just a broker that's going to give your move to someone else.
Second, it will put your mind at ease to see the moving company's facilities, its names on the trucks, etcetera.
Third, logistically, it's just easier. If you're moving from Texas to Seattle, how can a moving company in Ohio do your move? Will that moving company really be handling your move?
Finally, if you must follow up with the moving company for a damage claim or something else after the move, having them nearby makes that process much easier.
3. Going with a low-ball bid.
Beware of an offer that sounds too good to be true. You will almost certainly pay for it in some other way.
True, some companies might offer a lower price, but make sure it's a reasonable discount. First, you should get at least three moving quotes for your move. If two of the movers are priced around the same level, and the third comes in with a price that's 30 percent less, you need to be skeptical.
All moving companies face the same costs, so if someone is telling you they can do your move for a lot less, it's probably because they will make up the difference by larding on a bunch of ridiculous charges later, such as excess packing charges, or claims that you added stuff to be moved after you got your estimate.
Packing up and moving – whether across town or across the country – is always a nerve-racking experience. The thought of dealing with a potentially disreputable moving company adds another layer of unnecessary complexity. By avoiding these three common mistakes, you will increase your chances of having an easier, less stressful moving experience, and move on to enjoying your new home.
This article appeared in Realty Times
Written by: Tim Johnson
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, August 21, 2009
Selling Your Home, Know Your Buyer Market
Before you start a company, the first thing you should do is market research to determine your target market. This important step will help determine how successful you ultimately will be. The same is true when it comes to selling your home. Understanding the buyer market and who might be a good fit for your home will help ensure that you highlight the most vital features.
“Just like the business of television advertising commercials, you need to know who your target audience is,” writes Michael Corbet in his book Ready, Set, Sold! Before putting your home on the market, you should take time to search for the best agent to handle your transaction. The agent can help you better understand which buyers are most likely going to be interested in your home.
Even though you may have lived in your neighborhood for years, taking the time to drive or walk around it is a good idea. But this time do it with the same viewpoint you had when you were originally considering buying your home. It can really be a very different view. If you’re objective, you’ll see both the key selling points of the neighborhood as well as the things that may deter buyers. Seeing it all is beneficial because that’s exactly what potential buyers will see.
If there is a concern that needs addressing, an eyesore in the neighborhood or a foreclosure that’s been sitting boarded up on the block for several months, don’t be afraid to talk about it. The potential buyers are going to know it’s there (if they do their homework).
Making your home ready for your specific buyer market will help you not waste time marketing it to uninterested buyers. For instance, if your home is a two-story home, you might find that elderly couples or people looking to “age in place” might not be as attracted to it because of the steps to the second story. People seeking aging-in-place homes often want a single story so that the entire home is accessible without the difficulty or exertion of having to travel upstairs. If, your home is located in one of the best school districts, draw attention to this. Many parents will move to a neighborhood almost exclusively because of a school district’s glowing reputation. Don’t assume that the potential buyers automatically know this school district’s reputation—shout it through your marketing materials.
Corbet writes that there are several common types of buyers: single first-time, working couple, family, retirees or empty nesters, and a growing buyer market is women who purchase homes sans spouse/partner. Taking a closer look at these groups can help identify what’s important to each. Single first-time buyer: Corbet writes, “Since a huge percentage of renters are women, it’s no surprise that they represent a large percentage of first-time buyers.
The house needs to be spotless, have great curb appeal, and evoke a warm and welcoming feeling with a few amenities.” However, Corbet is quick to point out that in this economic era the home must also “be basic enough to be affordable.” Working couple: many times this buyer market is looking for a well-maintained home that offers privacy, and enough space for the couple to have some place to work and relax apart. Dual sinks in the bathroom are a plus, also extra storage and good closet accommodations.
Family: these buyers typically go wild over open floor plans, kitchens that flow into great rooms, lots of storage, backyard space, homes that are set-back off the street, cul-de-sacs, Jack and Jill bathrooms (the bathroom is attached to and between two bedrooms), and good-size laundry area.
Empty nesters: think ease, comfort, and lifestyle. This group has “been there, done that”! They’re looking for comfortable living with a simpler lifestyle. Corbet writes, “They also look for smaller, more manageable backyards and low-maintenance landscaping.” Security systems are a plus for this group too. Knowing your buyer market gives you an advantage—you can highlight the features of your home that are most likely exactly what those buyers want.
Published in Realty Times
Written by Phoebe Chongchua
August 21, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
“Just like the business of television advertising commercials, you need to know who your target audience is,” writes Michael Corbet in his book Ready, Set, Sold! Before putting your home on the market, you should take time to search for the best agent to handle your transaction. The agent can help you better understand which buyers are most likely going to be interested in your home.
Even though you may have lived in your neighborhood for years, taking the time to drive or walk around it is a good idea. But this time do it with the same viewpoint you had when you were originally considering buying your home. It can really be a very different view. If you’re objective, you’ll see both the key selling points of the neighborhood as well as the things that may deter buyers. Seeing it all is beneficial because that’s exactly what potential buyers will see.
If there is a concern that needs addressing, an eyesore in the neighborhood or a foreclosure that’s been sitting boarded up on the block for several months, don’t be afraid to talk about it. The potential buyers are going to know it’s there (if they do their homework).
Making your home ready for your specific buyer market will help you not waste time marketing it to uninterested buyers. For instance, if your home is a two-story home, you might find that elderly couples or people looking to “age in place” might not be as attracted to it because of the steps to the second story. People seeking aging-in-place homes often want a single story so that the entire home is accessible without the difficulty or exertion of having to travel upstairs. If, your home is located in one of the best school districts, draw attention to this. Many parents will move to a neighborhood almost exclusively because of a school district’s glowing reputation. Don’t assume that the potential buyers automatically know this school district’s reputation—shout it through your marketing materials.
Corbet writes that there are several common types of buyers: single first-time, working couple, family, retirees or empty nesters, and a growing buyer market is women who purchase homes sans spouse/partner. Taking a closer look at these groups can help identify what’s important to each. Single first-time buyer: Corbet writes, “Since a huge percentage of renters are women, it’s no surprise that they represent a large percentage of first-time buyers.
The house needs to be spotless, have great curb appeal, and evoke a warm and welcoming feeling with a few amenities.” However, Corbet is quick to point out that in this economic era the home must also “be basic enough to be affordable.” Working couple: many times this buyer market is looking for a well-maintained home that offers privacy, and enough space for the couple to have some place to work and relax apart. Dual sinks in the bathroom are a plus, also extra storage and good closet accommodations.
Family: these buyers typically go wild over open floor plans, kitchens that flow into great rooms, lots of storage, backyard space, homes that are set-back off the street, cul-de-sacs, Jack and Jill bathrooms (the bathroom is attached to and between two bedrooms), and good-size laundry area.
Empty nesters: think ease, comfort, and lifestyle. This group has “been there, done that”! They’re looking for comfortable living with a simpler lifestyle. Corbet writes, “They also look for smaller, more manageable backyards and low-maintenance landscaping.” Security systems are a plus for this group too. Knowing your buyer market gives you an advantage—you can highlight the features of your home that are most likely exactly what those buyers want.
Published in Realty Times
Written by Phoebe Chongchua
August 21, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, August 19, 2009
"Pur-Plexing"
When it comes to real estate, buying more may be a better long-term plan than settling for what lenders insist your current income dictates.
If your income is not high enough to finance the purchase of the single-family house you'd prefer, consider buying a revenue-generating property to boost your buying power and enhance your long-term financial prospects.
* Instead of a first-time purchase that's a shoe-box-sized condominium unit, a handyman's special or something at the end of a long commute, consider a move to an apartment where you're the landlord and the real tenants pay rent that becomes your cash flow.
* When the final child moves out for the final time, rather than life-by-committee in a condominium or taking on almost as much maintenance in a scaled-down bungalow, why not look into a revenue-generating property that will boost lifestyle-spending power and free up your time through an income-tax-deductible property management service? Whether you decide on a live-in asset or buy strictly for investment, the revenue generated may eventually represent or supplement pension income.
Purchase a revenue property, and rental income can cover mortgage payments, taxes and maintenance costs to increase equity or accumulated value. When the location increases in value over time, equity gets a second boost. Income-tax deductions from this rental business may reduce overall tax liability. Whether financing for the initial purchase or refinancing down the road, loan-to-value limits up to and including 95 percent of property value are possible.
From a mortgage point of view, investment revenue can dramatically increase your qualifying income and, therefore, your real estate purchasing power. Buy a two-family property or duplex, a three-family triplex or a fourplex, and you'll have one or more streams of rental income to boost your salary when it comes to qualifying for a mortgage. The percentage added to your income varies with lender policy, but it normally falls between 50 and 80 percent of rental income.
Lender calculations limit payment of principal, interest, taxes and perhaps heating to about 28 to 30 percent of your gross household income. If you already make monthly payments for a car loan or other debts, calculations will vary. The higher your income, the larger the mortgage you qualify for. Add that to the cash you have saved, borrowed from family or netted from selling another investment, and you have your total buying power.
By law, mortgages for more than 80 percent of the appraised value of a property require mortgage loan insurance (not mortgage life insurance) to reduce lender risk and, therefore, keep interest rates competitive. Lenders also have the right to include this insurance as one of the lending terms for lesser loans if the borrower appears to present greater risk. The premium on the total loan ranges up from 1.25 percent and is normally added to the mortgage, not paid out of pocket.
The federal housing agency, Canada Mortgage and Housing Corporation (CMHC), provides mortgage loan insurance through its CMHC Income Property product line for non-owner occupied 1 to 4 unit rental properties:
* Purchase and refinance with loan-to-value ratios up to 95 percent for permanent residents, newcomers and self-employed borrowers
* No application fee or lender appraisal required [bullet] Flexible financing options, terms and conditions
* Advantages for energy-efficient properties
* Available across the country with no set loan maximum
The stronger the investment potential of the property and of the borrower's financial track record, the greater the borrowing power. Higher credit scores are an important asset for borrowers. To determine your standing, access your credit scores, and credit and personal reports at no charge, before applying for financing, so errors or omissions can be corrected:
* EQUIFAX
* TRANSUNION
There are many factors involved, so talk to experienced mortgage brokers, real estate professionals and successful investors (like your landlord?). Ask a lot of questions about the type of income property and the locations you are considering.
You'll discover a framework of financing factors that will guide your search for the ideal property, but only when you ask for property-specific consideration will you know exactly and precisely what can and cannot be accomplished relative to a particular offer to purchase. For instance, owner-occupied properties are considered lower risk. If tenants pay heat and utilities, owner operating expenses will be lower, so a lender may allow a slightly larger mortgage.
Buying an income property is not a snap decision. Considering this alternative can add new dimension and possibilities to your real estate future. Here lies real "out of the box" thinking for those who've never thought beyond owning a house or cottage.
Source: "Pur-Plexing Yeah Buts: Need-to-Knows When Purchasing Your First Duplex, Triplex
or Fourplex"
This article appeared in Realty Times
Written by: PJ Wade, August 11, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
If your income is not high enough to finance the purchase of the single-family house you'd prefer, consider buying a revenue-generating property to boost your buying power and enhance your long-term financial prospects.
* Instead of a first-time purchase that's a shoe-box-sized condominium unit, a handyman's special or something at the end of a long commute, consider a move to an apartment where you're the landlord and the real tenants pay rent that becomes your cash flow.
* When the final child moves out for the final time, rather than life-by-committee in a condominium or taking on almost as much maintenance in a scaled-down bungalow, why not look into a revenue-generating property that will boost lifestyle-spending power and free up your time through an income-tax-deductible property management service? Whether you decide on a live-in asset or buy strictly for investment, the revenue generated may eventually represent or supplement pension income.
Purchase a revenue property, and rental income can cover mortgage payments, taxes and maintenance costs to increase equity or accumulated value. When the location increases in value over time, equity gets a second boost. Income-tax deductions from this rental business may reduce overall tax liability. Whether financing for the initial purchase or refinancing down the road, loan-to-value limits up to and including 95 percent of property value are possible.
From a mortgage point of view, investment revenue can dramatically increase your qualifying income and, therefore, your real estate purchasing power. Buy a two-family property or duplex, a three-family triplex or a fourplex, and you'll have one or more streams of rental income to boost your salary when it comes to qualifying for a mortgage. The percentage added to your income varies with lender policy, but it normally falls between 50 and 80 percent of rental income.
Lender calculations limit payment of principal, interest, taxes and perhaps heating to about 28 to 30 percent of your gross household income. If you already make monthly payments for a car loan or other debts, calculations will vary. The higher your income, the larger the mortgage you qualify for. Add that to the cash you have saved, borrowed from family or netted from selling another investment, and you have your total buying power.
By law, mortgages for more than 80 percent of the appraised value of a property require mortgage loan insurance (not mortgage life insurance) to reduce lender risk and, therefore, keep interest rates competitive. Lenders also have the right to include this insurance as one of the lending terms for lesser loans if the borrower appears to present greater risk. The premium on the total loan ranges up from 1.25 percent and is normally added to the mortgage, not paid out of pocket.
The federal housing agency, Canada Mortgage and Housing Corporation (CMHC), provides mortgage loan insurance through its CMHC Income Property product line for non-owner occupied 1 to 4 unit rental properties:
* Purchase and refinance with loan-to-value ratios up to 95 percent for permanent residents, newcomers and self-employed borrowers
* No application fee or lender appraisal required [bullet] Flexible financing options, terms and conditions
* Advantages for energy-efficient properties
* Available across the country with no set loan maximum
The stronger the investment potential of the property and of the borrower's financial track record, the greater the borrowing power. Higher credit scores are an important asset for borrowers. To determine your standing, access your credit scores, and credit and personal reports at no charge, before applying for financing, so errors or omissions can be corrected:
* EQUIFAX
* TRANSUNION
There are many factors involved, so talk to experienced mortgage brokers, real estate professionals and successful investors (like your landlord?). Ask a lot of questions about the type of income property and the locations you are considering.
You'll discover a framework of financing factors that will guide your search for the ideal property, but only when you ask for property-specific consideration will you know exactly and precisely what can and cannot be accomplished relative to a particular offer to purchase. For instance, owner-occupied properties are considered lower risk. If tenants pay heat and utilities, owner operating expenses will be lower, so a lender may allow a slightly larger mortgage.
Buying an income property is not a snap decision. Considering this alternative can add new dimension and possibilities to your real estate future. Here lies real "out of the box" thinking for those who've never thought beyond owning a house or cottage.
Source: "Pur-Plexing Yeah Buts: Need-to-Knows When Purchasing Your First Duplex, Triplex
or Fourplex"
This article appeared in Realty Times
Written by: PJ Wade, August 11, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, August 17, 2009
Incline Village Offers A Lot For Seniors
Incline Village General Improvement District (IVGID) has several summer senior programs. You can choose from a large variety of activities including hiking, yoga, water aerobics or fireside chats. Whether you prefer indoor or outdoor activities, there is something for you. For more information about the activities described when you open this article call 775-832-1310, the Incline Village Recreation Department.
55+ Take-A-Hike
Guided hikes of beautiful areas around Tahoe’s North shore will be offered this summer. Transportation and CPR certified guides will be provided for the first 10 registrants. You’ll need to bring a day pack, lunch, water and sunscreen. All hikes depart from the Recreation Center parking lot.
Moonlight Hikes & Wine and Cheese Social
Once a month from June – October, as part of the Incline Village Parks & Recs Dept and Washoe County Senior Services, a moderate 1 mile hike up a paved road to the Crystal Bay lookout. Just bring yourself and your camera, IVGID provides the guides, shuttle, fun, friends, wine and cheese. ADA assistance is available.
Senior Social Clubs Ages 49+
The ‘Incliners’, a 49 and up social club meet twice a month, hosting dinners, special events and theme parties. There is a potluck dinner the first Tuesday of the month and on the third Tuesday, a catered event. Reservations are required.
Aqua Fitness – All ages
This class is usually comprised of 50+ ladies but men are also welcome. (Hey guys, this is a great way to meet the ladies!) This is a low impact water workout where you will tone and strengthen while increasing your cardiovascular capacity.
Conversation Café
Always held in a public place, this drop-in conversation is free and hosted. Feel free to converse
and share your views with other seniors that also share a passion for meeting and engaging with others.
More …
Yoga & Fitness Classes … ongoing Senior Nutrition – Focuses on meeting & addressing the nutritional needs of the senior community. For more info on all of these events call (775) 832-
1310. Resident and non-resident rates apply for all activities.
This article appeared in the July/August issue of the Coldwell Banker E-Newsletter
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
55+ Take-A-Hike
Guided hikes of beautiful areas around Tahoe’s North shore will be offered this summer. Transportation and CPR certified guides will be provided for the first 10 registrants. You’ll need to bring a day pack, lunch, water and sunscreen. All hikes depart from the Recreation Center parking lot.
Moonlight Hikes & Wine and Cheese Social
Once a month from June – October, as part of the Incline Village Parks & Recs Dept and Washoe County Senior Services, a moderate 1 mile hike up a paved road to the Crystal Bay lookout. Just bring yourself and your camera, IVGID provides the guides, shuttle, fun, friends, wine and cheese. ADA assistance is available.
Senior Social Clubs Ages 49+
The ‘Incliners’, a 49 and up social club meet twice a month, hosting dinners, special events and theme parties. There is a potluck dinner the first Tuesday of the month and on the third Tuesday, a catered event. Reservations are required.
Aqua Fitness – All ages
This class is usually comprised of 50+ ladies but men are also welcome. (Hey guys, this is a great way to meet the ladies!) This is a low impact water workout where you will tone and strengthen while increasing your cardiovascular capacity.
Conversation Café
Always held in a public place, this drop-in conversation is free and hosted. Feel free to converse
and share your views with other seniors that also share a passion for meeting and engaging with others.
More …
Yoga & Fitness Classes … ongoing Senior Nutrition – Focuses on meeting & addressing the nutritional needs of the senior community. For more info on all of these events call (775) 832-
1310. Resident and non-resident rates apply for all activities.
This article appeared in the July/August issue of the Coldwell Banker E-Newsletter
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, August 14, 2009
Remodeling Increasing: How to Get the Best Value
Homeowners who have either decided to stay in their homes or are considering selling may be helping to build momentum in the remodeling market.
According to the National Association of Home Builders (NAHB), the organization's Chairman, Greg Miedema, said in a recent media statement that, "With more calls from homeowners and more projects under way, remodelers are seeing better activity in their businesses."
NAHB reports that indicators for current remodeling market conditions have improved in all regions across the country. "A significant portion of the market improvement came from the measure for major additions and alterations (jobs worth $25,000 or more with a leap to 38.2 (from 32.7)," according to NAHB. The association's Remodeling Market Index (RMI) measures ranges from zero (very poor conditions) to 100 (excellent conditions) as rated by the remodelers surveyed.
NAHB says several factors could be contributing to better remodeling conditions. "Remodeling does uptick when there are more new homes being built and sold or existing homes being sold because people tend to remodel when they're moving or when they're selling. … The other thing that we could be seeing is an increase in consumer sentiment in that people have been reluctant to spend but now are feeling a little bit more confident and more willing to spend. These are things that some of our researchers think might be part of the influencers right now," says Kelly Mack, Communications Manager for NAHB Remodelers.
Remodeling is, however, a big step for many homeowners. Getting the best value for your remodel shouldn't come from guesswork; instead, knowing how to find a remodeling company with a solid reputation for delivering quality work throughout the entire remodeling process requires research.
Choosing the best remodeler for your project can often be a tedious process and if you don't take the time to explore all your options it can result in frustration and too much money spent.
Making sure the company that is doing the remodel asks the right questions, does its homework, and offers full-service design and remodeling under one roof. This will help ensure a quality remodel that meets all your needs.
Steve Walton, Senior Design Consultant for Marrokal Design and Remodeling, in San Diego, California helps clients sort through what can be a complicated process to get the best value remodel.
"When I meet with clients, I have them describe their ideas for the remodeling project. I take a lot of notes," says Walton. The design consultant then sets another meeting at Marrokal's Design and Remodeling center. Prior to this meeting Walton has already done his homework and researched any likely obstacles for the remodel. Some companies take on a project and later discover remodeling barriers.
"I get your set-backs, zoning conditions, and height conditions and try to see if there are any issues. That way when we meet at our design center we can start looking at the architectural process," says Walton.
The full-service home-design remodel company offers homeowners one-stop shopping for their remodeling needs. "I develop a written program based on what my clients' needs and goals are for their remodel," says Walton. He adds, "Throughout this I am digging deep and finding out what's important to my clients. A lot of companies don't ask these questions but this is how Marrokal Design and Remodeling starts to develop a preliminary budget for our clients."
While not all remodelers offer full service (from design to construction), this type of company is often popular with homeowners. A full-service company keeps your remodeling project running smoothly by coordinating all of the necessary design, construction developments, and communication with trade companies through one primary source (removing the unnecessary hassle of trying to get numerous trade companies to work together).
Another approach to remodeling that sets quality remodelers apart from the rest is the use of value engineering to design the remodel. "Value engineering" means refining and sometimes redesigning aspects of the remodel to make it more cost-effective which ultimately saves money for the homeowner.
Mack adds that the basic tasks of asking for references, planning your budget, interviewing remodelers, asking about certifications that the remodeler holds, and making sure that all your questions are met will help set your mind at ease before you start the remodeling process.
If you're considering a remodel, understanding some of the most popular remodeling trends can help you decide which projects may have the greatest appeal for comfort and sale-ability.
Mack says high on the list are creating outdoor living space and energy-efficient remodels to help off-set the cost of utility bills. The outdoor living trend has been steadily increasing says Mack. "This is a trend that we think will grow into 2015."
Published in Realty Times
Written by Phoebe Chongchua
August 14, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
According to the National Association of Home Builders (NAHB), the organization's Chairman, Greg Miedema, said in a recent media statement that, "With more calls from homeowners and more projects under way, remodelers are seeing better activity in their businesses."
NAHB reports that indicators for current remodeling market conditions have improved in all regions across the country. "A significant portion of the market improvement came from the measure for major additions and alterations (jobs worth $25,000 or more with a leap to 38.2 (from 32.7)," according to NAHB. The association's Remodeling Market Index (RMI) measures ranges from zero (very poor conditions) to 100 (excellent conditions) as rated by the remodelers surveyed.
NAHB says several factors could be contributing to better remodeling conditions. "Remodeling does uptick when there are more new homes being built and sold or existing homes being sold because people tend to remodel when they're moving or when they're selling. … The other thing that we could be seeing is an increase in consumer sentiment in that people have been reluctant to spend but now are feeling a little bit more confident and more willing to spend. These are things that some of our researchers think might be part of the influencers right now," says Kelly Mack, Communications Manager for NAHB Remodelers.
Remodeling is, however, a big step for many homeowners. Getting the best value for your remodel shouldn't come from guesswork; instead, knowing how to find a remodeling company with a solid reputation for delivering quality work throughout the entire remodeling process requires research.
Choosing the best remodeler for your project can often be a tedious process and if you don't take the time to explore all your options it can result in frustration and too much money spent.
Making sure the company that is doing the remodel asks the right questions, does its homework, and offers full-service design and remodeling under one roof. This will help ensure a quality remodel that meets all your needs.
Steve Walton, Senior Design Consultant for Marrokal Design and Remodeling, in San Diego, California helps clients sort through what can be a complicated process to get the best value remodel.
"When I meet with clients, I have them describe their ideas for the remodeling project. I take a lot of notes," says Walton. The design consultant then sets another meeting at Marrokal's Design and Remodeling center. Prior to this meeting Walton has already done his homework and researched any likely obstacles for the remodel. Some companies take on a project and later discover remodeling barriers.
"I get your set-backs, zoning conditions, and height conditions and try to see if there are any issues. That way when we meet at our design center we can start looking at the architectural process," says Walton.
The full-service home-design remodel company offers homeowners one-stop shopping for their remodeling needs. "I develop a written program based on what my clients' needs and goals are for their remodel," says Walton. He adds, "Throughout this I am digging deep and finding out what's important to my clients. A lot of companies don't ask these questions but this is how Marrokal Design and Remodeling starts to develop a preliminary budget for our clients."
While not all remodelers offer full service (from design to construction), this type of company is often popular with homeowners. A full-service company keeps your remodeling project running smoothly by coordinating all of the necessary design, construction developments, and communication with trade companies through one primary source (removing the unnecessary hassle of trying to get numerous trade companies to work together).
Another approach to remodeling that sets quality remodelers apart from the rest is the use of value engineering to design the remodel. "Value engineering" means refining and sometimes redesigning aspects of the remodel to make it more cost-effective which ultimately saves money for the homeowner.
Mack adds that the basic tasks of asking for references, planning your budget, interviewing remodelers, asking about certifications that the remodeler holds, and making sure that all your questions are met will help set your mind at ease before you start the remodeling process.
If you're considering a remodel, understanding some of the most popular remodeling trends can help you decide which projects may have the greatest appeal for comfort and sale-ability.
Mack says high on the list are creating outdoor living space and energy-efficient remodels to help off-set the cost of utility bills. The outdoor living trend has been steadily increasing says Mack. "This is a trend that we think will grow into 2015."
Published in Realty Times
Written by Phoebe Chongchua
August 14, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, August 12, 2009
Seven Steps To A Credit Score Makeover
You can mitigate the effect of tighter mortgage underwriting standards by improving your credit report profile and, as a result, your credit score.
BankRate.com recently found that 32 percent of Americans surveyed never check their credit reports and have no idea what shape it's in. It's time to find out and do something about it.
Local lenders say the incidence of credit report knowledge is even higher when borrowers sit down to apply for home loans. "Less than 10 percent have seen their report and among those who have, most of the reports are old, many are only from one bureau and so they don't have a complete picture," said Joel Spolin, president of Absolute Mortgage in Palo Alto, CA.
Your credit report is a sort of fiscal fitness report on your credit habits and the information it contains factors heavily into your credit score, a statistical analysis or numerical value placed on your credit behavior. Your credit score is commonly used to nay or yea your requests for credit and determine how much you'll pay for credit approved.
Here are seven starter steps to take toward improving your creditworthiness.
These days getting a credit report should be the no-brainer first step toward improving your chances of landing credit at the best price possible.
Simply go online to AnnualCreditReport.com, the ONLY federally-sanctioned and cost-free service, and obtain a free credit report from Equifax, Experian and TransUnion. Given the year is more than half over, get your report from at least two companies, perhaps three. Next year set up your own credit monitoring service by getting a report from a different company every four months. Again, through AnnualCreditReport.com, each report is free.
Questions? Call (877) 322-8228 for details about your free credit report rights.
"We advise the client to get one report, pulled by a lender or broker and then use this report to share with other brokers so their credit is not getting constantly pulled," said Paul Garcia.
A trusted lender or broker can pull your report for you and show you the ropes. Limiting the number of credit report pulls is also key. However, someone pulling your credit report can charge you a fee and the pull will show up on your credit report, though with little consequence.
Get your feet wet the first time around. Pull your own free credit report. Examine it for errors. That's the spirit of the law, to give you control and knowledge. Bring in a realty pro later, if necessary.
"It's good to get the report so the borrower knows what they are dealing with and to determine if any corrective actions need to be taken," said Garcia.
* Check credit limits and attempt to keep balances evenly distributed across credit lines, advises attorney Edward Jamison, with the Los Angeles, CA Jamison Law Group he founded to specialize in consumer credit and identity theft.
* Make sure your maximum credit limit is reported for each account.
"When no limit is reported, credit scoring software presumes the account is 'maxed out'." Jamison says credit scoring software scores more favorably when the balance is 50 percent or below, but too many open accounts with zero balances could lower the score with the assumption you could suddenly run up a lot of credit.
* Keep some credit cards open. Close others. Open credit cards with limited balances and good payment records raises scores, especially long-time credit cards. However, the accounts should be limited in number and well-managed.
"Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have more six credit cards," says Jamison.
It's about striking a balance.
"Credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments," Jamison said.
* Where possible, get rid of late payments listed on the credit report. Jamison says if your late payments are dated and you've been a good credit customers for some time creditors may, in good faith, adjust your statement. "If you are a customer in good standing, the creditor may work with you," he said.
The effort isn't easy. A demanding, frustrated and rude approach will make it more difficult. The lender isn't required to remove dings for 7 to 10 years in some cases.
* Pay off collection accounts and past due amounts. Payoffs and paying past due accounts start the clock running on how long the ding will remain on your report. In some cases the collection agency or creditor may remove the ding, says Jamison. Again, it's not easy.
"The consumer should contact the collector and request a letter explicitly stating their agreement to delete the account upon receipt or clearance of the payment," he said.
* Likewise, whenever possible, seek to have charge-offs and liens that are less than two years old removed.
"Charge-offs and liens that are older than 24 months do not affect your credit score nearly as much as ones under 24 months," says Jamison. "But if they're newer than 24 months, they can seriously damage your credit," revealing you as a more recent credit slacker.
Keep in mind, all efforts to improve your credit, other than correcting errors, are typically based on you being a mature credit consumer -- pay your bills on time, don't overload yourself with debt and get in touch with lenders at the first sign of trouble for workouts than can help save your credit or reduce the damage to your report and your credit score.
This article appeared in Realty Times, Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, August 10, 2009
July Round Up: Rates Rise Slightly
In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 5.25 percent with an average 0.7 point for the week ending July 30, 2009, up from the previous week when it averaged 5.20 percent. Last year at this time, the 30-year FRM averaged 6.52 percent.
The 15-year FRM this week averaged 4.69 percent with an average 0.7 point, up slightly from the previous week when it averaged 4.68 percent.A year ago at this time, the 15-year FRM averaged 6.07 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.75 percent this week, with an average 0.6 point, up slightly from the previous week when it averaged 4.74 percent. A year ago, the 5-year ARM averaged 6.07 percent.
One-year Treasury-indexed ARMs averaged 4.80 percent this week with an average 0.5 point, up from the previous week when it averaged 4.77 percent. At this time last year, the 1-year ARM averaged 5.27 percent.
"Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields," said Frank Nothaft, Freddie Mac vice president and chief economist.
"For instance, the Federal Reserve reported in its July 29th regional review that residential real estate markets in most of its districts remained weak, but many reported signs of improvement. In addition, it noted that entry-level homes continued to perform relatively well in part due to the first-time homebuyer tax credit.
"Other economic reports confirm that the housing market may indeed be bottoming out. New home sales rose for the third consecutive month in June to an annual pace of 384,000 homes, the most since November 2008 and the number of new houses on the market fell to the lowest amount since February 1999, according to the Department of Commerce. Sales of existing homes also showed a three-month gain to 4.89 million, the most since October 2008, and the share of distressed homes fell to 31 percent compared to almost half at the beginning of the year, the National Association of Realtors® (NAR) reported."
First-Time Buyers: Hurry For $8,000 Tax Credit
It’s time to remind first-time home buyers that in order to qualify for the government’s $8,000 gift in the form of a tax credit, the deal must close by Dec. 1.
Buyers should have a purchase contract signed by early October, so they have 45 to 60 days to arrange financing and safely close the deal.
Even if you are not a recent first-time home buyer, it is important that you know about the tax credit availability. It may be the key factor to facilitate the sale of your home, or that of other homes in your community. It is an excellent time for a first-time home buyer to buy, with historic low rates, a plentiful supply of homes, lower prices in some markets, and the federal tax credit. Communities benefit from strong levels of home ownership.
Positive Growth
There was an important piece of economic news last month that has huge significance for real estate and housing, but it got minimal coverage on TV and in print.
The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.
That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.
That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.
There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.
The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.
Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.
Good Landscaping Draws in Buyers
In this challenging real estate market, curb appeal is particularly important for a home seller. Here are some tips for hiring a landscaper who will do a good job at a reasonable price.
* Review a portfolio. A neighbor's recommendation is a good starting point, but it is also worthwhile to examine other jobs the landscaper has done and ask for references. Hiring someone who isn't reliable, doesn't finish the job or who uses unhealthy plants is a costly mistake.
* Consider maintenance. Asking for a low-maintenance design will ensure that even if the home owner isn't able to spend hours on the task, the lawn will continue to look good.
* Know what good landscaping is worth. It can't hurt to let a potential buyer know what the value of the trees and shrubs are. The North Carolina-based Horticultural Asset Management specializes in assessing the value of landscape plants. For instance, it puts the worth of a healthy 60-foot-tall European beech at $50,000.
This article appeared in Realty Times
Written by: Realty Times Staff
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
The 15-year FRM this week averaged 4.69 percent with an average 0.7 point, up slightly from the previous week when it averaged 4.68 percent.A year ago at this time, the 15-year FRM averaged 6.07 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.75 percent this week, with an average 0.6 point, up slightly from the previous week when it averaged 4.74 percent. A year ago, the 5-year ARM averaged 6.07 percent.
One-year Treasury-indexed ARMs averaged 4.80 percent this week with an average 0.5 point, up from the previous week when it averaged 4.77 percent. At this time last year, the 1-year ARM averaged 5.27 percent.
"Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields," said Frank Nothaft, Freddie Mac vice president and chief economist.
"For instance, the Federal Reserve reported in its July 29th regional review that residential real estate markets in most of its districts remained weak, but many reported signs of improvement. In addition, it noted that entry-level homes continued to perform relatively well in part due to the first-time homebuyer tax credit.
"Other economic reports confirm that the housing market may indeed be bottoming out. New home sales rose for the third consecutive month in June to an annual pace of 384,000 homes, the most since November 2008 and the number of new houses on the market fell to the lowest amount since February 1999, according to the Department of Commerce. Sales of existing homes also showed a three-month gain to 4.89 million, the most since October 2008, and the share of distressed homes fell to 31 percent compared to almost half at the beginning of the year, the National Association of Realtors® (NAR) reported."
First-Time Buyers: Hurry For $8,000 Tax Credit
It’s time to remind first-time home buyers that in order to qualify for the government’s $8,000 gift in the form of a tax credit, the deal must close by Dec. 1.
Buyers should have a purchase contract signed by early October, so they have 45 to 60 days to arrange financing and safely close the deal.
Even if you are not a recent first-time home buyer, it is important that you know about the tax credit availability. It may be the key factor to facilitate the sale of your home, or that of other homes in your community. It is an excellent time for a first-time home buyer to buy, with historic low rates, a plentiful supply of homes, lower prices in some markets, and the federal tax credit. Communities benefit from strong levels of home ownership.
Positive Growth
There was an important piece of economic news last month that has huge significance for real estate and housing, but it got minimal coverage on TV and in print.
The Conference Board's Index of Leading Economic Indicators, widely acknowledged as the most accurate predictor of future activity and output in the U.S. economy, rose by almost a point in June.
That was the third straight month of positive growth. But more importantly, it was the first time since 2004 that the index has increased for three consecutive months.
That's crucial for real estate because housing sales, production and prices are closely tied to movements in the overall economy: jobs, manufacturing, exports, household incomes and the like.
There's no way we're going to see a sizable housing recovery until the economy pulls itself out of recession and starts to grow again.
The index of leading indicators is clearly telling us that that process is well underway -- and that's a very encouraging message.
Federal Reserve Chairman Ben Bernanke, in testimony before Congress last week, pretty much said the same: A modest recovery is not far off, he said, though it will take a long time to get unemployment levels back down to pre-recession levels.
Good Landscaping Draws in Buyers
In this challenging real estate market, curb appeal is particularly important for a home seller. Here are some tips for hiring a landscaper who will do a good job at a reasonable price.
* Review a portfolio. A neighbor's recommendation is a good starting point, but it is also worthwhile to examine other jobs the landscaper has done and ask for references. Hiring someone who isn't reliable, doesn't finish the job or who uses unhealthy plants is a costly mistake.
* Consider maintenance. Asking for a low-maintenance design will ensure that even if the home owner isn't able to spend hours on the task, the lawn will continue to look good.
* Know what good landscaping is worth. It can't hurt to let a potential buyer know what the value of the trees and shrubs are. The North Carolina-based Horticultural Asset Management specializes in assessing the value of landscape plants. For instance, it puts the worth of a healthy 60-foot-tall European beech at $50,000.
This article appeared in Realty Times
Written by: Realty Times Staff
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Friday, August 7, 2009
Making Homes Even More Affordable
More homeowners suffering mortgages larger than the value of their home can now trade in their mortgage for a more affordable home loan, under a broader Making Home Affordable refinance provision.
Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.
Previously, the Home Affordable Refinance Program's loan-to-value limit was 105 percent.
It's the latest Obama Administration effort to help more homeowners refinance their mortgage at a lower rate and reduce their monthly payments. A refinance can help owners buck up and keep homes that are worth less than they owe.
Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost.
Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.
Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.
As usual, high-coast areas including many in California, New England, New York and most resort and second home areas won't see much relief. Until the Fannie Mae Freddie Mac conforming loan limit was raised in high-priced areas last year, high-cost area homes were too expensive to be purchased under Fannie and Freddie guidelines.
The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.
The higher loan-to-value ratios are available now to qualified borrowers who apply through their existing servicer. After Oct. 1 a homeowner can shop around and refinance through any Fannie or Freddie lender.
To check your eligibility for a refinance under the new provision, go to Making Home Affordable.
Written by Broderick Perkins
August 6, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.
Previously, the Home Affordable Refinance Program's loan-to-value limit was 105 percent.
It's the latest Obama Administration effort to help more homeowners refinance their mortgage at a lower rate and reduce their monthly payments. A refinance can help owners buck up and keep homes that are worth less than they owe.
Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost.
Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.
Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.
As usual, high-coast areas including many in California, New England, New York and most resort and second home areas won't see much relief. Until the Fannie Mae Freddie Mac conforming loan limit was raised in high-priced areas last year, high-cost area homes were too expensive to be purchased under Fannie and Freddie guidelines.
The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.
The higher loan-to-value ratios are available now to qualified borrowers who apply through their existing servicer. After Oct. 1 a homeowner can shop around and refinance through any Fannie or Freddie lender.
To check your eligibility for a refinance under the new provision, go to Making Home Affordable.
Written by Broderick Perkins
August 6, 2009
Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com
Wednesday, August 5, 2009
Avoiding Closing Derailment
Like a train, a transaction can get derailed at any point on the track. A closing can be hit by a clouded title, a home not appraising for value, a rapid change in interest rates, an undisclosed credit or income issue, or one of countless other unanticipated issues.
Choke points cause delays and delays cause all kinds of problems for buyers, sellers, and agents. Moving plans get thrown into disarray. Interim housing or early-possession requests become necessary. Contingency plans need to be thrown together. Nerves get jangled. The resulting situation can be a nightmare for everyone involved in the transaction.
Eighty percent of the problems in closing transactions fall into three basic areas. Stay on the lookout for these problems to steer your home buying or selling experience clear of as much trouble as possible:
1. Documentation and verification: Lenders needs to assemble considerable paperwork and complete dozens of documents based on information submitted by the loan applicants. Then they need to verify all information for accuracy by checking the applicant's employment status, funds on deposit, and income level. The document preparation and information verification process takes time. If you fail to submit the required information on a timely basis, or if you turn it in piecemeal and bit-by-bit, delays are certain to result.
2. Repairs, repairs, repairs: This is a chokepoint that good advance planning can avert. Sellers should consider that only lender-required repairs will be done. If you don't, you leave yourself open to the risk that the buyer will come back with a laundry list of items.
A lender-required note usually limits repairs to structural, mechanical, or health and safety issues – with not a word about nicks in a walls or non-matching door knobs.
Also consider writing a dollar limit for repairs into the initial contract. The number isn't etched in stone, but it will help keep a lid on the potential amount for which a seller is responsible. The buyers may still refuse to lift the home inspection contingency until additional lender-required issues are dealt with, but the limit will help most sellers.
3. Underwriting of the buyer's loan: This is the stickiest of all closing choke points because the underwriter has complete power to approve the loan, approve the loan with additional conditions, or suspend the file until certain conditions are met, in which case the borrower starts the underwriting process all over again.
Underwriters check to make sure that the loan meets guidelines for debt ratio, loan-to-value ratio, credit score, employment history, and other qualifications. They also evaluate the loan based on whether it can be bundled with others in a big loan package that can be sold to Fannie Mae, Freddie Mac, or another entity that buys mortgages.
Very few lending institutions hold their loans to maturity. Most write loans, realize profits through origination fees, document preparation fees, and margins on basis points, and then sell the loans within 30 to 60 days, recouping the loan amount to sell again as part of the next loan deal.
If the underwriter approves a loan that can't be resold, then the lending institution has to keep the loan in its portfolio. If that situation occurs too often, and too many loans can't be resold, the lending institution runs out of money to loan, driving it out of business.
Of all the choke points in a transaction, the underwriting process can cause the biggest delays. Expect that there will be times when underwriters slow things down with requests for second appraisals or additional documentation of value, especially if the home is in a high price range. Once you clear the hurdle, the documents can be drawn and sent to closing.
This article appeared in Realty Times
Written by: Dirk Zeller
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Choke points cause delays and delays cause all kinds of problems for buyers, sellers, and agents. Moving plans get thrown into disarray. Interim housing or early-possession requests become necessary. Contingency plans need to be thrown together. Nerves get jangled. The resulting situation can be a nightmare for everyone involved in the transaction.
Eighty percent of the problems in closing transactions fall into three basic areas. Stay on the lookout for these problems to steer your home buying or selling experience clear of as much trouble as possible:
1. Documentation and verification: Lenders needs to assemble considerable paperwork and complete dozens of documents based on information submitted by the loan applicants. Then they need to verify all information for accuracy by checking the applicant's employment status, funds on deposit, and income level. The document preparation and information verification process takes time. If you fail to submit the required information on a timely basis, or if you turn it in piecemeal and bit-by-bit, delays are certain to result.
2. Repairs, repairs, repairs: This is a chokepoint that good advance planning can avert. Sellers should consider that only lender-required repairs will be done. If you don't, you leave yourself open to the risk that the buyer will come back with a laundry list of items.
A lender-required note usually limits repairs to structural, mechanical, or health and safety issues – with not a word about nicks in a walls or non-matching door knobs.
Also consider writing a dollar limit for repairs into the initial contract. The number isn't etched in stone, but it will help keep a lid on the potential amount for which a seller is responsible. The buyers may still refuse to lift the home inspection contingency until additional lender-required issues are dealt with, but the limit will help most sellers.
3. Underwriting of the buyer's loan: This is the stickiest of all closing choke points because the underwriter has complete power to approve the loan, approve the loan with additional conditions, or suspend the file until certain conditions are met, in which case the borrower starts the underwriting process all over again.
Underwriters check to make sure that the loan meets guidelines for debt ratio, loan-to-value ratio, credit score, employment history, and other qualifications. They also evaluate the loan based on whether it can be bundled with others in a big loan package that can be sold to Fannie Mae, Freddie Mac, or another entity that buys mortgages.
Very few lending institutions hold their loans to maturity. Most write loans, realize profits through origination fees, document preparation fees, and margins on basis points, and then sell the loans within 30 to 60 days, recouping the loan amount to sell again as part of the next loan deal.
If the underwriter approves a loan that can't be resold, then the lending institution has to keep the loan in its portfolio. If that situation occurs too often, and too many loans can't be resold, the lending institution runs out of money to loan, driving it out of business.
Of all the choke points in a transaction, the underwriting process can cause the biggest delays. Expect that there will be times when underwriters slow things down with requests for second appraisals or additional documentation of value, especially if the home is in a high price range. Once you clear the hurdle, the documents can be drawn and sent to closing.
This article appeared in Realty Times
Written by: Dirk Zeller
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
Monday, August 3, 2009
Home Hunting Without Fear
As any daredevil, extreme sports addict or adrenaline junkie knows, well-grounded preparation for the specific task at hand is what takes the fear out of trying.
The sometimes risky sport of home buying is no different.
Those who've suffered the agony of defeat in what's likely the most dangerous consumer game, learned the hard way that sheer fearlessness isn't enough to become and remain a homeowner -- through good times and bad.
With the rules of the housing game changed forever, preparing to just squeak by the home buying ordeal isn't enough to achieve a decisive and lasting victory.
The idea isn't just to buy a home. The goal is to keep your own roof over your head.
Preparation is key, according to the National Association of Realtors (NAR).
From NAR, here's how to get ready to be and remain a homeowner.
* Create a wish list. Write down housing wants and needs. Include all the physical characteristics you want or need. Include style, size, layout and room configuration. Look at the number of bedrooms and bathrooms, and the basic amenities you must have. Include critical features such as location and services and a home's proximity to good schools or public transportation lines.
* Browse for housing. Realtor.com and other Web sites offer home valuation features and neighborhood data on trends in local markets. Use features to determine how a listing compares with nearby, comparable properties in terms of value, actual sales prices, home features, neighborhood characteristics, and more.
* Work with an expert. Finding a professional real estate agent who will represent your best interests can make the difference in location, negotiating the best offer, and closing the home of your dreams. Look for a full time real estate agent, who has uploaded telling photos and videos of their listings and look for agents with good Web sites to market your listing.
* Get the complete picture before you visit. You can't know everything about a community from an online listing. Schools, crime, and proximity to shopping and work all impact property values. NAR says talk to a Realtor and go to Realtor.com to explore communities.
* Make sure the property details are reliable. Buyers need know when a listing has experienced a price change. Look for Web sites like Realtor.com that updates listings frequently, including price changes. Fresh and reliable information is critical. Realtor.com time stamps listings to help buyers make better informed decisions. Get email alerts and stay on top of changes so you can be first to act.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
The sometimes risky sport of home buying is no different.
Those who've suffered the agony of defeat in what's likely the most dangerous consumer game, learned the hard way that sheer fearlessness isn't enough to become and remain a homeowner -- through good times and bad.
With the rules of the housing game changed forever, preparing to just squeak by the home buying ordeal isn't enough to achieve a decisive and lasting victory.
The idea isn't just to buy a home. The goal is to keep your own roof over your head.
Preparation is key, according to the National Association of Realtors (NAR).
From NAR, here's how to get ready to be and remain a homeowner.
* Create a wish list. Write down housing wants and needs. Include all the physical characteristics you want or need. Include style, size, layout and room configuration. Look at the number of bedrooms and bathrooms, and the basic amenities you must have. Include critical features such as location and services and a home's proximity to good schools or public transportation lines.
* Browse for housing. Realtor.com and other Web sites offer home valuation features and neighborhood data on trends in local markets. Use features to determine how a listing compares with nearby, comparable properties in terms of value, actual sales prices, home features, neighborhood characteristics, and more.
* Work with an expert. Finding a professional real estate agent who will represent your best interests can make the difference in location, negotiating the best offer, and closing the home of your dreams. Look for a full time real estate agent, who has uploaded telling photos and videos of their listings and look for agents with good Web sites to market your listing.
* Get the complete picture before you visit. You can't know everything about a community from an online listing. Schools, crime, and proximity to shopping and work all impact property values. NAR says talk to a Realtor and go to Realtor.com to explore communities.
* Make sure the property details are reliable. Buyers need know when a listing has experienced a price change. Look for Web sites like Realtor.com that updates listings frequently, including price changes. Fresh and reliable information is critical. Realtor.com time stamps listings to help buyers make better informed decisions. Get email alerts and stay on top of changes so you can be first to act.
This article appeared in Realty Times
Written by: Broderick Perkins
Thinking about Buying or Selling?
Call Alvin's Team Today! 800-666-4718
Or visit our website: www.LivingLakeTahoe.com
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