Why Buy A Home?

The past few years of rocky real estate markets has left some people wondering, why buy a home? If you find that thought running through your mind consider these things.

A recent survey commissioned by the National Association of Home Builders found that 72 percent of its respondents opposed any effort to get rid of the homeowners' mortgage interest deduction. That's despite the fact that doing so could help ease the nation's budget deficit.

Gil Gross host of Real Estate Today Radio reported that, "The survey cut across partisan lines, and even across homeowner status. 76 percent of Republicans and 64 percent of Democrats oppose eliminating the deduction, as do 75 percent of owners and even 55 percent of renters. They all recognize the importance of homeownership to the nation's economy."

But why when you hear the horror stories of markets crashing, housing underwater and homeowners facing foreclosure, would you want to buy a home?

The first reason, we just addressed. When you buy a home there are tax advantages. Effectively, homeownership provides an excellent tax shelter. But there are more reasons to trade your rent payment for a mortgage. Buying a home for this tax advantage isn't how you should look at it. Rather, think of it this way. You need a place to live. Receiving a tax advantage for the place that you choose to live in, is a nice bonus.

When carefully used, a home equity loan (line of credit that allows you to borrow against your home) can be a better way to carry credit. That's because home equity lines can have lower interest rates and are also deductible whereas typical credit card interest is not.

Owning your own home gives you more freedom and the opportunity to create a living environment exactly how you want it. There's no consulting with landlords to see if you can do something to the home or who will pay for the change. Of course, that means when you buy a home you should consider what additional changes you plan to make, so that you can appropriately budget. Also, keep in mind that with homeownership come unexpected expenses for repairs and maintenance. While that may sound like a reason not to buy, it shouldn't be. Think about owning a car. There are maintenance issues and expenses but most people still like to own their own vehicle.

Homeownership provides a sense of stability and security. Instead of wondering when the landlord might decide to sell the home, you are in control of that decision. Additionally, homeownership provides immeasurable values of belonging to a social community. Also, as a homeowner, you'll have a greater influence on community affairs. Renters, being usually more transient, have less influence on policymakers.

What it comes down to is how long you plan on staying in a particular home and area and what you can afford. Owning your home weds you to a property which some people feel limits them. However, many others see a home as their life and the legacy they'll leave behind... a place where they raise children, enjoy company, experience life's ups and downs, and eventually pass on their home to loved ones. 

Written by Phoebe Chongchua
October 29, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Choosing Your Agent

It is recommended that you have a real estate agent help you with your transactions. But how do you know which agent to select? The choice can be difficult, but here are some questions to ask during potential agent interviews.

1. Do you have references from past clients? Ask their past clients if they were pleased with the service the agent provided them. Did they communicate in a timely manner, and were they kind and courteous?

2. What does being an agent mean to you? By asking this question you'll be able to see what their work ethic and business philosophy are. You want an agent that puts their priority on your happiness first, and their commission check second.

3. How long have you been in real estate? This is not to say that someone new to the business would not be a great asset. However, depending on the nature of your transaction, you may feel more comfortable with an agent with a proven record of sucess.

4. How many homes did you sell last year? Just because an agent has been in the business for a while doesn't mean they've been successful. You don't want to have your home on the market for months, when a savvy agent could have it sold in weeks.

5. What designations and certifications do you hold? Beyond holding a real estate license, agents can opt to expand their education and skills. There are a multitude of courses and programs available. In general, these certifications mean a more specialized agent.

6. What is your marketing plan? In an ideal world a house would just sell itself, right? But the market swings back and forth on a constant pendullum between being in favor of sellers and then buyers. If you are selling a house in a buyers market, then you need a solid marketing plan to make your home stand apart. Open houses, email campaigns, webcasts, and brochures are just a few of the items your agent may use.

7. Do you do dual agency? Dual agency is when the agent represents both the buyer and the seller. This is legal, as long as disclosed, but it may not be something you're interested in signing up for. Be sure to ask.

8. What are your home sales stats? It is important to ask them how long it takes them on average to sell a home. And then ask what the area average is. They should know this information off the top of their head, or at least have the statistics readily available.

9. How do you communicate with your clients? There is nothing worse than not being able to get ahold of your agent, with questions, for updates, and for feedback. In today's modern world of technology, there is no excuse for them not to stay in constant contact. There is email, texting, cell phones, and a myriad of other options. Ask what they use to stay in touch with their clients.

10. Do you have other connections? Meaning, will they be able to refer you to contractors, mortgage lenders, banks, landscapers, pool maintenance crews, and the like. This will be especially important if you are new to the area. 

Written by Carla Hill
May 17, 2010 

Thinking about Buying or Selling? 
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Or visit our website: www.LivingLakeTahoe.com

Creating Traditional Style

Are you moving into your dream house or dreaming of finding it? If you are like most potential homeowners, you are already designing and decorating the home in your head!

How can you make your new home a stand-out with Traditional style? Traditional design is characterized by tailoring, elegance, and an overall finely-crafted style.

HGTV.com gives a history lesson on Traditional, saying, "Traditional furnishings can hail from England in the 18th century, the French countryside, or even the exotic lands of the East. Among the most popular traditional styles today are 18th-century English, 19th-century neoclassic, French country, and British Colonial revival. "

In order to achieve a traditional look, consider a few of these tips:

Old with New: There is a fine line between Traditional style and other design ascetics, such as "Old World", but if used sparingly, antiques have rich and intricate woodwork, a great compliment to the Traditional style.

Color: Traditional design can be taken in numerous directions, depending on the homeowner's particular taste. Some opt for soft, calming palettes, while others aim to please with sharply contrasting black woods paired with the neutral tones. Whites, creams, greens, and neutral tones are favorites of this style. Regardless, all Traditional designs reflect order, precision, and tailoring. There is nothing ostentatious about Traditional homes.

Fabrics: If any design could be, this style is the Capricorn of the design world, being practical and well-thought out. But that doesn't mean "boring." Don't be afraid to mix fabrics and textures. When it comes to chairs, rugs, and carpet ... think "formal". Tailoring is key. Window treatments should be perfectly fitted, and made of rich, luxurious fabrics.

Furniture: Traditional is orderly, yes, but it is not cold. Create intimate sitting areas with your furniture. Warm up areas even more with woodworking. And have your rooms open to the outdoors with perfectly chic French doors.

To find great design ideas, consider picking up a copy of Traditional Home magazine, which features some of the best Traditional homes across the nation.

Style is what you make it. Don't ever feel obligated to follow someone else's "rules" of design. Mixing and matching design styles can be a fantastic way to make your home your own. Decide on your own signature style and your home will surely reflect your unique personality. 


Written by Carla Hill
September 23, 2010

Thinking about Buying or Selling? 
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Survey Reveals Buying Still Appeals

If you think buying a house still makes sense even in today's economy, welcome to the club!

A recent National Association of Realtors survey revealed that nearly eight out of ten believe buying a home is still a good financial decision.

The eighth annual Housing Opportunity Pulse Survey found that despite job security concerns being the highest reported in the last eight years, buying is still on the minds of Americans.

More than two-thirds of those surveyed, 68 percent, still think that "now is a good time to buy a home." And though cost remains an impediment for many buyers, the majority of respondents worry about the drop in home values. This is happening all across the nation as neighborhoods combat the effects of rampant foreclosures.

Over half surveyed say that foreclosures are a moderate to big problem in their area. And recent statistics from Zillow.com show that foreclosures are still on the rise. Last year's survey indicated that the blame for foreclosures was on those who bought homes they couldn't afford. That focus and blame has now shifted to the ailing job market, with layoffs and unemployment

There is concern, as well, over banks and lending standards. The majority of those surveyed worry that "banks have made it too hard to qualify for a home mortgage loan."

Are there new buyers waiting to enter the housing market? The survey reveals that 39 percent of renters feel that owning a home at some point in the future is a high priority. And 24 percent rank it as a moderate priority. That could be good news for a market desperate for buyers. 

Written by Carla Hill
October 19, 2010 

Thinking about Buying or Selling? 
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Heated Floors, a Warm Welcome for Chilly Buyers

When you feel a chill in the air and the leaves start to turn (okay, not so much in San Diego) but certainly in other parts of the country, then you know it’s time to load up the fireplaces with wood, close up the windows, and turn on the floors.

Turn on the floors? Yes, radiant heating is as attractive to cold toes as peanut butter is to jelly--they just go together.

These days radiant floors are becoming more popular especially for those interested in green design. There are several benefits for the environment and your pocketbook. As the floors get toasty warm, they help heat the rest of the room by warming it up and making it more comfortable on a cold night.

And if you heat your pool with solar energy or geothermal renewable energy systems, they can be used to power your heated floors too. A lot of people rely on central heating systems and while these work, they often fill the upper part of the room with hot air--making it stuffy and not quite providing the warmth needed where people are actually present in the room. The even heat distribution helps lower the cost of the home’s heating bill.

But perhaps the two biggest advantages are silent and unseen heating. With no heat registers or radiators, you can place furniture how you like without being concerned about blocking a heating system. Of course, there will be no forced hot-air fan noise, making this an invisible heating design.

The move toward radiant heat in floors is logical but that’s not the only place you’ll find heat. It’s also being installed in ceilings, walls, and driveways to help melt away the snow and ice.

The concept isn’t new, heated floors date back centuries. The Romans used to channel hot air underneath their floors to warm their villas. Today, it’s the allure of going green that also adds to the interest of installing radiant floors.

Radiant floors are easier to put in during the construction phase of a new home or when you’re remodeling since the pipes are laid down beneath the flooring.

According to the U.S. Department of Energy, there are three types of radiant floors: air-heated, electric, and hydronic (liquid) which are the most effective and popular. "Hydronic radiant floor systems pump heated water from a boiler through tubing laid in a pattern underneath the floor. In some systems, the temperature in each room is controlled by regulating the flow of hot water through each tubing loop."

A system then uses zoning valves or pumps and thermostats to regulate the temperature for the rooms.

The Energy Department writes on its site that "Because of the relatively high cost of electricity, electric radiant floors are usually only cost-effective if they include a significant thermal mass, such as a thick concrete floor, and your electric utility company offers time-of-use rates."

The time-of-use rates allow a homeowner to charge the concrete floor with heat during off-peak times (usually daytime hours). However, if the concrete mass is large enough, the heat will be retained in it for eight to 10 hours, providing warmth in that room without the need of any further electricity to heat it.

According to the Energy Department, air-heat radiant floors are the least affordable for residential homes because "air cannot hold large amounts of heat". Even though, the department points out, this type of floor can be combined with solar air heating systems, this is the least of the three to be installed in a home.

"Because of the inefficiency of trying to heat a home with a conventional furnace by pumping air through the floors, the benefits of using solar heat during the day are outweighed by the disadvantages of using the conventional system at night. Although some early solar air heating systems used rocks as a heat-storage medium, this approach is not recommended." Whether you’re thinking of installing radiant floors or you already have them and are getting ready to sell, understand that they can be a benefit, not only for your family’s comfort but also when it comes time to sell... highlight them when you list your home. Being knowledgable about the type of radiant floor heat that you use and how it will transfer warmth and cost-savings to the future buyer is a win-win. 


Written by Phoebe Chongchua
October 15, 2010. Published on Realty Times

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
Or visit our website: www.LivingLakeTahoe.com

Tax Incentives Benefit Younger Households

Younger Americans may now have added incentive to enter the housing market. New research reported by the National Association of Home Builders (NAHB) shows that certain mortgage tax deductions may decline with age, and thus favor the younger set of the nation, specifically those aged 18 to 45.

Recently released Statistics of Income (SOI) data from the Internal Revenue Service (IRS) shows, according to the NAHB, that "the descriptive statistics ... demonstrate that the housing-related tax deductions, the mortgage interest and real estate tax deductions, strongly benefit younger households who tend to be recent homebuyers with larger mortgage debt."

These findings could affect how tax codes changes are proposed in coming years, as an ailing housing market needs first-time and Generation Y homebuyers to enter the market.

"Opponents falsely argue that the [mortgage interest] deduction is only for the wealthy but it is clear that the mortgage interest deduction is also of great value to younger homeowners," said Robert Dietz, Assistant Vice President for Tax and Policy Issues for NAHB. "Any tampering with this deduction would have a disproportionate impact, as a share of household income, on younger homeowners who have relatively higher mortgage interest payments. These are households who have growing demand for homeownership due to marriages and children."

According to the research, the average mortgage interest deduction was highest for the 35 to 45 age group, and then declined with age. Those under the age of 35 had the second largest deductions, at around $12,000 average.

The same trend is seen for mortgage insurance deductions. NAHB research shows "as is expected, the largest shares for this deduction, associated with homebuyers with less than 20% of the home price as a downpayment, are for those aged 18 to 45."

These tax advantages, along with more affordable pricing and historically low interest rates are even more reason that new buyers should consider entering the market at this time. 

Written by Carla Hill
October 13, 2010 

Thinking about Buying or Selling? 
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Or visit our website: www.LivingLakeTahoe.com

First-Time Buyers Find a House

Buying a home is an exciting experience. For first time buyers new to the process, it can also be terrifying. In order to ease buying jitters, take a look at a few simple tips.

At the beginning of this journey, you'll need to decide on a budget. There are several factors you need to keep in mind. First, how much of a downpayment do you have? FHA loans allow for as little as 3.5 percent of the purchase price as a downpayment. Other lenders generally require a higher percentage.

Do you want to be house rich and cash poor? Just because a lender approves you for a mortgage payment of $200,000 at $2,000 a month, doesn't mean you want to spend that. It may leave you with no money left over for travel, entertainment, or other luxuries you have come to enjoy. Thus comes the saying, "house rich, cash poor."

To find out what a lender thinks you can afford, you will need to get pre-approved. The lender will examine your financial status, including your credit score. This will determine what interest rate you'll be offered and for what amount you are approved.

After setting your budget, you'll need to pick the neighborhoods you are interested in. Are you looking for a short commute, good schools, entertainment within walking distance, or an old neighborhood with charm? These preferences are entirely up to you and will determine the direction of your search.

The MLS is a great place to start your search. The real estate agent you are working with can help you weed through the thousands of listings by supplying you with potential matches, or a simple google search on your own can give you a list of MLS sites to search. Realtor.com also features a MLS that is open to the public. The MLS shows pictures, descriptions, and locations of homes that match your search criteria.

Use the MLS to narrow down potential neighborhoods. It can be a good starting point to give you an idea of costs, amenities, and size of homes.

As you begin your home search, your local real estate agent will let you know of upcoming open houses. An open house is generally held on a weekend and means the listed home will be open for you to view. There will be other potential buyers there, as well as their agents.

A showing, on the other hand, is when your agent and the listing agent agree upon a set upon time for you to view the house. The seller will not be present, and you'll have the house all to yourself.

Good luck with your home search, and may you find your dream home. 

Written by Carla Hill. Published on Realty Times

September 22, 2010 

Thinking about Buying or Selling? 
Call Alvin's Team Today! 877-651-7810 
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Recognizing a Buyer's Market

Are you on the search for a new home? Are you a first-time home buyer ready to enter the market? Then a buyers market is right where you want to be!

Recent years have turned many real estate markets on their heads. One-time hotbeds for rapid appreciation and booming sales have turned into areas rampant with dropping prices and foreclosures. Making matters even more complicated, is the realization that every market is different. Even neighborhoods within cities have varying markets.

How can you tell if you are living in an area experiencing a buyers market?

Key Indicators:

• More than six month's worth of inventory on the market

• Median sales price is down

• Fewer buyers on the market

• Relative large supply of homes and relative low prices

As a buyer, how can you maneuver yourself to take full advantage of a market which is stacked in your favor?

All of the market indicators translate into more choice for buyers. Prices become more negotiable. You have more homes to choose from.

One of your first steps is to hire a real estate agent. An agent can supply you with market statistics, including days on market, pricing, and neighborhood comparables. They can also direct you to home listings on the MLS.

With such economic uncertainty today, buyers are scared to venture into the market. They fear prices may drop after they buy, leaving them upside down in a home. They fear the market will not pick up for years, leaving them stuck in a home. That fear works in your favor, should you choose to buy. Interest rates are at historic lows. And buyer fear actually translates into more homes for you to choose from. It means sellers may be more willing to drop their price to make a sale.

In negotiating, foreclosures wreak havoc on a neighborhood. Foreclosures can lower values on an entire street. If a home has been sitting on the market for months, the likelihood that the seller will make concessions increases.

And even when a price won't budge, you can always discuss who will pay closing costs.

Deciding when to buy can be a big decision, but buying during a buyers market can give you many advantages over other markets. 


Written by Carla Hill
October 7, 2010 Published on Realty Times

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Mortgage Rates Continue to Fall According to Freddie Mac's Weekly Survey

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate dropped yet again to break the survey's all-time low; the 15-year fixed-rate did the same. The 5-year ARM also set an all-time survey low.

30-year fixed-rate mortgage (FRM) averaged 4.27 percent with an average 0.8 point for the week ending October 7, 2010, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.87 percent.

15-year FRM this week averaged a record low of 3.72 percent with an average 0.7 point, down from last week when it averaged 3.75 percent. A year ago at this time, the 15-year FRM averaged 4.33 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.52 percent. A year ago, the 5-year ARM averaged 4.35 percent.

1-year Treasury-indexed ARM averaged 3.40 percent this week with an average 0.7 point, down from last week when it averaged 3.48 percent. At this time last year, the 1-year ARM averaged 4.53 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac report, "The 12-month growth rate in the core price index for personal consumption , which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best. This allowed mortgage rates to ease to new or near record lows this week."

"Housing affordability increased for the second month in a row in August to tie April's level, according to the National Association of Realtors® (NAR). As a result, pending existing home sales also rose for the second consecutive month in August to the strongest pace in four months, the NAR also reported. Furthermore, since the end of August, mortgage applications for home purchases were up over 14 percent for the week ended October 1st." 

Published on Realty Times
October 8, 2010 

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American Dream Attracting More Foreigners

They comprise only a small share of homebuyers in the U.S., but more and more foreign buyers are coming to America for the homeownership piece of the dream.

More than a quarter of Realtors, 28 percent, reported working with at least one international client in the past year, up from 23 percent during the previous Profile of International Home Buying Activity.

The recently released 2010 study, which queried Realtors for a year ending in March 2010, found that 18 percent of all Realtors were estimated to have completed at least one international sale, compared to 12 percent last year.

Foreigners invested $41 billion in homes in the U.S. during the period, 4 percent of the total $907 billion market. Adding recent immigrants, or temporary visa holders, pushed the total to $66 billion, or 7 percent of the market according to the report.

A stronger dollar, desirable U.S. property and the slow, but emerging economic recovery are seen as factors in the growing demand for an American home.

Low mortgage rates haven't hurt.

"While all real estate in the U.S. is local, the same is not true for property owners," quipped NAR President Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, AZ.

"The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country," she added.

But not all U.S. real estate markets are created equal in the eyes of foreign buyers.

The survey found foreigners buying property in 39 states, but a bit more than half were in just four states: Arizona, California, Florida and Texas. Except for Texas, they are all states that were hotbed boomtowns during the last big boom.

By larger regions, foreign buyers favored the South (45 percent), over the West (32 percent), the Midwest (13 percent) and the Northeast (10 percent).

The buyers came from 53 countries, but the largest number was from just across the borders, Canada, at 23 percent and Mexico at 10 percent. The United Kingdom added 9 percent; China (including Hong Kong), 8 percent; Germany together with France, 7 percent; and India, 5 percent, according to the NAR survey.

More than one in three foreign buyers weren't closers. Thirty four percent hadfinancing problems, often because tight fisted lenders weren't willing to lend to those without Social Security numbers.

But money talks. Among those who did close, 55 percent paid cash, compared to only 8 percent of U.S. buyers coming to the table with a full stake.

Other findings:

The median price paid by international buyers was in the neighborhood of $219,400 during the 2009 to 2010 period. By contrast, the overall median price for all existing home sales was $173,000 during the same period. However, nearly half the foreign buyers, 46 percent, paid $200,000 or less during the period.

Most foreign buyers, 66 percent, purchased a detached single-family home, compared to 23 percent buying a condo, 8 percent a townhouse and 3 percent commercial property.

Fifty percent said they bought the property to live in as their primary residence, 22 percent as a vacation home; 14 percent as an investment and 14 percent as both aninvestment and vacation home.

Suburban areas were most popular, chosen 50 percent of the time over urban areas (27 percent), resort areas (14 percent), and rural or small town areas (9 percent). 

Written by Broderick Perkins
September 30, 2010 

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30-Year Mortgage Rate Ties Low While 15-Year Sets New Record

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®). The 30-year fixed-rate mortgage rate dropped to tie the survey’s all-time low and the 15-year fixed-rate set another record low.

30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.8 point for the week ending September 30, 2010, down from last week when it averaged 4.37 percent. Last year at this time, the 30-year FRM averaged 4.94 percent.

15-year FRM this week averaged a record low of 3.75 percent with an average 0.7 point, down from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.52 percent this week, with an average 0.6 point, down from last week when it averaged 3.54 percent. A year ago, the 5-year ARM averaged 4.42 percent.

1-year Treasury-indexed ARM averaged 3.48 percent this week with an average 0.7 point, up from last week when it averaged 3.46 percent. At this time last year, the 1-year ARM averaged 4.49 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, says, "Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week. The September Consumer Confidence Index by the Conference Board fell to the lowest level since February of this year, while the Business Roundtable CEO Business Outlook for the third quarter was the weakest in the past four quarters. Consequently, rates for the 15-year fixed mortgage and the 5-year hybrid ARM reached new all-time lows and rates for 30-year fixed mortgages tied its record set just four weeks ago."

"Homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010 after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009, the Federal Reserve Board reported. This, in part, strengthened household balance sheets and reduced serious mortgage delinquencies. For instance, first mortgages 90-days delinquent or worse fell to 3.16 percent in August from 4.76 percent a year prior and was the lowest rate since June 2008, according to the S&P/Experian Consumer Credit Default Indices ." 


October 1, 2010 Published on Realty Times

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