Should I Accept This Offer?

Being a seller in today's market can present its share of challenges. How do you know when to accept an offer and when to hold out for something better?

Is the current offer a low ball offer or are you simply hesitating over attachment to the home? This is the first and most crucial question to ask yourself.

You see the memories and the upgrades you've made to the home. You know down the cent how much you've invested in the property. In today's market, however, home values have fluctuated and dipped. It's time to detach emotionally from your home and view it in a financial light. Is this a low ball offer or is a reasonable offer for your current market?

How long has your home been on the market? If your home is new to the market, especially if you've had multiple requests for showings, then accepting the first offer can be a gamble. You might not receive another offer, but on the other hand if this offer is too low you might be dealing with a vulture.

Are the terms agreeable? Some offers are right on target with asking prices, but are demanding when it comes to closing cost concessions and even move-out dates. If you don't have a new home lined up and the buyer is wanting you out in 2 weeks you'll find yourself in quite the scramble! Consider all the factors included in the sale.

Will you lose money on the sale? Many homeowners have found that their homes have depreciated in value over the last six years. Can you afford to sell at the offered price? Think about if this will cause you to be too far in debt on your mortgage to buy your next home.

How fast are you needing to sell? -- Are you moving to another state or city? Many of today's sellers are needing to move and that means buying a home. Even if you're not moving, you may have already found, or purchased, your next home and don't need two mortgages hanging over your head. In this instance it would be best to run the numbers, negotiate competitively, and accept a fair (even if lower than expected) offer.

Are you are risk of going into foreclosure? If you are selling because you can no longer handle your payments and don't want to ruin your credit for the next seven years then it would be wise to accept even low offers. Buyers are few and far between in today's market.

This is where the expertise of your agent comes in. They can tell what market activity is like for your area. How long are homes staying on the market before selling? Do they think you'll receive another interested party? If they think the offer is too low and that you'll get more money by waiting a short period for another buyer, then you should wait it out.

Buyers today are just like anyone looking for a deal. They know that home prices are on the decline and that inventory far outweighs demand. They come in shooting from the hip, wounding asking prices with their offers. Don't be afraid to shoot back with competitive counter offers. If someone is truly interested and not just low-balling they'll play the game.

As the seller it is up to you to decide on what deals to accept. If your home is on the market or you are consider listing it, then it would serve you well to figure up your bottom line now. What selling price can you afford? Be aware of what you will and won't sell your home for. Then when offers come in you'll know just how you can respond.


Written by Carla Hill
February 29, 2012

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Real Estate Outlook: Bernanke on Housing

The recovery of the housing market and economy has been slow and arduous. Legislators and leading economists alike know that housing is the key to helping jobs and Americans get back on their feet.

Federal Reserve Chairman Ben Bernanke recently spoke at the 2012 National Association of Homebuilders International Builders' Show and made some strong statements about the housing market and what has and has not happened in recent years.

"The economic recovery began more than two years ago, but it doesn't feel like much of a recovery for many Americans--certainly for those of you who depend on the housing sector for your living, as well as for the millions of others who have seen their home values plummet or lost their homes through foreclosure," he said.

Historically during recoveries we've seen that "resurgent" housing is what fuels employment and rising incomes.

Today's recovery efforts however are coming up again a number of actors that constrain demand. Bernanke added, "Household formation has been down, particularly among young adults.

High unemployment and uncertain job prospects may have reduced the willingness of some households to commit to homeownership. Availability of mortgage credit is an important constraint."

The housing market is on the move, however, albeit slowly. In the latest existing-home sales survey by the National Association of Realtors (NAR), sales showed promising movement for the month of January. This is the third gain in the past four months. Existing-home sales rose 4.3 percent for the month.

Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. "The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents."

The Western region of the U.S. experienced the largest jump in sales, rising 8.8 percent for the month. This brought it's annual pace within 3.1 percent of the spike seen in January of last year.

The second largest rise was seen in the South, which rose 3.5 percent. The Northeast and Midwest experienced gains as well, rising 3.4 and 1.0 percent respectively.

"The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers," Yun said. "Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time."

Additionally, nationwide production of new single-family homes and apartments also rose 1.5 percent in January. According to the U.S. Commerce Department this was the second-best pace seen since October 2008.

"Today's solid housing starts report indicates that builders are putting more of their crews back to work, and adds to the growing field of evidence that the overall housing market is gradually but consistently moving in the right direction," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB)

To continue to see strides in the housing market, though, Bernanke stands by his advice that we need to continue to develop and implement policies to aid the housing sector. "No single solution will be sufficient. But sustained efforts to address the many interlocking factors holding back the housing market will pay dividends in the long run."


Written by Carla Hill
February 27, 2012

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Choosing Your Neighborhood

Choosing a home is about more than just selecting a house. Every neighborhood offers its own unique set of people, activities, and amenities. Which neighborhood is the right fit?

Take a moment to review the following factors that can influence your decision on where to live.

The first consideration of many home buyers is the education of their children. From private, charter, and magnet to public school, there are a wide range of options. Public schools dictate enrollment according to school district boundaries. Keep this in mind when looking at new homes. You may be surprised to find where lines are drawn. Are you trying to move into a highly rated district or are you wanting to avoid uprooting your children? You may wish to visit area schools to get a feel for which place is best for your family.

Next, analyze the data on the local economy. Is there a high rate of long-term employment? It's always good news when new industries are moving into town rather than out of town. Home values should rise alongside demand. Dig a little deeper and find out what industries are holding steady, how long homes are sitting on the market, as well as your local unemployment rate.

Homeownership is at least partially about making an investment. Over time you hope to build equity in your home, allowing you to have not only a large asset, but also the ability to "move up". Be aware of foreclosed homes in neighborhoods, as they tend to pull values down. And understand that some neighborhoods offer higher rates of appreciation than others.

Are home values on the rise? In today's difficult market, many areas are experiencing depreciation. This is not the normal trend, but rather is the consequence of our recent recession. In general, homes increase in value by about 5 percent per year. Ask your local real estate agent for the stats on past appreciation rates.

An additional factor affecting home values is the condition of the prospective neighborhood. Be sure to drive up and down adjacent streets. Are homes and yards in good repair? You want neighborhoods that reflect care and attention.

Additionally, research the local crime rates. Some neighborhoods experience higher levels of crime, both violent and petty. Safety of your person and property are valid considerations when buying a home.

And finally, on a lighter note, entertainment options are another valid consideration for home buyers. From restaurants and parks to neighborhoods with high ratings of walkability, the choices abound. What works best for you? Are there certain stores, clubs, gyms, or churches that you frequent? Choosing a neighborhood means considering all the options. What do you need and want out of your next home?

Choose wisely and you'll end up with a home that fits you now and for years to come.


Written by Carla Hill
Published by Realty Times

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Call Alvin's Team Today! 877-651-7810
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Average 30-Year Fixed-rate Mortgage Unchanged From All-time Record Low for 3rd Consecutive Week

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average fixed mortgage rates remained unchanged amid mixed consumer sentiment data. The average 30-year fixed-rate mortgage has been at its all-time record-breaking low of 3.87 percent since the first week of February, below 4.00 percent for the past 11 weeks, and below 5.00 percent for the past 52 weeks dating back to the February 17, 2011 release of the PMMS.

30-year fixed-rate mortgage (FRM) averaged 3.87 percent with an average 0.8 point for the week ending February 16, 2012, matching last week when it also averaged 3.87 percent. Last year at this time, the 30-year FRM averaged 5.00 percent.

15-year FRM this week averaged 3.16 percent with an average 0.8 point, matching last week when it also averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.27 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week, with an average 0.8 point, down from last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 3.87 percent.

1-year Treasury-indexed ARM averaged 2.84 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.39 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac:

"Fixed mortgage rates were unchanged this week amid mixed confidence measures. Small business confidence ticked up slightly in January, representing a fourth consecutive month gain, according to the National Federation of Independent Business index. However, the Reuters/University of Michigan index of consumer sentiment fell in February by more than the market consensus forecast breaking a five month trend. In the meantime, home builder confidence rose in February to the highest reading since May 2007, based on the NAHB/Wells Fargo Housing Market Index."


February 17, 2012, Published by Realty Times

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Be a Staging Star

If you're an HGTV junkie then chances are you've tuned in for some of the network's popular home improvement shows, nearly all of which have stressed the importance of staging your home for sale.

Are you tired of waiting for a TV crew to come help you with your own home? You don't have to find yourself on one of these hit shows to be a staging star. Simply follow a few of our expert tips!

1. Remove the Clutter. Instead of a potential buyer's eyes moving easily from one side of a room to another, leaving their mind at peace to imagine their own life in your space, clutter disrupts the flow and catches the buyer's gaze. They will focus on your mess or dust instead of your lovely fireplace or hardwood floors.

2. Organize. Once you have removed the clutter and knick-knacks (staging is more about minimal accents) it's time to organize what has been left behind. Built-in storage systems are an excellent way to get offices and closets in order. Need a way to take extra clothes or seasonal items to the garage? Invest in a few inexpensive plastic tubs. For future convenience, be sure to label all boxes.

3. Clean. You want your home to appear move-in ready at showings. That doesn't just mean that your title and contacts are in order. It means that your home needs to look and smell clean. Mop, vacuum, and wash down every surface. Leave no dust bunny unturned! This could be the time to hire a professional cleaning service.

4. Refresh Paint. Walls turn dingy over time even in the cleanest of homes. Consider putting on new color to freshen and update your rooms.

5. Room Appropriate. When your home is listed on the MLS as a 3 bedroom home it is important that this is what buyers see. They don't want to see 2 bedrooms and craft room, exercise room, or home office. During the staging process keep rooms what they were designed to be.

6. Create Ambiance. Ambiance is about the way a home makes you feel. In some homes you'll want a cool, modern atmosphere created by simple decor and perfect lighting. In most homes, though, buyers seek a warm and homey atmosphere. Accomplish this through the use of vanilla candles, lit fireplaces, area rugs, baked cookies, and staged living areas (set dining tables, games in the living room, and outdoor patios).

7. Staging Outdoors. Don't forget one of your most important spaces -- your outdoor “rooms.” More and more buyers are extending their living spaces into the great outdoors. Stage patios with simple furniture, outdoor dining sets, comfortable pillows, and chiminea or plant life.

8. Leave No Closet Unturned. Buyers will open your closet doors, so don't think you can stuff your clutter away! Stage these areas by color coding clothes and storing away small items in totes or boxes. If the budget allows consider investing in built-in storage units.

9. First Impressions. It is of paramount importance that you stage the front of your home. You never know what prospective buyer might drive by and see your For Sale sign. Front doors should have fresh coats of paint. Yards should be tidy and trimmed. And a new welcome mat and flowers or wreath are a great finishing touch.

10. New Eyes. One of the most important tips for staging is seeing your home through fresh eyes. We become accustomed to the way it looks and are apathetic to what changes need made. See your home through the eyes of a new buyer.

    Staging is one of the best ways to let your buyers see the true potential of your home. By creating an ambiance that is clean and stylish you can inspire buyers wanting to live that lifestyle to buy your home!
    
    
    Written by Carla Hill
    February 16, 2012, Published by Realty Times
    

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

    
    

Make Your Home Appealing to Buyers

As you start to gather up your belongings and pack them away for your move, many sellers question which items they should leave out for buyer appeal.

Often the wrong items are left on display; things like family photos, personal keepsakes, and treasured belongings. All of these items should be safely packed away which very often creates open space (a plus for buyers) on shelves, refrigerator doors, and desktops.

Buyers often make a decision within just seconds of seeing your home about whether or not they want to buy it. So picture your home through the eyes of your potential buyers. What do you see in about 10 seconds?

When you walk up do you see children’s toys scattered across the front lawn. Do you see overgrown shrubs and weeds? Do you see chipped paint on the front door, a screen that’s torn? Do you spot oil spills on the driveway?

Even answering yes to just one or two of those questions can be damaging and that’s before your potential buyer has entered your home. Sometimes, those seconds are all the buyers need to decide to simply do a "drive by" and not even stop to go inside.

Of course, the goal is to get the buyers inside. To get them to spend time, feel like your home could be their home. But even though that goal is so widespread and common among sellers, somehow the decisions some sellers make are almost completely polar to the goals.

Let’s look at five tips that can make your home appealing to buyers.

Check all the screens and molding around your windows and doors. This isn’t at the top of a seller’s list but it ought to be. Even slightly torn screens send a careless message to buyers. It gives an unconscious uneasiness that there’s been, at the very least, lack of care for this home.

Something simple like fixing a screen is often overlooked by a seller because it is so simple, yet, just seconds of seeing the ripped screen can cause a negative impact for buyers.

Add artwork to long hall ways. You don’t have to buy artwork that costs thousands of dollars but, if your home has long hall ways, it’s nice to break up the monotony with some tasteful artwork. Use contrasting shades and hues to coordinate with the flooring. When you’re shopping for the artwork or borrowing it from a friend or your real estate agent or homestager, bring swatches of the carpet or flooring and wall paint to match the artwork colors.

Make the kitchen a focal point. Whether they cook or not, the kitchen is of primary interest to many buyers. Winning over buyers with an appealing kitchen can often convince them that they must have the home. Make sure your appliances are clean, sparkling, and working. Return on investment in the kitchen is usually high and worth every penny, and more, you put into it.

Put the "ah" in the bedroom. The bedroom needs to look like a bedroom. Sounds funny, but many people use their bedroom for other things such as an office or storage. Boxes or newspapers are scattered or stacked in a corner. There’s no "ah" or sense of relaxation with that kind of room. So even if that’s how you’ve been living, understand that’s not how you should show a home.

If there isn’t much space, clear the clutter out. Remove excess furniture. It doesn’t matter if you use it. You can walk to another room to get what you need if it means you sell the home faster because it now looks more inviting and spacious.

Making your home more appealing is about seeing your home through the eyes of your potential buyers. When it comes time to go over the offers, you’ll be glad you did.


Written by Phoebe Chongchua
February 17, 2012, Published by Realty Times

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

Average 30-Year Fixed-Rate Mortgage Holds at All-Time Record Low

In Freddie Mac's results of its Primary Mortgage Market Survey®, most average mortgage rates inching higher on January's positive employment data. The 30-year fixed remained unchanged and at its all-time record low. One year ago at this time, the 30-year fixed averaged 5.05 percent.

30-year fixed-rate mortgage (FRM) averaged 3.87 percent with an average 0.8 point for the week ending February 9, 2012, matching last week when it also averaged 3.87 percent. Last year at this time, the 30-year FRM averaged 5.05 percent.

15-year FRM this week averaged 3.16 percent with an average 0.7 point, up from last week when it averaged 3.14 percent. A year ago at this time, the 15-year FRM averaged 4.29 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.83 percent this week, with an average 0.7 point, up from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 3.92 percent.

1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.76 percent. At this time last year, the 1-year ARM averaged 3.35 percent.

According to Frank Nothaft, vice president and chief economist, Freddie Mac: "A strong January employment report added upward pressure to most mortgage rates this week. The economy gained 243,000 jobs last month, the largest monthly gain since April 2011, and the unemployment rate fell to 8.3 percent, which was the lowest since February 2009. Although historical revisions also added 266,000 even more workers, they caused the labor participation rate to fall to 63.7 percent, representing the smallest share since May 1983, which offset some of the rise in mortgage rates."


February 10, 2012, Published by Realty Times

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Call Alvin's Team Today! 877-651-7810
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Relying On An Agent

The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.

The latest figures show that 89 percent of buyers purchased their home with the help of a real estate agent or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.

Why do today's buyers buyers choose to work with an agent? Let's look at just a few of the many reasons an agent can be your biggest ally.

First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.

They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you're interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.

Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.

They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.

Today's market also presents challenges that simply weren't present or didn't dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.

According to the NAR, "More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process."

Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.

The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today's buyers are very cautious about getting into the market. While a dual agent isn't supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, "60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer's agent only represented the buyer and not the seller."

If you are considering entering buying a home this year, be sure to strongly consider using a real estate agent. They could be your biggest ally.


Written by Carla Hill
Published by Realty Times

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

Know Your Expenses Before You Buy

For many, homeownership is still a dream. Moving from renting can seem like it’s an impossible mission. But if you plan ahead and carefully budget, the goal of homeownership can be yours.

When budgeting how much home you can afford, it’s important to understand and anticipate the costs of owning and maintaining a home. Here are a few things that some first-time buyers forget to include.

Private Mortgage Insurance

This is added on to your mortgage when the down payment is less than 20 percent. You can buy a home with less money but you’ll pay the PMI which covers the lender should a homebuyer default on the loan. As you build up equity, your PMI drops off.

Taxes

Property taxes generate revenue for municipalities, counties, and schools. It’s an expense that can vary across the U.S. However, on average, it’s 1.38 percent of the home’s value. Back East tends to have the highest property taxes.

HOA Fees

Homeowners’ Association fees (HOA) can add several hundred dollars to your monthly household expenses. These HOAs help to maintain common areas, typically within condominium complexes. They also govern what can be done to the unit and the surrounding area. While there is an up side to HOAs, some buyers prefer to have more freedom over their property, perhaps, until the neighbor paints his house turquoise with red accents.

Homeowner’s insurance

Lenders require homeowner’s insurance on your property. The amount you’ll pay depends on many variables including: where you live, the age, type, size of your home. For example, older homes can cost more to insure due to the fact that they may require more repairs than newer homes. Also, high-hazard areas can cost more to insure and some insurance companies may not offer an insurance policy for your home, if you’re in a high-risk area.

Utilities and appliances

These areas can be overlooked because, often, when people are renting the appliances are taken care of. When you own your own home, be sure to consider expenses such as the water heater or dishwasher breaking down. While, you can’t exactly figure out when an appliance is going to quit working, you can set a monthly allowance aside to start establishing a household repair fund. Just don’t touch the account or when you really need it, you’ll find it’s not there for you.

Inspections, appraisals, and closing costs

Many buyers understand they will have closing costs but they fail to budget for other items such as a home inspection. Sometimes inspections are paid for by the seller but it’s usually the buyer who pays for the inspection. And, even if the homeowner recently had a home inspection and has the report, a buyer still might want to pay for an inspector to have another look to compare the findings.

Depending on the home, there may also be other inspections such as for lead paint, pests or radon gas.

While the extra expenses do add up quickly, if you carefully budget and plan ahead, the goal of homeownership is achievable and very satisfying.

Written by Phoebe Chongchua
February 10, 201, Published by Realty Times

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

Homeownership Possible Within Three Years After Foreclosure

Losing your home can be devastating to your credit, not to mention your psyche, but you can buy again within as few as three years after a foreclosure or short sale.

It's not surprising when you lose your home you also lose some self-esteem, especially if your were raised in a culture that sees homeownership as a status symbol, as a sign that you've finally arrived.

Some lost self-esteem also comes from the belief you've lost your shot at the American Dream. Others will tell you seven to ten years must pass before you can buy again. At that time, uninformed people say, you'll have to buy at high interest rates.

That's not always true.

If you file for bankruptcy, and make the right credit and financial moves, you can buy a home again as soon as two years after your bankruptcy is discharged.

What's more, if you rebuild your credit and maintain a healthy, on-time credit profile, you can take advantage of low down payment and low interest rate loans. The Federal Housing Administration (FHA) allows you to buy a home with as little as 3.5 percent down and take advantage of some of the best interest rates on the market.

FHA loans literally replaced the subprime brand, but came with federal backing.

Also see: "U.S. to lower size of guaranteed mortgages"

You also may be eligible for first-time homebuyer programs that assist you with your down payment and closing costs. First-time homebuyer programs are not just for those who have never owned a home, but allow you to qualify if you have not owned a home in the past three years.

Some private lenders, home owners and investors also may allow you to buy a home even sooner than the two- to three-year period, but it will cost you a higher interest rate and require a large down payment.

With the housing market flat and many local markets still expected to see prices fall more, it is not a bad idea to spend the next several years cleaning up and re-establishing your credit. Good credit will allow you to buy a home with a minimal down payment and the lowest interest rates.

If you lost your home to foreclosure or a short sale, don't lose hope. Don't hesitate. Begin today putting yourself in a good position to buy.

Fix your credit

• Rebuild your credit by making your monthly debt payments on time. Don't ignore your remaining credit obligations during foreclosure or after losing your home. Yourcredit score gets a boost, in part, based on the number of positive accounts in your credit report. The more you have, within reason, the faster your credit score rises, even after losing a home.

• Pay down your credit cards but not to a zero balance. Your credit score gets a boost if you maintain a balance that is about 30 percent or lower than your credit limit. Keeping a balance reveals you can borrow money and pay it back on time. Don't close out your credit cards because the longer your positive credit history, the more your credit score and your ability to buy a home will improve.

Save money

• Most of today's homebuyer programs require a down payment. FHA loans require 3.5 percent down -- $3,500 for every $100,000 you borrow. You likely will have to pay closing costs, another 2 percent to 3 percent of the sales price. This is another $2,000 to $3,000 per $100,000. Do the math to determine how much you need to save each month, over the next two or three years, to have enough to cover your down payment and closing costs.

Don't be pressured

• Buy only when you are ready. You didn't lose your credit overnight. Likewise, it will take time to rebuild your credit and save for a down payment. Home buying deals will be available for years to come.

• Avoid adjustable rate mortgages (ARMs) and consider a 15- or 30-year fixed rate mortgage (FRM) that is a fully amortized loan so your payment and interest rate are fixed for the duration of the loan. Full amortization means each payment helps pay down the principal. When your loan term ends, so does the loan balance.

• Buy based on what you can afford, rather than a higher amount approved by the lender. You already know the risk of biting off more than you can chew. Lenders will pre-approve you based on your gross monthly income, but that does not consider taxes subtracted from your paycheck, food, clothing, utilities and other monthly obligations.

Know your comfort zone. Don't over-extend yourself.


Written by Robert Aldana
February 8, 2012 Published by Realty Times

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Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Real Estate Drops But Second Home Market May See Increase

Interest rates continue to remain low for mortgages and it looks as though the Federal Reserve will keep the rate at which banks lend to each other overnight low through 2014. The federal funds rate is expected to remain at zero to 1/4 percent for the next few years due to the depressed housing market and slow business investments.

Mortgages also remain very low. For two months now the 30-year fixed rate mortgage has been below 4 percent, averaging 3.98 percent in the week ending January 26. Also down, the 15-year fixed-rate mortgage. Last year it was at 4.09 percent and it was down to 3.24 percent, the week ending January 26.

Many homeowners are searching for the bottom but the bottom doesn't appear to be in sight yet. Property values in 20 cities declined 3.7 percent from November 2010, according to the S&P/Case-Shiller index.

While housing is more affordable, "The household balance sheet is still a mess," said Karl Case on Bloomberg radio, Co-Founder, Case-Shiller. Homeowners are still struggling to make ends meet and many are just barely hanging onto their homes.

However, Case believes, "The seeds of recovery are being planted," albeit slowly.

Those who are staying put are helping to fuel the remodeling industry. "Homeowners are estimated to spend a total of $113.6 billion on home improvements in the U.S. through the third quarter of 2012," according to The National Association of the Remodeling Industry (NARI).

While homeowners fix up their properties, millions of baby boomers (40.7 million people ages 50-59 in the U.S.) prepare to retire and many are predicted to enter the vacation and rental property markets, which would fuel the demand for these types of properties for the next several years.

The second-home market may be a shining star in the real estate market. The National Association of Realtors (NAR) uses the U.S. Census Bureau's data to look at the housing numbers. There are 74.8 million owner-occupied homes, 7.9 million vacation homes, and 41.6 million investment units in the United States.

The primary buying market is dominated by those aged 40-49, of which this group is 43.8 million strong. And, following closely behind at 40.4 million, is the 30-39 age group, which is soon to reach the prime age for buying. This group will also help fuel the second-home market in the coming decades.

Many of those who are purchasing second-homes are doing so with the thought that the home will likely become their place of retirement. So, they're capitalizing on the great deals on the market. Second-home purchasers tend to buy discounted distressed properties, more so than those buying primary residences. However, according to some statistics, the average vacation-home owner leaves the property vacant as much as 90 percent of the year and is therefore missing out on valuable rental income.

Purchasing a second home in today's market could mean getting a very enticing deal. But it's important to think things through and understand what your needs will be in the future.

Buying a property and renting it out can be a steady income stream until you're ready to take over the home and move into it. But many people have concerns about how the home will be kept up and if rental usage will create big maintenance issues. While these are valid concerns, renting your home out can offer some significant benefits. For instance, if you limit your personal usage of the property to only 10 percent (14 days), you may be be able to take a deduction of up to $25,000 in losses for things like maintenance.

Buying a second-home and entering into the rental property market doesn't have to scare you. However, you should seek professional and expert help to identify the best scenario for your housing and financial needs, now and in the years to come.


Written by Phoebe Chongchua
February 3, 2012

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

Why You Want a Guaranteed Loan

Today's buyers are facing quite a diverse housing market. There are great deals for buyers and investors alike. Home prices are at all-time lows and interest rates are creating some enticing conditions.

One word buyers and investors should familiarize themselves with is "title". When you buy anything -- a car, a house -- you want to be sure that you are gaining clear title. Simply exchanging money doesn't mean you have legal ownership of said property.

You may have been introduced to the term "quitclaim" deed. A quitclaim deed means there is no title covenant, or no guarantee of the title. Take it from the experts -- don't enter into one of these agreements.

Quitclaim deeds are only intended to be used by parties that know and trust each other, such as within a family. It should not be used during traditional sales and here's why.

A quitclaim deed means the seller doesn't guarantee that he/she actually owns the property! They are simply transferring whatever interest they have at the time of purchase.

In the still strong wake of the home foreclosure crisis, many owners are finding they've become the unfortunate victims of the robo-signing mortgage debacle.

According to RealtyTrac.com, the leading online marketplace of foreclosure properties, "The housing market has not completely escaped the clutches of this foreclosure crisis. Instead foreclosure processing delays in 2011 have artificially exaggerated what would have been a slow, natural decrease in foreclosure activity off the foreclosure peak of 2010. This artificial trough in foreclosure activity in 2011 will result in a corresponding double-peak in 2012."

These aforementioned "foreclosure processing delays" are direct effects of the robo-signing controversy, where documents had improper notarization and suspect signatures and are now being invalidated by courts, blocked by judged, and refused by insurers.

These weren't just small companies falling these procedures. Big names like Bank of America, JPMorgan Chase, and Wells Fargo were found to use these practices.

This scandal is nothing new. MSNBC reports that "Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than first thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years."

"Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C.

Distressed properties were scooped up across the nation by eager, and sometimes less than thorough or honest, investment companies who then unloaded them without clear titles, legal notary, or proper signatures to unsuspecting buyers.

Many of these buyers who were impressed by the ease of purchase are now discovering that documents that must be officially signed and notarized had simply been "robo-signed", sometimes without even the right person's electronic signature.

Now, in order to sell with a clear title they must now do the legwork of tracking down signatures and filing paperwork that should have been handled by the mortgage investment company. This has led to contract cancellations and lost sales.

If you are looking to buy property in today's housing market, be sure to pay careful attention to dotting the i's and crossing the t's in your contract. Be sure that you are receiving a clear title done the old fashioned way with a guaranteed loan.


Written by Carla Hill, Published by Realty Times
February 3, 2012

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