Thursday, April 26, 2012
California Home Prices Rise From A Year Earlier
California's median home price posted its first year-over-year gain since the fall of 2010 as sales picked up with the end of the traditionally sluggish winter season.
The Golden State's median home price in March rose 0.8% from the same month last year to hit $251,000. It was the first year-over-year increase since September 2010; that October, home values sank after the expiration of popular tax credits aimed at boosting the market. Last month's median price rose 5% from February, San Diego real estate firm DataQuick reported Thursday.
The year-over-year increase was small, but if prices hold, it could mark the first step toward a recovery.
"While the changes we're seeing are incremental, they're incremental in a positive direction," DataQuick President John Walsh said.
The bottom of the market was hit during the depths of the financial crisis in April 2009, when the state's median home price was $221,000.
The median is the point at which half the homes in the state sold for more and half for less. The median can be influenced by the types of homes selling. The high number of foreclosed homes and other so-called distressed properties remain a sizable weight on the market, and such sales have helped pull down the median price for months.
The number of sales increased 2.9% from March 2010 to hit 37,481. That was up 26.5% from February, a normal surge as winter gives way to spring and more people begin moving.
Sales of distressed homes — foreclosures and short sales — made up more than half of the market. Of all previously owned homes sold last month, 1 in 3 was a foreclosure and close to 1 in 5 was a short sale, in which a home is sold for less than the debt on the property.
In Southern California, the median home price of $280,000 was flat, down just 0.2% from March 2011, and a 5.8% increase from February. The number of sales increased 2.8% year-over-year to 19,953 homes in the six-county region, DataQuick reported. Sales improved the most in Orange, Ventura and San Diego counties.
Bay Area home sales notched their best March in five years as prices appeared to level off. Sales rose 9.1% from March 2011, totaling 7,694 across the nine-county region, and up 34.9% from the prior month. The region's median price was $358,000, down 0.6% from the same month a year earlier and up 10.2% from February.
The median price improved year-over-year in Napa, Contra Costa, Santa Clara and Sonoma counties. In San Francisco County, it was unchanged.
Nationally in March, buyers picked up 2.6% fewer existing homes — pushing the seasonally adjusted annual rate down to 4.48 million from February's 4.6 million, according to the National Assn. of Realtors.
In the West, sales were down 7.4% from February and down 0.9% from March 2011. Last month's median price of $198,300 was 1.6% higher than that of a year earlier.
NOTE: Article originally written By Alejandro Lazo, Los Angeles Times
Wednesday, April 25, 2012
Foreclosure bills will get legislative hearings
The Legislature started moving ahead Thursday with bills intended to protect homeowners in the foreclosure process, setting up a potential showdown between the state attorney general and mortgage lenders.
Among the changes sought by Attorney General Kamala Harris is one that would allow homeowners to challenge foreclosure proceedings in court, a step the state banking association says would reward delinquent borrowers.
Harris also wants to write into state law some of the temporary provisions of a nationwide mortgage settlement she helped negotiate with the nation's top five banks in February. They would ban "dual-track foreclosures" by prohibiting lenders from filing notices of default while they also are considering alternatives to foreclosures. Banks also would be prohibited from approving foreclosures without properly reviewing the documentation, a process known as "robo-signing."
Over Republicans' objections, the Senate approved an Assembly bill that will be used to create a conference committee to advance the major bills sought by Harris.
Seven of the bills in what Harris is calling her Homeowners Bill of Rights package cleared their first committees this week. But the measures most opposed by the lending industry were never considered in either chamber's banking committee because they lacked support from Republicans and business-oriented Democrats.
Organizations representing lenders and businesses objected that her bills would expand state law beyond the provisions in the national banking settlement, which will expire in three years. They contend that Harris is seeking to address with permanent legislation problems that lenders say were temporary abuses of the system.
Among the other provisions in Harris' bills are requirements that lenders prove to homeowners that they have a right to foreclose on the property before continuing. The state would also create a new Office of Homeowner Protection to aid borrowers.
She also proposes to increase borrowers' due process rights. Lenders would have to provide a single point of contact starting on July 1, 2013, for borrowers who want to discuss foreclosures or refinancing.
Banking and business groups said in a letter to lawmakers last week that the measures, particularly the provision letting individual borrowers go to court, would slow the state's economic and housing market recovery. What are intended by Harris as homeowner protections would "result in a de facto moratorium on foreclosures," the California Bankers Association said.
Harris and her staff declined comment as they left the private office of Senate President Pro Tem Darrell Steinberg shortly after the vote.
"What we need is real action for people who aren't thinking about conference committees versus standing committees. They want the state to pass the laws that provide them with real relief and allow them to stay in their homes," Steinberg, D-Sacramento, said in an interview after the Senate's procedural sidestep.
"We've had several years of failed attempts to enact these important protections but this year is different because we have the (national bank) settlement," added his spokeswoman, Alicia Trost.
Republicans who object to the provisions in the stalled legislation tried without success to block the bill.
Sen. Sam Blakeslee, R-San Luis Obispo, vice chairman of the Senate Banking Committee, said the move disempowers moderate Democrats on the banking committees who had sided with Republicans in objecting to Harris' bills.
"It really raises serious questions about to what lengths this body will go to jam through legislation," Blakeslee said.
NOTE: Article originally written By DON THOMPSON Associated Press
The Best Ways To Begin Your Summer New Home Search
Spring has sprung and you are ready to begin your new home search. Spring is a great time to start looking for a new home in preparation for a summer move. Summer is a great time to buy a home.
Let's look at some of the reasons why now is the time to begin planning.
1. Summer is a great time to buy a home because you can see your potential new home in all of its glory. You will be able to see if the lawn is green, if the foliage is alive and in good condition etc.
2. Have a vision of what you want before you begin your house hunting. Think about what local activities your family will require, the proximity to your work, how close the home is to your needs such as groceries, daycare etc.
3. Budget. Get your financial plan together. Can you afford a Home Owners Association fee if you find the perfect home? What about any other related expenses - landscaping, pool services etc?
4. Select a real estate agent. Select a realtor you trust to help you through the entire buying process.
5. Select a mortgage company or financial institution to help you with the pre-approval needs for your new home. Your realtor will be able to recommend some reputable companies based on their daily experience in dealing with mortgage companies.
6. Get a reality check. No matter how much you have to spend, it is unlikely that you will get 100% of everything you want in a home. Select a few "must haves" and let the rest of your wants come as they may. Some people have too many "must haves" and they end up tirelessly searching for that perfect home that just doesn't exist. The same thing goes for your champagne taste and your beer budget. If your realtor has shown you several homes that you want but have sold for more than you can spend, you may need to realize that you have to live within your means. Continuing your search for homes that you cannot afford will only delay the inevitable - finding a suitable home that you can afford!
7. Do your market research. Have your realtor do some market research for the area you are considering. This will help you to focus on what is real. Yes, there are many foreclosures and distressed properties out there but do you really want to go this route - dealing with the banks and their red tape. Then you will have to deal with the contractors once you purchase the home? Let your realtor help you find a home that is suitable for you and your family.
8. Read everything before you sign it or before proceeding with the deal. Read Everything! Enough said.
9. Don't get discouraged. It is normal to make offers on more than one home before you have a seller accept your offer. Don't worry, this is to be expected.
10. Don't let the competition get the better of you. It is not uncommon for buyers to start a bidding war for a home they want. But don't let temptation get the better of you. You do not want to end up spending thousands of dollars over your budget just because you want to "win" the deal. Remember, there are plenty of homes out there and if you miss out on this one there will be others. Guaranteed!
Your realtor will help you stay focused. So don't hesitate to talk to them about your wants and needs. Your agent knows the game and will be able to help you get the most for your money without getting into a bidding war.
Friday, April 20, 2012
How To Restore Your Credit Score Quickly
Buying a home is the American dream and you have decided that it is time to start looking into buying a home of your own. That's great! However, you probably know that there are things you should be doing before you begin your search - but where do you start?
The first thing you need to get in order, before you do anything else, is to get a copy of your credit reports. That's plural - credit reports.
You need to get a copy of your credit reports from all three credit reporting agencies - Trans Union, Equifax and Experian. If you are thinking about buying a house, you may not realize the importance your credit reports hold in getting an approval for your new home.
The mortgage companies are more concerned about your recent buying and repayment history than what may have happened years ago. If you have too many recent late payments or collections, there may not be anything you can do to get approved in the immediate future.
However, there are some things you can do to clean up your report. So in six months to a year or maybe even two years, depending on how bad your credit is and how long it takes you to clean it up, you can apply for a home mortgage and get your approval.
Here are a few things you can do to restore your credit and credit score quickly:
1. Check your credit reports for errors. Again , that is plural so check all three of your credit reports for errors. If there are mistakes on your credit reports, you will need to start an investigation with the company or the source of the derogatory information. Contact them in writing and make sure you include all supporting documentation proving the information is in fact an error.
2. Set up a timely repayment schedule. If you have any accounts that you have been late in paying, you will need to begin paying all of them on time. Paying your bills on time for a minimum of six months will go a long way in improving your credit rating.
3. Collections. Try to avoid having your accounts turned in to collections. A collection is the most damaging of all credit issues. So work out a re-payment plan before your account turns into a collection. A credit improvement agency may be able to help you get your collections erased; but only if the creditor did not abide by all of the laws of the Fair Credit Reporting Act. However, this is generally not the case because most creditors know the laws and how to follow them. So don't count on this as a quick fix . Most collection accounts will stay on your credit report for a minimum of seven years.
4. Keep a low balance on all of your revolving credit accounts. Try to keep your balances below 50% of your limit. The lesser the balance the better it looks to potential creditors.
5. Do some soul searching. Try to determine what caused your credit status to get out of control in the first place. Then do whatever you have to to amend your bad habits - if any.
6. Get a secured credit card. Secured credit cards can be very helpful in improving your credit. There are many things you can do to get your credit report back on track quickly. So talk to your real estate agent for more information about how you should go about doing this.
In the meantime, your Realtor will be able to get you started on your path to home ownership while you are working out your credit issues. Your agent has the experience and the know how to help you get into your new home as quickly as possible. So take advantage of all they have to offer you.
You need to get a copy of your credit reports from all three credit reporting agencies - Trans Union, Equifax and Experian. If you are thinking about buying a house, you may not realize the importance your credit reports hold in getting an approval for your new home.
The mortgage companies are more concerned about your recent buying and repayment history than what may have happened years ago. If you have too many recent late payments or collections, there may not be anything you can do to get approved in the immediate future.
However, there are some things you can do to clean up your report. So in six months to a year or maybe even two years, depending on how bad your credit is and how long it takes you to clean it up, you can apply for a home mortgage and get your approval.
Here are a few things you can do to restore your credit and credit score quickly:
1. Check your credit reports for errors. Again , that is plural so check all three of your credit reports for errors. If there are mistakes on your credit reports, you will need to start an investigation with the company or the source of the derogatory information. Contact them in writing and make sure you include all supporting documentation proving the information is in fact an error.
2. Set up a timely repayment schedule. If you have any accounts that you have been late in paying, you will need to begin paying all of them on time. Paying your bills on time for a minimum of six months will go a long way in improving your credit rating.
3. Collections. Try to avoid having your accounts turned in to collections. A collection is the most damaging of all credit issues. So work out a re-payment plan before your account turns into a collection. A credit improvement agency may be able to help you get your collections erased; but only if the creditor did not abide by all of the laws of the Fair Credit Reporting Act. However, this is generally not the case because most creditors know the laws and how to follow them. So don't count on this as a quick fix . Most collection accounts will stay on your credit report for a minimum of seven years.
4. Keep a low balance on all of your revolving credit accounts. Try to keep your balances below 50% of your limit. The lesser the balance the better it looks to potential creditors.
5. Do some soul searching. Try to determine what caused your credit status to get out of control in the first place. Then do whatever you have to to amend your bad habits - if any.
6. Get a secured credit card. Secured credit cards can be very helpful in improving your credit. There are many things you can do to get your credit report back on track quickly. So talk to your real estate agent for more information about how you should go about doing this.
In the meantime, your Realtor will be able to get you started on your path to home ownership while you are working out your credit issues. Your agent has the experience and the know how to help you get into your new home as quickly as possible. So take advantage of all they have to offer you.
Thursday, April 19, 2012
National Housing Outlook Brighter
It's been a long time since the market for new homes has looked this good.
Rising rents and a healthier job market are inspiring more people to consider buying.
Builders are responding to the demand by laying plans for more homes this year than at any other point in past 3 years.
And banks are helping both by approving more loans.
All that points to a better year for the housing market, though a full recovery could take several years.
"We're doing so much more business than we have in years," said Ed Kopal, who runs a construction company in East Texas and has seen his business more than double this year compared with 2011.
Others, too, foresee more enthusiasm among buyers after four sluggish years.
Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday.
The pace hasn't been that high since September 2008.
Of those requested, 462,000 permits were to build single-family homes.
That's 12percent more than just six months ago. Still, the figure remains far below the 800,000 permits a year that signify a stable new-home market.
Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent, to 285,000 permits. A healthy number is closer to 400,000 a year.
Rents are rising, which has spurred construction for both kinds of homes.
In Philadelphia, rents have increased nearly 15 percent over the past year through February, while home values have dropped 5.4 percent, according to real estate website Zillow.
Minneapolis rents are up nearly 10 percent; home prices are down nearly 7 percent. Baltimore has seen rents rise 8.6 percent and home values drop 4 percent.
In Chicago, median rents in the past 12 months have risen 8.6 percent, or more than $100 a month. In the same period, the median home price has fallen 11 percent, to just $154,600.
So while apartment developers are chasing higher rents, renters are seeing more incentive to buy homes.
A survey of homebuilders has shown an increasing amount of foot traffic at open houses across the country since September.
Kennon Reinard and her husband were among those who felt the time was right. The couple has rented a two-bedroom apartment in Chicago for the past six years. Over the past month, they looked at 14 houses before making an offer of nearly $260,000 on a four-bedroom home on the Northwest side of the city.
"We've always wanted a house, but we never thought we could afford one," said Kennon Reinard, 33. "But we started noticing friends buying houses last summer and, when we checked it out, we realized we could own a whole home with a backyard without paying that much more than what we're paying in rent."
NOTE: Article originally written by Derek Kravitz The Associated Press
Rising rents and a healthier job market are inspiring more people to consider buying.
Builders are responding to the demand by laying plans for more homes this year than at any other point in past 3 years.
And banks are helping both by approving more loans.
All that points to a better year for the housing market, though a full recovery could take several years.
"We're doing so much more business than we have in years," said Ed Kopal, who runs a construction company in East Texas and has seen his business more than double this year compared with 2011.
Others, too, foresee more enthusiasm among buyers after four sluggish years.
Builders requested a seasonally adjusted annual rate of 747,000 permits to build homes in March, the Commerce Department said Tuesday.
The pace hasn't been that high since September 2008.
Of those requested, 462,000 permits were to build single-family homes.
That's 12percent more than just six months ago. Still, the figure remains far below the 800,000 permits a year that signify a stable new-home market.
Builders are seeing more demand for apartments, too. Over the past six months, permits to build apartments have surged 68 percent, to 285,000 permits. A healthy number is closer to 400,000 a year.
Rents are rising, which has spurred construction for both kinds of homes.
In Philadelphia, rents have increased nearly 15 percent over the past year through February, while home values have dropped 5.4 percent, according to real estate website Zillow.
Minneapolis rents are up nearly 10 percent; home prices are down nearly 7 percent. Baltimore has seen rents rise 8.6 percent and home values drop 4 percent.
In Chicago, median rents in the past 12 months have risen 8.6 percent, or more than $100 a month. In the same period, the median home price has fallen 11 percent, to just $154,600.
So while apartment developers are chasing higher rents, renters are seeing more incentive to buy homes.
A survey of homebuilders has shown an increasing amount of foot traffic at open houses across the country since September.
Kennon Reinard and her husband were among those who felt the time was right. The couple has rented a two-bedroom apartment in Chicago for the past six years. Over the past month, they looked at 14 houses before making an offer of nearly $260,000 on a four-bedroom home on the Northwest side of the city.
"We've always wanted a house, but we never thought we could afford one," said Kennon Reinard, 33. "But we started noticing friends buying houses last summer and, when we checked it out, we realized we could own a whole home with a backyard without paying that much more than what we're paying in rent."
NOTE: Article originally written by Derek Kravitz The Associated Press
Tuesday, April 3, 2012
U.S. Rep. Janice Hahn Tours San Pedro Landslide Area
Laying the groundwork for federal assistance as part of the eventual fix for San Pedro's coastal landslide, U.S. Rep. Janice Hahn took the Los Angeles district commander for the Army Corps of Engineers on a personal tour of the site Monday.
"It's all going to be about resources in the end," Hahn said as she began the tour with Col. R. Mark Toy. They were joined by city District Engineer Lawrence Cuaresma, Los Angeles City Councilman Joe Buscaino, and several members of the community.
"I have a feeling this is going to have a price tag on it whether we rebuild, reroute or close the road," Hahn said.
A survey commissioned by the city is scheduled to be finished and ready in draft form sometime this month, with a public presentation of the findings anticipated around mid- May. That report will have to be analyzed before any plans can be made to shore up the collapsed bluff or rebuild the road. Community sentiment also is expected to play a central role in the decision of whether to rebuild a road.
Toy said that if wave action is found to be partly responsible for the Nov. 20 road collapse, it could qualify for Army Corps assistance under the agency's civil works umbrella that addresses flood management and environmental restoration.
If waves are deemed to have "caused damage to the bluff, it would allow us to consider options such as a sea wall to avoid further erosion," Toy said. It would be up to Congress to authorize and appropriate funding and other assistance from the Army Corps of Engineers.
Engineers continue to closely watch the slide area, with long-term projections for stability very much an unknown. But so far, Cuaresma said no new, significant movement has been detected at the site by surveyors who have 26 monitoring sites set up to measure ground shifts.
This was the second time Toy has visited the landslide site, which remains closed and fenced off to the public. Community opinion appears to be divided on whether the road should be rebuilt, with some local residents in the immediate area saying they'd prefer that the road not reopen. There also is concern that rebuilding the road would likely impact the 102-acre White Point Nature Preserve across the street from the landslide.
Others, however, say the road is a key connector on the south side of town and an important link for residents as well as emergency vehicles as they try to reach the various neighborhoods along San Pedro's south-facing ocean cliffs.
The city report is expected to address possible road options for the site. A decision on whether to reroute and rebuild the road probably won't be made for some time.
"Our No. 1 concern is the stabilization of the bluff, then we will talk about the road," said June Burlingame Smith, president of the Coastal San Pedro Neighborhood Council.
Buscaino said the safety of the residential neighborhoods adjacent to the area remains his main priority. Authorities say no homes are threatened, but one homeowner said he had noticed new, small cracks appearing in the street near his home in recent weeks.
Although Hahn represents most of San Pedro, the landslide area falls within the jurisdiction of U.S. Rep. Dana Rohrabacher, an Orange County Republican who had an aide attend the tour and pledge support
Rep. Janice Hahn toured the Paseo del Mar landslide area on Monday, April 2, 2012, to gather information and determine what federal help may be needed to restore access to the San Pedro site. (Scott Varley/Staff Photographer)
for repairs that will be needed.
"We're doing all the things we can right now to lay the groundwork," Hahn said, adding that no one was prepared for the collapse of the road.
A sinkhole appeared to be forming last summer along the stretch of Paso del Mar between Weymouth and Western avenues, prompting city and county engineers to begin monitoring the area. They closed the road in October when cracks and underground movement appeared to be accelerating at a rapid pace.
The road finally gave way on a rainy Sunday afternoon a month later.
The 45-minute walking tour behind the security fences on Monday provided officials and residents alike with a closer view of the extensive damage, which remains stunning to onlookers. One resident called the scene of sheared-off cliffs, along with broken and suspended chunks of roadway and underground pipes, still "surreal."
"If the study comes out saying we can engage the (help of the) Corps, I wanted Col. Toy to be ready," Hahn said of her decision to tour the site. "I want to make sure we have the best possible endgame."
Once the city's report is finalized, Hahn said, "we'll just have to work through" the process.
"This is so important to this whole region," Hahn said. "This really was a disaster on so many levels."
"It's all going to be about resources in the end," Hahn said as she began the tour with Col. R. Mark Toy. They were joined by city District Engineer Lawrence Cuaresma, Los Angeles City Councilman Joe Buscaino, and several members of the community.
"I have a feeling this is going to have a price tag on it whether we rebuild, reroute or close the road," Hahn said.
A survey commissioned by the city is scheduled to be finished and ready in draft form sometime this month, with a public presentation of the findings anticipated around mid- May. That report will have to be analyzed before any plans can be made to shore up the collapsed bluff or rebuild the road. Community sentiment also is expected to play a central role in the decision of whether to rebuild a road.
Toy said that if wave action is found to be partly responsible for the Nov. 20 road collapse, it could qualify for Army Corps assistance under the agency's civil works umbrella that addresses flood management and environmental restoration.
If waves are deemed to have "caused damage to the bluff, it would allow us to consider options such as a sea wall to avoid further erosion," Toy said. It would be up to Congress to authorize and appropriate funding and other assistance from the Army Corps of Engineers.
Engineers continue to closely watch the slide area, with long-term projections for stability very much an unknown. But so far, Cuaresma said no new, significant movement has been detected at the site by surveyors who have 26 monitoring sites set up to measure ground shifts.
This was the second time Toy has visited the landslide site, which remains closed and fenced off to the public. Community opinion appears to be divided on whether the road should be rebuilt, with some local residents in the immediate area saying they'd prefer that the road not reopen. There also is concern that rebuilding the road would likely impact the 102-acre White Point Nature Preserve across the street from the landslide.
Others, however, say the road is a key connector on the south side of town and an important link for residents as well as emergency vehicles as they try to reach the various neighborhoods along San Pedro's south-facing ocean cliffs.
The city report is expected to address possible road options for the site. A decision on whether to reroute and rebuild the road probably won't be made for some time.
"Our No. 1 concern is the stabilization of the bluff, then we will talk about the road," said June Burlingame Smith, president of the Coastal San Pedro Neighborhood Council.
Buscaino said the safety of the residential neighborhoods adjacent to the area remains his main priority. Authorities say no homes are threatened, but one homeowner said he had noticed new, small cracks appearing in the street near his home in recent weeks.
Although Hahn represents most of San Pedro, the landslide area falls within the jurisdiction of U.S. Rep. Dana Rohrabacher, an Orange County Republican who had an aide attend the tour and pledge support
Rep. Janice Hahn toured the Paseo del Mar landslide area on Monday, April 2, 2012, to gather information and determine what federal help may be needed to restore access to the San Pedro site. (Scott Varley/Staff Photographer)
for repairs that will be needed.
"We're doing all the things we can right now to lay the groundwork," Hahn said, adding that no one was prepared for the collapse of the road.
A sinkhole appeared to be forming last summer along the stretch of Paso del Mar between Weymouth and Western avenues, prompting city and county engineers to begin monitoring the area. They closed the road in October when cracks and underground movement appeared to be accelerating at a rapid pace.
The road finally gave way on a rainy Sunday afternoon a month later.
The 45-minute walking tour behind the security fences on Monday provided officials and residents alike with a closer view of the extensive damage, which remains stunning to onlookers. One resident called the scene of sheared-off cliffs, along with broken and suspended chunks of roadway and underground pipes, still "surreal."
"If the study comes out saying we can engage the (help of the) Corps, I wanted Col. Toy to be ready," Hahn said of her decision to tour the site. "I want to make sure we have the best possible endgame."
Once the city's report is finalized, Hahn said, "we'll just have to work through" the process.
"This is so important to this whole region," Hahn said. "This really was a disaster on so many levels."
Wednesday, March 28, 2012
U.S. home resales have best winter in 5 years
U.S. home sales are gradually coming back. A mild winter and a stronger job market helped boost sales ahead of the crucial spring buying season.
The last two months made up the best winter for sales of previously occupied homes in five years, when the housing crisis began. And the sales pace in January was the highest since May 2010, the last month that buyers could qualify for a federal home-buying tax credit.
February sales slipped only slightly from January to a seasonally adjusted 4.59 million, the National Assn. of Realtors said Wednesday. That's 13% higher than the sales pace last July and just below the revised 4.63 million in January.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the lower February numbers "should not detract from the key point, which is that sales are trending upward."
The pace remains far below the 6 million that economists equate with healthy markets. And the number of first-time buyers, who are crucial to a housing recovery, continues to lag behind normal levels, while foreclosures remain high.
Still, Chris Jones, an economist at TD Economics, said that the "economic environment is ripe for home sales to keep gaining pace."
The median sale price of homes rose for the first time in four months in February, to $156,600. And the supply of homes on the market increased more than 4% in February to 2.43 million, which could signal that more homeowners became confident in the housing market.
There have been other signs of improvement in the depressed housing market.
Home builders have grown more confident in the last six months after seeing more people express interest in buying. In February, they requested the most permits to build homes since October 2008.
Mortgage rates are near record lows. And the supply of homes fell in January to its lowest level in seven years.
But sales among first-time buyers, who are crucial to a housing recovery, fell slightly last month to 32% of all purchases. That's down from 33% in January. In healthy markets, first-time buyers make up at least 40%.
Homes at risk of foreclosure made up 34% of sales, down only slightly from 35% in January. In more stable markets, foreclosures make up less than 10% of sales.
The last two months made up the best winter for sales of previously occupied homes in five years, when the housing crisis began. And the sales pace in January was the highest since May 2010, the last month that buyers could qualify for a federal home-buying tax credit.
February sales slipped only slightly from January to a seasonally adjusted 4.59 million, the National Assn. of Realtors said Wednesday. That's 13% higher than the sales pace last July and just below the revised 4.63 million in January.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the lower February numbers "should not detract from the key point, which is that sales are trending upward."
The pace remains far below the 6 million that economists equate with healthy markets. And the number of first-time buyers, who are crucial to a housing recovery, continues to lag behind normal levels, while foreclosures remain high.
Still, Chris Jones, an economist at TD Economics, said that the "economic environment is ripe for home sales to keep gaining pace."
The median sale price of homes rose for the first time in four months in February, to $156,600. And the supply of homes on the market increased more than 4% in February to 2.43 million, which could signal that more homeowners became confident in the housing market.
There have been other signs of improvement in the depressed housing market.
Home builders have grown more confident in the last six months after seeing more people express interest in buying. In February, they requested the most permits to build homes since October 2008.
Mortgage rates are near record lows. And the supply of homes fell in January to its lowest level in seven years.
But sales among first-time buyers, who are crucial to a housing recovery, fell slightly last month to 32% of all purchases. That's down from 33% in January. In healthy markets, first-time buyers make up at least 40%.
Homes at risk of foreclosure made up 34% of sales, down only slightly from 35% in January. In more stable markets, foreclosures make up less than 10% of sales.
Monday, March 26, 2012
BofA To Try Converting Foreclosures Into Rentals
Bank of America Corp. has tentatively joined a nascent housing industry movement in which homes in or near foreclosure are sold to investors as rental properties.
The bank on Friday began a test program for 1,000 homeowners headed into foreclosure in Nevada, Arizona and upstate New York — borrowers it has been unable to help with loan modifications but hopes to keep on as renters. If successful, the program could be tried in California and rolled out nationally.
Consumer advocates maintain it often would be better for homeowners, communities and the banks themselves to keep troubled borrowers on as renters rather than kick them out. Seizing and selling empty homes creates neighborhood blight and accelerates downdrafts in housing prices, they contend.
Bank of America doesn't plan to become a longtime landlord for borrowers turned tenants. In the pilot, it hopes to take possession of homes for no more than three months before selling them to investors making a bet on the recovering housing markets. If the program becomes established, the goal would be for the investors to take over as soon as the occupants relinquish ownership and pay the first month's rent.
Whether this scheme can work is to be determined by the pilot, the first such test announced by any major mortgage company. The bank wants to find out whether getting a loan off its books with a quick sale at a deep discount is a better deal financially than the foreclosure process, which can drag on for months or even years in highly regulated states such as New York.
"This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support," said Bank of America's Ron Sturzenegger, who oversees about 1 million troubled loans inherited from aggressive mortgage giant Countrywide Financial Corp., which Bank of America purchased in 2008.
Homeowners can't apply for the program themselves, a bank spokesman said.
The trial is limited to a tiny slice of the 1 million loans that Bank of America owns outright. It is not testing any of the additional 8 million home loans on which it provides customer service but which are owned by investors in mortgage bonds.
Bank of America executives said the 1,000 homeowners selected are all at least 60 days late on their loans and are not qualified for or not willing to accept other alternatives to foreclosure.
They will be offered one final deal: hand their property titles to the bank, which would cancel their mortgages in what's known as a deed in lieu of foreclosure, and sign contracts agreeing to rent the home for up to three years at or below market rates.
Bank of America spokesman Dan B. Frahm said there are hundreds of investment groups across the country interested in acquiring troubled properties as rentals, each eyeing different regions and segments of the housing markets.
The pilot is designed to test the market for homes ranging in current value from $75,000 to $1 million, and to assess the program's viability in states such as New York that route foreclosures through the courts, as well as states that do not, such as California, Arizona and Nevada.
Initial interest in the pilot program is likely to be strong. Betting that the housing markets are bottoming out, hedge funds, private investors and even Omaha investment wizard Warren Buffett have expressed interest in snapping up distressed or foreclosed properties to rent out or sell to first-time buyers.
Indeed, some investment firms have been turning distressed properties into rental units for years.
TwinRock Partners, a private Newport Beach firm, recently told potential investors that more than 100 homes it has acquired and rented out over the last two years have produced annualized returns of 8.7%, with the potential for big resale profits if housing prices recover. TwinRock says it tries to keep the occupants in the house as renters and has done so about half the time.
The Obama administration has said it hopes investors will buy many of the nearly 250,000 foreclosed homes owned by government-controlled entities and turn them into rentals, although the former owners of these homes already have been given the boot.
The bank on Friday began a test program for 1,000 homeowners headed into foreclosure in Nevada, Arizona and upstate New York — borrowers it has been unable to help with loan modifications but hopes to keep on as renters. If successful, the program could be tried in California and rolled out nationally.
Consumer advocates maintain it often would be better for homeowners, communities and the banks themselves to keep troubled borrowers on as renters rather than kick them out. Seizing and selling empty homes creates neighborhood blight and accelerates downdrafts in housing prices, they contend.
Bank of America doesn't plan to become a longtime landlord for borrowers turned tenants. In the pilot, it hopes to take possession of homes for no more than three months before selling them to investors making a bet on the recovering housing markets. If the program becomes established, the goal would be for the investors to take over as soon as the occupants relinquish ownership and pay the first month's rent.
Whether this scheme can work is to be determined by the pilot, the first such test announced by any major mortgage company. The bank wants to find out whether getting a loan off its books with a quick sale at a deep discount is a better deal financially than the foreclosure process, which can drag on for months or even years in highly regulated states such as New York.
"This pilot will help determine whether conversion from homeownership to rental is something our customers, the community and investors will support," said Bank of America's Ron Sturzenegger, who oversees about 1 million troubled loans inherited from aggressive mortgage giant Countrywide Financial Corp., which Bank of America purchased in 2008.
Homeowners can't apply for the program themselves, a bank spokesman said.
The trial is limited to a tiny slice of the 1 million loans that Bank of America owns outright. It is not testing any of the additional 8 million home loans on which it provides customer service but which are owned by investors in mortgage bonds.
Bank of America executives said the 1,000 homeowners selected are all at least 60 days late on their loans and are not qualified for or not willing to accept other alternatives to foreclosure.
They will be offered one final deal: hand their property titles to the bank, which would cancel their mortgages in what's known as a deed in lieu of foreclosure, and sign contracts agreeing to rent the home for up to three years at or below market rates.
Bank of America spokesman Dan B. Frahm said there are hundreds of investment groups across the country interested in acquiring troubled properties as rentals, each eyeing different regions and segments of the housing markets.
The pilot is designed to test the market for homes ranging in current value from $75,000 to $1 million, and to assess the program's viability in states such as New York that route foreclosures through the courts, as well as states that do not, such as California, Arizona and Nevada.
Initial interest in the pilot program is likely to be strong. Betting that the housing markets are bottoming out, hedge funds, private investors and even Omaha investment wizard Warren Buffett have expressed interest in snapping up distressed or foreclosed properties to rent out or sell to first-time buyers.
Indeed, some investment firms have been turning distressed properties into rental units for years.
TwinRock Partners, a private Newport Beach firm, recently told potential investors that more than 100 homes it has acquired and rented out over the last two years have produced annualized returns of 8.7%, with the potential for big resale profits if housing prices recover. TwinRock says it tries to keep the occupants in the house as renters and has done so about half the time.
The Obama administration has said it hopes investors will buy many of the nearly 250,000 foreclosed homes owned by government-controlled entities and turn them into rentals, although the former owners of these homes already have been given the boot.
Wednesday, March 14, 2012
How To Save On Your Taxes Using The IRS Code 1031 Exchange
What exactly is the 1031 Exchange and how does it work? Well let's first define 1031 Exchange.
1031 Exchange: "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of the like kind, which is to be held either for productive use in a trade or business or for investment".
This rule was based on the 1031 section of the IRS code and the term 1031 Exchange is a term that is used within the real estate business. Now let's take a look at how it works.
1. It will allow any taxpayer to defer the taxes on a property sale if it is exchanged one investment property for another similar type of property that is being used for business or investment purposes
2. You will need to hire a real estate lawyer to apply the legal processes that are required in the 1031 Exchange
3. If you would rather, you can hire a Qualified Intermediary or QI as a third party that is independent of the process. A QI will hold the profits from the sale of the first property that you sell until you are able to invest into another property or properties. You should have a minimum of two properties involved in this transaction
4. You are not allowed to use your own home to qualify for the 1031 Exchange. The 1031 Exchange only allows the exchange of one property for another of the like kind. When I say like kind, it does not mean the condition of the property or the value of the property but only that they are similar in their types like one investment property for another investment property
5. There are two very strict timeline guidelines: the Identification Period and the Exchange Period. These dates cannot be extended to meet your needs and the process has to be completed within the time that is allowed by the IRS to take benefits out of complimentary tax treatment
• Identification Period = 45 days from the actual date you sell your property and the time you view the new property that you want to buy
• Exchange Period = 180 days from the classification date up to the closing date. During this time you must get through the entire exchange process
Your best bet is to find a realtor who is very familiar with the 1031 Exchange tax code and dealing with investment properties. The 1031 Exchange can be very beneficial to you; however, you will have to make sure that you do everything accordingly. The only way you can make sure of this is if you have a realtor and a real estate lawyer to handle the proceedings for you.
1031 Exchange: "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of the like kind, which is to be held either for productive use in a trade or business or for investment".
This rule was based on the 1031 section of the IRS code and the term 1031 Exchange is a term that is used within the real estate business. Now let's take a look at how it works.
1. It will allow any taxpayer to defer the taxes on a property sale if it is exchanged one investment property for another similar type of property that is being used for business or investment purposes
2. You will need to hire a real estate lawyer to apply the legal processes that are required in the 1031 Exchange
3. If you would rather, you can hire a Qualified Intermediary or QI as a third party that is independent of the process. A QI will hold the profits from the sale of the first property that you sell until you are able to invest into another property or properties. You should have a minimum of two properties involved in this transaction
4. You are not allowed to use your own home to qualify for the 1031 Exchange. The 1031 Exchange only allows the exchange of one property for another of the like kind. When I say like kind, it does not mean the condition of the property or the value of the property but only that they are similar in their types like one investment property for another investment property
5. There are two very strict timeline guidelines: the Identification Period and the Exchange Period. These dates cannot be extended to meet your needs and the process has to be completed within the time that is allowed by the IRS to take benefits out of complimentary tax treatment
• Identification Period = 45 days from the actual date you sell your property and the time you view the new property that you want to buy
• Exchange Period = 180 days from the classification date up to the closing date. During this time you must get through the entire exchange process
Your best bet is to find a realtor who is very familiar with the 1031 Exchange tax code and dealing with investment properties. The 1031 Exchange can be very beneficial to you; however, you will have to make sure that you do everything accordingly. The only way you can make sure of this is if you have a realtor and a real estate lawyer to handle the proceedings for you.
Friday, March 9, 2012
What Is Escrow And How Does It Work?
So what exactly is escrow. If you have recently bought a house or are thinking about buying a house, you will need to know what escrow is. Here is a quick overview of what escrow is and how it works.
Escrow is a deposit that is held by a third party or escrow agent. So in other words, an escrow deposit, is the money you put down on your new home. Your escrow deposit is held in a secure location by a neutral third party.
The escrow agent works for both the lender and the buyer and their purpose is to carry out the instructions that both parties have agreed on. The escrow agent will release your money once all of the terms of your agreement have been upheld.
Your mortgage lender will more than likely require you to open an escrow account to make sure there is enough money to cover your insurance and taxes. The way this works is you will make an initial deposit to your escrow account followed my monthly installments. Most lenders will arrange to have this included in your monthly mortgage payments. When your taxes and insurance premiums come due the escrow agent will release the funds to the appropriate party.
The reasoning behind having an escrow account is to protect the lender in the event you default on your payments. The lender is then protected from external perils that could arise as a result of you not paying your taxes or your insurance causing the lender to be left with no collateral.
An escrow account also helps the buyer because it allows you to spread your payments evenly over a 12 month period. Just imagine if your yearly taxes were $3000 and your yearly insurance was $1400, that would leave you owing $4400 in one lump sum.
Your escrow amounts could change from year to year due to the possible increase in your taxes and insurance. Therefore, your lender will review and adjust your escrow amounts annually and you will be given a revised mortgage payment if your taxes or insurance go up. On the same token; however, if your taxes or insurance rates go down, you will be given a refund.
Sometimes an escrow requirement can be waived. Some buyers prefer to pay all of their taxes and insurance directly. Your lender may allow you to do this if your down payment is more than 20% but they will more than likely raise your interest rate slightly to compensate. One thing to remember is that once you begin putting your funds into an escrow account, it can be difficult to cancel this process so make sure that you fully understand what your options are before doing anything.
Well, I hope that I have fully explained what escrow means and how it works. However, if there is anything you don't understand or anything you have questions about, please call your realtor. Your realtor has many years of experience with these kinds of things and will be more than happy to assist you.
Escrow is a deposit that is held by a third party or escrow agent. So in other words, an escrow deposit, is the money you put down on your new home. Your escrow deposit is held in a secure location by a neutral third party.
The escrow agent works for both the lender and the buyer and their purpose is to carry out the instructions that both parties have agreed on. The escrow agent will release your money once all of the terms of your agreement have been upheld.
Your mortgage lender will more than likely require you to open an escrow account to make sure there is enough money to cover your insurance and taxes. The way this works is you will make an initial deposit to your escrow account followed my monthly installments. Most lenders will arrange to have this included in your monthly mortgage payments. When your taxes and insurance premiums come due the escrow agent will release the funds to the appropriate party.
The reasoning behind having an escrow account is to protect the lender in the event you default on your payments. The lender is then protected from external perils that could arise as a result of you not paying your taxes or your insurance causing the lender to be left with no collateral.
An escrow account also helps the buyer because it allows you to spread your payments evenly over a 12 month period. Just imagine if your yearly taxes were $3000 and your yearly insurance was $1400, that would leave you owing $4400 in one lump sum.
Your escrow amounts could change from year to year due to the possible increase in your taxes and insurance. Therefore, your lender will review and adjust your escrow amounts annually and you will be given a revised mortgage payment if your taxes or insurance go up. On the same token; however, if your taxes or insurance rates go down, you will be given a refund.
Sometimes an escrow requirement can be waived. Some buyers prefer to pay all of their taxes and insurance directly. Your lender may allow you to do this if your down payment is more than 20% but they will more than likely raise your interest rate slightly to compensate. One thing to remember is that once you begin putting your funds into an escrow account, it can be difficult to cancel this process so make sure that you fully understand what your options are before doing anything.
Well, I hope that I have fully explained what escrow means and how it works. However, if there is anything you don't understand or anything you have questions about, please call your realtor. Your realtor has many years of experience with these kinds of things and will be more than happy to assist you.
Thursday, March 8, 2012
Unique Ways To Fund Your Downpayment
One of the biggest concerns many people have when it comes to buying a home is coming up with the down payment. Or perhaps coming up with a down payment that is large enough to lower their monthly payment. These are very legitimate concerns ; therefore, we have come up with some unique ways to help you afford your down payment.
1. The most popular(and maybe not so unique) is to dip into your savings account
2. Hit up some of your friends - who knows what kind of money they have lying around
3. Ask all of your relatives - if all of your relatives can give a little, perhaps you can reciprocate the next time they need a favor
4. Check with your 401k administrator - in certain cases you can borrow some money from it without penalties
5. Look at your entire portfolio - do you have stock proceeds you can use or maybe you could sell some stocks to beef up your down payment
6. What assets to you have - do you have anything that you could sell to come up with that extra down payment
7. Sometimes, depending on the lender , a co-signer might be an option
8. Does your city offer any down payment subsidy programs - sometimes these subsidies are $5000 to $10,000 - this is free money - who doesn't want free money. This will also significantly lower your monthly payments as well
9. Some banks still offer zero percent down - which means you have no down payment - these are usually reserved for first time home buyers with extremely good credit
10. Perhaps you might consider a lease with an option to buy
11. Sometimes a seller is willing to fund part or all of your down payment just to get the deal - this is called a carry back mortgage - it will help the seller sell their home faster and help the buyer buy a home that they could not otherwise afford
12. Talk to your lender about a second mortgage
There are many, many ways to fund your down payment. Ask your realtor to help you come up with the options that will work best for you. You might be surprised at just how well versed they are in helping buyers reach their down payment goals. So use their experience to your advantage and don't let a little thing like a down payment get in your way.
1. The most popular(and maybe not so unique) is to dip into your savings account
2. Hit up some of your friends - who knows what kind of money they have lying around
3. Ask all of your relatives - if all of your relatives can give a little, perhaps you can reciprocate the next time they need a favor
4. Check with your 401k administrator - in certain cases you can borrow some money from it without penalties
5. Look at your entire portfolio - do you have stock proceeds you can use or maybe you could sell some stocks to beef up your down payment
6. What assets to you have - do you have anything that you could sell to come up with that extra down payment
7. Sometimes, depending on the lender , a co-signer might be an option
8. Does your city offer any down payment subsidy programs - sometimes these subsidies are $5000 to $10,000 - this is free money - who doesn't want free money. This will also significantly lower your monthly payments as well
9. Some banks still offer zero percent down - which means you have no down payment - these are usually reserved for first time home buyers with extremely good credit
10. Perhaps you might consider a lease with an option to buy
11. Sometimes a seller is willing to fund part or all of your down payment just to get the deal - this is called a carry back mortgage - it will help the seller sell their home faster and help the buyer buy a home that they could not otherwise afford
12. Talk to your lender about a second mortgage
There are many, many ways to fund your down payment. Ask your realtor to help you come up with the options that will work best for you. You might be surprised at just how well versed they are in helping buyers reach their down payment goals. So use their experience to your advantage and don't let a little thing like a down payment get in your way.
Wednesday, March 7, 2012
Making Sense Of Points, Rates And Fees
You have just found the home of your dreams and the seller has accepted your offer. Now the fun begins. You keep hearing terms like "buy down", "discount points", "purchase points, but you have no idea what all this means. Do they all mean the same thing or is each term something different? This is where your realtor comes in. Of course you can always call your lender; however, your realtor is the one you have been dealing with and the one that will be more than happy to explain everything to you.
Purchase Points - which are also known as a buy down or discount points. Points is a term used to define an amount of money given to the lender at closing to lower your interest rate for your mortgage loan. Every point is equal to one percent of the total amount of your loan. So if you have a mortgage that is $100,000 then one point would equal $1000. Every point you buy will lower your interest rate by a certain percentage. Just remember, the more points you buy, the more money you are going to have to come up with at closing.
The question is - is it smarter to buy points or to hold on to your money? Well, that depends on how long you plan on staying in that home and of course what you can afford to pay. If you are planning on staying in this home for more than five years then my advice is for you to buy as many points as you can. Because this will lower your monthly payments and will save you interest over the life of the loan.
Interest Rates - interest rates fluctuate daily, and when you apply for a loan it doesn't mean that the rate you were quoted that day is the same rate you will get at closing unless you "lock in" your interest rate. Locking in your interest rate will give you a guaranteed rate within a specific time frame. Most lock in periods are for 15, 45 or 60 days. Keep in mind that the longer you lock in your rate the more it will cost you because a lender takes more of a risk to lock you in for a longer period of time.
Fees - since when have you ever bought anything that did not have some sort of fee associated with it? Well, a mortgage is no different. Some of the fees you can expect are: title fees, underwriting fees, land survey fees, appraisal fees etc. Each lender is different and will work your loan differently; some lenders will charge you lower fees but a higher interest rate.
So before you sign on the dotted line, make sure you do your homework and most definitely ask your realtor to let you know who they have had the best experiences with. Make sure there are no hidden fees and make sure that you fully understand what costs are involved and what your obligations are for the life of your loan.
Purchase Points - which are also known as a buy down or discount points. Points is a term used to define an amount of money given to the lender at closing to lower your interest rate for your mortgage loan. Every point is equal to one percent of the total amount of your loan. So if you have a mortgage that is $100,000 then one point would equal $1000. Every point you buy will lower your interest rate by a certain percentage. Just remember, the more points you buy, the more money you are going to have to come up with at closing.
The question is - is it smarter to buy points or to hold on to your money? Well, that depends on how long you plan on staying in that home and of course what you can afford to pay. If you are planning on staying in this home for more than five years then my advice is for you to buy as many points as you can. Because this will lower your monthly payments and will save you interest over the life of the loan.
Interest Rates - interest rates fluctuate daily, and when you apply for a loan it doesn't mean that the rate you were quoted that day is the same rate you will get at closing unless you "lock in" your interest rate. Locking in your interest rate will give you a guaranteed rate within a specific time frame. Most lock in periods are for 15, 45 or 60 days. Keep in mind that the longer you lock in your rate the more it will cost you because a lender takes more of a risk to lock you in for a longer period of time.
Fees - since when have you ever bought anything that did not have some sort of fee associated with it? Well, a mortgage is no different. Some of the fees you can expect are: title fees, underwriting fees, land survey fees, appraisal fees etc. Each lender is different and will work your loan differently; some lenders will charge you lower fees but a higher interest rate.
So before you sign on the dotted line, make sure you do your homework and most definitely ask your realtor to let you know who they have had the best experiences with. Make sure there are no hidden fees and make sure that you fully understand what costs are involved and what your obligations are for the life of your loan.
Wednesday, January 18, 2012
How To Avoid Buyer's Remorse
The excitement of buying a new home is indescribable. You spend all of your time going over all the details of each and every possible home that is suitable for you. Then you actually find a home that you just love. After spending a great amount of time thinking about your dream home, you make an offer. Then it happens, you get that call from your realtor - your offer has been accepted. All of a sudden the reality that you just bought a home hits you like a ton of bricks!
Buyers have different reactions the that "Oh My Gosh, I Just Bought A House" feeling and understandably so. Buying a home is a BIG decision. Many people begin to have second thoughts about their decision. Did I do the right thing? Can I afford this? What if something happens? How much money did I just spend? Can I come up with the down payment? How much are the closing costs going to be? Etc.
You feel like your life is going to be changed forever. You think that you will never again be able to live the life that you currently have - enjoying eating at a restaurant, going to the movies whenever you feel like it, having a shopping spree. You think your entertainment budget has been shot out the door! Then you get the dreaded truth in lending statement and you see just exactly how much your mortgage including the interest will be over 30 years and you are shocked and dismayed. You think "what have I done?"
Sit down and relax. Millions of people buy new homes every day and get through it with no problems. Don't worry, what you are feeling is normal and you will be glad to know that it is temporary. This too shall pass. You will adjust your lifestyle and things will be back to normal before you know it.
Try to replace all of those negative feelings with positive ones like - imagining yourself sitting in your new home, enjoying your new life. Picture how well your new home suits your family's needs. Think about all of the things that you will have in your new home that you don't have in your current home. Give it time, you will get the hang of it.
If you still have those "Buyers Blues" then call your realtor immediately. Your real estate agent has years of experience helping their clients through the home buying process from start to finish and they will be more than happy to help you with anything you need. So remember, these feelings are normal. Then go relax and enjoy yourself. Go and eat at your favorite restaurant or do a little shopping; whatever it takes to rid yourself of the buyers blues and before you know it you will be sitting in your new home wondering why you ever had any doubts!
Buyers have different reactions the that "Oh My Gosh, I Just Bought A House" feeling and understandably so. Buying a home is a BIG decision. Many people begin to have second thoughts about their decision. Did I do the right thing? Can I afford this? What if something happens? How much money did I just spend? Can I come up with the down payment? How much are the closing costs going to be? Etc.
You feel like your life is going to be changed forever. You think that you will never again be able to live the life that you currently have - enjoying eating at a restaurant, going to the movies whenever you feel like it, having a shopping spree. You think your entertainment budget has been shot out the door! Then you get the dreaded truth in lending statement and you see just exactly how much your mortgage including the interest will be over 30 years and you are shocked and dismayed. You think "what have I done?"
Sit down and relax. Millions of people buy new homes every day and get through it with no problems. Don't worry, what you are feeling is normal and you will be glad to know that it is temporary. This too shall pass. You will adjust your lifestyle and things will be back to normal before you know it.
Try to replace all of those negative feelings with positive ones like - imagining yourself sitting in your new home, enjoying your new life. Picture how well your new home suits your family's needs. Think about all of the things that you will have in your new home that you don't have in your current home. Give it time, you will get the hang of it.
If you still have those "Buyers Blues" then call your realtor immediately. Your real estate agent has years of experience helping their clients through the home buying process from start to finish and they will be more than happy to help you with anything you need. So remember, these feelings are normal. Then go relax and enjoy yourself. Go and eat at your favorite restaurant or do a little shopping; whatever it takes to rid yourself of the buyers blues and before you know it you will be sitting in your new home wondering why you ever had any doubts!
Thursday, January 12, 2012
Buying A Home At A Discount
Real estate is no exception when we talk about how inflation has affected each and every aspect of our life. At first, buying a home was only a matter of selecting your area, surveying places around it and making a decision. Times have changed now and the first thing that you bring under consideration is affordability. Not that you didn’t worry about finances back then, but you at least knew you weren’t over paying for your property. So the name of the game, when it comes to buying real estate today, is not only to get the best house of your liking but also to get the best financial deal for yourself.
Short Sales
So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn’t mean the lender will agree to sell to you in all cases.
Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.
Foreclosures
Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in today’s times, because of the large inventory of homes sitting on bank books.
Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn’t keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.
Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you’ve done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.
Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals – the deal will go a lot smoother if the bank sees that all the foot work has been completed.
Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.
Short Sales
So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn’t mean the lender will agree to sell to you in all cases.
Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.
Foreclosures
Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in today’s times, because of the large inventory of homes sitting on bank books.
Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn’t keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.
Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you’ve done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.
Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals – the deal will go a lot smoother if the bank sees that all the foot work has been completed.
Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.
Friday, January 6, 2012
6 Common Mistakes Homebuyers Still Make
Getting a new home is easy but tricky at times. Many buyers are encountering stumbling blocks en route to their chosen house. This is because they commit minor mistakes along the way that hinders smooth processing. This can be prevented only if you are familiar with these common mistakes.
1. Having no pre-arrangements with the bank for mortgages before making an offer is the most popular mistake. Communicate with a bank to know the price range you are capable of paying and other mortgage details that you need to know.
2. Knowing your exact budget is critical. Most people look around for houses even without the budget in mind. First thing you need to know before finding a home to purchase is how much you can pay for a new home. You can save much time if you trim down your list of houses based on its price; imagine finding that dream home only to find out you won’t be approved for the mortgage?
3. Getting unreliable and inexperienced real estate agents is a big no-no. Choose an agent that has the background to back him or her up. Also, consider the real estate companies you are dealing with. Make sure that they have a good standing in terms of the services they are providing.
4. Most people are shopping around within a limited market. You can find homes for sale anywhere such as internet, print ads, and even on TV. You may also want to ask for help from your agent to provide you a list of preferred houses. You can save time if you know what kind of house you are looking for.
5. Purchasing a home long distance without thorough inspection is a mortal mistake. After choosing a home, it is a must to visit it personally so that you can see it in a closer view. Some pictures only show the good angles of the house. It can be very deceiving at times. Check the structure and foundation to ensure safety. Also, look around the neighborhood and get comfortable with it.
6. Buyers tend not to compute the total cost of the house. Other expenses such as home insurance, association dues and even lawyer's fee for proper documentation of the purchase should be considered. We are not talking about coins here. These range from hundreds of dollars to even thousands. You need to prepare your pocket for it.
Buyers are usually not aware of all the details. It is your home and you are responsible for it. You need to know and understand everything about it, from home warranty to insurances and even the history of the house.
1. Having no pre-arrangements with the bank for mortgages before making an offer is the most popular mistake. Communicate with a bank to know the price range you are capable of paying and other mortgage details that you need to know.
2. Knowing your exact budget is critical. Most people look around for houses even without the budget in mind. First thing you need to know before finding a home to purchase is how much you can pay for a new home. You can save much time if you trim down your list of houses based on its price; imagine finding that dream home only to find out you won’t be approved for the mortgage?
3. Getting unreliable and inexperienced real estate agents is a big no-no. Choose an agent that has the background to back him or her up. Also, consider the real estate companies you are dealing with. Make sure that they have a good standing in terms of the services they are providing.
4. Most people are shopping around within a limited market. You can find homes for sale anywhere such as internet, print ads, and even on TV. You may also want to ask for help from your agent to provide you a list of preferred houses. You can save time if you know what kind of house you are looking for.
5. Purchasing a home long distance without thorough inspection is a mortal mistake. After choosing a home, it is a must to visit it personally so that you can see it in a closer view. Some pictures only show the good angles of the house. It can be very deceiving at times. Check the structure and foundation to ensure safety. Also, look around the neighborhood and get comfortable with it.
6. Buyers tend not to compute the total cost of the house. Other expenses such as home insurance, association dues and even lawyer's fee for proper documentation of the purchase should be considered. We are not talking about coins here. These range from hundreds of dollars to even thousands. You need to prepare your pocket for it.
Buyers are usually not aware of all the details. It is your home and you are responsible for it. You need to know and understand everything about it, from home warranty to insurances and even the history of the house.
Tuesday, January 3, 2012
How To Enhance Your Kitchen's Appeal
You know it. I know it. We all know it. Your kitchen is the most important room in the house and the one room that can make or break the sale of your home. So how does your kitchen look? Is it outdated? Does it need a little TLC? Ok, don't panic because there are a few things that you can do to your kitchen to make it more inviting to prospective buyers without breaking the bank.
The first thing you need to do is to stand back and take a good hard look at your kitchen. What do you see? Maybe it just needs a good thorough cleaning. If you have lived in your home for a while you may not be able to see the forest through the trees. So look at your kitchen as if you were buying your house and make notes about what you are seeing and what needs to be done.
Here are some quick tips to help enhance your kitchen and possibly add thousands to your bottom line.
1. Clean, Clean, Clean - don't forget to scrub the cabinets inside and out, and remember the floors, and the appliances too
2. De-clutter everything, including the cabinets, drawers and pantry. Your buyers will be looking at everything
3. Remove all personal items - this will help buyers to see your home as theirs and not yours
4. Go through all of your cabinets and remove any unnecessary items. This goes for your pantry as well. You want to showcase your kitchen as clean, neat and orderly - this is what sells
5. Clear off the countertops of small appliances and gadgets - this will make your kitchen look bigger
6. A fresh coat of paint will go a long way and give it a fresh, updated look for very little cost and this is something that is easily done yourself
7. If you have wallpaper, assess its condition and age and consider having it textured and painted. Sometimes wallpaper can date your kitchen quicker than anything else. Your buyers will see outdated instead of clean and fresh and this will reflect in a lower offer
8. Look at the floors. Are they outdated and worn? A simple new vinyl floor covering will make your kitchen look newer than perhaps it really is. A vinyl floor is a very cost effective way to instantly upgrade your kitchen with very little expense but could add to the value of your home in the mind of the buyer
9. Do you have cabinet knobs? Are they making your kitchen look dated? If so then change them, this is just another relatively simple way to make your kitchen look as if it has been upgraded
10. How about your countertops. How do they look? Did you know that there are companies that will come to your home and spray a new decorative surface on your countertops for pennies on the dollar of what it would cost you to replace them and it makes your kitchen look fabulous and barely cost you a thing. Again, this is just another quick, inexpensive way to update your kitchen.
Try some of these simple tips and tricks today and get ready for those top dollar offers to pour in. A few minor touches could make the difference between a good offer and a great offer.
The first thing you need to do is to stand back and take a good hard look at your kitchen. What do you see? Maybe it just needs a good thorough cleaning. If you have lived in your home for a while you may not be able to see the forest through the trees. So look at your kitchen as if you were buying your house and make notes about what you are seeing and what needs to be done.
Here are some quick tips to help enhance your kitchen and possibly add thousands to your bottom line.
1. Clean, Clean, Clean - don't forget to scrub the cabinets inside and out, and remember the floors, and the appliances too
2. De-clutter everything, including the cabinets, drawers and pantry. Your buyers will be looking at everything
3. Remove all personal items - this will help buyers to see your home as theirs and not yours
4. Go through all of your cabinets and remove any unnecessary items. This goes for your pantry as well. You want to showcase your kitchen as clean, neat and orderly - this is what sells
5. Clear off the countertops of small appliances and gadgets - this will make your kitchen look bigger
6. A fresh coat of paint will go a long way and give it a fresh, updated look for very little cost and this is something that is easily done yourself
7. If you have wallpaper, assess its condition and age and consider having it textured and painted. Sometimes wallpaper can date your kitchen quicker than anything else. Your buyers will see outdated instead of clean and fresh and this will reflect in a lower offer
8. Look at the floors. Are they outdated and worn? A simple new vinyl floor covering will make your kitchen look newer than perhaps it really is. A vinyl floor is a very cost effective way to instantly upgrade your kitchen with very little expense but could add to the value of your home in the mind of the buyer
9. Do you have cabinet knobs? Are they making your kitchen look dated? If so then change them, this is just another relatively simple way to make your kitchen look as if it has been upgraded
10. How about your countertops. How do they look? Did you know that there are companies that will come to your home and spray a new decorative surface on your countertops for pennies on the dollar of what it would cost you to replace them and it makes your kitchen look fabulous and barely cost you a thing. Again, this is just another quick, inexpensive way to update your kitchen.
Try some of these simple tips and tricks today and get ready for those top dollar offers to pour in. A few minor touches could make the difference between a good offer and a great offer.
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