Home buyers and home owners who are refinancing are increasingly enthusiastic about 15-year, fixed-rate mortgages.
Originations of 15-year mortgages at Wells Fargo & Co. are up 55 percent through November compared to a year ago. At J.P. Morgan Chase & Co., 20 percent of refinances are 15-year loans, up 10 percent in 2008.
One reason is that rates on 15-year fixed-rate conforming mortgages averaged 4.46 percent in early December, according to HSH Associates in Pompton Plains, N.J.
Source: The Wall Street Journal, Ruth Simon (12/09/2009)
Welcome to the DovCar Real Estate & Investments Blogspot! We would like to become your source for Metro Atlanta real estate; and use this Blog as an opportunity to pass along current information concerning the metro Atlanta real estate and foreclosure market. We also welcome your comments, questions and experiences as either sellers, buyers or real estate investors.
Wednesday, December 16, 2009
Thursday, December 10, 2009
Foreclosures Decline for Fourth-Straight Month
Foreclosures declined 8 percent in November compared with October, but were still up 18 percent from November 2008.
This was the fourth-straight month that U.S. foreclosures have declined since hitting an all-time high in July, according to online foreclosure marketer RealtyTrac.
Default notices, an indicator of coming foreclosures, also were down 8 percent from October, but up 22 percent from November 2008. Bank repossessions were flat from the previous month and down 2 percent from November 2008.
"We don't really believe the underlying problems have been resolved," said Rick Sharga, senior vice president for RealtyTrac. Many borrowers, he told the Associated Press, "simply aren't going to qualify" for government and mortgage servicer help.
States with the highest foreclosure rates are:
Nevada
Florida
California
Arizona
Idaho
Michigan
Illinois
Utah
Maryland
New Jersey
Four states account for more than 50 percent of actual foreclosures: California, Florida, Illinois, and Michigan.
Source: RealtyTrac, (12/10/2009)
This was the fourth-straight month that U.S. foreclosures have declined since hitting an all-time high in July, according to online foreclosure marketer RealtyTrac.
Default notices, an indicator of coming foreclosures, also were down 8 percent from October, but up 22 percent from November 2008. Bank repossessions were flat from the previous month and down 2 percent from November 2008.
"We don't really believe the underlying problems have been resolved," said Rick Sharga, senior vice president for RealtyTrac. Many borrowers, he told the Associated Press, "simply aren't going to qualify" for government and mortgage servicer help.
States with the highest foreclosure rates are:
Nevada
Florida
California
Arizona
Idaho
Michigan
Illinois
Utah
Maryland
New Jersey
Four states account for more than 50 percent of actual foreclosures: California, Florida, Illinois, and Michigan.
Source: RealtyTrac, (12/10/2009)
Friday, December 4, 2009
Banks Start to Embrace Short Sales
Daily Real Estate News
December 4, 2009
Banks Start to Embrace Short Sales
Even before the government put pressure on them to embrace short sales, more banks were starting to take their lumps, do the short-sale deals and move on.
Three years into the housing meltdown, short sales have tripled to 40,000 in the first six months of 2009, compared to the same time period a year ago, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
Wells Fargo, Bank of America Corp., and JPMorgan Chase & Co. this year have hired and trained more staff to handle short sales and also developed software for expediting them.
“It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”
Source: Bloomberg, John Gittelsohn and Margaret Collins (12/4/2009)
December 4, 2009
Banks Start to Embrace Short Sales
Even before the government put pressure on them to embrace short sales, more banks were starting to take their lumps, do the short-sale deals and move on.
Three years into the housing meltdown, short sales have tripled to 40,000 in the first six months of 2009, compared to the same time period a year ago, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
Wells Fargo, Bank of America Corp., and JPMorgan Chase & Co. this year have hired and trained more staff to handle short sales and also developed software for expediting them.
“It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”
Source: Bloomberg, John Gittelsohn and Margaret Collins (12/4/2009)
Monday, November 30, 2009
New Home Sales Rise in October
Daily Real Estate News
November 30, 2009
Share
New Home Sales Rise in October
New home sales rose 6.2 percent in October compared to September, according to a report released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This increase was 5.1 percent above the October 2008 level.
"New-home sales are what I am focusing on because they are the ones that are going to drive" gross domestic product, said Cameron Findlay, chief economist at LendingTree.com.
The median sale price of new homes was $212,200 in October with an estimated 239,000 units available at the end of that month, a 6.7-month inventory, according to the government.
Source: The Los Angeles Times, Alejandro Lazo (11/26/2009)
November 30, 2009
Share
New Home Sales Rise in October
New home sales rose 6.2 percent in October compared to September, according to a report released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This increase was 5.1 percent above the October 2008 level.
"New-home sales are what I am focusing on because they are the ones that are going to drive" gross domestic product, said Cameron Findlay, chief economist at LendingTree.com.
The median sale price of new homes was $212,200 in October with an estimated 239,000 units available at the end of that month, a 6.7-month inventory, according to the government.
Source: The Los Angeles Times, Alejandro Lazo (11/26/2009)
Thursday, October 29, 2009
Senators OK homebuyer tax credit extension Set to expire at end of November, plan will remain until end of April
Senators OK homebuyer tax credit extension
Set to expire at end of November, plan will remain until end of April
The Associated Press updated 6:56 p.m. ET, Wed., Oct . 28, 2009
WASHINGTON - Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.
The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.
Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.
Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.
Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.
Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.
Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.
Majority Democrats have refused to add the amendments.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
MSN Privacy . Legal
© 2009 MSNBC.com
Set to expire at end of November, plan will remain until end of April
The Associated Press updated 6:56 p.m. ET, Wed., Oct . 28, 2009
WASHINGTON - Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.
The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November.
Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, said a congressional aide, who spoke on condition of anonymity because he was not authorized to publicly discuss the deal.
Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.
Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.
Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.
Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.
Majority Democrats have refused to add the amendments.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
MSN Privacy . Legal
© 2009 MSNBC.com
Wednesday, October 28, 2009
Senate Close to Deal Replacing Homebuyer Tax Credit
By Dawn Kopecki and Ryan Donmoyer
Oct. 27 (Bloomberg) -- U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.
The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.
The new agreement, which is still being negotiated and may change, would grant the credit to borrowers who have lived in their current home for at least five years. Lawmakers want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression.
The demand for new homes and condominiums may increase by “more than two times because you’re allowing step-up buyers into the equation,” said Andrew Parmentier, a managing partner at Height Analytics, a research firm in Washington. “ You just opened up a whole new pool of people who can buy into those empty homes and empty condos that were built out.”
The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples. The income criteria for step-up buyers would be $125,000 for individuals and $250,000 for couples.
The credit would be limited to homes costing $800,000 or less. There is currently no price cap on home purchases.
Unemployment-Benefits Bill
Lawmakers are trying to attach the legislation, which is also being considered by leaders in the House, to a bill extending unemployment benefits under debate on the Senate floor, said Richard Durbin of Illinois, the Senate’s No. 2 Democrat.
Senator Bill Nelson, a Florida Democrat, told reporters yesterday of the tax credit that “we should be able to extend that later this week.” Nelson was traveling with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Lawmakers are also considering pairing the new homebuyer credit with a broader tax benefit for businesses with net operating losses, and passing that as a separate bill. The tax break, a priority for homebuilders, would allow companies to apply losses incurred in 2008 and 2009 to amend up to five years worth of earlier tax returns to get a refund of taxes paid in years when they were profitable.
That provision, along with the step-up, would be “extremely positive for the homebuilders,” Parmentier said.
A version of the benefit was included in February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. Business groups, including the Washington-based National Association of Manufacturers and National Association of Home Builders, lobbied unsuccessfully to have the benefit expanded to larger companies.
To contact the reporters on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.com; To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net.
Oct. 27 (Bloomberg) -- U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.
The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.
The new agreement, which is still being negotiated and may change, would grant the credit to borrowers who have lived in their current home for at least five years. Lawmakers want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression.
The demand for new homes and condominiums may increase by “more than two times because you’re allowing step-up buyers into the equation,” said Andrew Parmentier, a managing partner at Height Analytics, a research firm in Washington. “ You just opened up a whole new pool of people who can buy into those empty homes and empty condos that were built out.”
The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples. The income criteria for step-up buyers would be $125,000 for individuals and $250,000 for couples.
The credit would be limited to homes costing $800,000 or less. There is currently no price cap on home purchases.
Unemployment-Benefits Bill
Lawmakers are trying to attach the legislation, which is also being considered by leaders in the House, to a bill extending unemployment benefits under debate on the Senate floor, said Richard Durbin of Illinois, the Senate’s No. 2 Democrat.
Senator Bill Nelson, a Florida Democrat, told reporters yesterday of the tax credit that “we should be able to extend that later this week.” Nelson was traveling with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.
Lawmakers are also considering pairing the new homebuyer credit with a broader tax benefit for businesses with net operating losses, and passing that as a separate bill. The tax break, a priority for homebuilders, would allow companies to apply losses incurred in 2008 and 2009 to amend up to five years worth of earlier tax returns to get a refund of taxes paid in years when they were profitable.
That provision, along with the step-up, would be “extremely positive for the homebuilders,” Parmentier said.
A version of the benefit was included in February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. Business groups, including the Washington-based National Association of Manufacturers and National Association of Home Builders, lobbied unsuccessfully to have the benefit expanded to larger companies.
To contact the reporters on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.com; To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net.
Tuesday, October 27, 2009
Tax Credit Extension Seems Likely
It seems likely that the U.S. Senate will approve a deal to extend the First-Time Homebuyer Tax Credit, but the devil is in the details.
Florida Democrat Sen. Bill Nelson told reporters traveling to Florida with President Obama on Monday that he thought that the extension would be approved, but both senators and representatives are among those who think that there should be some fiscal offset for the cost of the extension. Spending any more money on the stimulus effort also could stir up a hornets' nest in some circles.
The proposal in the Senate that appears to have the most likelihood of passage would extend the $8,000 credit through March 31, then its value would drop by $2,000 for each of the subsequent three quarters of 2010. This plan was offered by Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
Source: Associated Press, Andrew Taylor (10/26/2009) and The Wall Street Journal, John D. McKinnon (10/27/2009)
Florida Democrat Sen. Bill Nelson told reporters traveling to Florida with President Obama on Monday that he thought that the extension would be approved, but both senators and representatives are among those who think that there should be some fiscal offset for the cost of the extension. Spending any more money on the stimulus effort also could stir up a hornets' nest in some circles.
The proposal in the Senate that appears to have the most likelihood of passage would extend the $8,000 credit through March 31, then its value would drop by $2,000 for each of the subsequent three quarters of 2010. This plan was offered by Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
Source: Associated Press, Andrew Taylor (10/26/2009) and The Wall Street Journal, John D. McKinnon (10/27/2009)
Monday, October 12, 2009
What to do when you have a problem setting the list price of a property?
Do your homework, provide not just avail/sold comps, cover the expired/withdrawn comps too. Call them MARKET REJECTS with clients; explain these are properties rejected by the MARKET.
Next get a US $100 bill (not a $20 or $50) out of your wallet, wave it in front of your client, and show it as beautiful and wonderful. Explain it is REAL, not counterfeit and the questions to follow are no gimmick or trick.
1. Ask the client, if you gave them the $100 would they take it?
They all say YES, and they reach for it.
2. As you take it back, ask, them if it were for sale for $50, would they consider buying it?
50% will say NO. Explain its no trick; ask them again.
Now they say sure! Now explain, the problem is (and point at whoever is near, if no one is around, point at the air), so will she and he, and her, and… they may even be willing to pay $55, $70, $85, even $96.
3. As they show understanding ask, WHY?
They will all give some variation (listen close for insight) it all comes down to VALUE.
4. As you agree with them, ask, would you pay $200, or $125, or just $105 for this $100 bill?
100% they say NO WAY.
5. Again, as you agree with them ask, WHY NOT (with extreme sarcasm)?
Again it comes down to VALUE. They will NOT pay more than $100 because it is NOT worth more than $100, it is important that you repeat that back to them.
“If I understand you correctly, you would pay $100 for the $100 bill, but not more than $100 because of value”? WAIT FOR A REPLY, STOP TALKING, JUST HOLD THAT $100 BILL IN FRONT OF THEM!!!
Now explain this is because that the market, not US (bring them into the situation) set the price of a $100 bill at $100. It sounds stupid, but everyone can relate to the value of a $100 bill (that is why you should always carry on with you at all times).
Now explain, people will pay less for a product because they perceive it as a bargain but, no one will pay more for a product because then the perception is the consumer would be OVER-paying. In other words, paying more than the product is worth.
Now, let’s use Real Estate, and say, your property is $100,000.
1. Ask, if the MARKET, not me or you, said the value of your house is $100,000 would you pay $50,000?
They say SURE.
2. Now ask WHY?
They will time jump straight to VALUE. If not, express their words into one word, “would you agree it comes down to VALUE”?
3. Now ask, if the MARKET, again not me or you, said the value of a given house was $100,000 would you pay $150,000?
100% say NO WAY !
4. Now ask, but what if it had gold plated faucets and ceramic tile and stainless appliances, etc?
Their answer will still be, it is only worth $100,000
NOW YOU HAVE THEM. In 3 to 5 minutes of role play they now understand the concept of value vs. pricing.
LAST QUESTION (it is critical this is asked no doubt in your voice)…
“So tell me, now that you understand the way the MARKET sets values, not you and not me, would you want to price your property at or above the market price”?
One of two things will happen, you will get the pricing that will work or you agree to go separate ways. I no longer have conflicts with sellers (or buyers, I use a variation to explain how lowball offers are a mistake). AND I am prepared to walk away from a potential seller or buyer. It is just not worth my time to try and make potential clients see the “light.” They will always be fighting you every step of the way and that I’ve found is just too draining.
BTW, if you have a client talking about what they paid for the home or what the owner paid, you can add the following when talking about the $100 bill:
Ask them, does it matter what I paid for this $100 bill? If you can get it for $50, would you care that I paid $25 for it? What if I paid $150 for it, would you care? NO… You don’t care about my loss; the MARKET set the price. What I make or lose has ZERO to do with what the MARKET will pay for any product.
Next get a US $100 bill (not a $20 or $50) out of your wallet, wave it in front of your client, and show it as beautiful and wonderful. Explain it is REAL, not counterfeit and the questions to follow are no gimmick or trick.
1. Ask the client, if you gave them the $100 would they take it?
They all say YES, and they reach for it.
2. As you take it back, ask, them if it were for sale for $50, would they consider buying it?
50% will say NO. Explain its no trick; ask them again.
Now they say sure! Now explain, the problem is (and point at whoever is near, if no one is around, point at the air), so will she and he, and her, and… they may even be willing to pay $55, $70, $85, even $96.
3. As they show understanding ask, WHY?
They will all give some variation (listen close for insight) it all comes down to VALUE.
4. As you agree with them, ask, would you pay $200, or $125, or just $105 for this $100 bill?
100% they say NO WAY.
5. Again, as you agree with them ask, WHY NOT (with extreme sarcasm)?
Again it comes down to VALUE. They will NOT pay more than $100 because it is NOT worth more than $100, it is important that you repeat that back to them.
“If I understand you correctly, you would pay $100 for the $100 bill, but not more than $100 because of value”? WAIT FOR A REPLY, STOP TALKING, JUST HOLD THAT $100 BILL IN FRONT OF THEM!!!
Now explain this is because that the market, not US (bring them into the situation) set the price of a $100 bill at $100. It sounds stupid, but everyone can relate to the value of a $100 bill (that is why you should always carry on with you at all times).
Now explain, people will pay less for a product because they perceive it as a bargain but, no one will pay more for a product because then the perception is the consumer would be OVER-paying. In other words, paying more than the product is worth.
Now, let’s use Real Estate, and say, your property is $100,000.
1. Ask, if the MARKET, not me or you, said the value of your house is $100,000 would you pay $50,000?
They say SURE.
2. Now ask WHY?
They will time jump straight to VALUE. If not, express their words into one word, “would you agree it comes down to VALUE”?
3. Now ask, if the MARKET, again not me or you, said the value of a given house was $100,000 would you pay $150,000?
100% say NO WAY !
4. Now ask, but what if it had gold plated faucets and ceramic tile and stainless appliances, etc?
Their answer will still be, it is only worth $100,000
NOW YOU HAVE THEM. In 3 to 5 minutes of role play they now understand the concept of value vs. pricing.
LAST QUESTION (it is critical this is asked no doubt in your voice)…
“So tell me, now that you understand the way the MARKET sets values, not you and not me, would you want to price your property at or above the market price”?
One of two things will happen, you will get the pricing that will work or you agree to go separate ways. I no longer have conflicts with sellers (or buyers, I use a variation to explain how lowball offers are a mistake). AND I am prepared to walk away from a potential seller or buyer. It is just not worth my time to try and make potential clients see the “light.” They will always be fighting you every step of the way and that I’ve found is just too draining.
BTW, if you have a client talking about what they paid for the home or what the owner paid, you can add the following when talking about the $100 bill:
Ask them, does it matter what I paid for this $100 bill? If you can get it for $50, would you care that I paid $25 for it? What if I paid $150 for it, would you care? NO… You don’t care about my loss; the MARKET set the price. What I make or lose has ZERO to do with what the MARKET will pay for any product.
Friday, October 9, 2009
Banks Making Short Sales Tougher
Daily Real Estate News
October 9, 2009
Banks Making Short Sales Tougher
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.
When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.
Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.
"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."
Source: BusinessWeek, Christopher Palmeri (10/09/2009)
October 9, 2009
Banks Making Short Sales Tougher
Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.
When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.
Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.
"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."
Source: BusinessWeek, Christopher Palmeri (10/09/2009)
Wednesday, September 2, 2009
Take the Stress Out of Moving with These Storage Ideas
Few things are more dreaded than moving day but new storage solutions can ease some of the stress. Learn how to select the right storage space for your needs, based upon your specific situation, without breaking the bank.
Flexible Time. If your top priority is a flexible schedule, a POD might be the perfect choice for you. PODs are large containers that allow you to pack - and unpack - at your own pace. Because PODs are closer to the ground, they also tend to be easier to load and unload.
Long-Term or Transitional Storage. If you are relocating for a job, downsizing or planning to move within a short period of time, longer-term on-site storage might make the most sense. Rather than selling all your belongings or buying a bigger home, shop around for a local self-storage facility within a short distance of your new home. It’s a great way to clear the clutter without sacrificing cost.
Whichever method you select, keep these tips in mind:
Ask about insurance: Don’t assume your homeowners policy covers belongings in storage. Verify it in advance or ask about a rider to ensure that your belongings are fully protected.
Evaluate on-site security: Not all storage solutions are equal - always verify the security measures are in place before making a final decision.”
Climate control. If you intend to store valuable antiques, expensive electronics or other items that may be impacted by high humidity or temperature extremes, consider opting for climate-controlled units instead.
Flexible Time. If your top priority is a flexible schedule, a POD might be the perfect choice for you. PODs are large containers that allow you to pack - and unpack - at your own pace. Because PODs are closer to the ground, they also tend to be easier to load and unload.
Long-Term or Transitional Storage. If you are relocating for a job, downsizing or planning to move within a short period of time, longer-term on-site storage might make the most sense. Rather than selling all your belongings or buying a bigger home, shop around for a local self-storage facility within a short distance of your new home. It’s a great way to clear the clutter without sacrificing cost.
Whichever method you select, keep these tips in mind:
Ask about insurance: Don’t assume your homeowners policy covers belongings in storage. Verify it in advance or ask about a rider to ensure that your belongings are fully protected.
Evaluate on-site security: Not all storage solutions are equal - always verify the security measures are in place before making a final decision.”
Climate control. If you intend to store valuable antiques, expensive electronics or other items that may be impacted by high humidity or temperature extremes, consider opting for climate-controlled units instead.
Friday, August 28, 2009
Second Wave of Option ARM's About to Hit
Option ARMs Put Recovery at Risk
Option ARMs, which accounted for $750 billion in mortgages issued between 2004 and 2007, according to Inside Mortgage Finance, are at serious risk with at least 50 percent already in default.
Resets on option ARMS have doubled the payments for many holders.
“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
Lenders have stopped offering option ARMS, but there are about 600,000 held by borrowers, three-quarters of whom are paying interest only. When the cap is reached – for most after they have held the loan for five years – they’ll face drastic increases.
Barclays Capital estimates that banks will lose $112 billion on option ARMs. Some banks are aggressively refinancing these loans, Barclays says.
Source: The New York Times, John Leland (08/26/2009)
Option ARMs, which accounted for $750 billion in mortgages issued between 2004 and 2007, according to Inside Mortgage Finance, are at serious risk with at least 50 percent already in default.
Resets on option ARMS have doubled the payments for many holders.
“Everyone’s been focused on subprime, but we’re more concerned about this,” says Todd Jadlos, managing director of LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
Lenders have stopped offering option ARMS, but there are about 600,000 held by borrowers, three-quarters of whom are paying interest only. When the cap is reached – for most after they have held the loan for five years – they’ll face drastic increases.
Barclays Capital estimates that banks will lose $112 billion on option ARMs. Some banks are aggressively refinancing these loans, Barclays says.
Source: The New York Times, John Leland (08/26/2009)
Chance of a Lifetime: Tips for First-Time Buyers
While the burst real estate bubble might be bad news for the economy, it could be good news for first-time homebuyers. In fact, now might just be the best buying opportunity of a lifetime.
Follow these steps to determine where to begin:
Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.
Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…
Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.
Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.
Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.
Follow these steps to determine where to begin:
Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.
Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…
Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.
Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.
Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.
Thursday, August 27, 2009
Buyers: What Makes a Good-Value Home Today
August 3rd, 2009 ·
Thanks in part to changing demographics combined with the economic downturn, a major move to get back to the basics is a hot trend in today’s real estate market.
For those seeking maximum value at a minimum price, keep these essentials in mind.
Bigger Isn’t Better: Bigger spaces are associated with higher utility bills, increased property taxes, expensive insurance and even more maintenance concerns. Instead of picking the largest house you can afford, search for the one with the amenities that your family will truly use.
Good Neighbors in Great Hoods: Friends, family and wonderful neighborhoods are major attractions. In fact, research shows that homes located in top-rated school districts routinely fetch 10% or more than do similar-sized homes in less desirable districts. Family-oriented neighborhoods with parks and other amenities are highly desirable, while empty-nesters can save thousands by searching for similar homes outside of popular school districts.
Fruit Trees and Gardening Are a Big Trend: Throughout the nation, high-maintenance lawns are giving way to eco-friendly (and budget-happy) gardens, fruit trees and other down-to-earth activities. Ask about HOA restrictions and the cost of water bills prior to buying with the intent of starting a garden.
Going Green Is Bigger Than Ever: From energy-efficient appliances to environmentally friendly building materials, green is not only “in” but bigger and better than ever. Save thousands of dollars by searching for homes that have already implemented upgrades like LED lighting and Energy Star appliances.
Entertaining: As the economic excess of recent years continues to drive down the market, people are interested in entertaining, exercising and even eating at home more. Focus on properties that support your interests and lifestyle for today and tomorrow. Remember, the average person remains in a home for seven years, so buy right to make sure that your next house truly feels like home.
Thanks in part to changing demographics combined with the economic downturn, a major move to get back to the basics is a hot trend in today’s real estate market.
For those seeking maximum value at a minimum price, keep these essentials in mind.
Bigger Isn’t Better: Bigger spaces are associated with higher utility bills, increased property taxes, expensive insurance and even more maintenance concerns. Instead of picking the largest house you can afford, search for the one with the amenities that your family will truly use.
Good Neighbors in Great Hoods: Friends, family and wonderful neighborhoods are major attractions. In fact, research shows that homes located in top-rated school districts routinely fetch 10% or more than do similar-sized homes in less desirable districts. Family-oriented neighborhoods with parks and other amenities are highly desirable, while empty-nesters can save thousands by searching for similar homes outside of popular school districts.
Fruit Trees and Gardening Are a Big Trend: Throughout the nation, high-maintenance lawns are giving way to eco-friendly (and budget-happy) gardens, fruit trees and other down-to-earth activities. Ask about HOA restrictions and the cost of water bills prior to buying with the intent of starting a garden.
Going Green Is Bigger Than Ever: From energy-efficient appliances to environmentally friendly building materials, green is not only “in” but bigger and better than ever. Save thousands of dollars by searching for homes that have already implemented upgrades like LED lighting and Energy Star appliances.
Entertaining: As the economic excess of recent years continues to drive down the market, people are interested in entertaining, exercising and even eating at home more. Focus on properties that support your interests and lifestyle for today and tomorrow. Remember, the average person remains in a home for seven years, so buy right to make sure that your next house truly feels like home.
Tuesday, August 25, 2009
Lease-to-Own: Today's Real Estate Sweet Spot
Looking to jump-start sales in a slow market? You might want to consider rent-to-own transactions. Here's how they work.
By Robert Freedman
September 2009
Banks are looking for more money down and better credit scores—exactly the opposite of what many households are capable of bringing to the table because of the struggling economy.
That puts real estate practitioners who are familiar with rent-to-own transactions in the perfect position, two specialists say.
"How do you put together deals when homes aren't selling and buyers aren't qualified?" asks Wendy Patton, a real estate broker in Clarkston, Mich., and a lease-to-own trainer. "You make it possible for the two of them to meet in the middle."
Patton defines that middle ground as the rent-to-own option, because many households who today can't afford to buy would nevertheless jump at the chance to become a buyer down the road by applying some of their rent to their eventual purchase of the property.
Exploring the Rent-to-Own Option
In fact, Brett Furniss had so much success structuring rent-to-own transactions as a real estate investor several years ago in Charlotte, N.C., that he launched a brokerage that specializes in the deals. Today, his niche matches nicely with the tough economic picture, he says.
"Rent-to-own is what the market looks like now," says Furniss, broker-owner of BDF Realty in Charlotte. "Banks are looking for more money down and higher credit scores, yet the reality is that households have lower credit scores and less money to put down."
The secret to rent-to-own success is to introduce the idea to your sellers and buyers rather than wait for them to bring it up, because few will do so, Patton says.
On the seller side, "you have many willing to do this but you don't have a clue that they are" until you bring it up, she says.
For many practitioners, the alternative for their seller clients who can’t find a qualified buyer is to rent the house until the market improves, but that's not a solution anyone is excited about, Patton says. The sales associate gets a small rental fee, the seller very likely can’t get a rental rate sufficient to cover the entire mortgage, and the buyer accumulates nothing that can help make future homeownership more likely.
What to Keep in Mind About These Transactions
Yet for all its attractiveness in today's tough climate, the rent-to-own transaction isn't something to be jumped into lightly. Structuring a deal in a way that benefits all parties takes patience and an understanding of arcane details, including realizing that:
1. Not all sellers are good candidates for rent-to-sell. For example, sellers who are in financial trouble and facing a good chance of defaulting on their mortgage are not ideal candidates. If they should default and go into foreclosure, what happens to the rent-to-own buyer?
2. Not all properties are good candidates. The governing associations of some condos, for instance, have rental caps. In such cases, structuring a deal in which the buyer comes in as a renter for the first year or two won’t fly.
Also, you'll want to consider the following questions when you work on rent-to-own transactions:
● How many ways can you structure these deals? For example, how long should the terms of a rent-to-own contract extend? How much of the monthly payment should go to the purchase? What safeguards do you put in place to make sure payments are allocated appropriately each month?
● What are the different ways practitioners can get paid? How much should practitioners ask for up front, how much each month, and how much once the property finally changes hands?
●What are wholesale options all about in the lease-to-own niche?
● Can a deal be made to work when the monthly rental rate generates negative cash flow? Can such a deal be made to work with the help of a money partner? What's the role of such a partner?
Notwithstanding issues like these, the niche opens up a large swath of the market that would otherwise be limited to rental transactions, so it makes sense to at least try to understand whether the transactions can work for you, Furniss and Patton say.
By Robert Freedman
September 2009
Banks are looking for more money down and better credit scores—exactly the opposite of what many households are capable of bringing to the table because of the struggling economy.
That puts real estate practitioners who are familiar with rent-to-own transactions in the perfect position, two specialists say.
"How do you put together deals when homes aren't selling and buyers aren't qualified?" asks Wendy Patton, a real estate broker in Clarkston, Mich., and a lease-to-own trainer. "You make it possible for the two of them to meet in the middle."
Patton defines that middle ground as the rent-to-own option, because many households who today can't afford to buy would nevertheless jump at the chance to become a buyer down the road by applying some of their rent to their eventual purchase of the property.
Exploring the Rent-to-Own Option
In fact, Brett Furniss had so much success structuring rent-to-own transactions as a real estate investor several years ago in Charlotte, N.C., that he launched a brokerage that specializes in the deals. Today, his niche matches nicely with the tough economic picture, he says.
"Rent-to-own is what the market looks like now," says Furniss, broker-owner of BDF Realty in Charlotte. "Banks are looking for more money down and higher credit scores, yet the reality is that households have lower credit scores and less money to put down."
The secret to rent-to-own success is to introduce the idea to your sellers and buyers rather than wait for them to bring it up, because few will do so, Patton says.
On the seller side, "you have many willing to do this but you don't have a clue that they are" until you bring it up, she says.
For many practitioners, the alternative for their seller clients who can’t find a qualified buyer is to rent the house until the market improves, but that's not a solution anyone is excited about, Patton says. The sales associate gets a small rental fee, the seller very likely can’t get a rental rate sufficient to cover the entire mortgage, and the buyer accumulates nothing that can help make future homeownership more likely.
What to Keep in Mind About These Transactions
Yet for all its attractiveness in today's tough climate, the rent-to-own transaction isn't something to be jumped into lightly. Structuring a deal in a way that benefits all parties takes patience and an understanding of arcane details, including realizing that:
1. Not all sellers are good candidates for rent-to-sell. For example, sellers who are in financial trouble and facing a good chance of defaulting on their mortgage are not ideal candidates. If they should default and go into foreclosure, what happens to the rent-to-own buyer?
2. Not all properties are good candidates. The governing associations of some condos, for instance, have rental caps. In such cases, structuring a deal in which the buyer comes in as a renter for the first year or two won’t fly.
Also, you'll want to consider the following questions when you work on rent-to-own transactions:
● How many ways can you structure these deals? For example, how long should the terms of a rent-to-own contract extend? How much of the monthly payment should go to the purchase? What safeguards do you put in place to make sure payments are allocated appropriately each month?
● What are the different ways practitioners can get paid? How much should practitioners ask for up front, how much each month, and how much once the property finally changes hands?
●What are wholesale options all about in the lease-to-own niche?
● Can a deal be made to work when the monthly rental rate generates negative cash flow? Can such a deal be made to work with the help of a money partner? What's the role of such a partner?
Notwithstanding issues like these, the niche opens up a large swath of the market that would otherwise be limited to rental transactions, so it makes sense to at least try to understand whether the transactions can work for you, Furniss and Patton say.
Friday, August 21, 2009
The Proper Way to Insure a Home
Orignally written and posted by Matt Broyles - agent with Metrobrokers GMAC:
I remember speaking to a group of real estate agents in Douglasville back in 2006 on a caravan. We were in a beautiful home in a subdivision with lots at least1.5 acres. Keep in mind, this was back when the market was still excellent for sellers and property values were at their peak. This particular home where the caravan was meeting sat on 5 acres. The features of the home were as follows:*2 Story custom-built all brick home* 6 Bedrooms, 6 full baths* 5 Car garage* Over 10,000 square feet of living area* Fully finished basement with complete in-law quarters, including full stainless kitchen with all granite counter tops….in the basement!* And more…
There was nothing in this home that was not the top of the line, from the Berber carpet, genuine hardwood floors, appliances, bath fixtures, 6 inch wood crown molding, and genuine cherry wood cabinets in the main kitchen as well as the basement kitchen.
The listing agent was in the meeting and I was explaining how to properly insure a home.Out of curiosity, I asked what the listed price was for this home.Keep in mind, there was not another home like this one in the subdivision, nor anywhere near the area. While the other homes in the subdivision were nice as well, none were like this one. This was the Mac-Daddy! The home was listed at $750,000, what a deal!
Now, if the new purchaser of this super deal came to me for an insurance quote and expected to have it insured for the purchase price and I wrote a policy for $750,000 to “protect their investment”, how surprised, no shocked, are we all going to be when the home is destroyed and a claim is filed. Let’s do the math…
$750,000 divided by 10,000 Square Feet = $75 per square foot to rebuild this home. $75 per square foot would barely rebuild a basic home on a slab with 4 sides vinyl siding! There is no way it would rebuild the home.
As a matter of fact, this home with all of its custom features would cost around $185 per square foot to rebuild. Do the math on that and the house should be insured for $1,850,000!
This was a rare case back in 2006, because at that time in the vast majority of the cases, it did cost less to rebuild a home than the purchase price.Then the insurance agent fought the battle with the mortgage company because the insurance policy was not written for 100% of the loan value. The appraised value or market value also included the value of the land, which has no bearing on the insurance policy. The insurance policy does not reimburse for damage to the land, only the home, personal property, loss of use, etc.
Insurance companies provide insurance agents with a computer estimating software from Marshall, Swift and Boeckh that is zip code specific so, we can plug the features of the home in, such as square feet of living area, type of home, exterior construction, type of garaging, etc., to come up with the “best guess” on the rebuild cost of the home. Many insurance companies will also send out their own inspectors to verify the insurance value is proper and would rebuild the home in the event of a total loss.
Especially in today’s market, people do not understand why they are paying $150,000 for a home that has to be insured for $280,000. The reason is the insurance policy owes to rebuild the home at today’s cost, not what the market says it is worth.
Make sure you are educating your buyer in every aspect of the transaction to avoid any surprises. The more you can educate them, the more credibility you bring to the table.
I remember speaking to a group of real estate agents in Douglasville back in 2006 on a caravan. We were in a beautiful home in a subdivision with lots at least1.5 acres. Keep in mind, this was back when the market was still excellent for sellers and property values were at their peak. This particular home where the caravan was meeting sat on 5 acres. The features of the home were as follows:*2 Story custom-built all brick home* 6 Bedrooms, 6 full baths* 5 Car garage* Over 10,000 square feet of living area* Fully finished basement with complete in-law quarters, including full stainless kitchen with all granite counter tops….in the basement!* And more…
There was nothing in this home that was not the top of the line, from the Berber carpet, genuine hardwood floors, appliances, bath fixtures, 6 inch wood crown molding, and genuine cherry wood cabinets in the main kitchen as well as the basement kitchen.
The listing agent was in the meeting and I was explaining how to properly insure a home.Out of curiosity, I asked what the listed price was for this home.Keep in mind, there was not another home like this one in the subdivision, nor anywhere near the area. While the other homes in the subdivision were nice as well, none were like this one. This was the Mac-Daddy! The home was listed at $750,000, what a deal!
Now, if the new purchaser of this super deal came to me for an insurance quote and expected to have it insured for the purchase price and I wrote a policy for $750,000 to “protect their investment”, how surprised, no shocked, are we all going to be when the home is destroyed and a claim is filed. Let’s do the math…
$750,000 divided by 10,000 Square Feet = $75 per square foot to rebuild this home. $75 per square foot would barely rebuild a basic home on a slab with 4 sides vinyl siding! There is no way it would rebuild the home.
As a matter of fact, this home with all of its custom features would cost around $185 per square foot to rebuild. Do the math on that and the house should be insured for $1,850,000!
This was a rare case back in 2006, because at that time in the vast majority of the cases, it did cost less to rebuild a home than the purchase price.Then the insurance agent fought the battle with the mortgage company because the insurance policy was not written for 100% of the loan value. The appraised value or market value also included the value of the land, which has no bearing on the insurance policy. The insurance policy does not reimburse for damage to the land, only the home, personal property, loss of use, etc.
Insurance companies provide insurance agents with a computer estimating software from Marshall, Swift and Boeckh that is zip code specific so, we can plug the features of the home in, such as square feet of living area, type of home, exterior construction, type of garaging, etc., to come up with the “best guess” on the rebuild cost of the home. Many insurance companies will also send out their own inspectors to verify the insurance value is proper and would rebuild the home in the event of a total loss.
Especially in today’s market, people do not understand why they are paying $150,000 for a home that has to be insured for $280,000. The reason is the insurance policy owes to rebuild the home at today’s cost, not what the market says it is worth.
Make sure you are educating your buyer in every aspect of the transaction to avoid any surprises. The more you can educate them, the more credibility you bring to the table.
Monday, August 17, 2009
Pricing Strategies For a Successful Sale
Price your home “right” from the START!
This is not the market to test the waters. Price your home using recent comparable sales (within the last three months if possible) and avoid comparing it to the active competition.
Better price from the start is offense which leads to positive momentum, shorter time on market, more activity, and closer to asking price sale, more control and fewer headaches. An unrealistic price leads to negative momentum which sets you up for playing defense which means longer time on market, price reductions, fewer showings, more frustration, low ending sale price. Be in control and play offense!
Resist the temptation of letting recent positive economy media reports affect your list price
There have been some recent encouraging news reports. We all truly hope they continue and ultimately lead us to a more prosperous future. Hopefully, this may indicate we are approaching the bottom. Nothing out there suggests that you can sell your home for more money just because the nation may be losing jobs at a slower rate or banks have been unloading foreclosures at a higher rate. Also, homeowners that are having financial issues gambling that prices will be higher in six months are using in a potentially risky and dangerous strategy. Keep your price down and let the reports motivate the buyers.
Don’t be afraid to price you home with zero wiggle room
In years past, many prices would be derived from a formula for instance: what we paid, what we spent, what we want, commission, and wiggle room. Many times in the past, in an appreciating market that actually worked. Sooner or later your home would appreciate to the level of asking price and your home would sell. It wasn’t really logical then, but lucky market conditions made it work. Take the wiggle room out. Worst case is that you may get some low ball offers that can’t be worked out. That is better than no offers and if your property is truly priced correctly it will sell at your price.
Don’t inflate the price with incentives or offer disincentives
If you can offer cars, vacations, furniture, include a pool or other upgrades at list price then you have the price inflated to reflect these perks and incentives.
Today’s buyers want real value and a DEAL. They are also very savvy and in the event you are lucky enough to get an offer, they will come in even lower knowing that you are including all of this fluff and extra items included in the price. You also don’t want to have disincentives like low unappealing selling agent commissions or situations where the buyer finishes the home himself if it can be avoided.
Posted by Tom Hicks, Realtor and Associate Broker
This is not the market to test the waters. Price your home using recent comparable sales (within the last three months if possible) and avoid comparing it to the active competition.
Better price from the start is offense which leads to positive momentum, shorter time on market, more activity, and closer to asking price sale, more control and fewer headaches. An unrealistic price leads to negative momentum which sets you up for playing defense which means longer time on market, price reductions, fewer showings, more frustration, low ending sale price. Be in control and play offense!
Resist the temptation of letting recent positive economy media reports affect your list price
There have been some recent encouraging news reports. We all truly hope they continue and ultimately lead us to a more prosperous future. Hopefully, this may indicate we are approaching the bottom. Nothing out there suggests that you can sell your home for more money just because the nation may be losing jobs at a slower rate or banks have been unloading foreclosures at a higher rate. Also, homeowners that are having financial issues gambling that prices will be higher in six months are using in a potentially risky and dangerous strategy. Keep your price down and let the reports motivate the buyers.
Don’t be afraid to price you home with zero wiggle room
In years past, many prices would be derived from a formula for instance: what we paid, what we spent, what we want, commission, and wiggle room. Many times in the past, in an appreciating market that actually worked. Sooner or later your home would appreciate to the level of asking price and your home would sell. It wasn’t really logical then, but lucky market conditions made it work. Take the wiggle room out. Worst case is that you may get some low ball offers that can’t be worked out. That is better than no offers and if your property is truly priced correctly it will sell at your price.
Don’t inflate the price with incentives or offer disincentives
If you can offer cars, vacations, furniture, include a pool or other upgrades at list price then you have the price inflated to reflect these perks and incentives.
Today’s buyers want real value and a DEAL. They are also very savvy and in the event you are lucky enough to get an offer, they will come in even lower knowing that you are including all of this fluff and extra items included in the price. You also don’t want to have disincentives like low unappealing selling agent commissions or situations where the buyer finishes the home himself if it can be avoided.
Posted by Tom Hicks, Realtor and Associate Broker
Monday, August 3, 2009
6 Reasons Why Some Homes Sell
Why do some houses sell and others don’t?There’s no ultimate answer to this question, but Tribune Media Services columnist Ilyce Glink has a theory. Here are her six top reasons properties linger on the market:
- Lousy pictures on the Web.
- Priced too high for the neighborhood.
- Blah interior; ho-hum landscaping.
- Little online marketing and hard-to-find MLS listings.
- Low commissions. Practitioners make sure their customers see properties that offer a payoff.
- Miserable maintenance, including ceiling stains, leaky faucets, and ancient furnaces.
Source: Tribune Media Services, Ilyce Glink (08/02/2009)
Thursday, July 30, 2009
Realtors® Applaud Appraisal Clarification as Good First Step
WASHINGTON (July 23, 2009) – The following is a statement by National Association of Realtors® President Charles McMillan:
“NAR and our 1.2 million members are pleased that the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to take action to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.
“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area. The ramifications were so great to our members and to the housing industry that I personally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns.
“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors® noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.
“We took this information, and our concerns, to those organizations responsible for the changes and we are pleased that they listened. Today Fannie Mae and Freddie Mac issued clear guidance on two very important points that we raised in our meetings. First, the guidance states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.
“NAR has asked Congress and the FHFA to immediately implement an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule. We will continue to push for this, but are pleased that this first step was taken today.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
“NAR and our 1.2 million members are pleased that the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to take action to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.
“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area. The ramifications were so great to our members and to the housing industry that I personally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns.
“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors® noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.
“We took this information, and our concerns, to those organizations responsible for the changes and we are pleased that they listened. Today Fannie Mae and Freddie Mac issued clear guidance on two very important points that we raised in our meetings. First, the guidance states that lenders should use appraisers who have clear experience in the geographic area. Second, it clarifies that appraisers are not prohibited from talking to real estate agents.
“NAR has asked Congress and the FHFA to immediately implement an 18-month moratorium on the new HVCC rules to further address unintended consequences of this new rule. We will continue to push for this, but are pleased that this first step was taken today.”
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
Wednesday, July 22, 2009
8 Reasons To Purchase Property
If you have been thinking of buying a new home, 1st time home buyer, upgrading to a larger home or downsizing to a smaller home, NOW is the time to investigate that wish! Take advantage of lower prices and govt issued tax breaks.
Also if you have some available funds, 401K money and would like to invest in an income producing property, get in touch with me as well. My team can assist you in finding a great investment property(ies).
Read the following article: http://www.garealtor.com/LinkClick.aspx?fileticket=1ipwod0lDBk%3d&tabid=408&mid=1369
Also if you have some available funds, 401K money and would like to invest in an income producing property, get in touch with me as well. My team can assist you in finding a great investment property(ies).
Read the following article: http://www.garealtor.com/LinkClick.aspx?fileticket=1ipwod0lDBk%3d&tabid=408&mid=1369
Tuesday, July 21, 2009
Investors Drive Foreclosure Prices Up
Daily Real Estate News July 21, 2009
Home shoppers in parts of the country with lots of foreclosures are finding it increasingly difficult to buy. Investors are bidding up prices thousands above the original asking price.Federal legislation slowing the number of foreclosures is adding to the problem by reducing the number of homes on the market. For instance, in Las Vegas, one of the areas where the bidding problem is greatest, home inventories are down 10 percent since March, according to the Las Vegas Association of REALTORS®.When a bidding war erupts, the problem is particularly difficult for traditional buyers because investors are usually cash purchasers. They can bid up a property without concern whether the appraisal will prevent them from getting a loan.Experts say the problem is not unlike the situation at the height of the housing bubble. "This market is about as abnormal as the hypermarket that we came out of a few years ago," says Jay Butler, director of the Realty Studies program at Arizona State University.
Source: The Associated Press, Jonathan J. Cooper (07/20/2009)
Home shoppers in parts of the country with lots of foreclosures are finding it increasingly difficult to buy. Investors are bidding up prices thousands above the original asking price.Federal legislation slowing the number of foreclosures is adding to the problem by reducing the number of homes on the market. For instance, in Las Vegas, one of the areas where the bidding problem is greatest, home inventories are down 10 percent since March, according to the Las Vegas Association of REALTORS®.When a bidding war erupts, the problem is particularly difficult for traditional buyers because investors are usually cash purchasers. They can bid up a property without concern whether the appraisal will prevent them from getting a loan.Experts say the problem is not unlike the situation at the height of the housing bubble. "This market is about as abnormal as the hypermarket that we came out of a few years ago," says Jay Butler, director of the Realty Studies program at Arizona State University.
Source: The Associated Press, Jonathan J. Cooper (07/20/2009)
Friday, July 17, 2009
Home Lending Rates Falling Again
Rates on 30-year fixed mortgages fell to 5.14 percent for the week ended July 16, down from 5.20 percent a week before and 6.26 percent a year earlier, Freddie Mac reports.Interest on fixed home loans has fallen in four of the past five weeks, and Freddie Mac economist Frank Nothaft says rate activity during that time has lowered the monthly payment on a $200,000 loan by $56. Here’s a look at how other mortgage rates performed this week:
15-year fixed loans fell to 4.63 percent from 4.69 percent.
One-year adjustable-rate mortgages fell to 4.76 percent from 4.82 percent.
Five-year hybrid ARMs bumped up a notch to 4.83 percent from 4.82 percent.
Source: Grand Junction Free Press, Wyatt Haupt Jr. (07/17/09)
15-year fixed loans fell to 4.63 percent from 4.69 percent.
One-year adjustable-rate mortgages fell to 4.76 percent from 4.82 percent.
Five-year hybrid ARMs bumped up a notch to 4.83 percent from 4.82 percent.
Source: Grand Junction Free Press, Wyatt Haupt Jr. (07/17/09)
Thursday, July 16, 2009
The Do's and Don'ts of Seller Disclosures
Bernice Ross, Thursday, July 16, 2009. Inman News
Almost every state in the U.S. requires both sellers and their agents to make disclosures about the condition of the for-sale home. How you make these disclosures can move your transaction forward or land you in a lawsuit.
The company I worked for in California once did a study to determine the factors that were most likely to result in litigation. There were three primary predictors: real estate clients who are attorneys, new construction, and hillside properties. They also found that the closer the property was to Century City (where there was a high concentration of attorneys), the more likely we were to be sued.
To avoid litigation when you sell your home, it's important to make a full and accurate disclosure about the condition of your property. When Realtors represent a seller, they typically use mandated forms from either their state or local association of Realtors.
Even with the forms, it's hard to know what to disclose. For example, do you have to disclose that the upstairs window is painted shut? What about that ceiling fan that works all right on the first two speeds but makes a terrible racket when you turn it on high? Is it necessary to disclose the 500 pounds of honey they pulled out of your attic last year because a huge colony of bees built a hive there?
Because there was such a high probability of being sued in Southern California, our company policy was that if you have to ask, "Do I need to disclose that?" the answer was always "yes."
An even greater challenge is selecting the correct language to use in making the disclosure. When speaking to a buyer or to your agent, you must be careful about what you say.
For example, a seller who had owned a property for a long period of time told the buyer that the property line was at the fence. The buyer purchased the property and was going to do a major remodel. When he had the property surveyed for the new building permit, it turned out that the fence was actually sitting on the neighbor's property.
It was off by 1 foot. The property line was 220 feet long. That mistake, due to the pricey nature of the area, cost the seller more than $100,000. If the seller was unsure about the location of the property line, the seller should have responded, "I don't know exactly. To determine the exact location, order a survey."
I once had a listing where there were brown spots on the ceiling. Everyone assumed there was a roof leak. The roofers couldn't find any evidence of a leak. What they did find was a huge beehive. Honey from the hive was leaking through the ceiling. If the cause was unknown, it would have been best to simply state, "brown spots noted on the master bedroom ceiling."
The way to properly disclose any type of issue with your property is to avoid attempts to diagnose what you do not know. In other words, unless you are a construction expert (and even then if you are the seller), it's best to note what you observe without guessing at the cause. Instead of saying that "the roof needs to be replaced," a better response is to state, "Damaged and missing shingles noted on roof."
We had several cases where our sellers were convinced that their house was haunted. Saying in writing that your house is haunted is probably not a great idea. Again, the best approach would be to avoid diagnosing. Instead, make objective observations.
For example, note that "lights flicker at night"; "the upstairs hallway becomes unusually cold for short periods of time, even in the summertime"; or "rustling noises noted in the attic and in the garage."
In these examples, the flickering lights could be due to an electrical problem; the unusual cold could result from a malfunctioning heating and air conditioning system; and the rustling noises could be rats or raccoons that have found their way into the home.
My experience has been that buyers will buy almost anything, provided that it's disclosed upfront. In fact, when I sold my last two properties, we paid to have our own physical inspection prior to listing the property. We also completed the repairs before we put the property on the market.
Our agent had a copy of the inspection report available for any buyer who wanted to see it. We also had all the receipts demonstrating the repairs had been made by a licensed contractor.
The challenge with doing an inspection ahead of time is that it can uncover major problems. It may be that your roof does need to be replaced or that the foundation needs to be reinforced. By doing your inspection ahead of time, you won't be ambushed by the discovery of a major problem while your property is under contract. You will need to disclose your report, however.
The situation is even more challenging when the buyer conducts an inspection and then cancels. In most states, you are probably obligated to disclose the report to future buyers. This is another reason it's smart to do your own report and address the issues ahead of time.
Remember, when it comes time to make disclosures about your property, avoid diagnosing, tell the truth, and order a home warranty to give yourself an extra degree of protection after the property closes.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
Almost every state in the U.S. requires both sellers and their agents to make disclosures about the condition of the for-sale home. How you make these disclosures can move your transaction forward or land you in a lawsuit.
The company I worked for in California once did a study to determine the factors that were most likely to result in litigation. There were three primary predictors: real estate clients who are attorneys, new construction, and hillside properties. They also found that the closer the property was to Century City (where there was a high concentration of attorneys), the more likely we were to be sued.
To avoid litigation when you sell your home, it's important to make a full and accurate disclosure about the condition of your property. When Realtors represent a seller, they typically use mandated forms from either their state or local association of Realtors.
Even with the forms, it's hard to know what to disclose. For example, do you have to disclose that the upstairs window is painted shut? What about that ceiling fan that works all right on the first two speeds but makes a terrible racket when you turn it on high? Is it necessary to disclose the 500 pounds of honey they pulled out of your attic last year because a huge colony of bees built a hive there?
Because there was such a high probability of being sued in Southern California, our company policy was that if you have to ask, "Do I need to disclose that?" the answer was always "yes."
An even greater challenge is selecting the correct language to use in making the disclosure. When speaking to a buyer or to your agent, you must be careful about what you say.
For example, a seller who had owned a property for a long period of time told the buyer that the property line was at the fence. The buyer purchased the property and was going to do a major remodel. When he had the property surveyed for the new building permit, it turned out that the fence was actually sitting on the neighbor's property.
It was off by 1 foot. The property line was 220 feet long. That mistake, due to the pricey nature of the area, cost the seller more than $100,000. If the seller was unsure about the location of the property line, the seller should have responded, "I don't know exactly. To determine the exact location, order a survey."
I once had a listing where there were brown spots on the ceiling. Everyone assumed there was a roof leak. The roofers couldn't find any evidence of a leak. What they did find was a huge beehive. Honey from the hive was leaking through the ceiling. If the cause was unknown, it would have been best to simply state, "brown spots noted on the master bedroom ceiling."
The way to properly disclose any type of issue with your property is to avoid attempts to diagnose what you do not know. In other words, unless you are a construction expert (and even then if you are the seller), it's best to note what you observe without guessing at the cause. Instead of saying that "the roof needs to be replaced," a better response is to state, "Damaged and missing shingles noted on roof."
We had several cases where our sellers were convinced that their house was haunted. Saying in writing that your house is haunted is probably not a great idea. Again, the best approach would be to avoid diagnosing. Instead, make objective observations.
For example, note that "lights flicker at night"; "the upstairs hallway becomes unusually cold for short periods of time, even in the summertime"; or "rustling noises noted in the attic and in the garage."
In these examples, the flickering lights could be due to an electrical problem; the unusual cold could result from a malfunctioning heating and air conditioning system; and the rustling noises could be rats or raccoons that have found their way into the home.
My experience has been that buyers will buy almost anything, provided that it's disclosed upfront. In fact, when I sold my last two properties, we paid to have our own physical inspection prior to listing the property. We also completed the repairs before we put the property on the market.
Our agent had a copy of the inspection report available for any buyer who wanted to see it. We also had all the receipts demonstrating the repairs had been made by a licensed contractor.
The challenge with doing an inspection ahead of time is that it can uncover major problems. It may be that your roof does need to be replaced or that the foundation needs to be reinforced. By doing your inspection ahead of time, you won't be ambushed by the discovery of a major problem while your property is under contract. You will need to disclose your report, however.
The situation is even more challenging when the buyer conducts an inspection and then cancels. In most states, you are probably obligated to disclose the report to future buyers. This is another reason it's smart to do your own report and address the issues ahead of time.
Remember, when it comes time to make disclosures about your property, avoid diagnosing, tell the truth, and order a home warranty to give yourself an extra degree of protection after the property closes.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
Monday, July 13, 2009
Mortgage Rates Drop This Week
Mortgage Rates Drop This Week
Interest on 30-year fixed mortgages, 15-year fixed loans, five-year adjustable-rate mortgages, and one-year ARMs all fell this week, according to Freddie Mac.
The average on 30-year financing slipped to 5.2 percent from 5.32 percent a week ago.
The 15-year mortgage declined to 4.69 percent, down from 4.77 percent.
Five-year ARMs were down to 4.82 percent from 4.88 percent.
One-year ARMs fell to 4.82 percent from 4.94 percent.
Source: Los Angeles Times (07/10/09)
Interest on 30-year fixed mortgages, 15-year fixed loans, five-year adjustable-rate mortgages, and one-year ARMs all fell this week, according to Freddie Mac.
The average on 30-year financing slipped to 5.2 percent from 5.32 percent a week ago.
The 15-year mortgage declined to 4.69 percent, down from 4.77 percent.
Five-year ARMs were down to 4.82 percent from 4.88 percent.
One-year ARMs fell to 4.82 percent from 4.94 percent.
Source: Los Angeles Times (07/10/09)
Friday, July 10, 2009
Downpayment, Closing Costs Biggest Obstacles
Daily Real Estate News July 10, 2009
Most Americans still consider having enough money for downpayment and closing costs to be the biggest obstacles to buying a home, according to the 2009 National Housing Pulse Survey, an annual survey released Thursday by the NATIONAL ASSOCIATION OF REALTORS®.The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in seven years of sampling. Two-thirds of Americans think job layoffs and unemployment are a big problem; eight in 10 cite these issues as a barrier to homeownership. “Homeownership is an investment in your future; however, saving for a downpayment and closing costs is still too great of an obstacle for 82 percent of house hunters looking to take advantage of the current market,” says NAR President Charles McMillan. “Monetizing the $8,000 first-time buyer tax credit for downpayment or closing costs on FHA-insured mortgages is a positive first step. Our hope is that the tax credit will be extended and expanded to all home buyers and will help bring stability to the housing market and enable more Americans to achieve the dream of homeownership."
Survey: Consumers Still Believe in Homeownership
Despite the challenges with the economy and housing market, 83 percent of Americans still believe buying a home is a good financial decision. Three-fourths of those surveyed also believe now is a good time to buy a home, a number that has increased steadily the past two years. In fact, one-third of renters are thinking more about buying home than they were a year ago. While Americans are seeing more stability in the real estate market, uncertainty persists. The number of those who feel buying and selling activity has stabilized or stayed nearly the same has grown significantly, from 18 percent last year to 26 percent this year. However the majority (58 percent) report that activity in their market has slowed. Regarding home sales, nearly eight in 10 say it’s harder to sell a home in their area today than it was a year ago, despite the fact that nearly three-fourths of respondents say home prices are less expensive. Large home inventories could be to blame; 44 percent cite concerns about the high number of homes and condos for sale in their area. While nearly three-fourths of Americans are concerned about the local drop in home values, respondents expect to see more stability in the near future. Nearly seven in 10 expect local home prices to remain about the same in the next three months; only 18 percent expect prices to further decrease. The drop in prices has improved affordability, and consequently, concerns about the lack of affordable housing are the lowest they’ve been in seven years of polling – 34 percent say it’s one of their biggest worries, down from 41 percent two years ago.
Foreclosures Among Top Concerns
Foreclosures remain a real concern among survey respondents. Slightly more than half (51 percent) say foreclosures are a big to moderate problem in their area. However, the rate of foreclosures is generally seen as stabilizing; 41 percent say the rate of foreclosures in their area is about the same as last year. Ninety-two percent of respondents said neither they nor members of their immediate family have experienced a foreclosure in the past year, yet it is still a personal concern for many. One in five respondents said they are very or fairly worried that they will have difficulty making their mortgage payments over the next year. Thirty-two percent say it’s a big or moderate worry that they, or a member of their family, may have their home repossessed or foreclosed because they are unable to pay rising monthly mortgage payments. In 2008, more than half of respondents (54 percent) were open to the federal government taking a more active role in overseeing mortgage and lending practices – the number dropped this year to 47 percent. This could be because 42 percent of Americans believe the country is back on the right track, more than double the number last year (16 percent).
Obtaining Financing Another Obstacle
Regarding financing, seven in 10 Americans cite a lack of confidence in their ability to be approved for a home loan as an obstacle to homeownership. The same number also say that banks are making it too hard to qualify for a loan (71 percent) and that fewer mortgage options offered by banks have made it harder for them to buy a home (71 percent). The perception of qualifying for a loan as a huge obstacle is especially high among minorities. “Home buyers need protection from risky lending products but also need access to mortgages at a reasonable cost. While there has been some easing of credit in the mortgage market, the availability of credit continues to be an issue for many qualified home buyers,” says McMillan. The 2009 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program. The telephone survey was among 1,250 adults living in the 25 most populous metropolitan statistical areas.
Most Americans still consider having enough money for downpayment and closing costs to be the biggest obstacles to buying a home, according to the 2009 National Housing Pulse Survey, an annual survey released Thursday by the NATIONAL ASSOCIATION OF REALTORS®.The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in seven years of sampling. Two-thirds of Americans think job layoffs and unemployment are a big problem; eight in 10 cite these issues as a barrier to homeownership. “Homeownership is an investment in your future; however, saving for a downpayment and closing costs is still too great of an obstacle for 82 percent of house hunters looking to take advantage of the current market,” says NAR President Charles McMillan. “Monetizing the $8,000 first-time buyer tax credit for downpayment or closing costs on FHA-insured mortgages is a positive first step. Our hope is that the tax credit will be extended and expanded to all home buyers and will help bring stability to the housing market and enable more Americans to achieve the dream of homeownership."
Survey: Consumers Still Believe in Homeownership
Despite the challenges with the economy and housing market, 83 percent of Americans still believe buying a home is a good financial decision. Three-fourths of those surveyed also believe now is a good time to buy a home, a number that has increased steadily the past two years. In fact, one-third of renters are thinking more about buying home than they were a year ago. While Americans are seeing more stability in the real estate market, uncertainty persists. The number of those who feel buying and selling activity has stabilized or stayed nearly the same has grown significantly, from 18 percent last year to 26 percent this year. However the majority (58 percent) report that activity in their market has slowed. Regarding home sales, nearly eight in 10 say it’s harder to sell a home in their area today than it was a year ago, despite the fact that nearly three-fourths of respondents say home prices are less expensive. Large home inventories could be to blame; 44 percent cite concerns about the high number of homes and condos for sale in their area. While nearly three-fourths of Americans are concerned about the local drop in home values, respondents expect to see more stability in the near future. Nearly seven in 10 expect local home prices to remain about the same in the next three months; only 18 percent expect prices to further decrease. The drop in prices has improved affordability, and consequently, concerns about the lack of affordable housing are the lowest they’ve been in seven years of polling – 34 percent say it’s one of their biggest worries, down from 41 percent two years ago.
Foreclosures Among Top Concerns
Foreclosures remain a real concern among survey respondents. Slightly more than half (51 percent) say foreclosures are a big to moderate problem in their area. However, the rate of foreclosures is generally seen as stabilizing; 41 percent say the rate of foreclosures in their area is about the same as last year. Ninety-two percent of respondents said neither they nor members of their immediate family have experienced a foreclosure in the past year, yet it is still a personal concern for many. One in five respondents said they are very or fairly worried that they will have difficulty making their mortgage payments over the next year. Thirty-two percent say it’s a big or moderate worry that they, or a member of their family, may have their home repossessed or foreclosed because they are unable to pay rising monthly mortgage payments. In 2008, more than half of respondents (54 percent) were open to the federal government taking a more active role in overseeing mortgage and lending practices – the number dropped this year to 47 percent. This could be because 42 percent of Americans believe the country is back on the right track, more than double the number last year (16 percent).
Obtaining Financing Another Obstacle
Regarding financing, seven in 10 Americans cite a lack of confidence in their ability to be approved for a home loan as an obstacle to homeownership. The same number also say that banks are making it too hard to qualify for a loan (71 percent) and that fewer mortgage options offered by banks have made it harder for them to buy a home (71 percent). The perception of qualifying for a loan as a huge obstacle is especially high among minorities. “Home buyers need protection from risky lending products but also need access to mortgages at a reasonable cost. While there has been some easing of credit in the mortgage market, the availability of credit continues to be an issue for many qualified home buyers,” says McMillan. The 2009 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program. The telephone survey was among 1,250 adults living in the 25 most populous metropolitan statistical areas.
Wednesday, July 8, 2009
Atlanta among best places to buy a home
Atlanta is the 13th-best American city to buy a house, Forbes magazine said in a new ranking of U.S. metro areas.Forbes also determined average price per square foot of housing space decreased 1.1 percent in Atlanta between February and March of this year, and that transactions declined 7.5 percent between March 2008 and March 2009.“While the majority of the nation’s housing markets are still working toward a bottom, some cities are boasting fundamentals that make them good places to buy a home now,” Forbes reported this week.The Forbes rankings seem geared more toward each market’s current and future potential as a place to buy a home, since some of the cities at or near the top of the list are among those hardest hit by the recession.The report ranked the 25 largest U.S. metro areas on the basis of change in price per square foot, frequency of real-estate transactions, and how evenly distributed home-sales activity is in a metro area.Denver is the best city to buy a home. Phoenix was ranked No. 2, followed by Boston, San Diego and Los Angeles.Forbes listed Las Vegas, Cleveland, Seattle and Detroit at the bottom of the 25 cities.“There, distressed sales have kept home values down and buyers away,” Forbes said.Forbes drew its data from March 2009 RPX Monthly Housing Market Report, distributed by Radar Logic Incorporated, a New York-based derivatives firm.Source: Forbes & Atlanta Business Chronicle
Tuesday, July 7, 2009
Tips for Negotiating a Mortgage Deal
Getting a mortgage loan these days can be a slow and frustrating experience.Here are some things that buyers should know as they go through the application process:
Ask for the “Good Faith Estimate” early. It won’t be released until it is officially “complete” and all the questions are answered. Push applicants to find answers right away to all the lender’s questions.
Suggest they read and ask questions about the fine print. Identifying and negotiating all the fees and charges can cut an applicant’s costs.
Shop title insurance. Point buyers toward Web sites like Closing.com, where they can comparison shop.
Get a commitment. Insist that the lender or loan broker agree that there won’t be any other charges on the HUD-1, which most borrowers don’t see until they are at the settlement table. "If [the lender] won't agree to that, you have to be a little suspicious," says Claire Fennessey, senior vice president of Entitle Direct.
Question flood insurance. If a property requires flood insurance, point buyers (and sellers) toward a civil engineering firm with experience with the Federal Emergency Management Agency’s resources to ensure that they aren’t paying too much. Eligibility for a preferred risk policy can cut costs substantially.
Source: Chicago Tribune, Mary Ellen Podmolik (07/05/2009)
Ask for the “Good Faith Estimate” early. It won’t be released until it is officially “complete” and all the questions are answered. Push applicants to find answers right away to all the lender’s questions.
Suggest they read and ask questions about the fine print. Identifying and negotiating all the fees and charges can cut an applicant’s costs.
Shop title insurance. Point buyers toward Web sites like Closing.com, where they can comparison shop.
Get a commitment. Insist that the lender or loan broker agree that there won’t be any other charges on the HUD-1, which most borrowers don’t see until they are at the settlement table. "If [the lender] won't agree to that, you have to be a little suspicious," says Claire Fennessey, senior vice president of Entitle Direct.
Question flood insurance. If a property requires flood insurance, point buyers (and sellers) toward a civil engineering firm with experience with the Federal Emergency Management Agency’s resources to ensure that they aren’t paying too much. Eligibility for a preferred risk policy can cut costs substantially.
Source: Chicago Tribune, Mary Ellen Podmolik (07/05/2009)
Saturday, July 4, 2009
Sellers: How to Make the Most of Your Homes Period Details
One of the major selling points of vintage homes is the attention to detail and fine craftsmanship only found in older houses. Learn how to make the most of the period details in your house to reap higher sales prices with these effective strategies:
Shine the Spotlight: Prepare your home in anticipation of taking plenty of photos. Pay attention to details and any unique features. If you have lived in your home for a while, ask friends or family to stop by and take a fresh look; it’s easy to forget how desirable your home is when you see it every day.
Provide Details: Was your house built with old yellow pine? Chances are it is virtually indestructible to most pests. What about the hardwood floors or gingerbread trim on the outside of the house? Any chance they are handmade? Cabinets, painted tiles and a variety of other common building materials have made a comeback in popularity. Take time to explain the history and benefits associated with each unique item of your home to prospective buyers. Not only does it set your home apart from the rest, but knowing the history helps buyers make that all-important emotional connection.
Appraise Items: If possible, hire an appraiser or perform a search for similar items to help demonstrate the inherent value of the items. For example, an old cast-iron tub in good condition can go for thousands; handmade lighting fixtures may range from a few hundred to thousands and many types of wood are not available at any price because of restrictions on harvesting and imports.
Shine the Spotlight: Prepare your home in anticipation of taking plenty of photos. Pay attention to details and any unique features. If you have lived in your home for a while, ask friends or family to stop by and take a fresh look; it’s easy to forget how desirable your home is when you see it every day.
Provide Details: Was your house built with old yellow pine? Chances are it is virtually indestructible to most pests. What about the hardwood floors or gingerbread trim on the outside of the house? Any chance they are handmade? Cabinets, painted tiles and a variety of other common building materials have made a comeback in popularity. Take time to explain the history and benefits associated with each unique item of your home to prospective buyers. Not only does it set your home apart from the rest, but knowing the history helps buyers make that all-important emotional connection.
Appraise Items: If possible, hire an appraiser or perform a search for similar items to help demonstrate the inherent value of the items. For example, an old cast-iron tub in good condition can go for thousands; handmade lighting fixtures may range from a few hundred to thousands and many types of wood are not available at any price because of restrictions on harvesting and imports.
Wednesday, July 1, 2009
H.R. 3044: To impose an 18-month moratorium on the Home Valuation Code of Conduct
McLean, VA - June 26, 2009 -
Last night, Representatives Childers (D-MS) and Miller (R-CA) introduced legislation calling for an 18 month moratorium on the Home Valuation Code of Conduct (HVCC). The National Association of Mortgage Brokers (NAMB) applauds the introduction of H.R. 3044. NAMB would like to thank Representative Childers (D-MS) and Representative Miller (R-CA) for their continued efforts and leadership on this issue.
"The introduction of this legislation is a victory for consumers and members of the industry alike," said NAMB President Marc Savitt, CRMS. "We thank Congress for recognizing the need to address the issue of appraiser coercion without causing undue harm to borrowers or diminishing competition in the marketplace."
NAMB has taken an active stance against the HVCC since its introduction in March of 2008. "We urge Congress to pass H.R. 3044 as soon as possible to ensure that more borrowers will not be negatively impacted by this de facto rule," stated Savitt. "In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo's rule."
NAMB looks forward to working with Members of Congress as this legislation progresses.
Last night, Representatives Childers (D-MS) and Miller (R-CA) introduced legislation calling for an 18 month moratorium on the Home Valuation Code of Conduct (HVCC). The National Association of Mortgage Brokers (NAMB) applauds the introduction of H.R. 3044. NAMB would like to thank Representative Childers (D-MS) and Representative Miller (R-CA) for their continued efforts and leadership on this issue.
"The introduction of this legislation is a victory for consumers and members of the industry alike," said NAMB President Marc Savitt, CRMS. "We thank Congress for recognizing the need to address the issue of appraiser coercion without causing undue harm to borrowers or diminishing competition in the marketplace."
NAMB has taken an active stance against the HVCC since its introduction in March of 2008. "We urge Congress to pass H.R. 3044 as soon as possible to ensure that more borrowers will not be negatively impacted by this de facto rule," stated Savitt. "In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo's rule."
NAMB looks forward to working with Members of Congress as this legislation progresses.
Saturday, June 27, 2009
Why it Makes Sense to Work with an Agent
If you have ever wondered why it’s better to work with an agent rather than listing “by owner,” you aren’t alone. Superficially, selling a home seems easy - until you actually try it.
According to statistics, nearly 80% of people give up and list with an agent after months of costly and time-consuming delay.
Here is why agents matter more than ever:
Time
Showing homes, answering calls, responding to email, scheduling inspections and appraisals plus much more are time consuming tasks; more importantly, everything involved in a real estate transaction is time sensitive. Delays can cause a deal to fall through even at the last moment.
Promotion
Agents specialize in a specific location and know exactly what buyers are searching for in your area.Not only do they know how to price right and grab the attention of prospective buyers, but many agents have an established list of buyers waiting for specific types of properties.Successful real estate marketing requires extensive experience, time and persistence to achieve top prices in a buyer’s market.
Cost
Selling a home requires more than simply placing a sign on the front lawn; it also entails a lot of out-of-pocket expenses with no guarantee of success. Advertising can cost hundreds or even thousands of dollars, listing with a “by owner” agency or MLS service typically adds hundreds more.
Finally, it is important to remember that real estate agents split commissions between the listing agent and the selling agent. To attract attention to your home it is still necessary to split the commission with any agents who bring buyers to the table.
Working with a real estate agent is likely to save you money over the long run.
According to statistics, nearly 80% of people give up and list with an agent after months of costly and time-consuming delay.
Here is why agents matter more than ever:
Time
Showing homes, answering calls, responding to email, scheduling inspections and appraisals plus much more are time consuming tasks; more importantly, everything involved in a real estate transaction is time sensitive. Delays can cause a deal to fall through even at the last moment.
Promotion
Agents specialize in a specific location and know exactly what buyers are searching for in your area.Not only do they know how to price right and grab the attention of prospective buyers, but many agents have an established list of buyers waiting for specific types of properties.Successful real estate marketing requires extensive experience, time and persistence to achieve top prices in a buyer’s market.
Cost
Selling a home requires more than simply placing a sign on the front lawn; it also entails a lot of out-of-pocket expenses with no guarantee of success. Advertising can cost hundreds or even thousands of dollars, listing with a “by owner” agency or MLS service typically adds hundreds more.
Finally, it is important to remember that real estate agents split commissions between the listing agent and the selling agent. To attract attention to your home it is still necessary to split the commission with any agents who bring buyers to the table.
Working with a real estate agent is likely to save you money over the long run.
Chance of a Lifetime: Tips for First-Time Buyers
While the burst real estate bubble might be bad news for the economy, it could be good news for first-time homebuyers. In fact, now might just be the best buying opportunity of a lifetime. Follow these steps to determine where to begin:
Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.
Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…
Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.
Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.
Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.
Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.
Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…
Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.
Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.
Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.
Comment on Realtor Response Time
As an Atlanta area Real Estate agent, I find I must comment on the lack of response from my peers.
In many cases, when I call for information on a listing I find I have to leave messages in any number of places and without fail, my messages are either never returned or they are hours later.
Two cases in point:
1. A few weeks ago I had a friend and fellow investor here from CA and she wanted to see some properties. We ended our day at a last minute stop to see a property in Lawrenceville, GA. There was only a contractors lockbox so I called the number on the sign. It was for an office and of course the nice lady who answered said she didn't have any info on the listing (BIG mistake number 1) and that I would have to speak directly to the listing agent. I was given this person's cell number, called and had to leave a message. My client and I waited about 15 minutes; no return call. I brought her back to her hotel, still no call. When I returned to my office I looked up the listing and then sent the agent an email. This has been a few weeks ago now and I am still waiting on a response from this agent!
2. Just yesterday I was with some clients who are moving from VA to the metro Atlanta area. These are VERY motivated buyers. There was a listing in Lithonia they desperately wanted to see so I printed out the listing and off we went. There was only a contractors lockbox but this time the lockbox code was in the private remarks on the Agent's listing. Perhaps you can guess what happens next. We get to the property and the lockbox code does not open the lockbox! I call the office and was told that was the code! I said no it isn't. And I was very curtly told that perhaps I input it wrong. Rather than coming back at her I asked for the listing agent's cell number. Of course there was no answer there and I had to leave a message. This all transpired at about 10:30 am. The listing agent fianlly called me back a little after 2:00 pm. UGH!
This is a promise from me. I ALWAYS return calls within an hour at the VERY latest. Usually it's within minutes. Why? Because un-returned calls means a possibility of lost revenue and business. In this market, no agent can afford to turn away business. Agents, answer your phone and return email inquiries. Many times if I am at the office in front of my laptop, I'll email a question to an agent. I understand that sometimes the phone ringing every 10 minutes can be annoying and intrusive. When I don't need an answer immediately, I'll email. When I am out of the office, I receive email on my phone. I can at least look quickly to see it's importance. Most times I respond quickly with, I received your email, however I am currently out of the office, but I will address your questions when I return. Something simple so the sender has been shown respect with an answer. Or, if I am able I will call the person but tell them I am away from the office. Allow me to get back there and I will be better equipped to answer your questions then. At least I have answered!!
In many cases, when I call for information on a listing I find I have to leave messages in any number of places and without fail, my messages are either never returned or they are hours later.
Two cases in point:
1. A few weeks ago I had a friend and fellow investor here from CA and she wanted to see some properties. We ended our day at a last minute stop to see a property in Lawrenceville, GA. There was only a contractors lockbox so I called the number on the sign. It was for an office and of course the nice lady who answered said she didn't have any info on the listing (BIG mistake number 1) and that I would have to speak directly to the listing agent. I was given this person's cell number, called and had to leave a message. My client and I waited about 15 minutes; no return call. I brought her back to her hotel, still no call. When I returned to my office I looked up the listing and then sent the agent an email. This has been a few weeks ago now and I am still waiting on a response from this agent!
2. Just yesterday I was with some clients who are moving from VA to the metro Atlanta area. These are VERY motivated buyers. There was a listing in Lithonia they desperately wanted to see so I printed out the listing and off we went. There was only a contractors lockbox but this time the lockbox code was in the private remarks on the Agent's listing. Perhaps you can guess what happens next. We get to the property and the lockbox code does not open the lockbox! I call the office and was told that was the code! I said no it isn't. And I was very curtly told that perhaps I input it wrong. Rather than coming back at her I asked for the listing agent's cell number. Of course there was no answer there and I had to leave a message. This all transpired at about 10:30 am. The listing agent fianlly called me back a little after 2:00 pm. UGH!
This is a promise from me. I ALWAYS return calls within an hour at the VERY latest. Usually it's within minutes. Why? Because un-returned calls means a possibility of lost revenue and business. In this market, no agent can afford to turn away business. Agents, answer your phone and return email inquiries. Many times if I am at the office in front of my laptop, I'll email a question to an agent. I understand that sometimes the phone ringing every 10 minutes can be annoying and intrusive. When I don't need an answer immediately, I'll email. When I am out of the office, I receive email on my phone. I can at least look quickly to see it's importance. Most times I respond quickly with, I received your email, however I am currently out of the office, but I will address your questions when I return. Something simple so the sender has been shown respect with an answer. Or, if I am able I will call the person but tell them I am away from the office. Allow me to get back there and I will be better equipped to answer your questions then. At least I have answered!!
Monday, June 22, 2009
Easy Touch-Ups to Give Your Home Curb Appeal
June 1st, 2009 ·
Spruce up your yard in time for summer entertainment with these quick and affordable fixes for the most common curbside complaints.
Pressure Wash and Spray
Start at the roof, then work your way down, to remove stains and dirt from walkways, driveways and even fences. Whiten and brighten the concrete, crevices and other corners of your home and yard to lighten the entire area.
Clear the Clutter
Trim and remove low branches and excess clutter to create the look and feel of clear, open space. Consider purchasing plastic partitions or other low-maintenance storage units to hide away trash cans and other unsightly items that add to the perception of clutter and detract from the beauty of your home.
Touch Up the Paint
Shutters, doors and awnings are all prone to excessive wear and tear over the winter months; make a point of touching up the paint. It’s an easy and affordable way to revitalize the look of your home.
Add a Touch of Color
Bring in fresh mulch; then follow up with strategically placed flowers, potted plants and other enhancements throughout the yard. This will add interest while helping hide those tough trouble spots.
Create a Focal Point
The most successful landscapes incorporate a central element that serves as the focal point for the entire area. Use the same strategy in your own yard. Begin with something affordable and small like a garden bench or pond to add elegance and appeal.
Spruce up your yard in time for summer entertainment with these quick and affordable fixes for the most common curbside complaints.
Pressure Wash and Spray
Start at the roof, then work your way down, to remove stains and dirt from walkways, driveways and even fences. Whiten and brighten the concrete, crevices and other corners of your home and yard to lighten the entire area.
Clear the Clutter
Trim and remove low branches and excess clutter to create the look and feel of clear, open space. Consider purchasing plastic partitions or other low-maintenance storage units to hide away trash cans and other unsightly items that add to the perception of clutter and detract from the beauty of your home.
Touch Up the Paint
Shutters, doors and awnings are all prone to excessive wear and tear over the winter months; make a point of touching up the paint. It’s an easy and affordable way to revitalize the look of your home.
Add a Touch of Color
Bring in fresh mulch; then follow up with strategically placed flowers, potted plants and other enhancements throughout the yard. This will add interest while helping hide those tough trouble spots.
Create a Focal Point
The most successful landscapes incorporate a central element that serves as the focal point for the entire area. Use the same strategy in your own yard. Begin with something affordable and small like a garden bench or pond to add elegance and appeal.
Friday, June 19, 2009
Atlanta Happenings - DovCar Investments LLC
Hi Everyone...just checking in to report the latest and greatest from Atlanta and our adventures... We had picked up some good homes in the city on the cheap that we were told would get high section 8 rents.
On the first house we spent around 55k total after rehab.... We were told that we should get $1800 per month with a $2000 one time incentive fee. We just had a hard time believing it would actually get that much in that area of the city. We just got the call after the Housing Authority completed the inspection...$1860 per month rents and $2100 one time incentive check. Wow..what a return on investment! We got the higher rents because it is 5 bedroom.
The other home is complete as well ...70k invested so far (was a newer 2006 home amidst similar newer homes thus was more expensive)...
We have a Section 8 renter ready to go and we feel we will at least get $1500 per month. We have had a lot of issues because the original builder majorly screwed up the addresses on the street.
Various agencys have had 4 different addresses for the home. Thus getting this all cleaned up with the city, the water dept, the post office and the Housing Authority has been quite a chore and we still have not jumped through enough hoops so we are in limbo being able to get the Housing Authority inspection done ...ugh...thus we wait.... :(
We have another home that we got just because we were in the right place at the right time....
our money partner has a friend who had to put her Mom in a nursing home and wanted to sell the home as soon as possible.
She just did not want to deal with it so she put it up for a quick highest and best offer and we got the house for a great price...
and since Bob was working with a client that was looking for a house in that area who has just qualified for a FHA loan, we are able to move Bob's client in under a Lease Purchase agreement until the 90 day seasoning is up and can cash us out when the FHA loan goes through. We have our fingers crossed that everything will go through ok. :)
Bob's become quite the expert so contact him if you, your investors, or your money partners are interested in doing Atlanta flips or rentals. ke knows how to find the workable properties.
Rick
770-654-7005
On the first house we spent around 55k total after rehab.... We were told that we should get $1800 per month with a $2000 one time incentive fee. We just had a hard time believing it would actually get that much in that area of the city. We just got the call after the Housing Authority completed the inspection...$1860 per month rents and $2100 one time incentive check. Wow..what a return on investment! We got the higher rents because it is 5 bedroom.
The other home is complete as well ...70k invested so far (was a newer 2006 home amidst similar newer homes thus was more expensive)...
We have a Section 8 renter ready to go and we feel we will at least get $1500 per month. We have had a lot of issues because the original builder majorly screwed up the addresses on the street.
Various agencys have had 4 different addresses for the home. Thus getting this all cleaned up with the city, the water dept, the post office and the Housing Authority has been quite a chore and we still have not jumped through enough hoops so we are in limbo being able to get the Housing Authority inspection done ...ugh...thus we wait.... :(
We have another home that we got just because we were in the right place at the right time....
our money partner has a friend who had to put her Mom in a nursing home and wanted to sell the home as soon as possible.
She just did not want to deal with it so she put it up for a quick highest and best offer and we got the house for a great price...
and since Bob was working with a client that was looking for a house in that area who has just qualified for a FHA loan, we are able to move Bob's client in under a Lease Purchase agreement until the 90 day seasoning is up and can cash us out when the FHA loan goes through. We have our fingers crossed that everything will go through ok. :)
Bob's become quite the expert so contact him if you, your investors, or your money partners are interested in doing Atlanta flips or rentals. ke knows how to find the workable properties.
Rick
770-654-7005
Thursday, June 11, 2009
National Tracts
Today at 3:15pm
Pending Home Sales Rise 3.2% - Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the latest report by the National Association of Realtors. The affordability index was 166.7 in March, down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year agoThe Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82 in February. It's 1.1 percent higher than March 2008 when it was 83.7. Here is a breakdown of pending home sales by region:* South; rose 8.5 percent* West; increased 3.9 percent* Northeast; fell 5.7 percent* Midwest; slipped 1 percentForecasters say recession nearing end - More than 90 percent of economists think the recession is nearing its end, but they don't expect the economy to soar anytime soon. Nearly 75 percent of economists, surveyed by the National Association for Business Economics, say that the recession will end in the third quarter. Another 19 percent think the turnaround will come in the fourth quarter. The rest are betting on the first quarter of 2010.Americans seem to believe that things are getting better too. The Conference Board's Consumer Confidence Index rose 14.1 points in May to 54.9, the second month in a row in which there has been an increase. Forecasters say that home sales ill bottom out in the second quarter, an important stabilizing factor.Source: The Associated Press, Jeannine Aversa (05/27/2009)This article was reprinted with permission by The Norton Agency- Market Watch 246
Pending Home Sales Rise 3.2% - Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the latest report by the National Association of Realtors. The affordability index was 166.7 in March, down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8 percentage points higher than a year agoThe Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82 in February. It's 1.1 percent higher than March 2008 when it was 83.7. Here is a breakdown of pending home sales by region:* South; rose 8.5 percent* West; increased 3.9 percent* Northeast; fell 5.7 percent* Midwest; slipped 1 percentForecasters say recession nearing end - More than 90 percent of economists think the recession is nearing its end, but they don't expect the economy to soar anytime soon. Nearly 75 percent of economists, surveyed by the National Association for Business Economics, say that the recession will end in the third quarter. Another 19 percent think the turnaround will come in the fourth quarter. The rest are betting on the first quarter of 2010.Americans seem to believe that things are getting better too. The Conference Board's Consumer Confidence Index rose 14.1 points in May to 54.9, the second month in a row in which there has been an increase. Forecasters say that home sales ill bottom out in the second quarter, an important stabilizing factor.Source: The Associated Press, Jeannine Aversa (05/27/2009)This article was reprinted with permission by The Norton Agency- Market Watch 246
Wednesday, May 13, 2009
New GA Tax Credit - House Bill 261
There has never been a better time to purchase a home!! Prices are down, rates are down, and the government has created yet another stimulus package to spur the housing industry back to another growth cycle.
Just this week, Governor Perdue signed into law House Bill 261, which offers a tax credit of 1.2 percent of the purchase price of a single-family home currently on the market. The credit tops out at $1,800 and will be taken over three years. The clock starts ticking now as Georgia taxpayers only have six months to qualify for the credit. For first-time home buyers, the state credit would be in addition to a federal credit offered through the federal stimulus act (up to $8,000). The new state credit, however, applies to any home buyer, not just first-timers.
Therefore, first time home buyers are eligible for up to a $9800 tax credit and any buyer is eligible for a $1800 tax credit!!
Just this week, Governor Perdue signed into law House Bill 261, which offers a tax credit of 1.2 percent of the purchase price of a single-family home currently on the market. The credit tops out at $1,800 and will be taken over three years. The clock starts ticking now as Georgia taxpayers only have six months to qualify for the credit. For first-time home buyers, the state credit would be in addition to a federal credit offered through the federal stimulus act (up to $8,000). The new state credit, however, applies to any home buyer, not just first-timers.
Therefore, first time home buyers are eligible for up to a $9800 tax credit and any buyer is eligible for a $1800 tax credit!!
Tuesday, May 5, 2009
GA Dream Homeownership Program
Hey Folks,
I just learned about a new program which began here in Georgia just last month (April) called the Neighborhood Stabilization Program. It is part of the GA Dream Home Ownership Program.
It is a great assistance tool for low to middle income families. For more info:
http://www.dca.state.ga.us/housing/Homeownership/programs/gadreamnspdownpayment.asp
Regards, Bob
I just learned about a new program which began here in Georgia just last month (April) called the Neighborhood Stabilization Program. It is part of the GA Dream Home Ownership Program.
It is a great assistance tool for low to middle income families. For more info:
http://www.dca.state.ga.us/housing/Homeownership/programs/gadreamnspdownpayment.asp
Regards, Bob
Friday, April 17, 2009
Great News From Nationwide First-time Buyer Survey
The national newswires recently picked up on some great news for the real estate industry, and hopefully it’s the harbinger of more good news. Century 21 Real Estate LLC, announced the results of their recently commissioned first-time home buyer survey, and reported that more than three-quarters (78%) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy. Out of 1,000 prospective U.S. first-time home buyers surveyed in early March, 68% believe now is a better time to buy than six months ago.
Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85%) saying they consider current home prices affordable and 73% stating that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between "being willing to consider an offer now" (42%) and "waiting for prices to go down before they seriously consider making a purchase" (48%).
Among the survey’s other key findings:
56% of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63% are open to purchasing either a "fixer-upper" or "as-is" home. Bargains in the marketplace are providing additional options for buyers to consider.
Price is a primary consideration with 87% saying this feature is "very important," followed closely by neighborhood safety (80%) and the condition of the home (71%).
Having enough money for a down payment is a top concern of potential first-time home buyers as nearly half (46%) said they are "very worried" about the issue.
86% of respondents are in the market for a single family home.
77% of potential first-time home buyers say they are more likely to buy a home in the next six months because of the $8,000 first-time home buyer tax credit offered in the American Recovery and Reinvestment Act of 2009.
Understanding the Buying Process
Prospective first-time home buyers also indicate that there is a real need for someone who can provide accurate and reliable information while they look for a home. When asked about the real estate transaction process, more than half (59 percent) of potential buyers rated their understanding of the process as only "fair" or "poor."
"Between home loans, the closing process and understanding the new government stimulus, real estate professionals play a vital role in working with first-time home buyers to help them navigate the current market," said Tom Kunz, Century 21 President and CEO. "Every individual situation is different, and consumers should use their REALTOR® as a trusted advisor to seek opportunities, get educated on the process and make informed decisions."
For more information on this comprehensive first-time home buyer survey, check out the FMLS page on www.facebook.com/pages/Atlanta-GA/FMLS-First-Multiple-Listing-Service/74279281544, where FMLS continually posts the latest good news in real estate. Access to the full article referenced above is also available on our Facebook fan page.
Portions of this article were excerpted from the January 8, 2009 press release from Century 21 Real Estate LLC, Parsippany, NJ: Century 21 Real Estate First-time Home Buyer Survey Reveals Increasing Demand Despite Concerns About the Economy.
Prices are the driving motivation for potential first-time home buyers with more than eight of ten first-time home buyers (85%) saying they consider current home prices affordable and 73% stating that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between "being willing to consider an offer now" (42%) and "waiting for prices to go down before they seriously consider making a purchase" (48%).
Among the survey’s other key findings:
56% of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63% are open to purchasing either a "fixer-upper" or "as-is" home. Bargains in the marketplace are providing additional options for buyers to consider.
Price is a primary consideration with 87% saying this feature is "very important," followed closely by neighborhood safety (80%) and the condition of the home (71%).
Having enough money for a down payment is a top concern of potential first-time home buyers as nearly half (46%) said they are "very worried" about the issue.
86% of respondents are in the market for a single family home.
77% of potential first-time home buyers say they are more likely to buy a home in the next six months because of the $8,000 first-time home buyer tax credit offered in the American Recovery and Reinvestment Act of 2009.
Understanding the Buying Process
Prospective first-time home buyers also indicate that there is a real need for someone who can provide accurate and reliable information while they look for a home. When asked about the real estate transaction process, more than half (59 percent) of potential buyers rated their understanding of the process as only "fair" or "poor."
"Between home loans, the closing process and understanding the new government stimulus, real estate professionals play a vital role in working with first-time home buyers to help them navigate the current market," said Tom Kunz, Century 21 President and CEO. "Every individual situation is different, and consumers should use their REALTOR® as a trusted advisor to seek opportunities, get educated on the process and make informed decisions."
For more information on this comprehensive first-time home buyer survey, check out the FMLS page on www.facebook.com/pages/Atlanta-GA/FMLS-First-Multiple-Listing-Service/74279281544, where FMLS continually posts the latest good news in real estate. Access to the full article referenced above is also available on our Facebook fan page.
Portions of this article were excerpted from the January 8, 2009 press release from Century 21 Real Estate LLC, Parsippany, NJ: Century 21 Real Estate First-time Home Buyer Survey Reveals Increasing Demand Despite Concerns About the Economy.
Sunday, April 12, 2009
Atlanta Has One Of The Highest Foreclosure Rates In The Nation
By : John Smith Submitted 2008-06-30 10:13:43
Due to the presence of a string of problems, such as rising rates and falling prices, several bad credit loans and also a heavy rate of mortgage fraud, the concentration of foreclosure has increased in Atlanta, Georgia. When analyzing foreclosures by state, the state of Georgia presents itself as one of the hardest-hit markets for the huge foreclosure mess that's happening lately, with the concentration being in DeKalb and Fulton counties and in the capital city Atlanta. This abysmal trend has begun in 2001. There are a lot of connected problems with foreclosures in Atlanta. It is not just about making someone homeless. With so many foreclosure homes in Atlanta, all occurring in a concentrated form in various parts of the city, they lead to the problems of homelessness, crimes in these empty homes, depreciation of the neighborhood in which the empty homes are present, loss of the tax income the state gets and a general loss of face for the city. Subprime loans may seem to be a good option for people with bad credit to get their homes, but they are turning to be a problem where the overall economy of Atlanta is considered. Due to defaulting subprime loans, the rate of foreclosure houses in Atlanta has increased immensely. People who file for Chapter 13 bankruptcy in Georgia do so thrice faster than people on a nationwide level. A major reason of these bankruptcy filings is a defaulting subprime loan. Another disturbing trend seen in Georgia and notably Atlanta, is the large number of African Americans who are bearing the brunt of increasing foreclosures. In present times, most of the foreclosure homes for sale used to belong to African American people of the state who took the benefit of the riskier loans due to their affluent status and the privileges accorded to minorities.
Due to the presence of a string of problems, such as rising rates and falling prices, several bad credit loans and also a heavy rate of mortgage fraud, the concentration of foreclosure has increased in Atlanta, Georgia. When analyzing foreclosures by state, the state of Georgia presents itself as one of the hardest-hit markets for the huge foreclosure mess that's happening lately, with the concentration being in DeKalb and Fulton counties and in the capital city Atlanta. This abysmal trend has begun in 2001. There are a lot of connected problems with foreclosures in Atlanta. It is not just about making someone homeless. With so many foreclosure homes in Atlanta, all occurring in a concentrated form in various parts of the city, they lead to the problems of homelessness, crimes in these empty homes, depreciation of the neighborhood in which the empty homes are present, loss of the tax income the state gets and a general loss of face for the city. Subprime loans may seem to be a good option for people with bad credit to get their homes, but they are turning to be a problem where the overall economy of Atlanta is considered. Due to defaulting subprime loans, the rate of foreclosure houses in Atlanta has increased immensely. People who file for Chapter 13 bankruptcy in Georgia do so thrice faster than people on a nationwide level. A major reason of these bankruptcy filings is a defaulting subprime loan. Another disturbing trend seen in Georgia and notably Atlanta, is the large number of African Americans who are bearing the brunt of increasing foreclosures. In present times, most of the foreclosure homes for sale used to belong to African American people of the state who took the benefit of the riskier loans due to their affluent status and the privileges accorded to minorities.
Saturday, April 11, 2009
Bob's Back In The ATL!
Hey Gang,
A Happy Easter Weekend to all. A special thanks to all the well wishes for my Mom. She is doing better - at least as well as can be expected after having pins and rods inserted into her back bone for stabilization and then another 2 hour surgery to scrape and open an infected abscess on her back. It hurts me to just write about it!
But I'm back and ready to answer any questions you might have on the current foreclosure/investor market here in the metro Atlanta area.
Fire Away!
A Happy Easter Weekend to all. A special thanks to all the well wishes for my Mom. She is doing better - at least as well as can be expected after having pins and rods inserted into her back bone for stabilization and then another 2 hour surgery to scrape and open an infected abscess on her back. It hurts me to just write about it!
But I'm back and ready to answer any questions you might have on the current foreclosure/investor market here in the metro Atlanta area.
Fire Away!
Wednesday, March 25, 2009
Away for a Bit
Hey Folks,
My Mom is in the hospital and we are anticipating a 3 hour back surgery for her on Monday, March 30. I will doing a Road Trip to Long Island so I will be away from the Blog for sometime.
If there are any questions please email them and I will try my best to get them answered as soon as I can!
Happy House Hunting!
Bob
My Mom is in the hospital and we are anticipating a 3 hour back surgery for her on Monday, March 30. I will doing a Road Trip to Long Island so I will be away from the Blog for sometime.
If there are any questions please email them and I will try my best to get them answered as soon as I can!
Happy House Hunting!
Bob
Monday, March 23, 2009
February existing home sales rise by 5.1 percent
From my friend and fellow R.E. Agent, Jeff Raw who emailed me this news this morning.
Thanks, Jeff
-Home Sales are on the rise again
-There is an $8,000 tax credit for first time home buyers
-Interest rates are close to all-time lows
The 3 items mentioned above are fact and shows that now is a great time to be in the market for a home. Does this mean we are at the bottom and prices are heading up? Nobody knows for sure until it actually happens, but this week definitely got off to a great start. Hedge fund managers are buying up non-performing assets from banks. Clearing these assets off their books is allowing lenders to loosen up their lending restrictions and allow small businesses and investors access to necessary capital. Wall Street is recognizing this as well and the Dow Jones jumped over 300 points this morning. This is definitely not the end of this economic rough patch, but it is a positive sign.
This article was pulled from AJC.com this morning and gives you more detail about the surprising jump in housing sales, spurred by bargain hunters knowing there will never be a better time to jump on deals and cash flow properties.
February existing home sales rise by 5.1 percent
By ALAN ZIBEL AP Real Estate Writer
WASHINGTON — Sales of existing homes rose from January to February in an unexpected boost for the slumping U.S housing market as buyers took advantage of deep discounts on foreclosures.
The National Association of Realtors said Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.
Sales had been expected to fall to an annual pace of 4.45 million units, according to Thomson Reuters.
The median sales price plunged to $165,400, down 15.5 percent from $195,800 a year earlier. That was the second-largest drop on record.
February's median sales price was up slightly from January, which recorded the lowest median price since September 2002. Prices are down about 28 percent from their peak in July 2006.
In contrast with the housing boom, when buyers took out ever-riskier loans and maxed out their home equity lines, "homebuyers are not over stretching" said Lawrence Yun, the Realtors' chief economist. "They want to stay within their budget."
By summertime, sales are expected to get a boost from a $8,000 tax credit for new home buyers included in the economic stimulus package signed by President Barack Obama last month.
The number of unsold homes on the market last month rose 5.2 percent to 3.8 million, a typical increase for the winter months. At February's sales pace, it would take 9.7 months to rid the market of all of those properties, unchanged from a month earlier.
The bursting of the U.S. housing bubble has caused foreclosures to swamp the market — especially in particularly distressed states like California, Florida, Nevada and Arizona.
About 45 percent of sales nationwide are foreclosures or other distressed property sales, according to the Realtors group. Those properties typically sell for about 20 percent less than non-distressed homes.
That's great news for buyers, who are paying the most attractive prices in years. Plus, interest rates have sunk to historic lows.
The Federal Reserve last week moved to reduce already low rates by printing $1.2 trillion and pumping it into the economy through the purchases of mortgage-backed securities and Treasury debt.
The central bank also will double its purchases of debt issued by Fannie Mae and Freddie Mac to $200 billion.
Thanks, Jeff
-Home Sales are on the rise again
-There is an $8,000 tax credit for first time home buyers
-Interest rates are close to all-time lows
The 3 items mentioned above are fact and shows that now is a great time to be in the market for a home. Does this mean we are at the bottom and prices are heading up? Nobody knows for sure until it actually happens, but this week definitely got off to a great start. Hedge fund managers are buying up non-performing assets from banks. Clearing these assets off their books is allowing lenders to loosen up their lending restrictions and allow small businesses and investors access to necessary capital. Wall Street is recognizing this as well and the Dow Jones jumped over 300 points this morning. This is definitely not the end of this economic rough patch, but it is a positive sign.
This article was pulled from AJC.com this morning and gives you more detail about the surprising jump in housing sales, spurred by bargain hunters knowing there will never be a better time to jump on deals and cash flow properties.
February existing home sales rise by 5.1 percent
By ALAN ZIBEL AP Real Estate Writer
WASHINGTON — Sales of existing homes rose from January to February in an unexpected boost for the slumping U.S housing market as buyers took advantage of deep discounts on foreclosures.
The National Association of Realtors said Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.
Sales had been expected to fall to an annual pace of 4.45 million units, according to Thomson Reuters.
The median sales price plunged to $165,400, down 15.5 percent from $195,800 a year earlier. That was the second-largest drop on record.
February's median sales price was up slightly from January, which recorded the lowest median price since September 2002. Prices are down about 28 percent from their peak in July 2006.
In contrast with the housing boom, when buyers took out ever-riskier loans and maxed out their home equity lines, "homebuyers are not over stretching" said Lawrence Yun, the Realtors' chief economist. "They want to stay within their budget."
By summertime, sales are expected to get a boost from a $8,000 tax credit for new home buyers included in the economic stimulus package signed by President Barack Obama last month.
The number of unsold homes on the market last month rose 5.2 percent to 3.8 million, a typical increase for the winter months. At February's sales pace, it would take 9.7 months to rid the market of all of those properties, unchanged from a month earlier.
The bursting of the U.S. housing bubble has caused foreclosures to swamp the market — especially in particularly distressed states like California, Florida, Nevada and Arizona.
About 45 percent of sales nationwide are foreclosures or other distressed property sales, according to the Realtors group. Those properties typically sell for about 20 percent less than non-distressed homes.
That's great news for buyers, who are paying the most attractive prices in years. Plus, interest rates have sunk to historic lows.
The Federal Reserve last week moved to reduce already low rates by printing $1.2 trillion and pumping it into the economy through the purchases of mortgage-backed securities and Treasury debt.
The central bank also will double its purchases of debt issued by Fannie Mae and Freddie Mac to $200 billion.
Sunday, March 22, 2009
Title Picture
One of our recent "SOLDS" in the Benteen Park area of Atlanta; just south of Grant Park is the featured picture in our Blog title.
Top 10 New Real Estate Investor Mistakes
I came across this article by Pat Curry. I like that it is a very concise summary of what new real estate investors encounter. ENJOY!
By Pat Curry • Bankrate.com
Once the market starts to rebound, investing in real property also becomes a more appealing idea -- either as a career or a great side job. Like any other endeavor, though, there's a right way and a wrong way to go about it.
Bank rate spoke with established, full-time real estate investors and with professionals, such as bankers, to identify the types of traps into which real estate investors most often fall.
1. Planning as you go. Andy Heller, an Atlanta-based investor and co-author of "Buy Even Lower: The Regular People's Guide to Real Estate Riches," says lack of a plan is the biggest mistake he sees new investors make. They buy a house because they think they got a good deal and then try to figure out what to do with it. That's working backward, Heller says. "First, you find the plan," he says. "Then you find the house to fit the plan. Pick your investment model, and then go find property to match that. Don't find the strategy after you find the home."
The problem is that most people look at real estate as a transaction instead of as an investment strategy, says Doug Crowe, a Chicago-based real estate investor and speaker. "People fall in love with a property," says Crowe, who is managing director of Springboard Academy, the nation's only real estate academy for investors. "I say, 'Who cares about the property?' I fall in love with a motivated seller."
The number is the number, and you don't go above that, he says. The best way to solve the problem is to have lots of activity and make offers on multiple properties. Then you don't care which one you get -- as long as the numbers work out in your favor.
2. Thinking you'll "get rich quick." That kind of wrong-headed thinking is fueled by "these self-appointed gurus who have infomercials and make it sound so easy to get rich in real estate," says Eric Tyson, co-author of "Real Estate Investing for Dummies." It's not easy. It's a good long-term investment, but so is putting your money in a mutual fund, which is a lot easier. "These gurus don't talk about all that hard work. You have to be smart, you have to be willing to work, and you have to understand your risk tolerance."
3. Playing Lone Ranger. A key to success is building the right team of professionals. At the very least, you need good relationships with at least one real estate agent, an appraiser, a home inspector, a closing attorney and a lender, both for your own deals and to assist with financing for prospective buyers. In the remodeling and maintenance segment of the business, the team includes a plumber, an electrician, a roofer, a painter, a heating and air conditioning, or HVAC, contractor, a flooring installer, a lawn maintenance service, a cleaning service and an all-around handyman. You can't build a business as an investor if you're spending all your time fixing leaky faucets and putting up ceiling fans.
4. Paying too much. Heller says the biggest reason investors don't make money is simple: They pay too much for the properties. "The profit is locked in immediately once the investor buys the property," he says. "Due to mistakes in the analysis, the investor pays too much and then is surprised later when he doesn't make any money."
5. Skipping homework. You wouldn't think you're qualified to perform open-heart surgery without years of education and training. Yet many wannabe real estate investors don't think twice about taking their financial lives in their hands without even cracking a book. Educate yourself before you put your family's financial security on the line. Read articles, check out books from the library and look for a local chapter of the National Real Estate Investors Association. Speakers at monthly meetings cover everything from buying foreclosures to screening tenants. If you can't find a local chapter, find out who owns a lot of rental properties in the area, call him up and offer to pay for an hour or two of his time to find out whether this is a good career for you.
6. Ducking due diligence. Investors often have to move very quickly on their deals. That doesn't mean they sign a contract and write a check without plenty of research, though. That's where a lot of newbies trip up, says Houston-based real estate agent Laolu Davies-Yemitan. They don't do their due diligence about the deal, the costs or the market conditions, and they wind up draining their personal savings because the house needs extensive repairs or they can't sell it. "Sometimes, new investors are buying property just based on the idea that the property is going to appreciate," he says. "Usually, they don't have any information to substantiate that."
7. Misjudging cash flow. If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance. "People think they can get a property manager," Tyson says. But many have never interviewed a property manager and have little idea about how they work. Most managers, for example, are reluctant to take on one single-family home or a duplex, he says, preferring larger complexes, and fees of 7 percent to 10 percent of the monthly rent are common. "It's a huge expense," Tyson says. "I can put my money in a mutual fund and it costs a half-percent a year."
Davies-Yemitan agrees. It's not uncommon for a property to sit on the Houston market for 90 to 120 days before it's leased, he says. Meanwhile the owner has to pay the mortgage, the taxes, the insurance, the cost of advertising and homeowner or condo association dues, he says. If the owner hasn't budgeted for that, an asset can quickly become a liability.
8. Lowering the volume. If you're working on one deal at a time, Crowe says, you're doing transactions, not running a business. You need a steady pipeline of prospective deals; sufficient volume will weed out the marginal deals and let the good ones rise to the top.
9. Painting yourself into a corner. Many people buy a property and get stuck with it because they only have one exit strategy. They're going to sell it or they're going to rent it out. What if it doesn't sell? What if the rental market stalls? Always have two, if not three, ways to get out of any deal. For example, if plan A is to rehab the house, put it on the market and resell it, then plan B could be to offer a lease-purchase to a buyer. Plan C might be to hold the house and rent it out. And as a plan D, there is the wholesale option, which would involve selling to another investor at a below-market price. Hopefully, you'll still make a profit, but at the very least, you'll cut the losses you're taking every month in carrying costs.
10. Miscalculating estimates. Crowe tells his new rehabbers that after they've done their homework, they should double the amount of time and money they think it will take. If they can still make money then and they might be able to rent it out, it's a good deal.
By Pat Curry • Bankrate.com
Once the market starts to rebound, investing in real property also becomes a more appealing idea -- either as a career or a great side job. Like any other endeavor, though, there's a right way and a wrong way to go about it.
Bank rate spoke with established, full-time real estate investors and with professionals, such as bankers, to identify the types of traps into which real estate investors most often fall.
1. Planning as you go. Andy Heller, an Atlanta-based investor and co-author of "Buy Even Lower: The Regular People's Guide to Real Estate Riches," says lack of a plan is the biggest mistake he sees new investors make. They buy a house because they think they got a good deal and then try to figure out what to do with it. That's working backward, Heller says. "First, you find the plan," he says. "Then you find the house to fit the plan. Pick your investment model, and then go find property to match that. Don't find the strategy after you find the home."
The problem is that most people look at real estate as a transaction instead of as an investment strategy, says Doug Crowe, a Chicago-based real estate investor and speaker. "People fall in love with a property," says Crowe, who is managing director of Springboard Academy, the nation's only real estate academy for investors. "I say, 'Who cares about the property?' I fall in love with a motivated seller."
The number is the number, and you don't go above that, he says. The best way to solve the problem is to have lots of activity and make offers on multiple properties. Then you don't care which one you get -- as long as the numbers work out in your favor.
2. Thinking you'll "get rich quick." That kind of wrong-headed thinking is fueled by "these self-appointed gurus who have infomercials and make it sound so easy to get rich in real estate," says Eric Tyson, co-author of "Real Estate Investing for Dummies." It's not easy. It's a good long-term investment, but so is putting your money in a mutual fund, which is a lot easier. "These gurus don't talk about all that hard work. You have to be smart, you have to be willing to work, and you have to understand your risk tolerance."
3. Playing Lone Ranger. A key to success is building the right team of professionals. At the very least, you need good relationships with at least one real estate agent, an appraiser, a home inspector, a closing attorney and a lender, both for your own deals and to assist with financing for prospective buyers. In the remodeling and maintenance segment of the business, the team includes a plumber, an electrician, a roofer, a painter, a heating and air conditioning, or HVAC, contractor, a flooring installer, a lawn maintenance service, a cleaning service and an all-around handyman. You can't build a business as an investor if you're spending all your time fixing leaky faucets and putting up ceiling fans.
4. Paying too much. Heller says the biggest reason investors don't make money is simple: They pay too much for the properties. "The profit is locked in immediately once the investor buys the property," he says. "Due to mistakes in the analysis, the investor pays too much and then is surprised later when he doesn't make any money."
5. Skipping homework. You wouldn't think you're qualified to perform open-heart surgery without years of education and training. Yet many wannabe real estate investors don't think twice about taking their financial lives in their hands without even cracking a book. Educate yourself before you put your family's financial security on the line. Read articles, check out books from the library and look for a local chapter of the National Real Estate Investors Association. Speakers at monthly meetings cover everything from buying foreclosures to screening tenants. If you can't find a local chapter, find out who owns a lot of rental properties in the area, call him up and offer to pay for an hour or two of his time to find out whether this is a good career for you.
6. Ducking due diligence. Investors often have to move very quickly on their deals. That doesn't mean they sign a contract and write a check without plenty of research, though. That's where a lot of newbies trip up, says Houston-based real estate agent Laolu Davies-Yemitan. They don't do their due diligence about the deal, the costs or the market conditions, and they wind up draining their personal savings because the house needs extensive repairs or they can't sell it. "Sometimes, new investors are buying property just based on the idea that the property is going to appreciate," he says. "Usually, they don't have any information to substantiate that."
7. Misjudging cash flow. If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance. "People think they can get a property manager," Tyson says. But many have never interviewed a property manager and have little idea about how they work. Most managers, for example, are reluctant to take on one single-family home or a duplex, he says, preferring larger complexes, and fees of 7 percent to 10 percent of the monthly rent are common. "It's a huge expense," Tyson says. "I can put my money in a mutual fund and it costs a half-percent a year."
Davies-Yemitan agrees. It's not uncommon for a property to sit on the Houston market for 90 to 120 days before it's leased, he says. Meanwhile the owner has to pay the mortgage, the taxes, the insurance, the cost of advertising and homeowner or condo association dues, he says. If the owner hasn't budgeted for that, an asset can quickly become a liability.
8. Lowering the volume. If you're working on one deal at a time, Crowe says, you're doing transactions, not running a business. You need a steady pipeline of prospective deals; sufficient volume will weed out the marginal deals and let the good ones rise to the top.
9. Painting yourself into a corner. Many people buy a property and get stuck with it because they only have one exit strategy. They're going to sell it or they're going to rent it out. What if it doesn't sell? What if the rental market stalls? Always have two, if not three, ways to get out of any deal. For example, if plan A is to rehab the house, put it on the market and resell it, then plan B could be to offer a lease-purchase to a buyer. Plan C might be to hold the house and rent it out. And as a plan D, there is the wholesale option, which would involve selling to another investor at a below-market price. Hopefully, you'll still make a profit, but at the very least, you'll cut the losses you're taking every month in carrying costs.
10. Miscalculating estimates. Crowe tells his new rehabbers that after they've done their homework, they should double the amount of time and money they think it will take. If they can still make money then and they might be able to rent it out, it's a good deal.
Thursday, March 19, 2009
10,000 Properties Foreclosed In April
10,000 Foreclosed properties up for sale in April - Fulton County at top of record-setting list
By KEVIN DUFFFY
The Atlanta Journal-Constitution - Monday, March 16, 2009
The foreclosure problem in metro Atlanta appears to be worsening. More than 10,000 lender-owned properties are scheduled to be sold on courthouse steps next month, according to EquityDepot.net, which tracks foreclosures.
The 10,138 figure for 13 counties shatters the previous record of 8,425 properties scheduled for sale in February, Equity Depot.net says.
“The economic situation we’ve got is causing more and more people to have difficulty making their house payments," said Steve Bridges, president and CEO of the Community Bankers Association of Georgia. “It’s not that surprising given the state of the economy and the number of jobs that have been lost."
The jobless rate in metro Atlanta is 8.7 percent, the highest rate reported since the measurement was standardized in 1976, the Georgia Labor Department said. The local unemployment rate is up 65 percent in the past 12 months.
Foreclosures are a big reason why Atlanta is the third emptiest metro area in America, according to a Forbes.com analysis of Census data.
In the new foreclosure numbers, Fulton leads with 2,181 properties scheduled for sale, followed by Gwinnett, DeKalb and Cobb counties.
“Until we see some bottoming out, I think we can expect to see numbers like this," said Joe Brannen, president of the Georgia Bankers Association.
Foreclosure sales are held on courthouse steps the first Tuesday of each month. Many properties end up not selling because of settlements and bankruptcy filings. When properties generate little bidder interest, lenders end up taking them back for sale later.
By KEVIN DUFFFY
The Atlanta Journal-Constitution - Monday, March 16, 2009
The foreclosure problem in metro Atlanta appears to be worsening. More than 10,000 lender-owned properties are scheduled to be sold on courthouse steps next month, according to EquityDepot.net, which tracks foreclosures.
The 10,138 figure for 13 counties shatters the previous record of 8,425 properties scheduled for sale in February, Equity Depot.net says.
“The economic situation we’ve got is causing more and more people to have difficulty making their house payments," said Steve Bridges, president and CEO of the Community Bankers Association of Georgia. “It’s not that surprising given the state of the economy and the number of jobs that have been lost."
The jobless rate in metro Atlanta is 8.7 percent, the highest rate reported since the measurement was standardized in 1976, the Georgia Labor Department said. The local unemployment rate is up 65 percent in the past 12 months.
Foreclosures are a big reason why Atlanta is the third emptiest metro area in America, according to a Forbes.com analysis of Census data.
In the new foreclosure numbers, Fulton leads with 2,181 properties scheduled for sale, followed by Gwinnett, DeKalb and Cobb counties.
“Until we see some bottoming out, I think we can expect to see numbers like this," said Joe Brannen, president of the Georgia Bankers Association.
Foreclosure sales are held on courthouse steps the first Tuesday of each month. Many properties end up not selling because of settlements and bankruptcy filings. When properties generate little bidder interest, lenders end up taking them back for sale later.
Metro Atlanta Mortgage Rates
Thursday, March 19 2009
For the latest in metro Atlanta Area Mortgage rates: http://realestate.yahoo.com/Georgia/Atlanta/loans/mortgage.html
For the latest in metro Atlanta Area Mortgage rates: http://realestate.yahoo.com/Georgia/Atlanta/loans/mortgage.html
Subscribe to:
Posts (Atom)
About Me
- PropBob
- Metro Atlanta, Georgia, United States
- Realtor and Real Estate Investor - Revitalizing metro Atlanta, One Property at a Time. www.dovcar.com