My favorite TV station is HGTV (surprised?) and second favorite is any station that hosts "This Old House". I really respect the opinion of Sandra Rinomato (see below). She has strong common sense and good ethics. Below is an article featuring her advice, from Rismedia.
10 Staging Tips to Help Your Home Sell
[1]RISMEDIA,
March 19, 2010—(MCT)—Want to sell your home? Get out the bucket, mop
and Mr. Clean. The key to making a positive first impression is simple,
said Sandra Rinomato, host of HGTV’s popular “Property Virgins” show.
“Get it clean, clean, clean,” said Rinomato. “If your house isn’t
clean, it instantly sends up negative thoughts that the home is not
well maintained. If your house is spotless, you’re ahead of the game,”
she said.
But don’t stop there, advised Rinomato. To increase your chances of
making a sale, “stage” the house to make it as attractive as possible.
Until recently, “Staging meant pulling out all the stops—setting the
dining table with your best china and crystal, arranging flowers,
lighting candles,” she said. “Now we take the minimalist approach.
Basically, you want to strip the house to its bare essentials,
depersonalize it so potential buyers can superimpose themselves and
their lifestyle on the house.”
Rinomato offered the following tips for staging a home:
1. Visit model homes and examine shelter magazines for inexpensive
decorating ideas. Always keep in mind you are not decorating for
yourself but for the general public.
2. Start with the outside. Give the house a fresh coat of paint, add
shiny hardware to the front door and plant a few flowers to send a
subliminal message the house is loved and well cared for.
3. Declutter every room to make it look larger. Get rid of family
pictures, trophies and knickknacks. Closets and drawers should be no
more than 30% full.
4. Invest in eco-friendly but bright lights. Open the drapes or
remove them completely. “Light, bright rooms give the impression this
is a happy place—and everyone wants to move into a happy place,” said
Rinomato.
5. Feature only a few pieces of furniture with mainstream appeal. Pull pieces away from walls to make rooms look bigger.
6. Make sure a room’s primary use is obvious. A bedroom should look like a bedroom, not an office, hobby center or gym.
7. Bedrooms and kitchens are difficult to stage because they are in
daily use, but make the effort. Clear everything off the counters and
nightstands, roll up the rugs and hide the laundry hamper. Buff the
cabinets with car wax and clean under the sinks. Invest in pristine
white bed linens and towels.
8. Minimize the “pet effect.” Remove food bowls and litter boxes to the utility room. Deodorize thoroughly.
9. Organize the utility room and garage. Hang up the bicycles, roll
up the hose. Renting a storage locker is worth the cost if it helps you
sell faster and for a higher price.
10. Once your house is staged, invite your friends or Realtor over and walk them through to get an objective opinion.
(c) 2010, The Orlando Sentinel (Fla.).
Posted By susanne On March 18, 2010 @ 3:50 pm In Homeowner's Toolkit, How to Sell Your Home, Real Estate, Today's Marketplace, Today's Top Story, Today's Top Story - Consumer |
Distributed by McClatchy-Tribune Information Services.
Top 9 Reverse Mortgage Myths – Separating Fact from Fiction
[1]RISMEDIA,
January 20, 2010—Recent headlines pointing to the detriments of reverse
mortgages aren’t getting the story straight. One of the nation’s
leading reverse mortgage lenders, Generation Mortgage Company, wants to
separate fact from fiction.
“Because so many Americans over the age of 62 are facing significant
financial stress due to dropping retirement and savings account
balances, as well as higher healthcare costs, many groups are targeting
seniors under the guise of helping them,” said Scott Peters, CEO and
President of Generation Mortgage. “HECM reverse mortgages are
Federal Housing Administration-insured products and are heavily
scrutinized by regulators and legislators looking to protect seniors’
best interests. As a result, more than 600,000 American seniors have
obtained reverse mortgages that have enriched their lives by allowing
them to stay in their homes and pay off their bills.”
The top 9 most common reverse mortgage myths include:
Myth: If I take out a reverse mortgage the lender will own my home.
Fact:
False. Homeowners still retain title and ownership to their homes
during the life of the loan, and can choose to sell the home at any
time. As long as the house is maintained and property taxes and
homeowners insurance are paid, the loan cannot be called due.
Myth: My children will be responsible for the repayment of the loan.
Fact:
False. Reverse mortgages are non-recourse loans. That means, if the
property is sold to pay-off the loan when the homeowner passes away or
decides to leave the home for other reasons, there will be no mortgage
debt for the family and heirs to repay. The maximum amount owed is the
current market value of the house. If the homeowner’s heirs want to
keep the home, they would pay the balance in-full to the reverse
mortgage lender.
Myth: I can’t get a reverse mortgage if I have an existing mortgage.
Fact:
False. With enough equity, you may be able to pay off your existing
mortgage or other debt with the reverse mortgage. The reverse mortgage
must be in a first lien position, so any existing mortgage must be paid
off. Seniors who take out reverse mortgages are free to do anything
they want with their reverse mortgage proceeds. Paying off an existing
mortgage is the number one reason most seniors take out a reverse
mortgage.
Myth: Only low-income seniors get reverse mortgages.
Fact:
False. Although some seniors may have a greater need than others for
the monthly proceeds or lump sum funds reverse mortgages offer, most
simply prefer to be free of monthly mortgage payments. Without monthly
mortgage payments, many homeowners find they can maintain their
existing quality of life and build their savings to help with future
expenses. A growing number of people who have no immediate need are
taking out these loans so that they have a financial cushion for future
expenses.
Myth: If I outlive my life expectancy, the lender will evict me.
Fact:
False. Reverse mortgage lenders put no time limit on how long seniors
can stay in their homes. Since homeowners still own the property,
lenders cannot evict them, provided they follow the program guidelines.
Myth: There are no objective advisors available to seniors trying to decide if a reverse mortgage suits their needs.
Fact:
False. Borrowers are required to work with independent, third party
counselors approved by the U.S. Department of Housing and Urban
Development (HUD) in their local communities. This educational session
helps them make the right decision for their unique situations.
Myth: There are restrictions on how reverse mortgage proceeds may be used.
Fact:
False. There are no restrictions. The cash proceeds from the reverse
mortgage can be used for virtually any purpose and borrowers should be
cautious of lenders attempting to cross sell other products. Many
seniors have used reverse mortgages to pay off debt, help their kids,
make ends meet or to have a financial reserve.
Myth: Reverse mortgage lenders take advantage of seniors.
Fact:
False. Seniors who have been victims of reverse mortgage lending
schemes are extreme exceptions and typically victims of unsavory
lenders. As a consumer, you should only work with lenders who are
Better Business Bureau and National Reverse Mortgage Lenders
Association (NRMLA) members and adhere to those organizations’ strict
Code of Ethics and Standards for Trust.
Myth: I’ve heard I won’t qualify for a reverse mortgage because of my limited income.
Fact:
Unlike a traditional mortgage where mortgage payments must be made each
month, a reverse mortgage pays you. Because of this, many seniors who
do not qualify for traditional financing are eligible for a reverse
mortgage.
[4] 10 Tips to Prepare for a Market Rebound: http://rismedia.com/2009-12-02/10-tips-to-prepare-for-a-market-rebound/
[5] Prudent Moves – How 3 Leading Prudential Brokers Are Paving the Road for 2010: http://rismedia.com/2009-12-01/prudent-moves-how-3-leading-prudential-brokers-are-paving-the-road-for-2010/
Here's a great article about an FHA program that seems to be a well-kept secret! NOT ANY MORE!! (Obviously the article is sponsored by Lowes - check in to their discount program-email me)
[1]RISMEDIA,
December 31, 2009—Driving to work one morning earlier this summer, home
buyer Lori Kramer was thinking about the homes she and her husband had
looked at the day before. Then, she had a thought that would eventually
change the direction of her home search completely. “My home at the
time was listed for less than what we were approved for and it needed
some work. So I wondered if we could use that remaining money to
upgrade a home we were considering and make it our own,” says Kramer of
Jacksonville, Florida.
From there, Kramer called her Wells Fargo mortgage consultant, Diana
Diallo, who told her about the 203k program. The FHA Section 203k
program is specifically designed to rehabilitate and repair
single-family homes. The 203k is a single mortgage loan that provides
funds to purchase a home and make repairs and improvements.
“As the market turned and we began to see more and more distressed
properties, Wells Fargo, as a company, has focused its efforts on
developing a more streamlined version of the typical 203k loan,”
explains Diallo.
After Kramer received preapproval from Wells Fargo, she consulted
with her Realtor, Shawn Norton of Keller Williams Realty, about
revisiting a home she and her husband had considered earlier; it needed
a lot of work, but Kramer saw the home’s possibilities and later bought
it. From there, Diallo worked with Kramer on choosing a home
improvement vendor. She selected Lowe’s, a decision Kramer calls “one
of the best decisions we made.”
“After comparing service and cost, Lowe’s out-delivered the other
vendors,” explains Diallo. “Thus, Lori chose Lowe’s to complete her
remodel repairs.” And the renovations were quite extensive.
With their 203k approval, the Kramers completely renovated the
kitchen, replacing all cabinets and countertops. They also revamped two
bathrooms and added new carpet and fencing to the home.
“Lowe’s was fantastic and they truly deserve some spotlight for
their service,” lauds Kramer. “The Lowe’s team and their contractors
helped with design, offered us some great tips and helped us with
materials and product selection; they did all of this and offered us
the selection we wanted for an affordable price—and within 45 days from
closing.” The Kramers closed on their home on August 18 and the work
was completed by October 1.
“We are extremely happy,” says Kramer. “This program changed the way
we looked at buying a home. Thanks to Lowe’s, our home has turned out
amazing. The before and after is unreal. My kitchen is particularly
amazing.
“In this market, where so many homes have been vacant for so long or
gutted in some cases, this program could really change the way people
are buying real estate,” adds Kramer. “I would definitely do this
again—and would work with Lowe’s to do it.”
Norton agrees.
“I learned so much from working on this with Lori and Diana,” says
Norton. “This really opened all of our eyes to see that you can fix
something if the structure’s good and you have the right people in
place to do the work.”
In many cases, homes that would qualify for the 203k loan are in
nice areas but have aesthetic problems. This program—because the home
improvements are built into the loan—opens the whole market to the
average home buyer. “I never would have bought this home without the
program—and I could not be happier,” says Kramer.
“Lowe’s was just awesome,” she adds. “From the program manager and
other managers to the contractors, everyone was just outstanding. Our
cabinet installer was the best—he was on point and professional. All of
our contractors were so good with us. Lowe’s was great to work with,
and I would love for other people to experience working with them as
well.”
For more information on the 203k loan program, visit www.hud.gov or www.re-buildusa.com[2].
Lowe’s contractors and installers are licensed where required. For more information, please visit www.lowes.com[3].
[1]RISMEDIA,
December 31, 2009—(MCT)-Much like returning from a vacation, putting
away the holiday decor just isn’t as fun as getting it all out. The
following pointers from a trio of organizational experts can keep the
seasonal clutter safely out of your way—and even make next November
easier.
Pare down. “Don’t be afraid to get rid of the stuff
you don’t like,” says Darcy Munzer, owner of Organize4U in
Independence, Mo. “If you don’t love it, get rid of it.” If it’s
broken, it doesn’t work or you haven’t used it, toss it, but donate
what’s in good condition.
Consider the sentimental value. The half-melted
choirboy candles have always been on the mantel at Christmas, says Mary
Ellen Vincent, owner of OrganizeMe in Kansas City, “because they remind
me every year of my mom.” For some items, though, you may be able to
snap a picture to preserve the memory, Vincent says.
Take inventory. How many wreaths do you own?
Strings of lights? Before you can organize and store, you need to be
aware of how much of everything you have, says Noelle Micek, a San
Francisco-based expert in residential organization and design.
Keep track. Munzer writes everything down,
including special Christmas recipes and the gifts she buys throughout
the year, in a notebook that she keeps in her home office.
Choose your storage space, and measure it. Most
people will store holiday decor in the basement, attic, garage, storage
shed or even under the bed. Just make sure it’s out of the way; you
don’t want to fight those bargain rolls of wrapping paper for the next
11 months. “Let the space you have limit what you own and keep,”
Vincent advises. Know the dimensions of your storage space, Micek
recommends, so any containers you buy will fit.
Keep it together. Store all the Christmas
items—ornaments, cookie cutters and everything in between—in one spot,
if possible. The exception: Keep certain heirloom items, linens and
high-risk breakables in a temperature-controlled environment in the
main part of the house.
Up and away. Holiday dishes can go in that hard-to-reach cabinet above the fridge.
Color code your containers. Use see-through plastic containers with the same color lids for each holiday, Micek suggests.
Label. Never put a box away without a label. Write
on the sides with a black marker, or list the contents on a 3-by-5-inch
card or color-coded construction paper. “You don’t want to look through
50 plain white boxes to find the four with ornaments,” Munzer says.
Number your boxes. Number them in the order they
should be opened. “You want the tree stand and skirt before you get the
lights and ornaments,” Micek says.
Choose the right containers. Buy the best quality
containers you can afford. You’ll protect against water damage,
accidental breakage and even pests such as mice. Shop around to find
what fits your needs. Cardboard can be recycled, but plastic offers a
better defense against moisture and pests.
(c) 2009, The Kansas City Star.
Distributed by McClatchy-Tribune Information Services.
This article is reprinted from RISMEDIA - a news source I trust, and which often has insightful information.
Home Buying 101: College Towns are Undiscovered, Affordable and Stable Markets for Homebuyers
RISMEDIA, November 16, 2009—Every fall, college football fans feel nostalgic for the tradition, lifestyle and spirit of their college towns as they cheer on their favorite teams. This year’s Coldwell Banker® College Home Price Comparison Index (HPCI) reveals that these school-centric areas also sport very affordable homes, in addition to the culture and economic stability associated with higher education institutions – making them great areas to purchase real estate.
The annual College HPCI released by Coldwell Banker Real Estate LLC provides an apples-to-apples comparison of similarly sized 2,200 square foot, four-bedroom, two-and-a-half bathroom homes in college markets home to the 120 Football Bowl Subdivision schools. This year, Akron, Ohio (University of Akron) is ranked as the most affordable college town, where a typical four-bedroom home costs $121,885. Muncie, Ind. (Ball State University) took the No. 2 spot at $144,996. Ann Arbor, Mich. (a quintessential college town home to the University of Michigan) came in as the No. 3 most affordable college market, where the sample size home only costs $148,000.
Overall, the 2009 College HPCI revealed that real estate buyers can find a typical four-bedroom home for less than $250,000 in 62% of the college markets surveyed (72 total), including iconic American college towns such as:
-Syracuse, N.Y (Syracuse University): $171,711
-South Bend, Ind. (University of Notre Dame) $183,938
-Athens, Ga. (University of Georgia): $205,862
-Oxford, Miss. (University of Mississippi): $212,000
-Knoxville, Tenn. (University of Tennessee): $223,850
Further research indicates that the charm and affordability of college towns is appealing to more than just students. According to the U.S. Census Bureau’s 2008 American Community Survey; Austin, Texas (University of Texas), Provo, Utah (Brigham Young University), and Raleigh, N.C. (North Carolina State University) were among the metropolitan cities with the greatest population growth in 2008. In all three rising cities, home buyers can find a four-bedroom home for very a reasonable price; only $226,642 in Austin; $231,000 in Provo; and $241,462 in Raleigh.
"College markets have long-been one of the real estate industry best-kept secrets," said Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate LLC. "Real estate professionals have been investing in college towns for years, often purchasing homes for their children who are attending school. However, these vibrant cities are not only for students; many empty nesters and families are attracted to the health care systems, culture and overall quality of life that college towns offer."
While real estate in college markets may be an undiscovered gem, pride for teams and alma maters are definitely not under-wraps, regardless of how pricey the school or city. For an added perspective, Coldwell Banker asked fans to share "what’s best" about living in their college towns for its new Coldwell Banker On Location video: http://www.youtube.com/watch?v=E0S7eKOih7k.
More expensive college towns are also worth the investment for many people. For example, students have been competing for years to get accepted into prestigious schools like Stanford University, despite its high tuition and cost of living. Located in the most expensive college market in the nation (Palo Alto, Calif.), an average 2,200 square foot home costs a whopping $1.49 million.
2009 Coldwell Banker College HPCI – Highlights & Interesting Real Estate Related Facts:
This year, there is a $1,367,841 price difference between the sample size four-bedroom home in the most affordable college town (Akron, Ohio) and most expensive college market (Palo Alto, Calif.).
If I only had a dollar for every time I tried to get clients to spruce things up... Of course a home is to live in, even while selling, but you're moving away, RIGHT?
This link to "This Old House" has some of the best ideas ever for staging your home. In fact, I'm NOT thinking of selling, but I like these ideas, period. You'll note that many of them DID NOT REPAINT OR REDECORATE, just made minor changes!
This good bit of advice comes from Home Warranty of America's monthly newsletter!With the fall and winter months upon us, now is the time to do some routine maintenance around your home to prepare for the changing weather ahead. Taking the time to do some work now may save on some major expenses later. Some of these tasks can be performed by you, and some may need to be done by a professional.
Outside your home
1. Clear debris out of window wells, gutters, downspouts, and storm drains. 2. Remove garden hoses from spouts. Drain and store for the winter. Wrap spouts in insulation. 3. Drain in-ground sprinkler systems. 4. Check windows, doors, and siding for holes and cracks. Caulk as necessary. 5. Check weather stripping on windows and doors for fit and condition. Replace as necessary. 6. Inspect all soffit vents and other venting systems to make sure they're clear of debris. 7. Check painted surfaces for paint failure, water damage, or mildew. Repair or repaint if needed. 8. Check caulking where two different materials meet, where wood siding joins the foundation wall, at inside corners, and where the window and door trim meets the siding. 9. Check for broken or cracked glass and damaged screens or storm windows. Check for loose putty around glass panes. Repair glass if necessary. 10. Insulate outdoor faucets, pipes in unheated garages, and pipes in crawl spaces with materials such as rags or newspapers.
Read more Inside your Home:
1. Have a heating professional check your heating system every year. Replace your furnace filter. 2. Woodburning stove connector pipes and chimneys should be inspected by a certified chimney sweep at least annually. 3. Make sure you have proper insulation in both your attic and basement. While checking your insulation, if you see any dark, dirty spots, it may indicate you have air leaks coming into your home. 4. Remove hair from drains in sinks, tubs, and showers. 5. Test all smoke alarms. Replace batteries as necessary. 6. Check your home around windows and doors for air leaks. An easy way to check for leaks is to move a lighter around the window or door frame and see if the flame moves with a breeze. If you find a leak, you can caulk it or you may have to replace the wood frame. Repairing these leaks can save you money on your energy bill during the cold months. 7. Check for water leaks on the ceiling. Repair if needed. 8. Make sure there are working nightlights at the top and bottom of all stairs. 9. Protect your home from frozen pipes. How to do this. 10. Test your emergency generator.
U.S. Homebuyers Pay Closer to Listing Price in August, but Are Still Negotiating Thousands in Discounts
lead webRISMEDIA, October 9, 2009—Home buyers in much of the U.S. are still paying thousands of dollars below the home’s asking price, but had slightly less negotiating power in August 2009 than they did in July, according to the August Zillow Real Estate Market Reports. Buyers paid a median $6,525, or 3% less than the last listing price on homes bought in August, down from $7,018, or 3.3%, less for homes bought in July. Negotiating power peaked in January 2009, when buyers were paying 4.5% less than last listing price, a median of $10,096. Meanwhile, sellers continue to cut prices on unsold homes. One quarter (24.7%) of all homes listed for sale on Zillow had at least one listing price reduction as of Oct. 1, 2009. The median U.S. price reduction was 6.6% off the original listing price.
Florida home buyers again in August had the most negotiating power, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 8.9%, or a median $20,974, less than the last listing price. Buyers in the Naples MSA paid 8% less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Ocala, Lakeland, Punta Gorda, Melbourne, Gainesville, Tampa, Jacksonville and Fort Myers MSAs also ranked, in that order, as the top markets for negotiation.
But in two California markets, buyers paid more than asking price during August. In the El Centro MSA, buyers paid 2.2%, or a median $2,479, more than asking price. In the Stockton MSA, buyers paid 1.3%, or $2,515, more.
“Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price,” said Zillow Chief Economist Dr. Stan Humphries. “Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers’ negotiating power to regain the ground it lost in August.”
For more information, visit www.Zillow.com.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Oh, I HATE articles like this, but to be fair, I want you to read it. Hmmm...
September 30, 2009—Nearly two-thirds of single-family home builders are reporting a severe lack of credit for housing production, threatening the fragile housing recovery before it has time to take hold, according to a new builder survey of acquisition, development and construction (AD&C) financing conducted by the National Association of Home Builders (NAHB).
“Across the country, home builders and developers are reporting a deterioration in credit availability and intensifying pressure on borrowers with outstanding loans,” said NAHB Chairman Joe Robson, a home builder from Tulsa, OK. “Lenders are cutting off loans for viable new housing projects and producing unnecessary foreclosures and losses on AD&C loans. With the pending expiration of the $8,000 first-time home buyer tax credit, these challenges threaten to halt any positive developments we have seen in the housing market in recent months.”
In the latest NAHB survey of AD&C financing conditions, 63% of builders stated that the availability of credit for single-family construction loans worsened in the second quarter of 2009.
Builders reporting deteriorating credit conditions cited the following reasons: 80% said that lenders are lowering the allowable loan-to-value ratio, 76% reported that lenders are not making new loans, 75% stated that lenders are reducing the amount they are willing to lend and 62% said that lenders are requiring personal guarantees or collateral not related to the project. Two-thirds of respondents reported putting single-family construction projects on hold until the financing climate gets better.
While federal banking regulators continue to maintain that they are not instructing institutions to stop making loans or to indiscriminately liquidate outstanding loans, builders responding to the survey cited the top reason that lenders have given them for restricting the availability of new loans or for tightening the terms of outstanding loans is that “regulators are forcing lenders to do it.”
NAHB believes that regulators and lenders should provide leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals, loan modifications and perhaps forbearance on loans to give builders time to complete and sell their inventory.
“There can be no meaningful economic recovery until the flow of credit is restored to housing,” said Robson.
Lowe's has an awesome websdite that is continually updated to reflect current trends and materials. This is a great article on Kitchens and Baths. Whoever wrote this article was a little Sassy! I like her (his?) style!
So what's the silver bullet—the thing that every new tenant will be looking for this year? Is stainless steel still the leading trend? Granite countertops? Hardwood floors? It turns out when it comes to amenities, the more modern they are, the more attractive they are to prospective residents.
More bang for your client's buck When the housing bubble burst last year, it opened up the supply of higher-end, luxury properties. “All these condos downtown are now luxury rentals,” says Nathan Brown, property manager and broker with Chicago-based Triview Property Management. Because of this, new renters have been clamoring for upgrades on their apartments.
“They are more likely to come in and say, ‘I want this, because I don't have it now,’” Brown says.
Brown adds that potential residents will often come into his office with a list of amenities they're hoping for—everything from a fitness room and doorman to a washer and dryer unit and hardwood floors. And lately, he's been surprised by how they've managed to get everything on that list.
“Clients are able to get a lot more for their money,” he said. “The going theme for 2009 is more bang for your buck.” Vintage loses its luster As new and modern properties come on the market, older “vintage” properties see their potential shrinking without updated interiors. Maurice Ortiz, the marketing director of Chicago-based agency, Apartment People, says the majority [of people] are looking for hardwood floors, stainless steel and granite. “In general, everyone is looking for a new or updated kitchen and bathroom. Not many people are looking for carpeting anymore,” he adds
Which is not to say people aren't interested in living in vintage buildings. But more often than not, that interest is solely directed at what's on the outside of the property. “People like a vintage exterior,” Ortiz said. “If there's a modern interior.”
The easiest way to show off that modern interior is to start with your kitchens and bathrooms. “Everyone looks at your kitchens and bathrooms first,” Ortiz said, so if you can't completely overhaul the apartment, those two rooms are the best places to start.
After that, Ortiz says the next logical step is to get rid of the carpet and install some hardwood floors. This can be expensive, but it can help add value to the property and attract more tenants in the long run.
“Hardwood floors are definitely more expensive,” he said, “but they're easier to maintain and they last longer [than carpeting].”
Make it look new The secret to staying competitive in this recession is to recognize that people are looking to pay less for more. As the news keeps reporting home prices falling, more and more potential residents will be sniffing out deals on higher end amenities.
But before you break your own budget trying to keep up with the latest in luxury amenities, remember what will be most useful. A multi-unit building could become more attractive with an exercise room, but if it's a waste of space in a smaller building with three or four apartments.
A washer and dryer in the apartment is a huge draw for prospective tenants, Ortiz says. But they come at a steep cost. For those with a smaller budget, attractive amenities begin with the bathroom and kitchen. Even if it's not the latest appliances, starting small can be a big help.
“You don't have to put in granite and stainless,” Ortiz said, “but at least make it look remodeled.”
Overall, both Ortiz and Brown said that people tend to think positively of a place if they're aware of any recent improvements.
“[People] are looking at the overall feel of the place,” Brown said. “Even if it only feels like it's been recently redone. Sometimes even that is enough.”
What to do next In order to compete, it is necessary to keep up with the current and popular trends in amenities. You can find out more through classes with the National Property Management Association (NPMA) or any local property management association. But don't forget your most valuable resource—your current and potential tenants. When showing the property for potential residents, have them fill out a quick survey beforehand about what kind of amenities they are most attracted too. You can also hand out a similar survey to current residents when it comes time to renew their leases.
The bottom line is this: The more modern the amenities and the newer the property looks, the easier it is to find people who want to call the place their home.
If you or someone you know is intending to buy and take advantage of the $8,000 tax credit, they need to GET THE LEAD OUT!
The Economic Recovery and
Reinvestment Act of 2009 was a nearly $800 billion economic stimulus
package, including the $8,000 tax credit to new home buyers. BUT IT'S TEMPORARY.
The tax credit covers homes purchased between January 1 and November 30, 2009. THE HOMES HAVE TO CLOSE BY NOVEMBER 30. Given the other news laws in place for lenders, it could easily take FOUR weeks or longer for a loan to fund! DON'T PUT IT OFF! If you are intending to buy a new home this year to take advantage of this awesome program, you need to find your home and get the paperwork rolling NOW!
Has your energy bill got you hot under the collar? The best way to
reduce your air conditioning bills this summer is to reduce heat in
your home.
Reserve
heat-generating activities such as cooking, washing or drying clothes,
and running the dishwasher until late evening or early morning, when it
is cooler outside.
Install mini-blinds or solar film on your windows to cut down on the heat from the sun.
Switch over to compact fluorescent light bulbs - not only do they use less energy, but they produce very little heat.
Set
the thermostat a few degrees higher - most people can be comfortable
with a setting of 78-80 degrees Fahrenheit; plus, you'll save 7 to 10
percent of your cooling costs for each degree above 78!
Try
using a ceiling fan or portable fan to supplement your air
conditioning. A fan can make you feel three to four degrees cooler and
only costs pennies per hour to operate.
Well, the reason it's a perfect time to launch this column should be
clear. There is an opportunity in residential real estate ownership
unlike any we've seen in quite a long time, a perfect storm of sorts
that is unlikely to last much longer. Home prices are down, interest
rates remain near historical lows, and inventory is high. Thus, those
with stable jobs and good credit can find their dream home, pay a price
lower than any time in the last five or more years, finance it at a
very favorable interest rate, and thereby be perfectly positioned for
the housing recovery that the magazine wrote about.
Most of us who remember shopping for a home in 2005 and 2006—when
national inventories were extremely low—recall how difficult it was to
find our dream home in our preferred neighborhood at a price we
considered affordable, let alone realistic. With so few houses
available, any home in a desirable area sold regardless of its
condition or layout—often before it was even officially listed.
According to the National Association of Realtors, the inventory of
existing homes for sale peaked in November of 2008 at an 11 months'
supply. There was a 9.6 month supply at the end of May and, from what I
hear, it has fallen since then.
While you think your dream home will remain on the market forever; the selection is shrinking.
You Can't See the Future
If we all had a crystal ball, we'd time our purchases by buying at
the bottom of every pricing cycle. However, we all know that most of us
are no better at picking bottoms than we are at selling tops. NAR
statistics indicate that the national average for existing home sale
prices peaked at $230,200 in July of 2006. In January of 2009, its
lowest point, the average fell to $164,800, down 28.3% from its peak.
Since then, despite foreclosures still making up a significant
portion of the transactions, the average price has slowly climbed each
month. It stood at $173,000 at the end of May.
While mortgage rates have always climbed slightly, they, too, are near historic lows. Freddie Mac (FRE)
reported recently that the average 30-year fixed mortgage rate is down
to 5.32%. When I bought my first home in 1992, I recall paying around
8.5% and thinking it was a good rate. My sentiment back then was
largely driven by my vision of my father getting stuck in a rate around
18% back in the early 1980s.
Given the economy over the last couple of years, we are all
rightfully skeptical. When you see your investment portfolio drop
dramatically—the Dow fell by more than a third, and the S&P and
NASDAQ did even worse last year—and the unemployment rate continue to
rise you have to think twice when someone tells you home prices are on
sale.
A Great Time to Shop
But the numbers—both current and historic—show it is indeed the
case. While the unemployment rate is high, the rate of people losing
their jobs is slowing and it appears that inflation has moved up the
list as a primary economic concern. And it's reasonable to expect any
increase in inflation to also include an increase in home prices.
I do not claim to be Nostradamus, but I am observant enough to
understand we are at a unique and opportunistic point in time within
the realm of residential real estate. There are some terrific homes on
the market today, at prices historically quite low, with attractive
interest rates available to those with good credit.
I'm not suggesting everyone run right out and buy a home above their
means. But I am suggesting that if you don't yet own a home, or if you
own a home and have been considering trading up, now is a great time to
go shopping.
I PULLED THIS INFORMATION FROM THE FHA WEBSITE -- I have a client who wants to add on a garage. It will increae the value of the home, and she will feel much safer.
SF Rehabilitation Loan Program (203k) Funds for Handyman-Specials and Fixer-Uppers
The purchase of a house that needs repair is often a catch-22 situation, because the bank won't lend the money to buy the house until the repairs are complete, and the repairs can't be done until the house has been purchased.
HUD's 203(k) program can help you overcome this obstacle by enabling you to purchase or refinance a property plus the cost of making the repairs and improvements in one mortgage. The FHA-insured 203(k) loan is provided through approved lenders nationwide and is available to persons wanting to occupy the home.
The downpayment requirement for an owner-occupant (or a nonprofit organization or government agency) is approximately 3.5% of the acquisition and repair costs of the property.
The 203(k) loan includes the following steps:
* A potential homebuyer locates a fixer-upper and executes a sales contract after doing a feasibility analysis of the property with his/her real estate professional. The contract should state that the buyer is seeking a 203(k) loan and that the contract is contingent on loan approval based on additional required repairs by the FHA or the lender. * The homebuyer then selects an FHA-approved 203(k) lender and arranges for a detailed proposal showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project. * The appraisal is performed to determine the value of the property after renovation. * If the borrower passes the lender's credit-worthiness test, the loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs and the allowable closing costs. The amount of the loan will also include a contingency reserve of 10% to 20% of the total remodeling costs and is used to cover any extra work not included in the original proposal. * At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period. * The mortgage payments and remodeling begin after the loan closes. The borrower can decide to have up to six mortgage payments (PITI) put into the cost of rehabilitation if the property is not going to be occupied during construction, but it cannot exceed the length of time it is estimated to complete the rehab. * Escrowed funds are released to the contractor during construction through a series of draw requests for completed work. To ensure completion of the job, 10% of each draw is held back; this money is paid after the lender determines there will be no liens on the property.
Housing in a nutshell: Foreclosures up. Sales up. Prices down.
New research by Paola Sapienza of Northwestern University and Luigi
Zingales from the University of Chicago, provide interesting insight
into the foreclosure tsunami.
In the 1990-91 recession the study found that very few people who could
afford their mortgage walked away from their homes. The magic number
was 10. When equity declines exceeded 10% of the value of the home,
owners started to waiver. A 10% loss and the default rate begins to
rise. A 50% loss of home value and 17% of all owners preferred default
to staying in the game.
The study concludes that in this cycle, a large segment of foreclosures
were driven by a different metric. One in four recent mortgage defaults
are strategic. Buyers of property make a business decision to walk away
because they no longer like the deal. For 25% of all foreclosures,
today, its not inability but unwillingness to make payments.
The study makes an interesting observation. The Obama administration is
focused on cash flow to owners to keep them in their homes. This study
points to a different reason for a large segment of foreclosures. Many
people wont stay in their homes when the value of their mortgage
exceeds the value of their home by 10% or more.
If the study is correct, then writing down the loan would significantly
stem the tide. Since lenders are unlikely to do so, Im betting we will
continue to see foreclosures for quite a while.
Thanks for Reading
Howard Bell yourpropertypath.com
1.9 Million Foreclosure Filings Reported on More Than 1.5 Million U.S. Properties in First Half of 2009
ISMEDIA,
July 16, 2009-RealtyTrac®, a leading online marketplace for foreclosure
properties, has released its Midyear 2009 U.S. Foreclosure Market
Report, which
shows a total of 1,905,723 foreclosure filings - default notices,
auction sale notices and bank repossessions - were reported on
1,528,364 U.S. properties in the first six months of 2009, a 9 percent
increase in total properties from the previous six months and a nearly
15 percent increase in total properties from the first six months of
2008. The report also shows that 1.19 percent of all U.S. housing units
(one in 84) received at least one foreclosure filing in the first half
of the year.
Foreclosure filings were reported on 336,173 U.S. properties in
June, the fourth straight monthly total exceeding 300,000 and helping
to boost the second quarter total to the highest quarterly total since
RealtyTrac began issuing its report in the first quarter of 2005.
Foreclosure filings were reported on 889,829 U.S. properties in the
second quarter, an increase of nearly 11 percent from the previous
quarter and a 20 percent increase from the second quarter of 2008.
“In spite of the industry-wide moratorium earlier this year, along
with local, state and national legislative action and increased levels
of loan modification activity, foreclosure activity continues to
increase to record levels,” noted James J. Saccacio, chief executive
officer of RealtyTrac. “Unemployment-related foreclosures account for
much of this increased activity, and the high number of borrowers who
find themselves owing more on their mortgages than their homes’ are now
worth represent a potentially significant future risk. Stemming the
tide of foreclosures is a critical component to stabilizing the housing
market, so it is imperative that the lending industry and the
government work in tandem to find new approaches to address this issue.”
Nevada, Arizona, Florida post top state foreclosure rates More than 6 percent of Nevada housing units (one in 16)
received at least one foreclosure filing in the first half of 2009,
giving it the nation’s highest foreclosure rate during the six-month
period. A total of 68,708 Nevada properties received a foreclosure
filing from January to June, an increase of 23 percent from the
previous six months and an increase of 61 percent from the first half
of 2008.
Arizona registered the nation’s second highest state foreclosure
rate in the first half of 2009, with 3.37 percent of its housing units
(one in 30) receiving at least one foreclosure filing, and Florida
registered the nation’s third highest state foreclosure rate, with 3.08
percent of its housing units (one in 33) receiving at least one
foreclosure filing.
Other states with foreclosure rates ranking among the nation’s 10
highest were California (2.94 percent), Utah (1.46 percent), Georgia
(1.42 percent), Michigan (1.34 percent), Illinois (1.31 percent), Idaho
(1.26 percent) and Colorado (1.25 percent).
California, Florida, Arizona post highest foreclosure totals A total of 391,611 California properties received a
foreclosure filing in the first half of 2009, the nation’s highest
total and 2.94 percent of the state’s housing units (one in 34) - the
nation’s fourth highest state foreclosure rate. California foreclosure
activity in the first half of 2009 increased nearly 14 percent from the
previous six months and increased nearly 15 percent from the first half
of 2008.
With 268,064 properties receiving a foreclosure filing in the first
six months of 2009, Florida documented the second highest state total.
Florida foreclosure activity in the first half of 2009 increased 7
percent from the previous six months and was up nearly 42 percent from
the first half of 2008.
Arizona’s 89,799 properties receiving a foreclosure filing in the
first six months of 2009 was the third highest state total. Arizona
foreclosure activity in the first half of 2009 increased 13 percent
from the previous six months and was up nearly 55 percent from the
first half of 2008.
Other states with totals among the 10 highest in the country were
Illinois (68,932), Nevada (68,708), Michigan (60,786), Ohio (58,937),
Georgia (56,391), Texas (49,144) and Virginia (28,368).
Report methodology The RealtyTrac U.S. Foreclosure Market Report provides a count
of the total number of properties with at least one foreclosure filing
reported during the first half of the year at the state and national
level. Data is also available at the individual county level. Data is
collected from more than 2,200 counties nationwide, and those counties
account for more than 90 percent of the U.S. population. RealtyTrac’s
report incorporates documents filed in all three phases of foreclosure:
Default - Notice of Default (NOD) and Lis Pendens (LIS); Auction -
Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS);
and Real Estate Owned, or REO properties (that have been foreclosed on
and repurchased by a bank). If more than one foreclosure document is
filed against a property during six-month period, only the most recent
filing is counted in the report.
Okay - this article has lots of technical stuff, but the bottom line is marked in yellow. If you or someone you know whats to buy a home and is putting it off because of the economy, consider: Where (financially) will I be if I buy a home now--lower prices, lower interest--than if I wait for 2 years? (Reminds me of the guidance counselor talking to a man about his education. Student: "I can't get a masters degree now--it'll take me three years. Do you know HOW OLD I'll be in three years?" Counselor: "How old will you be in three years if you DON'T pursue a masters degree?"
RISMEDIA,
July 2, 2009-Opportunity is knocking fairly loudly for many considering
homeownership. Home prices have declined in many markets around the country and tax incentives and other inducements have first-time home buyers and others weighing the possibilities.
Home affordability, as defined by the National Association of
Realtors’ Housing Affordability Index, stands near all-time highs,
thanks to declining prices and historically low mortgage rates. Yet,
while some consumers hold off on purchases as they attempt to catch the
home-price bottom, they could miss the mortgage-financing opportunity
of a lifetime.
Consider the weekly average yield spread between Fannie Mae’s
6.5-year bond to the “benchmark” 10-year Treasury note, a classic
relationship that involves the cost of making mortgage loans to
consumers. Before disarray in the financial markets, the spread ran
about 1% above Treasury bonds, reflecting investors’ confidence that
owning debt of bonds backed by Fannie and Freddie is nearly as safe as
owning government bonds.
The spread began widening in July 2007 as the global financial
crisis unfolded, then spiked to above 2% during the next year as the
U.S. economy seized and credit grew scarce. It grew to a startling 2.5%
late last year as bond investors’ skittishness about continued
delinquencies and defaults-and that the risk of these mortgages had not
been properly assessed-resulted in higher risk premiums and higher
costs to borrowers.
Late last year, however, the Federal Reserve Bank stepped in with a
promise to purchase $500 billion in Fannie Mae, Freddie Mac and Ginnie
Mae mortgage-backed securities, and raised that figure to $1.25
trillion in March. The move, combined with loan-modification
initiatives and other federal intervention, restored investor
confidence in the secondary market and mortgage rates declined rapidly.
The yield spread in March dropped to 1% and zero and then fell to an
unprecedented minus 0.5% by early May.
This condition is certainly unique and, likely, short-lived.
Statistically, when the yield spread deviates from historical norms,
the chances are great it will return to those levels. That could
quickly drive mortgage rates higher. How much is anyone’s guess, but if
the cost of making a mortgage goes up by 1.5% so, too, might mortgage
interest rates.
Yet, factor in some additional variables. The marketplace for bonds
relies heavily on purchases by offshore buyers who remain skeptical as
the global economy continues in flux. Then there’s the
inflation-deflation conundrum. Many fear a deflationary spiral-with
falling prices for goods and services that lead to falling wages-can
still drag down a stabilizing U.S. economy.
Conversely, others believe inflation will kick in, ushering in
higher consumer prices, including higher mortgage rates. How this issue
shakes out will have important implications for interest rates.
One thing is crystal clear: the odds that mortgage interest rates
will rise are much greater than any continued mortgage-rate decline.
And for most home buyers, the cost of mortgage financing can be as
important as the price of the home itself.
Real estate sales professionals can help their customers make the
best long-term decisions by demonstrating the degree to which housing
prices and mortgage interest rates could move from this point forward.
Customers waiting for the absolute lowest price on a house could miss a
golden financing opportunity and the lowest overall cost of
homeownership.
Andrew Downs is executive vice president at Prudential Real Estate and Relocation Services.
“The greatest discovery of my generation...is that a human being can alter his life by altering his attitudes of mind.”
-- William James
Home Maintenance Tip -
Your washer and dryer are designed to be simple to maintain, and there
are a few things you can do that will prolong the life of the machines
and reduce service calls.
Avoid overloading the washer - an overloaded washer strains the motor and transmission, shortening their lives.
Once
a month, remove and clean intake screens where water-supply hoses enter
the washing machine, and check water-supply hoses for splits, cracks,
or bulges.
Once a year, disconnect your dryer from the vent
hose and wall, and thoroughly vacuum and clean the lint pipe to improve
your drying efficiency and remove potentially flammable lint buildup.
Once a year disconnect the washer and dryer to clean underneath and check for any small leaks or hidden maintenance problems.
I don't think this applies only to first-time homeowners--it's great advice for anyone furnishing new digs! Elaine
By Nancy A. Herrick
Home prices have moderated, interest rates are reasonable, supply is abundant-and then there’s that $8,000 tax credit. Yes, it’s a great time to buy your first house.
If you do, you’ll have to furnish it, and that can be a challenge, especially if you have put much of your disposable income into a down payment. But you’re a grown-up now, and your first real home is no place for that grungy old futon or bookcases constructed with bricks and boards. It deserves better.
So what’s the best way to go about furnishing your new home? We’ve asked a variety of experts for their ideas on what to do after your offer has been accepted. Here are their ideas:
“Before you get carried away, take some time to determine what you have, what you need and what you want,” says Milwaukee-area interior designer Susan Michalek of Desumi Design Inc. “Deal with what you need first. That should be your highest priority.”
Wanda M. Colon, a designer who can be seen as host of TLC’s “Home Made Simple” and HGTV’s “24-Hour Design,” suggests that any assessment should include the amount of money you have to spend.
“It’s easy to overspend or make impulse purchases if you don’t have a budget,” she says. If you watch what you spend and stay within your limits, “as a bonus you might have money left over to purchase some extra goodies.”
Evaluate each room, says interior designer Jane Klein of Fox Point, Wis., and figure out how you plan to live in the house, considering: “Where you will spend most of your time, what you will do in each room? Will you want a table in the family room for work space, for example, or a comfortable chair and good lighting in the bedroom for relaxing and reading?
“Also think about the size of each room and the appropriate scale for the furniture,” Klein says. “You might fall in love with a sectional, but the reality is that it might not fit in a small room.”
Gary Steinhafel, president of Steinhafels Furniture, with six locations in Wisconsin, agrees.
“Not long ago, manufacturers were producing furniture designed to fill oversize great rooms,” he says. “Now many manufacturers are offering furniture on a smaller scale than ever for smaller homes and for people who are downsizing. Be aware that there are choices and figure out what works best for your home.”
Go Shopping, But Leave the Plastic Behind
Your early shopping trips should be a way to gather ideas, not furniture. As you walk up and down the store aisles and view furniture groupings, pay attention to colors, furniture styles, wood choices and more.
If you’re shopping with your significant other, have some discussions about what you like and don’t like, and what you think works well together and with the style of your home.
“You don’t have to choose strictly contemporary or strictly traditional,” Steinhafel says. “More likely the choice will be made based on whether you are going for a casual or more formal look.”
But remember that while an “eclectic” look works, that doesn’t mean anything goes. There should be some continuity or unifying elements so that the result isn’t a hodgepodge.
Colon suggests that you visit a variety of stores to see what’s available.
“Don’t buy everything in one place,” she says. “This allows you to compare styles and prices.”
It also gives you the opportunity to ask questions and to learn what goes into a quality piece of furniture.
As you peruse what’s available, take pictures of what you like, Klein says. “If you think it might work, take a picture, at stores, consignment shops, wherever you go. Then look at the pictures when you get home to remind you of the choices and to see which pieces work together.”
Get to Work
It’s easier to paint a house when it’s empty and to refinish or replace flooring or knock down walls when you’re not living there. So if there’s work to be done, allow time for that after closing but before you move in.
“The biggest change you can make for a minimal amount of money is with color on the walls,” Michalek says. “Buy good quality paint with no VOCs (volatile organic compounds), and if you do the job right you won’t have to paint again for a while.”
The colors you choose should coordinate with what you plan to buy and what you already have, of course, so take along strips of paint samples from the paint store or home center. Often furniture stores will allow you to take a fabric sample or sleeve cap home to help match colors. Make sure to look at them in a variety of lighting situations and at different times of the day to get a true idea of how well the colors coordinate.
Make Major Purchases
At minimum you will need: a good mattress and box spring and a bed or headboard to give the room a polished look; a quality sofa and chairs; a console unit for the television; and a table and chairs for dining (either for the kitchen or dining room).
Bette Kahn, spokeswoman for Crate & Barrel and CB2 stores, says microfibers are a good fabric choice for sofas because they’re so durable.
“They take cleaning or washing well and never show wear,” she says. “If you’re getting another fabric, make sure it’s fabric-protected. Solid colors are classic, but not as interesting as tweeds with small touches of color.”
She suggests going with neutrals for big pieces, “but if that’s too basic, they can always be made more interesting with pops of color through pillows, which can be changed.”
Steinhafel is a fan of leather for sofas.
“It wears three times longer, and prices have come down significantly because the tanning process is more sophisticated,” he says. “There’s a ton of variety in color, but shades of brown are very popular. It’s the new neutral and works well with other colors and with wood floors.”
“Make sure the frame of your sofa or chairs is high quality,” says Kahn, adding that if the piece wears out or looks outdated, it can be slip-covered or reupholstered if necessary.
If you buy high-quality pieces, you can build a room around them for years to come.
Fill in Creatively
After you’ve found the big pieces that serve as the foundation for a room, it’s time to fill in with smaller pieces. This is where you can have some fun, save money and add a touch of personal style.
Consignment stores, estate sales, resale shops and even Grandma’s attic are great places to find furniture, especially if you’re willing to fix it up.
For example, if you’ve purchased a bed but need a dresser or two, you might be able to find used pieces with similar lines. You can refinish or paint the dressers to match (assuming they aren’t valuable antiques, in which case the original finish should be preserved) and change the hardware for a coordinated look.
In the dining room, a horizontal dresser also can work as a server; the drawers can hold flatware and table linens. Antique chairs, even if they’re mismatched, add interest around a dining room table.
An odd-shaped table can find a new home in the corner of a living room or a foyer; add an oversize vase for visual interest. Don’t be afraid to rough up the surface and paint it so that it coordinates with the colors you’ve chosen in the room.
“America tends to be wasteful and often will replace a perfectly good piece with something that’s new,” Michalek says. “But you can find all kinds of new uses for older pieces of furniture that are built well.”
Area rugs, artwork and accent pieces are fun to shop for and also add personality to a room.
“Sometimes people spend a lot of time shopping for the big pieces but don’t do much to make the space their own,” Klein says. “A piece of art can do that, or an art furniture piece. They don’t have to be expensive but can wind up being a special focal point for a room.”
Be Patient
It probably took awhile to find the right house. It stands to reason it won’t be furnished in a week, a month or perhaps even a year.
“Many purchases can be put off, especially the decorative pieces,” Kahn says. “Besides, you’ll have more fun collecting those as you go through life.”
Colon warns first-time homeowners to take their time. “Don’t impulse-buy and end up feeling stuck because you acted too hastily,” she says.
Klein says: “Give yourself a little time. When you make a decision, use your head and your heart. Look at different options, ask lots of questions.
Of our 39 years of marriage, 19 of those years were spent in California. We became very fluent in "Quake-ese" and I became so quake-savvy that I'd grab the kids and run to cover even when a large truck passed and shook the house! No apologies for that--I was just being careful.
Here is a link to an excellent earthquake site, based upon the city of San Fancisco. Check it out--you'll have fun, maybe even grin, and learn too!
Rethinking Remodeling: Homeowners Want More Bang for Their Home-Improvement Buck
Fewer homeowners may be starting complete kitchen remodels, but they’re still replacing countertops and re-facing cabinets. They’re also investing in improvements to make their homes more energy-efficient, according to a recent home remodeling and repair report by ServiceMagic.com. Others are splurging on hot tubs and home theaters after realizing that they may be in their homes for some years to come-and want to make them as comfortable as possible.
“People are not going bigger and better, but improving what they have more cost effectively,” said Craig Smith, CEO of ServiceMagic, a website that connects homeowners to prescreened contractors. For instance, instead of buying new furniture, they’re repairing what they have. Or they’re deep cleaning the carpet in lieu of replacing it.
All for good reason: Money is tight, lending standards strict and in a sluggish housing market you might not recoup as much of your remodeling investment at resale.
Home improvement spending is expected to decline 12% in 2009, according to Harvard University’s Joint Center for Housing Studies. Lower financing costs may be starting to stabilize the downturn in existing home sales, but “they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home improvement projects,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center.
It’s much different than the days when home-equity lending was plentiful. Before doing anything, homeowners are carefully considering how they should spend their money.
In the days of easy credit, “there was a feeling of ‘we can’t go wrong, let’s just get started,’” said Bill Judson, an architect with HartmanBaldwin Design/Build, based in Claremont, Calif. “Now, it’s harder to get money, in terms of credit, and homeowners are taking it a little slower and educating themselves a little more.”
Meanwhile, those who do upgrade may be in for a bargain: Costs of materials, including lumber and copper, have dropped somewhat, Judson said. The biggest price cut has been related to lower labor costs as surviving contractors struggle to compete, he added.
The kitchen and bathroom are traditionally rooms where remodeling pays off. Some homeowners are still going through with full remodels these days, said Kimberly Sweet, editor of Kitchens.com. But they aren’t the norm. “A lot of people are making do with what they have, or maybe choosing to spruce up a few things and not do a full remodel,” Sweet said.
Nationally, the volume of countertop project requests rose 39% in the first quarter of 2009, compared with the first quarter of 2008, while major kitchen remodels are down 19%, according to ServiceMagic’s most recent Home Remodeling and Repair Index/Survey. The data comes from the company’s service requests; the site received 4.2 million requests from homeowners in 2008. Service requests for bathroom remodels were down 10% in the first quarter of this year, according to the report.
At the recent Kitchen/Bath Industry Show, affordable remodeling products included liquid stainless steel to refinish appliances and do-it-yourself backsplashes, Sweet said. Re-facing or painting cabinets and updating cabinet hardware have always been an option to remodel on a budget. For replacements, there are improved cabinet options in thermofoil, she said. Consumers still gravitate toward granite countertops, but other less expensive-yet still attractive-countertop materials are available, Sweet added. For those considering resale values, it might be best to go for minor fix-ups. “Doing all the high end may not get you the return you were looking for before,” Sweet continued. “You don’t want to be the most expensive house on the block in this market.”
According to Remodeling Magazine’s 2008-2009 Cost vs. Value report, replacement projects that improve curb appeal-including siding, windows and decks-are some of your best bets for recouping money at resale.
Upgrading windows can make a home more energy-efficient. ServiceMagic has seen more interest in projects including insulation and solar-panel installation, which cut energy bills and are likely eligible for government tax credits, according to the company’s report.
And some homeowners are investing in home energy audits, for a comprehensive view of what can be done to increase efficiency, said Smith. The cost: Between $300 and $500. “But people will pay that because the insight provided can save them a lot of money down the road.” An audit can help homeowners prioritize projects.
Most home improvement projects may be practical these days, but some splurges are also becoming popular as market conditions force people to stay in a home longer than previously planned and as the economy has them spending more time entertaining at home. As a result, some homeowners are buying hot tubs, spas and saunas, as well as TVs and other home theater components, Smith said.
Compared to large-scale remodeling projects, “hot tubs are not a massive out-of-pocket expense,” Smith said. And “with the prices of flat-screen TVs coming down and the whole ’staycation’ phenomenon,” updated media rooms also have appeal, he added.
(c) 2009, MarketWatch.com Inc. Distributed by McClatchy-Tribune Information Services.
When the announcement about the tax credit first came, it was a media explosion. This change, however, is announced in a whisper.
Not too much has changed - except that it can't be used to fund closing expenses. The tax credit will still be there at tax time!
From: stevan@axiomfinancial.com Date: Wed, 20 May 2009 10:18:31 -0600 Subject: Reversal of HUD's $8,000 tax credit announcement
Dear Agents and Friends:
This important announcement was released this morning regarding availability of the $8000 Stimulus Tax Credit at closing for home purchases.
As you know HUD made an announcement on May 12 that they were going to allow homeowners to use the $8000 tax credit as down payment monies by empowering state agencies, non profits and HUD approved Mortgagees to lend the monies to home buyers. HUD drafted HUD Mortgage Letter (2009-15), however, the letter was never officially released. HUD has since reversed their position on allowing the monetization of the tax credit over concerns that the proposal too closely resembles the now illegal practice of seller funded down payment assistance programs. IRS officials were also concerned that the proposal could create income tax issues.
The government may continue to seek other alternatives associated with boosting affordability and circumventing the 3.5% down payment requirement, but until further notice they have apparently killed this initiative.
Wood-destroying
organisms (termites) cause North American homeowners over two billion
dollars in damages each year. Don't be fooled, termites are living and thriving in Utah.
These destructive pests primarily feed on wood, but also damage paper,
books, insulation, and even swimming pool liners and filtration
systems. Wood destroying organisms are often referred to as the silent
destroyer because they may be causing damage to your home without you
knowing it. A trained inspector is usually required to identify the
problem, and will be necessary if you do have an infestation. Read on
to learn more about how to protect your home from these common pests.
When should I suspect I have a problem? Homeowners
rarely see termites; they are sneaky insects that hide themselves deep
in wood and soil. Finding signs of termite activity in your yard is
pretty common, but if you see winged termites indoors it almost always
indicates an infestation warranting treatment. The most common areas
where we see termites in Utah county is anywhere along the benches as
well as areas that use to be heavily wooded. For example, Orem use to
be all orchards.
What will a professional look for to determine the extent of the problem?
Inspection and treatment require special skills and technology. A
professional pest controller can help. Professionals will look for
telltale "mud tubes" or shelter tubes, which are solid evidence of
termite activity. They will also look for thin, "bubbled" or distorted
areas of paint on wooden surfaces, especially if these feel cool to the
touch. Finally, professional inspectors will check any wooden building
parts (especially if they are important support structures) that may be
beginning to "sag" unexpectedly.
What are my treatment options?
Treatment options vary considerably with the species of termite,
extent, and degree of infestation. Chemical treatment, in-ground
baiting systems, and fumigation are the most common treatment types.
Federal statues strictly regulate pesticide use and guarantee the
safety of chemicals for termite control when used by qualified
professionals. Regardless of which method or product is selected, it is
important to have an experienced technician treat the problem.
Pet odors can be a
problem when you're in the process of selling your home. If your house has an
odor problem, you should remove any offending furniture or carpets or hire a
professional to clean them. Be sure to check the cat box frequently and keep
the litter fresh.
Since some people
have allergies or fears of certain animals, it's a good idea to put dogs or
cats outside or confine your pets to one area when your house is being shown.
It's hard for buyers to fully appreciate your home through itchy, watery eyes
or in between sneezes! Even if the house is exactly what they want, your
chances of selling it are less if the scent of Spot lingers in their memory.
THIS IS BIG NEWS FOR THE UTAH HOUSING INDUSTRY - APPLIES ONLY TO NEW HOMES! It is intended to help the homebuilding industry, to fill up homes that are now sitting vacant!
Last night, Thursday, March 19, Governor Huntsman signed into law a FANTASTIC program for homebuyers in Utah. Using a combination of Federal and Utah funds, a $6,000 GRANT is available to Utahns who meet the following requirements:
Purchase a brand new, never-before-occupied home
The home must have an occupancy permit (no partially-built homes). Home MUST be complete.
The loan must be APPROVED in the lender's underwriting department. THIS IS NOT PREQUALIFICATION, WHICH IS USED TO HELP HOME BUYERS GUAGE HOW MUCH THEY CAN SPEND. That department must send the paperwork to Utah Housing Corporation (a state program) who will then fund the grant. It will take about a week to do the paperwork to receive the grant money (possibly more when news gets around!) and the money will be sent to the title company that handled the escrow.
This money can be used at closing to pay closing costs, or be issued in the form of a check at or after closing, payable to the homeowner.
Borrowers are restricted to an income of $75,000 per year for a single person, or a total of $150,000 per year for a couple.
This grant money is strictly for people who will live in the home, and
must be repaid if the homeonwers live in the home for LESS THAN 3
YEARS. After 3 years, there is no payback.
There are a limited number of these grants available, a few over 1,600, and when the money is gone IT'S GONE. This is a first-come, first-served program. The homeowner has 30 days from the time the loan is APPROVED until closing to receive this money.
This is not to be confused with the Federal program allowing an $8,000 tax credit. The Federal program is available to purchasers of ANY home, new or already occupied.
You must get your mortgage through an approved lender. Go to this link to find the name of an approved lender: http://b2b.utahhousingcorp.org/cgi-bin/HRLNDR
Loan must be a FIXED RATE loan, not an ARM.
BY THE END OF THE DAY FRIDAY OVER 70 GRANTS HAD ALREADY BEEN AWARDED! HURRY!
CONTACT ME RIGHT AWAY IF YOU ARE INTERESTED IN THIS PROGRAM!
As I have studied this problem, I have noticed that there are several misconceptions that buyers and sellers have regarding their rights, responsibilities and the overall process. No matter which side you're on, here are a dozen myths demystified. For a more in-depth view on these issues, visit the six-part series in this blog, beginning February 19, 'Homeowners in Distress'.
FORECLOSURE OWNER IN DEFAULT MYTHS
1. The bank really wants your home back.
Banks don’t want your home. They want to recover the money lent for its purchase. Foreclosure is a time-consuming, last-resort process for banks, and most will do everything possible to work things out with a homeowner in order to avoid it. Foreclosures can cost a bank in excess of $40,000!! At the present moment banks are even being given incentives to STOP foreclosures using loan restructuring.
2. Filing for bankruptcy stops a foreclosure.
Ouch! Bankruptcy creates only a temporary delay in the foreclosure process, so it's not a strategy for stopping it altogether. Bankruptcies totally destroy a person’s credit rating, and some of the bankruptcy laws are being changed to make it harder to declare bankruptcy.
3. You're not responsible for paying the bank's legal fees.
This isn’t a myth—it’ s true, but often misunderstood. You are responsible for paying the bank’s legal fees, and you will pay them if you want to hold on to your home. Pull out your mortgage agreement (remember all those loan papers you signed at the Title Company office?) The details are in that agreement, so take a close look at the fine print.
4. Even if I pull together the money I owe after the foreclosure process has begun, it's too late to stop it.
Not so. Most states have laws requiring that foreclosure proceedings be stopped if the homeowner has the money to cover all back payments, late fees and legal fees owed. Some homeowners have pulled their homes out of foreclosure the day before a Trustee’s Auction! A mortgage negotiation professional can assist you with this process if needed. There are attorneys who deal with nothing but foreclosures.
5. The bank will take all my stuff along with the house.
If the bank really doesn’t want your house, why would it want all your furniture and clothing? All personal property is yours to take; however, fixtures, floor coverings, appliances and anything else permanently attached to the house must remain with the house.
6. My involvement with the property is over once the bank takes it back.
If only you could walk away from such an unpleasant experience and never have to look back. Not gonna happen. Not only the bank, but the IRS has something to say about that. After foreclosure, if the bank sells the home for less than you owed on the mortgage, you'll still be responsible for the difference or "deficiency." What's more, they can collect interest on that amount. The IRS sees the deficiency as INCOME, therefore it is taxable. A deed in lieu of foreclosure or chapter 7 bankruptcy may clear you of owing a deficiency, so consult a bankruptcy attorney if you have questions about your status and options.
Foreclosure Buyer Myths
1. Foreclosed properties are always in bad neighborhoods.
In the current economic climate, every community and every part of town can contain foreclosed properties, with abodes ranging from modest town homes to extravagant vacation escapes appearing on the market.
2. Foreclosed properties are usually in poor condition.
Though this isn't generally the case, there can be significant issues hiding behind an attractive and seemingly well-tended façade. Do your research before purchasing any foreclosed property, being sure to find out how long maintenance had been deferred before the house hit the market, as well as how long it's been sitting idle and waiting for a buyer.
Another “caveat:” Check county records to see if there are liens against the property, and if they have to be satisfied.
3. A foreclosure sale takes advantage of the owners.
The occasional unscrupulous buyer or investor notwithstanding, purchase of a property that is being foreclosed upon actually helps the owner via payment of their debt, avoidance of bankruptcy and a bad mark on their credit history, and the possibility of something to show for their equity in a property. Purchases made during the pre-foreclosure period are even more advantageous for both the owner and buyer.
Still another "caveat:" There are so many scams out there. NEVER sign a Quit Claim Deed for someone who promises to help you out. Clear it through attorney!
4. Financial irresponsibility is always the source of foreclosure.
Boy, is THAT an unfair belief! All it takes is the loss of a job, an unexpected health issue or other life emergency to put a previously solid financial picture in jeopardy, and coverage of such major expenses as mortgage payments can easily be impacted.
5. Foreclosure guarantees bargain pricing.
Before falling completely in love with what looks like a can't-miss deal, be sure you know the property's true market value so you're not paying for more house than you're getting. I have seen SO MANY HUD homes sold for market or above-market price. Why? The auction bid frenzy. Look (at the comparables) before you leap!
6. A lower price equals higher equity.
While it’s nice to hope, this is one equation that won't pan out if a property involves unpaid taxes, mechanics' liens or an expensive string of repairs, all of which subtract from the equity and add to the cost.
Please feel free to call me if you have questions about Foreclosures or Short Sales. I’ll give you my no-obligation, honest opinion! I can be reached at HomesByElaine@hotmail.com, or by cell phone at (435) 609-9775
Buy Home; Get a Free Corvette Reported by: Betsey Martin, KARK 4 News Sunday, Feb 22, 2009 @04:59pm CST
In this economy, desperate times call for desperate measures.
One house in North Little Rock is not only for sale, it's offering a free corvette with purchase of the home. The realtor says it's an idea the owner shuffled around for a while, but in the end, decided to give up his ride, as an incentive.
"My first thoughts were can we really do this? And after thinking about it a little longer, it's definitely a great idea. It's bringing all kinds of attention to the house," realtor Michelle Hagerman said. Hagerman says her phones have been ringing off the hook ever since.
***Elaine's comment: Not many listings like that around here, but I'm sure someone could offer a bike, a riding lawn mower, the neighbor's irritating kid...?
Staging has been the buzzword in real estate for the past several years. But taking the next step to refreshing can really set one home apart from the rest.
Buyers look at a lot of homes. So how do you make sure a home is memorable to a buyer? Having a well-staged home is now the rule rather than the exception for a faster sell and a better price. Try to think beyond the obvious for ways to make the entire home feel updated and inspired.
A fresh coat of paint on worn walls provides a “wow” factor without excessive cost or effort. While this isn’t new news, something that tends to get overlooked (and can have just as much impact) is painting the trim and other accents that may have gotten scuffed or dingy over the years. Freshly painted trim work is cleaner and a healthy home environment is very appealing to buyers.
Hardware is a quick fix as well. Switching out knobs and pulls in the kitchen or bath will catch the eye and revive an entire room. Taking it a step further to update faucets, light fixtures and even switch plates can take a space from ordinary to inspiring. Area rugs, lamps and plants are also quick ways to add life and warmth to a room with the convenience of portability. Because they are easily changeable, updating “unattached” items can instantly modernize a space with a fresh style.
And don’t forget first impressions-exactly how fast are prospective buyers driving past the home? No brake lights? A quick tap and then accelerate? Or do they come to a full stop to get a better look? That fresh, new interior will never be revealed if the curb appeal of the exterior is blasé. Everything from container gardening and clean welcome mats to new storm doors and shutters can pull that buyer into your drive.
Artistic staging can showcase the best features in a home. But in today’s market, take a refreshing approach-go that extra mile and look for ways to make the home memorable to a potential buyer.
Melissa Birdsong is vice president for Trend, Design & Brand, Lowe’s Companies, Inc.
A "short sale" is considered one of the last options to foreclosure. It's still much better than a foreclosure, and does relieve the homeowner of a huge burden.
When should a homeowner consider a short sale? When they are "upside-down" on their loan. This happens for a number of reasons:
Home was purchased when the market was high, and now the market value of the home is less than it was at the time of purchase.
Second Mortgage or Home Equity loan has pushed the owner into owing more than the house can sell for.
Market price of the home is about the same, but seller has not been in the home long enough for the home to increase in value (Example: Been in home six months, then job was transferred to another state) and the seller does not have the money to pay the closing costs associated with his part of the sale.
While it doesn't happen very often, a home that has been severely damaged by the family will surely not sell at market value, and may be considered for a short sale.
A short sale will give you a mark on your credit score, but Fannie Mae (the largest lender in the world) will let a buyer come back 24 months after a short sale, and every product they have is available to them! You CAN'T do that with a foreclosure. In fact, it will be five years before Fannie Mae will give a loan to a buyer whose home was foreclosed.(At the five year mark they must have a credit score of at least 260-280, and the interest rate may be a little higher than the going rate.)
A short sale allows you to sell the home BEFORE it is foreclosed on. Banks are willing to participate in short sales because they stand to collect more on the loan amount. Remember, foreclosures can cost the lender in the ballpark of $40,000! (And they won't always get market value when the home is resold.)
Banks generally will not approve a short sale unless you are working with a licensed realtor. The paperwork is daunting but doable, and your realtor will help you. After you have signed a release of information form giving your realtor permission to talk with your lender, she will contact the lender's Loss Mitigation Department" and explain that the homeowner needs to sell the home as a short sale. The LM department will ask the homeowner to write a letter explaining the situation that has caused the need for a short sale, and will send other forms as well.
When the realtor is confident that the home can sell as a short-sale she will put the home on the market. When offers are received, the buyer "accepts" the offer, but that acceptance is not binding. The final decision is made by the lender. It's the realtor's responsibility to notify all people making an offer that this is a short sale, and that multiple offers have been or will be submitted. Most lenders will not even LOOK at an offer unless the buyer has at least been "prequalified" for a loan. (See blog February 17, "The Buyer Who's Wise Prequalifies") The lender usually has its "secret" amount that it will not go below when accepting an offer. It's usually around 15% to 18% lower than the amount owed. However, it depends on the property and -- get this --whether your loan was sold to them as a block with other loans that were "at risk" loans. (Back we go to the "finance of risky buyers.")
Homes in this category are often purchased by investors who will "buy low" and "sell high." Savvy home buyers are also on the lookout for a home that is being sold at or below market. If you fall into this category, a short sale is beneficial to you.
The seller will not have to pay any closing costs, and simply walks away from the home. He will not receive any proceeds from the sale. But he is out from under the burden of debt.
Note: The IRS CAN TAX YOU for the difference between the loan amount and the sales amount--as INCOME! Sellers should have their accountant or tax man prepare an IRS FORM 982 (Reduction of Tax Attributes due to Discharge of Indebtedness, Section 1082 Basis Adjustment)
Loan modification is one of the principal emphases of the President's stimulus package for real estate. One estimate I read recently said that one out of ten homeowners face loan problems.
I guess this is one of the symptoms of our "recession."
A loan modification is a procedure in which a loan's terms, such as interest rate, monthly payment, or duration, are altered.For some homeowners a loan modification can help them keep their home, restructure their mortgage, and avoid foreclosure and bankruptcy. In a modification a lender agrees to modify any or some of the terms of the mortgage, making it more affordable for you.These changes may include:
1) Reducing or modifying the interest rate 2) Extending the term of the loan 2) Changing the monthly payments 4) Combining any of the above
A loan modification is negotiated between the homeowner and the lender, and takes time. If homeowners think this is a step they want to take, they should look into loan modification as soon as they feel they are in trouble. First thing to do: Call your lender.
In light of recent legislation in Washington, lenders have been promised incentives to renegotiate loan terms. The money for the incentives is to go to lenders soon, as early as the next two months. Of course, there will be red tape, but lenders stand to make money by modifying loans.
Now, to turn a little negative for a few paragraphs. Realize two things: First, the lender is acting in its own self-interest, not yours. So be careful. Second, all workout offers are negotiable. Even loan modification offers which seem etched in stone may be negotiable.
If the homeowner actually has a considerable amount of equity it's likely that the lender will be less agreeable to modify the loan. It's possible the lender would be willing to foreclose, because the home's value will more than pay the balance due.
Since we are in the mortgage fiasco in part because some lenders were not honest and loaned money to people who could not pay it back. It makes sense that some lenders will be more willing than others to participate in the loan modification program. According to some estimates, as many as half of all loans written in the last seven years in one way or another violated the Truth In Lending Act, which is a federal offense. Lenders will do whatever it takes to avoid possible legal challenges, and not just with regard to the mortgage itself but also in the manner in which is has been administered, or "serviced."
This begins to sound a little sinister, doesn't it? This post isn't meant to scare, but as with all things in life, there are some caveats. Some lenders, who used predatory tactics could be in legal trouble as well. It's possible that the threat of legal action against a lender could result in more leverage for the borrower, helping them to get better terms. One article I read warned of a potential trap that borrowers should be aware of--an agreement prepared by a lender requiring the borrower to waive their legal rights to sue the lender in the future. The question is, "Sue for what?" If the loan was made in bad faith, had predatory characteristics (loan originator knew he couldn't afford the loan, told you one thing but delivered something else at closing, charged excessive fees, etc.), the homeowner may wish to have an attorney skilled in lending practices look over the original loan documents as well as the proposed loan papers.
If you are charged a fee in connection to the loan modification, be sure to request a point-by-point breakdown of the charges. Beware of excessive legal fees charged by the lender or "reinstatement" fees paid to the loan servicer and not applied to your delinquency if, indeed, you are delinquent.
Oh, boy! That's a question with a myriad of answers, especially in light of the recent legislation the federal government. Of course the simplest answer is "The loan is brought current, with all late fees paid".
Other options are:
Negotiate a change in the loan terms, also called a loan modification. In the next post I'll explain this in more detail.
Forbearance. Negotiate with the lender to have lender accept lower payments than originally agreed to in loan documents, for a specified time period to allow borrower to recover financially; borrower eventually must repay missing or reduced payments an all other remaining payments on the loan. (similar to loan modification)
Put the home on the market and sell it.
Short sale. The homeowner is "upside-down", owing more than he can sell the home for.
Foreclosure. The last resort. Credit rating takes a hit, and it's very hard to get a loan of any kind for at least two years.
Do all foreclosures proceed as indicated in Part 2 of this series. In theory, yes, but in actuality there are many actions that can delay or cancel a foreclosure. I've seen foreclosure take place within six months of the Notice of Default being filed, and I've seen some foreclosures take over a year.
If all proceeds according to schedule, the auction will take place--on the date set, after the notice of auction has appeared for at least three weeks in a local newspaper.
Most auctions will take place on the steps of the county courthouse or other public building, on the date specified, and at the time specified. The Trustee or his representative will open the auction at the appropriate time, and all present may bid. The minimum amount of the bid is usually the amount still owed on the loan, plus the legal fees and other expenses. Sometimes there are several bidders, and bidding continues until the property is won by the highest bidder. The winner of the bid then submits a specified amount of money, usually $5,000, as a deposit. The balance of the purchase price is delivered to the trustee the following day.
HOW MUCH ARE HOMES AUCTIONED FOR? The primary lien holder (the lender) will sell the home for at least the amount of the balance owed on the loan, plus expenses that have been incurred. Sometimes this is as little as one cent over the amount. Depending on the number of bidders, it can be sold for more. If any money is collected at the auction above that minimum amount, it will be paid to the next junior lien holder (for example, the lender holding the second mortgage). There may be taxes owed, as well, which MUST be paid.
WHAT ABOUT OTHER LIEN HOLDERS? Other liens can be placed against the property, such as Mechanics Liens (a lien brought by a contractor or subcontractor against the property). These liens will be paid IF there is money left over from the sale. How likely is it that they will be paid? Well, how often will people pay more at auction than they NEED to? Being in second or third position as a lien holder is not a good place to be. There is seldom any money left to give the homeowner
The Notice of Default letter has arrived in the mail, which means that a homeowner is over thirty days late making the payment. The Notice Of Default is filed with the county recorder, and the letter indicating that it has been filed is sent to the homeowner. The letter will usually give the homeowner a grace period in which to bring the payment current, along with late fees assessed. If the loan is brought current and late fees paid, the Notice of Default is cancelled or "cured" and the county recorder is informed. Nothing more happens. If the default is not cured, then foreclosure begins.
FORECLOSURE STEPS:
Loan is at least 3 months in default
A Trustee (an attorney or law firm specializing in foreclosures) is appointed by the lender to handle foreclosure proceedings.
The Trustee files a Notice of Foreclosure with the county recorder
The Trustee sets an auction date. This date is based upon legal notices being printed in local newspapers at least three successive weeks before the auction.
The loan is not brought current, and the auction continues as specified, and an attempt is made to sell the home at auction.
If the home is not sold at auction, ownership reverts to the lender, and the home is eventually b listed for sale with the lending institution as the seller. The homeowner in default must have moved by this time.
Note: Lending institutions are in the business of lending and collecting money- they do not want to be PROPERTY OWNERS. A foreclosure will cost the lender around $40,000 or more. Lenders are willing to stop the auction if it is possible to sell the home or to "cure the default". I've seen auctions cancelled the night before because the homeowner brought the payments up to date somehow, or was able to actually find a buyer. (That's a whole 'nother article).
Everywhere you turn nowadays you hear about foreclosures. Yes, this is a very real problem--for the seller. And a good thing for the buyer, maybe. Here is one of the generic articles you're no doubt seeing around--from our own local Pyramid Shopper. It's a good article, but somehow theHEART of this issue is lost. After reading, please drop below to see my comments. This is painful reading for me!No one wants to see someone they care about go into foreclosure on their home. In a conversation recently with a local banker, I heard the saddest story of his SISTER who was afraid to talk about the situation with anyone because she was embarrassed, and who WALKED AWAY FROM $60,000 in EQUITY! She lost her home, her equity, her self-esteem... THIS SHOULD NEVER HAPPEN--because there are ways to help out! Because we work with lenders, continue our education, study the market, sometimes realtors can help you "brainstorm", get creative, know what helps are out there. We don't always have to make a commission, you know.
There are so many ways to handle such a situation. Over the next few days I'm going to be posting some articles on the subjects of how to avoid foreclosure, what to do if you can't avoid it, softening the blow, mortgage helps, short sales-all targeted at the current homeowner. WHY WALK AWAY IF YOU DON'T HAVE TO?
Later, watch for articles on how this double-edged sword can be a boon to the buyer.
Sooo...how does the stimulus bill help homeowners? Here's a letter from the president of the National Association of Realtors with his take on the package. Realtors all over the country (including me) studied the issues and wrote letters to our congressmen and to the president. We think we accomplished some good things!
President's Message -
Dear Fellow REALTOR®,
Here's our take on the Stimulus Bill and Treasury announcements made this week. We look at the Stimulus package AND the Treasury's package holistically, in compliment with each other - mostly because that's how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.
So here's what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.
In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).
We did make a run at the $15,000 credit -- and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of 'what we are willing to give up to get a $15,000 tax credit' and kept the debate again, on how much it should be. It's pretty hard to complain when they give you what you ask for and you lose something you never had.
While we study the Treasury specifics on their major role in providing the rest of the housing solution -- there is much more to come and we are working diligently with the Administration to help 'unclog the pipeline' and get capital flowing into housing again.
Sincerely, Charles McMillan Signature Charles McMillan, CIPS, GRI 2009 NAR President
[1]RISMEDIA,
March 19, 2010—(MCT)—Want to sell your home? Get out the bucket, mop
and Mr. Clean. The key to making a positive first impression is simple,
said Sandra Rinomato, host of HGTV’s popular “Property Virgins” show.
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