Wednesday, December 22, 2010

10 Real Estate Predictions for the New Year

10 Real Estate Predictions for the New Year

RISMEDIA, December 22, 2010—

The start of a new year is often a time of reflection, as well as a time of anticipation for the future. It’s no different for real estate professionals, many of whom have weathered the recession and are now optimistic about 2011.

From the return of new construction to the creation of healthier homes, the following are 10 residential real estate trends they see for the coming year:

1.) Building is back: After three years of little to no new development, John Wozniak of Wheaton, Illinois-based J. Lawrence Homes said the builder is excited about 2011. “After a couple of very challenging years, the market for new-construction housing is showing signs of life. Slowly but surely, homes are selling and new properties are breaking ground, such as the two communities we opened this year in Lynwood and North Aurora,” he said. “We’ve had encouraging sales and I believe they point to an uptick for 2011.”

2.) Apartments continue to thrive: If there has been one bright spot over the past few years in the real estate industry, it has been the rental market. “People have realized the many benefits of renting, from having more flexibility with your housing commitments to a higher level of finishes and amenities. And, this demand will continue to outpace supply,” said Steve Fifield, president of Fifield Cos. “Appraisal Research reports that Chicago’s Class A downtown apartments are at a nearly 95 percent occupancy rate, and those numbers will continue to stay very strong for 2011.”

3.) Opting for established: The mega-communities in the exurbs are a thing of the past, said Brian Brunhofer of Meritus Homes. Instead, 2011 will see builders move toward smaller neighborhoods or pockets of homes in established communities. “Close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet you – that attractive quality of life is going to appeal to buyers much more in 2011.” Seconding the movement toward established communities is Jeff Benach of Lexington Homes. “Buyers are looking for a safer investment for their home purchase,” he said. “We won’t see them roll the dice like in the past on a fast-growing town in a far-out suburb. They want a proven area with access to retail development and employment corridors. They don’t want to wait for the surrounding area to be built. They want everything already in place,” he said.

4.) Make it modern: Chalk it up to “Mad Men” or simply a pendulum swing in taste, but either way transitional and warm-modern design will be prevalent in 2011, said Brian Goldberg, a partner in LG Development Group. “Our clients are looking for a cleaner approach to the style of their homes – more mid-century and less traditional with a warm and tailored aesthetic,” he said.Ray Hartshorne, principal of Hartshorne Plunkard Architecture, agrees. “From the single-family side, our clients are gravitating toward modern design instead of strictly traditional, that is simple, clean line exteriors and open floor plans that are comfortable for the family and versatile for entertaining,” he said. “In the multi-family sector, now more than ever, we are seeing an interest in contemporary-themed and luxurious interior design for lobbies and common areas.”

5.) Buying for the long term: The Census shows the average person moves about 11 times, but Jim Chittaro, president of Smykal Homes, predicts that number will slowly decrease. “Thankfully, the idea of a home as a short-term moneymaker is essentially gone, so when people do buy, they’ll do it with the intention of staying put for closer to 10 years rather than two to three,” he said This means people will be studying floor plans more closely, to ensure the home will grow with them, Chittaro continued. “Buyers want to be sure the home will suit their needs not only now, but down the road, whether they plan to expand their family or prepare for kids to leave the nest,” he said. “Floor plans that can adapt to lifestyle changes with flexible features like second family rooms should do well in 2011.”Brunhofer agrees that more buyers will be looking for a home for the long haul. “It’s not just floor plans that buyers are going over with a fine-tooth comb,” Brunhofer said. “Our buyers are very careful about school districts. They want to know they can send all of their children to a school with a proven track record and not have to relocate a few years down the road to ensure a good education.” The shift to long-term buyers will also put long-term builders in the spotlight. “People are hesitant to buy a home from a builder or secure a mortgage from a lender they don't perceive to be well-established,” said Benach. “Buyers want to know their builder is committed to them and the community, and that it’s not about making a quick buck or boosting a shareholder’s financial interest. That personal connection is really important.”

6.) Upping the ante on amenities: In 2011, developers will continue to create new and exciting amenities to differentiate their properties and keep them relevant in the marketplace, said Tony Rossi, president of RMK Management Corp. “Renters are looking for something special, like an outdoor grilling area or special events like dance lessons,” he said.But it’s not just enhanced outdoor spaces in apartments that will matter in 2011. Benach thinks condo and townhome buyers will also place a higher importance on outdoor space in the coming year, especially those who live in an urban setting. “People may realize they don’t need to live with as much square footage inside their home, so to compensate they’ll want a place to call their own outside their home,” said Benach.

7.) High-tech takes over: Running your home entertainment system, appliances and lighting from a centralized control panel is old news. Going forward, we’ll see more homeowners want a smart phone app that can control their residence remotely, noted Goldberg. “Each year, the demand increases for home technology that makes homeowners’ lives easier,” he said. “We’ll get to a point, and some of our clients are almost there, where homeowners can leave work and by activating an app on their phone have all of their home electronics queued up when they walk in the door – the oven is preheated, lights come on and a TV show turns on when motion sensors recognize they’ve walked into the room. It may sound like a movie, but some of this technology we can build into homes now.”

8.) Smaller homes stay the course: The average size of a new home decreased for the first time in decades from 2008 to 2009, and that trend will continue into 2011, said Benach. “This trend is fueled by first-time buyers with smaller budgets, requiring smaller homes,” he said. “New buyers will have to be more conservative with their mortgages and will need to pay a higher percentage for a down payment, which means they’ll need a home with a smaller price,” he said. “People won’t be buying more than they need. So to meet their needs, we’ll see builders continue to trim the size of their homes and look for new ways to make square footage work harder.”

9.) Green and gorgeous: As the green movement continues to grow, high-end builders and developers have found ways to make homes both green and gorgeous. “The old mind set was that a green home couldn’t also be stylish and sophisticated. It was as if the two concepts were mutually exclusive,” said Hartshorne. “But new products and forward-thinking design have proved that today’s homeowners can have both. Also, building a green home doesn’t have to break the bank. We are constantly being introduced to attractive, sustainable building materials that are more cost effective than in the past.”

10.) Healthy homes: When you consider a study by the National Institutes of Health that found the number of people with allergies is as much as five times higher than 30 years ago, the trend toward building homes with a healthier environment will also gain ground in 2011, said Goldberg. “Indoor air quality, low VOC paints and adhesives, and all-around healthier materials are becoming more and more of a concern for people building homes – especially for those with children,” he said. Rick Croce, from Wheaton-based Smykal Renovations, said this trend applies to existing homes, too. “Due to the economy, many people have decided to stay put in their existing home, which means they’ll be investing in changes to make it look better and live healthier,” he said. “We expect to be pricing out more jobs that include installing HVAC systems with better filtration, using low-VOC materials and even replacing old doors and windows to safeguard against exterior pollutants.”

Monday, December 20, 2010

Christmas Is a Time To Give

As we approach Christmas 2010 and the upcoming New Year 2011 there is excitement, anticipation and memories to be made that will last a lifetime in the upcoming weeks. For many, celebrating Christmas is a time to reflect on childhood memories and to create and make new lasting memories with your friends or for your own family, children or grandchildren. It’s a time of joy, and a time for family and loved ones.

For me and others, it’s this time for family but also a celebration that dates back thousands of years to celebrate the birth of Jesus Christ. For others that are not religious or follow Christianity the Holiday means other things. Each is entitled to their own faith and traditions and I am not one to pass judgment.

I do however want to comment on what I feel can be shared by all regardless of faith and that is the great joy that can be felt by giving to others. As I get older, each year holidays like Christmas become more and more special to me. I love to sit back and watch my nieces and nephews dive into their gifts with reckless abandon and smiles from ear to ear! They tear away the wrapping paper in a blink of an eye and to watch their eyes light up is the best feeling I can describe. It takes me back to those days as kids when me, my brother and sister would wake up at the crack of dawn to run downstairs and see what gifts were under the tree, then run to mom and dad’s room to wake them up so we could get to those gifts!

Now as I grow older, I also realize that for all of the wonderful memories I’ve been blessed with and continue to look forward to making each year, there are also those less fortunate. I try to do my part to help where I can including buying gifts for toys for tots and recently for a name-less single mother with three children from my church that has requested help this Christmas to bring smiles to her children, but do I do enough? Not hardly. I’m certain I could do much more but knowing that I can help even in a small way put a smile on a face of someone feels good. I want to challenge you to keep the joy of giving as a focus this year and share the neat poem written below that sums it all up!

The Joy of Giving
John Greenleaf Whittier

Somehow, not only for Christmas,

But all the long year through,

The joy that you give to others

Is the joy that comes back to you;

And the more you spend in blessing

The poor and lonely and sad,

The more of your heart's possessing

Returns to make you glad

Tuesday, December 14, 2010

Positive News for Chicago Area

Fewer Homes Underwater! For those of you not privy to our real estate terms, this means that fewer home owners now owe more, than the home that they own is worth.

For the Third Quarter of 2010, the number and percent of homeowners in the Chicago area who owe more on their mortgages than their homes are worth fell. This was the third straight decline, according to a report from CoreLogic. However, the report may be due to homes going into foreclosure rather than price gains but we see this as positive news regardless.

The the third quarter 22.3 percent of home in the Chicago area or 324,741 homes were underwater which was down from 22.7 percent.

What does this mean for the big picture? It may not signal any real breaking news that will catapult the real estate market or build much optimism to help us rebound from 2000 prices but we'll take it! Simply put, any news like this is better than the alternative and we need to keep our heads up and realize that despite tough times, the sky is not falling and things will improve.

I read in a book written from Dale Carnegie last night this quote from Marcus Aurelius...."The happiness of your life, depends upon the quality of your thoughts."

I love this quote and it can be summarized that if you think happy thoughts, you are more inclined to be happy. If you think negative thoughts or fearful thoughts, you most likely are living your life patterning those thoughts.

Keep this in mind as you look towards a great 2011 and success and happiness for the year ahead!

Monday, December 6, 2010

Advantage Realty Group Blog: Thinking of Being a Landlord or Investor? Underst...

Advantage Realty Group Blog: Thinking of Being a Landlord or Investor? Underst...: "Hello and thanks for reading my blog! If you are not a regular follower of this blog, please subscribe to it today. You'll be glad you did a..."

Thinking of Being a Landlord or Investor? Understanding Cap Rate is a Must!

Hello and thanks for reading my blog! If you are not a regular follower of this blog, please subscribe to it today. You'll be glad you did as I routinely share many useful tips for your home, tips on investing, and updates on the real estate market locally and nationally.
Today, I am going to discuss with you how to calculate capitalization rate and why this is a must when investing in real estate.

In order to invest in real estate in income producing properties you must have a method in determining the value of the property you're considering buying and by utilizing the tool of calculating cap rate you can quickly weed out homes that may or may not be a good investment.

So what is cap rate?

Definition: Capitalization rate defines the percentage number used to determine the current value of a property based on estimated future operating income. In other words, taking the net operating income from an apartment complex and dividing it by the capitalization rate would yield the approximate current value of the complex.

The capitalization rate would be determined based on an appraisal and/or the cap rates of similar properties that have sold recently. By taking another apartment project that sold recently, determining it's net operating income (NOI), you would divide the income by the sold price to get the cap rate.

When I review homes, I personally with some exceptions look for properties that have cap rates of 10% or better. For me, this guarantees that once I put money down and purchase the home, that I am immediately cash flowing. Many investors will be happy with less, for me its a number that I try to stick to and have found success.

The Cap Rate is computed by taking the rental net operating income (NOI) and dividing it by the property's fair market value (FMV). The higher the Capitalization Rate is the better.

Cap Rate - Practical Use #1
You can use the Cap Rate to value your property. Let's say that your property generates $10,000 of annual net operating income. Your real estate agent tells you that the Capitalization Rate in your area is approximately 4%. That would mean that the approximate fair market value of your property is $250,000 ($10,000 / .04).
Cap Rate - Practical Use #2
Let's assume that you are looking at investing in two properties. The first property has a projected NOI of $20,000 and an asking price of $500,000. The second property has a NOI of only $10,000 but an asking price of $110,000. Which one would the Cap Rate suggest is a better investment? That's right, the second property since the Cap Rate is 9% ($10,000 / $110,000) versus 4% ($20,000 / $500,000).

Hopefully the above has helped you both understand the benefit of understanding what cap rate is and how to determine what it is for your own properties or others that you are considering investing into.

Want additional information or assistance in finding a great home? Contact me direct for a free consultation where we will work on a personal plan for your own success!

Wednesday, December 1, 2010

Bob Hudetz of Advantage Realty Group Bone Marrow Donor for Leukemia Recipient!

Rock River Valley Blood Center helps man donate stem cells
By Mike DeDoncker

I wanted to share the below article as it speaks of the wonderful life that my business partner Bob Hudetz may have saved through the act of being a bone marrow donor. He's extremely proud to have been a match for a person in need and I hope you share in the great news that his selfless act may have just saved someones life :)

Have a wonderful day and thanks for reading our blog as usual!

Posted Nov 28, 2010 @ 09:19 PM

ROCKFORD — Somewhere, an anonymous patient was waiting Tuesday for Bob Hudetz’s appointment at the Rock River Valley Blood Center to be over.

That’s because when Hudetz was finished with the four-hour procedure to extract stem cells from his blood, a courier would immediately fly them to the 64-year-old woman who would receive a transplant to treat her acute myelogenic leukemia.

“It’s cutting-edge stuff, and, of course, it doesn’t happen here every day,” said Jennifer Bowman, the blood center’s public relations and marketing manager.

Hudetz, owner of Advantage Realty Group in Naperville, became a part of a national marrow donor registry two years ago when a Neuqua Valley High School student needed a bone-marrow transplant and he joined a drive to find a match for the student.Hudetz wasn’t a match for the student, but in July, the blood center’s marrow donation coordinator, Julie Tilbury, contacted Hudetz to tell him he was one of 10 potential donors for the woman fighting leukemia.

“Apparently, they need the perfect match to have this person to be able to accept my stem cells,” Hudetz said, “and, then, earlier this month Julie called to say I was the perfect match, that there was an urgent need and could we get this done.”

In the procedure, the stem cells are extracted from the white cells of the donor’s peripheral blood.“It’s the most common way that we do marrow transplants,” Bowman said. “Most of them are from an adult donor.”

Holly Lindquist, the blood center’s automated collection coordinator, said blood is drawn from one of the donor’s arms and the blood passes through a machine that separates the cells with a centrifuge. The machine saves the white blood cells, and the red cells and plasma are returned to the donor into the other arm.

“When somebody said ‘bone marrow transplant,’” said Hudetz, who sat comfortably with both arms covered by small blankets, “I used to think that’s painful. It’s as easy as giving blood.”

He also said the test he took to become part of the national donor registry was a simple, painless swab of the inside of his mouth.“Of the people who need these transplants, of those who get it, it’s like an 80 percent success rate,” Hudetz said. “People should get in the registry because, if you’re the match, you can save somebody’s life.”

Staff writer Mike DeDoncker can be reached at 815-987-1382 or
Copyright 2010 Rockford Register Star. Some rights reserved

Monday, November 29, 2010

Buying Your First Home

Buying Your First Home

Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.

Before You Start
  • Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.

  • Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.

  • Think about your lifestyle and how it might affect your choice of home and neighborhood.

  • Do a little research on current home prices in the neighborhoods you plan to target.

Buying Your First Home

Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.

Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.

Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.

How Much Mortgage Can You Afford?

Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.

The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28% of your monthly gross income.

The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36%.

Many home buyers choose to arrange financing before shopping for a home and most lenders will "prequalify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.

In addition to qualifying for a mortgage, you will probably need a down payment. The 28% to 36% debt ratios assume a 10% down payment. In practice, down payment requirements vary from more than 20% to as low as 0% for some Veterans Administration (VA) loans. Down payments greater than 20% generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.

How Much Home Can You Afford?

Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28% yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).

Their total debt ceiling of 36% is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.

Costs of Buying a Home

Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3% and 8% of your purchase price.

Ongoing Costs

In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.

Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.

Choosing a Neighborhood

Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.

Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.

Finding a Broker

If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.

Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5% to 7% and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.

Home Buying Costs

Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price

Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.

Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.


· Buying a home can mean building significant value through the years.

· Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.

· Prequalifying with your lender is a good way to determine how much house you can afford.

· You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.

· In addition to your mortgage payments, you will also need to consider the other costs of home ownership.

· Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.

· Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.

· Remember to consider resalability when buying your home.


  • Update your household budget so you can begin to realistically assess how much home you can afford. Be sure to factor in all your monthly income and all the expenses that may come with a home.

  • Add up any savings you could use toward a down payment, and decide whether you need to save more before you start house shopping.

  • Start talking to lenders about your options for prequalification and preapproval.

Wednesday, November 17, 2010

Avoid Paying to Much for your Next Home

Buying a home is one of the most exciting moments in life. It can also be one of the scariest. The question in every buyer's mind is: "How Do I make Sure that I'm not paying too much for this house?" In today's market, this is a valid concern.

In today's market it's not unusual to see homes which had been reduced tens of thousands of dollars...I'm talking between $40,000 ~ $50,000 and still remained unsold! In the higher price ranges, the downward shift was even more bone chilling...$100,000 ~ $150,000 or more. Matter of fact, recently I've spent a large amount of time viewing some absolutely gorgeous homes in Plainfield that were built in the past 4-5 years, sold for 600K-700K and now available for 300-400K! That kind of depreciation can feel like you're watching your money burn.

Throughout the country and locally, inventory levels are at an all time high. If no additional homes were listed in the Naperville Illinois area the current rate of sales would take the homes currently listed about a year to sell and in some cases more. This is what real estate agents refer to as the Absorption Rate...the rate at which homes are being absorbed in the current local market.

The absorption rate is important to follow. When it begins to fall or rise, it foreshadows a turn in market conditions. For reference purposes, a healthy rate of absorption is between 3-6 months of supply.

So, what's a buyer to do? There is a risk to purchasing and paying over market value for a home. But there is also a more insidious issue...the FEAR of being so cautious about making a mistake that you miss a deal that's literally "dancing across your eyelids" in the hopes that you'll blink and take notice.

You see, every market has its' great deals and its' lousy deals. It's not so much a function of the market as it is in knowing when you should hold on to an asset and when you need to let it go. AND everything hinges on HOW you buy the asset in the first place. Buying an over valued asset guarantees that money will be lost...your money. The key is identifying when this is about to take place.

Correctly discerning when money is going to be lost in a real estate transaction is a skill that requires precision, attention to detail and the wisdom of experience. In truth...there's also an element of luck involved. There is no guarantee when it comes to the market that is will improve or worsen, only time will tell. There are some situations which no advance preparation can completely protect against. Life happens...devastating financial reversals in a local economy can wreck havoc with pricing and subsequently a community's home values.

Nevertheless, there are some simple steps that can help you to assess what to pay for a particular home.

1. Know Your Market~
Contrary to conventional wisdom, I do think that home buyers have a responsibility to do their own independent research. Go on-line and look at homes, visit Open Houses and model homes and talk with friends who have bought homes. When you do these things AND talk with a competent professional real estate agent, you are much more likely to understand WHAT questions you need to ask AND to understand the implications of the counsel that you are being given. So often, I see clients who are given excellent information not follow it because they don't know enough about the issues at hand to make a good judgement.

2. Interview more than 1 Agent. ~
According to data compiled by the National Association of Realtors, most people will only interview one agent. This is not wise. There are significant differences in the service and experience levels offered by real estate agents. Most people would not buy the first car they looked at on a lot or forgo having a second opinion when facing a major medical decision. Purchasing a home correctly is a hefty financial obligation. Give yourself the benefit of comparing your options. Choosing the right real estate agent greatly increases the likelihood that you will have the information necessary to make the right offer.

3. Insist on a Comparative Market Analysis AND a Neighborhood Analysis.
At a time when prices in some locations can plummet as much as 25% within a six month period, it's important to have as much information as you can prior to making an offer. A properly prepared Neighborhood analysis will enable you to make comparisons across different neighborhoods. If you are not constrained by a school district, this can afford some incredible opportunities to purchase a good deal. When you compare similar homes in different areas, it is possible to identify which areas are holding their value.

A Comparative Market analysis is the traditional vehicle for determining a home's value. Often this is ONLY made available to home sellers. As a home buyer seeking to protect your investment, you should INSIST that you are given access to this valuable information. A good real estate agent will modify the Comparative Market analysis to ensure that as a home buyer, you are obtaining the information which allows you to make an educated decision about a particular home purchase.

At Advantage Realty Group we provide a number of specialized services to clients who are interested in making a solid investment. We understand that the Value of a Home can never be reduced to simple monetary terms. However, we know that for many home buyers, the prospect of making a poor decision is daunting. Our goal is to put our considerable experience and resources to work for our clients and assist in facilitating a transaction which enables your dream home to remain an excellent investment.

Monday, November 15, 2010

How Does the Foreclosure Freeze Impact Housing?

The Optimists

Bank of America, JP Morgan Chase, Ally Financials GMAC mortgage division and PNC Financial, have all suspended home seizures in all 23 states where courts oversee foreclosures. Bank of America is halting foreclosures in all 50 states to examine its process. Past sales will stand, and if you are not already out of the house.

Eviction: you could be evicted unless the buyer was the bank, they will not evict during the freeze

Helps families: The foreclosure freeze may buy time for some families and allow them to catch up and stay in their homes which could help some families try to get back on their feet and catch up with payments.

Reduces housing supply: In the short term, the lack of new foreclosed properties coming on the market could help the housing industry by keeping supply off the market.

Better mortgage mods: If the banks cannot willy nilly foreclose on properties, they will be forced to lend a stronger hand to mortgage modifications benefiting many more people.

Writedowns: banks may finally realize that foreclosure is damaging and that loan writedowns could be taken more seriously as a less complicated option to getting inventory off the books and repairing balance sheets by making these assets whole

Short Sales: Banks may be more willing to accept a short-sale offer. If the foreclosure route is messy or even unavailable for some period,the banks may become more open to a short sale as an alternative to holding inventory.

The Pessimists

The moratoriums can be incredibly destructive to the fragile recovery of the housing and housing finance markets. Consumers looking to get back into housing are even more put off than before.

Inventory: Those freezes could delay the housing market's recovery and a moratorium would add time to the necessary process of washing out all that surplus inventory.

Price stability: It will be difficult for prices to stabilize as long as a large number of homes remain in the foreclosure pipeline. They are likely to hold off to see whether more supply would lower prices even more, leading to further house price declines.

Crime and disrepair: if some properties are not taken off the market and are allowed to be abandoned they can It will also create more crime since communities will have vacant homes sitting empty for longer periods of time

A freeze in sales: The title insurance protects the bank that issuing a new mortgage. Title insurance searches for problems with title and assures or insures that the propertry is free and clear and can be sold. No title insurance, no new mortgage and no foreclosure sale. Title Insurance payouts could be enormous.

The banks will pull it: Fannie & Freddie stand to lose billions and will take the banks to court to recoup.

Sales slow significantly: If title insurance companies start to shy away from insuring foreclosed properties because of unexpected claims, the housing market could take another hit. Sales could be hampered by difficulty in getting title insurance, at or by higher fees associated with higher risk assessment.

You may republish this article, as long as you do not edit and you agree to preserve all links to the author and

Tuesday, November 9, 2010

Advantage Realty Group Blog: Cost Effective Ways to Winterize Your Home!

Advantage Realty Group Blog: Cost Effective Ways to Winterize Your Home!: "7 DIY Tips to Winterize Your Home for Cheap There are two kinds of home winterizing tips. The first variety often involves spending a load..."

Cost Effective Ways to Winterize Your Home!

7 DIY Tips to Winterize Your Home for Cheap

There are two kinds of home winterizing tips. The first variety often involves spending a load of money to upgrade your energy efficiency. While definitely worthwhile and timely with many federal energy tax credits expiring this year, these fixes can still be very costly (think adding insulation, getting a new energy efficient furnace, energy efficient windows, etc.).

The other variety of home winterizing tips focus on the things that you can do on a weekend afternoon for very little money (or free) with a little bit of elbow grease. The cost savings of doing such work generally comes in the form of preventing costly fix-it repairs that come from neglect. Here are seven things that you should do around the house every year before the first sign of snow hits.

1. Clean Out Your Gutters

Gutters that are dammed up with leaves can result in ice dams, which can lead to all kinds of costly outdoor repairs — damaged shingles, roof leaks, broken gutters, etc. Additionally, if your gutters are clogged up, water could be falling right next to your foundation and leads to possible flooding in the basement.

Estimated Cost: Free, as you don't fall off the roof and end up with a medical bill.

2. Drain Your External Faucets

Water that is sitting in pipes that lead to outside faucets can freeze and burst, ultimately flooding your basement and leading to possible water damage and mold problems. Simply close off the interior faucet valves by turning them clockwise all the way to the right. Then go outside and make sure that every last drop has come out of the faucet.

Estimated Cost: Free

3. Caulk

Search for drafts around windows and doors on a cold windy day. Place a tissue paper over the suspected draft area. If the paper flutters, you've probably located the draft. For drafts under doors, you may have to buy a rubber draft stopper to place at the bottom of the door.

Estimated Cost: $3/tube (One tube should be more than enough.)

4. Repair Your Shingles

If you have cracked, missing, or otherwise damaged shingles, have them replaced immediately so that you don't get roof leaks. Strong winds, falling tree limbs, and sun weathering can all lead to damaged shingles. You might as well check them out while you're up on your roof cleaning out your gutters.

Estimated Cost: $1/shingle

5. Flush Your Hot Water Heater

You can flush a hot water heater any time of year, but you might as well throw it in with the other maintenance work you'll be doing since you really only need to do it about once a year. If you don't, sediment can build up at the bottom of your water heater and cause it to lose efficiency or even leak.

Simply take one of your water hoses and fasten it to the water faucet at the bottom of your water heater. Turn off the water heater so that you don't get burned by hot water accidentally. Run the hose outdoors, preferably, but if you can't do that, then a laundry tub should be sufficient. Open the valve and let the water drain out completely, rinsing out the sediment with it.

Estimated Cost: $0.001 for the water

6. Replace Your Furnace Filter

Furnace filters, in a clean basement, can lead to a more efficient furnace when replaced about every six months. I usually replace mine when I first turn on the heat and then when I switch over to air conditioning in the summer.

Estimated Cost: $5-$15, depending on the furnace

7. Programmable Thermostat

Most programmable thermostats can be purchased for $30-$70. In a cold climate, you might be able to save that much in a month alone if you set one up to be cooler while you are out of the house and at night, and warmer when you are at home. And they are easier to install than you may think (half-hour job, max.).

Estimated Cost: $30-70

Monday, November 1, 2010

Advantage Realty Group Blog: Tips to Prepare for Your Home Appraisal

Advantage Realty Group Blog: Tips to Prepare for Your Home Appraisal: "When it comes to home appraisal tips, take the time to review what moves will have the most impact. An appraisal occurs when a property is ..."

Tips to Prepare for Your Home Appraisal

When it comes to home appraisal tips, take the time to review what moves will have the most impact. An appraisal occurs when a property is evaluated and a monetary value is set by an independent analyst, called an appraiser. Home appraisals also take into account the area where the property is located and the value of similar property in the neighborhood.

Two Weeks Before An Appraisal

Pull together a list of all the major repairs and upgrades that the home has. For example, if you replaced the roof a few years ago, make a note of that. Other key upkeeps are new water heaters, replaced windows and upgraded HVAC systems.
Add valuable features to the home and property. It's not necessary to do an extensive remodel, but investing a few hundred dollars in things like bathroom fixtures, storage shelves in the garage and newly planted trees can all add up to a higher appraisal.

Take care of all the small things wrong with the home, such as burned-out light bulbs, broken front steps, sticky sliding glass doors and smoke detectors without batteries.

One Week Before An Appraisal

Get the inside of the home in as good a shape as possible, including a fresh coat of neutral-colored paint. Other ideas for sprucing up the home include professional carpet cleaning, window washing and hiring a professional cleaning crew.
Don't ignore the outside of the home, either. Clean up all the landscaping so that it is visually appealing. Add to the landscaping, if possible, such as extending the patio or deck with paving stones, planting flowers in beds or pots or even cleaning up cluttered, junky areas of the property.
Simplify the look and layout of furniture and storage inside the home. If you have too much furniture crowded in one room, rearrange and even remove pieces so the room looks bigger and more spacious.

Clean cluttered shelves, and replace stuff with a few simple ornamental pieces. Giving the illusion of more space and clean and simple lines makes a room look bigger and feel more spacious.

The Day Before The Appraisal

Clean the house completely, with no room left undone. Look for cobwebs in high corners, dust light fixtures, sweep and mop floors and take out the garbage.
Place some potted flowers near the entrance of the home (proper weather allowing) to enhance the "curb" appeal.

Ensure the house smells good, either with a scented candle, air freshener or even freshly baked brownies.

Use the tips above and give your home the best chance to shine during its next appraisal. Now more than ever with the strict guidelines and regulations that lenders have, an appraisal can make or break a sale!

Friday, October 29, 2010

10 Steps to Establish a Frugal Home Remodeling Budget

We all have those one or two or in my case, half a dozen things that you really want to do to your home. You may have some needs that are more pressing than others and yet you may also find yourself in a quandary as to what to address first based on your budget and the potential expenses involved. Does this sound familiar or like you? :)

Before you go and tackle a home remodeling project be sure to first start with a plan of attack. The most important step is to establish a realistic and affordable budget. You'll need this so that you don't overspend and so that you also have some guidelines to follow for materials and labor needed for your project.

First things First:

1) Recognize Your Cash Flow - Do you currently know what your monthly budget consists of and what expendable money you may have to work with each month? If you have not set up a budget to track your monthly expenses, now is a good time to do that. Once you know what your typically spending against what you typically make, you'll better be able to assess what you can put towards a project without jeopardizing your finances.

2) How will you pay? - Its important to determine if the project will be paid for in cash/checks or on credit. Credit has its advantages if there are cash reward programs and if your strong at paying back the balance on a monthly basis. If you don't fall into that category and have not been great with credit then try to avoid it. Paying additional interest on items purchased compared with paying cash isn't a great way to save money!

3) Establish the scope of the project - In order to create a reasonable budget, you have to carefully set the scope of the project and stick to it. If you add additional tasks or projects as you go, then you won't be able to stick to your budget and run the risk of not finishing what you started due to finance shortfalls.

4) Consult a Pro- If your not a handy person and would like some guidance don't be afraid to contact a friend or a professional that can offer advice and can even possibly help with the planning and estimating.

5) Estimates - Are you doing this project yourself? If so then know your material costs but if that's not the case, then get your labor estimates in order. Rule of thumb is often to get 3 estimates but at least 2. You'll be surprised how much one may charge compared with another. Another tip would be to never pay in advance for the work. Its not uncommon to pay half once its half done but then the balance once the work is finished. Also, be sure they sign off on a time-line of when they feel they can complete this work.

6) Measure Carefully - If making measurements for backsplash, tile, etc... or any number of projects its vital to be very accurate with your measurements. You won't want to be wasteful for one, but more importantly you'll need to be in line with your budget and mis-calculating can throw your budget off significantly.

7) Cut Costs and Economize - It can be easier to stick to a remodeling budget if you can cut costs where possible. It's often possible to cut costs by simplifying designs and substituting less expensive materials.

8) Do Some Work Yourself - Many projects have a part to them that may not need the help of a professional that you can complete yourself. By doing so, you'll save money and labor costs. By doing some work where you are able by yourself, you can save money that you can possibly put towards additional work that you'll need help with.

9) Budget Cushion - You can be the best planner in the world, but you better prepared for surprises as they often come up. If you are going to plan a project that is $1000 for example, be sure that you expect to pay $1250. If you never need to dip into the extra amount, great! However, if you needed to but didn't plan for it then you'll wish you had!

10) Be Realistic - Be realistic and careful when planning for your home improvement project. If after careful estimates and budget planning it appears that you can't yet afford the project, either find ways to cut costs or delay the project until you can afford it!

Happy remodeling and don't forget to pass this along to your friends & family looking for great advice on a weekly basis!

Tuesday, October 26, 2010

Chicago Area Home Sales Down.....NOW IS TIME TO BUY!!

Today the most recent reports updating us from the Illinois Association of Realtors has given us another opportunity to look at the glass as half empty or half full.

As for me, while not always successful but given the chance will 9/10 times find myself seeing the glass as half full.

Here is the latest news; Despite record low mortage rates, home sales and median home prices tumbled in the Chicago area during September. According to the Illinois Association, September sales were down 22.4% from a year ago and down 5.4% from August. The median sales price was down 12.1% to $175,000.00

This Chicago "area" defines 9 counties in Northeastern Illinois and may not be a reflection on your area.

For Chicago, home sales fell 26.9% compared with last year and the median home price is down 20% from last year this time.

The forecasts for the remaining months of 2010 suggest more of the same. Other realtors and I can vouch for this, suggest that distressed properties, including foreclosures and short sales, dominate the market and are driving down prices.

Statewide numbers appear similar with home sales down 23.4% from a year ago and the median home sale price down 8 percent from a year ago to $145,983.

What can we take from this? Well if you are a "GLASS IS HALF EMPTY" type, then you'll say the market is terrible. Don't buy a home, don't invest in real estate and wait until things improve. Well, this may in fact be decent logic and based on past history one may conclude that things will not get any better for some time and we may not have seen prices hit the bottom yet.

I however would rather paint a better picture for you all to reflect on this news. Lets read between the lines.....The majority of all my clients and those other realtors are reporting that the majority of all sales have been foreclosures and short sales. Now think for a moment...Do you suppose all those buyers, who have recently purchased homes with prices as low as they are, coupled with interest rates at all time lows will see a great move in property value north of their investment when the market returns? Of course! If 9 out of 10 homes in any subdivision were purchased prior to the market slide then its a matter of economics that once distressed homes are no longer much of an option, home values will spike higher to that of a common ground that all home sellers once had. This means an opportunity people for you to purchase homes or investment properties as prices now that will see great returns in future years!

Don't sit on the sideline and wait for a recovery. It may be too late and interest rates may not be as low as they are today.

The best opportunity for anyone that has been renting and may qualify for a home is to act now. If your looking to invest in property above and beyond your home, act now. If you are in a financial position to sell your home and upgrade, do it now!

If you need help and would like to speak with a great lender, contact me today and I'll put you in touch with a couple of the best in the industry to discuss options with you. If you are already approved and ready to start your search then contact a local agent or if your in the Dupage/Will County area, contact me today, you'll be glad you !

Thanks as always for reading my blog and please feel free as always to forward this on to friends or family that you feel may benefit from hearing the most up to date news in real estate or tips for your home:)

Friday, October 22, 2010

How to Purchase a Home on a $100,000 Discount

Passing on this great article that i read today on Yahoo Finance! If you are in the market to buy or sell, contact a professional at the top of the game today like myself and take advantage of this great purchasing opportunity!

To pare down their growing inventory of properties, Fannie Mae and Freddie Mac are scrambling to unload nearly 150,000 foreclosed homes. And that means 2004-esque deals — like requiring as little as 3% down, offering to pay a portion of the closing costs and arranging special financing and warranties for repairs and renovations.

It's another option for home owners who want to trade up — and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.

The best bargain might be the home's price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.

And while many of Fannie and Freddie's homes are at the lower end of the market and in less-desirable areas, a search of Fannie Mae and Freddie Mac listings revealed that buyers could find properties in good neighborhoods — and for $100,000 less than comparable houses nearby. For example, a five-bedroom, three-bath with a backyard, deck and two-car garage in tony Alexandria, Va., was listed for $445,000, $100,000 less than the average listing price in the area, according to Four blocks away, a similar non-foreclosed colonial is listed for $639,900.

Or how about a three-bedroom, two-bath in Bergen County's leafy River Edge, N.J for $359,900 -- $85,000 less than the average listing in the area. One avenue over, a non-foreclosed similar home is listed for $474,888.

The downside: Angry neighbors. These types of listings are devaluing nearby properties, says David Howell, realtor and executive vice president at McEnearney Associates, which sells homes in the metropolitan Washington D.C. area. That means in some areas where Freddie and Fannie homes are on the market, buyers could find a better deal on a nearby market-rate home that doesn't require repairs, he says.

Buying a Fannie or Freddie home can be more complex than pursuing an open-market real estate listing — or even a commercial bank foreclosed property. There's a smaller selection of appealing properties — there were just six higher-end homes listed on a recent day in Alexandria, for example — and those tend to sell the fastest. And there's little room to negotiate price.
"Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them," says a Freddie Mac spokesman. "We absolutely have no motivation to be leading a downward spiral in home prices."

The three best features of Fannie and Freddie foreclosures that make digging for these deals worthwhile:

  • Small Down Payment
    For its foreclosed properties, Fannie Mae will accept down payments as low as 3% on 30-year mortgages at the same interest rates banks are currently offering. And Fannie Mae doesn't require private mortgage insurance. Compared to a typical bank mortgage, which requires 10% down, plus PMI for buyers with less than 20%, that's a huge savings — an estimated $51,000 up front and upwards of $2,500 per year PMI on a $300,000 mortgage.

It's a tradeoff, though. For buyers with 20% down, mortgage payments on a 30-year mortgage loan at 5% would be $1,288 a month. With just 3% down, the buyer would need to borrow $291,000 and make a $1,562 monthly payment.

  • Help with Renovations
    Fannie and Freddie have fixed big flaws like leaky roofs and damaged electrical work, and they often handle small projects like replacing appliances that are broken or missing, tearing up old carpet, or fixing other damage left by former owners or vandals.

Now, to entice buyers who want to update or upgrade, many of Fannie Mae's properties come with an optional mortgage that includes extra financing up to $30,000 for repairs and improvements. But with a little down payment and the extra amount tacked on, the buyer could end up owing more than the house is worth — especially if home prices continue to drop.

  • First Dibs
    Buyers who plan to live in their Freddie Mac-purchased home will get to see properties for at least the first 15 days they're on the market — before the listing opens to would-be landlords. Many bank-owned foreclosure properties are snatched up by cash-stocked investors who can wait out the downturn to sell later at a profit.

And Fannie and Freddie homes can be seen inside and out — unlike some regular foreclosure listings. Consider bringing along a contractor when you view the home to help spot areas that need repairs and provide pricing. (Most contractors will do this for free.)

"It gives families who want to buy a home to live in the opportunity to look and bid without competition from cash-rich investors," says a Freddie Mac spokesman

Looking to purchase a home or want further information about opportunities near you? Contact me direct and you'll be well on your way to taking your first step towards a great new home or investment property!

Wednesday, October 20, 2010

Facing Foreclosure?....7 Options To Consider

Here is some information that many of you may find useful when trying to determine your options if you find yourself or a friend/family member facing the challenge of losing your home.

According to, 1 out of 84 homeowners received at least 1 foreclosure filing during the first half of 2009, and for the 4th straight month, more than 300,000 foreclosure filings were reported nationwide.

The FDIC reports that the 2 most common reasons for foreclosures are job loss and health crisis. Despite the media seemingly blaming a subprime loan program that affected 3-5% of the population for our foreclosure woes, the reality is that the combination of job loss and dropping home values have created a perfect storm of financial disasters for many normal families. Now with a slower real estate market translating into falling home values, more homeowners who opted for adjustable rate mortgages are finding that their mortgage rate is rising as their home value is lowering. Therefore, unfortunately, the foreclosure crisis in America is likely to continue.

In years past, if you lost your job, couldn’t pay medical bills, or moved out of state, you had a decent chance of selling your home for a profit, or at least breaking even. Now, many people are tens of thousands of dollars upside down on their loan and are unable to downsize to a smaller dwelling without suffering a foreclosure.

According to, a foreclosure will damage a consumer’s credit score, lowering it on average 200-300 points and making it difficult to get another home for 5-7 years. Bad things happen to good people, and the purpose of this article is to provide people with options available to them during the foreclosure process:

Option 1- Bring loan current. According to the FDIC, most homeowners in foreclosure have no savings and no available credit. And since the number one reason for foreclosure is due to job loss, there may be no way for the homeowner to catch up the loan. However, if you as a homeowner struggling with a foreclosure have the reasonable expectation of income coming in sometime in the near future, it may benefit you to talk to an extended family member or friend about a short term loan.

• Option 2- Loan modifications. According to a Freddie Mac / Roper Poll, most homeowners fail to contact their lender because they are embarrassed, don’t believe the lender can help, and/or believe it would cause them to lose their home more quickly. However, this option may be a viable. Loan modifications occur when the bank agrees to reduce principal, interest, and/or payments. Unless you have experience with the Loss Mitigation Dept. at banks, I would recommend working with a legitimate, experienced loan modification company who can prepare an effective argument for the banks because loan modifications do not have a high success rate. According to the Office of Comptroller Mortgage Metrics report of April 2009, “…In 2008, only 41.85 percent of all modifications reduced monthly principal and interest payments for homeowners. For delinquent borrowers - - a loan modification resulted in an INCREASED or EQUAL payment amount 58.15% of the time!!” As stated earlier, the number one reason for people going into foreclosure is due to job loss. If no income is coming in from a traditional job, then there is little chance that a mortgage company will reduce your loan principle, interest rates, or payment.

Option 3 – Forbearance. Forbearances are when a mortgage company allows you to delay your payments or spread your missed payments over the next specified number of months until you are caught up. Again, if you have a reasonable expectation of revenue coming into your household within a certain number of months, then this may be a solution for you. However, keep in mind that until your past amounts are brought current, you will have a negative mark against your credit, even during months when you are paying more than your requirement! Also, some programs may allow the banks to immediately foreclose on you if you fall behind on payments again. Read the agreement you receive from the bank diligently and weigh the pros and cons carefully.

• Option 4- Deed in Lieu of Foreclosure. According to, “with a deed in lieu of foreclosure, you give your home to the lender (the “deed”) in exchange for the lender canceling the loan. The lender promises not to initiate foreclosure proceedings, and to terminate any existing foreclosure proceedings.” This option, if accepted by the bank, is a quick and easy way to walk away from the house, doesn’t require a sale, and may look better on a credit report than other options. Also, some banks may accept this option as it is less expensive than the foreclosure process. This process will not work if you have multiple liens on the house. Also, banks are in the business of collecting cash, not property. And the banks are holding onto more property than they would like so this options very seldom works. Plus, in many mortgage agreements, it is stated that if the buyer goes into default, the bank will only take the property back through foreclosure.

• Option 5 – Bankruptcy. This option is widely misunderstood and possibly the worst option for homeowners. Bankruptcy will only pause a foreclosure, not eliminate it. As stated earlier, most mortgage agreements state that if the property goes into default, the bank will take back the property through foreclosure. Then, you will have both a bankruptcy and foreclosure on your credit history for the next 10 years! Plus, you may still be required to work out a repayment plan for the house. Seek legal counseling prior to deciding on a bankruptcy.

• Option 6 – Foreclosure. Do nothing and let the bank take the house back. The foreclosure process will negatively impact your credit by dropping your score 200-300 points and preventing you from purchasing a house again for another 5-7 months. Plus, you may be sued for deficiencies by the bank for the difference between what the house sold for at auction and what you owed. Or you may receive a 1099 from the bank, stating that the difference is income and you can be taxed upon it.

• Option 7- Short Sale. A short sale occurs when a third party negotiates with the mortgage company to accept a discount on what is owned and release their interest in a property in exchange for a cash payment. The seller is not allowed to financially benefit from the transaction. For a short sale scenario, it is better to utilize the services of a Real Estate Investor rather than a Realtor. First, an investor has more experience with these types of creative transactions than a Realtor. Second, the investor will agree to purchase the house, providing the bank with a signed Purchase Agreement. This Purchase Agreement increases the likelihood of a bank accepting a discount. Most Realtors try to negotiate with the bank and then find a buyer after the negotiations. This strategy leads to a very low success rate. Some of the drawbacks of a short sale are similar to a foreclosure, as your credit score will be negatively impacted but you may be able to purchase a house again after 24 months.

Also, you may be sued and taxed as well, although if you have a knowledgeable investor working your short sale, he or she can negotiate with the bank a ‘satisfaction of the loan’ result, meaning that the accepted short sale would satisfy the loan and no remedies would be needed.

Doing nothing or declaring bankruptcy is probably your worst option. Homeowners facing foreclosure today are going through enough misery and stress and deserve options other than these.

Friday, October 15, 2010

Federal Tax Credits Expiring Soon - Find out what Qualifies Here!


Federal tax credits for buying an energy-efficient product or renewable energy system for your home are available. Here are some examples of what's covered by the various credits. For more information, go to

The tax credit gives you 30% of the cost up to $1,500 for:

  • biomass stoves

  • heating, ventilating, air-conditioning

  • roofs (metal and asphalt)

  • water heaters (non solar)

  • windows and doors

The credit expires Dec. 31 and applies only to existing homes and principal residences. A tax credit of 30% with no upper limit is for:

  • geothermal heat pumps

  • small wind turbines

  • solar energy systems

The credit expires Dec. 31, 2016, and applies to new and existing homes. Principal residences and second homes qualify, but not rental properties.

Be sure to keep up to date with all the latest news that is both relevant for real estate and life as it pertains to your wallet, living conditions and the economy by following my blog weekly for some informative articles published by yours truly, Ben :)

Feel free as always to please forward my blog onto any friends or family that may benefit from it!

Wednesday, October 13, 2010

Voice your Opinion - Survey: Economy Driving People Out of the Housing Market

Today I wanted to share with you an article that was published by RISMEDIA that I thought was interesting and worth sharing. Please read and share your opinions as I will at the end of the article:

RISMEDIA, October 12, 2010--Nearly two-thirds of Americans say the current economic situation is making them less likely to buy a house, according to a new national survey by (, a popular legal information website.

Sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy. Despite record-low mortgage rates and an abundance of houses available on the market, only 8 percent of people say the current economic situation makes them more likely to buy a house. About a quarter of people – 28 percent – say they are neither more likely nor less likely to buy a house because of the economy.

In particular, the current economy is driving lower-income individuals and families out of the market. People with annual incomes less than $50,000 were significantly more likely to say they are less inclined to buy a house than people with higher incomes.

"The current economic situation has greatly changed the dynamics of the housing market," said Stephanie Rahlfs, an attorney and editor with "Although mortgage rates are near record lows, stricter lending requirements are often making it more difficult for many people to obtain mortgages. High unemployment rates are raising concerns about housing appreciation, affordability and foreclosures. Together, these factors are causing many people to shy away from the idea of buying a house. Buying a home, selling a home and owning a home are all becoming more complicated, and it's important to know the ins and outs of contracts, finances and your rights as a buyer, seller or owner."

Well there you have it.....the reason many are choosing to wait to purchase a home. How do you feel about what you've read? Does this rationale make sense to you?

Here is a quote from Warren Buffett one of the most wealthy and savvy businessmen on earth.."We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

In essence as an investor in businesses he is simply saying that when most people are fearful as witnessed by this article, they sit back and do nothing and have paralysis to do anything when in fact that is often the best time to act. Comparing this to the housing market, now more than ever is the time to purchase. The general public spend so much time seeing through the rearview mirror and less from the windshield.

My take on the above article is that while people need to be cautious with their money and careful in how they spend it, making an investment into a home may have never been a better option. Put it this the end of every night, you can either rent your pillow or own it. In other words, you either pay someone elses' mortgage or you pay your own. Interest rates and home prices as they stand today present one of the best one/two punch opportunities for people that we may ever see.

When the stock market hit a tremendous low in March of 2009, if the average person threw a dart at a board of stocks that was listed on the DOW or S&P, he/she would have seen in most cases no less than 60% growth or more. Why? They hit a bottom and for those who didn't take money out of the market but put it in the market they capitalized tremendously.

The housing market doesn't have the capability to rebound as quickly but one day soon, some will look back and say....I WISH I HAD.....while others will say...I'M GLAD I DID...

Which one will you be?

Wednesday, October 6, 2010

Downsizing? Living Large in a Small Space

Today I came across an interesting article that many of my followers may be interested in reading. Hope your haBoldving a fantastic week and be sure to forward this and any of my past blogs to friends and family!(Also, don't forget if your buying or selling to contact me today for a free consultation!)

Downsizing? How to Live Large in a Small Space By Jaclyn Banash

RISMEDIA, October 6, 2010--(MCT)--It's a constant battle: Small versus big. Less or more? There are arguments to support both sides.

Having just downsized to the smallest apartment I have ever lived in, I was intrigued by the idea of small being the new big. The challenge of storage and saving space is usually the No. 1 problem for most small-home dwellers. Organization is key, as is making the space work for your lifestyle.

I have been racking my brain for months over how to make my new 656-square-foot apartment work best for me. I have found some great new ideas to integrate with some of my old tricks of the trade.Creative use of furniture is essential in small spaces or even in larger spaces that might need to be multifunctional.

Take, for instance, a guest bedroom that doubles as an office. Instead of crowding the room on a daily basis with a bed that only gets used a few times a year, why not use a sleeper sofa or a chair and a half with a twin sleeper sofa? This will free so much space for day-to-day activities in the office.A daybed is another good-looking piece of furniture that multitasks.
A daybed is a great way to divide a large space, but in a small space, if positioned against the wall, it doubles as a sofa with pillows across the back and an extra sleeping spot when the pillows are removed.
Lots of furniture pieces are known for their great multipurpose and space-saving qualities. The ever-popular pouf, for example, can double as an ottoman, become a small table for books, computers and drinks to rest upon or even turn into extra seating.

Nesting tables also provide options for tiny spaces because they are small and easily moved. Storage ottomans are an obvious choice for doubling as a bench or coffee table that can house toys, blankets and extra bedding.In dining room/eating areas, a custom-built bench/banquette with storage underneath is a great option for tight spaces.
If your budget does not allow for custom, then good-looking storage boxes fit nicely under most pre-made banquettes. If you are not looking for more storage but are just short on space, a breakfast nook can be created with a small table and stools that can tuck underneath when not in use.Simply by pushing a dining table against a wall or window you can save at least three feet. All you have to do is pull the table out for dinner parties. And don't forget, an old or unattractive table can always be put to use and instantly jazzed up with a custom table skirt in a fabulous fabric. Voila, another spot for hidden storage!

One of my recent favorite small-space solutions is installing built-in top-to-bottom mirrors on the inset of closet doors. How brilliant! No longer are you taking up precious wall space in the room with a floor-length mirror.
As for the actual layout and decoration of a small space, conflicting theories abound. Some say not to fill a small room with over-scaled furniture, as it eats up the space and feels cramped. Others say big furniture makes a small room seem grander.I gravitate toward the middle.

In general, I stay away from large, overstuffed furniture and do find that too many small pieces can feel cluttered. But I need enough seating for entertaining and recently purchased a set of Lucite folding chairs (clear furniture is another small-space trick) that can be stowed when not in use.I have never subscribed to pure minimalism, although I admire those who can.

I find it almost impossible to not surround myself with lovely items that I find along my travels, antiquing or shopping. The key is rigorous editing. I have seen many small, successful spaces that have a plethora of mementos or objets d'art.But once you get to a certain point, it becomes necessary to do the practice of one thing in, one thing out.

After all, no matter what size your space is, you need the room to enjoy it.

Monday, October 4, 2010

Why Fall is a Great Time to Buy a Home!

Everyone knows that the spring market can be hectic and often seen as the peak of the real estate in terms of annual activity. Buyers are chasing to find a great home to purchase and close during the summer, get acclimated to the new home in time for a new school year to start in the fall.

What most don't realize is that Fall isn't far behind in terms of activity and is a great time for buyers and for sellers. For many agents, this is the second busiest time of the year and its a great time for buyers to purchase and for sellers to move a home prior to winter.

Summer has passed an so has what appears to be a perfect time to have sold your home. Now Fall is here and if you won't sell your home in the next few months then old man winter is here with the prospect of selling your home greatly dimished. What does this mean? For many sellers it means lowering the price and doing their best to meet the demand of any buyers that are in the market.

For a buyer, this means that competition is heating up! If you find a home that your interested in buying, don't wait to make an offer, but do so quickly! Sellers are often willing to move more heading into a long winter on price as their motivation may be at an all time high during the selling process. As a buyer, make sure your agent keeps you abreast of all hot buys and when you find the one that fits your needs, act on it! Multiple offers are not extinct and are common place on homes when they are listed aggressively this time of year. This however is not an open suggestion to overpay for any home during this buyer's market. Don't let emotion cloud better judgement if you do find yourself in a mutliple bid situation. There will always be another home that will come on the market and fit your needs.

If you are in the market to purchase, contact an agent today and you'll find some amazing opportunities await! If your a seller, now is the time to put your home up for sale, not a few months from now when fewer buyers are available, demand is down and competition is high amongst all others that couldn't sell.

Wednesday, September 29, 2010

New 3.8% Tax from Health Care Bill on Home Sale

In March when the highly controversial Obama Health Care Plan was passed there were many people throughout the country and elected officials that truly didn't quite understand all that was in this new plan. With a book size break-down of the plan and what it meant to the tax paying citizens many have been left learning about the upcoming changes this plan will impact us on as its materializing.

One of the clauses in this plan has caused a tremendous amount of concern and has many home owners upset! What is it? Here is what has caused the stir:

March 28, 2010 in Opinion
Health law’s heavy impact
Paul Guppy Special to The Spokesman-Review
In the days leading up to the dramatic late-night vote on President Barack Obama’s health plan, Speaker Nancy Pelosi said, “We have to pass the bill so that you can find out what is in it …” Now that ObamaCare has passed, it is slowly dawning on people what the new law means for the country and for Washington state.

ObamaCare sweeps away a host of state regulations and permanently alters our state’s insurance market. From now on, the federal government will manage the health care of all Washingtonians. The 2,700-page law contains a complex web of mandates, directives, price controls, tax increases and subsidies.

Federal officials will now decide what kind of insurance people in Washington must have, what medicines will be covered, what treatments are allowed and which are not. Early reports indicate, however, that President Obama, Vice President Biden, the Cabinet, senior members of Congress and leadership staff are exempt.

The new law falls well short of universal coverage. ObamaCare will leave about 6 percent of Washington residents without coverage. The measure is conservatively expected to cost $2.4 trillion in its first full decade. Thousands of older Washingtonians will lose their Medicare Advantage coverage, and the state’s 120,000 Health Savings Account holders may need to buy new policies or face stiff penalties.

Washington residents will begin paying ObamaCare taxes this year, while most benefits don’t start until 2014. The law includes some 19 new taxes. Here’s a rundown of what Washingtonians can expect in the coming years.

Penalties on individuals. Individuals will pay a yearly penalty of $695, or up to 2.5 percent of their annual income, if they cannot show they have purchased a government-approved health policy.
Penalties on families. Families will pay a yearly penalty of $347 per child, up to $2,250 per family, if parents cannot show they have purchased a government- approved policy.

Penalties on employers. Business owners with more than 50 employees must buy government- acceptable health coverage or pay a yearly penalty of $2,000 per employee if at least one employee receives a tax credit.

Tax on investment income. ObamaCare imposes a 3.8 percent annual tax on investment income of individuals making $200,000 or more and on families making $250,000 or more. The new tax is not indexed to inflation, so more people will fall under it each year. Seniors on fixed incomes and people with IRAs and 401(k) plans will be hit particularly hard.

Tax on “Cadillac” health plans. Starting in 2018, imposes a 40 percent annual tax on health care plans valued at $10,200 for individuals and $27,500 for families.

Medicare tax increase. Requires single people earning $200,000 or more and couples earning $250,000 or more to pay an additional 0.9 percent in Medicare taxes.

Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one.

Tax on medical aid devices. Creates a new 2.9 percent tax on medical aid devices. Certain items intended for personal use are exempt.

Tax on tanning. Imposes a 10 percent tax on services at tanning salons. Business owners will collect the tax from customers and send it to the federal government. This appears to be the first federal sales tax in the United States.

ObamaCare will be enforced by the Internal Revenue Service. The tax agency plans to hire 16,500 new auditors, agents and investigators, and to increase enforcement audits. The IRS can confiscate tax refunds, place liens on property and seek jail time if health-related penalties and taxes are not paid.

President Obama had said people could keep their coverage if they want, yet the Congressional Budget Office estimates that under ObamaCare 8 million to 9 million people will lose their employer-provided coverage.

The ObamaCare law passed over bipartisan opposition in Congress. Republicans say they will run on a “repeal and replace” platform this fall, and Washington has joined 12 other states in a lawsuit challenging the federal government’s power to force state residents to buy a product – insurance – from private companies. The long-term prospects of ObamaCare are unclear. In the meantime, Washingtonians should prepare for major changes in their tax burden.

Now I did a little looking into this as its important to educate my clients on what types of expenses they may want to plan for when selling their homes. Afterall, isn't the real estate market been hit hard enough in recent years and any additional tax for home-owners would be tough to accept from the goverment.

Well the good news is that for most of us, we won't be affected by the tax. The scenarios for those to qualify for this additional 3.8% tax is as follows:

The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on "net gain … attributable to the disposition of property." That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is "taken into account in computing taxable income" under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.)

The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 135 of its report on the bill. The note states: "Gross income does not include … excluded gain from the sale of a principal residence."

And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. "Some home sales would see a tax increase under this bill," Ahern told us, "but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple)."

So hopefully this not only educates you on the tax but for most also alleviates any concern if it will affect you. I think we can all agree that only time will tell what type of impact this new Health Care will have on us all, but one this is for certain and that only a small few really know all that was approved and that to me is pretty scary!

Hope that you have enjoyed today's post and please be sure to pass this on to anyone else you know that may benefit from weekly updates as they related to life and real estate!