Tuesday, December 6, 2011

Sellers....To List or Not to List...The before or after the Holidays Question

Should I list my home or is it better to wait until after the Holidays? 

The big answer to the question that so many sellers ask themselves as Christmas, Hannakuh, and the New Year nears is not necessarily what you think.

Most real estate professionals always advise sellers to list their homes during the holiday season rather than waiting, citing more serious buyers and less competition among properties, according to a recent survey from Realtor.com.

The property search site's Holiday Home Selling Survey gathered responses from 429 real estate professionals surveyed online between Oct. 26, 2011, and Nov. 8, 2011. The "holiday season" was defined as Nov. 23, 2011, to Jan. 2, 2012.

Among respondents, 60 percent said they would always advise a seller to list a home during the holiday season and agreed that "it's a good time to sell," while 30 percent said they would sometimes advise it if the seller were motivated. Only 1 percent said they would never advise it because "selling during the holiday season is always a bad idea."

The vast majority of respondents, 79 percent, said more serious buyers were one of the biggest benefits of listing during the holidays, while 61 percent said less competition among homes was a plus. Only 17 percent said cold weather making homes look cozy was an advantage.

Indeed, 39 percent of respondents cited winter weather as one of the biggest challenges to putting a home on the market during the holidays. An equal share said buyer vacation and celebration schedules were problem.

But the biggest challenge, noted by 63 percent of respondents, was keeping a home "open house ready," meaning clean and staged, during this time of year.

Selling a home during the holidays requires employing different strategies from selling a home during other times of the year, according to the survey.

More than eight out of 10 respondents said online listing photos were particularly crucial for homes listed during the holiday season. The main reasons cited were that buyers attend fewer open houses because of busy schedules or winter weather, while sellers also host fewer open houses during this time.

The majority of respondents, 74 percent, said pricing a home to sell was even more important during the holiday season, and 40 percent said staging a home was more important at this time of year. Nearly a third said being flexible with contract terms such as move-in dates and when closing costs were paid was more essential during the holidays.

The way a home is staged during this time of year is also significant, according to the survey. Almost all respondents said they advised sellers to put up some seasonal decorations, though there were differing opinions on the types of decorations.

A 37 percent plurality said homeowners should put up some nonreligious holiday decorations to make a home feel inviting, while 28 percent said sellers should put up all of their holiday decorations, including religious ones, to make their home feel festive, the survey said.

A similar share, 27 percent, said sellers should put up seasonal decor that is not suggestive of specific holidays, while 8 percent of respondents advised sellers to stage their home without any decorations at all.

Eighty percent of respondents said they encourage sellers to light their fireplace when staging a home during the holiday season, while 62 percent said they suggested sellers update outdoor lighting because the buyer is more likely to see the home at night due to shorter days.

Other popular staging advice for sellers included using winter-scented home fragrances before an open house, making the home feel more cozy through reading nooks and blankets on couches and beds, setting the table to showcase holiday entertaining, and playing seasonal music that is not specific to a particular holiday, the survey said.

Hope this information you find useful and please feel free to share with others that may benefit from this advice.  I appreciate as always your time in reading my blog and I hope that you have a wonderful Holiday Season! Merry Christmas & Happy New Year :-)

Tuesday, November 15, 2011

Advantage Realty Group Blog: Have you Winterized Your Home Yet? Cost Effective ...

Advantage Realty Group Blog: Have you Winterized Your Home Yet? Cost Effective ...: Its that time of year again, yes Winter is around the corner or some would say is already here! Well be sure if you have not yet taken a ...

Have you Winterized Your Home Yet? Cost Effective Tips

Its that time of year again, yes Winter is around the corner or some would say is already here!  Well be sure if you have not yet taken a few steps to best winterize your home you do so now.

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

Hope you found this blog useful today as you prepare for the cold that is ahead of us!  Thanks for reading my blog and please feel free to share with any others that you know could benefit or would also enjoy being a follower!

Wednesday, October 12, 2011

Advantage Realty Group Blog: Can't Refinance? Can't Get a Loan? Here's why 2 Mi...

Advantage Realty Group Blog: Can't Refinance? Can't Get a Loan? Here's why 2 Mi...: Today is some useful information for those of you that are considering applying for a loan, have recently applied for a loan or would just...

Can't Refinance? Can't Get a Loan? Here's why 2 Million had the same problem in the past year...

Today is some useful information for those of you that are considering applying for a loan, have recently applied for a loan or would just like to know how the process works.

Half of refinance applications are abandoned or rejected, as are 30 percent of purchase mortgage applications, according to the Mortgage Bankers Association. All told, the Federal Financial Institutions Examination Council (FFIEC) says that well over 2 million mortgage applications were rejected last year.

Want to avoid falling into that number? It's tough -- especially in light of the fact that mortgage lenders have become increasingly restrictive in terms of their lending guidelines since the housing market crash.

Here, as a cautionary tale and primer on what to expect, are the top six reasons mortgage lenders reject applications.

1. Income issues. Most failed applications falling into this category have income too low for the mortgage amount they are seeking; often, a spouse's credit issues can create this problem, too, as the income the spouse plans to actually chip in toward the mortgage cannot be considered by a lender.

But increasingly, the recent vagaries of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.

2. Muddled money matters. If the mortgage for which you're applying plus your monthly payments on credit card, car and student loan debts will comprise more than 45 percent of your total income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income -- all of these can be difficult or impossible to get a mortgage bank to consider, and if they do, they might not take all of it into account.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you seek. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last two years, loan qualifying could be difficult to impossible.

4. Property didn't appraise. Since the whole industry had its hand (among other things) smacked for allowing home values to skyrocket in a very short time, appraisal guidelines have tightened up -- some would say, even more than overall mortgage guidelines. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.

This is especially common in the refinance realm, as well over a quarter of U.S. homes are now upside-down, meaning the mortgage balance owed is greater than the value of the home. (If you're trying to refinance an upside-down mortgage, consider the FHA Short Refi program -- contact your lender or get referrals to any mortgage broker who makes FHA details to apply.)

5. Condition problems. With all the distressed properties on the market, and with most nondistressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.

And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.
6. Technical difficulties with application. The days when lenders just took your word for it are long, long gone. Applications with incomplete or unverifiable information are doomed.

If any of these mortgage loan application glitches arise in your homebuying or refinancing process, it's critical that you connect with your mortgage professional, be it your banker or mortgage broker, to determine what course of action to take.

In some cases, it might be as simple as buying a stove you find at Craigslist and installing it before escrow closes; but with income issues your mortgage pro will need to help you determine whether it makes sense to pay some bills down, get a co-signer, or even wait six months so your income documentation will qualify.

Tuesday, September 6, 2011

Protect yourself or your Buyer in "AS-IS" purchases!

Q: What can a buyer do if the seller includes an as-is clause in the contract and "issues" are discovered from the inspection? Will the buyer lose his deposit if he walks away from the deal after the inspection uncovers, let's say, termites or electrical problems? It would seem to me that a buyer would insist that the as-is clause be removed. --V. Wohner

A: In most states, the phrase "as is" has been defined, over time (and lots of lawsuits) as also indicating that the buyer is taking the property in "as-disclosed" condition. These same states tend to have disclosure standards that require sellers to tell buyers, even as-is buyers, about any "material" issues with the property: things that the seller knows about that would have some influence on the decision-making process of a reasonable buyer.

In other states, though "as is" does not connote any disclosure requirement on the part of the seller. I recall reading an Arkansas case where the seller had known the property's lot flooded every year for many years, didn't disclose it to the as-is buyer, and the court sided with the seller. In these areas, "as is" might well be interpreted as "caveat emptor" (Latin for "buyer beware").

However, in the vast majority of cases, buyers can -- and should -- insert an inspection contingency into an as-is contract. In fact, the inspection is the vehicle for knowing what exactly is going on with the condition of the property. The inspection, follow-up, or specialty inspections and repair bids or estimates are really the only way for a smart buyer to know whether they should move forward with an as-is deal.

Under an as-is contract with an inspection contingency or an inspection period, the buyer will have a certain period of time to obtain his inspections and decide whether he wants to move forward with the transaction, back out of the transaction and recoup his deposit, or back out of the transaction.

If after inspections, the buyer decides to exercise the inspection contingency and back out of the transaction within the time frame provided in the contract, their deposit money is safe and must be returned by the seller.

If, on the other hand, the buyer receives troubling information during the inspection but would still like to move forward with the transaction as is, he can do that.

Some buyers do this, especially when they feel like they are getting a great deal, even with the repair costs, when they can afford the repairs or anticipated them in advance, and/or when the seller is already making nothing on the property, so a price reduction would turn the transaction into a short sale (which might or might not be allowed by the seller's bank).

Other buyers who learn of termite or other work that needs to be done choose several tactics. Some request that the seller complete some or all of the repairs, and insist that if the seller refuses, they (the buyers) will cancel the transaction and request their deposit back. Other buyers request a price reduction, on the same condition of canceling the transaction if the seller cannot or will not do so.

I see it as highly unethical to make a "fake" as-is offer, knowing full well that you plan to come back and ask for repairs or a price cut later in the transaction.

But if you get inspections and are surprised at how much work is needed, or at what it will cost, there is no legal or ethical bar from either backing out of the transaction entirely or making an effort to renegotiate the terms of the contract, so long as you do so within the contingency or objection period time frame provided in the contract.

In most states that allow for contingencies and objections, the buyer is legally able to back out of the contract after the contingency or objection period expires, but will forfeit his deposit or other liquidated damages provided in the contract if he does so.

Consult with your local broker or agent, or a local real estate attorney, to determine what avenues are available in your state and under your contract.

Friday, July 22, 2011

Dead Grass? Tips on How to Properly Water a Lawn

If you live in the Midwest then like me, you've probably recently attempted to off-set the staggering 90-100 Degree Heat Wave we've had to keep your grass alive by watering it.  I thought it was appropriate to find some useful tips to share so that you can maintain a green lawn, or close to it despite mother nature as of recent :)

How to Water Your Lawn Efficiently

The Environmental Protection Agency reports that nationally, lawn care and landscaping accounts for more than 30 percent of water use in the United States.

That is an amazing amount, especially if you consider how much time and energy it takes to treat water to make it suitable for drinking, only to use it on the grass. The worst part of it is that much of this water goes to waste due to inefficient watering techniques.

Knowing how to water you lawn efficiently can make for greener, healthier grass, and big water savings during the year. This article will cover some basic techniques to get the most out of your water when you irrigate your lawn.

When to water your lawn

Water your lawn only when it needs it. The first three to four inches of soil below the turfgrass should be dry before you water. Use an electronic soil tester to test the soil moisture, or use a trowel or a screwdriver to open the soil and feel it with your finger. Another way to test when you lawn needs water is to step on the grass. If you can easily flatten the grass with your foot, you should water it. If the grass regains its form quickly after you step on it, wait to water.

It’s always a good idea to water in the cool of the early morning or the evening to reduce the levels of evaporation. Watering in the morning is best as the water may sit overnight and cause problems with root rot or fungal diseases. Never water on a windy day.

How and how much to water your lawn

Water less frequently and more deeply. If you water deeply, your roots will begin to grow down further into the soil. This means that your grass will perform better during hot and drought-like periods.

One inch of water is a good rule of thumb for your lawn. However, this will really depend on where you live, the quality of your soil, etc. Soil types can make a big difference on how efficiently your lawn uses water. See this site from the Better Lawn and Turf Institute for a guide to how soil types affect watering rates.

Adding organic compost to your garden soil is one of the best ways to improve the efficiency of your lawn’s water use. You should water a little more during the hottest times of the year, and less during the fall. If your area is getting an inch of rain a week, there is no reason to water more. You should save you water until you need it.

Measuring how much you’re watering:

Go out and test to see how much water you’re using each time you water. Remember that your goal should be an inch of water about every week. Place a series of shallow containers throughout your lawn. Turn the sprinklers on and water your grass. When you’re finished, measure the water in the dishes. Adjust the time until the water is about an inch deep.

When you do this test, also observe your grass. If you see pools occurring quickly, this means that your soil may need some adjustment. Adding compost will do the trick.

In the meantime, you can turn off the water once the pools start to form and let the water soak in before you continue to water. If you have a sloping lawn, you’ll want to probably reduce the rate of your sprinkler system so that the water has more time to soak in.

If you have an automatic sprinkler system, this test will also help give you a time setting for your sprinkler system. This technique will also help you determine if your sprinkler system is working well. If you note large discrepancies in the level of water in the containers, you may need to adjust you sprinkler system.

Adjusting your sprinkler system:

Check your sprinkler system to make sure that it’s watering your grass and not your sidewalk, driveway, etc. Check all the sprinkler heads. Some may be clogged or pointing in the wrong direction. Replace and adjust any sprinkler heads that aren’t working properly. You can talk to a professional lawn and garden service if you need help with this. Also check for leaks, broken pipes, etc. If you have a timer for your sprinkler system, set it based on the 1 inch watering system.

How to water new lawns:

For newly laid sod, give the entire area a good, long drink right after you set up your lawn. You should continue with frequent soakings (every 2 days) for about 2 and a half weeks so that the roots establish. After this period, use the one inch rule for watering your sod.

When you seed a new lawn, it’s important to water it properly. You’ll initially want to water more frequently, but without saturating your lawn. You should keep the first few inches of soil moist during the establishment period. It will probably take a little over a month for the roots to begin to establish. At which point you can use the 1 inch of water rule.

Aerating your grass for efficient water use:

Soil aeration is another way to get your grass to use water more efficiently. Aerating your grass involves punching holes in your lawn with specialized aerating equipment.

Through time and continued use, the soil beneath your lawn becomes compacted and this affects water drainage, air circulation, and how efficiently your grass makes use of nutrients. The overuse of chemical fertilizers also can create soil compaction. Thus, aerating your soil is one of the best ways to get your lawn to make the best use of water and nutrients.

You should aerate your lawn to about 3-4 inches deep. A lawn coring aerating tool is a great tool for small lawns. For larger lawns, you may want to go ahead and rent a larger lawn aerating machine. When you aerate your lawn, try passing 2-3 times over the same area so that you properly cover your lawn with enough holes. If you use a machine aerator, make sure you leave the soil plugs on the grass. They should decompose quickly and will return nutrients to the soil.

Other water saving tips for your lawn:

To further increase your water savings, you should mow your grass correctly and use “grasscycling,” which means leaving the grass clippings on your lawn. The grass clippings act as natural mulch, retaining moisture and returning nutrients to the soil. This will improve soil texture and water retention. Reel mowers are a great way to grasscycle. Also, make sure to read this guide to grass cutting heights for more information.

Removing weeds can also help your grass use water more efficiently, as weeds compete with your grass for water. Invest in a good quality weeder to effectively remove weeds from your lawn.

Also, look for drought resistant and water-wise grasses. This website from Texas Aggie Horticulture is a good place to look for grasses that will use less water than standard turf grasses.

To further your water savings, you can use water absorbing polymers (water crystals) in your lawn to help you save water. These water absorbing gel products, such as Solid Water polymer gels, can help reduce the amount you water your landscaping by up to 50 percent.

Water absorbing polymer gels work by absorbing high quantities of water, in addition to beneficial nutrients, and then slowly releasing the water through osmosis. When mixed into the soil, the gel polymers come in direct contact with the roots of your grass. This translates to extremely efficient use of water in your landscaping. Gel polymers are safe for your family and pets and will not cause problems with root rot or soil borne diseases.

Friday, June 17, 2011

Foreclosure Activity falls to 42 Month Low in May!

Is the market finally on its way towards brighter days?  Can we really expect that with foreclosure numbers dwindling that our home inventory levels would finally subside and come down to normal levels within the next year? 

Anything is possible right? haha....Well I being the optimistic person that I am would love to see the foreclosure activity continue to fall, not just a month at a time but month after month.  This would then prove to me and to many others that we are in fact on our way to a recovery.  Yes, I said it....There is hope for a recovery folks but it starts with inventory levels as compared with the number of buyers and as long as we see the number of homes that hit the market decline from banks and short sales then we are on the right track. 

Foreclosure activity falls to 42-month low in May

Default notices drop to lowest monthly total since December 2006

By Inman News

Inman News™

Foreclosure-related filings on U.S. properties fell 33 percent year-over-year in May, hitting a 42-month low, according to a report from foreclosure data site RealtyTrac.

One in every 605 housing units, or 214,927 properties, received a foreclosure-related filing such as a default notice, scheduled auction, or bank repossession. That's a 2 percent drop from April and a 33 percent drop from a year ago.

"Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask," said James J. Saccacio, RealtyTrac's CEO, in a statement.

"First, activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. This pattern provides evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory.

"Second, while the inventory of properties in the foreclosure process has declined steadily over the past six months -- thanks in large part to 16 consecutive months of year-over-year declines in new default notices -- the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months. That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month."

Default notices declined to a 53-month low in May, falling to 58,797, the lowest monthly total since December 2006. Default notices fell 7 percent month-to-month and 39 percent year-over-year.

After eight straight months of decreases, the number of foreclosure auctions scheduled rose slightly, to 89,251, up 3 percent from April but down 33 percent from a year ago.

Bank repossessions fell 4 percent month-to-month and 29 percent year-over-year in May, with lenders taking 66,879 homes into their real-estate owned (REO) inventories.

"Since the so-called robo-signing controversy came to light in October 2010, REO activity has followed a roller coaster pattern, with five monthly decreases and three monthly increases," the report said.

States with a judicial foreclosure process saw activity decrease 45 percent year-over-year in May, while states with a nonjudicial foreclosure process saw activity fall 25 percent year-over-year. Scheduled auctions rose in both judicial and nonjudicial foreclosure states on a monthly basis, 6 percent and 2 percent, respectively. REO activity rose 1 percent month-to-month in judicial foreclosure states and fell 6 percent in nonjudicial foreclosure states.

Five states accounted for 51 percent of all foreclosure activity last month. California had the highest volume of properties receiving a filing (51,906), followed by Florida (19,192), Michigan (14,614), Arizona (13,122), and Nevada (11,039).

Nevada had the highest foreclosure rate among states for the 53rd straight month in May, with one in 103 housing units receiving a foreclosure-related filing that month. Overall foreclosure activity in the state fell 23.1 percent year-over-year, with bank repossessions falling 21 percent from an all-time monthly high in April. Default notices rose 8 percent and scheduled auctions fell 1 percent on a monthly basis.

For the sixth straight month, Arizona held the second-highest foreclosure rate in the nation with one in 210 housing units receiving a filing. Overall foreclosure activity in Arizona fell 18.5 percent year-over-year. Scheduled auctions rose 4 percent month-to-month and bank repossessions fell 8 percent month-to-month but were essentially flat year-over-year.

Scheduled auctions also rose month-to-month in California, 16 percent, though default notices fell 16 percent and REOs fell 25 percent. Though overall foreclosure activity fell 27.9 percent, the Golden State had the third-highest foreclosure rate in the nation, with one in 259 units receiving a foreclosure filing.

Tuesday, May 31, 2011

New 2 Years, Best Time to Invest?

Survey: Next 2 years is prime time for real estate investors

18.5% plan to pay in cash

By Inman News

Inman News™

Real estate investors are likely to be three times more active than other types of homebuyers in their local markets within the next two years, according to a nationwide survey from Realtor.com operator Move Inc.

Market research firm GfK Custom Research North America conducted the survey on behalf of Move from April 11-15, 2011. The survey included telephone interviews of 1,200 U.S. adults, of which about 200 were identified as real estate investors. Data was weighted by age, sex, education, race and geographic region.

A third of real estate investors are planning to buy in the next 24 months, compared to 8.6 percent of typical homebuyers -- those planning to purchase a primary residence, vacation home or retirement property. Another 9.1 percent of typical homebuyers, and 28 percent of investors, plan to purchase between two and five years from now.

Among the investors, half plan to hold their properties for five or more years while 11 percent expect to sell within a year of purchase, according to the survey.

Some 56.5 percent of investors said the repair and maintenance of their property has not been difficult, and 42 percent plan to spend their own time and energy for that upkeep going forward.

Among the rest, 29.5 percent said they would hire a contractor for repairs and 28 percent said they would purchase move-in-ready properties. About 65.7 percent don't expect repair costs to surpass 20 percent of the property's purchase price, the survey said.

"This data suggests today's climate is hot for investing and is attracting a lot of new people that don't fit the stereotypical deal-driven flippers who buy and sell properties quickly," said Steve Berkowitz, Move CEO, in a statement.

"They're mostly entrepreneurial individuals who will make vital contributions to local communities by investing their own money and sweat equity to improve and maintain properties. These personal sacrifices made over the long run will help improve housing stocks, home values, property tax bases, and thousands of local communities."

More than half of investors, 53.5 percent, expect home prices to remain the same in the next six to 12 months. Of the rest, 23 percent expect prices to fall. About 69 percent expect it would be easier to find properties in the next six months, though 43.5 percent expect it would be harder to find bargains.

Some 41.5 percent of investors expect it would be easier to sell their properties in the next six months, the survey said.
Only 18.5 percent of investors said they will engage in an all-cash purchase, while 75.5 percent plan to combine cash and credit to purchase a property. More than half (59.5 percent) plan to put down cash but finance more than half of the purchase.

Sixteen percent plan to put down more than 50 percent in cash and finance the rest. Of the cash-only buyers, eight out of 10 expect discounts from sellers.
About 65.5 percent of investor respondents expect the financing difficulties first-time buyers are having will make it easier for them to compete for properties, according to the survey.

"The fact that most real estate investors plan on combing cash and credit for their purchases goes against the conventional wisdom that investor transactions today are mostly cash-only sales," Berkowitz said.

"This suggests they're seeing tremendous or once-in-a-lifetime opportunities and may be tapping into credit or taking out second trusts on existing properties. The data also shows they're expecting high returns to match the level of investment they're making in an arena that is new to many investors."

Most, 59 percent, of investors said they were new to investing; only 36.5 percent had experience with more than one property transaction. Nearly half (48 percent) said they expected a profit of 20 percent or more from their property investments, equal to a 4 percent annual rate of return over five years, the survey said. Another 40 percent expected a profit of 10 percent

Monday, May 16, 2011

Tips for a Tricky Bathroom Installation

Hello and thanks for visiting my blog!  I hope you find it useful and please feel free to share this with others and become a faithful follower! 

Today I came across an article on something that can be a troublesome issue for many and wanted to share.  Enjoy :)

We all understand the old adage of what rolls downhill, right? Plumbers have certainly known that basic premise since the first toilet was invented, and that's why drain lines need to slope from the toilet down to the sewer or septic tank.

Simple enough -- until you're remodeling a basement or other below-grade area and want to install a toilet that's below the level of the main sewer line. If you have a project like that in your future, then you'll have to consider a different strategy.

Sewage ejector pumps and toilets

One option to consider when it's impossible to get the necessary natural slope for a standard gravity flow toilet is to use a sewage ejector pump. These powerful electric pumps are capable of handling solid waste as well as liquids, and most can process solids up to 2 inches in diameter.

As with any type of electric pump, sewage pumps are rated in horsepower, ranging from less than one-half to more than one horsepower. The size you need depends on the volume of material being handled and, most importantly, how far the waste material will need to be moved vertically.

This vertical pumping distance from the fixture to the main sewer line -- called "head" -- is crucial to sizing the pump, and will typically be limited to about 10 feet of head for solids and 15 feet for liquids.

For the typical sewage ejector pump installation, the pump and the float mechanism that activates it sit inside a polyethylene basin that's approximately 30 gallons in size. There's a 3-inch or 4-inch diameter intake line that brings waste into the basin, a 2-inch diameter discharge line with a backflow-prevention check valve, and a vent pipe. Most pumps are 115 volts, but some of the larger units are dual 115/230-volt models.

Another option is a specialized fixture called a sewage ejector toilet, which is designed for below-grade installations.

The typical sewage ejector toilet consists of a pedestal made of polyethylene, which acts as a base for mounting the toilet. The pedestal, which is about 5 to 6 inches high, can sit directly on the floor or can be recessed so that the toilet itself ends up level with the floor. Inside the unit is a set of impellers and a sewage ejector pump, which processes the waste and pushes it up to discharge into the main sewer line.

Some models of sewage ejector toilets are designed with the pump and related vent and discharge lines located far enough behind the toilet that it's possible to construct a wall between the toilet and the pump equipment. This allows for a cleaner installation, and makes the pipes and equipment much less obtrusive.

Composting toilets

Another possibility to consider, especially if you're thinking green, is the composting toilet. Composting toilets eliminate the need for a discharge pump altogether, and give a boost to the environment as well. The toilet is fully self-contained, requires no water inlet, no connection to a sewer, and no chemicals, but does require an electrical connection and a vent to the outside.

Composting toilets work similar to a septic tank. Approximately 90 percent of the waste material entering a toilet is actually water, so the composting toilet utilizes a small electric heating grid and fan inside the unit to evaporate the liquids through the vent pipe. The remaining 10 percent of the waste material breaks down through normal bacterial action, and is converted naturally into a soil-type residue. This residue filters down through a grid into a collection tray located in the bottom of the toilet. In normal use, the tray requires emptying only about once a year.

Composting toilets are not only good for below-grade applications, but also work great in cabins, shops, warehouses, and other locations where the installation of the waste and water lines necessary for a standard toilet is impractical.

Sewage ejector toilets and composting toilets, as well as sewage ejector pumps and related fittings, are typically available by special order through plumbing fixture retailers and some home centers, or through your plumber.

Tuesday, May 10, 2011

Advantage Realty Group Blog: Daily Motivation - I THINK I CAN

Advantage Realty Group Blog: Daily Motivation - I THINK I CAN: "I THINK I CAN  If you think you are beaten you are; If you think you dare not, you don't; If you want to win but think you can't; Its almo..."

Daily Motivation - I THINK I CAN


If you think you are beaten you are;
If you think you dare not, you don't;
If you want to win but think you can't;
Its almost a cinch you won't.

If you think you'll lose you're lost;
For out of the world we find
Success begins with a fellow's will;
It's all in a state of mind.

Life's battles don't always go
To the stronger faster man,
But sooner or later the man who wins
Is the man who thinks he can.

Monday, May 2, 2011

Affordable Rental Properties Now Harder To Find

According to a report released Tuesday by the Harvard Joint Center for Housing Studies, a large number of renters are allocating more than half their income to housing.

CNN Money reported the study discovered that one in four renters, or approximately 10.1 million households, are spending half of their paychecks on rent and utilities. The number of middle-income renters, who are also facing this problem, has increased by almost double to 7.5 percent during the last 10 years.

This problem can most likely be attributed to rising housing costs and weak income gains, according to the study. Also, the abundance of new renters who either lost their home to foreclosure or simply cannot afford to buy a home now has played a role.

“In the last decade, rental housing affordability problems went through the roof,” Eric Belsky, managing director of the Harvard Joint Center for Housing Studies, told CNN Money. “And these affordability problems are marching up the income scale.”

On top of those numbers, another 26.2 percent of people spent between 30 and 50 percent of their income on housing. The middle-income bracket makes between $42,000 and $62,900 and one in five of those people are paying between 30 and 50 percent of that for rent. This percentage is up 9 percent when compared to a decade ago.

The Harvard Joint Center for Housing Studies characterizes “affordable” as below 30 percent of the household income.

Another problem on the rise is the lack of inventory of affordable rental housing. In 1999, around 12 percent of low-cost market-rate rentals were dilapidated or lost from the housing stock. Also, due to the housing crisis there are few new multi-family buildings being constructed.

Belsky believes that the decline in supply conflicts with the increased demand. In 2010, there were an additional four million people renting compared to 2005.

Monday, April 25, 2011

Home Selling Tax Tips for Accidental Landlords

I read an article today that I felt was worth passing along as many home sellers are now becoming landlords.  In this article Stephen Fishman, a real estate Tax Expert and Attorney shares some thoughts:

Stephen Fishman:

Due to the precipitous decline in the housing market over the past few years, many homeowners who would otherwise sell their homes are renting them out. This may be because prices are too low, or because they have to move before they can sell due to a job change.

Such accidental landlords should understand that if they rent out their homes too long before they sell them, they could lose the biggest tax break available for most people: the home sale exclusion.

Homeowners who qualify for the home sale exclusion don't have to pay any income tax on up to $250,000 of the gain from the sale if they're single, or up to $500,000 if they're married and file a joint return. Of course, this exclusion is useful only for homeowners who have equity in their homes, not the millions who are "under water" and will receive no profit if they sell their homes.

To qualify for the exclusion, a homeowner must satisfy the ownership and use tests. This means that during the 5-year period ending on the date of the sale, the homeowner must have:
  • owned the home for at least 2 years (the ownership test), and
  • lived in the home as a primary residence for at least 2 years (the use test).
However, the homeowner need not be living in the house at the time it is sold. The two years of ownership and use may occur anytime during the five years before the date of the sale.

This means that a homeowner can move out of the house for up to three years and still qualify for the exclusion. Moreover, a homeowner can rent out a home and count that time as ownership time.

This rule has a very practical application: A homeowner may rent out a home for up to three years prior to the sale and still qualify for the exclusion. However, the exclusion works a bit different for homeowners who have rented out their homes.

They cannot exclude from their income the part of their gain equal to the depreciation they claimed (or could have claimed) while renting the home. Moreover, if the home is rental property at the time of the sale, the sale must be reported to the Internal Revenue Service on Form 4797: Sales of Business Property.

Example: Connie purchases a house on Feb. 1, 2007, and lives in it for two full years. She then moves to another state to take a new job. Rather than sell the house in a down market, she elects to rent it out.

If she sells the house by Feb. 1, 2012, she'll qualify for the $250,000 home sale exclusion because she owned and used the house as her principal home for two years during the five-year period before the sale. If she waits even one more day to sell, she will get no exclusion at all.

Thus, accidental landlords who have equity in their homes need to sell them before the three-year rental period expires, or they'll lose the home sale exclusion. If they can't or don't want to sell, they would have to move back into the home to preserve the exclusion.

Homeowners who don't qualify for the exclusion will have to pay a 15 percent capital gains tax on their gain from the sale (assuming the home was owned for at least one year).

Friday, April 22, 2011

Spring Tips for a Healthy Lawn

Not really sure if it Spring is truly here as in the past week we actually had snow in various parts of the midwest but according to the calendar its Spring! That being said, I continue to get visits weekly now from many companies vying for my business to help make my average lawn beautiful.  I'm sure this happens by you as well and for those not willing to spend the big bucks for one of these companies then hopefully the following tips will be of help.

The best lawn care tip you can get is to start with a solid plan.

1. Do you need to plant grass? Do some research on the best seed for your area, where to buy it cheap, and when it"s available. Depending on where you live, you"ll plant either cool season or warm season grass.

Cool season grass, planted in northern areas, is usually best planted in early fall, but if you missed planting then, plant it in the spring when soil temperatures reach 50 F.

Warm season grass needs soil temps of 70F to thrive and is the choice for southern plantings. Don"t make the mistake of thinking you can plant warm season grass in the upper Midwest. Warm season grasses are bred to thrive in southern climates and are not winter hardy in the north.

2. Of course, you"ll keep new grass plantings moist, but once grass reaches a height of three inches, water it deeply once a week.

A healthy lawn needs about an inch of water a week. When watering, remember to consider recent rainfalls. Shallow watering techniques keep grass from sinking the deep roots that your lawn needs to compete with deep-rooted weeds.

3. Do you already have a lawn? Aerate it in the spring while it"s still moist and before the spring rains are done.

Aerating your lawn in the springtime gives microbes and other small life forms a breath of fresh air after winter. Aeration also makes new paths for drainage and keeps your lawn from becoming saturated.

4. A lot is written about lawn fertilizer and the big question is why? Grass is the most efficient user of nitrogen on earth!

Feed your soil with nutrient rich compost and let your lawn get its nutrients the natural way. The more chemicals you use, the more you disturb the natural biological processes that convert organic matter into nutrients and the microbes and other small organisms that take natural care of your lawn.

5. Mow your grass high. A 2 ½ to 3-inch high cut makes your lawn look fuller, feel softer, and helps keep it healthy. Taller grass shades pesky weed seeds and keeps them from getting established. In addition, a taller lawn is better able to absorb sunshine and better able to retain moisture, the two main contributors to a healthy lawn.

6. Enjoy your lawn. After all, isn"t that your main reason for having a yard?


Thursday, April 14, 2011

Advice from Warren Buffett on the Real Estate Market

Warren Buffett, the man the myth the legend.  Commonly known as the worlds number one investor.  A man that despite his means, lives a very humble life.  Meeting him, you'd never know he was a billionare and known as the Oracle of Omaha.  His wisdom and investing strategies are such that when he speaks, Wall Street listens.  Well with his influence over the masses it sure would be nice to hear his thoughts on the housing market wouldn't it?  Well here he shares some tips for us all to buy into and learn from if you feel his advice is warranted, which i do :)

1. The Basic Premise of Home Ownership -- That Homes Increase In Value Over Time -- Is Sound

Last spring, the Congressional Financial Crisis Inquiry Commission called Buffett in for an interview. He was asked to explain some of his bubble-era investment decisions, as well as to give his take on what in the heck had happened to the economy. In the process, Buffett expressed his belief that the housing bubble was inflated by an irrational, widespread belief that home prices would only ever go up -- an extreme corruption of a generally valid premise. "It's a totally sound premise that houses will become worth more over time because the dollar becomes worth less," Buffett declared.

The sound premise, Buffett explained, got distorted and eventually caused the housing crisis when Americans started buying multiple homes to cash in on what they assumed was guaranteed appreciation, taking out "liar's loans," buying homes with no down payment and with unaffordable monthly payments -- and lenders let them -- all because of the assumption that prices could never go down.

Clearly, this assumption was wrong. As Buffett said in an earlier shareholder's letter: "A pin lies in wait for every bubble."

2. Buy Low (And Now Would Be a Good Time for That)

Buffett writes a letter to Berkshire Hathaway's shareholders every year that is chock-full of his review of the company's fortunes (literally) over the preceding year, his analysis of the stock market and the economy in general, and his smart, plain English tips on life and money and on life.

In last month's annual shareholder letter, Buffett addressed the industry-leading 2010 performance of one of his company's holdings, which sells and finances manufactured homes. During that discussion, the money maven declared that now would be a sensible time to buy a home, in light of record-high affordability: "Home ownership makes sense for most Americans, particularly at today's lower prices and bargain interest rates."

And Buffett didn't stop there. He pointed out his own tenure as a homeowner as an example. "All things considered, the third-best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks," he wrote. Then, to clarify for the readers who'd want to know what numbers one and two were, Buffett elaborated: "The two best investments were wedding rings."

3. But Don't Wait Too Long To Take Advantage of Low Prices

Buffett wrote a 2008 Op-Ed in the New York Times, explaining that buying while prices are low is stressful, because economic markets are volatile and impossible to predict in the short term, even for him. So, when conditions make an investment -- in stocks or in a home -- particularly advantageous, Buffett says not to hesitate too long. Painting a vivid verbal image to illustrate the likelihood that market prices "will move higher, perhaps substantially so, well before either sentiment or the economy turns up," Buffett warned: "if you wait for the robins, Spring will be over."

4. The Smart Way to Own a Home Has Three Elements

Those elements are: fixed mortgage, affordable payments and long-term hold. Detailing why his manufactured housing holding has done so much better than the rest of the real estate market, Buffett pointed out that "[o]ur approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income. This policy kept [the company] solvent and also kept buyers in their homes." And that was the ultimate difference between smart home-buying and the home-buying that led to the real estate bubble and the foreclosure crisis.

"If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did."

 In the stock world, Buffett has been quoted as advising investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." Well known for practicing what he preaches, we can presume a long-term hold strategy would also be an integral part of Buffett's advisory to homeowners, too. Despite his net worth of somewhere around $50 billion, according to the latest Forbes tally, Buffett still lives in the 5-bedroom Nebraska home he bought 52 years ago for $31,500.

5. Buying Your "Dream Home" May Lead to Nightmares

In the 2010 shareholder letter, after he pointed out the right way to own a home, Buffett went on to caution Americans against the wrong way. When dream homes are bought for ever-escalating prices, using rapidly adjusting mortgage payments and unsustainable monthly costs vis-a-vis the homeowners' income, the dream can go bad quickly. Buffett warned, "a house can be a nightmare if the buyer's eyes are bigger than his wallet and if a lender -- often protected by a government guarantee -- facilitates his fantasy. Our country's social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford."

I can't agree more with Mr. Buffet that now is a wonderful time to buy and that timing the market perfectly may not be feasible.  If you are currently renting or thinking about moving into a larger home, the opportunities that we are seeing daily are amazing and shouldn't be ignored. 

If you find this blog useful or beneficial, please as always forward to any friends or family that may also benefit.  Thanks and have a wonderful day! :) Ben

Tuesday, March 22, 2011

Tips to Prepare Your Grill for Spring & Summer

Well here we are, roughly two days in from what we calendarize as the 1st day of spring! I must say, yesterday sure felt like it as we had some sunshine and temparatures that rose as high as the low 60's! Felt like spring to me and when this weather warms up, we so often rush to start our grills and that wonderful smell of grilled food floods our senses and sends neighbors outside to do the same.

In our haste, have you ever thought what should be done to the grill in order to ensure that its ready for another full season of grilling? Well, here is your "HOW TO" guide when it comes to grill preparation.

Step 1) Turn the grill on and close the lid and get it super hot and burn off the gunk left from the previous year. Let it run for a good 10-15 minutes and as it heats up, old food and residue will burn off the grill making it easier to scrape the remains.

Step 2) Scrub the grates - Remove the charred residue from the grates with a semi-flexible stainless steel brush. If the grates undersides are greasy, remove them and wipe them down with a wet, soapy sponge. Once your finished with the above, be sure to rinse the grates and them dry them off.

Step 3) Attack the Burners - Pricier grills often have burner protectors - V shaped metal guarding the gas jets from food dripping. Remove the protectors, and use a putty knife or something similar to scrape the grease off. If this isn't doing the trick, get some hot soapy water and scrub away. Then as above, rinse and dry.

Step 4) Attack the Burners Part II - Clean the burners with a stainless steel brush using a side to side motion, not a length wise motion. Are the gas jets open or clogged? If clogged, use a thin wire, a close hanger may work to poke a hole through the center of each one. If the holes are rusted, its time to replace the burners. Now remove the burners in prepartion for the next step.

Step 5) Hit the Walls of the grill, also known as the cook box. You want to remove carbonized grease so it doesn't affect the taste of the food. If scraping it off isn't working, agian revert to dish soap and water.

Step 6) Clean it up - Make that grill sparkle on the outside as well. Rub it down and wipe away grease with a dedicated stainless steel cleaner and semi-soft sponge. Warm water works too!

Hope the above useful tips help you make the most of the upcoming grilling season. Now if only we can have mother nature cooperate so that the weather continues to improve then we'll all soon be enjoying the smell of those neighbors grill as well as your own filling the air with that sweet smell that only a grill creates :)

Happy Spring and as always, if you know anyone that you feel would benefit from my blog or find this useful, please feel free to share, thank you! Ben

Friday, March 18, 2011

10 Tax Deductions for Realtors or Brokerages

I wanted to pass along this wonderful article. If your like me and in this business, then more now than ever its vital to keep each and every penny earned as the business is far from that one would compare to "easy money". Hope this article comes to you as useful as it came to me!

10 tax deductions: in time for the April 18 deadlineReal Estate Tax Talk
By Stephen FishmanInman News™
March 18, 2011

Your tax return is due by April 18, 2011 (the deadline was extended three days this year because of weekends and holidays).

If you haven't filed yet, make sure you haven't forgotten the following 10 tax deductions, which are often overlooked by real estate agents and brokers.

1. Business clothing with logos: You can deduct clothing you buy for business use only if it can't be used for ordinary street wear. This means you can't deduct a regular business suit. However, you may deduct the cost of a sport jacket, coat or other clothing item with a company logo on it.

2. Car expenses if you take standard mileage rate: If, like most small businesspeople, you use the standard mileage rate to deduct your car expenses, you get to deduct 50 cents for every business mile you drove in 2010. You don't get to separately deduct the cost of gas, insurance, depreciation and similar items because these are all included in the standard mileage rate.
However, you can still deduct certain expenses, including the interest you pay on a loan for your business car, parking and tolls. However, you can't deduct the cost of parking tickets.

. Home telephone expenses: You get no deduction for a single phone in your home; but you may deduct the cost of long-distance phone calls and special phone services you use for business such as call waiting or message center. You may deduct the full cost of a second phone line you use at home for business, including a cell phone.

4. Business gifts: Gifts you purchase for clients are deductible as a business expense, but the deduction is limited to $25 per person per year. However, the $25 limit applies only to gifts to individuals.
It doesn't apply if you give a gift to an entire company, unless the gift was intended for a particular person or group of people within the company. Such companywide gifts are deductible in any amount, as long as it is reasonable.

5. Continuing-education courses: You can't deduct the education expenses you incur to qualify for a new business or profession. For example, you can't deduct the cost of studying for your real estate license.
However, you can deduct the cost of continuing-education courses you must take each year to maintain your license. Education that improves your knowledge and skills as a real estate professional is also deductible -- for example, you can deduct the cost of a webinar on how to use social media to find sales prospects.

6. Tax-preparation fees: You can deduct the cost of hiring a tax professional to prepare your business tax return. If the same tax pro prepares your personal and business return, you can deduct only the cost of preparing the business portion. Make sure that you get an itemized bill showing the portion of the tax preparation fee allocated to your business.

7. ATM fees, credit card fees, and interest: You can deduct ATM fees, credit card fees and other bank charges you paid during 2010 for all your business accounts.

8. Subscriptions: Real estate-related magazines and trade publications are deductible. You can also deduct the cost of subscribing to an online real estate news service.

9. Greeting cards: Greeting cards you send to clients and sales prospects are a deductible advertising expense.

10. Websites: You can deduct the cost of designing and maintaining a website you use for business. You can also deduct your Internet hosting fees and the cost of obtaining a domain name for your business.

Tuesday, March 15, 2011

Make a Home Investment in 2011

Location, location, location. In the latter half of 2011 that adage should come back into vogue. But first, more declines. C'mon, you're thinking, you've been hearing for months that prices have been more or less stable nationwide. True, but the still-soft job market, the foreclosure crisis, and the absence of incentives such as the homebuyers tax credit will push down the median home price another 5% or so next year, according to Moody's and Fiserv, before it stabilizes by late 2011 or early 2012.

Individual markets, though, will start diverging from the downtrend by summer. About one-quarter of the nation's 384 metro areas should see higher prices by year-end, and half will see drops of less than 3%.

Certainly, conditions will favor anyone in the market to buy a new home -- or homeowners looking to refinance. Today's record low mortgage rates, averaging 4.2% for a 30-year fixed term, are expected to remain low at least through the first half of the year.

Even if the economy picks up steam in the latter half of 2011, rates are unlikely to climb higher than 5%, says Amy Crews Cutts, deputy chief economist at Freddie Mac.

On top of that, assuming that banks can solve their issues with poorly documented foreclosures, home seizures will revert back to record highs, creating competition for sellers and keeping a lid on home values.

The combination of low prices, cheap mortgages, and a slowly improving job market should gradually entice buyers back to the market, setting the stage for prices to stabilize.

Demand, though, won't be strong enough for values to rise substantially, largely because the weak labor market is depressing new household formation as family and friends opt to live together, and recent graduates return to their childhood bedrooms, says Patrick Newport of IHS Global Insight.
Only about 350,000 households are forming a year, vs. 1.3 million typically. "All you hear about is foreclosures and the supply problem," says Michael Castleman Sr., CEO of housing research firm Metrostudy. "But the bigger problem is demand."

Wildcards: Foreclosures. If the investigations into robo-signed seizure documents and other issues turn up more problems for banks, foreclosures could be halted indefinitely. That would prop up prices in the short run but weigh them down over the long run.

Jobs. Housing demand could rise if the labor market picks up faster than expected. In that case, prices would firm up earlier in the year.

What to Watch: Signs of an improving market: three straight months of rising sales and a decreasing inventory of homes (a six-month supply is considered healthy; today it's 11 months). A local agent or realtor's association can supply you with that data.

Action Plan: Buyers. Don't try to time the market perfectly. Even if prices fall a bit more in your area, mortgage rates could rise later in the year, offsetting the drop. Initially bid about 10% below what comparable homes have sold for over the past three months; go even lower if the area is rife with foreclosures.

By contrast, if well-priced houses in your desired area are receiving multiple offers -- your agent will know -- bid close to list price. But don't engage in a bidding war, plenty more homes will be coming onto the market.

Until your house keys are in hand, don't change your financial profile don't buy a car, take a new job, or pay a loan late. Increasingly lenders are re-pulling credit reports and reconfirming jobs just before closing,

Action Plan: Sellers. Hang on a few more years until the market recovers. Can't hold off? Then try to unload fast.

Prices will be falling in most areas for the next several months and, depending on your location, the foreclosure slowdown in place may temporarily reduce your competition, advises Ellen Klein, a realtor in Rockaway, N.J.

Wherever you are, pricing your home right is key. Buyers typically put an upper limit on their search in increments of $25,000 or $50,000. If your house is priced at $365,000, shoppers who cut their search at $350,000 may never see your home.

Best idea: Slightly underprice your house. More often than not you'll attract numerous buyers who bid up the price, and you'll end up getting fair value in much less time.

Action Plan: Investors. Assuming foreclosures have slowed where you are, hold off until a few months after they ramp up again. Until then, inventory will be limited, and that will set a floor under prices. When you're ready to make your move, paying in cash will better the odds of a winning bid, says Foreman.

Action Plan: Owners. One word: refinance -- even if you just did it a few years ago, urges Keith Gumbinger of HSH.com, a mortgage information publisher.

If you can shave at least one point off your rate and plan to stay in your home for at least four years, a refi makes sense. On a two-year-old $300,000 loan at 6.5%, refinancing will save you $465 a month and $120,000 in interest.

Or go with a 15-year loan, which averages 3.7%. Your payment will jump $225, but you'll own your home 13 years earlier and save $253,000 in interest.

Underwater or have little equity? You may be able to refinance through a federal program known as HARP (for details go to makinghomeaffordable.gov). Have funds to spare? A cash-in refi, in which you put in enough to reach 10% or 20% equity, will let you nab those record low rates.

Monday, March 7, 2011

Flaws in Obama's Mortgage Reform Plan?

Attached is a great article to help you understand better the administrations mortage reform plan and potential flaws in it.

Scaling back housing finance: Fallout feared

Flaws in Obama's mortgage reform plan
By Jack GuttentagInman News™
March 07, 2011
Editor's note: This is Part 1 of a multipart series.

The document the administration recently sent to Congress outlining its game plan for housing finance has both scale-down and ramp-up thrusts. The scale-down thrust, comprising most of the report, involves shrinking the federal government's involvement in the market.
The ramp-up thrust would create a new federal program designed to support the private market. This article is about the scale-down.

The point of departure for this proposal is a post-crisis housing finance system in which only about 10 percent of all new home loans are strictly private. The remaining 90 percent are either acquired by Fannie Mae or Freddie Mac, or insured by the Federal Housing Administration (FHA).

Further, qualification requirements set by the strictly private market are far more restrictive than they were before the crisis, which is the reason their market share is now so low. Before the crisis, risk-based pricing was widely practiced, making loans available over a wide range of risks.

Today, only a sliver of risk-based pricing remains. For the most part, risk-based pricing has been replaced by risk cutoffs. At many lenders, borrowers with a credit score of 800 have to put 20 percent down, and borrowers who put 40 percent down still need a 700 score to qualify. Some lenders will go to 10 percent at 680, but limit the loan size.

Fannie Mae and Freddie Mac have tightened their requirements, but by much less than the strictly private sector. The agencies today will accept a credit score of 620 at 20 percent down, and 680 at 5 percent down. However, risk-based pricing is extensive and many borrowers with mediocre credit, small down payments or both, choose to opt out.

The average down payment on new loans is about 35 percent, and the average FICO is about 765. The agencies have also tightened their documentation and appraisal requirements significantly.
FHA has the most liberal requirements, which are little changed from what they were before the crisis. FHA accepts 3 percent down with a credit score of 580, though many lenders require higher scores so that they won't be tarred with originating too many loans that default. FHA has also increased its insurance premiums.

What scale-down means
The crux of the Obama administration's scale-down plan is a gradual phaseout of Fannie Mae and Freddie Mac, combined with a reduction in the scope of FHA operations. The ultimate goal seems to be a system in which the strictly private market would account for about 85 percent of the traffic, and FHA would have about 15 percent.

The report suggests a number of ways of accomplishing this, including reductions in the maximum qualifying loan size at all three agencies, and increases in insurance charges. The first reduces the number of borrowers who qualify, while the second forces price increases by the agencies that would make the strictly private market more price-competitive.

Implications and consequences
The volume of risky loans, already down sharply from the post-crisis tightening of qualification requirements, will shrink further as the scale-down proceeds. Because a large proportion of risky mortgages are generated by disadvantaged groups, this approach constitutes a reversal of what had been public policy for at least four decades, which was to encourage homeownership among such groups.

Sometime this year, the regulatory agencies will promulgate new rules implementing provisions of the Dodd-Frank bill that require them to define "qualified residential mortgage" (QRM).
These are low-risk loans that exempt originators from having to assume 5 percent of the risk of loss. The split in the market following implementation of this rule will further disadvantage weaker borrowers, since non-QRM loans will carry a higher price if they are available at all.

Softening the blow
The report recognizes the need to go slow and cautiously, but offers no concrete ideas on how to soften the blow. Here are two.

1. The administration ought to set up a task force to determine whether the existing regulatory structure, including the bank examination process, is unduly constraining the strictly private market. If government wants lenders to expand into the space vacated by Fannie, Freddie and FHA, government ought to make sure that it has not itself constructed roadblocks to such expansion.
2. FHA should extend its tentative steps toward risk-based pricing to a comprehensive system in which the insurance premium on every loan reflects the risk of loss to FHA of that loan. This will help keep FHA financially sound, reduce concerns if FHA is pressed to expand into some of the space vacated by Fannie and Freddie, and neutralize political pressures to liberalize terms unduly.

Thanks to Guy Cecala of Inside Mortgage Finance.

Next week: The ramp-up proposal.

Well, please feel free to share your thoughts and insight on the above. Also, please share this and any articles of mine that you feel may benefit friends or family! Thank you and have a wonderful day! Ben

Monday, February 21, 2011

Get that Spring To Do List Ready!

Really, can it be that spring is almost here? Yes indeed, won't be long and the birds will be chirping, the Canadian geese will be making their way back and the trees and bushes will end their season of hibernation and begin to bud. I don't know about you but I am done with Winter bring on the warmer weather already !

Recently I spoke about what the spring market means to buyers and sellers but today I'm going to share tips on what to do with your home to prepare for Spring. These tips are just a handful of some popular to do's that I've compiled that are sure to help you start the season off right.

There are both indoor and outdoor checklists but we'll start with OUTDOOR:

  • Take a walk around the home and look for any damage specifically to the roof. Are there any missing shingles or damage done from snow or ice that may have built up on the gutters?

  • Clean the gutters from all debris

  • Now is the perfect time to trim back trees or bushes as they are easiest to manage without leaves. Be sure to trim anything that is directly in contact with the home or roof to provide for a gap to protect your home and siding.

  • Pressure wash your deck if you've got one. Once the weather improves you'll want to put a sealer on it to protect against water and sun damage.

  • Wash Windows

  • Caulk Windows and seal any areas that could use it

  • Be sure to check your garden hoses for cracks and turn on the exterior water valves that you may have shut off prior to winter

  • Clean the grill

  • Rake the yard and clean up any leaves from the fall/winter season in the yard

That is a great start to your Spring Cleaning List! Once you've managed that part of the list, its time to focus on the INTERIOR:

  • Wash interior windows in addition to the exterior

  • Replace and check furnace filter

  • Caulk the windows inside your home as well to repair any damage that may have been done by ice and snow during a brutal winter. This will help maintain your heat/cool of the home and also prevent mold or other damage

  • Deep Clean the carpets

  • Clean and store your humidifiers that you would have made use of for fall/winter

  • Dust your home and be sure to pay special attention to the fans in your home. Clean them well so they are good to use once warmer weather arrives and you'll need the circulation they offer for the home.

  • Test your A/C. When its 105 this summer and you turn it on for the 1st time, that is not the time to find out it needs service. However, it is best to wait until the temperature is 65 to do this.

  • Test all your smoke and fire alarms in the house to ensure they are working

  • Did you use the fireplace quite often this winter? Now may be a great time to get this cleaned

I hope the tips I've provided can start you off on the right path to great home maintenance for the year and a wonderful spring!

As always, if you know anyone that may benefit from my blog please forward my articles on to them and be sure to follow future blogs :-) Thank you, Ben.