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 :-)

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.

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.

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).

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

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.

Backdrop
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

Real Estate Sales Rise in 49 States in 4th Quarter 2010

Real estate sales rise in 49 states in Q4NAR: home prices roughly flat year-over-year in Q4

By Inman NewsInman News™
February 10, 2011

Sales of existing single-family homes and condominiums in the fourth quarter of 2010 rose from the third quarter in all but one state, though only one state saw an annual rise compared to fourth-quarter 2009, according to a National Association of REALTORS® report released today.
Existing-home sales in the U.S. rose 15.4 percent in the fourth quarter from the third quarter, to a seasonally adjusted annual rate of 4.8 million. That's a 19.5 percent drop from fourth-quarter 2009, when the rate was 5.97 million -- a homebuyer tax credit-fueled rate NAR called "unsustainable." In 2010 overall, sales fell 4.8 percent, to an estimated 4.91 million, from 5.16 million in 2009.

The national median existing single-family home price in the fourth quarter of 2010 was essentially flat compared to the fourth quarter of 2009: $170,600.

Median prices in the fourth quarter of 2010 rose in 78 of 152 metropolitan areas across the country compared to the fourth quarter of 2009.

10 metro areas to see highest quarter-over-quarter median price jumps:
Metropolitan Area Q4 2009 median price Q4 2010 median price % change
Elmira, N.Y. $86,800 $101,100 16.5%
Pittsfield, Mass. $173,100 $200,500 15.8%
Binghamton, N.Y. $117,900 $136,300 15.6%
Burlington-South Burlington, Vt. $236,600 $270,600 14.4%
Bloomington-Normal, Ill. $146,700 $167,700 14.3%
Buffalo-Niagara Falls, N.Y. $110,700 $126,500 14.3%
Erie, Pa. $97,700 $110,300 12.9%
Peoria, Ill. $111,900 $126,100 12.7%
Indianapolis, Ind. $111,500 $124,300 11.5%
Milwaukee-Waukesha-West Allis, Wis. $188,400 $210,100 11.5%
Source: NAR

Median price rose the most quarter-over-quarter in the Northeast, up 2.3 percent to $240,400. Prices in the Midwest and South remained essentially flat at $139,200 and $152,400, respectively. The West was the only region to see a median price drop, -2.9 percent to $214,400.

When comparing 2009's median price to 2010's median price, metro areas in California stand out for their rate of appreciation:
Metro Area 2009 median price 2010 median price % change
Akron, Ohio $93,200 $108,900 16.8%
Elmira, N.Y. $87,300 $101,000 15.7%
San Fran Nor. Cali $493,310 $567,900 15.1%
San Jose-Sunnyvale $530,000 $602,000 13.6%
Riverside-San Bernardino $169,680 $187,000 10.2%
Erie, Pa. $97,900 $107,700 10.0%
Burlington-Vt. $241,800 $261,200 8.0%
Bridgeport-Conn. $379,200 $408,600 7.8%
Boston-Cambridge-N.H. $332,600 $357,300 7.4%
San Diego-Carlsbad-Calif. $359,500 $385,700 7.3%
Source: NAR

Lawrence Yun, NAR's chief economist, said in a statement that he was encouraged by the quarterly rise in sales. "Home sales ... are helping to absorb the inventory, including many distressed properties. Even with foreclosures continuing to enter the inventory pipeline, they've been selling well and housing supplies have trended down," Yun stated. "A recovery to normalcy requires steady trimming of the inventories."

Yun projected about 150,000 to 200,000 jobs will be added to the economy this year from an expected 300,000 additional home sales in 2011, the report said.
"An improving housing market and job growth will go hand in hand. The housing recovery will mean faster job growth," Yun added.

Virginia was the only state to see a quarterly drop in sales, down 5.4 percent, and sales in Washington, D.C., remained unchanged from the third quarter.

Compared to fourth-quarter 2009, however, only Idaho saw a yearly rise in sales: up 7.3 percent. Some foreclosure-ridden states -- Florida, Arizona, Nevada and California -- saw the smallest drops in sales during that time.

Distressed sales made up 34 percent of all sales in the fourth quarter, up only slightly from 32 percent in the fourth quarter of 2009.

10 states to see largest gains or smallest drops in sales from fourth quarter 2009 to fourth quarter 2010 (sales rates are seasonally adjusted, in thousands):
State Q4 2009 sales rate Q4 2010 sales rate % change
Idaho 49.2 52.8 7.3%
Florida 435.2 416.8 -4.2%
Arizona 158.4 150.4 -5.1%
Wyoming 9.6 8.8 -8.3%
Nevada 120 108 -10%
Mississippi 47.6 42.8 -10.1%
California 526.4 464.8 -11.7%
Hawaii 25.2 22 -12.7%
Colorado 108.4 90.8 -16.2%
Vermont 14.8 12.4 -16.2%
Source: NAR

Idaho also saw the biggest jump in sales from the third quarter of 2010 to the fourth quarter of 2010:
State Q3 2010 sales rate Q4 2010 sales rate % change
Idaho 26 52.8 103.1%
Vermont 8 12.4 55%
Minnesota 60.8 81.2 33.6%
Iowa 41.2 52.8 28.2%
North Dakota 9.2 11.6 26.1%
Oregon 44.4 56 26.1%
Utah 22 27.6 25.5%
Nevada 87.2 108 23.9%
Alaska 16.8 20.8 23.8%
Missouri 74.4 92 23.7%
Source: NAR

Idaho was at the top of a list of only seven states, and Washington, D.C., to see sales rise from 2009 to 2010:
State 2009 sales rate 2010 sales rate % change
Idaho 33.8 38.9 15.1%
Hawaii 18.4 21 14.1%
Florida 357.8 396.5 10.8%
Washington, D.C. 8.4 8.8 4.8%
Maryland 72.5 74.4 2.6%
Washington 82.3 83.7 1.7%
Mississippi 41.9 42.1 0.5%
Oregon 55 55.1 0.2%
Alaska 22.4 22.4 0%
Vermont 11.3 11.3 0%
Source: NAR

Several Midwestern states saw the biggest drops in sales from the fourth quarter of 2009 to the fourth quarter of 2010.

10 states to see biggest drops in quarter-over-quarter sales:
State Q4 2009 sales rate Q4 2010 sales rate % change
South Dakota 20.8 12.8 -38.5%
Minnesota 126 81.2 -35.6%
Pennsylvania 41 50.8 -33.4%
Kentucky 87.6 60 -31.5%
Nebraska 41.6 28.8 -30.8%
Indiana 124 88.4 -28.7%
Delaware 14 10 -28.6%
Oklahoma 89.66 4.4 -28.1%
North Dakota 16 11.6 -27.5%
Rhode Island 17.6 12.8 -27.3%
Source: NAR

The Midwest experienced the biggest estimated overall drop in sales in 2010 compared to 2009: 7.5 percent, to a rate of 1.08 million. The Northeast saw a drop of 4.8 percent, to 817,000. The West saw a decline of 4.7 percent, to 1.15 million. The South saw the smallest decrease, down 2.8 percent, to 1.86 million.

10 states to see biggest decreases in sales from 2009 to 2010:
State 2009 sales rate 2010 sales rate % change
South Dakota 17.4 14.2 -18.4%
Minnesota 107.4 89.7 -16.5%
Delaware 12.6 10.9 -13.5%
Oklahoma 83.5 72.3 -13.4%
Rhode Island 15.4 13.6 -11.7%
Missouri 105.9 94.6 -10.7%
Michigan 167.1 149.6 -10.5%
Pennsylvania 176.5 160.3 -9.2%
Utah 31.1 28.5 -8.4%
Kansas 56.5 51.8 -8.3%
Source: NAR

Springtime is Around the Corner....Buying? Selling?

Is it possible that after the worst snow storm in over a decade that we can really be talking or even thinking about Spring? Is is possible that in only a matter of a few short weeks that Mother Nature will shine down on us and bless us with warmer weather and melting snow?

I for one am ready for Spring and can only hope that we've seen our last of "major" snow falls for the year and I'm hopeful that warm weather and all the optimism of spring is around the corner. The realist in me however realizes that its very likely we may have a couple months before this happens.

So When is Spring?

We all have our own opinion on this but is it March, is is April or May? From a real estate broker's prospective the spring market is March. Its the month that we have glimpses of warm weather, then the next day may revert to cold and snow. The days lengthen however and there just seems to be a better all around mood amongst people as we are seeing that we are truly in the fourth quarter of a long winter.

What does this mean for Sellers?

Springtime historically is a time that many home sellers that are currently on the market may see a bump in activity and its a time when home sellers that had prepared over the winter time are set to put their home up for sale.

Putting a home up for sale in the dead of winter often has many obstacles to it compared with waiting until Spring.

1. Your competing with Holidays - Christmas, Thanksgiving, New Years....Buyers have too much on their plate to find time often to go home shopping.
   


2. Snow & Bath Weather - Lets face it, when its Minus 5 degrees there aren't many places most people would rather be when they aren't at work than wrapped up in a blanket at home.



3. Spring is Nearing - many buyers expect a larger number of homes to be available come spring so many decide to make plans for a more thorough and expansive home search once winter nears an end.

What Does Spring Mean for Buyers?

Spring is such a great time of year for so many reasons but for those looking to buy a home its now the time that you generally are seeing many options hit the market. Didn't find what you were looking for the previous few months? Now may be the time that the perfect home hits the market!

The downside for buyers if any with a spring market is that sellers do often have optimism at the highest and may put their home on the market a tad high. I've seen this more often than not but on the flip side, for those that may have missed the buyers they were hoping for during winter they may be getting more aggressive and will lower their prices as competition heats up.

No matter how you slice it, the upcoming Spring Season is always an exciting one for the Real Estate Market.

If your considering selling your home, now is the time to get it prepared. Meet with a professional realtor like myself and get advice on final "to do's" and set a goal for the completion of your projects.

If your hoping to buy a home, now is the time to meet with your banker or a mortgage broker. If you need someone, I have a few that I highly recommend that can be of assistance. Getting pre-approved to purchase a home is easy and painless. If your not quite ready to buy, it still may be a good idea to meet with a lender and discuss options and determine if your credit is where it needs to be in order to purchase a home in the future. If its not, they can often help advise you on what steps to take in order to clean up your credit.

I hope you found today's blog helpful! If you or anyone you know may benefit from my blog please feel free to forward this to them. Additionally, I'm available for any advice specific to your needs so please don't hesitate to contact me direct if you'd like.

Thanks for reading my blog and happy house-hunting/selling! Ben

Whats in Store for Former Real Estate Boom Towns

Study Predicts What's in Store for Former Real Estate Boom Towns

In former home-building hot spots, the housing bust has created a new kind of declining city, different from the nation’s traditional rusting centers of industry that could languish for years.

Although the causes of the decline in these metropolitan areas are distinct from the loss of employment from shrinking manufacturing and industry in some of the nation’s old industrial powerhouses, these areas could experience fates similar to places such as Cleveland and Detroit, with neighborhoods experiencing high rates of vacancies for a very long time, according to a recently released study.

“Some neighborhoods are going to suffer tremendously or are never going to come back or come back very, very slowly,” said James R. Follain, senior fellow at the Rockefeller Institute of Government and author of the study published by the Research Institute for Housing America, a division of the Mortgage Bankers Association.

Potential candidates for long-term decline named by the study are the areas hit hardest by the drop in home prices in recent years. They include Las Vegas, Miami and several inland California metropolitan areas that grew rapidly during the boom, such as Stockton and Modesto.

A traditional city in decline is one that has suffered a sustained population drop, leaving behind empty houses, apartment buildings, offices and storefronts. Cleveland and Detroit, for instance, suffered from the erosion of manufacturing and the loss of residents, who left in search of jobs.Instead of eroding a particular industry, however, the housing bust left a glut of homes because of overbuilding and the foreclosure crisis. Follain argues that the future of these cities is threatened in similar ways to that of Rust Belt cities.

“Long-vacant neighborhoods are going to develop, and we can imagine what can happen,” he said, including potentially higher crime and lower property taxes.In California, some coastal cities are already seeing a housing market recovery. But inland areas that were built on optimistic assumptions of continued population growth and ever-climbing home values are facing a much more difficult recovery.

Celia Chen, a housing economist with Moody’s Economy.com, predicts that a full recovery in parts of California, Nevada, Arizona and Florida won’t occur until 2030. “The housing boom elevated home prices in a number of areas far, far above what can be supported by the economic fundamentals, and so prices have fallen significantly, and they will remain below their previous peaks easily for a decade, or even two decades,” Chen said.Some experts contend that foreclosures, which have pierced neighborhoods of all income levels throughout the country, are quickly turning developments on the outskirts of metropolitan areas into the nation’s newest slums. Complicating any recovery for these beaten-down areas is the difficulty in predicting which neighborhoods will fare worst. That uncertainty could lead to increasing skepticism by buyers and lenders looking to make loans on homes in these areas.

“If you are looking at this from the perspective of a home buyer or a lender, it is one thing to say you are in a market where home prices may drop 10 percent or 20 percent,” said Michael Fratantoni, vice president of research and economics with the mortgage bankers group. “That is different from the idea that 80 percent to 90 percent of the value could evaporate. That changes the whole nature of the business.”

Still, the future of these regions remains a point of contention. Economist John Husing argues that the inland regions of California don’t have a long-term problem.“What has driven the Inland Empire economy is, for the last 30 years, simply the fact that the rest of Southern California is completely out of dirt,” Husing said. “Right now the price differential between coastal counties and inland counties is $100,000. People will ultimately respond to that.”The development of industrial facilities to handle cargo from Southern California’s ports will also continue inland because they require lots of space, said Husing, principal of Economics & Politics Inc. in Redlands. Such development, he said, will create jobs for workers who will need housing.

What Buyers can learn from the Stock Market

Real estate and stocks aren't often compared to one another unless your speaking of a REIT (real estate investment trust) or a stock in a company that focuses on real estate. Most of the time however they are mutually exclusive of one another.

While my career is in Real Estate I've dabbled in more than my share of stocks and share a passion for investing in companies and trends in the stock market. I've made far more mistakes trying to be the next Warren Buffet than I'd care to share however but have learned often more during these set-backs than I have during times when I've been right.

The one thing that I've learned that I can relate to the real estate market for today's buyers is that you shouldn't try to "TIME THE MARKET PERFECTLY".

Timing the market perfectly is a gamble that is never mastered. Even if prices fall a bit more in your area, mortgage interest may rise later in the year offsetting the drop. If your in the market for a new home, now is the time to get off the side-lines and make what could amount to be one of the better investments of your life. If your thinking about investing in real estate and want to purchase a rental property, also a great time to do so.

Of course when making a bid, have some research done to determine what comparable homes have been selling for over the past three to 6 months. Then make a bid 10% below that average number and in some cases more if the area is extremely distressed with foreclosures.

In contrast however, if your area has a home thats been listed at a very strong price and your comps suggest that it is, multiple offers are not uncommon even in this market. Your agent can contact the listing agent to find out about additional offers and if this is the predicament you are in, keep your offer as competitive as you feel you can. This however does not mean to let emotion get the best of you during a bidding war as many homes will be available if this bid doesn't work out for you.

If you are hoping to buy a home soon, another rule of thumb is to keep any and all other big ticket purchases on hold until you have successfully found and closed on a home. Do not purchase a new car, take a new job, or pay any loans late. This could all adversely affect your approval when it comes to the ability to get a loan.

Hope these suggestions and thoughts on the market are useful to you! As you take the next steps towards your new home be sure to find a full time realtor that knows the business, can be counted on to look out for your best interests, and is reliable.

Please forward this and any of my past blogs to anyone that you feel may find this useful information and thanks again for taking the time to read my blog! Ben

Moving? Tips for a Successful Stress Free Move

Tips for a Successful Move

Packing your belongings and moving is often fraught with high emotions and involves a to-do list a mile long. So, it’s tempting to give only passing attention to hiring a mover and the related incidental costs.

That could be a mistake—for your wallet and your peace of mind. Moving can be quite expensive. A typical full-service interstate move costs about $4,300, while the same in-state move might cost about $2,500, according to the American Moving & Storage Association. And while the moving industry has many fine companies, it is notorious for fraud and dirty tactics by so-called rogue movers.

Here are 12 tips to make your move simple and avoid the hassle.

Choose a type of move: You have three basic choices: do-it-yourself, full service and a relatively new hybrid of the two. Going it alone is the cheapest alternative, costing the rental price of a truck, gasoline, packing materials and, perhaps, pizza and beer for friends you rope into helping. With full-service moves, moving within a state is charged by the hour, while moving across state lines is charged by weight and mileage.

With a hybrid move, a mover will drop off a large container at your home for you to pack. The mover will then load the container onto a truck, drive the belongings to your new location and drop off the container for you to unload. Because you’re doing the manual labor of packing and unpacking, it’s far less costly than a full-service move.

Hire a quality mover: If you hire help, get at least three price quotes and do your homework before selecting a mover. Seek recommendations by talking with family and friends, even your Facebook circle. Investigate a company’s reputation with the Better Business Bureau (http://www.bbb.org/), Yelp.com and possibly the paid-membership site Angie’s List (angieslist.com). Check a company’s complaint history at the federal government site, ProtectYourMove.gov.

“People think a good reputation equals expensive, but that’s not true,” said Laura McHolm, co-founder of NorthStar Moving in Los Angeles. “You don’t get a good reputation by overcharging people.”

Look for two things when hiring a moving company: A full-service mover should visit your home in person, not give a quote over the phone or online, and should provide a written estimate, experts say.

Declutter: No matter what type of move you’re making, taking less stuff is cheaper and less hassle. Set up a staging area, perhaps in a garage, with various piles, such as throw out, recycle, donate and sell.For many items, use the rule of thumb, ‘If you haven’t used it in a year, you probably don’t need it.’Be flexible: Like airline fares, moving rates depend on when you book.

The busiest time for movers, and thus the most expensive time for consumers, is summer weekends near the 15th and 30th of the month.If you have time flexibility, ask what rates would be for different days or seasons. If you have extreme flexibility, ask about moving standby: waiting until the mover has extra space and needs to fill a truck.

Save on boxes: Buying new boxes from a moving company is the most expensive choice. To save some money on packing materials, ask if you can buy used boxes from your moving company.Cheaper yet is finding free boxes, ideally from somebody who just moved.

Ask your real estate agent to connect you with other clients who recently moved or look on Craigslist.org. Specialty boxes, such as wardrobe boxes, might be cheaper to purchase at a do-it-yourself moving store, such as U-Haul, than from your mover.

Save on packing materials: If you’re packing your belongings yourself, fill suitcases, laundry baskets and plastic containers with unbreakable items. Use pillows, scarves and towels to wrap fragile belongings.Mail books: If you have a large collection of books, pack them yourself and ship them at the postal media mail rate as it might be cheaper than paying a mover—a 70-pound box would cost less than $30.

Consider consolidation: For long-distance moves, ask about consolidating your stuff on a truck with other people’s as most homeowners can’t fill a full-size moving van. You might have to be flexible on delivery dates and times, but consolidation can be cheaper.

Insure it: Check your homeowner’s or renter’s insurance policy to determine whether it provides coverage for your belongings while in transit. If not, you’ll probably want more than the basic free valuation coverage a full-service mover provides.

The standard valuation is 60 cents per pound per item. That means breaking a 10-pound, $1,000 stereo system would net you $6. You’ll want full replacement-value insurance, which reimburses you what it will cost to replace broken items. But don’t necessarily buy that insurance from the moving company. Moving insurance is likely cheaper from a third party, but be aware that you probably cannot get insurance on boxes you packed yourself.

Be prepared: Plot out where furniture and boxes will go before moving day arrives. The less time movers spend rearranging, the less expensive it will be.In urban areas, reserve a space or two in front of your new home for the moving truck by parking your own vehicle there ahead of time. If the movers have to park too far away to unload, you could incur a “long carry” surcharge.

Stake your claim: If you’re moving for a job, negotiate the best relocation package you can. Unreimbursed expenses might be tax-deductible

2011 Is a Great Year to Buy a Home!

Happy New Year!

2010 is no more and as the New Year is upon us, great expectations, hopes, and optimism is at an all time high for the year 2011. For many, we have anxiously jumped into the year with goals and desires to improve our own lives.

Many new years resolutions involve the desire to quite smoking, excersise more, spend more time with family, vacation more and on and on. How many will be working towards these new goals in 30 days, 60 days and how many will throw in the towel? My hope for all is that each day is met as an opportunity to improve one's life and that these goals are met and succeeded.

Personally I have many personal and business related goals for 2011. Business related goals include helping many achieve the dream of owning their own home. Possibly you already own a home but want to move from your townhome or condo to a single family?

Question is, what can we expect from 2011 and is this a good year to purchase a home?

While I don't hold that magic crystal ball its safe to point out that there are many reasons why you shouldn't wait to purchase your next home or your first home. Lets start with the basics.

Prices

Home prices remain at 2000-2002 limits and in some cases even lower. What does this mean to you? Well simple, if the average person purchased a home in those years the appreciation for that home has gone up and then gone down dramatically in recent years back to this level. For you as a buyer, you are seeing some amazing opportunities to purchase homes that may not see prices this low ever again.

We've seen the average price of a home fall 30-50% from their highs in 2006 and this represents a huge opportunity!

Interest Rates

Interest rates have slowly crept up on the past month and may continue to rise. They are however, still historically very low and should be taken advantage of before they rise much more. If you think that rates may fall again to under 4% and gamble wrong will you regret that? Or, will you see that even though rates have moved up as of late, they are and remain very low and coupled with home prices create a great opportunity? I encourage the latter.

Supply & Demand

Everyday we are confronted with supply and demand and it affects our life in all areas. When we go to the gas station, grocery store or make travel plans, the prices we see are due to this force of supply and demand.

In real estate this remains true as well and in the scenario where the supply is far greater than the demand we call this a Buyers Market. This simply implies that the buyers have an advantage as they are at a premium. Many sellers will take much less for their home and banks are willing to take great losses on mortgages that were foreclosed on due to this. As a buyer, there are so many homes that are available that may fall in to an average buyers price range that it also may cause a lack of motivation to move quickly on homes of interest. I see on a weekly basis however that even in this market, some homes when priced right have multiple offers and can't be over-looked or expected to sit on the market for long.

We may never see a better combination of home prices and interest rates and I hope for all those that have thought about home ownership to consider contacting a professional lender today to discuss this. Once you have spoken with a lender/banker and have determined if you are approved to purchase a home and for what price, then contact a realtor for additional assistance.

For additional information or if you would personally like to discuss your own options, please feel free to contact me direct. I'm available for free one on one consultations and to assist you in any manner as it relates to your real estate goals.

Thanks as always for reading my blog and feel free to use our website at http://www.advantageil.com/ for your home shopping :)

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.

Summary

· 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.

Checklist

• 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.
  

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.

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:)