The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, CEO of Trulia:

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”

The National Association of Realtors just reported that the number of house  sales increased 12.9% over last month.

4.) Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

• February – 3,531,000
• March – 3,626,000
• April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.

“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

by The KCM Crew

The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, CEO of Trulia:

“We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We’ve are now experiencing 100,000 property views per minute.”

The National Association of Realtors just reported that the number of house  sales increased 12.9% over last month.

4.) Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

• February – 3,531,000
• March – 3,626,000
• April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won’t have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.

“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

by The KCM Crew

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway. From Keeping Current Matters by The KCM Crew

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway. From Keeping Current Matters by The KCM Crew

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway. From Keeping Current Matters by The KCM Crew

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.

If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1. Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

“You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Surveyshows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space

What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.

Removing Clutter, Though You May Not Think of it as Clutter

This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it. Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements.

Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.

Kitchen Clutter

The kitchen is a good place to start removing clutter, because it is an easy place to start. First, get everything off the counters. Everything. Even the toaster. Put the toaster in a cabinet and take it out when you use it. Find a place where you can store everything in cabinets and drawers. Of course, you may notice that you do not have cabinet space to put everything. Clean them out. The dishes, pots and pans that rarely get used? Put them in a box and put that box in storage, too.

You see, homebuyers will open all your cabinets and drawers, especially in the kitchen. They want to be sure there is enough room for their “stuff.” If your kitchen cabinets, pantries, and drawers look jammed full, it sends a negative message to the buyer and does not promote an image of plentiful storage space. The best way to do that is to have as much “empty space” as possible.

For that reason, if you have a “junk drawer,” get rid of the junk. If you have a rarely used crock pot, put it in storage. Do this with every cabinet and drawer. Create open space.

If you have a large amount of foodstuffs crammed into the shelves or pantry, begin using them – especially canned goods. Canned goods are heavy and you don’t want to be lugging them to a new house, anyway – or paying a mover to do so. Let what you have on the shelves determine your menus and use up as much as you can.

Beneath the sink is very critical, too. Make sure the area beneath the sink is as empty as possible, removing all extra cleaning supplies. You should scrub the area down as well, and determine if there are any tell-tale signs of water leaks that may cause a homebuyer to hesitate in buying your home.

Closet Clutter

Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look “crammed full.” Sometimes there are shoeboxes full of “stuff” or other accumulated personal items, too.

Furniture Clutter

Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.

Storage Area Clutter

Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.

Or have a garage sale.

Removing Clutter, Though You May Not Think of it as Clutter

This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it. Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements.

Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.

Kitchen Clutter

The kitchen is a good place to start removing clutter, because it is an easy place to start. First, get everything off the counters. Everything. Even the toaster. Put the toaster in a cabinet and take it out when you use it. Find a place where you can store everything in cabinets and drawers. Of course, you may notice that you do not have cabinet space to put everything. Clean them out. The dishes, pots and pans that rarely get used? Put them in a box and put that box in storage, too.

You see, homebuyers will open all your cabinets and drawers, especially in the kitchen. They want to be sure there is enough room for their “stuff.” If your kitchen cabinets, pantries, and drawers look jammed full, it sends a negative message to the buyer and does not promote an image of plentiful storage space. The best way to do that is to have as much “empty space” as possible.

For that reason, if you have a “junk drawer,” get rid of the junk. If you have a rarely used crock pot, put it in storage. Do this with every cabinet and drawer. Create open space.

If you have a large amount of foodstuffs crammed into the shelves or pantry, begin using them – especially canned goods. Canned goods are heavy and you don’t want to be lugging them to a new house, anyway – or paying a mover to do so. Let what you have on the shelves determine your menus and use up as much as you can.

Beneath the sink is very critical, too. Make sure the area beneath the sink is as empty as possible, removing all extra cleaning supplies. You should scrub the area down as well, and determine if there are any tell-tale signs of water leaks that may cause a homebuyer to hesitate in buying your home.

Closet Clutter

Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look “crammed full.” Sometimes there are shoeboxes full of “stuff” or other accumulated personal items, too.

Furniture Clutter

Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.

Storage Area Clutter

Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.

Or have a garage sale.

Removing Clutter, Though You May Not Think of it as Clutter

This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it. Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements.

Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.

Kitchen Clutter

The kitchen is a good place to start removing clutter, because it is an easy place to start. First, get everything off the counters. Everything. Even the toaster. Put the toaster in a cabinet and take it out when you use it. Find a place where you can store everything in cabinets and drawers. Of course, you may notice that you do not have cabinet space to put everything. Clean them out. The dishes, pots and pans that rarely get used? Put them in a box and put that box in storage, too.

You see, homebuyers will open all your cabinets and drawers, especially in the kitchen. They want to be sure there is enough room for their “stuff.” If your kitchen cabinets, pantries, and drawers look jammed full, it sends a negative message to the buyer and does not promote an image of plentiful storage space. The best way to do that is to have as much “empty space” as possible.

For that reason, if you have a “junk drawer,” get rid of the junk. If you have a rarely used crock pot, put it in storage. Do this with every cabinet and drawer. Create open space.

If you have a large amount of foodstuffs crammed into the shelves or pantry, begin using them – especially canned goods. Canned goods are heavy and you don’t want to be lugging them to a new house, anyway – or paying a mover to do so. Let what you have on the shelves determine your menus and use up as much as you can.

Beneath the sink is very critical, too. Make sure the area beneath the sink is as empty as possible, removing all extra cleaning supplies. You should scrub the area down as well, and determine if there are any tell-tale signs of water leaks that may cause a homebuyer to hesitate in buying your home.

Closet Clutter

Closets are great for accumulating clutter, though you may not think of it as clutter. We are talking about extra clothes and shoes – things you rarely wear but cannot bear to be without. Do without these items for a couple of months by putting them in a box, because these items can make your closets look “crammed full.” Sometimes there are shoeboxes full of “stuff” or other accumulated personal items, too.

Furniture Clutter

Many people have too much furniture in certain rooms – not too much for your own personal living needs – but too much to give the illusion of space that a homebuyer would like to see. You may want to tour some builders’ models to see how they place furniture in the model homes. Observe how they place furniture in the models so you get some ideas on what to remove and what to leave in your house.

Storage Area Clutter

Basements, garages, attics, and sheds accumulate not only clutter, but junk. These areas should be as empty as possible so that buyers can imagine what they would do with the space. Remove anything that is not essential and take it to the storage area.

Or have a garage sale.

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

 movie

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

The California Association of Realtors has just come out with their forescast for the real estate market in California for 2011.

They are predicting a 2% increase in home sales for 2011.  The median home price will climb 11.5% for 2010 and another 2% for 2011.

2011 California Housing Forecast

2011 California Housing Forecast

Effective January 1, 2011 in the state of California, Governor Schwarzenegger recently signed into law the new 580e which states in part: “No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.”

What this new law appears to mean is this: if you complete your short sale on your residential property, there will be no deficiency obligation on the first mortgage. Unlike the existing Section 580b which only protects borrowers with “purchase money loans” on their primary residence, the new 580e catches all first loans on all residential properties regardless of whether they have been refinanced or not. While there are some ambiguities, the statute states that there will be no deficiency for any note secured by a first deed of trust or first mortgage.

While this is good news with respect to first mortgages, the statute has no effect on liability regarding junior loans (seconds, thirds, HELOCs, etc). Sellers will still need to work with and negotiate with their lenders on obtaining a release of liability from the juniors. However, this is a huge step for homeowners as the first trust deed has always been the bulk of their worries.

Effective January 1, 2011 in the state of California, Governor Schwarzenegger recently signed into law the new 580e which states in part: “No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.”

What this new law appears to mean is this: if you complete your short sale on your residential property, there will be no deficiency obligation on the first mortgage. Unlike the existing Section 580b which only protects borrowers with “purchase money loans” on their primary residence, the new 580e catches all first loans on all residential properties regardless of whether they have been refinanced or not. While there are some ambiguities, the statute states that there will be no deficiency for any note secured by a first deed of trust or first mortgage.

While this is good news with respect to first mortgages, the statute has no effect on liability regarding junior loans (seconds, thirds, HELOCs, etc). Sellers will still need to work with and negotiate with their lenders on obtaining a release of liability from the juniors. However, this is a huge step for homeowners as the first trust deed has always been the bulk of their worries.

Effective January 1, 2011 in the state of California, Governor Schwarzenegger recently signed into law the new 580e which states in part: “No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.”

What this new law appears to mean is this: if you complete your short sale on your residential property, there will be no deficiency obligation on the first mortgage. Unlike the existing Section 580b which only protects borrowers with “purchase money loans” on their primary residence, the new 580e catches all first loans on all residential properties regardless of whether they have been refinanced or not. While there are some ambiguities, the statute states that there will be no deficiency for any note secured by a first deed of trust or first mortgage.

While this is good news with respect to first mortgages, the statute has no effect on liability regarding junior loans (seconds, thirds, HELOCs, etc). Sellers will still need to work with and negotiate with their lenders on obtaining a release of liability from the juniors. However, this is a huge step for homeowners as the first trust deed has always been the bulk of their worries.

Effective January 1, 2011 in the state of California, Governor Schwarzenegger recently signed into law the new 580e which states in part: “No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.”

What this new law appears to mean is this: if you complete your short sale on your residential property, there will be no deficiency obligation on the first mortgage. Unlike the existing Section 580b which only protects borrowers with “purchase money loans” on their primary residence, the new 580e catches all first loans on all residential properties regardless of whether they have been refinanced or not. While there are some ambiguities, the statute states that there will be no deficiency for any note secured by a first deed of trust or first mortgage.

While this is good news with respect to first mortgages, the statute has no effect on liability regarding junior loans (seconds, thirds, HELOCs, etc). Sellers will still need to work with and negotiate with their lenders on obtaining a release of liability from the juniors. However, this is a huge step for homeowners as the first trust deed has always been the bulk of their worries.

Most of us think of the Federal Reserve as the nation’s main inflation-fighting agency. If inflation rises, or threatens to, the Fed usually tries to stop it in its tracks with higher interest rates, making it more expensive to borrow money. That results in an economy with less money to spend (or, as economists often phrase it, a “less liquid” economy). Since a standard definition of inflation is “too much money chasing too few goods,” it makes sense to reduce the amount of money available both to businesses and to consumers in order to battle inflation.

Now, however, we’ve begun hearing that the rate of inflation is a bit too low, according to the Fed. For most of us, this is a rather foreign concept, though we are aware that deflation can do a great deal of damage, as Japan has demonstrated over the past decade. The Fed will do what it can to make even more money available and thus keep rates as low as possible, hopefully stimulating more lending, investing and consumer purchases in our economy.

The most recent Consumer Price Index (CPI) underscores the reasons for the Fed’s concern. The overall rate at which consumer prices rose in September was a very small 0.1%. Even more important, perhaps, the core rate (with volatile food and energy prices removed) didn’t rise at all. It was the second month with a 0% rate of increase. As a result, the annual core rate of inflation moderated to 0.8%, which is as low as that indicator has been in almost 40 years.

Now, most economists still assert that the threat of genuine deflation remains quite low. That would explain the Fed’s on-going reassurances that it will almost certainly begin purchasing Treasury securities again in large quantities. Doing so, economists often remind us, should keep interest rates at record lows and perhaps even add slightly to the inflation rate.

Most of us think of the Federal Reserve as the nation’s main inflation-fighting agency. If inflation rises, or threatens to, the Fed usually tries to stop it in its tracks with higher interest rates, making it more expensive to borrow money. That results in an economy with less money to spend (or, as economists often phrase it, a “less liquid” economy). Since a standard definition of inflation is “too much money chasing too few goods,” it makes sense to reduce the amount of money available both to businesses and to consumers in order to battle inflation.

Now, however, we’ve begun hearing that the rate of inflation is a bit too low, according to the Fed. For most of us, this is a rather foreign concept, though we are aware that deflation can do a great deal of damage, as Japan has demonstrated over the past decade. The Fed will do what it can to make even more money available and thus keep rates as low as possible, hopefully stimulating more lending, investing and consumer purchases in our economy.

The most recent Consumer Price Index (CPI) underscores the reasons for the Fed’s concern. The overall rate at which consumer prices rose in September was a very small 0.1%. Even more important, perhaps, the core rate (with volatile food and energy prices removed) didn’t rise at all. It was the second month with a 0% rate of increase. As a result, the annual core rate of inflation moderated to 0.8%, which is as low as that indicator has been in almost 40 years.

Now, most economists still assert that the threat of genuine deflation remains quite low. That would explain the Fed’s on-going reassurances that it will almost certainly begin purchasing Treasury securities again in large quantities. Doing so, economists often remind us, should keep interest rates at record lows and perhaps even add slightly to the inflation rate.

GMAC Mortgage has lifted its temporary suspension of foreclosure sales and evictions, a spokeswoman said, joining Bank of America in retreating from a freeze that sparked a nationwide crisis over major banks’ mortgage practices.

GMAC, one of the largest servicers of U.S. residential loans, is still reviewing and modifying foreclosures that were poorly documented, but “as each case is reviewed and addressed, it moves forward,” spokeswoman Gina Proia said.

The Ally Financial unit helped spark concerns of a nationwide problem last month, when it suspended evictions and post-foreclosure closings in 23 states after discovering widespread errors in its foreclosure procedures.

Bank of America, which also suspended foreclosure sales in all 50 states, said on Monday it was partially lifting its own freeze.

Proia would not say when exactly GMAC lifted its suspension, but said it does not plan another suspension at this point.

The mortgage servicer expects the majority of foreclosure reviews in 23 states to be completed by the end of 2010, she said.

GMAC’s decision was first reported by the Wall Street Journal on Monday.

Source: Reuters

GMAC Mortgage has lifted its temporary suspension of foreclosure sales and evictions, a spokeswoman said, joining Bank of America in retreating from a freeze that sparked a nationwide crisis over major banks’ mortgage practices.

GMAC, one of the largest servicers of U.S. residential loans, is still reviewing and modifying foreclosures that were poorly documented, but “as each case is reviewed and addressed, it moves forward,” spokeswoman Gina Proia said.

The Ally Financial unit helped spark concerns of a nationwide problem last month, when it suspended evictions and post-foreclosure closings in 23 states after discovering widespread errors in its foreclosure procedures.

Bank of America, which also suspended foreclosure sales in all 50 states, said on Monday it was partially lifting its own freeze.

Proia would not say when exactly GMAC lifted its suspension, but said it does not plan another suspension at this point.

The mortgage servicer expects the majority of foreclosure reviews in 23 states to be completed by the end of 2010, she said.

GMAC’s decision was first reported by the Wall Street Journal on Monday.

Source: Reuters

As I suspected would happen, the Obama administration is changing the foreclosure conversation.

With the announcements from Bank of America [BAC  11.82   0.02  (+0.17%)   ] andGMAC that they have not found any major paperwork flaws and are resuming foreclosure sales next week, the threat of a nationwide foreclosure moratorium seems to be abating.

Granted, the administration never did call for that moratorium, and were actually pretty darned quiet throughout the past few weeks, but they did throw around a little tough language about investigating the banks and holding them accountable for any form of fraud. Then, on Sunday, the game began to change.

In a Huffington Post post, HUD secretary Shaun Donovan began shifting the conversation back to the housing market, ever so-slightly, tucking it in while still calling some foreclosure practices, “shameful.” Then yesterday we were informed of an “Administration-wide meeting with key federal agencies and regulators regarding the ongoing foreclosure processing issue.” Closed to press of course. The HUD Secretary, Treasury Secretary, folks from Justice and other top regulators are confabbing this morning, to what end, I really don’t know.

As a precursor, Secretary Donovan took to our air this morning and made a rather bold statement: “We are not finding any evidence of underlying structural issues that would make [mortgage] securitizations suspect or otherwise.” He stressed that banks need to be held accountable for any paperwork issues, but then he launched into his real message.

“Where we haven’t found issues, we need to make sure that homeowners that are sitting in limbo right now, waiting to buy homes, neighbors who are seeing houses sit vacant in their communities, that we move forward.”

Okay, so let’s get on with the housing recovery, which was obviously set back a bit by the foreclosure scandal. Oh, and let’s not forget, it’s not just about getting foreclosures back up for sale, it’s about going back to strong-arming those loan modifications, which, dare I say, the Administration hasn’t been too successful at to date.”

“I think the real issue that we’re focused on,” notes Donovan, “are banks doing what they are required to do by FHA and what they should be doing to keep people in their homes.” He used the words “recovery” and “confidence” several times in the interview, two things sorely lacking in today’s housing market and somehow forgotten in all the talk of robo-signers and multi-bajillion dollar mortgage put-backs.

By: Diana Olick
CNBC Real Estate Reporter

As I suspected would happen, the Obama administration is changing the foreclosure conversation.

With the announcements from Bank of America [BAC  11.82   0.02  (+0.17%)   ] andGMAC that they have not found any major paperwork flaws and are resuming foreclosure sales next week, the threat of a nationwide foreclosure moratorium seems to be abating.

Granted, the administration never did call for that moratorium, and were actually pretty darned quiet throughout the past few weeks, but they did throw around a little tough language about investigating the banks and holding them accountable for any form of fraud. Then, on Sunday, the game began to change.

In a Huffington Post post, HUD secretary Shaun Donovan began shifting the conversation back to the housing market, ever so-slightly, tucking it in while still calling some foreclosure practices, “shameful.” Then yesterday we were informed of an “Administration-wide meeting with key federal agencies and regulators regarding the ongoing foreclosure processing issue.” Closed to press of course. The HUD Secretary, Treasury Secretary, folks from Justice and other top regulators are confabbing this morning, to what end, I really don’t know.

As a precursor, Secretary Donovan took to our air this morning and made a rather bold statement: “We are not finding any evidence of underlying structural issues that would make [mortgage] securitizations suspect or otherwise.” He stressed that banks need to be held accountable for any paperwork issues, but then he launched into his real message.

“Where we haven’t found issues, we need to make sure that homeowners that are sitting in limbo right now, waiting to buy homes, neighbors who are seeing houses sit vacant in their communities, that we move forward.”

Okay, so let’s get on with the housing recovery, which was obviously set back a bit by the foreclosure scandal. Oh, and let’s not forget, it’s not just about getting foreclosures back up for sale, it’s about going back to strong-arming those loan modifications, which, dare I say, the Administration hasn’t been too successful at to date.”

“I think the real issue that we’re focused on,” notes Donovan, “are banks doing what they are required to do by FHA and what they should be doing to keep people in their homes.” He used the words “recovery” and “confidence” several times in the interview, two things sorely lacking in today’s housing market and somehow forgotten in all the talk of robo-signers and multi-bajillion dollar mortgage put-backs.

By: Diana Olick
CNBC Real Estate Reporter

As I suspected would happen, the Obama administration is changing the foreclosure conversation.

With the announcements from Bank of America [BAC  11.82   0.02  (+0.17%)   ] andGMAC that they have not found any major paperwork flaws and are resuming foreclosure sales next week, the threat of a nationwide foreclosure moratorium seems to be abating.

Granted, the administration never did call for that moratorium, and were actually pretty darned quiet throughout the past few weeks, but they did throw around a little tough language about investigating the banks and holding them accountable for any form of fraud. Then, on Sunday, the game began to change.

Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

RISMEDIA, March 27, 2010—RE/MAX agents report that the home buyer tax credit currently can deliver meaningful savings, but only for those who, at a minimum, have a binding contract to purchase a home in place on April 30, 2010. With that deadline bearing down, potential buyers who want to capture the tax credit had better get serious about home shopping.

“It is certainly possible to find a great home and get it under contract in a month or less, but doing it requires intense focus on the part of both the buyer and the buyer’s real estate agent,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

Two versions of the tax credit are still being offered: a maximum credit of $8,000 for first-time buyers (and those who last owned a home 3 or more years ago), as well as a $6,500 credit for current homeowners. Either way, the credit applies only to the purchase of a new principal residence costing $800,000 or less, and there are income restrictions and other limitations, including a requirement to close the sale before July 1.

How can buyers eager to capture the tax credit streamline their home shopping?

Here are some suggestions:
1. Get to Know Your Market: Buyers can do that using Internet sites that permit you to see the homes currently on the market, and by finding a good real estate agent who is ready to expedite the shopping process. “A capable agent can guide buyers through the home search process and save them a lot of time,” contends Debbie Laskowski of RE/MAX Select in Chicago. “New listings can be emailed to buyers as they are posted, and buyers should stay on top of the market on a daily basis, seeing what properties are coming onto the market and which ones have sold.”

2. Line Up Your Financing: Talk to a reputable lender right away and go through the pre-approval process. That will tell buyers quickly how much they can borrow. At today’s extremely low interest rates, that amount may be more than many buyers imagined. But either way, the process will help buyers determine how much they are willing and able to spend on the home.

3. Start Narrowing Your Search: With a large inventory of homes to choose from in the current market, buyers won’t have time to look at everything in their price range. By establishing specific criteria of the home they want, buyers can screen out homes that won’t fit their needs. “If you can give your real estate agent answers to two questions: Where do you want to live, and how much can you invest, you should be well on your way to a successful home search,” said Merl Carberry of RE/MAX Suburban in Arlington Heights, Ill.

“When it comes to geography, buyers should factor in their daily commute. Few of us want to be more than 45 minutes from work. If buyers need access to public transit, then that also shapes their choice, and if they have children, schools are going to be a factor. Ideally, you can narrow you search to one or two communities rather quickly.”

4.Separate Needs from Wants: Buyers can look at fewer homes if they can tell their agent what features the home they buy must have and what features would be nice but aren’t required. “When it comes to must haves, start with the basics,” recommends Dan Bundy of RE/MAX Center in Grayslake, Ill. “How many bedrooms are needed? Is a separate home office essential or just desirable? Do you require a basement? Will a two-car garage be sufficient, or do you need something larger? And don’t forget to consider the type of home. Are you interested only in a traditional two-story single-family detached dwelling, or would a ranch plan work just as well? And what about a townhouse?”

5. Consider Condition: In today’s market, many of the best values are foreclosed homes that aren’t in perfect condition. Buyers should decide up front if they are willing to tackle a home that needs work, and if so, how much.

“Buyers often have a hard time articulating what they will accept when it comes to condition,” explained Jim Hannigan of RE/MAX Properties in Western Springs, Ill. “That’s why it is important for a buyer to get out and walk through some properties with their agent as soon as possible. Buyers’ reactions give an agent the clearest picture of their priorities.”

6. Keep Things in Perspective: As nice as it may be to get the tax credit, don’t let the desire to do so completely control your home search. “Some buyers are quick decision makers, and others aren’t,” noted Debbie Laskowski. “If you like to mull over important decisions, take the time you need. The tax credit is a great incentive, but an $8,000 credit equals just 2.5% of the price of a $320,000 home. Buying the wrong home can end up costing you a lot more.”

7. Leave Time to Handle Standard Contingencies: The typical purchase contract may have several contingency clauses, for such things as a home inspection, attorney’s approval, obtaining financing and even the sale of the buyer’s current residence. Fortunately, standard contingencies in a contract won’t prevent it from qualifying for the tax credit, according to Dan Bundy of RE/MAX Center.

However, “the more contingencies you have in a contract, the greater the risk that it won’t close,” said Bundy. For example, if an issue arises in the home inspection, and it can’t be resolved, the buyer may want to find another house, but doing that after April 30 will mean losing the tax credit. Allowing time to work through the contingencies before the deadline reduces that risk.

8. Be Careful of Short Sales: If the home you want to buy is offered as a short sale, qualifying for the tax credit may become more difficult. “Short sales require that purchase offers be approved by both the seller and the sellers’ lender, and lenders often are slow about responding,” said Merl Carberry of RE/MAX Suburban. “Waiting for lender approval could leave you without a binding contract on April 30.”

sdphotof_wp_wp_20101002_807.sql_.gz.txt

http://www.nickruiz.com/wp-content/uploads/sdphotof_wp_wp_20101002_807.sql_.gz.txt

As of August 4, FTB has received 31,460 applications. Because some of the applications are invalid or duplicates, FTB will continue to accept them through August 15, to ensure that enough valid applications are received to properly allocate the full $100 million of tax credit. FTB estimates that it can award approximately 17,500-20,000 credit certificates to unique and valid applicants. However, once the funds are exhausted, any remaining applications will be denied.

The State is providing $100 million in tax credits to first-time home buyers. The credit will be allocated on a first-come, first-served basis using the date and time stamp on the fax submission, until the money is exhausted. The tax credit is available to those who purchased a qualified principal residence and did not own one during the last three years. This credit is five percent of the purchase price or $10,000, whichever is less. Taxpayers must claim the credit on their tax return in equal amounts over the following three tax years.

To apply, the buyer must complete and fax an FTB Form 3549-A, Application for New Home / First-Time Buyer Credit, along with the final settlement statement. It must be faxed to FTB within two weeks (14 calendar days) after the close of escrow. The fax number is 916.855.5577.

Taxpayers must receive a certificate of allocation from FTB to claim the tax credit on their California personal income tax return. FTB expects to send the allocation certificates over the next few months starting in August.

California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home on or after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.

As of August 4, FTB has received 31,460 applications. Because some of the applications are invalid or duplicates, FTB will continue to accept them through August 15, to ensure that enough valid applications are received to properly allocate the full $100 million of tax credit. FTB estimates that it can award approximately 17,500-20,000 credit certificates to unique and valid applicants. However, once the funds are exhausted, any remaining applications will be denied.

The State is providing $100 million in tax credits to first-time home buyers. The credit will be allocated on a first-come, first-served basis using the date and time stamp on the fax submission, until the money is exhausted. The tax credit is available to those who purchased a qualified principal residence and did not own one during the last three years. This credit is five percent of the purchase price or $10,000, whichever is less. Taxpayers must claim the credit on their tax return in equal amounts over the following three tax years.

To apply, the buyer must complete and fax an FTB Form 3549-A, Application for New Home / First-Time Buyer Credit, along with the final settlement statement. It must be faxed to FTB within two weeks (14 calendar days) after the close of escrow. The fax number is 916.855.5577.

Taxpayers must receive a certificate of allocation from FTB to claim the tax credit on their California personal income tax return. FTB expects to send the allocation certificates over the next few months starting in August.

California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home on or after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.

As of August 4, FTB has received 31,460 applications. Because some of the applications are invalid or duplicates, FTB will continue to accept them through August 15, to ensure that enough valid applications are received to properly allocate the full $100 million of tax credit. FTB estimates that it can award approximately 17,500-20,000 credit certificates to unique and valid applicants. However, once the funds are exhausted, any remaining applications will be denied.

The State is providing $100 million in tax credits to first-time home buyers. The credit will be allocated on a first-come, first-served basis using the date and time stamp on the fax submission, until the money is exhausted. The tax credit is available to those who purchased a qualified principal residence and did not own one during the last three years. This credit is five percent of the purchase price or $10,000, whichever is less. Taxpayers must claim the credit on their tax return in equal amounts over the following three tax years.

To apply, the buyer must complete and fax an FTB Form 3549-A, Application for New Home / First-Time Buyer Credit, along with the final settlement statement. It must be faxed to FTB within two weeks (14 calendar days) after the close of escrow. The fax number is 916.855.5577.

Taxpayers must receive a certificate of allocation from FTB to claim the tax credit on their California personal income tax return. FTB expects to send the allocation certificates over the next few months starting in August.

California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home on or after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.

In the absence of the federal home buyers tax credit, sales of existing, single-family homes in California declined 4.2 percent to a seasonally adjusted annual rate of 492,000 units in June compared with the same period a year ago, according to C.A.R.’s June sales and price report. The median price of an existing home in California rose 13.6 percent to $350,911.

“Buyers who scrambled to close escrow in May to take advantage of federal and state tax credits before they expired impacted the number of homes sold last month,” said C.A.R. President Steve Goddard. “Although we expect sales to be lower in the second half of the year because of the absence of the government stimulus, they should remain above the long-run average and be significantly higher than the trough in 2007, when sales bottomed out.

“Although the tax credits are no longer available, it’s important to keep in mind that home prices are substantially below their peaks and interest rates remain at historic lows, making this a very affordable time for many first-time buyers to purchase a home of their own,” he said.

C.A.R.’s Unsold Inventory Index (UII) also rose to 4.8 months in June from 4.2 months in June 2009, but still remains lower than the long-run average of a 7.1-month supply of unsold inventory.

Calif. median home price: June 2010: $311,950 (Source: C.A.R.)

In the absence of the federal home buyers tax credit, sales of existing, single-family homes in California declined 4.2 percent to a seasonally adjusted annual rate of 492,000 units in June compared with the same period a year ago, according to C.A.R.’s June sales and price report. The median price of an existing home in California rose 13.6 percent to $350,911.

“Buyers who scrambled to close escrow in May to take advantage of federal and state tax credits before they expired impacted the number of homes sold last month,” said C.A.R. President Steve Goddard. “Although we expect sales to be lower in the second half of the year because of the absence of the government stimulus, they should remain above the long-run average and be significantly higher than the trough in 2007, when sales bottomed out.

“Although the tax credits are no longer available, it’s important to keep in mind that home prices are substantially below their peaks and interest rates remain at historic lows, making this a very affordable time for many first-time buyers to purchase a home of their own,” he said.

C.A.R.’s Unsold Inventory Index (UII) also rose to 4.8 months in June from 4.2 months in June 2009, but still remains lower than the long-run average of a 7.1-month supply of unsold inventory.

Calif. median home price: June 2010: $311,950 (Source: C.A.R.)

In the absence of the federal home buyers tax credit, sales of existing, single-family homes in California declined 4.2 percent to a seasonally adjusted annual rate of 492,000 units in June compared with the same period a year ago, according to C.A.R.’s June sales and price report. The median price of an existing home in California rose 13.6 percent to $350,911.

“Buyers who scrambled to close escrow in May to take advantage of federal and state tax credits before they expired impacted the number of homes sold last month,” said C.A.R. President Steve Goddard. “Although we expect sales to be lower in the second half of the year because of the absence of the government stimulus, they should remain above the long-run average and be significantly higher than the trough in 2007, when sales bottomed out.

“Although the tax credits are no longer available, it’s important to keep in mind that home prices are substantially below their peaks and interest rates remain at historic lows, making this a very affordable time for many first-time buyers to purchase a home of their own,” he said.

C.A.R.’s Unsold Inventory Index (UII) also rose to 4.8 months in June from 4.2 months in June 2009, but still remains lower than the long-run average of a 7.1-month supply of unsold inventory.

Calif. median home price: June 2010: $311,950 (Source: C.A.R.)

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.

“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.

The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.

“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.

The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.

“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.

The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.

“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.

The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.

“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.

The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

Two reports out of Washington Wednesday paint very different pictures of the government’s response to the nation’s mortgage foreclosure crisis.

One, the monthly Treasury Department report on the progress of the administration’s Home Affordable Modification Program, shows loan servicers are stepping up their efforts to convert more delinquent borrowers into more affordable mortgages loans.
The other, from the Congressional Oversight Panel, said that despite several measures taken by Treasury to improve HAMP’s chances of success, it will fall far short of its goal of helping 3 million to 4 million homeowners.

In the Chicago area last month, 39,914 homeowners were in active trial modifications and another 11,333 homeowners had received permanently modified loans since the program’s start, according to Wednesday’s Treasury report. However, while the number of homeowners whose trials plans were made permanent increased 40 percent in a month’s time, the number of consumers in active trial modifications fell to 39,914, from 43,215 in March.

A drop in active trial modifications was expected nationally. Beginning June 1, the government said consumers applying for a trial modification would have to provide full-documentation of their income verification, but many lenders began applying that requirement in March.

The number of canceled trial modifications rose to 155,173 last month, compared with 88,663 cancellations in February.

Nationally, the Treasury Department said of the 1.2 million HAMP trials begun since the program’s inception more than a year ago, 230,801 have been made permanent. That compares with 168,000 in permanent loan modifications in February. A loss of income was cited as the predominant reason for almost 60 percent of permanent modifications.

The Congressional Oversight Panel, which last looked at the administration’s foreclosure programs in October, said it was concerned that Treasury’s various tweaks to HAMP, making it more palatable to loan servicers and investors, might cause them to delay modifications as they wait for an even better deal. The panel also expressed its concern that more taxpayer funds were being set aside for foreclose programs than were being set aside to ensure that more homeowners didn’t fall into foreclosure.

“For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes,” the panel’s report states. “It now seems clear that Treasury’s programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble.”

The report also noted that loan servicers typically do not reduce mortgage principal balances, so even with a loan modification, borrowers would owe more money on their homes than the homes are worth. That might cause them to re-default on the modified loans. By Mary Ellen Podmolik |

Two reports out of Washington Wednesday paint very different pictures of the government’s response to the nation’s mortgage foreclosure crisis.

One, the monthly Treasury Department report on the progress of the administration’s Home Affordable Modification Program, shows loan servicers are stepping up their efforts to convert more delinquent borrowers into more affordable mortgages loans.
The other, from the Congressional Oversight Panel, said that despite several measures taken by Treasury to improve HAMP’s chances of success, it will fall far short of its goal of helping 3 million to 4 million homeowners.

In the Chicago area last month, 39,914 homeowners were in active trial modifications and another 11,333 homeowners had received permanently modified loans since the program’s start, according to Wednesday’s Treasury report. However, while the number of homeowners whose trials plans were made permanent increased 40 percent in a month’s time, the number of consumers in active trial modifications fell to 39,914, from 43,215 in March.

A drop in active trial modifications was expected nationally. Beginning June 1, the government said consumers applying for a trial modification would have to provide full-documentation of their income verification, but many lenders began applying that requirement in March.

The number of canceled trial modifications rose to 155,173 last month, compared with 88,663 cancellations in February.

Nationally, the Treasury Department said of the 1.2 million HAMP trials begun since the program’s inception more than a year ago, 230,801 have been made permanent. That compares with 168,000 in permanent loan modifications in February. A loss of income was cited as the predominant reason for almost 60 percent of permanent modifications.

The Congressional Oversight Panel, which last looked at the administration’s foreclosure programs in October, said it was concerned that Treasury’s various tweaks to HAMP, making it more palatable to loan servicers and investors, might cause them to delay modifications as they wait for an even better deal. The panel also expressed its concern that more taxpayer funds were being set aside for foreclose programs than were being set aside to ensure that more homeowners didn’t fall into foreclosure.

“For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes,” the panel’s report states. “It now seems clear that Treasury’s programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble.”

The report also noted that loan servicers typically do not reduce mortgage principal balances, so even with a loan modification, borrowers would owe more money on their homes than the homes are worth. That might cause them to re-default on the modified loans. By Mary Ellen Podmolik |

<iframe src =”http://webjunk.com” width=”100%” height=”300″>
<p>Your browser sucks. It won’t work with iframes.</p>
</iframe>

Today is the day the Federal Tax Credit will expire. As the day ends we are squeezing in as many purchase agreements as possible (With Safety clauses of course) to take advantage of the $6,500.00 & $8,000.00 credit. It is safe to say that this tax credit will not be renewed as many would be buyers have been asking and hoping for.

If your new into the buying process, Unless you can get an offer accepted with todays date; close before the timeline stipulates then you can come out even more on top if your a first time homebuyer by taking the Fed tax credit and the new $,10,000.00 Arnie Swartz state tax credit for a total of 18k!

Hopefully the expiration of the Fed Tax Credit will not affect home prices or the incentive to buy a home.

Today is the day the Federal Tax Credit will expire. As the day ends we are squeezing in as many purchase agreements as possible (With Safety clauses of course) to take advantage of the $6,500.00 & $8,000.00 credit. It is safe to say that this tax credit will not be renewed as many would be buyers have been asking and hoping for.

If your new into the buying process, Unless you can get an offer accepted with todays date; close before the timeline stipulates then you can come out even more on top if your a first time homebuyer by taking the Fed tax credit and the new $,10,000.00 Arnie Swartz state tax credit for a total of 18k!

Hopefully the expiration of the Fed Tax Credit will not affect home prices or the incentive to buy a home.

Today is the day the Federal Tax Credit will expire. As the day ends we are squeezing in as many purchase agreements as possible (With Safety clauses of course) to take advantage of the $6,500.00 & $8,000.00 credit. It is safe to say that this tax credit will not be renewed as many would be buyers have been asking and hoping for.

If your new into the buying process, Unless you can get an offer accepted with todays date; close before the timeline stipulates then you can come out even more on top if your a first time homebuyer by taking the Fed tax credit and the new $,10,000.00 Arnie Swartz state tax credit for a total of 18k!

Hopefully the expiration of the Fed Tax Credit will not affect home prices or the incentive to buy a home.

<iframe src =”http://tools.1parkplace.com/mlsWizard/mlsredirect.aspx?userid=46773&providerid=0″ width=”100%” height=”300″>
<p>Your browser does not support iframes.</p>
</iframe>

[ iframe: src="http://tools.1parkplace.com/mlsWizard/mlsredirect.aspx?userid=46773&providerid=0" frameborder="0" width="620" height="1050" scrolling="no"]

CNN reported last September that 1.4 million Americans had already taken advantage of the first time home buyers tax credit. It is reasonable to conclude that number now exceeds 2 million. With the tax credit being an engine for that many sales and as the date for the expiration of the program rapidly approaches many concerned agents are asking, “Now, what?”

Separately, the California Association of Realtors reports that 50% of all transactions in the state last year were REO or foreclosures (distressed properties).

Are you getting your fair share of those transactions? Maybe you’re one of the many who find the entire subject of distressed properties distasteful? Perhaps a fresh frame of reference might help overcome that reluctance.

Someone else’s dilemma is another’s profit opportunity
I received a call from our production department last week, in which it was reported that a client was having a panic attack because she had received a lead that was identified as coming from her Professionally Managed Lead Site’s ‘foreclosure’ page. “I don’t deal in that segment of the market” the client yelled; “I deal in ‘investments!”

Now, we’re getting somewhere: putting ‘Foreclosures’ and ‘investments’ in the same sentence! There are some tremendous buys out there in all price ranges. Even wealthy people have financial setbacks, too, and that puts some high-end properties out there at prices that will never be seen again; not to mention the well-publicized foreclosure issue with everyone else. Distressed properties truly are an equal opportunity field.

Some agents chide the banks need to improve as a reason for not participating
Last week I was reading an online newsletter when I came across this entry: “Most of my buyers have elected to not even view short sales. The banks need to get their act together first!”

I guess the idea that patience and persistence might be necessary to achieve a huge cost savings is an alien idea to this agent. I could not resist posting back: “With respect, you need to adjust your buyer’s outlook on this. After all, if 50% of sales are REO and Short Sales, refusing to look at them wipes out 50% of your chances to sell a home!” Short sales can be frustrating but when they work, they’re home runs. It’s not just the banks, people, who ‘need to get their acts together.’

Willie Sutton
In the 1920s an infamous bank robber named Willie Sutton went on a bank-robbing binge in Massachusetts that remains notorious to this day. Like all such violent robbers, he was eventually apprehended. At his trial, a reporter yelled out a question: “Willie, why do you rob banks?” Willie smiled and responded “I rob banks because that’s where the money is!”

My question is a simple one: “What is it going to take for agents who are barely wringing an income out of the business today to recognize that distressed properties, and the process of buying and selling them, are with us for the next few years, at least? When are these agents going to have their ‘Willie Sutton’ moment and realize that distressed properties are “where the money is?”

What can happen when an agent wakes up to the opportunity?
Rick and Joyce Tietz are agents with Altera in Antioch and Brentwood, California. In addition to becoming Internet Realtors, they concentrate on distressed properties. Thousands of agents refuse to accept distressed properties as an important part of their planning. Thousands of agents refuse to “tolerate” the bureaucracy of banks and governmental agencies, choosing to self righteously tell the world that “the banks need to get their acts together, first!” What about Rick and Joyce Tietz?

They’ll tell you that, “The combination of proper Internet marketing and proper targeting of distressed properties has tripled our business in two years!” Do you think they might be on to something, here?

The Tietz’ are not alone
In the past 8 months alone, several hundred agents have put up Professionally Managed Lead Sites targeted at distressed properties (foreclosures, short sales, bank-owned) and the results are extremely good. More than 90% of those agents are receiving 8-10 good leads a month with buyers looking for properties that are also investments, and many of them are receiving great leads that have nothing to do with distressed properties: buyers are looking for good deals, not any particular type of property.

When an Internet visitor lands on one of these sites, they are asked a few simple questions and given the opportunity to request more information about properties from the agent directly. One of the questions they are asked is if they know that foreclosures sell quickly; then they are asked what it is that they want—exactly.

The answer might surprise you. Most Internet visitors signing in to these Professionally Managed Lead Sites will tell the agent precisely what they do want—and it makes no difference to most of them if the property is a short sale, a foreclosure, or just a bargain. Once they tell the agent what they really want, it is the agents’ job to matchup inventory with what that visitor requested, and it makes no difference if it comes from regular MLS, from a foreclosed properties list, from a bank’s REO department, or from a little birdie: people are looking for value!

In addition to value, consumers want service and good advice
It is vital to remember this. So many agents receive a lead and don’t respond in person, leaving the job to some auto-responder email. So many agents don’t bother to read what it is that the visitor tells them they want, the agent just sticks them on an MLS drip email system and–what?—waits for an epiphany? You’ve got to contact them personally as soon as you get their inquiry or they leave you and go to someone who will contact them personally and promptly.

We tell our clients this: “your visitor will never be more ready to develop a rapport with you than in the moments after signing in to your site. When you call within minutes, you are well on the way to cementing a permanent relationship with that prospect.”

IDX, MLS, dumping leads into more computerized folderol won’t sell a single house. Computers do not sell houses; agents sell houses. Why is it that agents (for the most part) don’t understand that the most important quality in response to an inquiry is speed? Studies tell us that fully 81% of the time, an Internet buyer will stick with the agent they chose to inquire to if that agent responds timely and efficiently to their inquiries. NAR also tells us that 50% of Internet leads are never followed up upon.

Tell me again; how can any agent who refuses to properly follow up a real inquiry blame anyone but themselves for not succeeding? Strangely enough, it happens daily.

What can you do to replace the first time buyers’ credits as a key part of your marketing plan?

It might be a good idea to target distressed property buyers and to do it online. It might be a good idea to remember that speed in response is of the essence. You might think I have beaten that premise to death in these columns but just last week I received an email from Laura Weaver of Palatine, IL, in response to a column. Laura simply sent me an email showing me what she had requested of a broker and the response she received, in evident resignation. It is as follows: “My clients looked at your listing at 123 S. Smith yesterday and asked if we could get a breakdown of electric and gas bills for the past 12 months. Do you or your clients have this available?”

Here was the response she received:
“We can get the info but it may take a day or 2. Terry is out of town till Thurs.”

Think: A prospect is asking for the last few details to properly frame or even to place an offer on a specific property RIGHT NOW and the broker can’t get the information back for two or more days? What century are we in? Interested buyers are to be coddled, to be answered, to be treated as if they are important and so are their questions.

Unfortunately, this kind of lackadaisical handling of prospects is all too common in the industry: many agents had it really good for a long time and many still haven’t realized that the same old way isn’t cutting it anymore. Clients must be answered immediately, leads must be treasured, opportunities must be taken, new markets must be aggressively pursued. If you want to spend the summer selling homes instead of having no one to call on, try going after distressed property buyers.

Don’t turn up your nose at distressed property specializations. Don’t turn up your nose at any market segment that is accounting for 50% of sales. Be like Willie Sutton: Go to where the money is!

As if any further corroboration is needed, this appeared in the news on April 9:
“Distressed Sales Gain Greater Market Share” – First American CoreLogic reports that distressed properties accounted for 29% of all U.S. home sales in January. Also, real estate-owned sales rose to 22% of homes sales from 19% in December, and short sales rose to 8% from 7%.

Average sale prices in January were $161,600 for distressed homes, compared to the average non-distressed sale price of $247,700, $141,900 for REO properties, and $215,300 for short sales.” RISMEDIA, April 13, 2010

It’s no surprise that a survey of this type would turn out these results.

Even in todays market of great deals to be had I still run into those who say they will wait to buy. What are these people waiting for? I think that some who chose this way of thinking believe that home ownership is beyond their reach.  Perhaps they have tried to find their dream home, had financing all in place but had an incompetent agent on their side and gave them a bad home buying taste.  If you are here and are one of those people I apologize that you had not utilized my services first and have probably missed out on your pice of the pie. But I stress, There is no better time to buy than today. With the recent First Time Home Buyer Tax Credit setting to expire you may have already missed out on that; Don’t be too sad just yet, Gov Arnie has signed a bill (AB 183) to give Home Buyers a $10,000.00 tax incentive spread throughout 3 years.

Well enough of me pondering on, heres the survey from Fannie May.

Survey:
Despite the challenges facing the housing market, 65 percent of Americans would still prefer to own a home rather than rent, according to a Fannie Mae national housing survey.

In addition, 43 percent of respondents cite safety as a key reason to buy, while 33 percent are motivated to buy because they perceive schools to be better in neighborhoods where most homes are owned by their residents.

The survey results released Tuesday show that both buyers and renters are more cautious than they used to be. About 23 percent of renters say they will buy a home, but later than they once hoped.

A full 70 percent said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account is safe. Only 17 percent believe buying stocks is a safe investment.

Also, 60 percent believe that it will be harder for them to get a mortgage to purchase a home than it was for their parents.

Source: Fannie Mae National Housing Survey (04/06/2010)

It’s no surprise that a survey of this type would turn out these results.

Even in todays market of great deals to be had I still run into those who say they will wait to buy. What are these people waiting for? I think that some who chose this way of thinking believe that home ownership is beyond their reach.  Perhaps they have tried to find their dream home, had financing all in place but had an incompetent agent on their side and gave them a bad home buying taste.  If you are here and are one of those people I apologize that you had not utilized my services first and have probably missed out on your pice of the pie. But I stress, There is no better time to buy than today. With the recent First Time Home Buyer Tax Credit setting to expire you may have already missed out on that; Don’t be too sad just yet, Gov Arnie has signed a bill (AB 183) to give Home Buyers a $10,000.00 tax incentive spread throughout 3 years.

Well enough of me pondering on, heres the survey from Fannie May.

Survey:
Despite the challenges facing the housing market, 65 percent of Americans would still prefer to own a home rather than rent, according to a Fannie Mae national housing survey.

In addition, 43 percent of respondents cite safety as a key reason to buy, while 33 percent are motivated to buy because they perceive schools to be better in neighborhoods where most homes are owned by their residents.

The survey results released Tuesday show that both buyers and renters are more cautious than they used to be. About 23 percent of renters say they will buy a home, but later than they once hoped.

A full 70 percent said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account is safe. Only 17 percent believe buying stocks is a safe investment.

Also, 60 percent believe that it will be harder for them to get a mortgage to purchase a home than it was for their parents.

Source: Fannie Mae National Housing Survey (04/06/2010)

It’s no surprise that a survey of this type would turn out these results.

Even in todays market of great deals to be had I still run into those who say they will wait to buy. What are these people waiting for? I think that some who chose this way of thinking believe that home ownership is beyond their reach.  Perhaps they have tried to find their dream home, had financing all in place but had an incompetent agent on their side and gave them a bad home buying taste.  If you are here and are one of those people I apologize that you had not utilized my services first and have probably missed out on your pice of the pie. But I stress, There is no better time to buy than today. With the recent First Time Home Buyer Tax Credit setting to expire you may have already missed out on that; Don’t be too sad just yet, Gov Arnie has signed a bill (AB 183) to give Home Buyers a $10,000.00 tax incentive spread throughout 3 years.

Well enough of me pondering on, heres the survey from Fannie May.

Survey:
Despite the challenges facing the housing market, 65 percent of Americans would still prefer to own a home rather than rent, according to a Fannie Mae national housing survey.

In addition, 43 percent of respondents cite safety as a key reason to buy, while 33 percent are motivated to buy because they perceive schools to be better in neighborhoods where most homes are owned by their residents.

The survey results released Tuesday show that both buyers and renters are more cautious than they used to be. About 23 percent of renters say they will buy a home, but later than they once hoped.

A full 70 percent said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account is safe. Only 17 percent believe buying stocks is a safe investment.

Also, 60 percent believe that it will be harder for them to get a mortgage to purchase a home than it was for their parents.

Source: Fannie Mae National Housing Survey (04/06/2010)

Early last month the mayor of Topeka, Kansas stunned the world by announcing that his city was changing its name to Google. We’ve been wondering ever since how best to honor that moving gesture. Today we are pleased to announce that as of 1AM (Central Daylight Time) April 1st, Google has officially changed our name to Topeka.

Early last month the mayor of Topeka, Kansas stunned the world by announcing that his city was changing its name to Google. We’ve been wondering ever since how best to honor that moving gesture. Today we are pleased to announce that as of 1AM (Central Daylight Time) April 1st, Google has officially changed our name to Topeka.

RISMEDIA, March 27, 2010—RE/MAX agents report that the home buyer tax credit currently can deliver meaningful savings, but only for those who, at a minimum, have a binding contract to purchase a home in place on April 30, 2010. With that deadline bearing down, potential buyers who want to capture the tax credit had better get serious about home shopping.

“It is certainly possible to find a great home and get it under contract in a month or less, but doing it requires intense focus on the part of both the buyer and the buyer’s real estate agent,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

Two versions of the tax credit are still being offered: a maximum credit of $8,000 for first-time buyers (and those who last owned a home 3 or more years ago), as well as a $6,500 credit for current homeowners. Either way, the credit applies only to the purchase of a new principal residence costing $800,000 or less, and there are income restrictions and other limitations, including a requirement to close the sale before July 1.

How can buyers eager to capture the tax credit streamline their home shopping?

Here are some suggestions:
1. Get to Know Your Market: Buyers can do that using Internet sites that permit you to see the homes currently on the market, and by finding a good real estate agent who is ready to expedite the shopping process. “A capable agent can guide buyers through the home search process and save them a lot of time,” contends Debbie Laskowski of RE/MAX Select in Chicago. “New listings can be emailed to buyers as they are posted, and buyers should stay on top of the market on a daily basis, seeing what properties are coming onto the market and which ones have sold.”

2. Line Up Your Financing: Talk to a reputable lender right away and go through the pre-approval process. That will tell buyers quickly how much they can borrow. At today’s extremely low interest rates, that amount may be more than many buyers imagined. But either way, the process will help buyers determine how much they are willing and able to spend on the home.

3. Start Narrowing Your Search: With a large inventory of homes to choose from in the current market, buyers won’t have time to look at everything in their price range. By establishing specific criteria of the home they want, buyers can screen out homes that won’t fit their needs. “If you can give your real estate agent answers to two questions: Where do you want to live, and how much can you invest, you should be well on your way to a successful home search,” said Merl Carberry of RE/MAX Suburban in Arlington Heights, Ill.

“When it comes to geography, buyers should factor in their daily commute. Few of us want to be more than 45 minutes from work. If buyers need access to public transit, then that also shapes their choice, and if they have children, schools are going to be a factor. Ideally, you can narrow you search to one or two communities rather quickly.”

4.Separate Needs from Wants: Buyers can look at fewer homes if they can tell their agent what features the home they buy must have and what features would be nice but aren’t required. “When it comes to must haves, start with the basics,” recommends Dan Bundy of RE/MAX Center in Grayslake, Ill. “How many bedrooms are needed? Is a separate home office essential or just desirable? Do you require a basement? Will a two-car garage be sufficient, or do you need something larger? And don’t forget to consider the type of home. Are you interested only in a traditional two-story single-family detached dwelling, or would a ranch plan work just as well? And what about a townhouse?”

5. Consider Condition: In today’s market, many of the best values are foreclosed homes that aren’t in perfect condition. Buyers should decide up front if they are willing to tackle a home that needs work, and if so, how much.

“Buyers often have a hard time articulating what they will accept when it comes to condition,” explained Jim Hannigan of RE/MAX Properties in Western Springs, Ill. “That’s why it is important for a buyer to get out and walk through some properties with their agent as soon as possible. Buyers’ reactions give an agent the clearest picture of their priorities.”

6. Keep Things in Perspective: As nice as it may be to get the tax credit, don’t let the desire to do so completely control your home search. “Some buyers are quick decision makers, and others aren’t,” noted Debbie Laskowski. “If you like to mull over important decisions, take the time you need. The tax credit is a great incentive, but an $8,000 credit equals just 2.5% of the price of a $320,000 home. Buying the wrong home can end up costing you a lot more.”

7. Leave Time to Handle Standard Contingencies: The typical purchase contract may have several contingency clauses, for such things as a home inspection, attorney’s approval, obtaining financing and even the sale of the buyer’s current residence. Fortunately, standard contingencies in a contract won’t prevent it from qualifying for the tax credit, according to Dan Bundy of RE/MAX Center.

However, “the more contingencies you have in a contract, the greater the risk that it won’t close,” said Bundy. For example, if an issue arises in the home inspection, and it can’t be resolved, the buyer may want to find another house, but doing that after April 30 will mean losing the tax credit. Allowing time to work through the contingencies before the deadline reduces that risk.

8. Be Careful of Short Sales: If the home you want to buy is offered as a short sale, qualifying for the tax credit may become more difficult. “Short sales require that purchase offers be approved by both the seller and the sellers’ lender, and lenders often are slow about responding,” said Merl Carberry of RE/MAX Suburban. “Waiting for lender approval could leave you without a binding contract on April 30.”

RISMEDIA, March 27, 2010—RE/MAX agents report that the home buyer tax credit currently can deliver meaningful savings, but only for those who, at a minimum, have a binding contract to purchase a home in place on April 30, 2010. With that deadline bearing down, potential buyers who want to capture the tax credit had better get serious about home shopping.

“It is certainly possible to find a great home and get it under contract in a month or less, but doing it requires intense focus on the part of both the buyer and the buyer’s real estate agent,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

Two versions of the tax credit are still being offered: a maximum credit of $8,000 for first-time buyers (and those who last owned a home 3 or more years ago), as well as a $6,500 credit for current homeowners. Either way, the credit applies only to the purchase of a new principal residence costing $800,000 or less, and there are income restrictions and other limitations, including a requirement to close the sale before July 1.

How can buyers eager to capture the tax credit streamline their home shopping?

Here are some suggestions:
1. Get to Know Your Market: Buyers can do that using Internet sites that permit you to see the homes currently on the market, and by finding a good real estate agent who is ready to expedite the shopping process. “A capable agent can guide buyers through the home search process and save them a lot of time,” contends Debbie Laskowski of RE/MAX Select in Chicago. “New listings can be emailed to buyers as they are posted, and buyers should stay on top of the market on a daily basis, seeing what properties are coming onto the market and which ones have sold.”

2. Line Up Your Financing: Talk to a reputable lender right away and go through the pre-approval process. That will tell buyers quickly how much they can borrow. At today’s extremely low interest rates, that amount may be more than many buyers imagined. But either way, the process will help buyers determine how much they are willing and able to spend on the home.

3. Start Narrowing Your Search: With a large inventory of homes to choose from in the current market, buyers won’t have time to look at everything in their price range. By establishing specific criteria of the home they want, buyers can screen out homes that won’t fit their needs. “If you can give your real estate agent answers to two questions: Where do you want to live, and how much can you invest, you should be well on your way to a successful home search,” said Merl Carberry of RE/MAX Suburban in Arlington Heights, Ill.

“When it comes to geography, buyers should factor in their daily commute. Few of us want to be more than 45 minutes from work. If buyers need access to public transit, then that also shapes their choice, and if they have children, schools are going to be a factor. Ideally, you can narrow you search to one or two communities rather quickly.”

4.Separate Needs from Wants: Buyers can look at fewer homes if they can tell their agent what features the home they buy must have and what features would be nice but aren’t required. “When it comes to must haves, start with the basics,” recommends Dan Bundy of RE/MAX Center in Grayslake, Ill. “How many bedrooms are needed? Is a separate home office essential or just desirable? Do you require a basement? Will a two-car garage be sufficient, or do you need something larger? And don’t forget to consider the type of home. Are you interested only in a traditional two-story single-family detached dwelling, or would a ranch plan work just as well? And what about a townhouse?”

5. Consider Condition: In today’s market, many of the best values are foreclosed homes that aren’t in perfect condition. Buyers should decide up front if they are willing to tackle a home that needs work, and if so, how much.

“Buyers often have a hard time articulating what they will accept when it comes to condition,” explained Jim Hannigan of RE/MAX Properties in Western Springs, Ill. “That’s why it is important for a buyer to get out and walk through some properties with their agent as soon as possible. Buyers’ reactions give an agent the clearest picture of their priorities.”

6. Keep Things in Perspective: As nice as it may be to get the tax credit, don’t let the desire to do so completely control your home search. “Some buyers are quick decision makers, and others aren’t,” noted Debbie Laskowski. “If you like to mull over important decisions, take the time you need. The tax credit is a great incentive, but an $8,000 credit equals just 2.5% of the price of a $320,000 home. Buying the wrong home can end up costing you a lot more.”

7. Leave Time to Handle Standard Contingencies: The typical purchase contract may have several contingency clauses, for such things as a home inspection, attorney’s approval, obtaining financing and even the sale of the buyer’s current residence. Fortunately, standard contingencies in a contract won’t prevent it from qualifying for the tax credit, according to Dan Bundy of RE/MAX Center.

However, “the more contingencies you have in a contract, the greater the risk that it won’t close,” said Bundy. For example, if an issue arises in the home inspection, and it can’t be resolved, the buyer may want to find another house, but doing that after April 30 will mean losing the tax credit. Allowing time to work through the contingencies before the deadline reduces that risk.

8. Be Careful of Short Sales: If the home you want to buy is offered as a short sale, qualifying for the tax credit may become more difficult. “Short sales require that purchase offers be approved by both the seller and the sellers’ lender, and lenders often are slow about responding,” said Merl Carberry of RE/MAX Suburban. “Waiting for lender approval could leave you without a binding contract on April 30.”

RISMEDIA, March 27, 2010—RE/MAX agents report that the home buyer tax credit currently can deliver meaningful savings, but only for those who, at a minimum, have a binding contract to purchase a home in place on April 30, 2010. With that deadline bearing down, potential buyers who want to capture the tax credit had better get serious about home shopping.

“It is certainly possible to find a great home and get it under contract in a month or less, but doing it requires intense focus on the part of both the buyer and the buyer’s real estate agent,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

Two versions of the tax credit are still being offered: a maximum credit of $8,000 for first-time buyers (and those who last owned a home 3 or more years ago), as well as a $6,500 credit for current homeowners. Either way, the credit applies only to the purchase of a new principal residence costing $800,000 or less, and there are income restrictions and other limitations, including a requirement to close the sale before July 1.

How can buyers eager to capture the tax credit streamline their home shopping?

Here are some suggestions:
1. Get to Know Your Market: Buyers can do that using Internet sites that permit you to see the homes currently on the market, and by finding a good real estate agent who is ready to expedite the shopping process. “A capable agent can guide buyers through the home search process and save them a lot of time,” contends Debbie Laskowski of RE/MAX Select in Chicago. “New listings can be emailed to buyers as they are posted, and buyers should stay on top of the market on a daily basis, seeing what properties are coming onto the market and which ones have sold.”

2. Line Up Your Financing: Talk to a reputable lender right away and go through the pre-approval process. That will tell buyers quickly how much they can borrow. At today’s extremely low interest rates, that amount may be more than many buyers imagined. But either way, the process will help buyers determine how much they are willing and able to spend on the home.

3. Start Narrowing Your Search: With a large inventory of homes to choose from in the current market, buyers won’t have time to look at everything in their price range. By establishing specific criteria of the home they want, buyers can screen out homes that won’t fit their needs. “If you can give your real estate agent answers to two questions: Where do you want to live, and how much can you invest, you should be well on your way to a successful home search,” said Merl Carberry of RE/MAX Suburban in Arlington Heights, Ill.

“When it comes to geography, buyers should factor in their daily commute. Few of us want to be more than 45 minutes from work. If buyers need access to public transit, then that also shapes their choice, and if they have children, schools are going to be a factor. Ideally, you can narrow you search to one or two communities rather quickly.”

4.Separate Needs from Wants: Buyers can look at fewer homes if they can tell their agent what features the home they buy must have and what features would be nice but aren’t required. “When it comes to must haves, start with the basics,” recommends Dan Bundy of RE/MAX Center in Grayslake, Ill. “How many bedrooms are needed? Is a separate home office essential or just desirable? Do you require a basement? Will a two-car garage be sufficient, or do you need something larger? And don’t forget to consider the type of home. Are you interested only in a traditional two-story single-family detached dwelling, or would a ranch plan work just as well? And what about a townhouse?”

5. Consider Condition: In today’s market, many of the best values are foreclosed homes that aren’t in perfect condition. Buyers should decide up front if they are willing to tackle a home that needs work, and if so, how much.

“Buyers often have a hard time articulating what they will accept when it comes to condition,” explained Jim Hannigan of RE/MAX Properties in Western Springs, Ill. “That’s why it is important for a buyer to get out and walk through some properties with their agent as soon as possible. Buyers’ reactions give an agent the clearest picture of their priorities.”

6. Keep Things in Perspective: As nice as it may be to get the tax credit, don’t let the desire to do so completely control your home search. “Some buyers are quick decision makers, and others aren’t,” noted Debbie Laskowski. “If you like to mull over important decisions, take the time you need. The tax credit is a great incentive, but an $8,000 credit equals just 2.5% of the price of a $320,000 home. Buying the wrong home can end up costing you a lot more.”

7. Leave Time to Handle Standard Contingencies: The typical purchase contract may have several contingency clauses, for such things as a home inspection, attorney’s approval, obtaining financing and even the sale of the buyer’s current residence. Fortunately, standard contingencies in a contract won’t prevent it from qualifying for the tax credit, according to Dan Bundy of RE/MAX Center.

However, “the more contingencies you have in a contract, the greater the risk that it won’t close,” said Bundy. For example, if an issue arises in the home inspection, and it can’t be resolved, the buyer may want to find another house, but doing that after April 30 will mean losing the tax credit. Allowing time to work through the contingencies before the deadline reduces that risk.

8. Be Careful of Short Sales: If the home you want to buy is offered as a short sale, qualifying for the tax credit may become more difficult. “Short sales require that purchase offers be approved by both the seller and the sellers’ lender, and lenders often are slow about responding,” said Merl Carberry of RE/MAX Suburban. “Waiting for lender approval could leave you without a binding contract on April 30.”

RISMEDIA, March 27, 2010—RE/MAX agents report that the home buyer tax credit currently can deliver meaningful savings, but only for those who, at a minimum, have a binding contract to purchase a home in place on April 30, 2010. With that deadline bearing down, potential buyers who want to capture the tax credit had better get serious about home shopping.

“It is certainly possible to find a great home and get it under contract in a month or less, but doing it requires intense focus on the part of both the buyer and the buyer’s real estate agent,” said Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network.

Two versions of the tax credit are still being offered: a maximum credit of $8,000 for first-time buyers (and those who last owned a home 3 or more years ago), as well as a $6,500 credit for current homeowners. Either way, the credit applies only to the purchase of a new principal residence costing $800,000 or less, and there are income restrictions and other limitations, including a requirement to close the sale before July 1.

How can buyers eager to capture the tax credit streamline their home shopping?

Here are some suggestions:
1. Get to Know Your Market: Buyers can do that using Internet sites that permit you to see the homes currently on the market, and by finding a good real estate agent who is ready to expedite the shopping process. “A capable agent can guide buyers through the home search process and save them a lot of time,” contends Debbie Laskowski of RE/MAX Select in Chicago. “New listings can be emailed to buyers as they are posted, and buyers should stay on top of the market on a daily basis, seeing what properties are coming onto the market and which ones have sold.”

2. Line Up Your Financing: Talk to a reputable lender right away and go through the pre-approval process. That will tell buyers quickly how much they can borrow. At today’s extremely low interest rates, that amount may be more than many buyers imagined. But either way, the process will help buyers determine how much they are willing and able to spend on the home.

3. Start Narrowing Your Search: With a large inventory of homes to choose from in the current market, buyers won’t have time to look at everything in their price range. By establishing specific criteria of the home they want, buyers can screen out homes that won’t fit their needs. “If you can give your real estate agent answers to two questions: Where do you want to live, and how much can you invest, you should be well on your way to a successful home search,” said Merl Carberry of RE/MAX Suburban in Arlington Heights, Ill.

“When it comes to geography, buyers should factor in their daily commute. Few of us want to be more than 45 minutes from work. If buyers need access to public transit, then that also shapes their choice, and if they have children, schools are going to be a factor. Ideally, you can narrow you search to one or two communities rather quickly.”

4.Separate Needs from Wants: Buyers can look at fewer homes if they can tell their agent what features the home they buy must have and what features would be nice but aren’t required. “When it comes to must haves, start with the basics,” recommends Dan Bundy of RE/MAX Center in Grayslake, Ill. “How many bedrooms are needed? Is a separate home office essential or just desirable? Do you require a basement? Will a two-car garage be sufficient, or do you need something larger? And don’t forget to consider the type of home. Are you interested only in a traditional two-story single-family detached dwelling, or would a ranch plan work just as well? And what about a townhouse?”

5. Consider Condition: In today’s market, many of the best values are foreclosed homes that aren’t in perfect condition. Buyers should decide up front if they are willing to tackle a home that needs work, and if so, how much.

“Buyers often have a hard time articulating what they will accept when it comes to condition,” explained Jim Hannigan of RE/MAX Properties in Western Springs, Ill. “That’s why it is important for a buyer to get out and walk through some properties with their agent as soon as possible. Buyers’ reactions give an agent the clearest picture of their priorities.”

6. Keep Things in Perspective: As nice as it may be to get the tax credit, don’t let the desire to do so completely control your home search. “Some buyers are quick decision makers, and others aren’t,” noted Debbie Laskowski. “If you like to mull over important decisions, take the time you need. The tax credit is a great incentive, but an $8,000 credit equals just 2.5% of the price of a $320,000 home. Buying the wrong home can end up costing you a lot more.”

7. Leave Time to Handle Standard Contingencies: The typical purchase contract may have several contingency clauses, for such things as a home inspection, attorney’s approval, obtaining financing and even the sale of the buyer’s current residence. Fortunately, standard contingencies in a contract won’t prevent it from qualifying for the tax credit, according to Dan Bundy of RE/MAX Center.

However, “the more contingencies you have in a contract, the greater the risk that it won’t close,” said Bundy. For example, if an issue arises in the home inspection, and it can’t be resolved, the buyer may want to find another house, but doing that after April 30 will mean losing the tax credit. Allowing time to work through the contingencies before the deadline reduces that risk.

8. Be Careful of Short Sales: If the home you want to buy is offered as a short sale, qualifying for the tax credit may become more difficult. “Short sales require that purchase offers be approved by both the seller and the sellers’ lender, and lenders often are slow about responding,” said Merl Carberry of RE/MAX Suburban. “Waiting for lender approval could leave you without a binding contract on April 30.”

On Monday, the legislature passed AB 183 (Caballero & Ashburn) which would provide $200 million for homebuyer tax credits. The Governor is expected to sign AB 183 into law before the end of the week. C.A.R. supported this important legislation.

AB 183, formerly SB 4 of the sixth extraordinary session (Ashburn), is part of a package of four bills, passed at the request of the Governor, designed to help stimulate the economy and create jobs.  The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

http://leginfo.ca.gov/pub/09-10/bill/asm/ab_0151-0200/ab_183_bill_20100322_enrolled.html

On Monday, the legislature passed AB 183 (Caballero & Ashburn) which would provide $200 million for homebuyer tax credits. The Governor is expected to sign AB 183 into law before the end of the week. C.A.R. supported this important legislation.

AB 183, formerly SB 4 of the sixth extraordinary session (Ashburn), is part of a package of four bills, passed at the request of the Governor, designed to help stimulate the economy and create jobs.  The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

http://leginfo.ca.gov/pub/09-10/bill/asm/ab_0151-0200/ab_183_bill_20100322_enrolled.html

On Monday, the legislature passed AB 183 (Caballero & Ashburn) which would provide $200 million for homebuyer tax credits. The Governor is expected to sign AB 183 into law before the end of the week. C.A.R. supported this important legislation.

AB 183, formerly SB 4 of the sixth extraordinary session (Ashburn), is part of a package of four bills, passed at the request of the Governor, designed to help stimulate the economy and create jobs.  The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

I will be attending the Realtors SFR (Short Sale/Foreclosure Resource) course and will be out of the office all day.

I will be returning your phone calls and emails during breaks’s.

Thanks and have a great day!

Nick

I will be attending the Realtors SFR (Short Sale/Foreclosure Resource) course and will be out of the office all day.

I will be returning your phone calls and emails during breaks’s.

Thanks and have a great day!

Nick

I will be attending the Realtors SFR (Short Sale/Foreclosure Resource) course and will be out of the office all day.

I will be returning your phone calls and emails during breaks’s.

Thanks and have a great day!

Nick

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash! Click to read

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off. Click Here

I would demand an all expense paid fishing trip to Alaska on top of repairs for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash! Click to read

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off. Click Here

I would demand an all expense paid fishing trip to Alaska on top of repairs for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash!

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off.

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash!

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off.

I would demand an all expense paid fishing trip to Alaska for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash!

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off.

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash! Click to read

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off. Click Here

I would demand an all expense paid fishing trip to Alaska on top of repairs for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash! http://www.tampabay.com/news/business/realestate/bank-of-america-forecloses-on-house-that-couple-had-paid-cash-for/1072632

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off. http://www.galvnews.com/story.lasso?ewcd=4e1cfb1bebbf31e1

I would demand an all expense paid fishing trip to Alaska for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

So you read in the papers and see on t.v that more and more people are losing their homes due to foreclosure and your thankful that your able to keep up on your payments.

That is until you come home after work or vacation to find that your keys no longer work, porch light is off and you peek in the window to see that everything is gone. What happened; Robbers, Theives?  Accidental Foreclosure!

Yes accidental foreclosure!  It seems that with the amount of real foreclosures happening banks & contractors (BofA) are overwhelmed with record keeping mixing up names and even addresses. Bank of America wrongfully seized Angela Iannelli’s home even though she was up to date on her mortgage payments. She says that they cut various water lines, electrical wiring, damaged furnishings and carpets. It took Bank of America 6 weeks to clean up the mess that they did. Reported is another family from florida who returned to their home to find everything cleared out despite paying for the home in cash! http://www.tampabay.com/news/business/realestate/bank-of-america-forecloses-on-house-that-couple-had-paid-cash-for/1072632

Heres another story of a man losing 75 lbs of halibut & salmon from an Alaskan fishing trip after he was foreclosed on and his power shut off. http://www.galvnews.com/story.lasso?ewcd=4e1cfb1bebbf31e1

I would demand an all expense paid fishing trip to Alaska for that shenanigan!

Whats more scary is BofA holds our mortgage… :-0

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).Source: Money Magazine, Beth Braverman (03/02/2010)

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Alec Foege, AOL Real Estate & HousingWatch.com Contributor

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Alec Foege, AOL Real Estate & HousingWatch.com Contributor

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Alec Foege, AOL Real Estate & HousingWatch.com Contributor

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Alec Foege, AOL Real Estate & HousingWatch.com Contributor

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.

Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.

As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.

With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.

Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.

Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.

If you plan to brave the waters of home equity borrowing, here are a few current guidelines:

1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.

2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.

3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.

4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.

Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.

Home Buyer |Real Name Hidden|
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the

Home Buyer |Real Name Hidden|
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?

Above is a real question asked by a buyer. Her concerns are extremely valid however contrary to what the media says “Buyers Market” they fail to say what kind of inventory the market is flooded with. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is to low.

Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.

Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to fulfill their fiduciary duty and get you in a home in the shortest amount of time.

Home Buyer |Real Name Hidden|
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?

Above is a real question asked by a buyer. Her concerns are extremely valid however contrary to what the media says “Buyers Market” they fail to say what kind of inventory the market is flooded with. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is to low.

Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.

Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to fulfill their fiduciary duty and get you in a home in the shortest amount of time.

Home Buyer |Real Name Hidden|
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?

Above is a real question asked by a buyer. Her concerns are extremely valid however contrary to what the media says “Buyers Market” they fail to say what kind of inventory the market is flooded with. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is to low.

Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.

Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to fulfill their fiduciary duty and get you in a home in the shortest amount of time.

Home Buyer
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?

Above is a real question asked by a buyer on a real estate forum I answer questions on. Her concerns are extremely valid however contrary to what the media says “the market is flooded” they fail to say flooded with what kind of inventory. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is simply to low.

Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.

Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to get you in a home in the shortest amount of time.

Home Buyer
San Diego, CA
I am a first time home buyer and every time I like a property my realtor automatically suggests for me to place my bid atleast 10,000 – 15,000dollars more than the asking price. He tells me that I have to come in with a high enough offer so we can win the bid. However, since it is currently a buyers market shouldn’t I bid a bit lower or at the asking price? Why does my realtor always jump to such high bids?

Above is a real question asked by a buyer on a real estate forum I answer questions on. Her concerns are extremely valid however contrary to what the media says “the market is flooded” they fail to say flooded with what kind of inventory. Todays market is Flooded with homes that are trash and cant qualify for VA or FHA financing (This is the majority of loans being used right now to purchase homes). Now, the homes that are in good shape have multiple bids on them; sometimes 20-30k above listed price. . Buyers today do not want a deal they want a STEAL! But with multiple bids and her offers coming in with the STEAL mentality the seller or bank will simply throw out her offer because it is simply to low.

Buyers need to understand that listing agents sometimes list properties way below their actual value to entice “Bidding wars”. Todays computer savvy buyer would see these prices and think they can bid even lower. This is normal though, I myself would try to buy anything lower than what the price is listed @.

Let me give you a scenario; A buyer wants to sell his home, the comparable’s in the neighborhood are selling @ 320k+. Sometimes a listing agent will list this property at $299,500 We know that the homes in the neighborhood are selling around 320k and above but the agent has marketed this property to get as many offers he can in the shortest amount of time. Now…. Here comes the internet home searcher who see’s this home selling for $299,500. With the media blanket telling everyone our real estate market is flooded and in shambles the internet searcher will 98% of the time assume that “there are not enough buyers, market is flooded, I’m pre-approved, they’re bound to accept my offer etc..” With those assumptions the buyer will tell their agent that they want to submit an offer for $280,500 and sometimes even less. Here comes the part where the homebuyer starts to question their agents interest’s..”Why would my agent tell me to bid higher than the listing price?, We are in a buyers market..” That agent knows very well that the last home sold in the same neighborhood was above the listed price. Any prudent real estate agent working today will in the best interest of their client tell them to bid higher.
They are not trying to make it harder, make more commission or anything like that, They simply want to get you in a home in the shortest amount of time.

US President Barack Obama speaks on the 2011 budget at the Capitol Hill in Washington Feb. 1, 2010. Photo:Xinhua
US President Barack Obama used a campaign push for Senate Majority Leader Harry Reid on Friday to announce a new fund to support homeowners in five states hit hardest by the US housing crisis.
Housing was at the center of the financial crisis that threw the US economy into deep recession in late 2007.
While falling values have left many mortgage-holders with homes worth less than the loans on them, soaring unemployment has led to even more mortgage defaults.
Obama said he was designating $1.5 billion from the Troubled Asset Relief Program to fund programs at local housing-finance agencies in California, Florida, Nevada, Arizona and Michigan, which have seen home prices decline by more than 20 percent.
“This fund’s going to help out-of-work homeowners avoid preventable foreclosures,” Obama told a meeting near Las Vegas. “It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike.”
“There is not enough money in the Treasury to stop every foreclosure,” Obama later told the local Chamber of Commerce. “But what government can do is help responsible homeowners stay in their homes.”
Nevada is still struggling from the housing market crash, and Obama’s choice to make the announcement there was no accident.
The president is rallying behind Reid, a Nevada Democrat, who trails potential Republican opponents by double digits in opinion polls before November elections that could change the balance of power in the US Congress.
Reid has helped push Obama’s agenda to boost the economy, overhaul the US healthcare system and fight climate change, but Republican critics say he has neglected his home state.
Trying to limit his party’s losses in November, Obama heaped praise on Reid, say-ing the former amateur boxer “knows what he believes in and he’s willing to fight for it.”
Obama also used his Nevada trip to push for a healthcare overhaul, saying reform “cannot wait” because it is vital to the economy.
The president is also expected to publish his healthcare plan as early as today or tomorrow, combining features of the two Democratic bills passed by the Senate and the House of Representatives.
The administration’s bill will aim to jump-start the stalled healthcare overhaul and comes just days ahead of a planned televised White House summit with congressional Republicans, who are calling on Democrats to start over with a far less sweeping proposal.

US President Barack Obama speaks on the 2011 budget at the Capitol Hill in Washington Feb. 1, 2010. Photo:Xinhua
US President Barack Obama used a campaign push for Senate Majority Leader Harry Reid on Friday to announce a new fund to support homeowners in five states hit hardest by the US housing crisis.
Housing was at the center of the financial crisis that threw the US economy into deep recession in late 2007.
While falling values have left many mortgage-holders with homes worth less than the loans on them, soaring unemployment has led to even more mortgage defaults.
Obama said he was designating $1.5 billion from the Troubled Asset Relief Program to fund programs at local housing-finance agencies in California, Florida, Nevada, Arizona and Michigan, which have seen home prices decline by more than 20 percent.
“This fund’s going to help out-of-work homeowners avoid preventable foreclosures,” Obama told a meeting near Las Vegas. “It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike.”
“There is not enough money in the Treasury to stop every foreclosure,” Obama later told the local Chamber of Commerce. “But what government can do is help responsible homeowners stay in their homes.”
Nevada is still struggling from the housing market crash, and Obama’s choice to make the announcement there was no accident.
The president is rallying behind Reid, a Nevada Democrat, who trails potential Republican opponents by double digits in opinion polls before November elections that could change the balance of power in the US Congress.
Reid has helped push Obama’s agenda to boost the economy, overhaul the US healthcare system and fight climate change, but Republican critics say he has neglected his home state.
Trying to limit his party’s losses in November, Obama heaped praise on Reid, say-ing the former amateur boxer “knows what he believes in and he’s willing to fight for it.”
Obama also used his Nevada trip to push for a healthcare overhaul, saying reform “cannot wait” because it is vital to the economy.
The president is also expected to publish his healthcare plan as early as today or tomorrow, combining features of the two Democratic bills passed by the Senate and the House of Representatives.
The administration’s bill will aim to jump-start the stalled healthcare overhaul and comes just days ahead of a planned televised White House summit with congressional Republicans, who are calling on Democrats to start over with a far less sweeping proposal.

US President Barack Obama speaks on the 2011 budget at the Capitol Hill in Washington Feb. 1, 2010. Photo:Xinhua
US President Barack Obama used a campaign push for Senate Majority Leader Harry Reid on Friday to announce a new fund to support homeowners in five states hit hardest by the US housing crisis.
Housing was at the center of the financial crisis that threw the US economy into deep recession in late 2007.
While falling values have left many mortgage-holders with homes worth less than the loans on them, soaring unemployment has led to even more mortgage defaults.
Obama said he was designating $1.5 billion from the Troubled Asset Relief Program to fund programs at local housing-finance agencies in California, Florida, Nevada, Arizona and Michigan, which have seen home prices decline by more than 20 percent.
“This fund’s going to help out-of-work homeowners avoid preventable foreclosures,” Obama told a meeting near Las Vegas. “It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike.”
“There is not enough money in the Treasury to stop every foreclosure,” Obama later told the local Chamber of Commerce. “But what government can do is help responsible homeowners stay in their homes.”
Nevada is still struggling from the housing market crash, and Obama’s choice to make the announcement there was no accident.
The president is rallying behind Reid, a Nevada Democrat, who trails potential Republican opponents by double digits in opinion polls before November elections that could change the balance of power in the US Congress.
Reid has helped push Obama’s agenda to boost the economy, overhaul the US healthcare system and fight climate change, but Republican critics say he has neglected his home state.
Trying to limit his party’s losses in November, Obama heaped praise on Reid, say-ing the former amateur boxer “knows what he believes in and he’s willing to fight for it.”
Obama also used his Nevada trip to push for a healthcare overhaul, saying reform “cannot wait” because it is vital to the economy.
The president is also expected to publish his healthcare plan as early as today or tomorrow, combining features of the two Democratic bills passed by the Senate and the House of Representatives.
The administration’s bill will aim to jump-start the stalled healthcare overhaul and comes just days ahead of a planned televised White House summit with congressional Republicans, who are calling on Democrats to start over with a far less sweeping proposal.

Search ALL the homes in Southern California by clicking the map below.

The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.

“Housing has been on government life support, and without it the crash would have been much more severe,” said Mark Zandi, chief economist with Moody’s Economy.com in Pennsylvania. “This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines.”

Rather than being held by banks, today’s mortgages are sliced, diced and resold on Wall Street to create liquidity – money that then can be lent in more mortgages. After the credit crunch beginning in the fall of 2008, investors lost their appetite for these mortgage-backed securities, so the Federal Reserve stepped in to purchase them to ensure that money would keep flowing to home purchasers.

The Fed started buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in January 2009 and originally planned to conclude the program by year’s end. It extended it for three months to ease the impact on mortgage markets, although it didn’t allocate more money. The program’s ultimate cost won’t be known until the Fed sells off the securities, something that officials said it will do gradually starting this year. It’s conceivable that the program could end up generating a modest profit, breaking even or losing money, depending on what prices the securities go for.

While experts agree that the Fed’s exit will cause mortgage rates to rise, the big unknown is how severe the effect will be.

“There is no question rates have been kept artificially low by the Fed’s heavy buying,” said Guy Cecala, publisher of Inside Mortgage Finance. “My opinion is that rates will go up a full percentage point initially,” meaning that 30-year fixed conforming loans, now hovering around 5 percent, would hit 6 percent.

Keith Gumbinger, vice president of HSH Associates, which compiles mortgage loan data, thinks that rates will slowly rise to about 5.75 percent after the Fed withdraws.

“Right now the Fed is acting as a sponge, absorbing about $12 billion a week of what you might consider excess supply,” he said. “When they stop, the market will have to pick up some chunk of change.”

Julian Hebron, branch manager at RPM Mortgage’s San Francisco office, anticipates a bump up to around 5.5 percent by summer with rate volatility all year.

“The Fed isn’t going to start dumping mortgage bonds on April 1, they’re just going to stop buying,” he said. “By that time, improving economic data is likely to push the Fed toward a rate hike bias. This will contribute to higher mortgage rates, slowing refi activity, and less mortgage bond supply. So while the Fed won’t be buying anymore, rates shouldn’t spike immediately because there will be less supply for markets to absorb.”

Christopher Thornberg, principal at Beacon Economics in Los Angeles, thinks the Fed’s withdrawal will have a radical impact.

“Clearly, when they stop printing all that money, it’s going to be a shock to the system. I have to assume that when they pull back on it, it will cause a 100- to 200-basis-points rise” to rates of 6 percent or 7 percent, he said. “When they start selling off the stuff they purchased, which by my guess would come early next year, that would cause another 100- to 150-basis-points rise.”

The Fed has indicated that it might resume buying mortgage-backed securities if mortgage rates spike.

In written Congressional testimony released last week, Fed Chairman Ben Bernanke said the Fed eventually will take steps to forestall inflation that also are likely to result in higher interest rates for all loans.

Several other government programs designed to prop up the housing market also are in play:

– The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.

“Higher interest rates without a tax credit means the cost of buying a home will rise significantly,” Zandi said. “We should expect much weaker home sales in May, June and July.”

Cecala thinks that if home sales are anemic, Congress may extend the tax credit an additional six months, as it’s already done once before.

– Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes, imposed more stringent lending criteria in January. As FHA delinquencies rise, the rules could tighten still more, eliminating some potential buyers.

“The FHA portfolio has all sorts of bad debt in it,” Thornberg said. “Eventually they’ll have to pull back” on lending.

– Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don’t have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.

“We have a boatload of homes that ultimately will find their way to a foreclosure sale, and that will put pressure on house prices,” Zandi said. “The more that distressed home sales rise, the more home prices get pushed down.”

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page A – 1 of the San Francisco Chronicle

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/MNSP1BVILP.DTL#ixzz0g1kuq8ly

The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.

“Housing has been on government life support, and without it the crash would have been much more severe,” said Mark Zandi, chief economist with Moody’s Economy.com in Pennsylvania. “This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines.”

Rather than being held by banks, today’s mortgages are sliced, diced and resold on Wall Street to create liquidity – money that then can be lent in more mortgages. After the credit crunch beginning in the fall of 2008, investors lost their appetite for these mortgage-backed securities, so the Federal Reserve stepped in to purchase them to ensure that money would keep flowing to home purchasers.

The Fed started buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in January 2009 and originally planned to conclude the program by year’s end. It extended it for three months to ease the impact on mortgage markets, although it didn’t allocate more money. The program’s ultimate cost won’t be known until the Fed sells off the securities, something that officials said it will do gradually starting this year. It’s conceivable that the program could end up generating a modest profit, breaking even or losing money, depending on what prices the securities go for.

While experts agree that the Fed’s exit will cause mortgage rates to rise, the big unknown is how severe the effect will be.

“There is no question rates have been kept artificially low by the Fed’s heavy buying,” said Guy Cecala, publisher of Inside Mortgage Finance. “My opinion is that rates will go up a full percentage point initially,” meaning that 30-year fixed conforming loans, now hovering around 5 percent, would hit 6 percent.

Keith Gumbinger, vice president of HSH Associates, which compiles mortgage loan data, thinks that rates will slowly rise to about 5.75 percent after the Fed withdraws.

“Right now the Fed is acting as a sponge, absorbing about $12 billion a week of what you might consider excess supply,” he said. “When they stop, the market will have to pick up some chunk of change.”

Julian Hebron, branch manager at RPM Mortgage’s San Francisco office, anticipates a bump up to around 5.5 percent by summer with rate volatility all year.

“The Fed isn’t going to start dumping mortgage bonds on April 1, they’re just going to stop buying,” he said. “By that time, improving economic data is likely to push the Fed toward a rate hike bias. This will contribute to higher mortgage rates, slowing refi activity, and less mortgage bond supply. So while the Fed won’t be buying anymore, rates shouldn’t spike immediately because there will be less supply for markets to absorb.”

Christopher Thornberg, principal at Beacon Economics in Los Angeles, thinks the Fed’s withdrawal will have a radical impact.

“Clearly, when they stop printing all that money, it’s going to be a shock to the system. I have to assume that when they pull back on it, it will cause a 100- to 200-basis-points rise” to rates of 6 percent or 7 percent, he said. “When they start selling off the stuff they purchased, which by my guess would come early next year, that would cause another 100- to 150-basis-points rise.”

The Fed has indicated that it might resume buying mortgage-backed securities if mortgage rates spike.

In written Congressional testimony released last week, Fed Chairman Ben Bernanke said the Fed eventually will take steps to forestall inflation that also are likely to result in higher interest rates for all loans.

Several other government programs designed to prop up the housing market also are in play:

– The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.

“Higher interest rates without a tax credit means the cost of buying a home will rise significantly,” Zandi said. “We should expect much weaker home sales in May, June and July.”

Cecala thinks that if home sales are anemic, Congress may extend the tax credit an additional six months, as it’s already done once before.

– Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes, imposed more stringent lending criteria in January. As FHA delinquencies rise, the rules could tighten still more, eliminating some potential buyers.

“The FHA portfolio has all sorts of bad debt in it,” Thornberg said. “Eventually they’ll have to pull back” on lending.

– Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don’t have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.

“We have a boatload of homes that ultimately will find their way to a foreclosure sale, and that will put pressure on house prices,” Zandi said. “The more that distressed home sales rise, the more home prices get pushed down.”

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page A – 1 of the San Francisco Chronicle

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/MNSP1BVILP.DTL#ixzz0g1kuq8ly

The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.

“Housing has been on government life support, and without it the crash would have been much more severe,” said Mark Zandi, chief economist with Moody’s Economy.com in Pennsylvania. “This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines.”

Rather than being held by banks, today’s mortgages are sliced, diced and resold on Wall Street to create liquidity – money that then can be lent in more mortgages. After the credit crunch beginning in the fall of 2008, investors lost their appetite for these mortgage-backed securities, so the Federal Reserve stepped in to purchase them to ensure that money would keep flowing to home purchasers.

The Fed started buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in January 2009 and originally planned to conclude the program by year’s end. It extended it for three months to ease the impact on mortgage markets, although it didn’t allocate more money. The program’s ultimate cost won’t be known until the Fed sells off the securities, something that officials said it will do gradually starting this year. It’s conceivable that the program could end up generating a modest profit, breaking even or losing money, depending on what prices the securities go for.

While experts agree that the Fed’s exit will cause mortgage rates to rise, the big unknown is how severe the effect will be.

“There is no question rates have been kept artificially low by the Fed’s heavy buying,” said Guy Cecala, publisher of Inside Mortgage Finance. “My opinion is that rates will go up a full percentage point initially,” meaning that 30-year fixed conforming loans, now hovering around 5 percent, would hit 6 percent.

Keith Gumbinger, vice president of HSH Associates, which compiles mortgage loan data, thinks that rates will slowly rise to about 5.75 percent after the Fed withdraws.

“Right now the Fed is acting as a sponge, absorbing about $12 billion a week of what you might consider excess supply,” he said. “When they stop, the market will have to pick up some chunk of change.”

Julian Hebron, branch manager at RPM Mortgage’s San Francisco office, anticipates a bump up to around 5.5 percent by summer with rate volatility all year.

“The Fed isn’t going to start dumping mortgage bonds on April 1, they’re just going to stop buying,” he said. “By that time, improving economic data is likely to push the Fed toward a rate hike bias. This will contribute to higher mortgage rates, slowing refi activity, and less mortgage bond supply. So while the Fed won’t be buying anymore, rates shouldn’t spike immediately because there will be less supply for markets to absorb.”

Christopher Thornberg, principal at Beacon Economics in Los Angeles, thinks the Fed’s withdrawal will have a radical impact.

“Clearly, when they stop printing all that money, it’s going to be a shock to the system. I have to assume that when they pull back on it, it will cause a 100- to 200-basis-points rise” to rates of 6 percent or 7 percent, he said. “When they start selling off the stuff they purchased, which by my guess would come early next year, that would cause another 100- to 150-basis-points rise.”

The Fed has indicated that it might resume buying mortgage-backed securities if mortgage rates spike.

In written Congressional testimony released last week, Fed Chairman Ben Bernanke said the Fed eventually will take steps to forestall inflation that also are likely to result in higher interest rates for all loans.

Several other government programs designed to prop up the housing market also are in play:

– The home buyers tax credit of $8,000 for first-time buyers and $6,500 for repeat buyers expires April 30. Although many experts think the program simply caused people to buy houses earlier than they had planned, its end is likely to cause a dip in home sales.

“Higher interest rates without a tax credit means the cost of buying a home will rise significantly,” Zandi said. “We should expect much weaker home sales in May, June and July.”

Cecala thinks that if home sales are anemic, Congress may extend the tax credit an additional six months, as it’s already done once before.

– Federal Housing Administration loans, an increasingly important source of financing for many borrowers, especially those with low and moderate incomes, imposed more stringent lending criteria in January. As FHA delinquencies rise, the rules could tighten still more, eliminating some potential buyers.

“The FHA portfolio has all sorts of bad debt in it,” Thornberg said. “Eventually they’ll have to pull back” on lending.

– Home Affordable Modification Program, the government-backed plan to get banks to help troubled homeowners, has kept the market from being flooded with foreclosures, as hundreds of thousands of borrowers are negotiating with their lenders for lower payments. Eventually, observers say, much of that backlog will wind up in foreclosure because homeowners simply don’t have the income or ability to make modified payments. A new surge of bargain-basement foreclosures would undermine home prices.

“We have a boatload of homes that ultimately will find their way to a foreclosure sale, and that will put pressure on house prices,” Zandi said. “The more that distressed home sales rise, the more home prices get pushed down.”

E-mail Carolyn Said at csaid@sfchronicle.com.

This article appeared on page A – 1 of the San Francisco Chronicle

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/MNSP1BVILP.DTL#ixzz0g1kuq8ly

1. What is a short sale?

A short sale is a sales transaction wherein the seller’s lender agrees to accept a payoff less than the balance due on the loan. In addition to absorbing the loss on the loan, the lender in most cases, agrees to pay the costs of the sale.

2. In the event a lender agrees to a short sale is the remaining debt automatically forgiven?

Not likely. Due to significant increases in non-performing loans lenders may not be willing to forgive the remaining debt which is often referred to as a “deficiency.”  In those cases, it is not uncommon for a lender to ask the homeowner to contribute towards the deficiency with a cash contribution or a personal note. In fact, the approval of any short sale will specify the terms under which the lender will agree.

3. How will the lender communicate the terms of short sale approval?

Any agreement to approve a short sale must be in writing. An offer of settlement comes in many forms and may include specific conditions.  Homeowners are strongly urged to have legal and tax professionals review and approve any agreement prior to signing.

4. How long does a short sale take?

It can take anywhere from one to six months or longer once the lender receives a fully negotiated signed offer from both the buyer and seller. The process frequently moves slowly. Currently, many lenders are working to revamp their system to speed up the process.

5. If a short sale transaction can take up to six months, why do they call it a “short sale”?

It may be because the value is “shorter” (less than) the loan amount. The truth is a short sale has multiple phases that may affect the transaction time frame.  Depending on market trends, price positioning, and other factors, it can take up to 180 days or more for a property to sell. Once the negotiations are complete, the short sale proposal is sent to the lender who will evaluate it from a financial perspective.  A number of factors must be considered including evaluation of homeowner’s eligibility. Understandably this process takes time.

6. How do I determine whether or not I am eligible for a short sale?

Each lender has different criteria.  Contact your lender for specific details. Be prepared to establish your eligibility by providing supporting documentation such as, W-2 forms, bank statements, tax returns, and other financial documents.

Homeowners should be aware of their options before considering a short sale.  Other alternatives include: loan modification, refinance, deed in lieu of foreclosure, foreclosure, and bankruptcy.  Non-profit counselors are available to advise homeowners on the advantages and disadvantages of each of the foregoing options.  A directory of approved counselors may be obtained at www.hud.gov

7. Why would a lender agree to a short sale?

There are various reasons why a lender may agree to a short sale.  For example, Senate Bill 1137 (which became effective in July 2008) and other state and federal regulations impose strict requirements on lenders prior to exercising their right to foreclose. Foreclosures take time, and as we all know, time is money.

The expense to the lender is a significant factor. Foreclosure costs may include: internal fees and expenses, eviction, repairs and maintenance of the property, security, as well as Home Owners Association (HOA) dues and utilities.  These factors, combined with the federal and state government’s push to halt foreclosures, may cause the lender to see a short sale as a preferred alternative to foreclosure.

8. Is a short sale still an option if foreclosure has already taken place on my home?

No. Once the lender has completed the foreclosure process, a short sale is no longer an option.  For that reason, it is vital that homeowners understand the importance of early communication with the lender. Don’t wait until it is too late. Speak to your lender, and advise them of your financial or other difficulties. The fact that you are negotiating the possibility of a short sale does not preclude the lender from proceeding with the foreclosure.  Any postponement of foreclosure must be in writing.

In the event you want to retain ownership of your home, you should work with your lender to explore alternatives to foreclosure.

9. I have a second mortgage on my home. Does this make me ineligible for a short sale?

In many cases, a short sale can be achieved on properties with multiple loans.  Depending on the amount of the loss to the junior lien holder (second trust deed), a short sale may be possible under certain circumstances.  Proposals and requests for short sale consideration should be submitted to all lenders at the onset.  Lenders who hold second trust deeds are often very rigid and may make demands for additional funds from the homeowner and as well as the buyer in order to mitigate their loss.

10. Once I have an offer on my home, what happens next?

Your agent will assist you in negotiating the best price and terms.  Once the negotiations are complete, the offer and all supporting documentation should be packaged and submitted to the lender’s loss mitigation department.  Follow-up and ongoing communication are significant components of a successful short sale.

11. Are their tax consequences to a short sale?

In many cases the answer is yes.  A homeowner should consult with their tax advisor to determine tax liability before agreeing to a short sale.  For additional information, you may visit www.irs.gov to learn more about taxation of short sales.

12. Will a short sale affect my credit?

Yes. Your tax and legal advisors will be able to address your specific situation.

Note:  When the amount of the loan and other costs of the sale exceed the current market value of the property, struggling homeowners have a number of alternatives to consider, including loan modification, refinance, deed in lieu of foreclosure, foreclosure, bankruptcy and short sale. This Q & A does not serve as a substitute for tax and legal advice.  Any homeowner considering a short sale should consult with legal and tax advisors.  A directory of non-profit counselors is available at www.hud.gov

1. What is a short sale?

A short sale is a sales transaction wherein the seller’s lender agrees to accept a payoff less than the balance due on the loan. In addition to absorbing the loss on the loan, the lender in most cases, agrees to pay the costs of the sale.

2. In the event a lender agrees to a short sale is the remaining debt automatically forgiven?

Not likely. Due to significant increases in non-performing loans lenders may not be willing to forgive the remaining debt which is often referred to as a “deficiency.”  In those cases, it is not uncommon for a lender to ask the homeowner to contribute towards the deficiency with a cash contribution or a personal note. In fact, the approval of any short sale will specify the terms under which the lender will agree.

3. How will the lender communicate the terms of short sale approval?

Any agreement to approve a short sale must be in writing. An offer of settlement comes in many forms and may include specific conditions.  Homeowners are strongly urged to have legal and tax professionals review and approve any agreement prior to signing.

4. How long does a short sale take?

It can take anywhere from one to six months or longer once the lender receives a fully negotiated signed offer from both the buyer and seller. The process frequently moves slowly. Currently, many lenders are working to revamp their system to speed up the process.

5. If a short sale transaction can take up to six months, why do they call it a “short sale”?

It may be because the value is “shorter” (less than) the loan amount. The truth is a short sale has multiple phases that may affect the transaction time frame.  Depending on market trends, price positioning, and other factors, it can take up to 180 days or more for a property to sell. Once the negotiations are complete, the short sale proposal is sent to the lender who will evaluate it from a financial perspective.  A number of factors must be considered including evaluation of homeowner’s eligibility. Understandably this process takes time.

6. How do I determine whether or not I am eligible for a short sale?

Each lender has different criteria.  Contact your lender for specific details. Be prepared to establish your eligibility by providing supporting documentation such as, W-2 forms, bank statements, tax returns, and other financial documents.

Homeowners should be aware of their options before considering a short sale.  Other alternatives include: loan modification, refinance, deed in lieu of foreclosure, foreclosure, and bankruptcy.  Non-profit counselors are available to advise homeowners on the advantages and disadvantages of each of the foregoing options.  A directory of approved counselors may be obtained at www.hud.gov

7. Why would a lender agree to a short sale?

There are various reasons why a lender may agree to a short sale.  For example, Senate Bill 1137 (which became effective in July 2008) and other state and federal regulations impose strict requirements on lenders prior to exercising their right to foreclose. Foreclosures take time, and as we all know, time is money.

The expense to the lender is a significant factor. Foreclosure costs may include: internal fees and expenses, eviction, repairs and maintenance of the property, security, as well as Home Owners Association (HOA) dues and utilities.  These factors, combined with the federal and state government’s push to halt foreclosures, may cause the lender to see a short sale as a preferred alternative to foreclosure.

8. Is a short sale still an option if foreclosure has already taken place on my home?

No. Once the lender has completed the foreclosure process, a short sale is no longer an option.  For that reason, it is vital that homeowners understand the importance of early communication with the lender. Don’t wait until it is too late. Speak to your lender, and advise them of your financial or other difficulties. The fact that you are negotiating the possibility of a short sale does not preclude the lender from proceeding with the foreclosure.  Any postponement of foreclosure must be in writing.

In the event you want to retain ownership of your home, you should work with your lender to explore alternatives to foreclosure.

9. I have a second mortgage on my home. Does this make me ineligible for a short sale?

In many cases, a short sale can be achieved on properties with multiple loans.  Depending on the amount of the loss to the junior lien holder (second trust deed), a short sale may be possible under certain circumstances.  Proposals and requests for short sale consideration should be submitted to all lenders at the onset.  Lenders who hold second trust deeds are often very rigid and may make demands for additional funds from the homeowner and as well as the buyer in order to mitigate their loss.

10. Once I have an offer on my home, what happens next?

Your agent will assist you in negotiating the best price and terms.  Once the negotiations are complete, the offer and all supporting documentation should be packaged and submitted to the lender’s loss mitigation department.  Follow-up and ongoing communication are significant components of a successful short sale.

11. Are their tax consequences to a short sale?

In many cases the answer is yes.  A homeowner should consult with their tax advisor to determine tax liability before agreeing to a short sale.  For additional information, you may visit www.irs.gov to learn more about taxation of short sales.

12. Will a short sale affect my credit?

Yes. Your tax and legal advisors will be able to address your specific situation.

Note:  When the amount of the loan and other costs of the sale exceed the current market value of the property, struggling homeowners have a number of alternatives to consider, including loan modification, refinance, deed in lieu of foreclosure, foreclosure, bankruptcy and short sale. This Q & A does not serve as a substitute for tax and legal advice.  Any homeowner considering a short sale should consult with legal and tax advisors.  A directory of non-profit counselors is available at www.hud.gov

1. What is a short sale?

A short sale is a sales transaction wherein the seller’s lender agrees to accept a payoff less than the balance due on the loan. In addition to absorbing the loss on the loan, the lender in most cases, agrees to pay the costs of the sale.

2. In the event a lender agrees to a short sale is the remaining debt automatically forgiven?

Not likely. Due to significant increases in non-performing loans lenders may not be willing to forgive the remaining debt which is often referred to as a “deficiency.”  In those cases, it is not uncommon for a lender to ask the homeowner to contribute towards the deficiency with a cash contribution or a personal note. In fact, the approval of any short sale will specify the terms under which the lender will agree.

3. How will the lender communicate the terms of short sale approval?

Any agreement to approve a short sale must be in writing. An offer of settlement comes in many forms and may include specific conditions.  Homeowners are strongly urged to have legal and tax professionals review and approve any agreement prior to signing.

4. How long does a short sale take?

It can take anywhere from one to six months or longer once the lender receives a fully negotiated signed offer from both the buyer and seller. The process frequently moves slowly. Currently, many lenders are working to revamp their system to speed up the process.

5. If a short sale transaction can take up to six months, why do they call it a “short sale”?

It may be because the value is “shorter” (less than) the loan amount. The truth is a short sale has multiple phases that may affect the transaction time frame.  Depending on market trends, price positioning, and other factors, it can take up to 180 days or more for a property to sell. Once the negotiations are complete, the short sale proposal is sent to the lender who will evaluate it from a financial perspective.  A number of factors must be considered including evaluation of homeowner’s eligibility. Understandably this process takes time.

6. How do I determine whether or not I am eligible for a short sale?

Each lender has different criteria.  Contact your lender for specific details. Be prepared to establish your eligibility by providing supporting documentation such as, W-2 forms, bank statements, tax returns, and other financial documents.

Homeowners should be aware of their options before considering a short sale.  Other alternatives include: loan modification, refinance, deed in lieu of foreclosure, foreclosure, and bankruptcy.  Non-profit counselors are available to advise homeowners on the advantages and disadvantages of each of the foregoing options.  A directory of approved counselors may be obtained at www.hud.gov

7. Why would a lender agree to a short sale?

There are various reasons why a lender may agree to a short sale.  For example, Senate Bill 1137 (which became effective in July 2008) and other state and federal regulations impose strict requirements on lenders prior to exercising their right to foreclose. Foreclosures take time, and as we all know, time is money.

The expense to the lender is a significant factor. Foreclosure costs may include: internal fees and expenses, eviction, repairs and maintenance of the property, security, as well as Home Owners Association (HOA) dues and utilities.  These factors, combined with the federal and state government’s push to halt foreclosures, may cause the lender to see a short sale as a preferred alternative to foreclosure.

8. Is a short sale still an option if foreclosure has already taken place on my home?

No. Once the lender has completed the foreclosure process, a short sale is no longer an option.  For that reason, it is vital that homeowners understand the importance of early communication with the lender. Don’t wait until it is too late. Speak to your lender, and advise them of your financial or other difficulties. The fact that you are negotiating the possibility of a short sale does not preclude the lender from proceeding with the foreclosure.  Any postponement of foreclosure must be in writing.

In the event you want to retain ownership of your home, you should work with your lender to explore alternatives to foreclosure.

9. I have a second mortgage on my home. Does this make me ineligible for a short sale?

In many cases, a short sale can be achieved on properties with multiple loans.  Depending on the amount of the loss to the junior lien holder (second trust deed), a short sale may be possible under certain circumstances.  Proposals and requests for short sale consideration should be submitted to all lenders at the onset.  Lenders who hold second trust deeds are often very rigid and may make demands for additional funds from the homeowner and as well as the buyer in order to mitigate their loss.

10. Once I have an offer on my home, what happens next?

Your agent will assist you in negotiating the best price and terms.  Once the negotiations are complete, the offer and all supporting documentation should be packaged and submitted to the lender’s loss mitigation department.  Follow-up and ongoing communication are significant components of a successful short sale.

11. Are their tax consequences to a short sale?

In many cases the answer is yes.  A homeowner should consult with their tax advisor to determine tax liability before agreeing to a short sale.  For additional information, you may visit www.irs.gov to learn more about taxation of short sales.

12. Will a short sale affect my credit?

Yes. Your tax and legal advisors will be able to address your specific situation.

Note:  When the amount of the loan and other costs of the sale exceed the current market value of the property, struggling homeowners have a number of alternatives to consider, including loan modification, refinance, deed in lieu of foreclosure, foreclosure, bankruptcy and short sale. This Q & A does not serve as a substitute for tax and legal advice.  Any homeowner considering a short sale should consult with legal and tax advisors.  A directory of non-profit counselors is available at www.hud.gov

1. What is a short sale?

A short sale is a sales transaction wherein the seller’s lender agrees to accept a payoff less than the balance due on the loan. In addition to absorbing the loss on the loan, the lender in most cases, agrees to pay the costs of the sale.

2. In the event a lender agrees to a short sale is the remaining debt automatically forgiven?

Not likely. Due to significant increases in non-performing loans lenders may not be willing to forgive the remaining debt which is often referred to as a “deficiency.”  In those cases, it is not uncommon for a lender to ask the homeowner to contribute towards the deficiency with a cash contribution or a personal note. In fact, the approval of any short sale will specify the terms under which the lender will agree.

3. How will the lender communicate the terms of short sale approval?

Any agreement to approve a short sale must be in writing. An offer of settlement comes in many forms and may include specific conditions.  Homeowners are strongly urged to have legal and tax professionals review and approve any agreement prior to signing.

4. How long does a short sale take?

It can take anywhere from one to six months or longer once the lender receives a fully negotiated signed offer from both the buyer and seller. The process frequently moves slowly. Currently, many lenders are working to revamp their system to speed up the process.

5. If a short sale transaction can take up to six months, why do they call it a “short sale”?

It may be because the value is “shorter” (less than) the loan amount. The truth is a short sale has multiple phases that may affect the transaction time frame.  Depending on market trends, price positioning, and other factors, it can take up to 180 days or more for a property to sell. Once the negotiations are complete, the short sale proposal is sent to the lender who will evaluate it from a financial perspective.  A number of factors must be considered including evaluation of homeowner’s eligibility. Understandably this process takes time.

6. How do I determine whether or not I am eligible for a short sale?

Each lender has different criteria.  Contact your lender for specific details. Be prepared to establish your eligibility by providing supporting documentation such as, W-2 forms, bank statements, tax returns, and other financial documents.

Homeowners should be aware of their options before considering a short sale.  Other alternatives include: loan modification, refinance, deed in lieu of foreclosure, foreclosure, and bankruptcy.  Non-profit counselors are available to advise homeowners on the advantages and disadvantages of each of the foregoing options.  A directory of approved counselors may be obtained at www.hud.gov

7. Why would a lender agree to a short sale?

There are various reasons why a lender may agree to a short sale.  For example, Senate Bill 1137 (which became effective in July 2008) and other state and federal regulations impose strict requirements on lenders prior to exercising their right to foreclose. Foreclosures take time, and as we all know, time is money.

The expense to the lender is a significant factor. Foreclosure costs may include: internal fees and expenses, eviction, repairs and maintenance of the property, security, as well as Home Owners Association (HOA) dues and utilities.  These factors, combined with the federal and state government’s push to halt foreclosures, may cause the lender to see a short sale as a preferred alternative to foreclosure.

8. Is a short sale still an option if foreclosure has already taken place on my home?

No. Once the lender has completed the foreclosure process, a short sale is no longer an option.  For that reason, it is vital that homeowners understand the importance of early communication with the lender. Don’t wait until it is too late. Speak to your lender, and advise them of your financial or other difficulties. The fact that you are negotiating the possibility of a short sale does not preclude the lender from proceeding with the foreclosure.  Any postponement of foreclosure must be in writing.

In the event you want to retain ownership of your home, you should work with your lender to explore alternatives to foreclosure.

9. I have a second mortgage on my home. Does this make me ineligible for a short sale?

In many cases, a short sale can be achieved on properties with multiple loans.  Depending on the amount of the loss to the junior lien holder (second trust deed), a short sale may be possible under certain circumstances.  Proposals and requests for short sale consideration should be submitted to all lenders at the onset.  Lenders who hold second trust deeds are often very rigid and may make demands for additional funds from the homeowner and as well as the buyer in order to mitigate their loss.

10. Once I have an offer on my home, what happens next?

Your agent will assist you in negotiating the best price and terms.  Once the negotiations are complete, the offer and all supporting documentation should be packaged and submitted to the lender’s loss mitigation department.  Follow-up and ongoing communication are significant components of a successful short sale.

11. Are their tax consequences to a short sale?

In many cases the answer is yes.  A homeowner should consult with their tax advisor to determine tax liability before agreeing to a short sale.  For additional information, you may visit www.irs.gov to learn more about taxation of short sales.

12. Will a short sale affect my credit?

Yes. Your tax and legal advisors will be able to address your specific situation.

Note:  When the amount of the loan and other costs of the sale exceed the current market value of the property, struggling homeowners have a number of alternatives to consider, including loan modification, refinance, deed in lieu of foreclosure, foreclosure, bankruptcy and short sale. This Q & A does not serve as a substitute for tax and legal advice.  Any homeowner considering a short sale should consult with legal and tax advisors.  A directory of non-profit counselors is available at www.hud.gov

With todays Real Estate market theres obviously no way we could have all the answers posted on our site. If you have any Real Estate or Financing questions that you do not see here please feel free to ask your question(s) below, Be sure to add your email so when we reply you’ll get your answer right away!

Question: HOW DO I KNOW IF I’M READY TO BUY A HOME?
Answer: You can find out by asking yourself some questions:

Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
Do I have a good record of paying my bills?
Do I have few outstanding long-term debts, like car payments?
Do I have money saved for a down payment?
Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.

Question: HOW DOES PURCHASING A HOME COMPARE WITH RENTING?
Answer: The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.
Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

Question: HOW DO I SELECT THE RIGHT REAL ESTATE AGENT?
Answer: Start by asking family and friends if they can recommend an agent. Compile a list of several agents and talk to each before choosing one. Look for an agent who listens well and understands your needs, and whose judgment you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need. You are at the right place.

Question: WHAT SHOULD I DO IF I’M FEELING EXCLUDED FROM CERTAIN NEIGHBORHOODS?
Answer: Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD’s Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired).

Question: HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS?
Answer: You can get information about school systems by contacting the city or county school board or the local schools. We may also be knowledgeable about schools in the area.

Question: HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS?
Answer: We can give you a ballpark figure by showing you comparable listings. If you are working with a REALTOR, they may have access to comparable sales maintained on a database.

Question: HOW CAN I FIND INFORMATION ON THE PROPERTY TAX LIABILITY?
Answer: The total amount of the previous year’s property taxes is usually included in the listing information. If it’s not, ask the seller for a tax receipt or contact the local assessor’s off ice. Tax rates can change from year to year, so these figures may be approximate.

Question: WHAT OTHER TAX ISSUES SHOULD I TAKE INTO CONSIDERATION?
Answer: Keep in mind that your mortgage interest and real estate taxes will be deductible. A qualified real estate professional can give you more details on other tax benefits and liabilities.

Question: IS AN OLDER HOME A BETTER VALUE THAN A NEW ONE?
Answer: There isn’t a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn’t mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.

Question: WHAT QUESTIONS SHOULD I ASK WHEN LOOKING AT HOMES?
Answer: You can find out by asking yourself some questions:Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller’s or real estate agent’s answers are clear and complete. Ask questions until you understand all of the information they’ve given. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list.

Question: HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?
Answer: If the house you’re considering was built before 1978 and you have children under the age of seven, you will want to have an inspection for lead-based point. It’s important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

Question: WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?
Answer: Fixed Rate Mortgages: Payments remain the same for the the life of the loan

Types

15-year
30-year

Advantages

Predictable
Housing cost remains unaffected by interest rate changes and inflation.

Adjustable Rate Mortgages (ARMS): Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits

Types

Balloon Mortgage- Offers very low rates for an Initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically)
Two-Step Mortgage- Interest rate adjusts only once and remains the same for the life of the loan
ARMS linked to a specific index or margin

Advantages

Generally offer lower initial interest rates
Monthly payments can be lower
May allow borrower to qualify for a larger loan amount

Question: What is a 1031 Tax Exchange?
Answer: For comprehensive information on 1031′s see the IRS site or confer with a licensed 1031 agent. (Back to Top)
In laymen’s terms a 1031 transfer allows a person to transfer the equity of a rental property into a new investment. The previous property may have been partially or wholly depreciated but the seller will not suffer capital gains tax as long as all of the equity is transferred. Often the new property is refinanced after the transfer freeing up the investors capital for further investments.

Question: What is “A” paper
Answer: A paper is a term used by underwriters to refer to a loan which meets the parameters set by Fannie Mae/Freddie Mac for loans those organizations will buy or purchase. Also referred to as conforming, A paper says the borrower has adequate credit, income and job history for a given loan.

Question 3: What is “B” paper?
Answer: “B” paper on nonconforming is a loan which does not meet the requirements set out by Fannie Mae. At least one factor has caused the loan to be unacceptable. The borrower may be borrowing a large percentage of his income, his credit score may be low or his income erratic or poorly documented. These loans have higher rates and more fees than A paper. If you believe you are eligible for a conforming loan and are not being offered one see another lender.

Question: What is pre-qualified?
Answer: A pre-qualification is a statement by a loan officer that a person appears qualified based on the answers to some questions. None of the information has been verified and neither buyer nor seller should rely on this statement. Please do not go looking for your dream home with just a Pre-Qual letter.

Question: What is pre-approved?
Answer: A buyer can be pre-approved after they have applied for a loan and had a credit report run. A pre-approval will have some exceptions, the fewer the exceptions the stronger the preapproval. Remember the preapproval is only as good as the institution issuing it.

Question: Why should I be pre-approved?
Answer: Pre-approval has many benefits. The buyer is assured of his/her purchasing power and only shops within that range. The agents involved and the seller are all assured of the buyers serious intent. This assurance of ability and intent makes the preapproved buyer a more desirable than someone who has not put forth the effort. Not being preapproved can cost the buyer thousands in negotiating.

With todays Real Estate market theres obviously no way we could have all the answers posted on our site. If you have any Real Estate or Financing questions that you do not see here please feel free to ask your question(s) below, Be sure to add your email so when we reply you’ll get your answer right away!

Question: HOW DO I KNOW IF I’M READY TO BUY A HOME?
Answer: You can find out by asking yourself some questions:

Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?
Do I have a good record of paying my bills?
Do I have few outstanding long-term debts, like car payments?
Do I have money saved for a down payment?
Do I have the ability to pay a mortgage every month, plus additional costs?

If you can answer “yes” to these questions, you are probably ready to buy your own home.

Question: HOW DOES PURCHASING A HOME COMPARE WITH RENTING?
Answer: The two don’t really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.
Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that’s an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities- like insurance, real estate taxes, and upkeep- which can be substantial. But given the freedom, stability, and security of owning your own home, they are worth it.

Question: HOW DO I SELECT THE RIGHT REAL ESTATE AGENT?
Answer: Start by asking family and friends if they can recommend an agent. Compile a list of several agents and talk to each before choosing one. Look for an agent who listens well and understands your needs, and whose judgment you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need. You are at the right place.

Question: WHAT SHOULD I DO IF I’M FEELING EXCLUDED FROM CERTAIN NEIGHBORHOODS?
Answer: Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD’s Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777 (and 1-800-927-9275 for the hearing impaired).

Question: HOW CAN I FIND OUT ABOUT LOCAL SCHOOLS?
Answer: You can get information about school systems by contacting the city or county school board or the local schools. We may also be knowledgeable about schools in the area.

Question: HOW CAN I FIND OUT HOW MUCH HOMES ARE SELLING FOR IN CERTAIN COMMUNITIES AND NEIGHBORHOODS?
Answer: We can give you a ballpark figure by showing you comparable listings. If you are working with a REALTOR, they may have access to comparable sales maintained on a database.

Question: HOW CAN I FIND INFORMATION ON THE PROPERTY TAX LIABILITY?
Answer: The total amount of the previous year’s property taxes is usually included in the listing information. If it’s not, ask the seller for a tax receipt or contact the local assessor’s off ice. Tax rates can change from year to year, so these figures may be approximate.

Question: WHAT OTHER TAX ISSUES SHOULD I TAKE INTO CONSIDERATION?
Answer: Keep in mind that your mortgage interest and real estate taxes will be deductible. A qualified real estate professional can give you more details on other tax benefits and liabilities.

Question: IS AN OLDER HOME A BETTER VALUE THAN A NEW ONE?
Answer: There isn’t a definitive answer to this question. You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn’t mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.

Question: WHAT QUESTIONS SHOULD I ASK WHEN LOOKING AT HOMES?
Answer: You can find out by asking yourself some questions:Many of your questions should focus on potential problems and maintenance issues. Does anything need to be replaced? What things require ongoing maintenance (e.g., paint, roof, HVAC, appliances, carpet)? Also ask about the house and neighborhood, focusing on quality of life issues. Be sure the seller’s or real estate agent’s answers are clear and complete. Ask questions until you understand all of the information they’ve given. Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list.

Question: HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?
Answer: If the house you’re considering was built before 1978 and you have children under the age of seven, you will want to have an inspection for lead-based point. It’s important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

Question: WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?
Answer: Fixed Rate Mortgages: Payments remain the same for the the life of the loan

Types

15-year
30-year

Advantages

Predictable
Housing cost remains unaffected by interest rate changes and inflation.

Adjustable Rate Mortgages (ARMS): Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits

Types

Balloon Mortgage- Offers very low rates for an Initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically)
Two-Step Mortgage- Interest rate adjusts only once and remains the same for the life of the loan
ARMS linked to a specific index or margin

Advantages

Generally offer lower initial interest rates
Monthly payments can be lower
May allow borrower to qualify for a larger loan amount

Question: What is a 1031 Tax Exchange?
Answer: For comprehensive information on 1031′s see the IRS site or confer with a licensed 1031 agent. (Back to Top)
In laymen’s terms a 1031 transfer allows a person to transfer the equity of a rental property into a new investment. The previous property may have been partially or wholly depreciated but the seller will not suffer capital gains tax as long as all of the equity is transferred. Often the new property is refinanced after the transfer freeing up the investors capital for further investments.

Question: What is “A” paper
Answer: A paper is a term used by underwriters to refer to a loan which meets the parameters set by Fannie Mae/Freddie Mac for loans those organizations will buy or purchase. Also referred to as conforming, A paper says the borrower has adequate credit, income and job history for a given loan.

Question 3: What is “B” paper?
Answer: “B” paper on nonconforming is a loan which does not meet the requirements set out by Fannie Mae. At least one factor has caused the loan to be unacceptable. The borrower may be borrowing a large percentage of his income, his credit score may be low or his income erratic or poorly documented. These loans have higher rates and more fees than A paper. If you believe you are eligible for a conforming loan and are not being offered one see another lender.

Question: What is pre-qualified?
Answer: A pre-qualification is a statement by a loan officer that a person appears qualified based on the answers to some questions. None of the information has been verified and neither buyer nor seller should rely on this statement. Please do not go looking for your dream home with just a Pre-Qual letter.

Question: What is pre-approved?
Answer: A buyer can be pre-approved after they have applied for a loan and had a credit report run. A pre-approval will have some exceptions, the fewer the exceptions the stronger the preapproval. Remember the preapproval is only as good as the institution issuing it.

Question: Why should I be pre-approved?
Answer: Pre-approval has many benefits. The buyer is assured of his/her purchasing power and only shops within that range. The agents involved and the seller are all assured of the buyers serious intent. This assurance of ability and intent makes the preapproved buyer a more desirable than someone who has not put forth the effort. Not being preapproved can cost the buyer thousands in negotiating.