Defending Your Home Base Against Foreclosure
by Matt Englett
Throughout Florida, we see the number of foreclosures continue to rise. While Winter Park may have been more stable when the housing crisis began, the community is now feeling the impact of the foreclosure wave that is washing over our state and nation.
A recent report by RealtyTrac, Inc. found that Orlando's four county region, including the city of Winter Park, had nearly 8,000 homes with a foreclosure filing, notice of foreclosure or repossession by a lending group. This figure has doubled since last year's data collection. Now, more than ever, I hear from worried homeowners asking questions like: "What should I do if I can't pay my mortgage?" and "What should I do if I'm served a foreclosure notice?" People think there is little that can be done to defend against foreclosure. Good news that is absolutely not true.
Understand that many people, including elected officials and community groups at all levels, are working tirelessly to slow the rate of new foreclosures. There are, however, a few attempting to take advantage of scared, inexperienced homeowners who are faced with losing everything. My Advice: don't be afraid, get informed.
The most critical first step for individuals faced with mortgage foreclosure is to find and secure the services of an experienced attorney, familiar with these issues. A foreclosure filing should be viewed like a lawsuit, and you'll need someone who can successfully litigate your case. A thorough understanding of your mortgage right, which include, but are not limited to, loan modifications, is of the highest importance.
Be wary of non-attorneys offering assistance as they have no leverage in dealing with lenders. In the end, they cannot do anything to help their clients if a foreclosure case goes to court. Lenders have become keenly aware of this deficiency, and they will exploit your team's weakness.
There are a number of benefits linked to working with a reputable foreclosure attorney who can who can lead a dynamic defense. Your attorney will work to delay or stop foreclosure, and you will be able to set aside funds that can be used when seeking reinstatement. Furthermore, people who put up a strong defense have an extra leverage and are well positioned for future reinstatement. Working with a defense attorney, borrowers affected by foreclosures can use the legal process to achieve fair loan modification – a solution that allows people to keep their homes. This route reworks the terms of an existing mortgage, thereby lowering monthly payments and making the loan more affordable.
This can play out in various ways, including; the principal balance of the loan can be reduced; the interest rate lowered, and some or all of the past-due payments can even be eliminated. Essentially, homeowners get a new start on their credit report and improve their credit scores over a matter of months. Each situation is a different, and you must work with your trusted advisers to decide the best course of action for you and your family.
While the process may seem overwhelming, the bottom line is … a reputable attorney will be able to set you on the right course toward keeping your home. If you're in trouble, unable to make your mortgage payments or if a foreclosure complaint has already been filed against you, please do your homework and find experienced legal representation.
Matt Englett is a foreclosure defense attorney with the Orlando based firm of Kauffman, Englett And Lynd. He can be reached at 407-513-1901.
Wednesday, October 28, 2009
Monday, October 19, 2009
Buyers and Sellers get on the Same Page.
Buyers and sellers get on the same page
While property values down, pricing is no longer high-stakes game of roulette
By Candace Taylor
Zhann Jochinke, an associate broker at Argo Residential, put an alcove studio on the market last year for $525,000. But the offers that came in were as low as $390,000.
"People were putting bids out there just to see if the person had to sell," he recalled.
More recently, however, he convinced the seller to drop the price to around $490,000.
Offers began coming in at "5 percent or less off the asking price," he said. Now, the listing is in contract, and expected to close in the next month.
After months of uncertainty, Manhattan buyers and sellers are finally making a market. In the terrifying period after the Lehman Brothers crisis, so few properties were sold that pricing an apartment became a game of roulette. Buyers, too, were unsure what a property would trade for, and their offers were all over the map.
Plummeting prices made matters worse.
"Earlier in the year, recent comps were being considered, and then 10, 15, 20 percent was being subtracted to set a reasonable asking price," Jochinke said. "It wasn't uncommon, even at these prices, that offers would still come in well under ask."
But thanks to the uptick in activity that started in the spring and has carried over into fall, a new batch of closed sales is providing much more accurate information, allowing both buyers and sellers to get a clearer understanding of how much their properties are worth.
"We are able to list a property today at a number very similar to one that closed in the past couple of months," Jochinke said.
As a result, Antonio del Rosario, the president and co-owner of A.C. Lawrence, said he's now seeing accepted offers come in within 2 percent of the asking price, or "many times, at the asking price," he said, adding, "I'm seeing a lot of sellers align with the market."
A nearby example is Bernie Madoff's five-bedroom mansion in Montauk, which reportedly sold last month for more than its $8.75 million asking price.
The shrinking gap between buyers' and sellers' expectations makes it easier to put listings into contract, said Michael Garr, a senior vice president at Core.
"There is a tremendous increase in competitive offers from savvy buyers, which have resulted in more listings in contract," said Garr, who recently held an open house for a two-bedroom co-op at 105 West 13th Street in Greenwich Village that attracted 21 people. "Five months ago, I would have had half that number," he said.
Make no mistake: these deals are trading at lower prices than last year. But properties that have languished on the market for months are now beginning to move.
For example, last month, the Manhattan-based brokerage Marketing Directors sold a three-bedroom penthouse at the Platinum at 247 West 46th Street, a listing that first went on the market in September 2008.
According to city records, the selling price was $5.8 million -- down about 17 percent from the original asking price of $7 million.
"If both parties are realistic about the market, deals are being made," said Jacqueline Urgo, president of Marketing Directors.
As a result, inventory has not risen as precipitously as some had feared it might.
According to Jonathan Miller, the president of the appraisal firm Miller Samuel, there were 8,535 homes on the market in Manhattan at the end of August. That's 4 percent more than the same month last year.
However, it's 22 percent less than six months ago, when there were some 11,000 homes available for sale, he said.
"There is still a lot more on the market than there was two years ago," said Ric Swezey, a senior associate at the Corcoran Group, "but the market has stabilized from this time last year, which has allowed some of the inventory to be absorbed."
It's still anyone's guess how much prices will fall as the recession continues. But brokers report that the steep drop-off in prices that characterized the immediate post-Lehman aftermath seems to have stopped -- for the time being, anyway -- giving buyers and sellers enough breathing room to comfortably make purchases.
"I can confidently say pricing has finally stabilized," said del Rosario of A.C. Lawrence.
However, he cautioned, "I don't know how long it will last, since we have yet to see unemployment rates reach a plateau. Until that part of our economy has stabilized, I don't think the housing market in [New York] or in any part of the country can stand on solid ground."
Experts agree with del Rosario that unemployment and other market fundamentals remain weak, making a speedy return to the boom years -- and prices -- of the mid-2000s very unlikely.
Also, even as buyers exhibit renewed confidence and interest in real estate, strict lending requirements are slowing the buying process.
"Our contracts and closings are up, but there is still no financing," said Marilyn Harra Kaye, president of MLBKaye International Realty, adding that buyers have been asking, "When will the FICO [credit] scores come down to get financing?"
The continued underlying market weakness is most evident in the higher-end market, which has been particularly hard-hit by the lack of available jumbo mortgages.
"The weakest part of the market continues to be homes priced above $2 million," said Steven McArdle, the principal of Urban Marketing. "However, I'm seeing tremendous activity in homes priced at $1.5 million and below."
Also, on the very high end of the market, some listings are beginning to change hands, or at least generate new interest (see "Trophy listings at lower prices"). Early last month, news broke that a townhouse at 165 East 70th was sold in August for $13.5 million to John Mack, the CEO of Morgan Stanley.
The rental market is exhibiting similar trends, with activity greater than it was in the immediate aftermath of Lehman's collapse.
In its first-ever peak-season rental report, released late last month, Citi Habitats found that average rents across Manhattan -- excluding incentives -- dropped by more than 8 percent between May and August 2009, compared to the same four months in 2008. Studio apartments and two-bedroom apartments showed the steepest drop, at 11 percent.
Another rental report, prepared by the brokerage TDG/TREGNY, found that rents for all categories of apartments had dropped between 6 and 10 percent from September 2008 to last month.
"While activity has increased, the numbers have not shown significant improvement," the report said. "Rents have stabilized, but at levels nearly 10 percent back from already depressed 2008 numbers.
"And although vacancies showed improvement this month, they have yet to establish the trend necessary to absorb the considerable amount of excess inventory that is continuing to depress the market."
Overall, brokers are breathing a sigh of relief, as business appears to be getting somewhat back to normal. But they acknowledge the market is not out of the woods.
"The general sentiment is that we still have a long way to go, but any future declines in the market will be slower and less of a free fall," said Kristin Hitsous, an associate attorney at real estate law firm Rosabianca & Associates.
While property values down, pricing is no longer high-stakes game of roulette
By Candace Taylor
Zhann Jochinke, an associate broker at Argo Residential, put an alcove studio on the market last year for $525,000. But the offers that came in were as low as $390,000.
"People were putting bids out there just to see if the person had to sell," he recalled.
More recently, however, he convinced the seller to drop the price to around $490,000.
Offers began coming in at "5 percent or less off the asking price," he said. Now, the listing is in contract, and expected to close in the next month.
After months of uncertainty, Manhattan buyers and sellers are finally making a market. In the terrifying period after the Lehman Brothers crisis, so few properties were sold that pricing an apartment became a game of roulette. Buyers, too, were unsure what a property would trade for, and their offers were all over the map.
Plummeting prices made matters worse.
"Earlier in the year, recent comps were being considered, and then 10, 15, 20 percent was being subtracted to set a reasonable asking price," Jochinke said. "It wasn't uncommon, even at these prices, that offers would still come in well under ask."
But thanks to the uptick in activity that started in the spring and has carried over into fall, a new batch of closed sales is providing much more accurate information, allowing both buyers and sellers to get a clearer understanding of how much their properties are worth.
"We are able to list a property today at a number very similar to one that closed in the past couple of months," Jochinke said.
As a result, Antonio del Rosario, the president and co-owner of A.C. Lawrence, said he's now seeing accepted offers come in within 2 percent of the asking price, or "many times, at the asking price," he said, adding, "I'm seeing a lot of sellers align with the market."
A nearby example is Bernie Madoff's five-bedroom mansion in Montauk, which reportedly sold last month for more than its $8.75 million asking price.
The shrinking gap between buyers' and sellers' expectations makes it easier to put listings into contract, said Michael Garr, a senior vice president at Core.
"There is a tremendous increase in competitive offers from savvy buyers, which have resulted in more listings in contract," said Garr, who recently held an open house for a two-bedroom co-op at 105 West 13th Street in Greenwich Village that attracted 21 people. "Five months ago, I would have had half that number," he said.
Make no mistake: these deals are trading at lower prices than last year. But properties that have languished on the market for months are now beginning to move.
For example, last month, the Manhattan-based brokerage Marketing Directors sold a three-bedroom penthouse at the Platinum at 247 West 46th Street, a listing that first went on the market in September 2008.
According to city records, the selling price was $5.8 million -- down about 17 percent from the original asking price of $7 million.
"If both parties are realistic about the market, deals are being made," said Jacqueline Urgo, president of Marketing Directors.
As a result, inventory has not risen as precipitously as some had feared it might.
According to Jonathan Miller, the president of the appraisal firm Miller Samuel, there were 8,535 homes on the market in Manhattan at the end of August. That's 4 percent more than the same month last year.
However, it's 22 percent less than six months ago, when there were some 11,000 homes available for sale, he said.
"There is still a lot more on the market than there was two years ago," said Ric Swezey, a senior associate at the Corcoran Group, "but the market has stabilized from this time last year, which has allowed some of the inventory to be absorbed."
It's still anyone's guess how much prices will fall as the recession continues. But brokers report that the steep drop-off in prices that characterized the immediate post-Lehman aftermath seems to have stopped -- for the time being, anyway -- giving buyers and sellers enough breathing room to comfortably make purchases.
"I can confidently say pricing has finally stabilized," said del Rosario of A.C. Lawrence.
However, he cautioned, "I don't know how long it will last, since we have yet to see unemployment rates reach a plateau. Until that part of our economy has stabilized, I don't think the housing market in [New York] or in any part of the country can stand on solid ground."
Experts agree with del Rosario that unemployment and other market fundamentals remain weak, making a speedy return to the boom years -- and prices -- of the mid-2000s very unlikely.
Also, even as buyers exhibit renewed confidence and interest in real estate, strict lending requirements are slowing the buying process.
"Our contracts and closings are up, but there is still no financing," said Marilyn Harra Kaye, president of MLBKaye International Realty, adding that buyers have been asking, "When will the FICO [credit] scores come down to get financing?"
The continued underlying market weakness is most evident in the higher-end market, which has been particularly hard-hit by the lack of available jumbo mortgages.
"The weakest part of the market continues to be homes priced above $2 million," said Steven McArdle, the principal of Urban Marketing. "However, I'm seeing tremendous activity in homes priced at $1.5 million and below."
Also, on the very high end of the market, some listings are beginning to change hands, or at least generate new interest (see "Trophy listings at lower prices"). Early last month, news broke that a townhouse at 165 East 70th was sold in August for $13.5 million to John Mack, the CEO of Morgan Stanley.
The rental market is exhibiting similar trends, with activity greater than it was in the immediate aftermath of Lehman's collapse.
In its first-ever peak-season rental report, released late last month, Citi Habitats found that average rents across Manhattan -- excluding incentives -- dropped by more than 8 percent between May and August 2009, compared to the same four months in 2008. Studio apartments and two-bedroom apartments showed the steepest drop, at 11 percent.
Another rental report, prepared by the brokerage TDG/TREGNY, found that rents for all categories of apartments had dropped between 6 and 10 percent from September 2008 to last month.
"While activity has increased, the numbers have not shown significant improvement," the report said. "Rents have stabilized, but at levels nearly 10 percent back from already depressed 2008 numbers.
"And although vacancies showed improvement this month, they have yet to establish the trend necessary to absorb the considerable amount of excess inventory that is continuing to depress the market."
Overall, brokers are breathing a sigh of relief, as business appears to be getting somewhat back to normal. But they acknowledge the market is not out of the woods.
"The general sentiment is that we still have a long way to go, but any future declines in the market will be slower and less of a free fall," said Kristin Hitsous, an associate attorney at real estate law firm Rosabianca & Associates.
Tuesday, October 13, 2009
4 Ideas for Selling Real Estate in a Slow Market
Author: Joshua Dorkin
http://www.biggerpockets.com/ August 25th, 2006
The CBS Early Show interviewed Wall Street Journal reporter June Fletcher, who covered four helpful ideas for selling your home.
1. SET YOUR PRICE REALISTICALLY
“Look at what other similar houses in the neighborhood are selling for and then set your price at 10 percent under the market. . . This is a counterintuitive move,” she admits, but, “by setting your price 10 percent under the market, your home will get more attention. You’ll get more people looking at your home and you’ll create a sense of urgency to get people to act to buy. This urgency, and a greater number of people looking at your home, drive up the price by creating a bidding war for it.”
2. MAKE MEMORY POINTS
“What is a “memory point”? Fletcher calls it “that special detail that is memorable and sets your house apart from the others. It makes your house memorable. Everyone has granite counters these days. So, you might want to install a concrete one for a fraction of the price. And, it will be distinctive. ”
3. USE UNUSUAL ADVERTISING MARKETS
“Think of publications that don’t usually have real estate ads, such as alumni magazines, hobby magazines, train magazines, places you wouldn’t usually think about, but where your ad will really stand out.”
4. ADVERTISE ABROAD
“No matter what happens in our economy, our homes are still a bargain to people in other parts of the world like Germany and Japan. Learn to think globally.”
If your thinking of buying or selling your home feel free to call me.
Michael Scearce
336-209-0049
http://www.biggerpockets.com/ August 25th, 2006
The CBS Early Show interviewed Wall Street Journal reporter June Fletcher, who covered four helpful ideas for selling your home.
1. SET YOUR PRICE REALISTICALLY
“Look at what other similar houses in the neighborhood are selling for and then set your price at 10 percent under the market. . . This is a counterintuitive move,” she admits, but, “by setting your price 10 percent under the market, your home will get more attention. You’ll get more people looking at your home and you’ll create a sense of urgency to get people to act to buy. This urgency, and a greater number of people looking at your home, drive up the price by creating a bidding war for it.”
2. MAKE MEMORY POINTS
“What is a “memory point”? Fletcher calls it “that special detail that is memorable and sets your house apart from the others. It makes your house memorable. Everyone has granite counters these days. So, you might want to install a concrete one for a fraction of the price. And, it will be distinctive. ”
3. USE UNUSUAL ADVERTISING MARKETS
“Think of publications that don’t usually have real estate ads, such as alumni magazines, hobby magazines, train magazines, places you wouldn’t usually think about, but where your ad will really stand out.”
4. ADVERTISE ABROAD
“No matter what happens in our economy, our homes are still a bargain to people in other parts of the world like Germany and Japan. Learn to think globally.”
If your thinking of buying or selling your home feel free to call me.
Michael Scearce
336-209-0049
Thursday, October 8, 2009
FREE TICKETS
I've got 2 tickets to the Rockingham American 200 this Sunday. Anybody want them? They're free! Call me 336-209-0049
Monday, October 5, 2009
Insulating your Wallet with Home Insulation!
Insulating Your Wallet With Home Insulation
by Phoebe Chongchua
Heating and cooling for an average home account for 50 percent to 70 percent of a homeowner's energy usage. If your home isn't adequately insulated that can mean added costs that deplete your wallet each month.
The Energy Efficient Codes Coalition (EECC) strives to achieve an initial 30 percent boost in the energy efficiency of the 2009 International Energy Conservation Code (IECC) over its 2006 counterpart. The EECC writes on its Web site, "Because homes and other buildings are the largest sectors for US energy and electricity consumption, using 40 percent of US energy and 71 percent of its electricity, respectively and, at 37 percent, the largest single source of American's greenhouse gas emissions, they represent the nation's last great frontier of wasted energy.
The move toward building more energy-efficient homes is increasing. According to the 2006 McGraw-Hill Construction Residential Green Building SmartMarket Report, by 2010 green homes will make up 10 percent of new home construction; that's up from just 2 percent in 2005.
Actor Brad Pitt has given his time and energy to bring awareness to the energy-efficiency movement by taking ownership of efforts that build green homes through his foundation. In the aftermath of Katrina the community of homes being built under the "Make It Right New Orleans" housing charity is considered "the largest and greenest community of single-family homes in the world", according to U.S. Green Building Council President, CEO & Founding Chair, Rick Fedrizzi. Four years after the devastating hurricane struck, green houses are rising from the wreckage. So far there are only about 15 homes completed in the Lower 9th Ward, but Pitt says that there will be 150 by the end of 2010. He claims that the families living in these homes are paying significantly reduced electrical and utility bills.
But energy-efficient homes still remain the exception. There are approximately 45 million homes in the U.S. that lack the proper levels of Insulation.
That causes not only higher household utility expenses but also more health hazards. According to the Harvard University School of Public Health, thermal insulation not only helps with energy efficiency but also contributes dramatically to public health. Studies show that increasing insulation reduces energy usage and emissions which result in fewer deaths and instances of respiratory and cardiovascular ailments that are often associated with air pollution.
Experts say that homes under 10-years old could be lacking the proper amount of insulation. Taking steps to adequately insulate your home can help your current financial picture (federal tax credits and incentives may apply). Increased insulation can also be considered a very valuable benefit when it comes time to sell. If you've already upgraded your insulation and are listing your home on the market, it's a good idea to make that known in marketing materials. Insulation is a hidden advantage. It's not as easy as showing off a newly remodeled kitchen, however, it can be a big influencer for buyers—especially if you educate them about the upgrades that you've made and how that transfers to savings for them once they're living in the home.
Published: October 2, 2009
Thinking of making a change? Call me for a free market analysis on your home or a list of great homes available in the area.
Michael Scearce GRI, AHWD, CDPE
336-209-0049
www.MichaelScearce.com
Michael@MichaelScearce.com
www.RENTrrc.com
by Phoebe Chongchua
Heating and cooling for an average home account for 50 percent to 70 percent of a homeowner's energy usage. If your home isn't adequately insulated that can mean added costs that deplete your wallet each month.
The Energy Efficient Codes Coalition (EECC) strives to achieve an initial 30 percent boost in the energy efficiency of the 2009 International Energy Conservation Code (IECC) over its 2006 counterpart. The EECC writes on its Web site, "Because homes and other buildings are the largest sectors for US energy and electricity consumption, using 40 percent of US energy and 71 percent of its electricity, respectively and, at 37 percent, the largest single source of American's greenhouse gas emissions, they represent the nation's last great frontier of wasted energy.
The move toward building more energy-efficient homes is increasing. According to the 2006 McGraw-Hill Construction Residential Green Building SmartMarket Report, by 2010 green homes will make up 10 percent of new home construction; that's up from just 2 percent in 2005.
Actor Brad Pitt has given his time and energy to bring awareness to the energy-efficiency movement by taking ownership of efforts that build green homes through his foundation. In the aftermath of Katrina the community of homes being built under the "Make It Right New Orleans" housing charity is considered "the largest and greenest community of single-family homes in the world", according to U.S. Green Building Council President, CEO & Founding Chair, Rick Fedrizzi. Four years after the devastating hurricane struck, green houses are rising from the wreckage. So far there are only about 15 homes completed in the Lower 9th Ward, but Pitt says that there will be 150 by the end of 2010. He claims that the families living in these homes are paying significantly reduced electrical and utility bills.
But energy-efficient homes still remain the exception. There are approximately 45 million homes in the U.S. that lack the proper levels of Insulation.
That causes not only higher household utility expenses but also more health hazards. According to the Harvard University School of Public Health, thermal insulation not only helps with energy efficiency but also contributes dramatically to public health. Studies show that increasing insulation reduces energy usage and emissions which result in fewer deaths and instances of respiratory and cardiovascular ailments that are often associated with air pollution.
Experts say that homes under 10-years old could be lacking the proper amount of insulation. Taking steps to adequately insulate your home can help your current financial picture (federal tax credits and incentives may apply). Increased insulation can also be considered a very valuable benefit when it comes time to sell. If you've already upgraded your insulation and are listing your home on the market, it's a good idea to make that known in marketing materials. Insulation is a hidden advantage. It's not as easy as showing off a newly remodeled kitchen, however, it can be a big influencer for buyers—especially if you educate them about the upgrades that you've made and how that transfers to savings for them once they're living in the home.
Published: October 2, 2009
Thinking of making a change? Call me for a free market analysis on your home or a list of great homes available in the area.
Michael Scearce GRI, AHWD, CDPE
336-209-0049
www.MichaelScearce.com
Michael@MichaelScearce.com
www.RENTrrc.com
Monday, September 28, 2009
Are you or someone you know thinking of
buying a home and would be a first time home buyer?
Well, this is your last chance to get up to $8,000.00 free money just for buying a home before November 30th. Come see how to take advantage of this great deal.
First time home buyer seminars:
When: September 29th at 6:30pm or October 1st at 6:30pm
****Dinner provided****
Where: 2731 Horse Pen Creek Rd.
Greensboro, NC 27410
Please call me to reserve your spot.
Seating is limited. Bring this card for other special offers.
Michael Scearce
336-209-0049
Michael@MichaelScearce.com
buying a home and would be a first time home buyer?
Well, this is your last chance to get up to $8,000.00 free money just for buying a home before November 30th. Come see how to take advantage of this great deal.
First time home buyer seminars:
When: September 29th at 6:30pm or October 1st at 6:30pm
****Dinner provided****
Where: 2731 Horse Pen Creek Rd.
Greensboro, NC 27410
Please call me to reserve your spot.
Seating is limited. Bring this card for other special offers.
Michael Scearce
336-209-0049
Michael@MichaelScearce.com
Monday, September 21, 2009
Household's Net Worth Rises for the First Time in Two Years!
Households’ Net Worth Rises for First Time in Two Years
By Rex Nutting
RISMEDIA, September 21, 2009—(MCT)—American households were $2 trillion richer on June 30, 2009 than they were three months earlier, the first time in two years that household net worth has increased, the Federal Reserve recently reported.
Household wealth rose in the second quarter at a 17% annual rate, or $2 trillion, to $53.1 trillion after falling at a 13% rate in the first quarter, the Fed said. It was the first time since the second quarter of 2007 that wealth had increased. Net worth is down $12.2 trillion from the peak in 2007, an indication of how much the collapse in stock prices and home prices have hurt. The figures are not adjusted for inflation.
Net worth is defined as assets minus liabilities. Assets rose by $2 trillion to $67.2 trillion. Liabilities fell by $34 billion to $14.1 trillion. The rally on Wall Street was the main reason for the increase in household wealth, but rising home prices contributed as well. Wealth in corporate equities rose by $1.04 trillion, while real estate wealth rose by $139 billion. Assets held in mutual funds, life insurance and pension funds rose by $1.06 trillion. Households had lost real-estate wealth for nine consecutive quarters before the second quarter’s gain.
Consumers continued to pay down debts or have their debts written off at a record pace. In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter. Household debt has fallen four quarters in a row and is down 5% from the peak. Before this recession, household debt had never declined in any quarter dating back to 1952.
Stimulus payments boosted disposable incomes by 5.2% annualized to $10.9 trillion annually. It was the first increase since the stimulus payments in the second quarter of 2008. Over the past four quarters, disposable incomes fell 0.6%, the first year-over-year decline on record dating back to 1952.
Household debt dropped to 126% of disposable income from 128% in the first quarter and a record 131% in the first quarter of 2008. In 2000, it was 91%.
Household mortgage debt fell 1.4% annualized to $10.4 trillion, the fifth consecutive decline in mortgage debt. Consumer credit fell at a 6.1% annual rate to $2.5 trillion. It was the largest percentage decline in consumer debt since 1980. In a separate report, the Fed has said consumer credit declined even faster in July, dropping at a 10.4%.
Total debt in the economy grew at a 4.9% annual rate, boosted by massive debts taken on by the federal, state and local governments. Federal government debt rose at a 28.2% annual rate, the fourth straight increase of more than 20%. In the past year, federal debt rose by $1.9 trillion to $7.2 trillion. State and local borrowing rose at an 8.3% annual rate in the quarter to $2.3 trillion. Nonfinancial business debt fell at a 1.8% annual rate, despite a 1% increase in corporate debt. The net worth of nonfarm nonfinancial companies fell at a 175 annual rate, the seventh consecutive decline.
Debt of domestic financial firms fell at a 12.2% annual rate to $16.5 trillion, the largest percentage decline since 1961.
(c) 2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
RISMedia welcomes your questions and comments.
Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Read more: http://rismedia.com/2009-09-20/households-net-worth-rises-for-first-time-in-two-years/#ixzz0RlCXpKSy
By Rex Nutting
RISMEDIA, September 21, 2009—(MCT)—American households were $2 trillion richer on June 30, 2009 than they were three months earlier, the first time in two years that household net worth has increased, the Federal Reserve recently reported.
Household wealth rose in the second quarter at a 17% annual rate, or $2 trillion, to $53.1 trillion after falling at a 13% rate in the first quarter, the Fed said. It was the first time since the second quarter of 2007 that wealth had increased. Net worth is down $12.2 trillion from the peak in 2007, an indication of how much the collapse in stock prices and home prices have hurt. The figures are not adjusted for inflation.
Net worth is defined as assets minus liabilities. Assets rose by $2 trillion to $67.2 trillion. Liabilities fell by $34 billion to $14.1 trillion. The rally on Wall Street was the main reason for the increase in household wealth, but rising home prices contributed as well. Wealth in corporate equities rose by $1.04 trillion, while real estate wealth rose by $139 billion. Assets held in mutual funds, life insurance and pension funds rose by $1.06 trillion. Households had lost real-estate wealth for nine consecutive quarters before the second quarter’s gain.
Consumers continued to pay down debts or have their debts written off at a record pace. In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter. Household debt has fallen four quarters in a row and is down 5% from the peak. Before this recession, household debt had never declined in any quarter dating back to 1952.
Stimulus payments boosted disposable incomes by 5.2% annualized to $10.9 trillion annually. It was the first increase since the stimulus payments in the second quarter of 2008. Over the past four quarters, disposable incomes fell 0.6%, the first year-over-year decline on record dating back to 1952.
Household debt dropped to 126% of disposable income from 128% in the first quarter and a record 131% in the first quarter of 2008. In 2000, it was 91%.
Household mortgage debt fell 1.4% annualized to $10.4 trillion, the fifth consecutive decline in mortgage debt. Consumer credit fell at a 6.1% annual rate to $2.5 trillion. It was the largest percentage decline in consumer debt since 1980. In a separate report, the Fed has said consumer credit declined even faster in July, dropping at a 10.4%.
Total debt in the economy grew at a 4.9% annual rate, boosted by massive debts taken on by the federal, state and local governments. Federal government debt rose at a 28.2% annual rate, the fourth straight increase of more than 20%. In the past year, federal debt rose by $1.9 trillion to $7.2 trillion. State and local borrowing rose at an 8.3% annual rate in the quarter to $2.3 trillion. Nonfinancial business debt fell at a 1.8% annual rate, despite a 1% increase in corporate debt. The net worth of nonfarm nonfinancial companies fell at a 175 annual rate, the seventh consecutive decline.
Debt of domestic financial firms fell at a 12.2% annual rate to $16.5 trillion, the largest percentage decline since 1961.
(c) 2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
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Monday, September 14, 2009
Would you like $8,000.00? This is your last chance!
$8,000 Home Buyer Tax Credit at a Glance
The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
For more information about this credit check out the web site at http://www.federalhousingtaxcredit.com/
Are you or someone you know thinking of buying a home and would be a first time home buyer?
Well, this is your last chance to get up to $8,000.00 free money just for buying a home before November 30th. Come see how to take advantage of this great deal.
First time home buyer seminars:
When: September 29th at 6:30pm or October 1st at 6:30pm
****Dinner provided****
Where: 2731 Horse Pen Creek Rd. Greensboro, NC 27410
Please call me to reserve your spot.
Seating is limited. Print and bring this posting for other special offers.
Michael Scearce GRI, AHWD, CDPE
REMAX Realty Consultants
336-209-0049
The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
For more information about this credit check out the web site at http://www.federalhousingtaxcredit.com/
Are you or someone you know thinking of buying a home and would be a first time home buyer?
Well, this is your last chance to get up to $8,000.00 free money just for buying a home before November 30th. Come see how to take advantage of this great deal.
First time home buyer seminars:
When: September 29th at 6:30pm or October 1st at 6:30pm
****Dinner provided****
Where: 2731 Horse Pen Creek Rd. Greensboro, NC 27410
Please call me to reserve your spot.
Seating is limited. Print and bring this posting for other special offers.
Michael Scearce GRI, AHWD, CDPE
REMAX Realty Consultants
336-209-0049
Monday, September 7, 2009
No More Lonely Homes!
No More Lonely Home: Details About House-Sitting Strategy
by Phoebe Chongchua
Vacant homes often don’t appeal to buyers. So, these days, some real estate companies are suggesting house-sitters to help keep the home maintained and give it a lived-in feel.
The house-sitting strategy is being used with foreclosed homes and involves allowing people to live in the property for little rent (some as low as $400 per month) in exchange for house-sitting the residence. Typically, the house-sitters or caretakers are responsible for keeping up the home, paying for utilities, and any homeowners’ association fees. They aren’t usually offered a lease term and they’re required to move out with as little as five days’ notice if the home sells. “It’s not for everyone and nothing in life is free,” said home caretaker, Rose Duran in the ABC report. She is able to live in a 2,000 square foot house at least until it sells. Duran calls it a win-win situation for people seeking less expensive rent and for owners of vacant properties.
ABC News reports that the concept was introduced in this economy because foreclosed homes are at risk of vandalism. “Obviously, when there is nobody living in them, the whole neighborhood could lose value,” said Christine Lohkamp of Homes in Transition, a company based in Albuquerque, New Mexico. Some details about the house-sitting strategy. You might be wondering how much of a difference can having a house-sitter make.
Homes in Transition says that homes can sell for 20 percent more and 30 percent faster. The service costs nothing for the homeowner and is actually designed to alleviate many of the costs that are associated with maintaining a vacant property because they are paid for by the resident property house-sitter.
However, with Homes in Transition you, the homeowner of a vacant property, won’t collect a fee. The company writes on its website, “Homes in Transition collects a small fee from our Caretakers each month which allows us to ensure the care, maintenance and showability for your home during the term of our Caretaker’s occupancy and its eventual return to you ready for closing.” The company also advises doing any necessary repairs before the house-sitter moves in so that the home is in the condition that you would like to have it maintained. House-sitters are not allowed to bring pets or smoke in the home.
What are house-sitters responsible for? Exact details vary depending on the agreements between the homeowner and house-sitter or company that’s helping fill the residence, but generally you can expect house-sitters to perform a variety of household tasks. Basically the tasks are things that most homeowners either do or hire someone to do for them, such as, cleaning furnace filters, fixing dripping faucets or toilets, changing light bulbs, removing their own accumulated trash, as well as helping to care for the yard.
Some companies such as Homes in Transition offer the house-sitter the option of paying into a monthly maintenance service program so that when household problems occur, the general contractor associated with the company can fix them. The service program follows the house-sitter. So, when relocation occurs the services are then transferred to the next property the house-sitter moves into.
The interim house-sitter strategy is promoted as a way to alleviate the concerns that often accompany having a home sit vacant for long periods of time.
For more details visit: homesintransition.com.
Published: March 27, 2009
by Phoebe Chongchua
Vacant homes often don’t appeal to buyers. So, these days, some real estate companies are suggesting house-sitters to help keep the home maintained and give it a lived-in feel.
The house-sitting strategy is being used with foreclosed homes and involves allowing people to live in the property for little rent (some as low as $400 per month) in exchange for house-sitting the residence. Typically, the house-sitters or caretakers are responsible for keeping up the home, paying for utilities, and any homeowners’ association fees. They aren’t usually offered a lease term and they’re required to move out with as little as five days’ notice if the home sells. “It’s not for everyone and nothing in life is free,” said home caretaker, Rose Duran in the ABC report. She is able to live in a 2,000 square foot house at least until it sells. Duran calls it a win-win situation for people seeking less expensive rent and for owners of vacant properties.
ABC News reports that the concept was introduced in this economy because foreclosed homes are at risk of vandalism. “Obviously, when there is nobody living in them, the whole neighborhood could lose value,” said Christine Lohkamp of Homes in Transition, a company based in Albuquerque, New Mexico. Some details about the house-sitting strategy. You might be wondering how much of a difference can having a house-sitter make.
Homes in Transition says that homes can sell for 20 percent more and 30 percent faster. The service costs nothing for the homeowner and is actually designed to alleviate many of the costs that are associated with maintaining a vacant property because they are paid for by the resident property house-sitter.
However, with Homes in Transition you, the homeowner of a vacant property, won’t collect a fee. The company writes on its website, “Homes in Transition collects a small fee from our Caretakers each month which allows us to ensure the care, maintenance and showability for your home during the term of our Caretaker’s occupancy and its eventual return to you ready for closing.” The company also advises doing any necessary repairs before the house-sitter moves in so that the home is in the condition that you would like to have it maintained. House-sitters are not allowed to bring pets or smoke in the home.
What are house-sitters responsible for? Exact details vary depending on the agreements between the homeowner and house-sitter or company that’s helping fill the residence, but generally you can expect house-sitters to perform a variety of household tasks. Basically the tasks are things that most homeowners either do or hire someone to do for them, such as, cleaning furnace filters, fixing dripping faucets or toilets, changing light bulbs, removing their own accumulated trash, as well as helping to care for the yard.
Some companies such as Homes in Transition offer the house-sitter the option of paying into a monthly maintenance service program so that when household problems occur, the general contractor associated with the company can fix them. The service program follows the house-sitter. So, when relocation occurs the services are then transferred to the next property the house-sitter moves into.
The interim house-sitter strategy is promoted as a way to alleviate the concerns that often accompany having a home sit vacant for long periods of time.
For more details visit: homesintransition.com.
Published: March 27, 2009
Tuesday, September 1, 2009
Strong Gain in Existing-Home Sales Maintains Uptrend
Strong Gain in Existing-Home Sales Maintains Uptrend
by Realty Times Staff
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors® (NAR).
Existing-home sales – including single-family, town homes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. "The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
"Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," Yun said.
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. "In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move," he said.
"Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September," McMillan said. "Otherwise, they may miss the November 30 closing deadline."
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes. Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.
Courtesy of:
Richard Watkins
email: richard.watkins@ncmc.com
website: www.ncmc.com/richardwatkins
phone: 336-274-1196 ext 234
by Realty Times Staff
For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors® (NAR).
Existing-home sales – including single-family, town homes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. "The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," he said.
The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999.
"Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," Yun said.
An NAR practitioner survey showed first-time buyers purchased 30 percent of homes in July, and that distressed homes accounted for 31 percent of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. "In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move," he said.
"Realtors are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September," McMillan said. "Otherwise, they may miss the November 30 closing deadline."
Total housing inventory at the end of July rose 7.3 percent to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6 percent lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes. Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Existing condominium and co-op sales jumped 12.5 percent to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9 percent above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9 percent from July 2008.
Courtesy of:
Richard Watkins
email: richard.watkins@ncmc.com
website: www.ncmc.com/richardwatkins
phone: 336-274-1196 ext 234
Tuesday, August 25, 2009
Social Networking!
Social Networking
by Marylyn B. Schwartz
I am relatively new to using social networking as a means of communicating with friends, associates, clients and others. The journey to reach my skill level, moderately adept, has been both interesting and frustrating -- more the latter than the former.
Let's face it, we middle aged folks (I am giving myself significant leeway here as I don't know many 115 year old people) are generally a stubborn lot who find it tough to completely change the way we are used to things being done. Remember, we are the ones who walked 10 miles to school without shoes. Okay, I rode the bus, but it was a public bus replete with winos and peeping Toms.
Think of it. First, there was the computer. Talk about a learning curve. My curve looked like the flight path of Haley's comet. What would the nuns from my Catholic school education days say about the decline of the handwritten letter? Mercifully, most of those nuns have passed on now. I shudder to think how the loss of the mastery of cursive would have broken their blessed hearts.
So, kicking and screaming we get the computer thing down pretty well: term papers, letters, office stuff, etc. and then bam, we're hit with e-mail communication.
Those were tough times. I longed to hear the words, "Give me your address so I can drop you a note." Instead, the cry throughout the land was, "What's your e-mail address?" The minute you said, I don't have one, you were branded as a Paleozoic idiot. Move over Lucy, we have the new missing link right here.
E-mail was repugnant, lacking all warmth, tone and innuendo. It threatened to render the youth of the nation incapable of empathetic communication. We were warmed not to type in all caps. When you type in all caps, YOU ARE YELLING AT YOUR AUDIENCE. Sorry gang. Oh, and heaven help us when emoticons were born. Apparently e-mail cannot simultaneously exist with language that expresses the most common of human sentiments. Without symbols to denote joy, fear, anger, amusement, disgust, etc. we were emotionally illiterate. Yikes, that is to say: :(
However, the human spirit, especially in the older and wiser among us, is indomitable. We overcame our distaste for the lowly e-mail and are now e-mailing with the best of them… or are we? What seems to be happening is that we are suddenly e-mailing less and Facebook-ing, MySpace-ing, Linkedin-ing … more than e-mailing. Oh, I still get e-mails, but I get more private "my-wall-to- your-wall" notes than e-mails. (If you don't know what that means, you are not social networking -- yet) What would happen to all of those private communications if I suddenly stopped checking my sites? Would I be friendless in no time flat? Would the world slip by while I sat ideally watching the birds in my yard? Within weeks would people say, Marylyn who? And, if that were the case, would that be so bad??? There in lies the real question. Can we stand by, arms crossed, chins raised in haughty defiance, shouting, We're not going to take it anymore! Right, try it and that's when the family has the private meeting and the words long-term care are bantered about.
Truth be told, we don't want to be left out totally while the youth of the world continue to hunker down in their rooms creating their avatars, blogging to each other, texting till their little fingers all develop arthritis, exercise using their Wiis and creating ever more diabolical ways to advance technological communication.
Like it or not, our options are limited. The world is going forward with or without us. You're in or you're out. I say, sign up, log in, blog a lot, blog a little and enjoy the ride. Oh, by the way, there are blogs for martini drinkers and wine lovers. Thank goodness, it is not all work!
Published: August 24, 2009
by Marylyn B. Schwartz
I am relatively new to using social networking as a means of communicating with friends, associates, clients and others. The journey to reach my skill level, moderately adept, has been both interesting and frustrating -- more the latter than the former.
Let's face it, we middle aged folks (I am giving myself significant leeway here as I don't know many 115 year old people) are generally a stubborn lot who find it tough to completely change the way we are used to things being done. Remember, we are the ones who walked 10 miles to school without shoes. Okay, I rode the bus, but it was a public bus replete with winos and peeping Toms.
Think of it. First, there was the computer. Talk about a learning curve. My curve looked like the flight path of Haley's comet. What would the nuns from my Catholic school education days say about the decline of the handwritten letter? Mercifully, most of those nuns have passed on now. I shudder to think how the loss of the mastery of cursive would have broken their blessed hearts.
So, kicking and screaming we get the computer thing down pretty well: term papers, letters, office stuff, etc. and then bam, we're hit with e-mail communication.
Those were tough times. I longed to hear the words, "Give me your address so I can drop you a note." Instead, the cry throughout the land was, "What's your e-mail address?" The minute you said, I don't have one, you were branded as a Paleozoic idiot. Move over Lucy, we have the new missing link right here.
E-mail was repugnant, lacking all warmth, tone and innuendo. It threatened to render the youth of the nation incapable of empathetic communication. We were warmed not to type in all caps. When you type in all caps, YOU ARE YELLING AT YOUR AUDIENCE. Sorry gang. Oh, and heaven help us when emoticons were born. Apparently e-mail cannot simultaneously exist with language that expresses the most common of human sentiments. Without symbols to denote joy, fear, anger, amusement, disgust, etc. we were emotionally illiterate. Yikes, that is to say: :(
However, the human spirit, especially in the older and wiser among us, is indomitable. We overcame our distaste for the lowly e-mail and are now e-mailing with the best of them… or are we? What seems to be happening is that we are suddenly e-mailing less and Facebook-ing, MySpace-ing, Linkedin-ing … more than e-mailing. Oh, I still get e-mails, but I get more private "my-wall-to- your-wall" notes than e-mails. (If you don't know what that means, you are not social networking -- yet) What would happen to all of those private communications if I suddenly stopped checking my sites? Would I be friendless in no time flat? Would the world slip by while I sat ideally watching the birds in my yard? Within weeks would people say, Marylyn who? And, if that were the case, would that be so bad??? There in lies the real question. Can we stand by, arms crossed, chins raised in haughty defiance, shouting, We're not going to take it anymore! Right, try it and that's when the family has the private meeting and the words long-term care are bantered about.
Truth be told, we don't want to be left out totally while the youth of the world continue to hunker down in their rooms creating their avatars, blogging to each other, texting till their little fingers all develop arthritis, exercise using their Wiis and creating ever more diabolical ways to advance technological communication.
Like it or not, our options are limited. The world is going forward with or without us. You're in or you're out. I say, sign up, log in, blog a lot, blog a little and enjoy the ride. Oh, by the way, there are blogs for martini drinkers and wine lovers. Thank goodness, it is not all work!
Published: August 24, 2009
10 Steps to Sell Tour Home in a Slow Market.
10 Steps to Sell Your Home Faster In A Slow Market
You probably already know that real estate across most of the country is not appreciating as fast as it was at one time. This isn't necessarily a bad thing, unless of course you purchased last year and are now selling. People who have owned a property for several years are still generally well ahead in the game. We can't predict what 2009 will bring, but so far, most markets have slowed, if not declined. For the majority of established home owners in the prevailing market, prior property appreciation will ensure at least some degree of profit, though today's sales might not be as prosperous as they would have been in 2006. But all homeowners want to get the highest possible profits. How do you go about this? There are 10 negotiating steps that a seller can follow to assure that a person's home gets the best price and is sold quickly.
Step 1: Use a broker from the local area. When the market is down, so is the number of buyers. That means that you need to expose your property to as many potential buyers as possible. Who do prospective buyers get in touch with when they are house hunting? Real estate brokers. National Association of Realtors statistics show that 85% of purchasers count on real estate brokers for their home selections, while the Internet accounts for 80%. Who creates all of those online real estate postings? Real estate brokers from the local area.
Step 2: Familiarize yourself with the entire sale agreement. Nearly all jurisdictions have standardized real estate contract which have become lengthy and complex over many years. If you use one of those, read it carefully and be aware that you are agreeing to every unmodified term and condition. Make sure there is nothing in the agreement that needs to be taken out, rewritten or added. The brokers should offer a copy of the sale agreement that they might use at listing presentations and the sale deed should be read to avoid misunderstandings. As these are agreements on forms, whatever is not stated as a requirement by the law can be changed by a cross-out or addendum. Consult your attorney or broker for further detailed information.
Step 3: Be completely familiar with the current real estate market. For the sake of negotiations, knowing what the recorded sale prices were isn't sufficient because often they don't give the complete picture. As an example, two houses might have both sold for $300,000. A person might have sold for $350,000 while the other for $300,000 but the owner gave the buyer a 6 percent seller credit for a new roof and appliances, which is $18,000. Local brokers who are familiar with the details of recent sales are able to provide the best negotiation advice.
Step 4: Understand all of the terms you are willing to offer. You are confident that your home is going to sell at some satisfactory price, but instead of starting out with an inflexible amount, consider the property sale as a combination of price and terms. For example, it might make more sense in a slow market to help reduce the buyer's closing costs by offering a "seller contribution "instead of lowering the price of the property. Often the seller contribution could be significantly less than a reduction in price, and buyers who require cash to close the sale could find it more attractive as well.
Step 5: Request a smaller deposit. In order to bind a legal contract, the buyer needs to make a deposit. In an ideal marketplace, a seller will receive a large deposit, but in a down or "off" market, a much smaller deposit may have to be accepted. The buyers prefer to make the lowest possible deposit because a huge deposit indicates a big financial and psychological commitment. You can ask for a lower deposit if the buyer has a mortgage pre-approval or if the buyer shows a strong interest in the property and you have no other offers.
Step 6: Sweeten the pot. Are you really planning to take large items like a swing set or washing machine? In certain cases it may be better to leave such items if a buyer makes an offer.
Step 7: MLS photos have to be updated. If your MLS photo shows snow around your home in the middle of the summer, potential buyers will know your house has been on the market a while. They may interpret this as meaning that you might be desperate to sell and will expect to lower your initial offer. Make sure your broker posts recent photographs.
Step 8: Fully understand the marketing plan. The broker's marketing plan should be reviewed quite often to see that it is being followed and is changed whenever it is needed.
Step 9: Check out open houses. Going to open houses, also known as your competition is a great idea. It isn't always easy to be objective. However, do other owners have selling ideas that might work in regards to your home? Is there something you can use to bargain with? You could consider offering to do some painting or other cosmetic repairs.
Step 10: Keep everything in context. Don't worry about nickels and dimes when your main goal is to get the house sold.As an example, just before closing the deal, we had a buyer request an extra $600 to resolve last minute concerns. That gesture seemed like nothing more than a case of buyer's remorse, so we agreed to it, received an otherwise ideal price, and closed the sale. It wasn't long before the prices softened in the local market. It was better to lose $600 than to find another buyer later when the market was harsher and the final sale price might have been less by several thousands of dollars. Would we have preferred to save that $600? Certainly. However, six hundred dollars was a small price to pay considering that the delays could have meant a big reduction in price.
You probably already know that real estate across most of the country is not appreciating as fast as it was at one time. This isn't necessarily a bad thing, unless of course you purchased last year and are now selling. People who have owned a property for several years are still generally well ahead in the game. We can't predict what 2009 will bring, but so far, most markets have slowed, if not declined. For the majority of established home owners in the prevailing market, prior property appreciation will ensure at least some degree of profit, though today's sales might not be as prosperous as they would have been in 2006. But all homeowners want to get the highest possible profits. How do you go about this? There are 10 negotiating steps that a seller can follow to assure that a person's home gets the best price and is sold quickly.
Step 1: Use a broker from the local area. When the market is down, so is the number of buyers. That means that you need to expose your property to as many potential buyers as possible. Who do prospective buyers get in touch with when they are house hunting? Real estate brokers. National Association of Realtors statistics show that 85% of purchasers count on real estate brokers for their home selections, while the Internet accounts for 80%. Who creates all of those online real estate postings? Real estate brokers from the local area.
Step 2: Familiarize yourself with the entire sale agreement. Nearly all jurisdictions have standardized real estate contract which have become lengthy and complex over many years. If you use one of those, read it carefully and be aware that you are agreeing to every unmodified term and condition. Make sure there is nothing in the agreement that needs to be taken out, rewritten or added. The brokers should offer a copy of the sale agreement that they might use at listing presentations and the sale deed should be read to avoid misunderstandings. As these are agreements on forms, whatever is not stated as a requirement by the law can be changed by a cross-out or addendum. Consult your attorney or broker for further detailed information.
Step 3: Be completely familiar with the current real estate market. For the sake of negotiations, knowing what the recorded sale prices were isn't sufficient because often they don't give the complete picture. As an example, two houses might have both sold for $300,000. A person might have sold for $350,000 while the other for $300,000 but the owner gave the buyer a 6 percent seller credit for a new roof and appliances, which is $18,000. Local brokers who are familiar with the details of recent sales are able to provide the best negotiation advice.
Step 4: Understand all of the terms you are willing to offer. You are confident that your home is going to sell at some satisfactory price, but instead of starting out with an inflexible amount, consider the property sale as a combination of price and terms. For example, it might make more sense in a slow market to help reduce the buyer's closing costs by offering a "seller contribution "instead of lowering the price of the property. Often the seller contribution could be significantly less than a reduction in price, and buyers who require cash to close the sale could find it more attractive as well.
Step 5: Request a smaller deposit. In order to bind a legal contract, the buyer needs to make a deposit. In an ideal marketplace, a seller will receive a large deposit, but in a down or "off" market, a much smaller deposit may have to be accepted. The buyers prefer to make the lowest possible deposit because a huge deposit indicates a big financial and psychological commitment. You can ask for a lower deposit if the buyer has a mortgage pre-approval or if the buyer shows a strong interest in the property and you have no other offers.
Step 6: Sweeten the pot. Are you really planning to take large items like a swing set or washing machine? In certain cases it may be better to leave such items if a buyer makes an offer.
Step 7: MLS photos have to be updated. If your MLS photo shows snow around your home in the middle of the summer, potential buyers will know your house has been on the market a while. They may interpret this as meaning that you might be desperate to sell and will expect to lower your initial offer. Make sure your broker posts recent photographs.
Step 8: Fully understand the marketing plan. The broker's marketing plan should be reviewed quite often to see that it is being followed and is changed whenever it is needed.
Step 9: Check out open houses. Going to open houses, also known as your competition is a great idea. It isn't always easy to be objective. However, do other owners have selling ideas that might work in regards to your home? Is there something you can use to bargain with? You could consider offering to do some painting or other cosmetic repairs.
Step 10: Keep everything in context. Don't worry about nickels and dimes when your main goal is to get the house sold.As an example, just before closing the deal, we had a buyer request an extra $600 to resolve last minute concerns. That gesture seemed like nothing more than a case of buyer's remorse, so we agreed to it, received an otherwise ideal price, and closed the sale. It wasn't long before the prices softened in the local market. It was better to lose $600 than to find another buyer later when the market was harsher and the final sale price might have been less by several thousands of dollars. Would we have preferred to save that $600? Certainly. However, six hundred dollars was a small price to pay considering that the delays could have meant a big reduction in price.
Tuesday, August 18, 2009
Pur-Plexing
"Pur-Plexing"
by PJ Wade
When it comes to real estate, buying more may be a better long-term plan than settling for what lenders insist your current income dictates.
If your income is not high enough to finance the purchase of the single-family house you'd prefer, consider buying a revenue-generating property to boost your buying power and enhance your long-term financial prospects.
Instead of a first-time purchase that's a shoe-box-sized condominium unit, a handyman's special or something at the end of a long commute, consider a move to an apartment where you're the landlord and the real tenants pay rent that becomes your cash flow.
When the final child moves out for the final time, rather than life-by-committee in a condominium or taking on almost as much maintenance in a scaled-down bungalow, why not look into a revenue-generating property that will boost lifestyle-spending power and free up your time through an income-tax-deductible property management service? Whether you decide on a live-in asset or buy strictly for investment, the revenue generated may eventually represent or supplement pension income.
Purchase a revenue property, and rental income can cover mortgage payments, taxes and maintenance costs to increase equity or accumulated value. When the location increases in value over time, equity gets a second boost. Income-tax deductions from this rental business may reduce overall tax liability. Whether financing for the initial purchase or refinancing down the road, loan-to-value limits up to and including 95 percent of property value are possible.
From a mortgage point of view, investment revenue can dramatically increase your qualifying income and, therefore, your real estate purchasing power. Buy a two-family property or duplex, a three-family triplex or a fourplex, and you'll have one or more streams of rental income to boost your salary when it comes to qualifying for a mortgage. The percentage added to your income varies with lender policy, but it normally falls between 50 and 80 percent of rental income.
Lender calculations limit payment of principal, interest, taxes and perhaps heating to about 28 to 30 percent of your gross household income. If you already make monthly payments for a car loan or other debts, calculations will vary. The higher your income, the larger the mortgage you qualify for. Add that to the cash you have saved, borrowed from family or netted from selling another investment, and you have your total buying power.
By law, mortgages for more than 80 percent of the appraised value of a property require mortgage loan insurance (not mortgage life insurance) to reduce lender risk and, therefore, keep interest rates competitive. Lenders also have the right to include this insurance as one of the lending terms for lesser loans if the borrower appears to present greater risk. The premium on the total loan ranges up from 1.25 percent and is normally added to the mortgage, not paid out of pocket.
The federal housing agency, Canada Mortgage and Housing Corporation (CMHC), provides mortgage loan insurance through its CMHC Income Property product line for non-owner occupied 1 to 4 unit rental properties:
Purchase and refinance with loan-to-value ratios up to 95 percent for permanent residents, newcomers and self-employed borrowers
No application fee or lender appraisal required [bullet] Flexible financing options, terms and conditions
Advantages for energy-efficient properties
Available across the country with no set loan maximum
The stronger the investment potential of the property and of the borrower's financial track record, the greater the borrowing power. Higher credit scores are an important asset for borrowers. To determine your standing, access your credit scores, and credit and personal reports at no charge, before applying for financing, so errors or omissions can be corrected:
EQUIFAX
TRANSUNION
There are many factors involved, so talk to experienced mortgage brokers, real estate professionals and successful investors (like your landlord?). Ask a lot of questions about the type of income property and the locations you are considering.
You'll discover a framework of financing factors that will guide your search for the ideal property, but only when you ask for property-specific consideration will you know exactly and precisely what can and cannot be accomplished relative to a particular offer to purchase. For instance, owner-occupied properties are considered lower risk. If tenants pay heat and utilities, owner operating expenses will be lower, so a lender may allow a slightly larger mortgage.
Buying an income property is not a snap decision. Considering this alternative can add new dimension and possibilities to your real estate future. Here lies real "out of the box" thinking for those who've never thought beyond owning a house or cottage.
Source: "Pur-Plexing Yeah Buts: Need-to-Knows When Purchasing Your First Duplex, Triplex or Fourplex"
Published: August 11, 2009
by PJ Wade
When it comes to real estate, buying more may be a better long-term plan than settling for what lenders insist your current income dictates.
If your income is not high enough to finance the purchase of the single-family house you'd prefer, consider buying a revenue-generating property to boost your buying power and enhance your long-term financial prospects.
Instead of a first-time purchase that's a shoe-box-sized condominium unit, a handyman's special or something at the end of a long commute, consider a move to an apartment where you're the landlord and the real tenants pay rent that becomes your cash flow.
When the final child moves out for the final time, rather than life-by-committee in a condominium or taking on almost as much maintenance in a scaled-down bungalow, why not look into a revenue-generating property that will boost lifestyle-spending power and free up your time through an income-tax-deductible property management service? Whether you decide on a live-in asset or buy strictly for investment, the revenue generated may eventually represent or supplement pension income.
Purchase a revenue property, and rental income can cover mortgage payments, taxes and maintenance costs to increase equity or accumulated value. When the location increases in value over time, equity gets a second boost. Income-tax deductions from this rental business may reduce overall tax liability. Whether financing for the initial purchase or refinancing down the road, loan-to-value limits up to and including 95 percent of property value are possible.
From a mortgage point of view, investment revenue can dramatically increase your qualifying income and, therefore, your real estate purchasing power. Buy a two-family property or duplex, a three-family triplex or a fourplex, and you'll have one or more streams of rental income to boost your salary when it comes to qualifying for a mortgage. The percentage added to your income varies with lender policy, but it normally falls between 50 and 80 percent of rental income.
Lender calculations limit payment of principal, interest, taxes and perhaps heating to about 28 to 30 percent of your gross household income. If you already make monthly payments for a car loan or other debts, calculations will vary. The higher your income, the larger the mortgage you qualify for. Add that to the cash you have saved, borrowed from family or netted from selling another investment, and you have your total buying power.
By law, mortgages for more than 80 percent of the appraised value of a property require mortgage loan insurance (not mortgage life insurance) to reduce lender risk and, therefore, keep interest rates competitive. Lenders also have the right to include this insurance as one of the lending terms for lesser loans if the borrower appears to present greater risk. The premium on the total loan ranges up from 1.25 percent and is normally added to the mortgage, not paid out of pocket.
The federal housing agency, Canada Mortgage and Housing Corporation (CMHC), provides mortgage loan insurance through its CMHC Income Property product line for non-owner occupied 1 to 4 unit rental properties:
Purchase and refinance with loan-to-value ratios up to 95 percent for permanent residents, newcomers and self-employed borrowers
No application fee or lender appraisal required [bullet] Flexible financing options, terms and conditions
Advantages for energy-efficient properties
Available across the country with no set loan maximum
The stronger the investment potential of the property and of the borrower's financial track record, the greater the borrowing power. Higher credit scores are an important asset for borrowers. To determine your standing, access your credit scores, and credit and personal reports at no charge, before applying for financing, so errors or omissions can be corrected:
EQUIFAX
TRANSUNION
There are many factors involved, so talk to experienced mortgage brokers, real estate professionals and successful investors (like your landlord?). Ask a lot of questions about the type of income property and the locations you are considering.
You'll discover a framework of financing factors that will guide your search for the ideal property, but only when you ask for property-specific consideration will you know exactly and precisely what can and cannot be accomplished relative to a particular offer to purchase. For instance, owner-occupied properties are considered lower risk. If tenants pay heat and utilities, owner operating expenses will be lower, so a lender may allow a slightly larger mortgage.
Buying an income property is not a snap decision. Considering this alternative can add new dimension and possibilities to your real estate future. Here lies real "out of the box" thinking for those who've never thought beyond owning a house or cottage.
Source: "Pur-Plexing Yeah Buts: Need-to-Knows When Purchasing Your First Duplex, Triplex or Fourplex"
Published: August 11, 2009
No Recess for Housing
The Senate and House may have left Capitol Hill for their August break, but housing lobbyists are busy at work gearing up a major campaign to extend the $8,000 home buyer tax credit.
The credit for first-time purchasers is scheduled to expire November 30.
The National Association of Home Builders and the National Association of Realtors want to persuade Congress to nail down an extension of the credit, and maybe even broaden its coverage, as soon as possible.
The home builders are mounting an aggressive campaign during the congressional recess. The association is sending out local teams of members to meet with congressmen and senators in their home districts, urging not only a one year extension of the credit, but an expansion of the concept to cover all home buyers next year, not just first-timers.
Though the endorsement may, or may not, have been connected with the home builders' campaign, one of the most politically powerful Democrats has already signaled that he favors a one year extension.
Senate Majority Leader Harry Reid of Nevada, said he thinks “it's something we can get done.” According to a report in the Las Vegas Sun, Reid made the comment last week during a conference call with Nevada reporters.
Meanwhile, the influential chairman of the Senate banking committee, Connecticut Democrat Chris Dodd, has teamed up with Georgia Republican Senator Johnny Isakson to sponsor a bill that would extend the credit for another year and expand it to a $15,000 maximum.
In the House, two bills have been introduced to extend and expand the credit for either six months or 12 months. The National Association of Realtors is strongly supporting the extension efforts, and is sending its own delegations to lobby key members of the House Ways and Means committee and the Senate Finance committee.
So with all this going on, is it a sure thing that the tax credit will be available in some form for home buyers next year? Should consumers who can't quite make the November 30 deadline breathe easier?
Absolutely not. There is no sure thing on Capitol Hill whenever legislation looks like it's got a clear path to passage. That's when opponents hijack the bill or filibuster it in the Senate.
Nonetheless, extension of the credit looks like it has growing bipartisan support. Mary Trupo, legislative spokesperson for the National Association of Realtors, told Realty Times last week that “we feel Congress is receptive” to the message that the housing tax credit helps create jobs, and stimulates the economy.
But nobody should assume it's a done deal, until it is.
Published: August 17, 2009
By Kenneth R Harney
The Senate and House may have left Capitol Hill for their August break, but housing lobbyists are busy at work gearing up a major campaign to extend the $8,000 home buyer tax credit.
The credit for first-time purchasers is scheduled to expire November 30.
The National Association of Home Builders and the National Association of Realtors want to persuade Congress to nail down an extension of the credit, and maybe even broaden its coverage, as soon as possible.
The home builders are mounting an aggressive campaign during the congressional recess. The association is sending out local teams of members to meet with congressmen and senators in their home districts, urging not only a one year extension of the credit, but an expansion of the concept to cover all home buyers next year, not just first-timers.
Though the endorsement may, or may not, have been connected with the home builders' campaign, one of the most politically powerful Democrats has already signaled that he favors a one year extension.
Senate Majority Leader Harry Reid of Nevada, said he thinks “it's something we can get done.” According to a report in the Las Vegas Sun, Reid made the comment last week during a conference call with Nevada reporters.
Meanwhile, the influential chairman of the Senate banking committee, Connecticut Democrat Chris Dodd, has teamed up with Georgia Republican Senator Johnny Isakson to sponsor a bill that would extend the credit for another year and expand it to a $15,000 maximum.
In the House, two bills have been introduced to extend and expand the credit for either six months or 12 months. The National Association of Realtors is strongly supporting the extension efforts, and is sending its own delegations to lobby key members of the House Ways and Means committee and the Senate Finance committee.
So with all this going on, is it a sure thing that the tax credit will be available in some form for home buyers next year? Should consumers who can't quite make the November 30 deadline breathe easier?
Absolutely not. There is no sure thing on Capitol Hill whenever legislation looks like it's got a clear path to passage. That's when opponents hijack the bill or filibuster it in the Senate.
Nonetheless, extension of the credit looks like it has growing bipartisan support. Mary Trupo, legislative spokesperson for the National Association of Realtors, told Realty Times last week that “we feel Congress is receptive” to the message that the housing tax credit helps create jobs, and stimulates the economy.
But nobody should assume it's a done deal, until it is.
Published: August 17, 2009
By Kenneth R Harney
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