Cribbin Realty's Blog

How to Win the Mortgage Game When Relocating

2012-01-23T07:59:00.000-06:00

The single smartest move you can make is to put off house hunting until you have a firm idea of your buying power. If you are pre-approved for a loan, you can save considerable time house hunting and mortgage shopping.

A pre-approved mortgage loan is an excellent guideline to help relocating home buyers know how much home they can afford. For the seller, pre-approval is proof that the buyer’s lender feels confident a loan commitment would not be a problem if all the financial documentation were in order.
Pre-Approval Benefits:
• Streamlines house hunting.

A pre-approval identifies how much money the transferee can obtain, so precious time isn’t wasted looking at too-costly homes.
• Offers peace of mind.

You know for sure how much home you can afford, and there is little chance a lender will not make the requested commitment.
• Prevents "house poor" homeowners.

Pre-approval reduces the possibility of you becoming overextended and unable to meet payments later on.
• Boosts bargaining power.

Pre-approved buyers tend to be in an advantageous position when bidding against other buyers, as sellers like knowing your loan is guaranteed.
• Pinpoints best mortgage option.

The pre-approval process helps you identify ahead of time which type of mortgage best meets your personal needs.
Before you jump into planning your move, there are some terrific services we offer to relocating families moving into or out of our area. Let us help you take advantage of them. Send us an e-mail or give us a call.

Did You Know That Parents Can Profit From Equity-Sharing and Help Their Kids?

2012-01-04T18:11:00.002-06:00

Equity-sharing is a two-way street that lets everyone in the family reach their real estate goals:
• With parents’ cash help, a young married couple, for instance, can buy a home they couldn’t otherwise afford.
• With children sharing costs, parents enjoy both tax benefits and investment profits.
Example: In return for a 50% (figure varies) ownership interest, parents make $20,000 down payment on a $100,000 home.

The young folks live in the house and pay:
• Half the mortgage payments.
• Half the property taxes.
• All the maintenance costs.
The children can claim tax deductions for:
• Their half of the mortgage interest.
• Their half of the property taxes.
The parents do not live in the house. As investors, they can depreciate their half of the house (not counting the value of the land).

When the home is sold, the equity-sharers divide profits 50/50. Out of their share, the young folks repay the parents the $20,000 original down payment.

Such a system will work on any ownership percentage the co-owners agree on (a 25/75 split, etc.) It also is applicable in cases where co-owners are not related.

For more details on an equity-sharing purchase, your call or e-mail is welcome, We’ll be glad to share our knowledge.

Which Home Improvement Projects Offer the Best Returns?

2011-12-26T08:18:00.001-06:00

When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.

“This year’s Remodeling Cost vs. Value Report shows the value of putting your home’s best façade forward, so to speak,” said National Association of REALTORS® President Moe Veissi. “Inexpensive exterior replacement projects are not only crucial to a home’s regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal.”

HouseLogic.com, NAR’s consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.

Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.

The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project — upscale vinyl — rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.

Thursday Morning with Mike

2011-12-20T14:24:00.000-06:00

The first video in the series is on my website now http://www.cribbinrealty.com. Take a look and let me know what you think. It will be changing every Thursday.

Which Home Improvement Projects Offer the Best Returns?

2011-12-16T14:05:00.001-06:00

BofA Considers Renting REOs Back to Former Owners

2011-12-13T08:40:00.001-06:00

In facing large inventories of foreclosures, Bank of America is considering a program that would allow investors to buy a foreclosed home and then rent it back to the former home owner, HousingWire reports.

Bank of America is looking for ideas on how to handle the large inventories of foreclosures in some areas where demand hasn’t picked up.

"We are looking at programs where you can capture somebody before the REO process and offer a deed-for-lease," Ron Sturzenegger, who leads the bank's legacy asset servicing division, explained to HousingWire. "We would go to the customer and say, 'We'll do a short sale. Will you be interested in leasing your property back? We're still going to sell the property. You will no longer be the owner. But you can be a tenant now in that same property and save you from moving on.'"

The program is still in very early stages and more details need to be worked out, Sturzenegger noted.

Source: “BofA Developing Foreclosure Rental Programs to Deal With Distressed Properties,” HousingWire (Dec. 9, 2011)

A Most Unpopular Room

2011-12-09T08:29:00.002-06:00

A recent survey in a leading home & garden magazine found that the dining room is the least-used room in the modern American home. Because the dining room is typically used only for special occasions and formal gatherings, it may be wise to consider remodeling the room into an expanded kitchen or living space. Not only will this make your home more comfortable, but it also may boost your property value as well.

If you know someone who has been considering remodeling their home or perhaps moving into another home entirely, please have them call or email me. From listing their current home to finding them a property that fits their ever-changing needs, I can help make the right choices!

Sellers Overvalue Their Home’s Worth, Study Finds

2011-12-07T15:11:00.001-06:00

About 76 percent of home owners believe their home is worth more than their agent’s recommended listing price -- that’s up from 73 percent last year, according to a new survey conducted by HomeGain of real estate professionals and home owners.

On the other hand, 68 percent of home buyers say homes are overpriced, with 32 percent saying homes are overpriced by more than 10 percent.

“Home buyers and sellers continue to remain apart as to home valuations with the vast majority of home owners thinking their homes are worth more than their agents and the market are telling them,” Louis Cammarosano, general manager of HomeGain said in a statement.

Source: “Three Quarters of Owners Continue to Overvalue,” RISMedia (Dec. 6, 2011)

Secret Plan Revealed: Fannie Mae, Freddie Mac Planning On RENTING REOs?

2011-12-05T07:39:00.000-06:00

Should Fannie and Freddie LEASE their massive inventory of unsold homes vs selling them as REOs?

This approach has been tested in Florida with very mixed results. Is the government clearing the decks to become the nations largest land lord?

Consider these facts:

“The ‘inflection point’ of REO sales that suggests the beginnings of a recovery probably won’t happen until 2014 Then it’s just a matter of how quickly the market will be able to absorb all those REOs,”” Rick Sharga

■Fannie Mae and Freddie Mac still hold more than 180,000 homes
■Fannie Mae sold more than 58,000 REO in the third quarter,
■Fannie disclosed that it sold their REO Assets for roughly 56% of the former loan balance…in other words, REOs sell for almost 60% less than what was owed.
■Fannie Mae has 122,616 as REOs. Freddie Mac has 60,000 REOs.
■For reference sakes it would take Freddie 15 years to sell its currently REO inventory based on market conditions. It would take Fannie nearly four years to sell their currently REO inventory (as our REO students know, Fannie is more efficient getting their assets on the market and sold)
■There are currently 11,000,0oo underwater owners.

Renting out REO properties would be a drop in the bucket — it wouldn’t clear much of the housing inventory and wouldn’t ease rising urban rents, but it would help shore up neighborhoods where housing prices took the biggest slide, and that makes it worthwhile.

The Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac, is considering proposals for selling government-owned homes to investors, who would then turnaround and sell or rent them out. (The official request for policy ideas ishere.) It’s hoped that this move would help government agencies earn some much-needed revenue, boost neighborhood home values by getting buyers or renters into vacant homes and ease tight rental markets by expanding the supply of rental housing.

Even though Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) are national agencies, housing markets are local, which means that the vacant, foreclosed properties they own are concentrated in regions that were hit hardest by the housing crisis. Among larger metro areas, these agencies own the most foreclosed property – known as REO (real estate owned) – in Las Vegas and Atlanta, after adjusting for metro area size. Several metros in Arizona, Michigan and California are also among the top 20 metros where the government owns a lot of homes.

Generally, places that suffered most during the housing bust from severely falling home prices and high mortgage delinquency rates now have the highest concentration of these vacant, foreclosed government-owned homes. The big exception is Florida. While the Sunshine State experienced big price declines and lots of defaults, surprisingly few of the homes lost there have made it through the foreclosure process and can be put back on the market. Why is that? It’s because the foreclosure process in Florida takes a lot longer than in most other states. As a result, many of the Florida homes that the government and banks plan to put on the market someday are trapped in a slow limbo today.

Would selling these government homes to investors help neighborhoods? Yes. Vacant, foreclosed homes drag down the value of neighboring properties, so getting those homes occupied would help stabilize neighborhoods. A push to rent or sell these homes can and would help neighborhood home prices in areas where the government owns a lot of the homes – but such a policy wouldn’t do as much good for hard-hit Florida where the government has less REO to sell. The map shows where the government owns the most REO ready to sell (relative to total housing units) – and where getting those homes occupied could help local markets the most. The Southwest, inland California, northern Georgia and southeastern Michiganstand to gain the most from selling or renting out government REO.

But if you don’t live in a neighborhood with lots of homes that the government can sell or rent, then REO policies wouldn’t do you much good. Renting out these government-owned homes wouldn’t ease pressure on tightening urban rental markets. Renters typically live in bigger, denser cities, which are not where most of the government-owned homes are. In fact the typical location of a government-owned home is in a neighborhood with fewer renters, higher rental vacancies and where homes are more spread out. (FYI, this description is based on the housing characteristics of zip codes where these government REOs are located.) In short: you’d benefit if you live near government-owned vacant homes that get occupied, or if you’re looking to rent in neighborhoods where lots of overbuilding led to lots of foreclosures, but most people facing tight rental markets live far from these clusters of REO properties. Renting out government-owned homes wouldn’t give renters more options in most neighborhoods, which means that those same government-owned homes might have a tough time finding tenants.

And even if the government sold all its REO to investors and those investors were able to find buyers or renters immediately, it would make only a small dent in the overhang of empty homes from the housing boom. Of all the REO homes currently owned by Fannie Mae, Freddie Mac and FHA, fewer than 100,000 units are currently listed for sale. (In total, including those not yet being marketed for sale, these agencies own over 200,000 homes.) There are over 3 million total homes on the market, plus millions more of “shadow inventory” – homes in default or foreclosure that aren’t on the market but are likely to be in the future. Getting people in 100,000 government-owned homes still leaves a lot of housing supply that will take years for the market to absorb.

So is this policy a misstep? No. It would help some of the most struggling neighborhoods in the country by getting vacant homes occupied. It leaves lots of big problems unsolved, but no one housing policy will fix what ails every local housing market. And, remember, housing is local, so the housing market is not just the federal government’s problem: state and local governments need to act, too. Florida loses out on the benefits of REO sales because its foreclosure process takes so long. Cities with tight rental markets need to boost supply by undoing regulations that make construction expensive or impossible. Just because one policy wouldn’t fix everything is no reason not to do it, but we can’t stop there.

Pros and cons of paying mortgage during short sale

2011-12-03T07:13:00.000-06:00

Q: We just got multiple offers on my "vacation" house listed as a short sale. And so far, we have begged and borrowed to keep our mortgage current so our credit scores will be less bruised. But now that our house is in contract, do I continue to pay the mortgage? Our debt exceeds our income due to job and benefit loss.

Here's my bigger concern: Since we are current, I don't want the bank to reject the offers just because we have been current, although our financial papers will prove that our debt exceeds our income. --Cindy

A: There are a number of schools of thought and approaches to deciding whether to continue making your mortgage payments while you're selling your home on a short sale, and your ultimate decision will require you to weigh a number of factors and see where your personal calculus of your own values and interests comes out:

Legal: Legally speaking, you have an obligation to pay your mortgage and property taxes as long as you own your home. While you might very well make the decision not to for a number of reasons (see below), it's important to keep the legal contract you made to pay especially your mortgage in mind, as some lenders make efforts to reserve the right to come after you later for the deficiency (i.e., the difference between the sale price of your home and your mortgage balance). For this reason, it's not a bad idea to have a local real estate attorney involved in your short-sale transaction, to help you negotiate a complete release of liability for the mortgage.

Article continues below

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The moral/ethical perspective: Morally and ethically, some homeowners view themselves as having an obligation in line with their legal commitment to pay all these items. Others look at the various factors beyond their control that have forced them to short-sale their home, like the decline in property values and the weak employment market, and have made a decision that their personal moral imperative weighs in favor of protecting their family finances and children's education funds. In that vein, some make the conscious decision to stop paying once they're in a short-sale situation or on a clear path to foreclosure.

Financial/business: Once you know 100 percent that you'll be divesting of your home in some way, shape or form, continued investments in the property can seem to easily fall into the "throwing good money after bad" bucket, looking at the situation from a strictly business and financial perspective. There is also a strong sentiment among many real estate professionals that if you keep your mortgage current, while applying for a short sale or loan modification of any sort, you decrease the chances that your lender will approve of the sale.

The theory goes that if you are current on your payments, you can't possibly have the level of hardship you must claim (and the lender must believe you have) for them to agree to waive the deficiency amount and release you from the mortgage.

I've seen very mixed feelings on this in the real estate industry; on this point specifically, you should definitely talk with your listing agent and your local attorney, and take their advice into account -- they might have worked with this bank in the past and be able to shed light on how staying current or falling behind may affect the success prospects of your short sale application.

Credit/ability to buy again: Right now, you are probably fixated on getting out from under this onerous debt, as virtually every homeowner in your situation is as a matter of course. But I've worked with a number of folks through this entire experience of going upside down, losing a home through a foreclosure or short sale and financial recovery, and I know that before too terribly long, you could very well be looking to buy a home again. Just be aware that most lenders will impose a two- to three-year waiting period after you have a short sale, if you were in default on your mortgage at the time the short sale closed (sometimes the waiting period is as long as seven years, depending on what type of loan you're trying to use to buy your new home).

However, if you do not default on your loan and are able to get your lender to green-light your short sale, you can qualify for an FHA mortgage immediately. I don't know your personal situation, and it's been my experience that the majority of homeowners who have a financial hardship severe enough to even attempt a short sale need a couple of years to get back on their feet, but if you think you'll want to buy another home anytime sooner than two years from now, you'll need to stay current on this mortgage.

Just as there are many factors your bank will weigh in determining whether to allow your short sale to close, and on what terms, you have a lot of considerations to weigh in deciding whether to continue making your mortgage payments while you await their decision. I can't urge you strongly enough to include your real estate agent and an attorney in your decision-making process.
By Tara-Nicholle Nelson, Monday, November 28, 2011.

Inman News™

Fannie Mae Halts Foreclosures for the Holidays

2011-12-01T15:37:00.001-06:00

Fannie Mae says it will suspend evictions for single-family foreclosures and two- to four-unit properties during the holiday season, from Dec. 19 through Jan. 2, 2012.

“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” Terry Edwards, executive vice president of Credit Portfolio Management for Fannie Mae, said in a statement. “No family should have to give up their home during this holiday season.”

While the holiday moratorium is in place, legal and administrative proceedings for evictions may continue, but “families living in foreclosed properties will be permitted to remain in the home,” Fannie Mae announced in a statement.

Source: Fannie Mae

2011-11-30T19:04:00.000-06:00

Foreclosures Continue to Weigh on Home Values

2011-11-30T13:33:00.001-06:00

Distressed homes continue to chip away at overall home prices across the country, but the “plunging collapse of prices seen in 2007-2009 seem to be behind us,” David Blitzer, chairman of the Index Committee at Standard and Poor, said in a recent statement.

For the third quarter, market research firm CoreLogic reports about 22 percent of all borrowers with residential homes are “underwater,” owing more on their mortgage than their home is currently worth.

"The negative equity portion definitely continues to be one of the major issues for the housing market, [and] the overall economy as well," Anika Khan, an economist with Wells Fargo Securities, told Market News International.

The states with the highest percentage of borrowers with negative equity, according to CoreLogic are:

•Nevada: 58 percent
•Arizona: 47 percent
•Florida: 44 percent
•Michigan: 35 percent
•Georgia: 30 percent
"Home prices continue to come down due to the number of distressed transactions, be it short sales or foreclosures or REO, and we expect that pace to continue into 2012," Khan told Market News International.

Source: “Analysts: Distressed Sales Still Weighing On US Housing Market,” Market News International (Nov. 29, 2011)

“The heart buys a place to live, the head buys a good investment, together they buy the perfect home.”

2011-11-27T11:21:00.001-06:00

With a price tag involving many zeros, buying a home fits squarely into the investment category. Yet, choosing a home strictly as an investment may not be a great idea. If you ignore your lifestyle needs and aesthetic preferences, you could get unhappy enough to sell your investment long before it can provide a return.

Look for a balance between your personal needs and your financial goals by paying attention to appreciation rates in the area; neighborhood amenities; purchase and maintenance costs; size and architectural style; and proximity to work, schools, friends, shopping and entertainment.

Should You Consider Listing Your Home During the Holidays?

2011-11-22T09:12:00.000-06:00

As the holidays approach, I’m always asked the same questions:

•Should we keep our property on the real estate market or take it off?

•Do we list now, wait until after the first of the year, or hold off until spring?

In the past, conventional wisdom said you shouldn’t try to sell a home during the holidays. However, the old thinking doesn’t really apply any longer — thanks to the Internet and hectic lifestyles as well as traditional rules of supply and demand.

Whether to sell or not at the end of the year has to do with your particular situation and market. But in general, here’s some real estate advice about why you should consider listing your home during the holidays, or even in January.

Buyers are always looking for properties online

Historically, potential home buyers felt that the holidays were too hectic for home shopping. They were preoccupied with planning parties, cooking meals, buying presents or planning vacations. Going out with a real estate agent to look at properties conflicted with a busy holiday schedule. This made perfect sense — before the Internet, smart phones, and tablets came along.

In my opinion, traditional buying and selling seasons have evolved as a result of instant, ubiquitous access to property listings. Someone who is serious today about buying real estate is always looking.

Our hectic lifestyles also play a role. Often, serious buyers are working hard and not shifting into holiday mode until the last minute. Even during the holiday break, they’re squeezing in work. They’re already staying “on the grid,” so why not continue monitoring the real estate listings in their area too?

The inventory — and the competition — is usually lighter during the holidays

Despite our always-on access to property listings today, there’s still a lingering perception that the year-end holidays aren’t a good time to list a home. Similarly, if your property has been sitting on the market for months, conventional wisdom says to give it a rest during the holidays. Given these factors, we end up seeing the inventory for good homes tighten up this time of year. But buyers are still out there looking at real estate and no doubt wishing there were more properties available.

In fact, if I have a seller who has been talking about selling, is truly motivated, is flexible on timing, and has a home that truly sparkles, I often suggest they list right after Thanksgiving. There’s still a window of several weeks to get buyers into your home before the end of the year. And those buyers flipping through listings at their kid’s soccer game will be so excited to see something new and awesome hitting the market — especially if there’s a lack of good inventory in their area. Those motivated soccer moms and dads are the ones who’ll take the time to see your home, regardless of what the calendar says.

Home been on the market too long? This could be a great time to lower the price or change your strategy

If your property has been sitting on the market for months, most buyers and their agents will see it as stale or overpriced and disregard it — no matter how great it is or how light the competition currently is.

In that scenario, it’s time to take action, and the year-end holidays can be a golden opportunity to shift course. Making a dramatic price reduction or overcoming some major obstacle that has been preventing the sale might be just the right thing to do this time of year. If you had lower offers early on but you weren’t ready to accept them, or you keep hearing that there are issues with the way your property shows, this could be your chance to show the market you’re listening and serious about selling. The motivated buyers will notice you and take a look.

You even stand a chance of getting a sale closed before the end of the year; I’ve seen it happen. As always, before you make any big changes, talk it over with your real estate agent.

Don’t want to be bothered during the holidays? List your property in January

Admittedly, the thought of keeping the house clean, holding open houses, and vacating to accommodate last-minute showings during the holidays is a deal killer for some. If so, consider listing your property after New Year’s Day.

Traditionally, we don’t see much inventory coming on the market in January. It’s cold in most places, and many sellers prefer to wait until the spring, a more conventional time to sell. As a result, we don’t see much inventory in January. And yet, each January my phone rings with new buyers wanting to get into the market. Or I’ll hear from on-the-fence buyers who may have lost interest earlier in the year and are now suddenly motivated again.

There’s something about the beginning of a new year that galvanizes people. The motivation to buy could be due to year-end tax planning, with buyers seeing how much they owe and how owning a home could help. It could be because of New Year’s resolutions to finally stop spending money on rentals and invest in property. Maybe a rich relative gave them money for a down payment (wouldn’t that be nice?).

Whatever the motivation, for sellers it means one thing: There can be an increase in demand at a time when inventory is traditionally low — resulting in less competition from other sellers. If you’re motivated to sell your home, you’ll have an even more “captive” audience in January.

“Most home fix-ups take more elbow grease than money.”

2011-11-20T12:33:00.001-06:00

Getting your home ready to sell doesn't have to be an expensive proposition--in most cases, it shouldn't be. Few remodeling projects pay back 100% of their cost. Why spend lots of money preparing your home to sell if you can't raise its price enough to cover your expenses?

The ideal type of preparation should put your home in good working order and make it attractive. Needed repairs, fresh paint, removing clutter, a thorough cleaning, a trim landscape--they're all relatively low-cost (if high-energy) things you can do to ensure the highest profit possible from your home sale.

Housing Picture Expected to Brighten in 2012

2011-11-18T08:52:00.000-06:00

STILL NOT GOOD GOING UP .25% THAT IS NOTHING. WHAT IS THE MARGIN OF ERROR 2-3%?

Better times are ahead for the real estate market in the new year, according to several forecasts and recent surveys.

Fiserv, a financial information services firm, predicts that 95 percent of the 384 metro areas it tracks will see prices rise in 2012.

Many surveys and economists are forecasting a very modest increase for the housing market in the new year, but after several years of dropping prices and rising foreclosures, even the slightest increase would signal a glimmer of hope for the market. In a survey by MacroMarkets of 100 economists and real estate professionals, respondents reported home values will likely rise slightly at 0.25 percent in the new year.

The real estate market still faces a large backlog of foreclosures that it must work through in many markets. As such, price gains through 2015 will likely just be around 1.1 percent, according to the survey. However, this is a reversal after a forecast of 2.8 percent decline in median home values for this year.

Foreclosures continue to weigh on many markets and are preventing home values from stabilizing, economists say.

"The water is very deep in the living room, but it's no longer getting deeper and is starting to recede,” says Mark Fleming, CoreLogic's chief economist.

Low interest rates on mortgages mixed with more affordable housing for families in the median income range are expected help the market in its rebound in 2012, economists say.

Source: “A Smaller House Will Make a Big Difference,” Money Magazine (Nov. 14, 2011)

INSPECTIONS:Smart Strategies To Make A Home Inspection Work For You

2011-11-13T12:12:00.000-06:00

Whether you're buying or selling a home (or both), pay special attention to how a home inspection can serve your interests. A professional home inspection protects both buyers and sellers from legal action sparked by problems found after a home is sold.
Buyers have long been advised to include a home inspection contingency in their purchase offers. The cost--$300 or so--is well worth the information it buys, protecting the purchaser from costly surprises later on. In fact, many homes harbor problems their owners aren't even aware of until a professional inspector points them out. (That's why some savvy sellers have been getting their homes inspected before putting them on the market.)

A sales contract may include one of two types of inspection contingencies:

1. A "general contingency" inspection clause stipulates that the contract is contingent on the buyer conducting a "satisfactory" professional home inspection. The contingency specifies a certain number of days for the buyer to conduct the inspection and report back to the seller, and allows the seller time to respond to the inspector's findings.
With a general contingency clause, if the buyer dislikes anything in the inspection results and chooses not to go forward with the transaction, the contract is null and void. Obviously, this type of contingency favors the buyer.

2. A "specific contingency" spells out particular criteria that must be met before the buyer can back out, e.g., the owner's failure to fix a problem identified by the inspection. The buyer can't just walk away for any reason. Although not ideal for buyers, this type of contingency offers more protection than no home inspection clause at all.
Checking It Out

The most reputable home inspectors are members of The American Society of Home Inspectors (ASHI) and are bonded, licensed and insured.
What do these professionals look at?
ASHI Standards of Practice require that an inspection evaluate the following:

• Structural Components
• Exterior
• Roofing o Central Air Conditioning
• Heating
• Plumbing
• Electrical
• Insulation and Ventilation
• Interiors

It's equally important to understand what a professional inspector is not supposed to do.

An inspector can't tell you everything you want to know about a house. Remember, inspectors are generalists who have a fair amount of information about all home systems but usually are not experts on any of them.
Professional inspectors are not supposed to fix problems they find. How much would you trust someone if you knew they were looking for a repair job while searching for defects in the home? If a major problem is found, ask a reputable contractor how much it would cost to repair or replace it.
Don't expect the inspection report to include the condition of every single nail, electrical wire or piece of plumbing. Inspectors check out the overall systems, not all the joints and nail pops (unless they are visible).

Inspectors can't give you the reason for the defects they find. Their job is to find defects, not to explain them.

Don't expect a listing of cosmetic concerns--that's the buyer's job.
The inspector has no way of telling how long a system will last and shouldn't volunteer an opinion about it. The inspection is not intended to be a guarantee of future performance.

Non-Contingent Inspections

As many real estate markets in the nation have heated up, buyers have increasingly been making purchase offers without including a home-inspection contingency. In an active market, this strategy can help make your offer more attractive to a seller, even though it puts you at risk for purchasing a home with problems that could be expensive to correct.
If you're considering foregoing the home-inspection contingency, think seriously about having the home inspected anyway. Finding out ahead of time what you'll need to fix will help you budget more realistically for your home purchase. For example, you may want to make a smaller down payment so you'll have the cash you need for repairs.

Another reason to order a non-contingent inspection is if you're thinking about purchasing a home warranty. These warranties can afford you some protection in case a system in your home malfunctions, but they will not cover "pre-existing defects." If something does go wrong later, your home inspection report can help you prove to the warranty provider that the problem did not exist when you purchased the home.

Seller Benefits

Especially in slow markets, sellers do well to order home inspections (and make needed repairs) before putting their homes on the market. Being able to show that your home has a clean bill of health can encourage purchase offers from skittish buyers and speed your contract settlement.
Even if you're selling in a seller's market, you may want to accept a contract with an inspection contingency or have your home pre-inspected. Letting buyers know about defects you don't intend to correct will help provide protection against legal action later. More and more buyers have been filing after-purchase lawsuits against home sellers for major defects found in homes that were not inspected before settlement. Whether such lawsuits are successful or not, they represent a real hassle for sellers.
Give us a call if you have any questions about ordering professional home inspections. We would be happy to provide you with a list of reputable inspectors in the area.

NAHB to Appraisers: Stop Using Distressed Sales in Comps

2011-11-11T15:08:00.001-06:00

The National Association of Home Builders is speaking out against the use of foreclosures, short sales, and other distressed properties used as comparables to new-home in appraisals.

In a speech to the Appraisal Institute in August, NAHB Chairman Bob Nielsen told appraiser attendees that the use of distressed sales as comparables in new-home sales was not appropriate and is causing home prices to plunge.

“By definition, distressed properties are not comparable to a new home. They are fundamentally different,” Nielsen said.

Nielsen said that unlike most older homes, new homes reflect current building codes, often boast “green” and energy efficient features, and are in move-in condition. Distressed properties often suffer from neglect due to deferred maintenance or vandalism, Nielsen said.

Nielsen also stressed that “green” and energy efficient features need to be recognized more by the appraisal system.

Source: “Distressed Properties Don’t Compare With New Homes, Nielsen Tells Appraisers,” National Association of Home Builders (Nov. 7, 2011)

Survey Reveals Why Buyers Are Waiting on Sidelines

2011-11-09T14:56:00.001-06:00

Twenty-seven percent of Americans say they plan to buy a home in the future (with most saying in two or more years), and only two percent say they plan to purchase a home in the next 12 months, according to a new Move Inc. survey of 1,000 American adults. So why are so many buyers continuing to wait on the sidelines when home affordability is high and interest rates are at or hovering near record lows?

About 23 percent of those surveyed say they are delaying buying a home because they are concerned about the real estate market in their local area, particularly with concerns over the future of home values, the economy and jobs, as well as difficulty in saving for a down payment.

"Perceptions as much as the realities of home ownership are standing in the way of boosting demand for housing," Errol Samuelson, chief revenue officer of Move Inc., said in a statement. "Concerns that the economy will continue to put jobs at risk and that prices won't rise near term are keeping buyers on the sidelines as much as the difficulty they're having in getting credit or saving for down payments. Until these concerns are resolved, we expect both buyers and sellers to remain on the sidelines."

Nearly 35 percent of those surveyed say their inability to get credit or find affordable credit are the main reasons why they’re putting off purchasing a home.

The Move survey also found that younger adults—the millennial generation—tends to look at home ownership as a place to be happy, not an investment. But this large segment of first-time home buyers admit they are picky when it comes to finding a home—80 percent say they are picky, in fact. A lot of that pickiness comes from the fact that 75 percent say that their home defines them and is a part of who they are.

The survey also found that younger adults tend to spend more on housing than older adults. For example, the survey revealed that two out of five--or about 40 percent--of millennials say they should spend 30 to 60 percent of their gross monthly income on housing. More than half of older Americans, on the other hand, say they plan to spend less than 30 percent of their gross monthly on housing.

Lenders often recommend spending 28 percent of annual gross wages on housing, when taking into account principal, interest, and taxes.

Source: “2012 Presidential Elections: 69.6% of Americans Said Housing Will Influence Their Vote,” Move Inc. (Nov. 8, 2011)

Foreclosures on Rise Again, More Trouble for Home Values?

2011-11-09T07:51:00.001-06:00

Foreclosure starts are reversing course and are back on the rise, which is expected to continue to put downward pressure on home prices, a new report released Monday from Fitch Ratings says. With a jump in the inventory of distressed homes, Fitch predicts home prices to dive another 10 percent nationally before stabilizing.

Foreclosures on delinquent loans have nearly doubled compared to this time last year, when a robo-signing scandal temporarily brought foreclosures to a standstill in many parts of the country.

According to Fitch’s most recent report, foreclosure starts on severely delinquent loans have jumped more than 10 percent in a month. In fact, the spike is nearing the average rate of 14 percent that was seen between 2000 and 2010, according to Fitch’s RMBS (residential mortgage-backed security) Performance Metric.

Foreclosure initiation rates on borrowers who haven’t made a mortgage payment in more than six months also have nearly doubled in the last five months.

"Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year," Diane Pendley, Fitch managing director, said in the report. "Mortgage servicers now generally feel they have implemented the corrective actions that they determined were needed."

Source: Fitch Ratings; “Rising Foreclosure Rates to Impact Home Prices, Fitch Says,” HousingWire (Nov. 7, 2011); and “Fitch Ratings Says Foreclosure Rate of 10 Percent is Almost Twice as High as Last Year’s Level,” Associated Press (Nov. 7, 2011)

Number of ‘Underwater’ Home Owners Grows

2011-11-08T13:37:00.001-06:00

In the third quarter, the number of U.S. home owners who owe more than their homes are currently worth continued to rise, according to new housing data by Zillow Inc.

Borrowers with negative equity on their homes increased to 28.6 percent -- that’s up from 26.8 percent in the second quarter and 23.2 percent a year prior.

“We still have very high negative equity rates; that’s putting extreme pressure on households because temporary job losses translate into foreclosures at much higher rates when the household is in negative equity,” Stan Humphries, Zillow’s chief economist, told Bloomberg.

Zillow also reported that home values dropped from the previous three months in 105 of the 157 housing markets it tracks, according to its most recent Home Value Index. The cities bucking the trend and posting some of the largest gains were Detroit, Boston, Denver, and Pittsburgh, according to the index.

Source: “U.S. ‘Underwater’ Home Owners Increase to 28.6%, Zillow Reports,” Bloomberg (Nov. 8, 2011)

“Buy the lowest priced house in the highest priced neighborhood you can afford.”

2011-11-06T13:57:00.001-06:00

It's smart to buy at the low end of a desirable neighborhood because your less-expensive home will appreciate on the coattails of your neighbors' sought-after homes. Buying low also gives you some room to fix-up or add-on without exceeding average prices in the area.

If you find a home that's selling under market, be sure to find out why. First, get a professional inspection to make sure nothing major is wrong. Next, check the location. If it's next to a high school, for example, think twice about the traffic and noise next door. If you're lucky, the home may be sound and well-located but perhaps in less-than-optimal condition--something you can put right with "sweat equity." The home could also be priced lower than average because it is smaller than average or the sellers are under pressure to move quickly.

How To Prepare Your Home For The Fall Season

2011-11-03T18:44:00.000-05:00

It’s about that time again! The crisp/cool air, countless beautiful shades of colors, and plenty of enjoyable evenings around the bonfire await us. Yet, amidst all these great things, there are certain preparations that you need to be aware of when getting ready for the fall season as well.
As a homeowner, it’s important that you take certain steps in order to protect your home’s condition and also your wallet. So let’s explore 5 key areas that you ought to review over the upcoming weeks to be fully equipped for what lies ahead:

Routine furnace maintenance: Don’t hesitate to schedule an appointment for your furnace. While trying to juggle work obligations, kids, school, chores, and much more, this is one of those areas that can easily be overlooked.

But a couple hundred dollars now is much more reasonable than a few thousand later. Keep your furnace in good working condition and make sure you’re prepared for the colder temperatures.
Clean off your roof: As the leaves begin to fall, it’s important that you protect your roof from unnecessary moisture. Take the time to clean off any debris that builds up before the winter months and ensure that your roof is patched from any basic wear and tear.

This will be especially vital when winter snow begins to accumulate. Also, clear out your gutters and scan the area around your chimney as well. If there seems to be any places where water could leak in than it may be time to call a professional.
Prepare Your Pipes: First of all, don’t forget to unscrew any hoses or nozzles attached to the outside faucets. For those who are using underground sprinklers, take the time to push out any remaining water from the summer. Also, cleaning your septic system may be beneficial before the temperatures hit freezing.
Basic Crack Repair & Landscape: For those who have minor sidewalk or concrete damage, now may be a good time to fill some of those areas with something like Quikrete to avoid further damage. This can help to keep water and moisture out, especially once snow hits. Also, make sure to clear out the areas around your house where leaves have fallen, and cut back any other trees or shrubbery.
Insulation & Energy Efficiency: This can be a huge money waster! For those who are rarely at home and constantly on the run, you may want to consider investing in a programmable thermostat. This can save you hundreds of dollars alone by cutting back on unnecessary energy costs. Especially with the rise in most utilities costs, this should certainly be considered.

Also, are there areas around your windows, doors or elsewhere that may be allowing draughts to enter your home? Consider either having these places sealed or maybe investing in some new materials. Depending on how long you plan to live at your current residence, the cost could certainly be justified.

Hopefully you have found these 5 tips to be helpful and informative. Please visit us again soon, as we update our website with other useful tips on a regular basis.

“Pretty doesn't pay--but it does sell faster.”

2011-11-01T11:51:00.003-05:00

Ideally, your home will be gorgeous before it goes on the market--fresh paint, cleaned windows and drapes, spotless floors and carpets, fresh flowers on the table, every detail attended to. Will you get more money for your home than a similar but less-attractive home down the street? Not much more.

A home's value is mostly based on its features--location, size, number of bedrooms and baths, garage, style, age, etc.--and what that combination of features is worth in a particular neighborhood. The reason for making your home cosmetically attractive is not to increase its value, but to sell it quickly. If yours looks better than the competition's, you'll get the first offers!

When In Doubt, Throw It Out

2011-11-01T11:51:00.001-05:00

We’re all collectors and stashers of one kind or another, but if you take a little time to clear out the stuff you've been accumulating for years, you'll be surprised to see how much you really can live without. This is a great exercise if you are: considering a move soon, planning a garage sale, or looking for items to donate to charitable organizations. Bonus benefit: clearing out the clutter can even lift your spirits!
Here are some sensible tips for paring down your possessions:
• Don’t attack the entire house at once. Take it room by room.
• Label four cartons or bags: "Keep," "Sell," "Give Away" and "Toss."
• Divide and conquer the contents of boxes, closets and drawers.
• Consider the big items too: Do you really like that armchair well enough to have it reupholstered, or are you ready to replace it? (Keep in mind that reupholstering can cost more than buying a new piece of furniture.)
• Clothing: True, some styles could make a comeback – but do you have enough closet space to hold onto those super-short flowered dresses or pea green ultra-suede pants another year? If you haven’t worn it in over a year, consider letting it go.

Bargains Abound: What Are Buyers Waiting for?

2011-10-25T20:25:00.001-05:00

With low home prices and ultra-low interest rates, the housing market is offering “perhaps the best deals of a generation,” notes a recent article by Bloomberg Businessweek.

Since the housing boom of 2006, home prices have fallen about 31 percent. Also, mortgage rates have been hovering at record lows for the past few weeks (4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac’s mortgage market survey).

“It’s hard to see the possibility of losing on a home purchase right now, with these mortgage rates,” says economist Dean Baker. “Prices may go lower, but not by much.”

The article notes the following scenario: Buying a $300,000 home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012 but mortgage rates will increase by a half-point. So for that same loan under that scenario, a home would sell for $289,000 while the monthly mortgage bill would be $1,171--only a $26 difference.

For those who can qualify for a mortgage, "playing the waiting game" won't result in much gain, Nariman Behravesh, chief economist at IHS in Englewood, Colo., told Bloomberg Businessweek.

Source: “Crazy Home Deals Await the Creditworthy,” Bloomberg Businessweek (Oct. 24, 2011)

Buying Vs. Renting

2011-10-24T13:57:00.000-05:00

“Refinancing is like selling your home to yourself.”

2011-10-24T05:31:00.001-05:00

What's the point of re-buying your own home? As the seller, you have the opportunity to tap into some of your home's equity, perhaps to pay down consumer debt, finance a college education or make other investments. You may also have the opportunity to retire a mortgage loan that carries a higher interest rate than those currently available.

From a buyer perspective, refinancing lets you take advantage of better interest rates and new mortgage plans that may not have been available when you first financed your home. You could end up lowering your monthly payment or dramatically reducing the amount of interest you pay over the life of your loan.

Points to Understand about Points

2011-10-24T04:58:00.001-05:00

• What is a point? A point is a one-time charge paid at settlement when a loan is made. It equals one percentage point of the borrowed amount (thereby deriving its name). On a $50,000 loan, two points equals $1,000.

• Why are points charged? Because conventional mortgage loan rates are generally higher than VA or FHA rates, lenders often charge "discount points" to make up the difference. By paying points, a buyer trades increased initial costs for a reduced interest rate.

• Who pays points? A buyer usually pays a "loan origination fee," which is a service charge equal to one point. As for discount points, both buyers and sellers can pay to bring the buyer's rate down. This can be an attractive selling tool, and a great tax advantage if you're the buyer. Rules vary slightly for VA and FHA loans, so be sure to ask for specific information.

Do you have more questions about buying, selling, or financing a home? Call or e-mail us; we can put your mind at ease.

Incentives Grow to Get Struggling Home Buyers Moving

2011-10-21T12:15:00.001-05:00

With distressed properties accounting for 30 percent of existing-home sales, more real estate professionals are finding a growing part of their job is offering struggling home owners “cash for keys,” according to a recent article at MSNBC.com.

In the “Cash for Keys” program, home owners who are facing foreclosure are typically offered between $500 to $2,500 if they agree to move out within 30 days (and leave the place clean, too). The program frees home owners from their obligations while getting a little extra money for moving expenses and avoiding a ruined credit profile from a foreclosure. It also allows the lender to not incur the extra costs of an eviction.

The “Cash for Keys” program is expected to become a more mainstream option for handling short sales too, not just foreclosures. For example, Bank of America is piloting a program in Florida that will pay up to $20,000 to short sellers as well as forgive their loan deficiency.

Banks are looking at offering more incentives to short sales since their losses tend to be far less than a foreclosure. For example, foreclosure properties tend to sell for 40 percent below non-comparable non-distressed properties while short sales tend to sell for 20 percent less.

“The more the inventory builds up, the more generous the cash for keys from clients,” Benjamin Barber, a senior sales specialist Green River Capital LC in West Valley, Utah, told MSNBC.com.

Real estate professionals are often the ones who deliver the “cash for keys” offer to home owners. And as more real estate professionals continue to find foreclosures and short sales an increasing part of their job description, they’re seeking extra training in how to handle such situations with home owners and navigate these often-complex transactions. About 21 percent of National Association of REALTORS® members hold special certifications that help agents better handle distressed property — that’s up from 12 percent last year. For example, in one such designation, the Short Sale & Foreclosure Resource (SFR), real estate professionals learn how to aid buyers and sellers through the short sale and foreclosure process.

Source: “Real Estate Agents Learning Fine Art of ‘Cash for Keys,’” MSNBC.com (Oct. 21, 2011)

Could Loan Limits Be Restored?

2011-10-21T12:14:00.001-05:00

The Senate voted on Thursday to attach a proposal to a spending bill that could restore the size of loans the government buys or insures to a maximum mortgage amount of $729,750 in many markets.

The higher conforming loan limits expired at the end of September, reverting to a maximum amount of $625,500, despite mass calls from the industry that doing so could potentially weaken the housing market, particularly in high-priced areas.

The lower loan limits are making it more difficult for “middle class home buyers to get credit when credit is tight," says Robert Menendez, D-N.J., who introduced the bill amendment. "Getting our housing market moving again is one of the most important tasks facing the country.”

The Senate voted 60-38 on the spending bill. It’s expected to go before the House later this year.

The National Association of REALTORS®, along with several other housing groups, have been urging Congress to renew a two-year extension that would maintain the GSE maximum loan limit at $729,750.

Source: “Senate Backs Plan to Help Americans Buy Homes,” Reuters (Oct. 21, 2011)

GREAT PRICE - UPDATED 1.5 STORY HOME WITH FINISHED LL AND WALKOUT

2011-10-21T09:06:00.001-05:00

GREAT PRICE!!! - UPDATED 1.5 STORY HOME WITH FINISHED LL AND WALKOUT

Overview

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Description

$134,900

Single Family Home

Main Features

4 Bedrooms
2 Bathrooms
Lot: 14,453 sqft

Location

4 Northwinds Dr.
St. Peters, MO 63376
USA

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Are Banks Getting Better on Short Sales?

2011-10-20T14:30:00.001-05:00

Are short sales getting easier? Some home owners are reporting that banks are now not only more willing to consider a short sale, but are even offering incentives to complete a short sale. For example, a home owner in Chicago says his lender approved his short sale and then gave him a $20,000 check after the deal was finalized for selling the home as a short sale instead of letting it sink into foreclosure.

Lenders accepting a lower mortgage payoff from an underwater seller traditionally isn’t thought of an easy transaction to complete. Lenders weren’t so willing a few years ago. But as the number of Americans underwater on their mortgages grow, more lenders are reconsidering as they try to avoid extra costs incurred to their bottom-lines that a foreclosure can cause.

For 2011, short sales accounted for about 8 percent of total home sales, and rose 7 percent over 2010 totals, according to CoreLogic data. Short sales are up by 59 percent year-over-year in Illinois, 32 percent in Michigan, and 19 percent in Arizona alone, according to CoreLogic.

“We’re starting to see that servicers and lenders are viewing short sales as a better alternative than they had in the past,” says Daren Blomquist, spokesman for RealtyTrac. “Some of that relates to the fact that it’s getting harder to foreclose. There are additional requirements in terms of paperwork and requirements that states and judges are imposing.”

Short sales can still be complex and lengthy — they can take up to nine months to close and even after that, there’s no guarantee it’ll end successfully. “In general, it is a totally different type of transaction,” says Mike Cuevas, a real estate profesional at Exit Realty in Chicago. “You’re not only selling a house, you’re negotiating debt.”

Source: “Why it can Pay to try a Short Sale; Lenders may be Viewing Short Sales as a Better Alternative,” MarketWatch (Oct. 20, 2011)

When Will REO Sales Finally Reach the Peak?

2011-10-18T13:24:00.001-05:00

Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.

Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.

However, with the surge, "we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller," the analysts said.

The increase in foreclosures is expected to mostly change from private banks’ portfolios -- which nearly half are from now -- to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.

To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.

But some analysts are skeptical that a surge in foreclosures will come without an intervention from the government.

"Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?" Scott Sambucci, chief analyst at Altos Research, told HousingWire.

Source: “REO Sales May Not Peak Until 2013,” HousingWire (Oct. 17, 2011)

More Adults Move in With Relatives

2011-10-14T13:41:00.001-05:00

Nearly 1 in 3 adults — or 30 percent — live with their relatives, according to a new study. The cohabitation is known as “doubling up,” and it has risen to levels not seen since the Great Depression, according to a survey of 3,000 home owners and renters conducted by Hanley Wood.

Recent U.S. Census data also showed an increase in “doubling up” among household, particularly among young adults who are opting to move back with their parents. About 5.9 million Americans aged 25-34 lived with their parents in 2010, which is a 25 percent increase compared to the years immediately preceding the recession. Men were found to be nearly twice as likely as women to live with their parents.

The Hanley Wood survey also found that renters and home owners are delaying new home purchases due to tougher mortgage qualifying standards and concerns over the economy and job security. Yet, the majority of home owners and renters say home ownership is important and they felt that now was a good time to buy with lower home prices.

Source: “Almost 1 in 3 Adults Live With Relatives,” HousingPredictor (Oct. 12, 2011) and “Census: Recession Takes Big Toll on Young Adults,” Associated Press (Sept. 22, 2011)

Foreclosure Filings Drop, But More Trouble Ahead?

2011-10-13T12:56:00.001-05:00

Foreclosure filings dropped 6 percent from August to September, and marks a 38 percent decrease since September 2010, according to the latest RealtyTrac report.

"While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up," says James Saccacio, RealtyTrac chief executive.

Already, foreclosures have posted slight increases when looked at on a quarterly basis. Following three consecutive quarterly decreases, foreclosure filings reversed trend in the third quarter, inching up slightly by less than 1 percent, RealtyTrac reports.

"This marginal increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures," says Saccacio.

Meanwhile, the foreclosure process continues to be a lengthy one. Banks are taking an average of 366 days to from start to finish in the foreclosure process — that’s up from an average of 318 days during the second quarter, according to RealtyTrac.

Some states are posting even longer delays. For example, in New York, the foreclosure process took an average of 986 days — the longest in the country. In New Jersey, foreclosures dragged on average for 974 days. Foreclosures were moving more quickly in Texas, which had the fastest foreclosure process at an average of 86 days.

Source: “Foreclosures Continue to Plague Housing Market,” CNNMoney (Oct. 13, 2011)and “Foreclosure Activity on Slow Burn,” RealtyTrac (Oct. 11, 2011)

Buyers Want a Deal--or a Steal?

2011-10-13T08:28:00.000-05:00

Buyers are still looking for homes, but they won’t settle for anything less than a great deal.

All the buyers across the board want everything in a house, They want it completely done. They want all the newest, trendy materials, and they want it for 2005 prices.

Regardless of buyers’ high desires these days, the homes that are selling tend to be the ones where sellers price their homes the most competitively.

When you have realistic sellers, then we have competitive bidding on houses and you might even see that price go up. When you have an unrealistic seller, then you have a house on the market for a long time.

“The true market value of a home is what a buyer is willing and able to pay for it.”

2011-10-09T15:35:00.001-05:00

Setting a sales price for a home is a delicate balance. Price too high and the home won't sell; too low and it won't sell for what it's worth. Of course, the sales price should be based on fair market value--what a knowledgeable buyer would pay and an informed seller would accept.

A home's value has a lot to do with what other similar homes in the area have sold for recently, taking into account size, style, age, number of bedrooms and baths, garage, lot size, condition and, of course, location. Ultimately, though, the price you receive for your home will have to do with who the available buyers are, what they're looking for and what other houses are available for sale.

30% of Buyers Denied, Give Up Getting Mortgage

2011-10-07T14:04:00.001-05:00

Credit has gotten tighter, and more buyers are being left out or becoming so frustrated they’re giving up. More than 2 million people were turned down for mortgages last year, according to the Federal Financial Institutions Examination Council.

About 30 percent of buyers are either denied a mortgage or drop out of the application process, the Mortgage Bankers Association estimates, with stringent lender requirements or incomplete applications most at blame.

The New York Times notes some of the biggest reasons for rejection are buyers coming with insufficient income, bad credit (applicants with FICO scores below 620 are usually rejected, although some lenders are rejecting anyone below 660); and low appraisals.

What’s more, lenders usually want a two-year history of income so applicants who have changed jobs recently may face hurdles. “It’s common to get turned down if you have a gap in employment history over the last two years,” Erin Lantz, the director of the Zillow Mortgage Marketplace, told The New York Times.

Source: “Triggers for Rejection,” The New York Times (Oct. 6, 2011)

Housing Can Be 'Key Engine of Job Growth'

2011-10-06T12:43:00.003-05:00

The National Association of Home Builders is stressing the need for policymakers to remove anti-housing barriers that they say are preventing a housing market recovery. After all, NAHB says, housing can be the answer policymakers have been searching for in boosting jobs and economic recovery.

The housing industry can be the “key engine of job growth” the country needs, says Bob Nielsen, chairman of the National Association of Home Builders.Nielsen says that constructing just 100 single-family homes can generate more than 300 jobs and $8.9 million in taxes and revenue for state, local, and federal governments.

Yet, Nielsen says the government keeps placing stringent policies that are preventing the housing market from recovering and that are dampening demand and reducing Americans ability to purchase a home, from the tightening of credit and possible stricter down payment qualifications to reducing the conforming loan limit on Oct. 1.

One of the main hurdles home builders are facing is obtaining credit from banks so they can begin working on new homes. The tightening of credit has brought new-home construction practically to a standstill in many parts of the country.

Since April 2006, more than 1.4 million residential construction jobs have been lost, according to NAHB. “Yet there is demand for housing in markets that are on the mend," says Nielsen. "Home builders have plenty of shovel-ready jobs set to go but they can't keep their doors open and create jobs in their communities if federal regulators continue to shut off the credit spigot."

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Bill May Help Home Owners Tap Retirement Accounts

2011-10-06T12:43:00.001-05:00

A new bill introduced in Congress this week, if approved, would allow home owners to withdraw funds tax-free from their retirement accounts to help pay for their mortgage.

The Home Act, introduced on Wednesday by Sen. Johnny Isakson, R-Ga., and Rep. Tom Gravees, R-Ga., would allow home owners to take up to $50,000 from their retirement account or half of the current value of their account to help pay their mortgage without incurring the standard 10 percent tax penalty, HousingWire reports. Any money withdrawn would be required to go toward paying the mortgage within 120 days to avoid the tax penalty.

"This bill will help Americans who are at risk of foreclosure use their own resources to make their mortgage payment on time without being penalized by the federal government," says Isakson. "I firmly believe that economic recovery in this country will not occur until the housing market bounces back."

Source: “Bill Allows Tax-Free Use of Retirement Funds for Mortgage Payments,” HousingWire (Oct. 5, 2011)

Millions of Loans May Face Foreclosure Reviews

2011-10-05T08:49:00.001-05:00

About 4.5 million current and former home owners will be eligible to have their foreclosure cases reviewed, and banks will compensate them if mistakes are found, as part of a mandate by federal regulators to the nation’s banks.

Borrowers eligible for the reviews must have been in some stage of foreclosure in 2009 or 2010. If the reviews uncover such things as banks’ miscalculating mortgage payments or applying impermissible fees of penalties, the borrower may be eligible for compensation from the banks, The Wall Street Journal reports. No foreclosures are expected to be overturned following reviews, however.

"It's a substantial undertaking at great expense to the banks," Tim Rood, a partner at Collingwood Group, told The Wall Street Journal.

A public outreach campaign in the coming weeks is expected to announce the third-party reviews and reach out to eligible borrowers through direct mail, a web site and toll-free number. Borrowers will need to request a review of their case.

Federal regulators have ordered the banks to conduct the reviews following a “robo-signing” scandal that surfaced last fall, in which regulators uncovered lenders signing off on numerous foreclosures without proper reviews. “Robo-signing” caused judges to question the validity of banks’ foreclosure practices.

Source: “Review of Foreclosure Mistakes Is Set,” The Wall Street Journal (Oct. 4, 2011)

Has the Housing Market Hit Bottom?

2011-10-03T11:54:00.001-05:00

Rick Sharga, executive vice president with Carrington Mortgage Holdings, says the housing market is in a “catfish recovery,” with the market hitting bottom this year but prices mostly remaining flat until 2014.

The looming shadow inventories of distressed properties are continuing to prevent prices from rebounding, he explains. Sharga, former senior vice president at RealtyTrac, says more than a million foreclosure actions failed to move forward this year due to delays, which will cause a delay in prices rebounding. Sharga made his comments during a talk at the Asian Real Estate Association of America conference last week in San Francisco.

About 800,000 REOs remain on banks’ books, with three-quarters of those not yet listed for sale, Sharga says. What’s more, an additional 800,000 homes are in foreclosure, and 1.5 million loans are delinquent, HousingWire reports.

Sharga says he expects monthly foreclosures to remain high through 2012, and REO inventories to stay elevated through 2013.

Source: “Housing Market Hit Bottom: Former RealtyTrac Exec,” HousingWire (Sept. 30, 2011)

Short Sales Lose Appeal Among First-time Buyers

2011-09-27T13:20:00.001-05:00

Short sale transactions are becoming less popular among first-time home buyers. Buying a home in a short sale transaction may offer a huge bargain—sale prices average 27 percent lower than non-distressed properties—but more first-time home buyers say the processing delays aren’t worth the trouble.

Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August—posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers’ share of short sales had reached a peak of 54.1 percent of all short sale transactions.

With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.

Source: “First-Time Buyers Losing Interest in Short Sales,” RISMedia (Sept. 26, 2011)

“Buy for today with an eye on selling tomorrow.”

2011-09-26T13:54:00.001-05:00

The home you buy will affect you personally and financially for quite a while. Make sure it's a home you'll still want to own several years down the road.

Will you be starting or expanding your family? Buy a home with extra space now. Is your income likely to increase over the next several years? Stretching your budget early may make sense if you'll be happy in the home longer. Are there any plans for major changes in the area? New roads, housing or shopping developments, and expanded commercial activity could affect your home's value--positively or negatively. In short, it pays to look ahead before you leap into your next home.

How Much Longer Will Housing Remain Sluggish?

2011-09-23T08:48:00.001-05:00

The weak U.S. economy will likely dampen the housing market until 2015, according to a new survey of economists, analysts, and real estate professionals.

Home prices are expected to grow only slightly at 1.1 percent annually through 2015, the survey by MacroMarkets LLC and Pulsenomics notes. Yet, some local markets may see — or already are seeing — larger home price growth.

The report also notes that home price expectations for 2011 are not as dismal as once forecasted. Home prices haven’t fallen anywhere near the pace of 2008. Still, "average projection is somewhat more negative for each of the following four years," according to the report. More home owners continue to be underwater on their mortgage and foreclosures continue to grow.

Meanwhile, lawmakers are trying to come up with ways to stimulate the housing market, including urging banks to write down loan balances for borrowers seriously underwater or loosening standards to allow more home owners to refinance at current low mortgage rates. Recovery would also involve working with federal regulators on ways to rent out or clear the high inventory of foreclosed homes plaguing many markets.

Source: “Home Forecast Calls for Pain,” The Wall Street Journal (Sept. 21, 2011)

Fed’s Latest Move May Send Rates Lower

2011-09-22T16:00:00.001-05:00

The Federal Reserve announced Wednesday it will invest $400 billion in long-term Treasury securities over the next nine months, which is expected to send interest rates on mortgages even lower. The Fed’s move is yet another attempt to try to stimulate economic growth, which has faced stagnation in employment, housing, and household spending over the past couple of years.

"This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative," the Fed said in a statement Wednesday.

Mortgage rates have already been reaching record lows in recent weeks, but the Fed’s latest efforts are expected to send rates dropping even further. Economists predict that interest rates could drop by a few tenths of a percentage point, which would be significant to anyone getting a loan to purchase a home.

However, tough lending standards remain an obstacle that is keeping many home buyers on the sidelines. Banks have tightened their lending standards, which have made even some buyers with good credit struggle to qualify for the best rate.

Source: “Fed Will Shift Debt Holdings to Lift Growth,” The New York Times (Sept. 21, 2011)

Down Payment Remains Obstacle to Home Ownership

2011-09-22T12:17:00.001-05:00

More than half of renters who wish to buy a home say they are unable to because they’re not able to save enough for a down payment, according to Trulia’s Fall 2011 American Dream survey.

Lack of a down payment proved to be the biggest obstacle for young adults (18-34 year olds), as 62 percent cite it as the reason they have been unable to buy a home. Among those aged 35-54, the bigger concern was qualifying for a loan and having a poor credit history, the survey found.

“From saving enough for a down payment to qualifying for a mortgage and having a poor credit history, today’s aspiring home owners face many financial obstacles in order achieve their American Dream of home ownership,” says Jed Kolko, Trulia’s chief economist. “These obstacles keep some would-be home owners from taking advantage of low mortgage rates. On the other hand, they prevent some people from buying homes they can’t really afford. Government home ownership policies can target some of these obstacles to home ownership, but only stronger economic recovery will help households facing multiple obstacles become better able to buy homes.”

Home Ownership Still Ranks High
Despite the sluggish real estate market, Americans aren’t turned off to home ownership. In fact, 70 percent of Americans say home ownership is part of achieving the American Dream, according to Trulia’s survey. Fifty-seven percent of current home owners say owning a home is among the best long-term investments they could make, and 80 percent of home owners said they plan to buy another home in the future.

By REALTOR® Magazine Daily News

Is Tight Credit Keeping Even Good Buyers Out?

2011-09-18T07:51:00.001-05:00

It’s not easy to get a loan these days, say housing experts. Even home buyers with excellent credit are struggling to get approved for a loan, as home lending standards have tightened to some of their strictest level in decades.

Tightening credit is affecting home sales and hurting the housing industry’s recovery, economists note, as more borrowers face increased scrutiny in qualifying for a loan at the best rates. To get the lowest interest rates, home buyers are having to come with higher credit scores and larger down payments than just a few years ago, as well as having to show steady employment, verify assets, and even explain new credit cards and small bank account deposits, USA Today reports. Banks hope the higher standards will lead to fewer future defaults.

Higher Credit Scores, Larger Down Payments
Through June, single-family home loans bought by Freddie Mac boasted an average down payment of 29 percent and an average FICO credit score of 751. In 2007, average down payments were 23 percent and FICO scores averaged 707.

Federal Housing Administration loans, which tend to be a lure for buyers without large down payments, are also being issued to buyers with higher credit scores than in the past. From January through March, FHA loans went to borrowers with an average credit score of 704, up from 631 four years ago.

In an analysis recently done by Zillow of 3.6 million loan inquiries, it found that prospective borrowers getting the best loan rates had average down payments of 28 percent. Three years ago, prospective borrowers averaged down payments of less than 24 percent, according to Zillow.

"It used to be anybody with a pulse could get a home loan. Now you have to be an Olympic athlete," Guy Cecala of Inside Mortgage Finance, told USA Today. "The pendulum has swung too far."

Source: “Tight Standards Make Mortgages Tough to Get,” USA Today (Sept. 14, 2011)

Defaults Soar 33%, Biggest Monthly Gain in 4 Years

2011-09-15T17:51:00.001-05:00

A new wave of foreclosures hit in August, as banks picked up the pace in taking action against home owners who have fallen behind on their mortgage payments, RealtyTrac Inc. reported Thursday.

The number of U.S. homes that receiving an initial default notice rose 33 percent in August from July. That increase represents the biggest monthly gain in four years, according to RealtyTrac.

"This is really the first time we've seen a significant increase in the number of new foreclosure actions," says Rick Sharga, a senior vice president at RealtyTrac. "It's still possible this is a blip, but I think it's much more likely we're seeing the beginning of a trend here."

The uptick in foreclosure activity follows after months of a slowdown in foreclosures, which started last fall, with banks reviewing foreclosure policies and paperwork after facing lawsuits and criticism over how they processed foreclosures. Some banks even temporarily halted their foreclosures as they more carefully reviewed pending cases. The slowdown was also blamed on court delays in some states.

But some housing experts say the increase in foreclosure activity actually could be good for the housing market. A faster turnaround in foreclosures could help clear the glut of shadow inventory hovering over the market, which many say has caused home values to plummet.

The “bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery," said Josh Levin, a Citi analyst. About 3.7 million more homes are in some stage of foreclosure than in a normal housing market, Levin said.

Banks are on track to repossess about 800,000 homes this year — down from more than 1 million last year, Sharga said.

Overall, 228,098 U.S. homes — or one in every 570 U.S. households — received a foreclosure-related notice in August, a 7 percent increase from July. However, that represents a 33 percent decline from August 2010.

Source: “Report: Mortgage Default Warnings Spiked in August, Signaling Potential New Foreclosure Wave,” Associated Press (Sept. 15, 2011)

“Moving usually beats improving.”

2011-09-12T07:57:00.001-05:00

Small improvements certainly are worth doing to make your home more livable and to increase its value. But if your home is too small, too far away from work or family, has the wrong floor plan or lacks a number of features you really want, chances are your fixed-up home still won't suit you well.

Major additions and remodeling projects seldom return 100% of the investment in them--often much less. They tend to "over-improve" the home, hiking its value beyond what neighborhood prices will support--and what buyers will pay for. Consider, too, the inconvenience of living through a major construction project and the hassles of managing it. You're likely to get more of what you want, at a lower cost, buying a different home.

Drop in Loan Limits Has Many Concerned

2011-09-07T14:35:00.002-05:00

In less than a month, Fannie Mae and Freddie Mac will scale back the size of loans they buy from lenders, which some industry groups are saying will hurt home sales and could further dampen a housing market recovery. The drop in the conforming loan limit may make it more difficult for some buyers to purchase homes in expensive markets, housing experts say.

The current loan limits are set to expire Oct. 1. If an extension isn’t granted, the maximum mortgage amount in high-cost areas will drop from $729,750 to $625,500 (although that limit will vary throughout the country).

Some banks, such as Bank of America, have already stopped taking new applications for jumbo loans at the current rate so that they can process the ones already in the pipeline in time for the Oct. 1 deadline.

The drop in the conforming loan limit is expected to impact 2 percent of homes nationwide, but will have a much greater effect in some areas. For example, some analysts say 10 percent of the housing market in New York will be affected.

Pamela Liebman, CEO of New York real estate company the Corcoran Group, told USA Today that the new loan requirements will “put a lot of buyers out of the market.”

Meanwhile, lobbying efforts are continuing, as several industry groups, including the National Association of REALTORS®, are urging Congress to act quickly on a two-year extension to maintain the GSE loan limit at $729,750.

Seven Buying And Selling Secrets To Know Before You Relocate

2011-09-05T19:03:00.000-05:00

TIMING:
Seven Buying And Selling Secrets To Know Before You Relocate

The secret to a successful relocation is timing -- synchronized buying, moving and selling. Good timing just takes a little advance planning that puts you in control. Here are seven relocation secrets to make your move work smoothly for you.

Seven Secrets

1. Sell First
Ideally, you should sell your current home first in order to have all your financial resources available to purchase your next home. You want to avoid waiting until the closing on your new home forces you to sell your old home under the gun. Note that in some markets today, houses are moving so quickly that sellers will not even consider taking a contingency clause that postpones their sale until the buyer's home sells. Setting the right price for your home and having a customized marketing plan are your best bets for bringing about a quick sale.

2. Find Out What You Can Afford
While your house is on the market, look at what's available to buy within your price range in your destination area. Your perfect house is out there, but take as much time as you can to find it. It's not just the house you'll have to live with -- you'll want to find out about the neighborhood, the schools, proximity to shopping, etc. before you commit to your next home.

3. Shop For A Loan Before You Shop For A House
Try to lock in the best rate you can find. Get pre-approved for financing so you have more bargaining power when you bid on a house. With a pre-approved loan, you'll be able to go to closing on your new house faster.

4. Coordinate Settlements And Moving Dates
Try to move directly from the old home to the new one. Sometimes you can rent back the old property for a few days or weeks if closing on the new one is delayed. Another alternative is an interim move to an apartment for a short time while waiting to close on the new house.

5. Begin Fix-Ups And Pre-Sale Improvements Early
Have any needed work completed before your house goes on the market. Consider having a home inspection early in the fix-up process so you know what's important to repair or replace before you set the sales price for your house.

6. Work Closely With Your Agent
Make sure every "i" is dotted and every "t" crossed on time for both closings. You may save time and money for the buyer of your old home with lower "re-issue" fees by referring them to the previous providers of inspections, surveys, title insurance, etc. The information is in your settlement papers. And, if it's a busy season, line up appointments in advance with the people you'll need to close on your new house.

7. Avoid The Last-Minute Rush
Call us early. We'll gather information and provide it to you quickly so you can make informed decisions and workable plans.

“Location. Location. Location.”

2011-09-05T19:01:00.001-05:00

No doubt, you've heard this age-old real estate maxim before. You can redecorate, rebuild, relandscape, perhaps even modify certain aspects of a home's location (e.g., erecting a sound barrier, planting a wind screen), but practically speaking, you can't change where a home is located.

At minimum, avoid locations that involve high noise levels, unsavory elements, traffic, pollution, crime, poorly kept homes and decreasing property values. Instead, look in areas where homes are appreciating and close (but not next to) employment, good schools, transportation, shopping, entertainment, restaurants and parks. Remember, a home priced low due to its location will sell low due to location later on.

Obama Expected to Unveil Plan to Revive Housing

2011-09-01T13:32:00.001-05:00

The Obama administration is expected to announce a new mortgage relief program next week to help struggling home owners stay in their home and reduce the number of foreclosures, Reuters reports.

While the exact details of the proposal are still unknown, analysts are speculating that President Barack Obama is likely to announce a plan that would help more borrowers to refinance loans, allowing them to lower their monthly payments and ward off possible foreclosure.

The refinancing plan will reportedly apply to loans backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, allowing more home owners who have been unable to refinance due to poor credit, owing too much above their home’s current value, or unemployment, to take advantage of current low interest rates.

Other lawmakers who have pushed for such a move have argued that by lowering home owners’ monthly payments, it would free up cash for other spending, which will help stimulate the overall economy.

Source: “White House Could Unveil Mortgage Plan Next Week,” Reuters (Aug. 31, 2011)

New Listing 809 Whispering Windsong

2011-09-01T10:10:00.000-05:00

Beautiful Home With Finished Lower Level

Overview

Maps

Photos

$170,000

Single Family Home

Main Features

4 Bedrooms
3 Bathrooms
Lot: 9,148 sqft

Location

809 Whispering Windsong Dr.
OFallon, MO 63366
USA

To get updates on open home dates and other property events, please click the "Like" button below:

Mike Cribbin

Cribbin Realty
(636) 294-6061
mike@cribbinrealty.com
http://www.cribbinrealty.com

Listed by: Cribbin Reatly

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More Banks Offer Incentives to Unload REOs

2011-08-30T23:19:00.001-05:00

Banks facing high inventories of REOs are turning to financial incentives in the hopes of accelerating sales of these often vacant, deteriorating properties.

For example, Fannie Mae and Freddie Mac are trying to liquidate its REOs, the National Mortgage News reports. By the end of 2010, Fannie Mae was authorizing lenders to offer the HomePath program for Fannie Mae REOs. In the program, which is available to individual buyers and investors, home buyers do not need perfect credit and can put down as little as 3 percent of the property price, qualifying for a loan up to 97 percent of the purchase price.

Also, HUD’s National Community Stabilization Trust “First Look” program is providing competitive prices on REO properties and giving buyers priority access to these homes before they are broadly listed for sale.

Some cities are coming up with their own programs to stimulate sales. For example, JPMorgan Chase recently teamed with Detroit city officials to offer down payment assistance to police officers and city employees who purchase a vacant home in the city over the next two years. The first buyers will receive $25,000 in down payment assistance, while 60 other buyers will receive up to $15,000.

Source: “REO Incentives Accelerate,” National Mortgage News (Aug. 29, 2011)

Seven Smart Ways To Reduce Your Mortgage Rate

2011-08-29T10:57:00.001-05:00

LOWER RATE:
Seven Smart Ways To Reduce Your Mortgage Rate
Predicting interest rates in today's economy is at least as hard as winning in Las Vegas. But even if rates are on the rise, there are a number of options you can exercise to get the lowest rate possible on your home loan. Consider the following strategies.
Seven Ways To Reduce Your Mortgage Rate

1. Consider An Adjustable Rate Mortgage (ARM)
Even though the rate on your loan may fluctuate, an ARM will allow you to enjoy a lower monthly payment at the outset. Traditional ARMs adjust every year, but ARMs now exist to suit just about everyone with 3- and 5-year adjustment periods, even a single adjustment at the 7-year mark.

2. Float Down
Financial products introduced recently will lower your rate if market rates fall, but won't raise it if rates creep up again.

3. Quick Close
If you can settle on your loan quickly (say, 30 days or less), some lenders will agree to shave percentage points off your rate.

4. Lock In
If you fear rates are going to rise, lock in early before they do. Some lenders allow a float-down option, but with an up-front fee.

5. Pay Points
If you're willing to pay some interest up front (known as points), you can get a fixed-rate mortgage with a lower interest rate.

6. Stay Awhile
If you agree to keep the same loan for five years or longer, some lenders will cut their interest rate. If you do move or refinance before the agreed-upon deadline, you may have to pay a penalty of about 1% of your loan.

7. Use Good Credit To Negotiate
Do you have A-1 credit? If so, you're a hot commodity for lenders. They may even be willing to reduce closing costs to get your business. If interest rates are firm, ask for a reduction in fees for document preparation, processing, courier services, copying, underwriting, appraisal or application. Other reductions might include: fewer or no points, lender's attorney's fee, commission rate (for mortgage brokers) and the credit check fee. On an adjustable rate mortgage, ask for a lower starting rate.

“You shouldn't take the first offer on your home because higher ones may come along later.”

2011-08-29T10:55:00.001-05:00

Believe it or not, first offers are often the best that will come along. They're usually made by people who have been watching the market and are motivated to buy. Waiting for higher offers that may never materialize puts your home at risk for becoming shopworn. The longer your home sits on the market, the more "desperate" you'll appear to buyers, who will lower their offers accordingly.

Banks Agree to More Short Sales

2011-08-27T10:51:00.001-05:00

Banks are agreeing to more short sale transactions, and short sales are taking less time to sell, which is helping to clear large inventories of distressed properties more efficiently, says James J. Saccacio, RealtyTrac CEO, in releasing new housing data this week.

“This is a glimmer of hope that lenders are getting more realistic,” Rick Sharga, senior vice president of RealtyTrac, told Bloomberg News. “It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”

During the second quarter, the number of homes nearing foreclosure accounted for 12 percent of total home sales, with banks agreeing to more transactions at prices below the outstanding mortgage balance, RealtyTrac reported in releasing its second quarter data this week.

What’s more, pre-foreclosure homes took an average of 245 days to sell after receiving the initial foreclosure notice--that’s down from 256 days in the first quarter, RealtyTrac reports.

Sales of homes in the foreclosure process or short sales sold on average for a 21 percent discount--or an average sales price of $192,129--compared to the sales price of non-distressed homes.

Source: “Home Short Sales Increase as Banks ‘More Realistic’ on Market,” Bloomberg News (Aug. 24, 2011)

Proposal to bulk sell REO could hurt home prices: Radar Logic

2011-08-26T08:01:00.001-05:00

At least one housing analyst is pushing back against a government proposal to dispose of the government's real-estate owned properties through bulk sales to investors.

Quinn Eddins, director of research at data firm Radar Logic, concluded in the latest RPX Monthly Housing Market Report that housing remains a drag on the economy and home price stability could be negatively impacted by the Fed's proposed REO-disposition plan to sell Fannie Mae, Freddie Mac and other government-held inventory in bulk. The RPX Composite price index, which tracks home values in 25 metro areas, showed a 4.7% drop year-over-year in June.

Eddins said analysts are concerned about the Fed's proposal to cut down on the number of government-owned distressed properties by allowing investors to buy these REOs in bulk for the purpose of turning them into rentals.

"Unless careful steps are taken to prevent it, we fear that bulk sales of REO properties could have an adverse effect on the appraised values of homes, and therefore home sales," the RPX monthly report warned.

Eddins believes a bulk sale could result in markets with a large number of low-priced homes with "misleadingly low appraisals" on REO properties — skewing home prices across the board.

"The low appraisals could then scuttle home sales that do not involve REO properties," Eddins wrote. "Even if local appraisers do not use the bulk-sale properties as comps, there are many automated valuation models that would likely incorporate the prices of those properties unless there was some way to designate them as bulk-sale properties. This issue should be taken into consideration by anyone trying to implement a bulk-sale program."

The report goes on to say bulk sales will likely result in the GSEs recording losses on the REO properties when comparing the sale amount to the principal on the defaulted loan. "We believe these losses, which will ultimately be passed to taxpayers, could be huge," Radar Logic said.

Instead of going the route of selling the properties to investors, the RPX report recommends the Federal Housing Finance Agency focus on restructuring delinquent or distressed loans to cut down on the flow of properties to government portfolios.

Eddins says the Fed could then rent out properties from its REO portfolios by working with private-sector property managers.

"We believe our two-pronged strategy will reduce the REO portfolios of the enterprises and the FHA and reduce the oversupply problem currently facing the housing market while avoiding a devastating loss to taxpayers," Eddins writes.

The plan will officially be proposed by Radar Logic next month.

Looking forward, the RPX report said "housing is poised for further weakness," but analysts expect a recovery eventually.

Foreclosures Sell for Up to 40% Less

2011-08-25T11:33:00.001-05:00

Foreclosures made up about one-third of all home sales during the spring quarter (April to June), and sales were about six times the percentage of foreclosures in a healthy housing market, RealtyTrac Inc. reports.

Foreclosure sales likely would have been much higher too if so many banks hadn’t slowed their foreclosure processes while state and federal officials continued to investigate possible faulty practices. Foreclosure sales — which include homes purchased after they receive a notice of default or that were repossessed by lenders — peaked two years ago at 37.4 percent of sales, compared to 31 percent in the April to June quarter.

During the second quarter, 265,087 homes sold were in some stage of foreclosure or owned by banks — but that’s down 11 percent from the same period a year ago, RealtyTrac reports.

The state with the highest number of foreclosure sales was Nevada, where foreclosure sales accounted for 65 percent of all sales. Arizona followed with foreclosure sales accounting for 57 percent of all home sales for the quarter.

Foreclosures Continue to Weigh on Home Prices
Foreclosed homes continue to sell for less than other homes. During the spring, bank-owned homes sold for 40 percent less than the average price of other homes. Sales of homes in the foreclosure process or short sales sold for 21 percent less than the average home sold.

The average sales price of a foreclosed property was $164,217, a drop of less than 1 percent from the January-March quarter and a nearly 5 percent drop from the April-June quarter in 2010.

Source: “Foreclosure Sales This Spring were 6 Times Higher Than in Healthy Housing Markets,” Associated Press (Aug. 25, 2011)

White House Weighs Mass Refinancing Plan

2011-08-25T11:32:00.001-05:00

The White House is considering a housing proposal that would allow millions of home owners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.

“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.

Many home owners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.

“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.

The White House is also considering other options to try to stimulate the housing market or save home owners from foreclosure. Such options include more changes to its refinancing programs so more home owners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.

Source: “U.S. May Back Refinance Plan for Mortgages,” The New York Times (Aug. 24, 2011)

Fannie Mae Revises Growth Estimate

2011-08-24T14:51:00.001-05:00

Fannie Mae has revised its economic growth forecast to 1.4 percent this year, down from a July estimate of 2.4 percent, and to 2 percent for 2012, down from its prediction of 3.1 percent last month. The firm expects housing activity to weaken, except for the rental sector. The housing market and overall economy, it said, will be impacted by lower business and consumer confidence and a slowdown in hiring.

Source: "Fannie Mae Revises Growth Estimate

Economic Woes Prompt Buyers to Back Out of Deals

2011-08-22T11:42:00.001-05:00

Recent falls in the stock market and growing concerns over the cloud hanging over the U.S. economy has prompted more home buyers to cancel real estate deals or continue to sit on the sidelines, analysts say.

The National Association of REALTORS® said in a recent report that home buyer cancellations in the last two months increased about 10 percent from a year earlier. Lawrence Yun, NAR’s chief economist, says the increase is due to low appraisals that do not match the mortgage amount, “overly stringent” lending standards, as well as waning buyer confidence.

“The typical home buyer gets rattled when confronted with economic turmoil,” says Stan Humphries, Zillow.com’s chief economist. “The type of fear we’re seeing could substantially worsen the housing market.”

Stock market declines are denting many buyers’ pocketbooks. “A lot of people have seen their down payments for a home disappear in the stock market,” Keith Gumbinger, vice president of HSH Associates, told Bloomberg News. “It served as a reinforcement to the hunker-down mentality that a lot of home buyers already had.”

Some home buyers who still have the means to buy are waiting for prices to fall even further too, says Jim Hamilton, with Lyon Real Estate.

“People are watching the stock market as a major indicator of what’s going on in the economy,” Hamilton told Bloomberg News. “Buyers are beginning to think that if they wait, they’re going to get a better deal in a few months.”

Even Low Interest Rates Can’t Get Buyers Moving
Despite borrowing costs at record low levels, applications for mortgages to purchase homes continues to fall. In fact, for the week ending Aug. 12, mortgage applications to buy dropped to a 13-month low, according to the Mortgage Bankers Association.

Federal Reserve Chairman Ben Bernanke was hoping to revive demand for housing by lowering interest rates and vowing to not raise key rates until 2013. Rates have been below 5 percent for more than two weeks but have failed to spark more buying.

“Low mortgage rates are only helpful to home buyers who aren’t paralyzed with fear after watching their 401(k) disappear,” says Mark Goldman, a lecturer at the Corky McMillin Center for Real Estate at San Diego State University. “For now, people see the stock market as a casino table.”

Source: “Housing’s Drag on Economy May Worsen,” Bloomberg News (Aug. 21, 2011)

Buyers to Sellers: Just How Low Will You Go?

2011-08-20T15:07:00.001-05:00

Low-ball offers from home buyers seems to be the norm these days. But as economic and stock market woes continue, some buyers are using it as an opportunity to submit even lower offers, The Wall Street Journal reports.

"Buyers are going to use every point of leverage they can to get a lower price," Glenn Kelman, chief executive of Redfin Corp., told The Wall Street Journal.

For example, home buyer Ryan Goodman says he reduced bids on two homes he submitted in Barrington, Ill., because of the stock markets plunge. He and his wife had originally offered $680,000 for a home listed at $800,000, and this week submitted a new offer of $650,000.

"Unless we get a steal, we're not going to buy any house," Goodman says.

Analysts say that the Federal Reserve’s vow to keep short-term interest rates near zero until 2013 has reduced the urgency of buyers. It gives buyers “comfort that they are not missing out on low interest rates if they wait," says John Burns, a home-building consultant in Irvine, Calif. “That has tilted even more power toward home buyers.”

Source: “New Round of Upheaval Reduces Home Buyers’ Urgency to Do a Deal,” The Wall Street Journal (Aug. 19, 2011)

Shadow Inventory Falls, Expected to Continue

2011-08-19T08:53:00.001-05:00

Standard & Poor’s estimates that it would take nearly four years — or 47 months — for the housing market to work through its shadow inventory at the current rate. While that number is still high, it marks an improvement over S&P’s first quarter report that had estimated 52 months.

Shadow inventory represents homes that are in the foreclosure system but haven’t hit the market yet. S&P defines shadow inventory as foreclosure and REO properties in 90-day delinquency or worse.

"In conjunction with stable liquidation rates, we believe these are positive signs that the amount of time it will take to clear this 'shadow inventory' should continue to decline over the next year," S&P analysts said.

Delays from mortgage servicers in processing foreclosures likely will cause more than 1 million foreclosures to be postponed until next year, RealtyTrac recently reported.

As such, "the shadow inventory will continue to jeopardize the housing market's recovery until servicers are able to improve liquidation times," S&P said. "However, if and when that happens, an influx of homes will likely enter the market, increasing supply and driving prices down further."

Shadow inventories are largest in New York, where S&P estimates it will take 144 months — or 12 years — to work through foreclosure properties at the current rate. That is down slightly from 146 months in the first quarter.

Source: “Standard & Poor’s: Shadow Inventory Levels Begin to Improve,” HousingWire (Aug. 17, 2011)

Tightening of Credit Still Shuts Many Buyers Out

2011-08-18T13:45:00.001-05:00

The majority of renters — 73 percent — who live in single-family homes say that the challenges of getting a home mortgage is one of the main culprits keeping them from home ownership. About 33 percent point to their credit history as posing the biggest challenge in qualifying for a mortgage, while others are concerned about the tightening of credit that make it too difficult to qualify in general, according to the latest Fannie Mae National Housing Survey.

Concerns about obtaining financing and growing concerns over the economy continue to plague the housing market, the survey finds.

“Consumers are more cautious due to concerns over employment and household finances,” says Doug Duncan, chief economist of Fannie Mae. “As a result, consumer spending, which accounts for about 70 percent of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market.”

Renters, however, seem to be getting the message that home ownership still makes more financial sense. Only 23 percent of renters living in single family homes said that renting makes more sense than buying a home.

But besides the tightening of credit, concerns over employment is also keeping many out of the market. “Dissatisfaction about the direction of the economy and related employment fears are damping demand to buy homes and slowing the recovery,” Duncan says. “People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve.”

Source: “Credit Concerns Keep Renters From Buying,” RISMedia (Aug. 16, 2011)

Despite Low Rates, Buyers Still on the Fence

2011-08-15T12:27:00.001-05:00

The Federal Reserve last week announced that it would keep the key interest rate low for at least the next two years. But even low interest rates can’t seem to get home buyers off the sidelines.

“Under normal circumstances, the Fed's announcement might have attracted new home and car buyers and prompted credit card holders to rack up fresh charges,” according to a recent New York Times article. “But with unemployment high and those with jobs worried about keeping them, consumers are more concerned about paying off the loans they already have than adding more debt. And by showing its hand for the next two years, the Fed may have inadvertently invited prospective borrowers to put off large purchases.”

Credit remains tight, despite the low interest rates, and that is also keeping some buyers out, analysts say. Also, with more home owners underwater on their mortgage, they cannot afford to sell their home and move up to a new home, experts say.

Applications for new mortgages have slowed this year to a 10-year low, reports the Mortgage Bankers Association.

Source: “Low Rates May Do Little to Entice Nervous Consumers,” The New York Times (Aug. 15, 2011)

Fed to Keep Interest Rates Low Until 2013

2011-08-13T20:37:00.001-05:00

In an unusual step, the Federal Reserve vowed Tuesday to keep interest rates low for at least the next two years.

The Fed said it’ll keep its key benchmark interest rate near zero through mid-2013. The Fed’s commitment was welcome news to many in the real estate industry who see it as a positive move for the housing industry, allowing buyers more time to take advantage of ultra low mortgage rates.

The Fed said in a statement following its regular policy-setting meeting Tuesday that the overall economy has grown "considerably slower" than it expected and that consumer spending "has flattened out." Some economists in recent days have expressed concerns that the U.S. is heading for a double-dip recession.

Fed officials "are very nervous about the economy," says Mark Zandi, chief economist at Moody's Analytics. "This is unprecedented for the Fed to indicate they are ready to keep rates low for two more years."

Still, the Fed continues to forecast a moderate pick-up in growth for the economy in the second half of the year.

Source: “Fed says it Will Hold Rates Fast Until mid-2013,” MSNBC.com (Aug. 9, 2011)

Tips for Customers: How to Raise a Credit Score

2011-08-13T20:36:00.001-05:00

A good credit score is crucial for getting approved for a mortgage. So how can your customers improve their credit score? Here are a few tips recently featured in an article at RISMedia:

Check reports to ensure accuracy. First, your customers want to make sure they aren’t getting penalized by a low score that is a mistake. They can get a free copy of their three major credit reports at annualcreditreport.com, a government-authorized Web site. Credit bureaus are required to investigate any mistakes you bring to their attention. “Typically, they ask the creditor that reported the past-due information to check its records. If the creditor can’t verify the info or doesn’t respond, the item should be deleted,” the article notes.

Always pay bills on time. Paying bills on time is critical for a good credit score. Your payment history comprises more than one-third of the typical credit-score determination, says Liz Weston, author of “Your Credit Score.”

Keep accounts open. Don’t close old credit card accounts, even ones you’re not using. It’ll reduce the amount of available credit and can actually lower your credit score.

Get more tips and a handout to download to give to your customers: What You Can Do to Improve Your Credit Score.

Source: “5 Tips to Raise Your Credit Score,” RISMedia (Aug. 6, 2011)

Young Generation Hit Hard by Recession

2011-08-09T10:55:00.001-05:00

The recession has hit the younger generation hard and is forcing them to delay many major life changes and purchases, according to a new survey. About 44 percent of Millennials — people aged 18 to 29 — say they will have to delay buying a home due to economic factors, according to a survey conducted by The Polling Co. Inc./WomanTrend.

About 75 percent say they have or will delay a major life change or purchase due to economic factors, and 30 percent say the bad economy has prompted them to delay changing jobs or cities. What’s more, nearly 25 percent say they will delay starting a family, and 18 percent say they will delay getting married.

Such delays by the younger generation has started to affect household formation. Many young professionals are moving back in with their parents to curb costs, which has caused household to grow in recent years after facing decades of declines.

"The impact of the poor economy, in human terms, has been devastating. This is especially true for young Americans, whose lives have been interrupted and dreams put on hold due to the lack of economic opportunity," says Paul T. Conway, president of Generation Opportunity.

CoreLogic: Home Price Index increased 0.7% in June

2011-08-03T11:57:00.001-05:00

Notes: Case-Shiller is the most followed house price index, but CoreLogic is used by the Federal Reserve and is followed by many analysts. The CoreLogic HPI is a three month weighted average of April, May and June (June weighted the most) and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic® Home Price Index Shows Third Consecutive Month-Over-Month Increase

CoreLogic ... today released its June Home Price Index (HPI) which shows that home prices in the U.S. increased by 0.7 percent in June 2011 compared to May 2011, the third consecutive month-over-month increase. According to CoreLogic, national home prices, including distressed sales, declined by 6.8 percent in June 2011 compared to June 2010 after declining by 6.7 percent* in May 2011 compared to May 2010. Excluding distressed sales, year-over-year prices declined by 1.1 percent in June 2011 compared to June 2010 and by 2.1* percent in May 2011 compared to May 2010. Distressed sales include short sales and real estate owned (REO) transactions.

“While there is a consistent and sustained seasonal improvement in prices over the last three months, prices are lower than a year ago due to the decline in prices after the expiration of the tax credit last year. The difference between the overall HPI and our index excluding distressed sales indicates that the price declines are more concentrated in the distressed sales market,” said Mark Fleming, chief economist for CoreLogic.

Is the Cure for Foreclosure Glut a Bulldozer?

2011-07-28T13:12:00.002-05:00

Bank of America Corp. is taking an unusual step in chipping away at its high inventory of repossessed homes by demolishing some of the most run-down homes in its inventory.

Bank of America will be donating 100 foreclosed homes in Cleveland, 100 in Detroit, and 150 in Chicago--with nine other cities are expected to be added by the end of the year--to local agencies and contributing to their demolition. Wells Fargo, Citigroup, JPMorgan Chase, and Fannie Mae are also moving forward on similar demolition plans for its most decrepit homes.

Banks have faced high inventories of foreclosures in the last few years that have lingered on the market and brought property values nationwide down. In June alone, more than 1.6 million homes -- or one in every 77 households -- were in some stage of foreclosure, according to RealtyTrac.

“There is way too much supply,” Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., told Bloomberg News. “The best thing we can do to stabilize the market is to get the garbage off.”

The homes slated to be demolished by Bank of America have been deemed uninhabitable, with some of the homes worth less than $10,000. The bank said it would cost too much money to restore the homes. The property’s land will be used for development, open space, or urban farming, according to a company statement.

In the first quarter of this year, Bank of America boasted 40,000 foreclosures on its books.

Source: “BofA Donates Then Demolishes Houses to Cut Glut of Foreclosures,” Bloomberg.com (July 27, 2011)

Gov't in Talks to Rent Out Foreclosures

2011-07-22T14:18:00.000-05:00

THIS IS A MUST READ!!! LET ME KNOW WHAT YOU THINK OF THIS

The Obama administration is considering a plan that would take foreclosed homes off the market and rent them out--in a move aimed at clearing the glut of unsold foreclosed homes and preventing home values from falling any more, The Wall Street Journal reports.

The talks come at a time when national rents are on the rise and home prices have been falling. By taking advantage of these higher rents, lenders would be able to cover the costs of holding the properties until the homes can be resold once the market stabilizes, and maybe even make a profit on it later, experts note.

Nationally, sales of distressed homes, which are often sold at steep discounts, continue to pull down home values. Removing some of the high number of foreclosed homes for sale is “worth looking at,” Federal Reserve Chairman Ben Bernanke said last week in testimony to Congress.

Just reducing Fannie Mae and Freddie Mac’s foreclosed property sales from its current rate of 50,000 each month to 30,000 could lessen total distressed sales by one-third and help avoid a further 3 percent to 5 percent decline in home prices, analysts at Credit Suisse estimate.

However, turning foreclosed homes into rentals could place lenders and the government in an unknown role of playing landlord.

Another idea being tossed around, according to The Wall Street Journal: Federal officials selling thousands of foreclosed properties to private investors who would agree to rent them out, and who could then work with property management firms and handle the day-to-day tenant demands.

Source: “Uncle Sam Weighs Landlord Role to Ease Housing Slump,” The Wall Street Journal (July 22, 2011)

PRICING: Beat Your Competition To The Contract

2011-07-11T12:53:00.000-05:00

To sell your home quickly for top dollar in today's market, the best move you can make is to price the property at its current market value. When you set the right price on your home, you have an edge on your competition.
Here's how setting the right price helps you:

You tap the pent-up demand of buyers who have already seen everything on the market and are waiting for new home listings.

You target the right group of prospects -- the ones who can afford your home and are looking at similar properties.

Your home will compare favorably with other homes potential buyers see because yours will look better than overpriced homes in your category.

Perils Of Overpricing

Overpricing your home gives the advantage to your competition -- the other homes on the market. The buyers you want to attract won't see your home because they are only looking at homes listed in their price range.

Prospective buyers who do see your home realize they can get a better deal elsewhere. If it's your home they want, they may choose to wait until you lower the price. And if you do reduce the price, other potential buyers wonder why the home has been on the market so long.

The right price is determined by the size, condition and location of your home, what comparable homes are selling for at the time you list yours, and the balance of supply and demand in your area.

Strategic Pricing
Setting the best price to list your home is part science, part art. There are several aspects of the home's value we consider when making pricing recommendations.

1. Comparison.
Where does your home fit in the marketplace? It should be priced to be competitive with comparable homes in the same area.

2. Negotiation.
The price should allow some space to make concessions in order to close the deal.

3. Return.
The listing price should be set so you net the most money possible from the sale.

4. Target.
Ideally, the price is adjusted to the top of a multiple listing category, so the home's features compare favorably with lower-priced homes in the range. (If it is placed at the bottom of the next higher price grouping, the higher-priced homes will look better and sell more quickly.)
Other Factors

Unfortunately, what you paid for your home is not a factor in determining its market value.

Neither is what you would like to get out of the home. Some home improvements you've made may add to the market value, however. Having the home in picture-perfect condition from the first day of the listing may also increase the value of your home. But mostly, these will help you sell faster, and that could mean a sale price close to your asking price.

Call us to find out more about how you can price your home to sell it quickly. We'll be happy to conduct a FREE market analysis to find the best price for listing your home.

How Much Cash Should You Put Down?

2011-07-05T07:57:00.001-05:00

When you’re buying a home, you can put as much or as little of your own money into it as your finances dictate – from as little as 3% fro some loans to all-cash. It depends on your available money and the practices of different lenders.

A 5%, 10%, or 20% down payment is typical, and if you’re shopping for a mortgage, you can bet lenders will more readily commit their money when you commit a healthy portion of yours. Less than 20%, and lenders generally take a harder look at your whole financial situation. They are also apt to require either private mortgage insurance (PMI), or the government backing of the Federal Housing Administration (FHA) or the Veterans Administration (VA) – all good and available options for buyers who simply don’t have the 20% cash.

Under the new tax law, it may be to your advantage to pay the 20%, if you possibly can – especially if you have to buy private mortgage insurance. PMI costs you up front, at closing and again in annual premiums.

If you need help, we’ll be glad to advise you. Just e-mail us or give us a call.

4 Shortcuts for Your Android Phone

2011-06-29T11:23:00.001-05:00

The New York Times recently featured a series of articles unlocking tricks and tips that will make your Android smartphone even smarter.

Unlike Apple’s iPhone, mobile phones that run Google’s Android operating system come in a large variety and features can vary somewhat. But there are some commonalities. Here are a few time-saving tricks you may be unaware that your Android can do:

‘Long press’ to access shortcuts: The New York Times considers the “long press” an important key to unlocking many time-saving secrets with Android phones. The long press is when instead of tapping a button or icon on the screen, you press and hold your finger on it for two seconds. This will then usually bring up a menu of options specific to the type of item and you may unlock quite a few features.

For example, long press the home key on your phone’s case, you’ll bring up a menu of your eight most recently used apps. Long press the search key (it appears as a magnifying glass) and a microphone icon will appear that says “Speak Now.” You can then use voice commands to tell your phone what to do, e.g. “Send text to John Smith, will be at the showing by 5” or “Navigate to the nearest gas station.”

Quickly access phone, text, and e-mail: While in your address book, tap the photo of the person instead of the person’s name. You’ll get a menu of icons to call, e-mail, text, or even send messages through Facebook or Twitter.

Type faster: When texting or e-mailing a message, press the spacebar twice and the Android automatically will insert one period and one space at the end of your sentence so you don’t have to fumble around for the period key.

Send to voicemail: Maybe you have a few callers you want to avoid or you’re going to a showing and don’t want to be disturbed. Make sure the caller is in your address book and then click on “Additional info” option there. At the bottom of these extra options, you’ll find “Send straight to voice mail?”

Tight Credit Continues to Shut Buyers Out

2011-06-27T16:52:00.001-05:00

With the tightening of credit over the last few years by banks, more potential buyers find they are being shut out of home ownership, unable to obtain financing for their home purchase. And it’s not just buyers with poor credit histories being rejected for home loans--some buyers are even coming with stellar credit scores and big down payments, experts say.

For example, Amy Menell told The Wall Street Journal how a bank denied her for a home loan, despite her credit score being above 800, no debt, and having a down payment of more than 50 percent of the cost of the $400,000 home. However, Menell, who was in the process of finalizing a divorce, works as a real estate agent and didn’t have much income in 2009. While her business has picked up since then, she did not have the two years of documented income the banks wanted to process her loan application.

Other qualified buyers coming with good credit scores and credit histories are also finding themselves unable to get a home loan. Those who are having the toughest time are those who have seen their incomes drop or interrupted by a time of unemployment and self-employed applicants.

The percentage of mortgage applications rejected by the nation's largest lenders increased last year: The country’s 10 largest mortgage lenders denied 26.8 percent of loan applications in 2010, which is up from 23.5 percent in 2009, according to an analysis by The Wall Street Journal.

The analysis showed denial rates for loans were highest in Miami, Detroit, and New Orleans. In Miami, for example, nearly 44 percent of home loan applications were denied last year (home prices in Miami have dropped by 50 percent since their 2006 peak), according to The Wall Street Journal. Lenders denied the fewest loans in Raleigh, N.C.; Bethesda, Md.; and San Jose, Calif.

An Ease in Sight?

Banks continue to be under pressure to avoid heavy losses, which fueled the tightened standards in the first place.

"Clearly we got too loose. This is a return to historical standards," says Doug Duncan, Fannie's chief economist.

Lenders don’t appear to have plans to ease credit soon either. Nearly four in 10 banks reported even tighter mortgage lending standards for the 12-month period ended in February, according to a survey by the Office of the Comptroller of the Currency. Only 8 percent of the banks surveyed said they had eased their credit standards.

Source: “Tighter Lending Crimps Housing,” The Wall Street Journal (June 25, 2011)

What Today's Home Buyers Desire

2011-06-20T14:11:00.002-05:00

Home buyers have high expectations for their purchases this year, the most critical of which may be a really great deal. In addition to more bang for the buck — and the bragging rights that go along with a superior bargain — today's house hunters also are looking for incentives, such as gift cards that they can use to decorate their new home or financial assistance at the settlement table.

Another important desire of buyers is that the property be well-maintained. "I'm not working with too many people who want a fixer-upper," says Pat Vredevoogd Combs, vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., and past president of the National Association of REALTORS®.

Current NAR President Ron Phipps agrees. More often than not, he explains, "buyers have limited amounts of cash. Even if they want to do a fixer-upper, they don't have the money to do it."

That is true even for buyers of bank-owned properties, says real estate broker Joan Pratt of RE/MAX Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures, and they want them to look like they're owner-occupied," she says. "They don't want to paint. They don't want to put carpet in. They don't want to clean."

Modern buyers also favor open kitchens; open floor plans; and outdoor living components, such as screened porches, exterior kitchens, and two-way fireplaces. Additionally, the environment is increasingly important, with today's prospects seeking out elements such as triple-glazed windows and energy-efficient appliances.

Repurposed materials matter, too. "We're seeing lots of different materials and lots of reusable materials, which is interesting," Phipps notes. "Also a lot of unusual uses of hardwood — like pine flooring (reclaimed and) reused for counters," or terra cotta slabs for countertops. Buyers in 2011 are indicating a preference for smaller homes, but they like them nicely appointed. Luxurious elements such as coffee bars in the master bedroom are gaining popularity, as are expensive finishes in not-so-expensive homes.

Source: "Nine Items Homebuyers Desire in 2011," Bankrate.com, Dana Dratch (June 16, 2011)

“Every plan to move should include a Plan B.”

2011-06-20T01:57:00.001-05:00

Moving to a new home doesn't always go the way you'd like. If it did, you would sell your home quickly, then settle on a perfect new home just before your household goods pull up at the front door. Unfortunately, details often get in the way of what's supposed to happen on schedule.

If you're planning a relocation, make sure you develop alternate plans in case something doesn't go as planned. For example, talk with your lender about a bridge loan, in case your old home doesn't sell before your new home goes to settlement. The opposite could happen too--a lag between vacating your old home and settling on your new one. Having a plan in place for temporary housing could come in very handy.

The Bankster's Latest Tricks

2011-06-16T16:20:00.001-05:00

I thought the banks had gone as far as possible to take money from the taxpayers and the government through their TARP funds and the manner in which they paid it back, enabling them to pay bonuses to their executives without government interference. They did not make the money by doing what banks are supposed to do, which is lend money. Instead, they invested it in the stock market, driving it up, and then selling and reaping the profits.

Of course, that results in capital gains that is taxable income with no offsetting deductions other than capital losses. God forbid the banksters should pay tax to the government (and the taxpayers) who bailed them out. They had to come up with a way to create more capital losses.

Of course, for these brilliant people, this was an easy task. Here is what they did, and I have the proof, which I am forwarding to the Internal Revenue Service this week. This was a JP Morgan Chase Bank transaction.

1. When they foreclose on a property, they report the "transfer value" to the county recorder. I am not sure how this affects the property taxes in other states, but in California the property taxes are assessed based upon the transfer value, as are the transfer taxes. The property for which I have the proof was reported to the county as having a transfer value of $143,000.

2. Chase then issued to the previous owner a 1099-A, as required by Federal law, to report the amount of the obligation and the fair market value of the property. In this case the outstanding principle was $283,000.00. In spite of the fact that they had shown a transfer value of $143,000 to the county, Chase reported that the Fair Market Value of the property was $345,000, more than $200,000 higher!

3. Chase then put the property on the market for $147,000, even though they had already turned down a short sale offer of $150,000 cash. They ultimately sold the property for $130,000.

What this means is that they now showed a capital loss of the difference between what they reported as the Fair Market Value ($345,000) and the final selling price ($130,000). Using those numbers, their capital loss was $215,000 which they could now offset against the capital gains from their stock dealings, saving them $32,250 in Federal taxes, and who knows how much in state taxes.

Doesn't seem like all that much for a big corporation such as Chase, but multiply that by 100,000 foreclosures and you come up with something like $3 billion dollars in fraudulent tax evasion.

In the mean time, our government leaders ignore these facts and have allowed the big banks and the rest of the financial markets to run our country because they have all of the wealth. They continue to drive down the prices of homes through the foreclosure process, while the government sits on the side lines making meaningless gestures regarding helping homeowners, while allowing the banksters free reign in destroying the fabric of America.

Published on Tuesday, June 14, 2011, 1:06 PM Last Update: 1 day(s) ago by Ken Koenen

Do You Know How to Do Your Own Pre-Purchase Inspection?

2011-06-12T06:34:00.000-05:00

Buying your first - or any - home means taking a cool look at what you're about to invest in. Here are four major items to check out before you write your check.

• Sills, beams.

o Possible defect: Rot caused by moisture or boring insects.
o Check method: Poke wood with knife for spongy spots, especially near the foundation. Request certification of most recent termite inspection.

• Windows and Doors.

o Possible defect: Sticking, poor weather stripping.
o Check method: Try all openings and note kind and condition of weather stripping.

• Plumbing.

o Possible defect: Aging, leaking pipes; inadequate water heater or water pressure.
o Check method: Note kind of pipe (copper is best); compare heater's capacity with family needs; try faucets while flushing for steady faucet flow.

• Electricity.

o Possible defects: Insufficient voltage; too few outlets.
o Check method: Compare number of amps to appliance requirements; count outlets.

Set The Stage For A Quick Sale

2011-06-09T14:19:00.000-05:00

Remember the last time you visited a new home development? How did you feel touring the model? Usually, pleasant memories come to mind about how well the home looked. That's because it was "showcased" properly.

You can do the same thing when you prepare your own home for sale.
Home showcasing is not about remodeling, fixing up or making your home look sterile. Instead, it focuses on amazingly simple steps to make your home show like a model without spending a lot of money. The secret is setting the stage, which helps potential buyers imagine themselves and their families at home in your "home for sale."

Set The Stage

Strip Down And Build Up

The first step is to clear the set. Take out extraneous furniture, decorations, pictures, etc. Take each room down to its most basic form, opening up the living space as much as possible. Then build it back up to the way you want it to look, as simply as possible, and without clutter.
Make the strip-down process simpler by stowing packed boxes in a staging area like the garage, or by renting a storage space to hold extra furnishings while your home is on the market. In essence, pack up early.

Props

When building the set, try to make each room tell a story. Help potential buyers see themselves in each room. A clever arrangement of props will make it easy for buyers to imagine writing a letter at the desk in the kitchen, clicking on the television and enjoying a bowl of popcorn, turning on the stove and preparing a holiday repast.

Themes for a room can help you narrow down how to display it. You can, of course, stage the room as you use it now, or choose a particular motif, i.e. Southwestern, country style, international. Or you could pick an activity to illustrate on your stage, i.e., relaxed office or library, gourmet cooking, resort or vacation living. What would you like to do in that room? Place the props needed for those activities throughout the room.

Lighting

Lots of lights open up a room and gives it a larger appearance. If you've been using 50 watt bulbs, move up to 100 watts. If a large living room has only one lamp, move in another. Open curtains. Add mirrors. When it's being shown, the home should be bright. Brightness gives a showy feel. And your home is now center stage!

Do Your Homework

Ask what buyers are looking for in your community. What are they saying about the homes they don't buy? And what is it about the homes that are selling that makes them so popular? By determining your ideal target buyer, you will better understand how to merchandise your home. Our experience in your specific neighborhood can help you answer all these questions and more.

Aroma Therapy

Almost as important as how a home looks is how it smells. Ask a close friend to walk through your home -- objectively -- and take a whiff here and there. Are there any offensive odors? Is it too perfumy? Too drab? Stale? Musty? Are there pet odors (which should be fixed -- not covered up!)? What can you do to impress potential buyers with aroma therapy?
When it comes time to sell your home, you'll want to work with a real estate professional who knows all aspects of the selling process -- including showcasing. Call us today to talk about how we can help you display your home to sell for the best possible price!

Fannie Revamps Rules on Delinquent Loans

2011-06-07T13:34:00.001-05:00

Fannie Mae announced this week new rules that will require mortgage servicers to act more quickly and consistently in helping troubled home owners avoid foreclosure.

Fannie told servicers they must strive to build a “strong customer service relationship,” better understand why the borrower is missing payments, and educate them on ways to prevent foreclosure.

"We want home owners to be able to understand their options when facing foreclosure, and we want servicers to reach home owners early in the process, communicate frequently and clearly, and help home owners avoid foreclosure," says Jeff Hayward, senior vice president of Fannie Mae’s national servicing organization.

Also among the revamped guidelines, Fannie told servicers they will be required to contact home owners verbally and in writing within 120 days after a loan first becomes delinquent. They will need to try to complete a loan modification or other option that keeps the borrower in their home or helps the borrower avoid the foreclosure process.

If foreclosure is unavoidable, servicers will need to follow a clear timeline and must begin the foreclosure process once a loan has been delinquent for more than 120 days. Servicers also must make it clear when a property in the foreclosure process will be sold.

“You can't create a lasting home until you own one.”

2011-06-06T08:49:00.002-05:00

It isn't unusual these days for newlyweds to have enough income but not enough down payment or credit history to buy their own home. You may be able to make homeownership possible for them--at very little expense to yourself.

If the couple has a small down payment, you could help them avoid the additional expense of paying private mortgage insurance by putting up collateral--Certificates of Deposit, stocks or other assets--until the loan is paid down to a predetermined level. Another option is helping them qualify for the mortgage by co-signing their loan. This pledges you'll be responsible for the mortgage should they default. In that event, your agreement should state that the property would become yours to sell or rent to pay off the loan.

“There's a big difference between a 'handyman's special' and a 'money pit.'”

2011-05-31T07:26:00.001-05:00

Well-located homes in need of tender loving care can be a terrific value. If you're interested in building "sweat equity" fixing up a home, hire a professional inspector to ensure the home won't cost you a fortune to refurbish.

A worthy handyman's special will be structurally sound with all major systems in good working order--heating/cooling, plumbing, electrical, roof. Those are the most costly items to repair or replace. Your time and effort will be better spent painting, making minor repairs, adding or replacing fixtures, sprucing up the landscaping, and accomplishing other low-cost fix-ups.

Aristotle's quote

2011-05-30T21:45:00.002-05:00

We are what we repeatedly do. Excellence then, is not an act, but a habit.
Aristotle

How To Buy The Home You Love At The Price You Want

2011-05-29T08:24:00.002-05:00

Found the house of your dreams? Now the negotiations begin.
The agent you're working with can guide you through the process of making a purchase offer. You'll want to start by learning as much as you can about how much the property is worth.

Check the comparables:

Your agent has up-to-the-minute price data at hand to help you analyze any comparable properties; just ask. Although every home is unique, here's some of what makes a home "comparable" to the one you're considering purchasing:
• same neighborhood;
• same age and condition;
• same size lot;
• same home style--equivalent living space, number of rooms and baths;
• similar terms of sale.

Offer what you think the house is worth
Some asking prices have built-in padding, but others are already priced to sell. You could lose a well-priced home with a low-ball bid. Remember, a lower mortgage interest rate will allow you to borrow more and pay a higher price for a home without increasing your monthly payment.

Spell out the details

Consider getting a pre-purchase appraisal and home inspection. The appraisal will give an independent valuation of the house, and the inspection will help identify any potential problems you may have overlooked. Consider including a contingency making the contract subject to a satisfactory appraisal and inspection.

Evaluate contingencies

The contract can also be contingent upon an attorney's review, previous home sale, and acceptable mortgage loan terms, etc. Contingencies are typically used to smooth acceptance of an offer without delaying the final decision. Too many contingencies, however, weaken your bargaining position.

Know what's important to you

Prioritize the elements of the sale on paper ("must" and "want") and decide where you have negotiating room--what you'll give up or accept in exchange for a concession. Items frequently negotiated include adjustments for needed or requested repairs, what personal property stays and what goes with the seller, points and closing costs, and move-in date. Knowing exactly what you want and where you are willing to bargain is your most important negotiating tool.

Put everything in the first purchase offer

If the first offer is accepted it may be too late to add anything. Include a financial statement. Do all negotiating in writing with a deadline for a response, often 48 hours. You are free to cancel an offer until it is accepted by the seller. Require that your binder or deposit be held in an escrow account with the interest credited to you.
Be patient

Negotiating could take several days. Be patient; you won't want to rush into one of the most important purchases you'll ever make.

We can help

If you'd like help finding your dream home, please call or e-mail us. We'll help with your home search and will give you all the important information we can provide to help you make the right offer for the right home.

New Listing in Ofallon

2011-05-27T08:02:00.000-05:00

HOME THAT BACKS TO WOODS!!

Overview

Maps

Photos

Description

Neighborhood

$179,900

Single Family Home

Main Features

3 Bedrooms
2 Bathrooms
Interior: 1074 sqft
Lot: 0.21 acre(s)

Location

1034 Fawn Ridge Dr.
OFallon, MO 63366
USA

To get updates on open home dates and other property events, please click the "Like" button below:

Mike Cribbin

Cribbin Realty
(636) 294-6061
mike@cribbinrealty.com
http://www.cribbinrealty.com

Listed by: Cribbin Realty

Our recent listings

HOME THAT BACKS TO WOODS!!
Completely Update Home
SHORT SALE
Home with Almost 10 Acres of Woods
SHORT SALE PRICE BUT NOT A SHORT SALE

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Will REOs Hamper a Housing Recovery?

2011-05-23T11:55:00.001-05:00

The nation’s largest banks and mortgage lenders currently own more than 872,000 homes — properties in which they repossessed from foreclosure, according to RealtyTrac. That is nearly twice the amount they repossessed in 2007, when the financial crisis began.

But the problem may get even worse: Banks are ready to repossess another 1 million homes in foreclosure, RealtyTrac reports.

The swelling number of lender-owned homes has economists concerned because higher inventories of distressed homes can depress overall home values. Economists say that it could take lenders three years to sell their foreclosed home inventory.

“It remains a heavy weight on the banking system,” says Mark Zandi, the chief economist of Moody’s Analytics.

Indeed, the high number of lender-owned homes stands to cost banks $40 billion in additional losses as they’re forced to sell these homes at sharp discounts over the next two years, according to Trepp, a real estate research firm.

Real estate professionals told The New York Times that lenders seem overwhelmed by the huge inventory of homes. They also say these lender-owned listings are often out of date and overpriced by as much as 10 percent, and that lenders take too long to accept an offer.

These homes also can sit in limbo for nearly two years. It can take 400 days just for lenders to foreclose on the home and then 176 days, on average, to sell it.

Source: “As Lenders Hold Homes in Foreclosure, Sales Are Hurt,” The New York Times (May 23, 2011)

Finding the Right Sales Price Isn't Easy

2011-05-23T11:53:00.001-05:00

In a volatile real estate market, knowing the right price for a home isn’t always clear, experts say.

Having to drop a home's sale price from its initial list price is common. On average, sellers reduce their list prices after about 2.5 months by 8 percent when a property hasn't sold yet, according to a report by Trulia.com. After making one price reduction, 35 percent of those sellers will make a second price cut too.

Even homes without any obvious faults are undergoing price cuts, agents say.

Real estate pros are finding that to find the right price for a home is much more than comparing it to a set of comps. But determining a price to fit a few of a home's unique limitations isn't easy.

BEST ROOFS: Pick The Best Roof And Contractor For Your Home

2011-05-22T19:07:00.000-05:00

Need a new roof? Your choice of a roofing "system" will determine how much you spend, how well it protects your home and how many years it lasts. Of course, it will also have an impact on how your home looks. The National Roofing Contractors Association offers some valuable advice for homeowners who face a new roof installation or replacement.

Taking into consideration your home's architectural style and the local climate, your budget will certainly be the major factor in your decision about what type of roof to purchase. Here are the types usually installed on "steep slope" structures--those with a slope of 25% or more. (Note that all roofing materials are given a Class A, B or C fire resistance rating.)

Need a new roof?

Asphalt Shingles

This is by far the most commonly used material for steep-slope roofs due to its low cost and relative ease of installation. There are two types:
• Organic shingles have a cellulose (wood) fiber base, saturated with asphalt and covered with colored mineral granules. Most have a Class C rating. If purchasing this type of shingle, the NRCA recommends you make sure it meets ASTM (American Society for Testing and Materials) D 225 standard.
• Fiberglass shingles (more frequently chosen these days) are made from a fiberglass base with top and bottom layers of asphalt and a top covering of mineral granules. Most have a Class A rating. Look for products meeting the ASTM D 3462 standard.
Some asphalt shingles are manufactured to have a textured appearance so they look like wood shakes or slate. You can also purchase them with imbedded zinc or copper-coated ceramic particles to help battle algae growth.

Wood Shingles/Shakes

Usually made from cedar, redwood or southern pine, this material gives a natural look to the home. Their fire-resistance rating, however, is often Class C or none, which is why some local building codes prohibit their use. Some manufacturers, however, apply a fire-resistant treatment to the wood at the factory, which earns them a Class A rating.

Tile

Made either of clay or concrete, tiles come in the round-topped Spanish style or flat English/French style. It is an extremely durable roofing material that comes in a number of colors and finished. It is heavy, however, and requires a strong roof structure (rafters and trusses) to support its weight.

Slate

This expensive but very long-lasting roofing material comes in a variety of colors and grades. It also needs a strong roof structure, and its installation requires a skillful, experienced crew.

Metal

Another good choice for longevity, metal roofs come in panels and shingles. A variety of metal panel shapes and configurations are available. Lightweight metal shingles are manufactured to look like other roofing materials such as wood shakes, shingles and tile. They have good weather resistance and some have Class A fire-resistance ratings.

Once you determine the kind of roof you want to purchase, you'll want to go shopping for quotes. Be careful, however, not to assume that the lowest quote is the best deal. Check to ensure that your roofing contractor has:

• a permanent place of business.
• a business license (and a roofing contractor license if required by your state).
• proper liability and workers' compensation insurance.
• a proven track record and references you can speak with.
Get at least three written quotes for materials and installation. And be sure that the materials that arrive at your door match the grade of materials you specified in your contract.

April Existing-Home Sales Ease

2011-05-20T09:28:00.002-05:00

Obstacles to Recovery
A parallel NAR practitioner survey shows 11 percent of REALTORS® report a contract was cancelled in April from an appraisal coming in below the price negotiated between a buyer and seller, 10 percent had a contract delayed, and 14 percent said a contract was renegotiated to a lower sales price as a result of a low appraisal.

Price Stability
The national median existing-home price for all housing types was $163,700 in April, which is 5.0 percent below April 2010. Distressed homes — typically sold at a discount of about 20 percent — accounted for 37 percent of sales in April, down from 40 percent in March. They were 33 percent in April 2010.

Total housing inventory at the end of April increased 9.9 percent to 3.87 million existing homes available for sale, which represents a 9.2-month supply at the current sales pace, up from an 8.3-month supply in March.

First-time buyers purchased 36 percent of homes in April, up from 33 percent in March; they were 49 percent in April 2010 when the tax credit was in place. Investors slipped to 20 percent in April from 22 percent of purchase activity in March; they were 15 percent in April 2010. The balance of sales was to repeat buyers, which were 44 percent in April.

Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.42 million in April from 4.44 million in March, and are 12.6 percent below the 5.06 million pace in April 2010. The median existing single-family home price was $163,200 in April, which is 5.4 percent below a year ago.

Existing-home sales in the Midwest rose 5.7 percent in April to a level of 1.12 million but are 16.4 percent below a cyclical peak in April 2010. The median price in the Midwest was $133,200, down 5.1 percent from a year ago.

Housing Recovery Unlikely Until 2014?

2011-05-19T18:31:00.001-05:00

Fifty-four percent of American adults say they believe a housing recovery won’t occur for another three years, or possibly even later, according to an annual survey of more than 2,000 U.S. adults by Trulia and RealtyTrac, which evaluated attitudes toward home ownership and foreclosures.

In a November 2010 survey, Americans were a little more optimistic that a recovery would happen sooner. About 42 percent said they thought the market would turn around by 2012 or had already turned around. Yet, in the most recent survey in April, that has now dropped to 23 percent who see a recovery in sight by 2012, and a majority who see a recovery further down the road.

“Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process,” says Pete Flint, CEO of Trulia. “Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate. On the flip side, mortgage rates won’t stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market.”

Indeed, according to Trulia’s latest data, owning a home is more affordable than renting in 78 percent of the major U.S. cities.

The public is eyeing deals in the real estate market, too. In the survey, about 56 percent of renters and 47 percent of current home owners say they are at least somewhat likely to purchase a foreclosed home. Many of those surveyed say that they expect to pay 38 percent less for a foreclosure property than for if they would buy similar home not in foreclosure.

Source: “Trulia and RealtyTrac Survey Reveals 54 Percent of American Adults Now Believe Housing Recovery Remains Unlikely Until 2014 or Later,” Trulia.com (May 18, 2011)

Cribbin Realty Mobile Site

2011-05-18T13:27:00.001-05:00

Scan me with your smartphone to bookmark
our mobile website at http://cribbinrealty.realbird.com

New Listing

2011-05-16T11:12:00.000-05:00

SHORT SALE

Overview

Maps

Photos

Description

$140,000

Single Family Home

Main Features

3 Bedrooms
3 Bathrooms
Interior: 1480 sqft
Lot: 18,353 sqft

Location

31 Taylon Ct.
Troy, MO 63379
USA

To get updates on open home dates and other property events, please click the "Like" button below:

Mike Cribbin

Cribbin Realty
(636) 294-6061
mike@cribbinrealty.com
http://www.cribbinrealty.com

Listed by: Cribbin Realty

Our recent listings

Completely Update Home
LUXURY LIVING WITH AN AFFORDABLE PRICE
Home with Almost 10 Acres of Woods
SHORT SALE PRICE BUT NOT A SHORT SALE
1st Time Home Buyers Dream!!!!!

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New Listing

2011-05-14T13:50:00.002-05:00

Completely Update Home

Overview

Maps

Photos

Description

Neighborhood

$138,500

Single Family Home

Main Features

3 Bedrooms
3 Bathrooms
Interior: 1188 sqft
Lot: 8,364 sqft

Location

1711 Pebble Brook Dr.
OFallon, MO 63366
USA

To get updates on open home dates and other property events, please click the "Like" button below:

Mike Cribbin

Cribbin Realty
(636) 294-6061
mike@cribbinrealty.com
http://www.cribbinrealty.com

Listed by: Cribbin Realty

Our recent listings

LUXURY LIVING WITH AN AFFORDABLE PRICE
Home with Almost 10 Acres of Woods
SHORT SALE PRICE BUT NOT A SHORT SALE
1st Time Home Buyers Dream!!!!!
GOLF COURSE HOME!!!! Seller Says Bring Offer!

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On Attack Against Threats to Homeownership

2011-05-11T13:18:00.003-05:00

A wide range of issues that risk putting homeownership out of reach for all but a narrow slice of households in the U.S. are coming to a head.

That’s the big picture that members of Congress must see as REALTORS® flood Capitol Hill for meetings with their senators and representatives this week, NAR’s chief lobbyist Jerry Giovaniello told REALTORS® attending the 2011 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington.

Among the high-profile issues that lawmakers are starting to talk about: Reforming secondary mortgage market companies Fannie Mae and Freddie Mac and deciding whether the mortgage interest deduction should be curbed, perhaps starting with second homes. But these are just the tip of the iceberg, Giovaniello told hundreds of REALTORS® at the Federal Issues Update Wednesday morning.

Some 8,000 REALTORS® are in Washington, D.C., this week and meetings with their members of Congress are a central part of why they’re here.

Among the threats to home ownership for the broad middle class are rising fees and tightening standards for FHA and conventional financing, a looming decrease in high-cost loan limits for FHA and conventional mortgages, a proposal to require a high minimum down payment for “safe” conventional loans, overly rigid FHA condominium financing rules, and a looming expiration of federal flood insurance.

The Question Lawmakers Need to Hear

“This is a perfect storm,” Giovaniello said. “There are 83 new members of Congress.” For these and other members who might not see how all of the different issues knit together, “you need to get back to the original attack on home ownership. The question is whether only a certain class of households will be able to become home owners in this country.”

The proposal for a high down payment is of particular importance, because if the proposal stands, it would lead to further consolidation in the mortgage lending industry, leading to just a few financial institutions in the industry, Giovaniello said. These big lenders are already too big to fail, in the same way that Fannie Mae and Freddie Mac were considered too big to fail. That led to hundreds of billions in bailout funds after the mortgage meltdown.

The high down payment proposal is in a recommended rule by banking regulators that would define a safe conventional mortgage as that with at least 20 percent down, and other tight underwriting requirements. If loans don’t meet that definition, lenders would have to retain 5 percent of the value of the loans on their books, a requirement that would lead to far higher interest rates, knocking out much of the broad middle class of home buyers.

Down Payment Isn't the Issue; Underwriting Is

Should the proposal be finalized into law, it would lead to concentration in lending among the largest banks because community banks and other small lenders won’t have the resources to hold the 5 percent on their books.

Giovaniello said lawmakers might try to compromise and press the regulators to lower the requirement to 10 percent down, but that misses the point. The issue isn’t minimum down payment, Giovaniello said. FHA and VA have very low down payments, yet they have better loan performance than the conventional market. The issue is simply sound underwriting.

“We have to change this argument,” he said. “Lenders want REALTORS® to compromise at 10 percent. That’s just not going to work.”

— Robert Freedman, REALTOR® Magazine