Realty Times - Home Sales May Grow Thanks To Affordable Housing

Realty Times - Home Sales May Grow Thanks To Affordable Housing

by Phoebe Chongchua

Even without a homebuyer tax credit, home sales are on track to outperform last year's rate. Being credited are the improving job market, sustained economic growth, and, of course, superior housing affordability conditions. Experts are predicting home sales to reach higher than 5 million for this year–up about 7-10 percent over last year.
Painting an even more optimistic picture, Frank Nothaft, Chief Economist for Freddie Mac (secondary mortgage market company), expects more job growth–nearing the 2-million mark. However this will only make a dent in the unemployment rate.Currently unemployment stands at about 9 percent, but more than 100,000 jobs are created monthly and nationally that could mean 1.5 million new jobs in 2011, according to the National Association of Realtor's (NAR) Chief Economist, Lawrence Yun.
Approximately 2 million jobs were lost in the recession (2008-2009) and an expected 2-million new incoming job entrants from college, etc. will continue the unemployment gap. However, experts say the unemployment rate should fall to 8.8 percent in 2011, 8.6 percent the following year, and then drop to 6 percent, a more normal level, around 2015. Yun also expects the Gross Domestic Product to grow 2.5 percent in 2011 and in 2012, 2.7 percent.
Still, housing prices are the most affordable ever which means that, based on NAR's Affordability Index, those who earn the national median income have 170 percent of the income needed to purchase a home priced at the national median. Marking four solid years of little price change, Yun expects the median existing-home price to stay at approximately $170,000 for the next couple of years.
What are helping make these homes so affordable are the low interest rates. Couple that with the surplus of inventory of distressed homes where homeowners are "under water" (owing more than the value of the home) and it's understandable why the market is so affordable.
But despite the low rates and affordable housing, experts say, the lending conditions are not quite ripe for increasing home sales even though lenders are now in a position (with plenty of cash) to make loans to qualified buyers. What some call the new "overly" strict lending standards are being blamed for the present lack of more robust housing sales.
So what's the best position for a homebuyer? Cash, of course, works great in any market conditions. All-cash buyers represent 40 percent of the market. This type of buyer typically isn't a first-time buyer. Instead these are usually investors who either believe they'll get a better return on their money by investing in real estate or they can't get mortgage financing. And a recent NAR study found that 59 percent of investors paid all cash. According to past surveys, that figure is significantly higher than the 32 percent and 17 percent in 2006 and 2004, respectively. Hot cash markets included Florida, California, and Arizona. Meanwhile, experts say refinancing may only produce half the activity it did last year which could create reason for banks to be more willing to lend to home buyers again.
Published: May 20, 2011

If I Attend an Open House, Do I Have To Use the Realtor Who Is Holding the Open House?

If I Attend an Open House, Do I Have To Use the Realtor Who Is Holding the Open House?

Q: If I attend an open house, am I obligated to use the realtor staging the open house if I decide to make an offer?

– Anonymous

A: Absolutely not! You are not the first buyer to be confused about the role of a real estate agent in their quest to purchase a home. They may not understand exactly who the agent represents and real estate agency (Broker) relationship. Let me educate you a bit about what’s called “Agency” (I.E. who represents whom) in a Real Estate transaction. Many states actually demand that agents give buyers and sellers an “Agency Disclosure” form to sign up front before a transaction is started or offer is written. This form is not a contract or an agreement, it simply disclosures the various types of possible agency relationships that may exist. It is very important that you read the disclosure to better understand it and all that is involved in “Agency”. In this way you will be able to determine what type of agency relationship will work best for you.

Single Agency vs. Dual Agency– Generally, buyers agents who represent buyers are operating in a single agency capacity as a buyer’s agent and seller’s agents who represent sellers are operating in a single agency capacity as a listing agent. Agents who represent clients under single agency owe a “fiduciary responsibility” to their client. Agents are not allowed to share confidential information with the other party or the other party’s representative. Single agency agents are bound to use care and due diligence while performing their duties, disclose all material facts and above all be honest. Buyer’s agents and the buyer sometimes sign a buyer’s broker agreement, which lays out the duties and obligations of the agent. Both listing agents and buyer’s agents owe the client loyalty, confidentiality, accountability and honesty. Some agents work as buyer’s agent with buyers and as a seller’s agent with sellers, (both sides of the fence) and some agents work solely as exclusive buyer’s agents and don’t take listings.

Dual Agency With Two Agents– Because all real estate agents are licensed under a real estate broker, it is possible to work with one agent who is licensed by the same broker as the listing agent. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller. When first representing a new client an agent probably entered into a single agency relationship with their buyer. However, when the buyer chooses a home listed by that agent’s broker, the agent’s relationship with the buyer changes. Not all single agents make a point of informing their buyer of the change. The listing agent must also inform their seller of the newly created agency relationship as well. Remember, transparency is key. Dual agency must be agreed to in writing by both the buyer and the seller.

I’ll always remember my first transaction. After signing up with the seller as their listing agent I proceeded to write an offer from a buyer visiting my first open house. I instantly became a dual agent. I managed to close a very lucrative deal in about 60 days with a very understanding seller and a buyer who thought they were making the best possible decision to have me represent them.

Personally I’ll never understand the thinking of buyers and sellers who freely fall into dual agency at the blink of an eye. To me it’s like hiring your wife’s divorce lawyer to represent you in the proceedings. But that’s just me.

Lee Dworshak is a Realtor® with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.

A: Not at all, good luck!

Lesley Barbosa is a Realtor® with Shelia Banner Weichert Realtors in Blue Bell, PA.

CALIFORNIA ASSOCIATION OF REALTORS: Selling Your Home - Deciding to Sell

CALIFORNIA ASSOCIATION OF REALTORS: Selling Your Home - Deciding to Sell

Deciding to Sell

You've probably already considered your personal reasons for selling. Now you need to take into account the other factors involved, such as market conditions, your property's value, and tax implications. Unless you're locked into selling your home (e.g., you've already accepted a job offer in another city), it's a good idea to look at the whole picture before deciding to sell.

Assessing Market Conditions

There's a rule of thumb to keep in mind when deciding to sell your home: Your home is only worth what a qualified buyer is willing to pay at the time it's on the market. The current real estate market fluctuates based on supply and demand, interest rates, general economic conditions, and other factors. The same house may sell for more or less under a different economy. Your REALTOR® can inform you of the going price for homes in your area at the current time; this data is included in a Competitive Market Analysis.

Tax Implications of Selling

There are many dynamics that can affect your tax liability upon selling your home. These issues include whether you purchased the home or inherited it, if you used your home for business or rental purposes, costs associated with selling your home, and any home improvements and additions that you've undertaken.

The Federal Taxpayer Relief Act of 1997 provides capital gains tax exclusions of up to $500,000 for married taxpayers filing jointly and $250,000 for single taxpayers or married taxpayers filing separately. Current capital gains rates are 20 percent for those in upper tax brackets and 10 percent for those in lower tax brackets. Overall capital gains rates have been lowered even further — to 18 percent and 8 percent respectively — for assets acquired after December 31, 2000, and held five years or more.

To qualify for this tax break, you must have used the home as your primary residence for at least two of the prior five years; these two years don't have to be consecutive. If you relocate for your job but don't meet the requirement, you may be allowed to take a capital gains exclusion proportionate to your circumstances. This exclusion is not a one-time benefit; you may take advantage of it once every two years as long as you meet the qualifications.

The tax rules differ when you sell a home that you've inherited. If you sell the inherited home for a profit, you're required to pay federal and state taxes on the gain. If you keep the house as a second residence and/or eventually move into it after renting it to tenants, you may take the $250,000/$500,000 capital gains tax exclusion if you meet the requirements. When you're deciding what to do with inherited property, you should consider the current estate tax laws and basis practices.

Beyond these general rules, it's wise to discuss your home's sale with a tax professional who can advise you on tax benefits in more detail.

Timing Your Decision to Sell

Because most sellers finance a new home purchase with the sale of their present home, they usually put their homes on the market before they begin their search for a new home. Learning the price you can expect from the sale often sets the pricing parameters for your new home search.

Obviously, it's not wise to wait until the sale on your property closes completely before beginning to look for your new home. Timing your search properly with the buyers' transaction can make the difference between having the available funds to buy a new home and cutting down on the interim period between homes.

DoorFly.com: 10 Painting Cleanup Tips For The Homeowner

DoorFly.com: 10 Painting Cleanup Tips For The Homeowner

Painting any part of your house is something that most homeowners eventually have to do. It doesn’t matter if it needs to be painted from weather damage, or it’s a simple wish to redecorate. Either one can create a need to get out the brushes and paint. When it is all done, the new paint job brings new life to the area.You’ll generally be glad you took the time to change the color or restore its fresh appearance. Then comes the time for clean up. This is never as fun as the painting, but it isn’t something that can be avoided either. Here are ten painting clean up tips that will hopefully make the process a little easier.

1. Use a plastic garbage bag. Put your roller tray inside a plastic bag before putting in paint into it. When you are done you can turn the bag inside out for use again and the roller tray is already clean for the next job.
2. Use plastic bags on rollers and brushes. At the end of the day you don’t have to clean up your brushes and rollers. Put them in a plastic bag and seal out the air. They will stay fresh and be ready to finish the project the next day.
3. Keep roller tray in plastic bag. If you need to stop painting partway through a project, you can save yourself some cleanup time. Just seal your roller tray in a plastic garbage bag, after use, and keep the air out, trying not to let the bag touch the paint. It will be ready to use when you remove the bag again.
4. Store paint in margarine tubs. For those small painting jobs, keep the paint you will use in small margarine tubs. They are easy to use for painting and can be thrown away afterwards.
5. Brushes and containers. You don’t have to have different brushes for each color. It will decrease the clean up time needed, if you used the same brush for more than one color.
6. Cleaning up splatters. The best time to clean up paint that has splattered is when it first happens. No matter how careful we try to be, there will be some accidents. They clean up much easier while wet.
7. Reusable Drop Cloths. Try to buy drop cloths you can reuse. Pick out ones made of canvas or heavy duty plastic that can be left to dry after painting then folded up and used the next time. It will save having to replace them when you use the cheaper disposable types.
8. Don’t Delay In Cleaning. When you do have to clean up, don’t put it off. Dried paint will not come out of a brush as easy as wet paint. The few minutes spent after painting on clean up will be less time consuming, than if wait until the paint dries. It may not come out at all, if you wait too long.
9. Rags. Be sure you have an adequate supply of rags. It is easy to spill or have accidents, and they clean off easier when you have fresh dry rags. They can be cleaned later, but the more you have on hand, the easier clean up will be.
10. Razor Blades. These work great on cleaning up drips on tile and windows. Even after the paint has dried, the razor edge will scrape the window glass clean.

Using these tips should help with the clean up you do after painting. There is no reason to add to the chore of clean up, when you have these easy methods to keep it simple and hassle free.

7 ways to ready home for spring | Maria Paulina Pagano, Real Estate Sales Professional

7 ways to ready home for spring

Posted on May 9, 2011 by Maria Paulina Pagano

Furnace, windows, soil need close attention click here to read all articles
By Paul Bianchina
Inman News™

May 06, 2011

As the seasons change and things start to warm up again, it’s time to start thinking about what’s outside. Here’s my annual spring checklist of chores you want to be considering in order to clean up after winter’s wrath and start getting ready for an enjoyable summer.

Roof ventilation

I hate to be the one to remind you, but remember that ice dam on the roof you wrestled with all winter? And remember how hot the attic was last summer when you went up there to store some boxes? Spring is the ideal time to take care of both of those problems by adding some additional attic ventilation while it’s not too hot or too cold to work up there.

Attic ventilation should equal approximately 1 square foot of vent area for every 300 square feet of attic, so first figure out roughly how many square feet your attic is, then divide by 300. The total vent area should be roughly split between high and low vents, so now divide that number by two.

Take some measurements to see if you have an adequate amount of vent area both low in the eaves or soffits, and high on the roof at the ridge or in the gable ends. If not, add more as needed. While you’re at it, repair any vent screens and flashings.

Spring cleaning

Now’s the time to get the yard cleaned up from all the debris that’s blown down. Rake up loose leaves and needles. Remove debris from roofs and gutters. Haul off limbs and other debris. Remove, clean and store your storm windows. Use a broom or water spray to remove cobwebs and dirt from under eaves, as well as on siding and exterior doors. Pressure-wash patios and walkways (pressure washers can be purchased or rented).

Check windows and screens

Do a thorough inspection of all your windows and window screens. Remove and wash all the screens. Look for small holes in the screens that are going to let those pesky insects in this summer, and repair or rescreen them. Clean all the windows inside and out. Clean the window tracks. Clean and lubricate window locks and sliding mechanisms as needed. For added security this summer, consider installing additional locks that allow you to latch the windows in a partially open position for secure ventilation.

Check and adjust grade

Soil is very susceptible to being washed away or redistributed by heavy winter rains and melting snow. That movement can change grade levels and slopes, causing water to run back against your foundation, into your basement or crawlspace, or onto your neighbor’s property.

Look for areas where soil seems too high or too low in relation to your home, as well as for marks on your siding, foundation, walkways, and other areas that might indicate that soil or water is in a place it shouldn’t be. A 4-foot builder’s level placed on a long, straight board can help you check grade and slope. If needed, redistribute and regrade the soil so that for every foot extending horizontally out from the house the soil drops at least 1/4 inch vertically.

Condition yard tools

Dust off all your yard tools and get them ready for the coming season. Replace broken or damaged handles, and clean and condition metal parts. Tighten fittings and fasteners, sharpen cutting tools and mower blades, and service engines and belts in lawn mowers and other power equipment.

Change furnace filters

Now is the time to replace furnace filters that have become choked with dust from the winter heating season. This is especially important if you have central air conditioning, or if you utilize your heating system’s fan to circulate air during the summer.

Check smoke detectors

Daylight saving time came around early this year, and that’s usually the semi-annual reminder to check your smoke alarms. So if you haven’t already done it, now’s the time. Replace the batteries, clean the covers, and test the detector’s operation before it’s too late.

If you have gas-fired appliances in the house, including a water heater, now is also a great time to consider adding a carbon monoxide detector. These detectors are inexpensive and easy to install, and are available at most home centers and other retailers of electrical parts and supplies.

Remodeling and repair questions? Email Paul at paulbianchina@inman.com. All product reviews are based on the author’s actual testing of free review samples provided by the manufacturers.

Contact Paul Bianchina:

About Maria Paulina Pagano

As a Realtor for the last eighteen years and a Monmouth County resident for twenty-two years, I have accumulated extensive and invaluable knowledge of the Real Estate Market and Market Trends. Member of Ocean, Monmouth, & Middlesex MLS.

View all posts by Maria Paulina Pagano →

Should I buy the first listing I see?

Should I buy the first listing I see?

Why contract contingencies are a must By Dian Hymer
Inman News™May 09, 2011

Some buyers look for years before they find the right home to buy. These are usually repeat buyers. They already own a home, but it no longer meets their needs. And, they could be trying to find a home in a high-demand, low-inventory market.

In 2008, a couple in Oakland, Calif., made three offers on listings, in competition, before they were successful in buying a replacement home. Granted, they had specialized needs. Most people do when they make a move from their first home to one that will work for them indefinitely.

During the last several years, there has been a dearth of quality listings priced right for the market. Often, when a prime listing comes on the market, there is more than one buyer making offers. Consider yourself lucky if you find your dream house, or close to it, early on in your house search.

Often buyers have a difficult time buying a home they see the day they start looking. What if something better comes along? Is there something better currently on the market? Is the listing worth what the seller is asking?

HOUSE HUNTING TIP: Don't pass on a great listing just because you found it quickly (without having to look for months or more). However, try to complete your due diligence investigations, at least on the value of the listing, before you make an offer. This will increase your comfort level if you act swiftly.

Ask your real estate agent to show you any similar listings that might suit your needs to see if there's one you might like as well or better. If there aren't any comparable listings for sale, find out how often listings similar to the one you like come on the market.

Some homes, particularly in housing developments, are similar to one another. You might expect to see more homes you'll like in the near future. So, there's no pressure to act quickly. However, if the home is unusual in terms of availability, give it careful consideration.

Whether you're buying immediately or months later, make sure your real estate agent provides you with comparable sales information. You want to know about currently pending listings in the neighborhood that are similar in size and condition, as well as the most recently sold listings available.

Finding recently sold comparables is difficult at the beginning of year. New underwriting guidelines require that the lender's appraiser provide comparable sales information for the past three months. Before the housing market declined, lenders looked at comparables for the previous six months. Now, lenders' underwriters are sensitive to the state of the local market in question: stable, advancing or declining.

Most sellers don't bring their homes on the market between December and March, creating a void in the bank of comparable sale information. The inventory of closed sales for the year usually starts to grow in April and May.

When appraisers can't find enough data to adequately analyze the market value of a listing, they will go further back in time, or broaden the geographical search area, and make adjustments. As a buyer, you can protect yourself if you feel unsure about the value of a listing by including an appraisal contingency in the purchase contract.

This way, if the property doesn't appraise for the purchase price, you can withdraw from the contract without penalty, depending on how your contract is written.

Find out if there are disclosures that you can review before making an offer. If the listing needs a lot of work and you're reaching to meet the seller's price, you might want to reconsider making an offer, or offer a price that takes the needed work into account.

THE CLOSING: In any event, include an inspection contingency in your contract.

Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

Reasons To Reject Short Sale Offers

Reasons To Reject Short Sale Offers

8 Reasons Why You Will Not Buy My Short Sale Listing

by BILL GASSETT on MAY 5, 2011 · 0 COMMENTS

One of the grossly misunderstood topics in Real Estate is the short sale transaction. There are a large number of Realtors who unfortunately do not possess the knowledge to properly educate their clients on what should be expected of them when trying to make a short sale purchase.

The problem is further exacerbated because there are an inordinate amount of Realtors who are now listing short sales who have no business doing so!

Having poor seller representation in a short sale is far worse than a traditional sale because the home owner is relying on this person to help them navigate out of a financially difficult time. Without a short sale approval the most likely outcome is a foreclosure which is the very thing a seller was trying to avoid by going the short sale route.

As the volume of short sales has grown so has the amount of Realtors who are looking to cash in. Money all too often gets in the way of sound decision making.

The code of ethics in Real Estate clearly states that you should not get involved in a type of Real Estate transaction in which you have no expertise.

This is the reason why there will be short sale lawsuits against Realtors! When I am representing a seller in a short sale and receive an offer from a buyer’s agent, most of the time the offer will have significant changes that need to be made in order to protect the seller’s interest.

Below are 8 reasons why you will more than likely NOT be buying one of my clients short sales if you don’t agree to modify your offer:

Low ball short sale offer ~ If you think a short sale is an automatic invitation to submit a ridiculous offer to the seller you might as well not even bother. The majority of the time you will see my short sales priced right at market value or even slightly below market.

The property is already a bargain to begin with. Both buyer’s and seller’s need to understand that once a short sale offer is submitted to the lender they will be sending out either an appraiser or Real Estate agent to do a broker price opinion (BPO). The contract price needs to be within reasonable proximity to market value or the offer will be rejected.

Inappropriate escrow funds ~ In Massachusetts the typical deposit when buying a home is $1000 at the offer and a balance of 5% upon signing a purchase and sale agreement, as we are a two contract state. These figures are of course negotiable but don’t expect you are going to be putting up two nickels the seller can rub together. The whole point of having escrow funds is to ensure a buyer does not walk away from the transaction. You need to have enough funds to prevent that from being easy to do.

Doing a home inspection after short sale approval ~ This is not in the slightest bit negotiable. A buyer will do their home inspection up front in the normal time frame for doing an inspection which is typically 7-10 days from the offer being accepted. Do you really think we are going to wait a significant amount of time to get short sale approval and then you are going to be able to walk because you don’t like the the fact there are no GFI plugs in the bathroom or the water heater is at the end of it’s life expectancy? Sorry friend it does not work that way.

If you are buying a short sale and are worrying about losing $400-500 you shouldn’t be looking at one. Additionally, if there are issues from a home inspection you can negotiate a possible credit. Once short sale approval comes the lender doesn’t want to hear about any problems.

As a buyer the other thing to consider is the fact that you would be out of the market for months when you could have discovered an issue that might cause you not to move forward without waiting all that time.

Leaving the purchase and sale signing date until after short sale approval ~ You are either going to purchase the home or you aren’t. We will not be waiting until after short sale approval to have a contract in place. Everything will be negotiated and agreed to up front.

Not getting a financing commitment right away ~ If you are going to purchase one of my short sale listings you will apply and get your financing before short sale approval. When the lender approves the short sale they will more than likely ask for a 30 day closing. We will NOT be waiting to find out if you are able to get financing that quickly or if at all!

Submitting an unrealistic closing date ~ Short sales should really be called “long sales” because most of the time they take longer to complete than a traditional sale. If you are buying a short sale you need to take this into consideration. If you are not committed to waiting then don’t get involved with a short sale. My short sales on average take about 90 days for short sale approval. The closing date should read “30 days from short sale approval”. You can not put an exact date when we don’t know when it will be!

Not agreeing to wait 90 days for short sale approval ~ The buyer we will be looking for is going to be committed to the property. If you think that you are going to find your self restless 5 weeks later because we don’t have an approval yet then a short sale is not right for you. Don’t forget you are purchasing a home that is probably a pretty decent value. It is worth the wait! It clearly would not be in the best interest of the seller if a buyer bailed on the transaction a month or two in and they had to start the process all over again.

Asking to take over the short sale because you are an investor ~ Sorry my friend if you are an investor please feel free to make a realistic offer but don’t think you are going to take over the negotiations with the lender. Don’t think you are going to make a low ball offer and the seller is going to accept it while you look for an end buyer to sell to and make a handsome profit. No I don’t think so! The seller hired me to complete the short sale. I don’t feel like defending myself in court on why I let an investor take over the obligations I was hired to perform.

Folks these are the kind of things that go on every day in short sales because seller’s do not do their home work in picking a short sale Realtor to work with. Don’t make that mistake. When you need to short sell your home do your research and hire a pro! These are all great reasons to reject short sale offers.

Who you work with to complete your short sale will have the greatest impact in helping you reach your financial goals. Completing a short sale remains a much better alternative than letting a property go to foreclosure for a number of reasons centered around credit and your ability to buy another property in the future.

I am successfully completing short sales through out the Metrowest Massachusetts area as well as parts of Worcester County. As of this writing in four years, knock on wood, I have a 100% success rate for short sale approval!