Real Estate Blogging

HOME SALES

Mary Stewart Realtor Oregon First — Tue, 24 Aug 2010 11:57:00 GMT

Plunging home sales could sink recovery

By Hibah Yousuf, staff reporterAugust 24, 2010: 12:25 PM ET

NEW YORK (CNNMoney.com) -- With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.

Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.

That credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.

"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, things could get a lot worse."

The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.

Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.

5 most affordable cities to buy a house

The combination of weak demand and glut of homes has put downward pressure on prices.

And as the recession proved, the housing market and the broader economy are closely intertwined. When housing prices collapse, so does the overall wealth and confidence of Americans.

"Falling housing prices strain the overall confidence in the economy and discourage Americans from spending," Dales said. "They also mean that banks lose money on their investments and curtail lending, meaning there is less money out there to invest and boost the economy.

The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.

Though prices have yet to fall back, Dales expects they will decline about 5% from current levels over the next six months.

On the bright side, Dales said while a drop prices will put a dent in the economy recovery, it won't lead to another recession.

"The bulk of the downward adjustment in housing prices has been achieved over the last several years, so we're not headed for a complete disaster," said Dales. "We're going to see a double-dip in housing prices, but not a double-dip in the overall economy."

Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.

The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.

Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.

They fell by 25% in the West and 22.6% in the South.

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7 REASONS

Mary Stewart Realtor Oregon First — Tue, 03 Aug 2010 10:40:00 GMT

Top Seven Reasons Banks are Denying Home Loan Requests

RISMEDIA, August 2, 2010—The lending landscape has changed quite drastically over the past several years. Practices, approvals and standards that were once widely accepted have either vanished or transformed beyond the point of recognition. Many banks, which were once extremely careless with their loan underwriting techniques and approvals, have dug themselves into a significant hole that will take many years to climb out of. Promotions such as “100% Financing” and “No Doc Loans” were both major contributors to the financial crisis banks and consumers are facing today.

Today, banks are making sure they don’t make the same mistakes again, so loan underwriting standards have become more stringent than ever before.

According to a recent Federal Reserve survey, it was found that about 75% of the banks surveyed indicated they had tightened their lending standards for prime, subprime and commercial mortgages. That was up from about 60% in the previous survey. With this sharp increase in lending standards, borrowers are being turned down for real estate loans at an alarming rate.

Here are the top seven reasons banks are denying home loan requests:
1. Poor credit: The borrower may have a heavy down payment or excellent equity built-up in their house, but if their credit score is under a certain threshold, obtaining a new loan or refinance from a traditional bank is challenging. Even FHA (Federal Housing Administration) loans, which have traditionally catered to borrowers with lower FICO scores, have an average borrower credit score of 693, according to CNN Money, which is above the national average.

2. Insufficient liquidity: If the borrower doesn’t have a heavy down payment (20%-30% for most banks) and strong excess liquidity, banks don’t want to take the risk on funding their loan.

3. Lack of income: The borrower doesn’t have consistent proof of income for the last two to five years. Regardless of how good their credit score is or how much equity they have in their home, if they can’t show the bank proof of income, loan approval will be tough. This can be a big hurdle in the loan process, particularly for retired borrowers.

4. Lying on the application: Banks have learned their lesson and are no longer putting up with borrowers stretching the truth on their applications.

5. Debt: Borrower has excessive debt and their debt-to-income ratio exceeds the bank’s guidelines.

6. Unemployment: Most lenders will like to see at least two years of stable work to issue loan approval.

7. Self employment: Lenders are looking at self-employed applicants with a lot more scrutiny these days, making it very tough for these borrowers to get approved.

Obviously some of these newly structured standards are for the betterment of the industry, and our overall economy, but at the same time, home buyers across the country are realizing quickly that reputable credit and stable income aren’t always enough in qualifying for a loan through a traditional bank.

This predicament is not only affecting potential home buyers, but also the real estate professionals who represent them. Real estate professionals nationwide have expressed that this has become a challenging part of the transaction.

According to Monique Bryher (http://www.californiarealestatefraudreport.com/), a broker associate at Keller Williams Realty, “Home buyers are definitely having a harder time in being qualified. Several of the loan officers with whom I work have complained that loans that would have been approved 6 months ago are being denied now. What’s interesting is that loan applications in terms of volume are up, lenders are busy processing them, but it’s harder to get them approved and it’s taking longer to close even simple, straight-forward transactions.”

Once the traditional lending route has been exhausted, both Realtors and potential buyers are often times at a loss of what to do as a backup plan. Private lending has been around for many years, but most borrowers and brokers have no idea that it’s even an option.

“With the strict underwriting guidelines banks are governed by these days, private lending is the wave of the future for getting real estate loans funded,” explains Eric Wohl, president of NoteFlo, an online private lending marketplace launching today. NoteFlo’s unique service allows borrowers to post loan funding requests for free, which will be broadcast out to thousands of private lenders that will bid for the opportunity to fund their loan. “Our goal is to make sure borrowers know that they have plenty of other options if their loan application is denied by a traditional bank,” says Wohl.

For more information, visit www.noteflo.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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LOCKING MORTGAGE RATES - NOW?

Mary Stewart Realtor Oregon First — Thu, 29 Jul 2010 08:37:00 GMT

Jack M. Guttentag The Mortgage Professor

Record Lows: Should You Lock in Your Mortgage Rate Now?

by Jack M. Guttentag

(Posted on Thursday, July 22, 2010, 12:00AM)

“Mortgage interest rates are currently at record lows, and it would seem that they couldn't possibly fall any lower. Would you recommend, then, that borrowers obtain a rate lock as soon as they begin the process of shopping for a mortgage?”

Two days after I received this letter, rates dropped again. Nonetheless, the writer’s major point, that at current rate levels there is much greater potential for rate increases than rate decreases, is valid. And that is a good reason for locking ASAP. But it is not the only reason, as indicated by this reader.

“While comparing two lenders, the first lender sent me the GFE and TIL and locked us immediately upon receiving the memorandum of terms of the house purchase. The second lender gave us a rate quote via email that was 1/8% less than that of the first lender for the same lender fees, so we cancelled our lock with the first lender.

But then the second lender told me he needed the signed purchase contract before he could lock, which took one day. Then he told me he needed additional verification of my income, which took two more days. Next he told me that he needed an appraisal, which took more time. By the time he was prepared to lock, the market had changed and both the rate and fees were higher than those offered by the first lender. We had no choice except to close with the second lender.”

This reader locked immediately, then walked away from the lock because he thought he could do better, only to learn (at considerable cost) the difference between a price quote and a price lock. His experience suggests another reason why it is a good idea to lock ASAP: Lenders who deliberately drag out the lock process may be playing with a stacked desk.

The lender who won’t lock until he has all the data is positioned to cheat. He can low-ball, quoting a price below what he can deliver and to which he cannot be held, the intent being to snare the borrower. He can then raise the price when the borrower is committed and it is too late to back out. In all probability, the second reader was ripped off in that way. Note that such rip-offs depend on the borrower not being able to check the validity of the quoted prices.

Critical Factors

This view that reliable lenders will lock quickly was confirmed by my locking guru, Jack Pritchard. In most cases, he says, the borrower’s credit and a computerized estimate of property value can be obtained within a few minutes, while the borrower’s income can be verified or at least checked for reasonableness within the day. These are the critical factors involved in a lock.

That does not mean that an honest lender will always provide an immediate lock to any loan applicant. Because locking imposes a cost on the lender, no lender wants to lock a loan that is unlikely to close. If the initial information available to the lender indicates that the borrower may not qualify for the requested loan at the posted price, the lender won’t lock. In that situation, the borrower must decide whether the lender has a valid reason for delaying the lock, or is using delay as a tool for gaining a strategic advantage.

There is only one reliable way to answer that question, and that is to determine whether the lender offers an objective method of disclosing its loan prices. If a price is communicated orally, or in an email, the borrower should assume that the lender is trying to game him with the delay.

On the other hand, if the borrower can find his price on the lender’s Web site, there is no strategic advantage to the lender of delaying a lock, because the borrower can check any future lock price. It may be higher or lower than the price on the day a lock was first requested, depending on which way the market has moved, but it is the correct price on the day the loan is finally locked.

Shifting the Burden

If you are dealing with a loan officer who can’t give you a same-day lock, and if you can’t price your loan online, you should shift the burden of proving objectivity to the loan officer. All loan officers today have computer access to the lender’s posted prices and can print the page showing your price. Ask for that page on the day you receive your initial price quote -- it will be your assurance that you have not been low-balled. And ask for a commitment that you will receive an updated version when your loan is finally locked.

Such objectivity in pricing disclosure should also come into play in the event that a price lock is nullified when new information received by the lender invalidates the information on which the lock is based. That happens occasionally when an appraisal comes in unexpectedly low, or there is a hit to the borrower’s credit score. In such case, the burden should be on the loan officer to document the validity of the new price.

Bottom line, “lock ASAP” is a good rule in today’s market, but to make it work effectively, it should be accompanied by another rule: “make the lender document your price.”

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SMALL SPACES ~ MAKE THEM SEEM LARGER

Mary Stewart Realtor Oregon First — Thu, 29 Jul 2010 08:04:00 GMT

Make Small Spaces Bigger: 5 Ways to Show Off Space

Buyers want spacious homes. Here's how you can show off every square inch.

By Melissa Dittmann Tracey | July 2010

Size does matter when it comes to the perception of space in a home. That's why it's
important to make sure you show off every square foot of your listing so that buyers can

visualize enough room for all of their belongings.

However, home owners often crowd spaces with oversized furniture, bulky accessories, and piles of clutter that wind up making a room look much smaller than what it really is, says staging pro Jennie Norris, president of the International Association of Home Staging Professionals.

So how can you show off that space in your listings? Besides the obvious of removing clutter, try these simple ideas from Norris.

1. Scale down the furniture: By having too many large pieces of furniture in a small room, a space can feel more cramped, Norris says. Select smaller-scale furniture over large, chunky options. A good choice: furniture with wooden legs or unskirted chairs, so that you can see through the furniture to the floor underneath to open up a room.

2. Beware of overly busy patterns: Too many bold patterns in a room with fabrics and accent pieces can make a room feel smaller, Norris says. Big prints, bold plaids, and large floral patterns can be too busy for a small space. Stick to solids and use texture in fabrics to add interest.

3. Lighten Up: Dark colors absorb the light making small rooms look even smaller. "The general color rule for small spaces is lighter is better," Norris says. Lighter colors on walls - such as creams, light blues, light greens, tan, and soft yellows - help expand the room. Plus, softer, cooler tones are soothing and relaxing, she adds.

4. Add height: Bring in anything that is tall to show off the height of the space. Whether it is a piece of furniture such as a bookcase or an object like a tall tree, the height of the object will draw the eye upwards. Also in a house where you want to show off the height, hang the curtains above the normal window top level, Norris says. To widen the window, tie the curtains back with a rope tieback to show off the windows.

5. Use the reflection: Hang mirrors on walls to help add visual space. "When the room is reflected in the mirror, it can make us feel like there is more space as we see 'another room' in the mirror," Norris says. "Mirrors can also reflect light and views, which will help lighten up the room and make it feel open and airy."

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DO YOU DEDUCT YOUR MORTGAGE INTEREST ?

Mary Stewart Realtor Oregon First — Thu, 15 Jul 2010 07:40:00 GMT

Mortgage Interest Deduction – by State

by Danielle Hale and Selma Lewis, Research Economists

While only about one percent of recent home buyers cite the tax benefits of ownership as a primary reason for purchasing a home, a significant share of home buyers do actually take advantage of the mortgage interest deduction. According to recently released IRS tax data for 2008 by state, about 26.8 percent, or a little over a quarter of individual income tax filers claimed a mortgage interest deduction (MID) in 2008.

While the homeownership rate in the U.S. is significantly higher (the latest figure for the first quarter of 2010 is 67.1 percent) the difference in the two rates is due in part to the fact that many homeowners do not claim the deduction. This could be for various reasons. Homeowners may choose not to itemize deductions on their tax returns if the interest deduction is not larger than the standard deduction they can claim instead. Sometimes, however, homeowners have paid off their mortgages and have no more interest payments to deduct; NAR research estimates that 32 percent of homeowners own their homes without debt.

On average, among all tax returns, including those for non-homeowners and those who do not deduct mortgage interest, each tax filer deducted $3,279 in mortgage interest. Counting only the tax returns that deducted mortgage interest, the average amount deducted was $12,221.

Not surprisingly, the share of taxpayers who claim the mortgage interest deduction (MID), and the average amount of that deduction, varies by state. In 2008, Maryland had the highest percentage of tax returns claiming the MID, 37.9 percent, but it ranked fifth in the average dollar amount claimed.* The average Maryland tax return claimed $14,162 in mortgage interest. The state also ranked second for the average deduction among all tax returns, $5,372. It is worth noting, that among all states Maryland has the highest share of tax filers who itemize deductions, 49.3 percent. In the US generally, only 34.2 percent of tax filers itemize deductions.

In California, on the other hand, a smaller share of tax filers claimed the mortgage interest deduction, 29 percent, but the average deduction per claimant was the highest in the country, $18,876. California also ranked the highest in average deduction among all tax filers, and due in part to its large population, had the greatest number of tax filers.

In addition to Maryland, Connecticut, Colorado, Minnesota and Virginia, also had very high percentages of tax filers claiming the MID, ranging between 33 percent and 35 percent.

In dollar terms, Hawaii ranked second highest, with mortgage interest deductions averaging $16,730 among claimants, yet only 24 percent of homeowners in Hawaii claimed the MID. Nevada ranked third, averaging $15,502 per mortgage interest deduction. The high ranking of Nevada is likely due to the fact that the state’s fast growth and availability of alternative mortgage products during the housing boom led to many new home owners who deducted substantial amounts of mortgage interest since the interest payment is a high share of the total mortgage payment in the early years of a mortgage. Florida and Arizona are similar cases in which the mortgage interest deduction averaged $13,375 and $13,616, respectively. Notably, the average mortgage interest deduction in 2008 was smaller than the average mortgage interest deduction taken in 2007 in all states except Maine, New Hampshire, Iowa, Alaska, and Montana. The states with the largest decline in the size of the average mortgage interest deduction are Nevada, California, New York, and Florida. The decline in the average MID in Nevada was $2,689.

Although there has not been a large change in the share of filers claiming mortgage interest deduction across the states between 2007 and 2008, there are couple of changes worth noting. Iowa and Michigan
had the largest decreases since 2007, with as much as 3.25 percentage points fewer claimants in Iowa and 1.9 percentage points fewer in Michigan. On the other end, Louisiana and West Virginia had the largest increase in the share of claimants, rising 1.66 and 1.61 points respectively.

Mortgage interest deductions vary from state to state for several main reasons. First, average incomes differ by state. Higher income individuals usually have larger expenses that can be itemized and deducted including state and local income or sales taxes, mortgage interest, real estate taxes, etc. Thus, higher income individuals are more likely to exceed the standard deduction threshold (which is a fixed dollar amount regardless of income) and tend to itemize at higher rates.

Another reason for the difference among states is homeownership rates. Homeownership rates are low in states such as California and New York where rates are 56.5 and 54.4 percent respectively compared to 67.1 percent in the US. One reason for the low homeownership rates may be the high degree of urbanization. Homeownership rates are lower in principal cities, 52.6 percent compare with rates above 70 percent in suburbs and non-metro areas. In New York for example, 43 percent of the state’s population in 2008 was estimated to live in New York City. Low homeownership rates mean high rates of renters who are not eligible to claim a mortgage interest deduction. However, the high cost of homes in cities such as New York mean that those who did claim a mortgage interest deduction in New York, have higher average deduction since homes are more expensive.

Finally, the more recent a home purchase or refinance of a mortgage can also affect the size of the mortgage interest deduction. As in the case of Nevada (see above) and other fast-growing, sun-belt states, new home owners or owners who refinanced can deduct substantial amounts of interest since the interest payment is a high share of the total mortgage payment in the early years of a mortgage.

* This ranking excludes the District of Columbia and the IRS category ‘Other Areas’ which includes returns filed from Army Post Office and Fleet Post Office addresses by members of the armed forces stationed overseas; returns filed by other U.S. citizens abroad; and returns filed by residents of Puerto Rico with income from sources outside Puerto Rico or with income earned as U.S. government employees.

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What do you know about FHA

Mary Stewart Realtor Oregon First — Tue, 13 Jul 2010 07:06:00 GMT

FHA Loans - Reasons Home Buyers Love FHA Loans

FHA Loans Carry Many Benefits for Home Buying or Refinancing

By Elizabeth Weintraub, About.com Guide

FHA Loans Are Perfect for First-Time Home Buyers

Big Stock Photo

FHA loans are fell out of grace for a few years, but since 2005 have rebounded! It's an institution that has been around for a long time, since June 27, 1934. The Department of Housing & Urban Development folded the Federal Housing Administration (FHA) under its umbrella in 1965.

FHA loans began to lose favor in the late 1990s, when home values began to inch upwards, surpassing FHA mortgage limits, and sellers balked at FHA's stringent appraisal¹ guidelines.

How FHA Loans Work
Now, FHA does not make loans or guarantee loans. It insures loans. The insurance removes or minimizes the default risk lenders face when buyers put down less than 20 percent. Without further approval from FHA, its approved lenders are authorized to:

Take loan applications
Process loan applications
Underwrite² and close the loan

FHA Mortgage Limits
My parents bought our first home in 1955 for $9,000 with an FHA loan. It's almost inconceivable to think of a home costing that today. As a result, FHA periodically changes its mortgage limits. As of January 1, 2009, the maximum mortgage limit in high-cost areas is 115% of local median prices, not to exceed $625,500. The maximum conforming loan limit is $417,000 for single-family residences nationwide. Your area could support a lower mortgage limit. Here is how to find your FHA mortgage limit³.

FHA Loans Allow a Blemished Credit History
If your credit is less than perfect, FHA might be the loan for you. You may qualify for an FHA loan even though you have had financial problems.

FICO scores⁴ can be lower than those for a conventional loan.
Bankruptcy. You can obtain an FHA loan two to three years from the date of your bankruptcy discharge, as long as you've maintained good credit since your debts were discharged.
Foreclosure. If you keep your credit in excellent shape since a foreclosure, an FHA loan will be available to you two to three years from the final date of your foreclosure.

FHA Loans Boast Competitive Rates & Terms
Today's terms are pretty straightforward. In fact, in many markets the rates and terms are better than those for 80% / 20% piggyback loans. ⁵

There is little or no adjustment to the interest rate for an FHA loan, as the rates vary within .125 percent of a conventional loan.
Mortgage insurance is funded into the loan, meaning a premium of 1.5% is added to the loan balance instead of being paid out-of-pocket. In addition, a small portion for the mortgage insurance premium is added to the monthly payment, but it is far less than private mortgage insurance premiums.
As of January 1, 2009, Borrowers can finance 96.5% of the purchase price and put down 3.5 percent. In some instances, when combined with other types of loans, the down payment can be zero.
Allowable debt ratios⁶ are higher than the debt-ratio limits imposed for conventional loans.

FHA Loans Demand Fewer Repairs
At one point, FHA repair demands were so excessive that sellers would discount the list price to buyers who would agree to obtain conventional loans over FHA loans. Today the requirements appear more reasonable.

Defective roofs that leak still need to be replaced but an older roof does not necessitate replacement if it doesn't leak.
Windows that stick upon opening or have cracked panes do not require replacement.
FHA appraisals do not take the place of a home inspection, never have. Buyers should still obtain a professional home inspection.

FHA loans are available to anybody but are used most often by first-time home buyers and low- to moderate-income buyers. However, there are no income limit qualifications.

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Guidelines Tightened

Mary Stewart Realtor Oregon First — Tue, 08 Jun 2010 06:59:00 GMT

Elizabeth Weintraub, About.com Guide

Fannie Mae Tightens Underwriting Guidelines

Wednesday June 2, 2010

Although lenders for years have routinely pulled second credit reports on borrowers in underwriting¹, as of June 1, all lenders who sell loans to Fannie Mae² will now be required to obtain a second credit report before closing. This new procedure is an effort to tighten underwriting guidelines.

Generally, lenders pull a credit report when a home buyer applies for a loan. A lot can happen between the preapproval letter³ and closing. For example, a borrower might shop for a loan by calling a number of lenders and comparing rates. Those inquiries will show up on a credit report. If a lender spots an inquiry after its approval, that inquiry could cause a red flag and delay closing.

In addition, sometimes home buyers change their financial situation while they're waiting to close on a loan. They might buy a car, figuring the credit report won't be updated. Any new debt will be reflected on an updated credit report. New financial obligations could change the borrower's ability to qualify to buy that home.

Your best bet is to charge absolutely nothing. Don't put any new charges on your credit cards or open up any new accounts between the time you apply for a loan and the time you close.

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MYTHS ABOUT BUYING A FORECLOSURE

Mary Stewart Realtor Oregon First — Thu, 03 Jun 2010 08:12:00 GMT

Top 10 Myths About Buying a Foreclosure

By Tara-Nicholle Nelson | Broker in San Francisco, CA Trulia Staff

Trulia.com and RealtyTrac recently surveyed US adults to get some insight into what people *think* is involved with buying a foreclosure. Here are the Top 10 Myths that came up, and the facts to set the record straight:

1. Foreclosures need a huge amount of work. 92 percent of consumers expressed that if they bought a foreclosure, they would be willing to make home improvements after they closed the deal, with 65 percent being willing to invest 20 percent or less of the purchase price. Although stories of foreclosures missing plumbing and every electrical fixture are very memorable, many foreclosed homes need only the (relatively inexpensive) cosmetics that many new homeowners want to customize no matter what kind of home they’re buying: paint, carpet, etc.

2. Foreclosures sell at massive discounts, compared to other homes. Almost every member – 95 percent – of the surveyed group expected to pay less for a foreclosed home than for a similar, non-foreclosed home; 18 percent had realistic expectations of less than a 25 percent discount. However, 36 percent expected to receive a bargain basement discount of 50 percent or more off the value of a similar non-foreclosure. Reality check: while foreclosures might be discounted massively from what the former owner paid or owed, their discounts are much more modest when compared to their value on today’s market and the prices of similar homes.

3. Buying a foreclosure is risky. 49% of respondents said they perceived buying a foreclosure as risky. And yes - buying a foreclosure at the auction on the county courthouse steps can have risks, including the risk the new owner will take on the former’s owner’s liens and other loans. But most buyers looking for foreclosures are looking at bank-owned properties, which are listed on the open market with other, ‘regular’ homes. Buying these homes is really no more risky than buying a non-foreclosed home.

4. You can’t get inspections on the property when you buy a foreclosed home. County auction foreclosures don’t often offer the ability for buyers to have the homes inspected. But virtually all bank-owned properties for sale on the open market not only allow, but encourage buyers to obtain every inspection they deem necessary. This is because almost every bank sells their foreclosed homes as-is, and they want to avoid later liability. It’s in everyone’s best interests to make sure that the buyer has full information about the property’s condition before they close the deal.

5. There are hidden costs to watch out for when buying a foreclosed home. Sixty-eight percent of survey respondents who felt there is a negative stigma to buying a foreclosure expressed the concern that buying a foreclosure poses the danger of hidden costs. At some foreclosure auctions, there are buyer’s premiums and other hefty fees that can really add up and take a chunk out of the effective savings the buyer stood to realize. However, when you buy a bank-owned property that is listed for sale with a real estate agent, the closing costs are the same as they would be if you bought a non-foreclosed home. Overdue property taxes, HOA dues and other bills left behind by the defaulting homeowner are cleared by the bank that owns a foreclosed home before it is sold on the market, though these items should be watched out for if you buy a home at the county foreclosure auction.

6. Foreclosures are more likely to lose their value than “regular” homes. Thirty-five percent of U.S. adults who believed there are downsides to buying foreclosed properties believed this myth. In fact, because foreclosures often offer a discount from the home’s current market value, they may offer some degree of insulation from further depreciation. Whether a home loses its value or not has to do with the dynamics of the local market, including the area’s supply of homes, demand for homes, interest rates and the health of the employment market – not with whether the home was or was not a foreclosure at the time it was purchased.

7. Most foreclosures happen when homeowners just walk away. Out of homeowners with a mortgage, only 1 percent said walking away from their home would be their first choice if they were unable to pay their mortgage. And a whopping 59 percent of mortgage-holders said they wouldn’t walk away from their home – no matter how upside down they were on their mortgage. Most foreclosures happen when the owners lose their jobs or their mortgage adjusts to the point where they absolutely cannot pay the mortgage, no matter how hard they try. Voluntary ‘walk-away’s are simply not as popular as many people think.

8. When you buy a foreclosure, you should lowball the bank – they are desperate to get these homes off their books. Stories about in the press abound about the large numbers of foreclosed homes the banks have on their books. We’ve all heard the adage that banks have no interest in owning these properties. But the real deal is that they’re simply not desperate enough to give these places away. Also, the banks mostly service the defaulted loans – they don’t own them. Various groups of investors do, and they hold the banks accountable to selling the bank-owned property at as high a price as possible, helping them cut their losses. Many banks won’t even consider lowball offers, and many bank-owned properties actually sell for above the asking price. Before a bank will take a lowball offer, they will almost always reduce the list price first, and see if that attracts a higher offer than the lowball one they have in hand.

9. You need to be able to pay in cash in order to buy a foreclosure. Again, if you buy a foreclosed home on the county courthouse steps, you might need to bring a cashier’s check and be ready to pay for the place on the spot. By contrast, bank-owned homes are bought through a more normal real estate transaction, which means buyers can obtain a mortgage to finance the home just like they would if the home weren’t a foreclosure. It is true, though, that in some markets, banks prefer offers from cash buyers, but this tends to be in situations where the property’s condition is pretty dire, and the bank knows this may make it hard for a buyer to obtain financing.

10. It’s easier to buy a foreclosure with bad credit if you get a mortgage with the same bank that owns the property. Think about it: why would the bank want to end up with the same property as a foreclosure, again? Well, that’s what would happen if they allowed buyers with low credit scores to buy their foreclosures just to earn the interest on the mortgage. In reality, many banks do offer incentives like lower fees or closing cost credits for buyers who use their bank for their mortgage. But the buyers must meet the same credit, income and other qualification standards as anyone else would to seal the deal.

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Fannie Mae

Mary Stewart Realtor Oregon First — Tue, 25 May 2010 07:55:00 GMT

Fannie Mae Short Sale Requirements

Your Fannie Mae Short Sale Might Be Rejected if You Are Not Delinquent

By Elizabeth Weintraub, About.com Guide

Fannie Mae investor guidelines dictate how short sales are handled.

The United States government is telling financially strapped homeowners to stop making their mortgage payments and go into foreclosure. This might sound like something you'd read in a science fiction novel, but truth is generally stranger than fiction. Over and over, I see Fannie Mae, owned 79.9% by the government, demanding a delinquency before it will approve a short sale.

Brief History of Fannie Mae

See, Fannie Mae, along with Freddie Mac, are two mortgage giants that own almost 3 out of every 4 mortgages in the United States. From Fannie Mae's humble beginnings in 1938 -- formed by President Franklin D. Roosevelt and Congress to buy mortgages in the secondary market -- to its public offering in 1968, Fannie Mae soared to record profits before the great mortgage meltdown of 2007. Fannie Mae was placed into government conservatorship in September 2008, under the Federal Housing Finance Agency.

According to CNNMoney.com's Bailout Tracker, Fannie Mae has received more than $200 billion from the Troubled Asset Relief Program (T.A.R.P.) Let's not even talk about the millions of dollars of bonuses offered to its executives, in return for what some critics call fleecing the American taxpayers.

What is a Fannie Mae short sale?

Fannie Mae adds another layer to the short sale process. Generally, the seller will present a hardship and the home will be upside-down to qualify for a short sale. Once the seller has received an offer to buy that short sale, the offer, along with other qualifying documentation, is sent to the seller's bank.

If the bank is merely servicing the loan because the loan has been sold to Fannie Mae, not only will the servicing bank process the short sale, but the package will later be sent to Fannie Mae for approval. This means even if the seller's bank approves the short sale, the seller will still need Fannie Mae's approval. Fannie Mae short sales take longer to close.

Can a Seller Stay Current and Do a Fannie Mae Short Sale?

The answer appears to be no. Negotiators at Fannie Mae have told me over and over that Fannie Mae will not issue short sale approval if the seller is not in default. Other lenders such as Bank of America and Wells Fargo do not force the seller into default and will grant a short sale when a seller is current.

I have experience working on Fannie Mae short sales in Sacramento. Here is a sample transaction. Bank of America approves a short sale and sends the package to Fannie Mae for review. Fannie Mae then rejects the short sale because the seller is still making the mortgage payment. So, the following month, the seller decides to not make a payment. Sixty days later, Fannie Mae approves the short sale.

Will Fannie Mae Postpone a Trustee's Sale if a Short Sale Offer is Pending?

Again, the answer is no. Once a notice of default has been filed, Fannie Mae has said it will not stop the foreclosure process while it is considering a short sale. If the short sale cannot be finalized prior to the auction date, Fannie Mae will foreclose -- even if the reason the short sale is not approved is due to delays at Fannie Mae.

Isn't this exasperating news? The government is pushing sellers who would otherwise stay current on their mortgage payments into foreclosure. On top of that, once the foreclosure process has begun, the government will take away a borrower's home if the short sale can't close before the sale date.

If you would like to find out if your loan is held by Fannie Mae, go to the Fannie Mae Loan Lookup site.

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MORTGAGE NEWS

Mary Stewart Realtor Oregon First — Mon, 24 May 2010 12:04:00 GMT

MAY 24, 2010

Mortgage Rates Decline

Home Buyers Get Surprise Boost From Europe Crisis as Loans Drop to Below 5%

By NICK TIMIRAOS

The financial turmoil in Europe is providing an unexpected windfall for American home buyers, as international money seeking a safe haven is flowing into the U.S., pushing domestic mortgage rates to the lowest levels of the year and back near 50-year lows.

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A real estate agent leaves an open house for a home for sale in San Francisco. Falling mortgage rates could lift the U.S. housing market.

The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve's $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market.

Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.

Refinance business "exploded" last week, says Jeff Lazerson, chief executive of Mortgage Grader, a brokerage in Laguna Niguel, Calif. "It's schizophrenic. We all had this expectation of higher interest rates and no more refinances." He says he helped a borrower lock in a 30-year loan with a 4.25% fixed rate last week, the lowest in his 24 years in the business.

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Rates on 30-year mortgages averaged 4.84% last week, according to a survey by mortgage-insurance titan Freddie Mac. Rates were quoted late Friday at 4.86%, the lowest since December 2009, according to a survey by financial publisher HSH Associates, and down from a high of 5.27% for the week ended April 9. Rates on 15-year mortgages averaged 4.24% last week—the lowest since Freddie began its survey in 1991.

Economists largely attribute the decline in mortgage rates to the European debt crisis and new concerns about the global economy, which unleashed a massive wave of cash into U.S. bonds from investors around the world.

This buying pushed down yields on Treasury bonds. Because mortgage rates are closely pegged to yields on 10-year Treasury notes, which fell to 3.2% Friday, the decline in Treasurys pulled down mortgage yields. Typically, mortgage yields remain around 1.5 percentage points above yields on 10-year Treasury notes.

Falling mortgage rates can give a powerful lift to the housing market. A general rule of thumb holds that every one percentage point decline in mortgage rates is the equivalent of roughly a 10% reduction in the home price for the buyer. So, if the current rates hold, say economists, that could help stabilize prices and allow current homeowners to sell existing homes without substantial price cuts.

It isn't clear how much home-buying the lower rates will spur. Demand had fallen in recent weeks after buyers raced to close sales ahead of last month's expiration of an $8,000 federal tax credit for home purchases. Applications for new-purchase loans hit a 13-year low in the week ending May 14, according to the Mortgage Bankers Association.

Borrowers do face roadblocks. Underwriting standards are their strictest in a decade, and record numbers of borrowers are "underwater," owing more to the bank than their homes are worth. That has excluded large swaths of borrowers from getting loans at the new lower rates.

Still, lower rates could widen the pool of people who qualify for a mortgage, while others may find they qualify for a slightly larger loan. "They can buy the place with the extra bedroom or the swimming pool," says Jay Brinkmann, chief economist at the Mortgage Bankers Association.

Falling rates have encouraged some Americans to consider refinancing their existing mortgages to save money. A one-percentage-point decline in mortgage rates can cut $250 off the monthly payment on a $400,000 30-year fixed-rate mortgage, giving consumers cash they can use to spend.

Richard Hunsinger plans to refinance two loans on his Potomac, Md., home into a new 15-year mortgage this week with a 4.37% rate. The 55-year-old dentist is worried that interest rates will eventually rise sharply, boosting the payment on his home-equity line of credit. His first mortgage, also a 15-year loan, currently has a fixed rate of 5.25%. And while the rate on his $240,000 home-equity loan is just 3.25%, it has risen as high as 8% in the past.

Rates "can't stay low forever," says Dr. Hunsinger. If they go up over the next year, "this will look like a really bright decision."

By historical standards, rates are incredibly low. Until 2003, rates on 30-year fixed-rate loans hadn't dipped below 5% since the 1960s. Rates fell to similar points throughout much of the past year as the government was helping to hold down costs for borrowers.

Nearly half of all borrowers with 30-year conforming fixed-rate mortgages have mortgage rates of 5.75% or higher and could reduce their rates by a full percentage point if they refinanced at current rates, according to investment bank Credit Suisse.

Many of those borrowers may have tried to refinance last year, only to find that they couldn't qualify. When rates fell to similar lows in 2003, refinance activity hit a record $2.9 trillion, compared to $1.2 trillion last year, according to Inside Mortgage Finance, a trade publication.

Now, more private investors are coming into the market for loans, offering better prices for securities containing mortgages with low rates than they were one year ago. That could lead banks and brokers to cut upfront origination fees, and borrowers who are able to refinance could find it cheaper to do so than last year.

"I'm calling people back and saying, 'Now it's worth it,'" says Michael Menatian, a mortgage banker in West Hartford, Conn.

—Prabha Natarajan contributed to this article

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FIVE BAD HOME IMPROVEMENT IDEAS

Mary Stewart Realtor Oregon First — Tue, 18 May 2010 13:33:00 GMT

When considering adding value to a home, you consistently hear from the real estate industry that updated bathrooms and quality kitchens stand out in a home sale. Those are proven sale closers. There are certain other improvements you can make to your home that will beautify it or create convenience for your family. When it comes time to selling, however, those improvements may do nothing to increase the value of the property and may even turn off potential home buyers.

Over-the-Top Renovations

Au contraire mon frère, not all renovations will raise the value of your home. Just `cause it's bigger doesn't mean it will be perceived as better by future home buyers. Unless your home is located in Beverly Hills or some other very posh neighborhood, don't install the bathroom with the super sized steam shower, imported Italian marble and several different spray heads ... unless you have the money to do it for your own pleasure and enjoyment only. That kind of improvement doesn't typically do anything to increase the value of the average home.

On the other hand, if you updated an old bathroom, you could see an increase of several thousand dollars to your home's bottom line. Real estate professionals suggest that homeowners pour over local home listings to see what amenities are the standard in your area, then upgrade your home to meet it. If you overdo it, however, you may not recoup your investment.

Swimming Pools

If you think installing a swimming pool in the back side of your home will draw hoards of home buyers clamoring to make offers on your home at sale time, you'd be wrong. Some may consider it a perk, but others may perceive it as a pain with all the maintenance it will require.

Homeowners have even paid to have their swimming pools buried to create more yard space. If you shell out the expense to build one, don't expect your home's value to budge. The only exception to building a swimming pool is if you live in states where they are considered the norm.

Home Office Renovations

Although, a home office is often an amenity appreciated by those shopping for a home, it should be built with frugality in mind. Overhauling an office doesn't pay off when it's time to sell your home. Don't steal usable space from another living area to create a home office. Instead, make sure the space can easily be converted back into a bedroom or other living space if needed. If you decide you just have to have the built-in Curly Maple wood shelves, know that you will only recoup around 50 percent of your cost at sale time.

Unique Builds

Home magazines are always coming up with clever and creative ways to change the look of your living space. Some are exotic and outlandish, but they can pique your interest. Tempted to put a classic disco ball with lights in your bedroom, a constellation ceiling in your family room or a peaceful Koi pond in your back yard? Avoid making outlandish changes to your home or changes that will be perceived as adding work for a future homeowner. Don't be tempted to incorporate these ideas into your own home, unless you don't plan on selling anytime soon. Home buyers may not share your enthusiasm.

Roof Renovations

If your roof needs repair, don't hesitate to have the work done. It will be one less issue you'll have to deal with when listing your home. If in your pursuit to list your home you think replacing your roof with cedar shakes or clay tiles will increase the value, think again. Although they have the ability to make your home stand out, they probably won't inspire home buyers to pay more for them. So, unless you have the money to burn, keep it simple when preparing your home to be listed on the real estate market.

By Kimbrough Gray, Austin

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PREPARE YOUR HOME TO SELL

Mary Stewart Realtor Oregon First — Tue, 13 Apr 2010 07:03:00 GMT

How To Prepare Your House For Sale

By Elizabeth Weintraub, About.com Guide

The first step to preparing a home for sale is to let go of your emotional attachment to it.

Prepping and staging a house¹. Every seller wants her home to sell fast and bring top dollar. Does that sound good to you? Well, it's not luck that makes that happen. It's careful planning and knowing how to professionally spruce up your home that will send home buyers scurrying for their checkbooks. Here is how to prep a house and turn it into an irresistible and marketable home.

Difficulty: Average

Time Required: Seven to 10 Days

Here's How:

Disassociate Yourself With Your Home.
- Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.
- Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.
- Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners!
- Say goodbye to every room.
- Don't look backwards -- look toward the future.
De-Personalize.
Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can see myself living here."
De-Clutter!
People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.
- If you don't need it, why not donate it or throw it away?
- Remove all books from bookcases.
- Pack up those knickknacks.
- Clean off everything on kitchen counters.
- Put essential items used daily in a small box that can be stored in a closet when not in use.
- Think of this process as a head-start on the packing you will eventually need to do anyway.
Rearrange Bedroom Closets and Kitchen Cabinets.
Buyers love to snoop² and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:
- Alphabetize spice jars.
- Neatly stack dishes.
- Turn coffee cup handles facing the same way.
- Hang shirts together, buttoned and facing the same direction.
- Line up shoes.
Rent a Storage Unit.
Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around. You don't want buyers scratching their heads and saying, "What is this room used for?"
Remove/Replace Favorite Items.
If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.
Make Minor Repairs³.
- Replace cracked floor or counter tiles.
- Patch holes in walls.
- Fix leaky faucets.
- Fix doors that don't close properly and kitchen drawers that jam.
- Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
  (Don't give buyers any reason to remember your home as "the house with the orange bathroom.")
- Replace burned-out light bulbs.
- If you've considered replacing a worn bedspread, do so now!
Make the House Sparkle!
- Wash windows inside and out.
- Rent a pressure washer and spray down sidewalks and exterior.
- Clean out cobwebs.
- Re-caulk tubs, showers and sinks.
- Polish chrome faucets and mirrors.
- Clean out the refrigerator.
- Vacuum daily.
- Wax floors.
- Dust furniture, ceiling fan blades and light fixtures.
- Bleach dingy grout.
- Replace worn rugs.
- Hang up fresh towels.
- Bathroom towels look great fastened with ribbon and bows.
- Clean and air out any musty smelling areas. Odors are a no-no.
Scrutinize.
- Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
- Linger in the doorway of every single room and imagine how your house will look to a buyer.
- Examine carefully how furniture is arranged and move pieces around until it makes sense.
- Make sure window coverings hang level.
- Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
- Does it look like nobody lives in this house? You're almost finished.
Check Curb Appeal.
If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.
- Keep the sidewalks cleared.
- Mow the lawn.
- Paint faded window trim.
- Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
- Trim your bushes.
- Make sure visitors can clearly read your house number.

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DON'T FORECLOSE !

Mary Stewart Realtor Oregon First — Mon, 29 Mar 2010 11:27:00 GMT

Don't foreclose! Do a short sale

This Virginia home was sold in a short sale. A new government program will make these transactions more common.By Les Christie, staff writerMarch 29, 2010: 3:46 AM ET

NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals.

"Banks have ramped up short sale approvals," said Duane Legate of House Buyer Network, which connects short sellers with buyers. "They're hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales."

These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.

And Bank of America (BAC, Fortune 500), the country's largest mortgage servicer, has more than doubled the number of short sales it processed in recent months.

Elizabeth Weintraub, a Sacramento, Calif.-area real estate agent who handles many short sales, was amazed at how quickly a recent deal went through. "Bank of America approved it in 24 days," she said. "That flipped me out."

This is a huge change from even just six months ago when the short-sale market was stalled and most people would describe the process has real estate hell. Because lenders stand to lose so much on these transactions, they have been reluctant to make short sales happen, often waiting months before getting back to potential buyers.

Beware: You lost your house but still have to pay

"In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete," said Chris Saitta, CEO of Equator, which produces short sale software.

"Things would just fall into a black hole and not come out again," added Weintraub.

And even when banks did agree to the sale, the process could be further complicated if the original owner had a second mortgage.

In most cases, the first lender is repaid in full before any money flows to a second-lein holder. And because most distressed borrowers are severely underwater, there's usually nothing left to send on. As a result, second-lein holders are left holding the bag and have been killing many deals.

But that has been changing. For one thing, banks realize that they make out far better financially with a short sale than a foreclosure. "The lenders lose 50% on a foreclosure and only 30% on a short sale," said Glenn Kelman, founder of the real estate Web site Redfin. "And short sales offer a way to get distressed properties off their books quickly."

And on April 5, lenders and mortgage investors will have even more incentives to offer troubled borrowers short sales instead of foreclosing.

Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 "relocation incentive" and servicers will get $1,500 for handling a short sale.

The investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days.

Equator's Saiita anticipates a short sale explosion in response to the new program. "The challenge will be handling all the volume," he said.

The company has already tweaked its software, which 58 servicers use, to handle the new HAFA rules. And that should help reduce the time it takes to execute a sale, which currently averages 88 days.

The boom in short sales may accelerate the end to the foreclosure crisis by cleaning out the overhang of borrowers in distress and replacing them with more stable homeowners.

Plus, these sales are better for distressed borrowers because their credit scores suffer less. Going through a foreclosure can knock 200 points off a FICO score, twice as much as the penalty for a short sale.

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2010 KITCHEN TRENDS

Mary Stewart Realtor Oregon First — Fri, 26 Mar 2010 10:09:00 GMT

Top Kitchen Trends for 2010

March 15, 2010 by Melissa Tracey · 4 Comments
Filed under: Home Trends

By Melissa Dittmann Tracey, REALTOR Magazine

So what’s cooking in the kitchen this year? The National Kitchen & Bath Association surveyed designers to reveal the top design trends for 2010.

Among the trends gaining popularity this year: Hide your appliances in kitchen drawers, whether dishwashers-in-a-drawer or undercounter refrigeration (drawers being used as refrigerators). More home owners are opting to tuck their appliances away so they don’t interfere with the design.

Also part of the appeal to dishwashers-in-a-drawer is their convenience with the capability of washing small loads of dishes in each drawer, which saves water and electricity.
Here are some of the other top kitchen trends for 2010:

Color: Shades of white and off-whites are the most common kitchen colors, followed by brown, beige, and bone hues.

Cabinetry: The most popular wood for kitchen cabinetry remains cherry, followed by maple. In the decline: Painted cabinetry and light natural finishes and distressed finishes.

Design style: Traditional is the most popular kitchen design with contemporary following closely behind.

Flooring: Ceramic and porcelain tile and natural stone remain the most popular kitchen flooring. Hardwood, however, will dominate kitchens this year more than ever.

Countertops: Granite is the most popular option, but quartz is inching up to it in popularity

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Tips for Selling your House

Mary Stewart Realtor Oregon First — Tue, 23 Mar 2010 08:28:00 GMT

Feng Shui House Sale: Easy Feng Shui Tips

Speed up the sale of your house with basic feng shui tips

By Rodika Tchi, About.com Guide

Be aware of the feng shui triangle when selling a house: the kitchen, the bathroom and the bedroom. Buyers need to know they will sleep well, eat well, and well, unwind well if they choose to buy your home. Use feng shui to treat their imagination.

Stockbyte / Getty Images

Have a house to sell or looking to buy a new one? I hope you know feng shui¹ can help you. Feng shui house sale tips can be used with much success to help you achieve your real estate goals. If you plan to sell your house, or have been trying to sell your house for a while now, here are some easy feng shui tips to get the energy moving.

FENG SHUI HOUSE SALE TIP # 1:

Go Outside. You duplex, your condo, your house, whatever it is that you are selling, and look at it from a bit of a distance. Better yet, do this little feng shui exercise with a friend who has not seen your house for a while. Quickly jot down all the thoughts and first impressions about your house that come to mind in the first 2-3 minutes.

Do not censor the information or get defensive; the more open you are to criticism, the better off you will be when presenting your house. You might think the big purple frog looks cool by your front door² and is even good feng shui (no, it is not!); potential buyers, however, might not appreciate it. As with every sale, selling your house is about selling a specific emotion, rather than the commodity itself. Be very mindful about the quality of energy at your main entrance; make it look fresh and inviting.

FENG SHUI HOUSE SALE TIP # 2:

Go Fresh and Go Green. If you own a house, definitely invest in some landscaping; this will increase the value of your property, as well as attract better quality energy to your home. If you live in a duplex or a condo and there is not much "outside" to work on, focus on the main entrance and bring vibrant Chi, or energy³ to you main entry. Invest in a tall lush plant or bring a vase with fresh cut flowers, have good lighting, beautiful art; create a feel of spaciousness and expansion with the strategic feng shui placement of mirrors⁴, refresh the wall paint color⁵, etc.

FENG SHUI HOUSE SALE TIP # 3:

Less is More. When you shop for anything, and I mean anything - clothes, appliances, food - it is often helpful to see the item in action. If you sample specific food, you are much more inclined to buy it, right? The same goes with clothing - that lovely sweater looks much better on a mannequin than stacked with all the other sweaters. You see it, you touch it, you experience it, you want to buy it. However, would you want to pay full price for a used item? Probably not. Think of this when you are preparing for your house sale - the less personal, or used you make your house look, the better. Show to the best of your ability how the space can be used, but do not overdo it with personal touches.

Create a spa feel in the bathroom⁶, but do hide all your personal items (buyers do not need to know which toothpaste brand you prefer); make the kitchen smell and look good, but take it easy with displaying old recycled cans, etc. You get the idea.

FENG SHUI HOUSE SALE TIP # 4:

Go for Good Energy. Most importantly, be aware of the very important feng shui energy triangle when selling a home. The energy in the kitchen⁷, the bathroom⁸, and the bedroom⁹ is either making or breaking the house sale. Buyers need to know they will sleep well, eat well, and well, unwind well if they choose to buy your home. Treat the imagination of your potential buyers with respect: know how to ignite it, know how to sustain it throughout your home, and also know when to step back and let them take it from there.

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Facts on the Energy-Efficiency Tax Credit from the National Assoc of Home Builders

Mary Stewart Realtor Oregon First — Fri, 12 Mar 2010 13:06:00 GMT

Take advantage of improved tax credits available for a number of energy-efficient home improvements. Find a professional remodeler in your neighborhood at www.nahb.org/remodel to get excellent advice and your assurance of a project well done.

The Existing Home Retrofit Tax Credit (Tax Code Section 25C): Tax credits are available at 30 percent of the cost, up to a $1,500 lifetime limit, for installation in 2009 & 2010 (for existing homes only) of these products:

Building envelope components (Installation costs not included):

Qualified energy products (Installation costs may be included):

Electric heat pump water heaters that yield an energy factor of at least 2.0 in the standard Department of Energy test procedure.
Electric heat pumps and central air conditioners that achieve the highest efficiency tier established by the Consortium for Energy Efficiency as of Jan. 1, 2009.
Natural gas, propane or oil water heaters with an energy factor of at least .82 or thermal efficiency of at least 90 percent
Biomass burning stoves with a thermal efficiency rating of at least 75 percent as measured using a lower heating value
Natural gas and propane furnaces that achieve an annual fuel utilization efficiency rate of not less than 95
Natural gas, propane, or oil water boilers and oil furnaces that achieve an annual fuel utilization rate of not less than 90
Advanced main air conditioning fans with annual electricity use of no more than 2 percent of the total annual energy use of the furnace

The Wind, Solar, Geothermal and Fuel Cell Tax Credit (Tax Code Section 25D): Tax credits are available at 30 percent of the cost, with no cap through 2016, for existing homes and new construction, for:

The energy-efficiency home products must be placed in service between Jan. 1, 2009 and Dec. 31, 2010. The credits are only valid for improvements made to the taxpayer's principal residence, except for qualified geothermal, solar, wind property, which can be installed on any home used as a residence by the taxpayer.

Home owners can claim the 25C and 25D credits on Form 5695 when they file their income tax returns. Check with your tax professional to ensure correct application of the energy-efficiency tax credit. Retain all receipts as well as records that include:

Name and address of manufacturer
Identification of the class of eligible building envelope component
Make, model number and any other property identifiers
A statement that the component is eligible for the credit (may include U factor, class of window or door, etc.)

For a short, one-page description of the energy efficiency tax credits, download this fact sheet.

IRS Clarifies What Qualifies for Home Owner Energy Tax Credit

The Internal Revenue Service has published new guidance on Internal Revenue Code Section 25C, which allows up to a $1,500 tax credit for home owners who install energy-efficient windows, insulation and other qualifying products. The tax credit is equal to 30 percent of the qualified energy efficiency expenses paid by the home owner, but it is limited to $1,500 for improvements made during 2009 and 2010.

Notice 2009-53 explains the requirements for home owners to claim the 25C credit and provides detailed technical information regarding what improvements can qualify. Home owners can claim the credit only for improvements made to an existing home. However, NAHB has learned from the IRS that tax credit-qualified improvements installed in an addition to an existing home also qualify for the 25C program.

Among the highlights:

Tax credit eligible products must be reasonably expected to remain in use for at least five years. One method taxpayers can rely on to satisfy this requirement is to purchase products from a manufacturer who offers a warranty lasting at least two years at no additional cost.
Not all Energy Star-rated products that are installed qualify for the tax credit. The Energy Star Web site includes a detailed listing of products that qualify for the section 25C program.
The credit excludes installation costs for building envelope components such as insulation and windows. In order for the home owner to claim the credit, the remodeler must provide an itemized breakout of the cost of these installed products, minus any labor or installation charges.

Also of importance, Notice 2009-53 provides the set of transition rules for qualified products installed before June 1, 2009. For these installations, taxpayers can claim for tax credit purposes the installation of property that meets less stringent energy efficiency requirements.

In particular, taxpayers can claim the credit for installation of windows and skylights that meet Energy Star requirements, requirements listed under prior IRS Notice 2006-53 or manufacturers certifications for 25C made under IRS Notice 2006-53. For installations on or after June 1, the requirements listed in Notice 2009-53 and described above are binding.

NAHB Teleconference on Claiming Energy-Efficiency Tax Credits

Newly expanded federal tax credits for energy efficiency are providing consumers with added incentives for upgrading their homes. Homeowners now can claim up to $1,500 in tax credits for remodeling their principal residence to reduce energy consumption through the enhanced Existing Home Retrofit (25C) tax credit. During a media teleconference next week, NAHB Director of tax issues discussed how to take advantage of the credit, while three professional remodelers from around the country provided examples of the types of projects that may qualify, such as adding insulation, replacing doors and windows, and updating heating and cooling systems. The panelists also provided guidance on selecting a qualified remodeler and certifying home remodelers under the National Green Building Standard, which is the only national standard to certify green home remodeling and renovation projects.

Who:

Rob Dietz, Director of Tax Issues for the National Association of Home Builders
Greg Miedema, CGR, CAPS, GMB, CGP, NAHB Remodelers Chairman and President of Dakota Builders, Tucson, Ariz.
Donna Shirey, CGR, CAPS, CGP, President of Shirey Contracting, Issaquah, Wash.
Michael Strong, CGR, GMB, CAPS, CGP, President of Brothers Strong, Houston

To listen:

NAHB Energy Efficiency Tax Credit media call audio file

Learn more about how to plan a remodel and hire a professional remodeler at www.nahb.org/remodel.

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WHAT REALTOR'S KNOW

Mary Stewart Realtor Oregon First — Thu, 04 Mar 2010 10:42:00 GMT

When We Represent a Seller:

We know what to do when you receive multiple offers. We know how to go back to all the interested parties to get a highest and best offer from them without alienating them or getting into legal trouble.

We know how to put together a deal with a buyer who already has a house they need to sell in order to buy your house. We know what’s fair to ask of them so you don’t alienate a perfectly good buyer, but also to insulate you from risk as much as possible.

We know what to do when a buyer fails to close on time because their loan didn’t come through.

We know how to open escrow.

We know how to comply with the Federal Lead Based Paint law that applies to all homes built prior to 1978.

We know how to comply with the Oregon Property Disclosure Law.

We know how to comply with the Oregon Homebuyer Protection Act.

We know how to comply with Oregon Revised Statute 93.040 that requires certain Warning statements to buyers “in the body of an instrument transferring or contracting to transfer fee title to real property” having to do with approved uses, fire protection, and the recently added “lawfully established unit of land” clause (House Bill 2723, 2007 Regular Session).

We know what you must disclose to potential buyers of your home and what you can keep to yourself.

We know what kinds of repairs would be reasonable for a buyer to expect from you at the price they are paying.

We have a pretty good idea of what kinds of improvements to a house will actually make a difference in the sales price; which ones won’t get you more money, but will cause the house to sell faster; and which ones you should hold off on doing unless a buyer specifically asks for it.

We know how buyers think.

When We Represent a Buyer:

We know how to help you decide what you want to offer for a house REGARDLESS of what the seller is asking for the house, which may or may not be a fair price.

We know what kind of repairs would be reasonable to ask a seller to do given what you are paying for the house.

We know how to structure a deal so you can have the option of doing the repairs yourself with the seller’s money (lenders will not allow you to receive cash from the seller at closing, even if it is to perform repairs).

We know the pros and cons of doing the repairs yourself after closing or having the seller do them before closing.

We know how to advise you about the potential long term value of homes you are considering so you can compare and contrast them.

We know what mortgage brokers have worked well for other buyers in the past.

We know how to open escrow.

We know how the deadline on an inspection contingency works and how it doesn’t.

We know how to put together a deal so that you get your earnest money back if you can’t get a loan or the house turns out to have problems.

We know what kind of rights you have in terms of receiving written disclosures from the seller about the condition of the property.

We know what sellers must disclose to you and what they can keep to themselves (so you better do your own investigations).

We know how sellers think.

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WHY USE A BROKER

Mary Stewart Realtor Oregon First — Thu, 04 Mar 2010 10:32:00 GMT

Many companies have begun charging for services that encourage home sellers to become unrepresented sellers by selling their homes themselves. Here are several of their claims:

THEY CLAIM:
When selling by owner, you don't have to leave the house because an agent wants to show it, or clean it every morning before leaving "just in case". You know when people are coming, and can prepare accordingly. And when a buyer makes an offer, there's not all that frustrating back-and-forth telephone tag between agents to reach an agreement. It can be done in minutes, and end with a friendly handshake and smile between owner & buyer.

REALTORS KNOW:
When a buyer has trouble getting in to see your house because they have to make an appointment with you, it makes it LESS likely that they will buy your home and MORE likely that your home will take longer to sell. Since each home is utterly unique, buyers can't wait to see every home on the market for a month and then go back to a home they saw that first day to make an offer on it - it will probably be gone. Buyers know this, so they make offers on the first home they see that they would want to live in, even if they might have liked yours better. Also, regarding the "friendly handshakes", there are LOTS of different kinds of people out there. People don't always come across to each other the way they need to in order to close the transaction to the benefit of both parties. Often, people are either too scared to be mean, or they come across as too defensive and aggressive because they are nervous and not sure of themselves. Or, both parties want to be reasonable and know how to be reasonable, they just don't know what reasonable IS. They don't have enough experience to know what would be typical or atypical. You probably wouldn't want a transaction with them based on a "friendly handshake".

THEY CLAIM:
You know your home best; the schools, the neighborhood, what is special about the area and the house, as well as other details about the property. A well-maintained, fairly priced home virtually sells itself; your role is simply to provide additional information.

REALTORS KNOW:
Homes simply show a lot better when the owners aren't present. As any buyer who's been out touring homes can attest to, it's very difficult to feel comfortable in a home if the owners are there. It is difficult to do the work of imagining yourself living in the home if you are expending your energy trying to be polite. It's also true that most people will not feel comfortable discussing the flaws of the home in front of the owners, and the things which cause the most trouble are the things which get left unsaid, the worries that fester. It's absolutely vital for buyers to be able to bring up their concerns, the things they DON'T like right then, so their agent or the other buyer, if there is one, can say, "Hey, that's not so bad, we could just do _____!" Also, people need to be able to feel comfortable expressing their pleasure and excitement over the home. They need to NOT feel like they are going to be blowing their negotiating position if they keep saying, "I love this house!" because that process of talking about how much you love a home is what gets the buyer stoked to actually make an offer.

THEY CLAIM:
Nobody is going to tell you what to do. You can advertise where and how you want to, schedule showings when it's convenient for you, talk directly with prospective buyers yourself, even take your house off the market for a while if you can't find the right house for you. You aren't obligated to a 3, 6, or 12 month contract...you make your own rules.

REALTORS KNOW:
This one is a little weird. When you hire someone to perform a service for you (i.e. an agent), you most certainly are in control. If you don't feel like you can control your own agent, then you should definitely not attempt to negotiate a sale on your own. You need someone who can advocate for you.

THEY CLAIM:
Obviously, this is the main reason why most FSBO home sellers are selling their home themselves. You can save up to 7% commission by doing it yourself. On a $200,000 home you may save up to $14,000. Here's another way of looking at it. Let's say that your home will sell for $200,000 and you owe $144,000 on the mortgage, so you have $56,000 in equity. If you pay $14,000 in sales commissions, that's 25% of your equity! Sell it yourself and you'll save a very large portion of your equity!

REALTORS KNOW:
This is all true, sort of. Their numbers are accurate, but they don't take everything into consideration, which is probably why Realtor listed homes fetch 27% more, on average, than non-Realtor listed homes (according to the NAR 2002 Profile of Home Buyers and Sellers). When you consider the costs of the seller's time and the costs of the property taking longer to sell... One of the big costs comes via the temptation to lower the price of the property because the seller thinks THAT is the reason their home isn't selling when it is really just that it's not on enough buyers' radar screens (because real estate agents aren't finding out about it or because people can't get in to see it easily). We've all sold wonderful FSBOs that were on the market WAY too long given their desirable location and their below market price. We've also all sold homes within days of it being listed by another Realtor after they had been FSBOs - sometimes for over a YEAR.

The thing is, for buyers who are really serious about buying a home, it's just easier to have a Realtor and it's those SERIOUS buyers you want coming to see your house, the folks who are educated about the market. It's a fact that nationwide, 85% of buyers buy their home with the help of a Realtor. Of the other 15%, half were transfers between people who already knew each other. This is probably why, according to the NAR survey, only 35% of FSBOsï¿½ said they would attempt to go it alone next time - and remember, a lot of these folks sold to members of their own family!

THEY CLAIM:
If you list your home at a full commission with a real estate agent, you'll probably inflate the asking price to cover the cost of the commission. Two to four months later you'll come to the painful realization that no one is going to buy your home at that price, and you'll end up reducing the price (or accepting an offer) equal to the original amount you would have asked if selling by owner. Do it right the first time, and avoid taking the loss.

REALTORS KNOW:
This one sounds real good, but it's based on some erroneous assumptions about how markets work. It's also in complete opposition to what they just said about how an unrepresented seller gets to KEEP all that "excess" money. A house is worth what a buyer will pay for it, not what they seller WANTS to get to cover their costs. This is basic Econ 101 stuff. If you look at RMLS data and compare it to FSBO data, no doubt about it: Realtor listed homes sell closer to original asking price (many times OVER) than FSBO. In part because the seller gets a professional opinion about what their home is worth and in part because the seller doesn't fiddle with the asking price thinking THAT is the problem when really it's just that folks aren't getting in to see the house easily and when they do, they are made uncomfortable by the owner's presence. In other words, correct pricing is a function of supply vs. demand. Realtors INCREASE the pool of prospective buyers (demand) thereby INCREASING price.

THEY CLAIM:
Because you meet the prospective buyers, you have a much better idea how interested people are, what they like about the home, how serious they are about buying and what their timeframe and situation is. The direct feedback is easier to live with than wondering how things are going, or worse, why no one has made an offer yet.

REALTORS KNOW:
Pick up a phone and call your agent. Ask your agent why they haven't called you with feedback from the showings! And meeting the prospective buyer isn't all it's cracked up to be. Sometimes, people get feelings about the buyer/seller and that can affect the home sale, when it doesn't have anything to do with anything. Better to keep focused on your own needs and the logistics of the sale then expend any energy thinking about if you LIKE the people who are going to buy your home or if they LIKE you. This sounds harsh, but in the long run, it leads to greater happiness for both buyer and seller. Also, people won't necessarily give YOU, the homeowner, honest feedback about your home. They don't want to be rude. Again - this is why it is good for the seller to be absent during the showing. People can then IMAGINE the home as their own, and not waste time trying to be friendly and polite.

THEY CLAIM:
"If you can sell your own car, you can sell your own home... it's that simple" said one of our home sellers. And he's right, once you find a buyer... lenders, lawyers or title companies take over (depending on your area of the country).

REALTORS KNOW:
Wow! This claim is really wild. Look - normally, you have two sets of nice people who don't know what they are doing trying to buy/sell a home. And everything works out just fine because nobody knows what laws the other person (usually the seller) is breaking. But what if you got involved with a buyer who DID know the laws? They could really hurt you. Here's an example: You take your home off the market because you have an accepted offer. You buy another house with the money you are going to get from the sale of your existing home and hire the moving vans and make your earnest money ($5,000) on the home you've just bought nonrefundable. The day before closing the buyers tell you that you have to lower your price by $10,000 or they will turn you into the federal government for not ever giving them the statutorily required Lead Based Paint Addendum. They claim it's a good deal for you because the fine for not giving it is $25,000. What do you do? Or maybe they just say, "Sorry we are buying another home we like better. Oh? You don't think we can pull out of the deal? We can because you never gave us a Disclosure or a Disclaimer". What if the home you are selling was your mother's or a rental? Does that make a difference? Do you know? The idea that you just get a signed deal and then lawyers or title people take over? Well, perhaps it works differently in other states, but in Oregon there are no lawyers unless you PAY for them and the title company will ONLY follow the written instructions they get from both the buyer and seller. That's their role, not giving free advice that might open them up to potential legal liability. This is another aspect of "are you really saving money?" If there are no problems, yes. But we all buy insurance even though we don't REALLY expect our homes to burn down or our legs to get ripped off in industrial accidents.

Another final consideration:

Most folks don't think about the potential security risks they are taking when they attempt to sell their own homes. In any other situation, if a total stranger came to your door and said, "OK, I'm here - now let me in to take a look around." You would not do it. But if you want to sell your home, you have no choice. Realtors here in the State of Oregon are fingerprinted and go through FBI background checks before we are given the electronic key-card that will open the lockboxes on homes for sale. These lockboxes record which agent accessed the lockbox and when. And, since you aren't home during the showing, you don't have to worry about your personal safety.

Selling your home yourself can work just fine, but be sure you make that decision with all the facts and weighing all the pros and cons. Please contact us if you have questions particular to your situation.

Oregon First Realtors

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Simple Real Estate Definitions ~ Short Sale

Mary Stewart Realtor Oregon First — Wed, 03 Feb 2010 10:56:00 GMT

A short sale is when a home seller sells his home for a lesser amount than what is owed on his mortgage, and the mortgage lender agrees to accept the lesser amount in lieu of a full payoff.

By way of example, a Short Sale may be appropriate for a home seller whose mortgage balance is $250,000 but whose home wouldn't sell for more than $220,000. Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a mortgage loan. Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

For this reason, Short Sales are sometimes considered the economical alternative to default.

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone speaking with a real estate agent about the proper protocol is usually the best place to start. And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

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Pending Home Sales Predict A Stronger Spring Market Share

Mary Stewart Realtor Oregon First — Wed, 03 Feb 2010 10:49:00 GMT

Today at 5:48am

The Pending Home Sales Index rose slightly in December, climbing 1 percent from November.

A Pending Home Sale is a home that is under contract to sell, but not yet sold. It’s a figure compiled by the National Association of Realtors® using sales data from over 100 regional listing services and more than 60 large brokerages around the country.

Because each pending sale is a true measure of sales activity, the Pending Home Sales Index is purported to be the most reliable forward-looking indicator for housing.

Recent data supports this hypothesis.

After Pending Home Sales plunged 16 percent in November, Existing Home Sales fell by 17 percent in December. Based on the most recent Pending Sales Index, therefore, we can expect January’s closed sales to be similarly level.

For home buyers , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers. When buyers outnumber sellers, like they did through most of 2009, home supplies dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009.

With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result.

Activity has since slowed, however, and fewer buyers are in today’s market. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same.

The net result: Home buyers have more homes from which to choose and that can create negotiation leverage for better prices and better concessions.

With mortgage rates still low and a looming deadline on the homebuyer’s tax credit, market activity should be strong between now and April. Take your time and bid right. And when you’re ready, be ready. The best deals likely won’t last.

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Preparing Your Home for Sale ~ On a Budget

Mary Stewart Realtor Oregon First — Tue, 19 Jan 2010 07:54:00 GMT

By Elizabeth Weintraub, About.com Guide

It's not always necessary to spend a lot of money to prepare your home for sale.

A reader asks: "Our REALTOR® says we have enough equity in our home to make a small profit after selling (thank God), but he wants us to prepare the home for sale. He's got some pretty grand ideas of what we should do to make it more attractive to buyers, but the truth is we don't have enough money saved up to do everything he wants. He says the carpeting is dirty and should be replaced. Our kitchen counters have older tile, and he suggests we put in granite. Plus, he wants us to paint the entire house. My husband and I have about $3,000 to spend, and that's it. How can I prepare my home for sale on a budget?"

Answer: All homes tend to sell for money after they are prepared properly for the market, and I would not let a small budget for home selling dissuade you. After all, in some areas such as the bathrooms, buyers spend about 2 seconds peeking into those rooms.

From the information you have given, I would suggest that you start on the outside. Ask a friend or neighbor to come over and give you objective advice. Because after you live in a home for a while, you might not see the things that will distract home buyers.

Home Selling on a Budget Starts With the Exterior

First impressions count. That's why your yard needs to be inviting. Trim back the bushes and trees, especially if they block views from the windows and make your home difficult to see from the street. Here are a few other low-cost curb appeal improvements that you can do for less than $500:

Keep the lawn mowed, preferably on the diagonal.
Plant yellow flowers such as marigolds along the walk or by the front door. The color yellow sells.
Wash the exterior windows.
Paint or replace the front door and buy new hardware.
Power spray the house to get rid of dirt and cobwebs.
Buy a new welcome mat for the front steps.
Paint or replace the mailbox.
Paint your house number on the curb or buy a plaque displaying your house number and install near the entry.
Wash or replace a front porch light fixture.

Remove Excess Clutter and Furniture

Many homes contain too much furniture. You may benefit from removing 2 to 3 pieces of furniture from each room. Less furniture will make the rooms appear bigger. You can pay about $100 a month to place the furniture into storage or simply stack it neatly in the garage for free.

Remove all personal photographs from tables and walls. Patch holes in the walls or hang non-personalized artwork over the existing nails.
Pack up your bookcases (you're going to move anyway).
Clean out the closets and store non-essential items.
Rearrange your kitchen pantry, kitchen cabinets and bedroom closets in an orderly manner.

Thoroughly Clean the House Before Selling

You can hire a professional cleaning crew for about $300 or do it yourself for free. Be sure to wash the inside of the windows.

Rent a carpet steamer and clean the carpets. You may find they do not need to be replaced.
Dust the tops of your doorways and window frames.
Polish all wood / ceramic flooring.
Wash all light fixture coverings and ceiling fan blades.
To give your home a more open feeling, consider removing a few doors that open into each other or otherwise block the flow of traffic.

Updating the Kitchen on a Budget

Kitchens are the most important room in the house. It's the heart and soul of the home. Even if a buyer is not much of a cook, the kitchen is still where family and friends tend to gather.

If new granite is out of your budget, consider either re-grouting the kitchen counter tiles, which is surprisingly cost effective, or covering them with granite tiles instead of granite slab.
For wood cabinets, stripping the finish and re-staining or painting will save you more money than re-surfacing the cabinets.
Buy new knobs and / or pulls for the cabinet doors. If you have 40 or so knobs on your kitchen cabinet, at a cost of about $5 per knob, your total outlay for new hardware will be about $200. New hardware will transform the appearance of your cabinets.
Replace a worn kitchen faucet for about $100 to $200.
Buy new kitchen sink basket strainers for less than $25 each.
Consider installing kitchen pendant lights over the sink. Cost: About $500.

Painting the Interior

Professional painters will probably charge you anywhere from $300 to $500 to paint each room, but with a little patience, you can paint the rooms yourself. This is not the time to get creative.

Choose a soft color in a light brown tone (never white), and paint every room the same color.
The painting will go faster if you paint the ceilings the same color, but ceilings really pop if they are a lighter color than the color of the walls. Lighter colors also make the ceilings appear higher.
For a 10 x 10 room, you will need 2 one-gallon cans of eggshell paint. Each one-gallon can of paint should cost no more than $25. For the amount of money a professional painter will charge you to paint one room, you can probably paint the entire house yourself.

Freshening Bathrooms on a Budget

If you have wallpaper in the bathroom, it's most likely peeling and should be removed. You can rent a steamer to remove the wallpaper or strip it yourself.

Consider replacing the toilet and vanity, especially if they are stained or particularly outdated. A new toilet and vanity will cost less than $500, and it's easy to replace a toilet.
Buy a two-light wall fixture or a light bar for over the sink. Cost: About $200.
If the tub is stained, hire a professional to refinish it. Cost: About $200 to $300.
Replace water-stained shower doors or clean them with a lime dissolving detergent.
Buy a new shower curtain and tie it back with ribbons.
Hang fresh towels and lay down a new bath rug.
Place scented candles near a basket of tightly rolled wash cloths to create a spa-like environment.
Stash all personal items under the bathroom sink.

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2010 FHA Loan Limits Released

Mary Stewart Realtor Oregon First — Fri, 08 Jan 2010 07:49:00 GMT

FHA home loans are federal assistance mortgages made by lenders, and backed by the government. The FHA doesn't make loans to homeowners by federally-qualified lenders.

By all accounts, FHA home loans are surging in popularity.

2006, FHA insured 3.3% of all mortgages made
Q2 2009, FHA insured 19.2% of all mortgages made

A major reason for the increase can be tied to guidelines.

As compared to its conforming mortgage cousins Fannie Mae and Freddie Mac, FHA home loans have lower downpayment requirements and looser credit standards. The FHA allows downpayments of 3.5 percent and Fannie Mae and Freddie Mac do not, as an example.

Another reason is that FHA home loans aren't subject to credit score fees the way that conforming mortgages are. Through Fannie or Freddie, a home buyer with a 650 FICO and 20% down is subject to 3% in risk fees. Via the FHA, the fee is zero, making FHA the better "deal".

The FHA published its 2010 loan limits. There's no change from 2009.

The base 2010 FHA loan limits are:

1-unit : $271,050
2-unit : $347,000
3-unit : $419,400
4-unit : $521,250

We say "base" because these loan limits don't apply to all areas equally. Higher-cost regions get higher loan limits, based on typical home values. Homes in Los Angeles County, for example, can be FHA-insured up to $729,750 in 2010, and there are special exceptions made for Alaska and Hawaii.

The official FHA announcement included a complete, county-by-county FHA loan limit list. The first spreadsheet shows each county at or above the $729,750 maximum; the second list is everyone else.

If your home's county is on neither list, use the "base" numbers above.

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7 Smart Strategies for Remodeling Your Kitchen

Mary Stewart Realtor Oregon First — Mon, 04 Jan 2010 08:15:00 GMT

7 Smart Strategies for Remodeling Your Kitchen

By: John Riha

Published: September 21, 2009

When planning a kitchen remodeling project, keep the same footprint, add storage, and design adequate lighting so that you preserve value and keep costs on track.

Progress	H K
Value Added	High $16,100 - $43,000
Effort	High 6-12 mos (including planning)
Investment	High $21,400 - $57,200

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4 of 4

If you’re contemplating a kitchen remodel, you’re also weighing a considerable investment. But a significant portion of the upfront costs may be recovered by the value the project brings to your home. Kitchen remodels in the $50,000 range recouped 76% of the initial project cost at the home’s resale, according to recent data from Remodeling Magazine’s Cost vs. Value Report. To make sure you maximize your return, consider these seven smart kitchen remodeling strategies.

1. Establish your priorities

Simple enough? Not so fast. The National Kitchen and Bath Association (NKBA) recommends spending at least six months planning before beginning the work. That way, you can thoroughly evaluate your priorities and won’t be tempted to change your mind during construction. Contractors often have clauses in their contracts that specify additional costs for amendments to original plans. Planning points to consider include:

Avoid traffic jams. A walkway through the kitchen should be at least 36 inches wide, according to the NKBA. Work aisles for one cook should be a minimum of 42 inches wide and at least 48 inches wide for households with multiple cooks.
Consider children. Avoid sharp, square corners on countertops, and make sure microwave ovens are installed at the heights recommended by the NKBA—3 inches below the shoulder of the principle user but not more than 54 inches from the floor.
Access to the outside. If you want to easily reach entertaining areas, such as a deck or a patio, factor a new exterior door into your plans.

Because planning a kitchen is complex, consider hiring a professional designer. A pro can help make style decisions and foresee potential problems, so you can avoid costly mistakes. In addition, a pro makes sure contractors and installers are sequenced properly so that workflow is cost-effective. Expect fees around $50 to $150 per hour, or 5% to 15% of the total cost of the project.

2. Keep the same footprint

No matter the size and scope of your planned kitchen, you can save major expense by not rearranging walls, and by locating any new plumbing fixtures near existing plumbing pipes. Not only will you save on demolition and reconstruction, you’ll greatly reduce the amount of dust and debris your project generates.

3. Match appliances to your skill level

A six-burner commercial-grade range and luxury-brand refrigerator might make eye-catching centerpieces, but be sure they fit your lifestyle, says Molly Erin McCabe, owner of A Kitchen That Works design firm in Bainbridge Island, Wash. “It’s probably the part of a kitchen project where people tend to overspend the most.”

The high price is only worth the investment if you’re an exceptional cook. Otherwise, save thousands with trusted brands that receive high marks at consumer review websites, like www.ePinions.com and www.amazon.com, and resources such as Consumer Reports.

4. Create a well-designed lighting scheme

Some guidelines:

• Install task lighting, such as recessed or track lights, over sinks and food prep areas; assign at least two fixtures per task to eliminate shadows. Under-cabinet lights illuminate clean-up and are great for reading cookbooks. Pendant lights over counters bring the light source close to work surfaces.

• Ambient lighting includes flush-mounted ceiling fixtures, wall sconces, and track lights. Consider dimmer switches with ambient lighting to control intensity and mood.

5. Focus on durability

“People are putting more emphasis on functionality and durability in the kitchen,” says McCabe. That may mean resisting bargain prices and focusing on products that combine low-maintenance with long warranty periods. “Solid-surface countertops [Corian, Silestone] are a perfect example,” adds McCabe. “They may cost a little more, but they’re going to look as good in 10 years as they did the day they were installed.”

If you’re not planning to stay in your house that long, products with substantial warranties can become a selling point. “Individual upgrades don’t necessarily give you a 100% return,” says Frank Gregoire, a real estate appraiser in St. Petersburg, Fla. “But they can give you an edge when it comes time to market your home for sale” if other for-sale homes have similar features.

6. Add storage, not space

To add storage without bumping out walls:

• Specify upper cabinets that reach the ceiling. They may cost a bit more, but you’ll gain valuable storage space. In addition, you won’t have to worry about dusting the tops.

• Hang it up. Install small shelving units on unused wall areas, and add narrow spice racks and shelves on the insides of cabinet doors. Use a ceiling-mounted pot rack to keep bulkier pots and pans from cluttering cabinets. Add hooks to the backs of closet doors for aprons, brooms, and mops.

7. Communicate effectively—and often

Having a good rapport with your project manager or construction team is essential for staying on budget. “Poor communication is a leading cause of kitchen projects going sour,” says McCabe. To keep the sweetness in your project:

Drop by the project during work hours as often as possible. Your presence assures subcontractors and other workers of your commitment to getting good results.
Establish a communication routine. Hang a message board on-site where you and the project manager can leave each other daily communiques. Give your email address and cell phone number to subs and team leaders.
Set house rules. Be clear about smoking, boom box noise levels, which bathroom is available, and where workers should park their vehicles.

Consumers spend more money on kitchen remodeling than any other home improvement project, according to the Home Improvement Research Institute, and with good reason. They’re the hub of home life, and a source of pride. With a little strategizing, you can ensure your new kitchen gives you years of satisfaction.

John Riha has written six books on home improvement and hundreds of articles on home-related topics. He’s been a residential builder, the editorial director of the Black & Decker Home Improvement Library, and the executive editor of Better Homes and Gardens magazine. His standard 1968 suburban house has been an ongoing source of maintenance experience.

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When It's A Holiday Week, Mortgage Rate Shoppers Should Be Extra Vigilant

Mary Stewart Realtor Oregon First — Tue, 22 Dec 2009 08:10:00 GMT

When It's A Holiday Week, Mortgage Rate Shoppers Should Be Extra Vigilant

Mortgage pricing worsened Monday, driving mortgage rates to their highest levels since October.

The day's action was drastic, too.

Some banks issued as many as 3 rate sheets Monday -- each worse than the preceding and one reason why rates got so bad, so quickly, is because this week marks the beginning of mini-Vacation Season on Wall Street.

Between now and January 4, 2010, be prepared for big swings in pricing from day-to-day. Shopping for a mortgage could be a challenge.

The relationship between vacation days and mortgage rate volatility is rooted in how mortgage rates are "made".

Conforming mortgage rates are based on the price of mortgage-backed bonds, a security that is sold on Wall Street
Mortgage-backed bonds can't sell without a bond buyer and a bond seller agreeing to a specific sale price

So, during vacation week, when the total number of market participants are less, there are fewer opportunities for buyers and sellers to meet at a specific price. As a result, bond prices rise and fall with a higher velocity than on a "normal" day. Rallies and momentum plays are exaggerated, too.

Now, mortgage market action like this can work in your favor, or it could work out of your favor. Unfortunately, on Monday, rates moved out of favor.

This rest of this week is stacked with market-moving economic data. The data could be better-than-expected, or worse-than-expected. Either way, markets will react a little more feverishly than normal. Therefore, if you have a chance to lock a favorable rate, consider taking it.

Before long, the rate could be gone.

Michael Eiden, Mortgage Express's Notes

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Business Week on Purchasing a house NOW ~ A Good Read

Mary Stewart Realtor Oregon First — Wed, 09 Dec 2009 14:00:00 GMT

Wednesday November 4, 2009

Roth on Real Estate December 8, 2009, 4:01PM EST text size: T T

If You Don't Buy a House Now, You're Stupid or Broke

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

By Marc Roth

Well, you may not be stupid or broke. Maybe you already have a house and you don't want to move. Or maybe you're a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let's look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren't happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We've since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let's assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let's put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is "more stable" and it's safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you're borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

Marc Roth is the founder and president of Home Warranty of America, which touches just about every part of the real estate industry since it sells through builders, real estate agents, title companies, mortgage companies, and directly to consumers.

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If You Don't Buy a House Now, You're Stupid or Broke

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

Interest Rate Lessons

Loan Costs