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BUYING A HOUSE? EVERYONE SEEMS TO THINK THIS IS THE TIME

“The idea is to make decisions and act on them — to decide what is important to accomplish, to decide how something can best be accomplished, to find time to work at it and to get it done.” ~ Karen Kakascik

home for saleThere has never been a better time to purchase a home than this year.  Prices are still down as are interest rates.  There are still foreclosures and short sales on the market that will be a great buy for those willing to put a little sweat equity into their home. Read the equity report by clicking on the link below then take a look at the why buy now.
         Equity Report          Why Buy Now?

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5 EVENTS THAT ROCKED HOUSING IN 2011

5 EVENTS THAT ROCKED HOUSING IN 2011

“A bank is a place that will lend you money if you can prove that you don’t need it.” –  Bob Hope

Re-printed from Trulia
January 3, 2012|Tools & Trends|No Comments
Jed Kolko, Trulia’s Chief Economist

5 events that rocked housing  in 2011; by Jed Kolko

Government, lending changes, and forces of nature all shook the housing market in 2011. They had both an immediate impact and slow-burning effects. They set the stage for a bumpy 2012 with more foreclosures, political battles and local market risks – which will affect the industry and how agents do business.

1) Robo-Signing Reverberations

The “robo-signing” scandal – where banks were accused of approving foreclosures with incomplete or incorrect documentation – exploded in October 2010, but where are we now? Banks want a settlement in order to avoid costly, drawn-out lawsuits. One is shaping up that could reduce loan balances or interest rates for current homeowners, give payments to people who lost their homes and establish new mortgage servicing standards for the future.

Even if you think there’s money coming to you because you lost your home, don’t start spending against your settlement windfall just yet. One estimate from the Wall Street Journal is for a settlement of $25 billion if all states participate. Another report from TIME says that will translate into $1,500-$2,000 for households who were mistreated in the foreclosure process. A couple thousand dollars will give people some breathing room, but it won’t change anyone’s financial lives. And, be patient: it could be months before a deal is reached, an administrator is in place and the details are finalized.

Until that’s all figured out, here’s the immediate drama: who’s in and who’s out? Some states might hold out for a better deal or decide to sue these mortgage servicers directly, as Massachusetts has. California was the first and most vocal state to back out, and New York, Delaware, and Nevada have spoken out, too.

What Really Mattered: The threat of robo-signing lawsuits made banks gun-shy about pursuing foreclosures in 2011, which left many homes stuck in the foreclosure process. But once a settlement is reached, we’ll see a rush of foreclosures in 2012.

What It Means for Agents: More foreclosures will hurt prices and consumer confidence. Short sales could be harder to get approved if the foreclosure process gets easier.

2) The Debt Ceiling and the Budget Deficit

The federal government is running a deficit — it is spending more than it collects in taxes and other revenue – so it borrows to cover the gap by issuing debt. When there’s a deficit, we add to the pile of debt. To shrink this pile, the government needs to collect more than it spends (or, if you prefer, spend less than it collects) and use the surplus to reduce the debt.

In August, the government played a game of chicken over whether to raise the debt ceiling – which is really just a formality acknowledging that the deficit requires issuing debt to keep the government going. However, the right way to deal with the debt is to reduce the deficit – not by fighting over the debt ceiling.

Long before the debt ceiling debate and Standard & Poor’s federal credit-rating downgrade, we all knew that the federal budget was in bad shape. The debt ceiling debate rattled the markets and consumer confidence temporarily but interest rates stayed low. The important effect was that Congress created a bipartisan supercommittee to tackle the deficit – but it couldn’t reach agreement by its November deadline.

What Really Mattered: The deficit-reduction supercommittee teased us with some policy proposals that will surely rear their heads again. One idea that both Republicans and Democrats didn’t totally disagree about was reducing the mortgage interest and other tax deductions. If and when that happens, high-income homeowners with mortgages would pay a lot more in taxes.

What It Means for Agents: Scaling back the mortgage interest deduction would lower the offers buyers – especially high-income buyers – will make on homes. And some buyers will drop out of the market if the deduction, which favors homeownership, shrinks or vanishes.

3) The Expansion of HARP

In October, the Federal Housing Finance Agency (FHFA) said seriously underwater homeowners will be able to refinance through the Home Affordable Refinance Program (HARP). Originally, refinancing under HARP required a loan-to-value of less than 125% — that is, you couldn’t be more than 25% underwater – but that rule goes away for fixed-rate mortgages. But there’s a catch! Loans must be guaranteed by Fannie Mae or Freddie Mac, and – more importantly – borrowers must be current on their payments and must not have missed a payment in the last 6 months.

What Really Mattered: Some seriously underwater borrowers who fell behind on their payments in hopes of negotiating a loan modification are now kicking themselves because those missed payments make them ineligible to refinance. But those who can and do refinance will have lower monthly payments and extra money to spend — which will help stimulate the economy.

What It Means for Agents: Even if easier refinancing may not affect the home-purchase market directly, it will stimulate the economy a bit, which will raise housing demand and give buyers more confidence.

4) Natural Disasters Cause Insurance Disaster?

In 2011, several tornadoes, floodings and a hurricane temporarily halted what little construction there was to begin with, but this was just a short-term slowdown. The bigger long-term effect was the near-collapse of the federal government’s National Flood Insurance Program (NFIP). Still struggling financially under debt amassed after Hurricane Katrina, the NFIP’s insurance premiums don’t fully cover insurance claims when disaster strikes. August’s Hurricane Irene and its flood damage returned this problem to center-stage.

What Really Mattered: In flood-prone areas, you can’t get a mortgage if you don’t have flood insurance. Without NFIP, housing markets in these areas would skid to a stop. Could the program actually expire? It could, but as part of last week’s payroll tax agreement, the program got a last-minute extension until May 2012. No doubt, the political fight over this program’s long-term future will continue in into next year.

What It Means for Agents: Those working in flood-prone areas should be aware of private-sector flood insurance options for buyers in case the federal program lapses after May. And agents in these areas should follow the debate over NFIP on websites and blogs that cover the insurance industry.

5) Lowering the Conforming Loan Limit

Starting in October, the government lowered the upper limit for loans backed by Fannie Mae or Freddie Mac or insured by the Federal Housing Administration (FHA) from $729,750 to $625,500. Why? Government agencies now back or insure most loans, but it’s time to make the housing market less dependent on the feds. Lowering loan limits is one step in that direction; however, the real estate industry has urged the government to push the loan limits back up. And you know what? They scored a half-win in November, raising the loan limit back up for FHA loans but not for Fannie and Freddie.

What Really Mattered: Mortgage lenders are willing to charge lower rates for loans that are backed by Fannie or Freddie; with a lower conforming loan limit, a small number of loans that used to qualify for federal backing no longer do. As a result, homes that are now on the wrong side of the conforming loan limit will see fewer potential buyers and lower sales prices. This will matter more in California, New York, and other high-cost areas.

What It Means for Agents: Agents need to know the local loan limits, which may be different for FHA insurance and Fannie/Freddie backing. Homes for which loans will be above the new limits might see less buyer interest and price reductions.

DON’T WAIT UNTIL IT’S TOO LATE!

“For most folks, no news is good news; for the press, good news is not news.”  – Gloria Borger

You hear the bad news everywhere you turn. It’s on the television, the Internet, the radio and in print headlines. A lot of negative coverage has been devoted to today’s housing market.  What you don’t hear is the good news about the real estate market and the many reasons why the current real estate market may be beneficial to you.

Bad news sells newspapers and gets high television ratings; therefore, the media has no reason to report the upside of today’s real estate market to the average American. This is where I come in. For example, did you know that approximately 30 percent of homeowners own their home free and clear?

The current market also affords some great opportunities for those looking to purchase a home. First-time homeowners, move-up buyers and investors can all benefit from low home prices, and historically low-interest rates, making now a great time to lock in a long-term mortgage. Also, the large selection of homes and low sales prices make it a great buyer’s market. And did you know that if you buy in a rural area –Alachua, High Springs and Newberry qualify as rural areas –  you may qualify for a USDA loan, which is a 100% loan – a “no money down” loan.

Ultimately, though, these favorable conditions will go away. As inflation rises, so do interest rates. If you are looking to become a homeowner, you need to strike while the iron is hot!

SHORT SALES – WHAT ARE THEY?

“Believe that life is worth living and your belief will help create the fact.” – William James

First of all, a short sale is not short!  For the general public, that is a misnomer, but for a bank that is an accurate statement.  You see, a short sale falls short of what is owed.  For example: in 2005 you purchased a lovely 4 bedroom, 3 bath home on 10 acres for $425,000.00.  Suddenly this year you lost your job and decided it was best to unload the home and go back and live with mom and dad.   You hired an appraiser – good move on your part to do that up front – and couldn’t believe what you read when you saw the appraiser’s report.  “It’s worth how much now?”  Say it isn’t so.   There isn’t enough equity in the home to do anything with and your thinking -“How am I supposed to come up with over $125,000.00 to give to the bank, just so I can sell?”.

You can negotiate you loan and try to get the payments lowered or you can try to sell for as much as you can and hope the bank will not hold you responsible for the deficiency.  Lot’s of luck! Nowadays most banks want everything they can get and they will bleed you dry.  Have you seen all the new banks going up around town.  Not just little structures but Big, MONUMENTAL, BUILDINGS.

I often wonder if all the money they make goes back into building these large structures.

Anyway, some banks are trying to help the homeowners  – a little late, but I guess it’s better late than never.  These banks are giving incentives to the homeowner to sell. The banks are not just asking anyone to sell, they are contacting people who are in imminent danger of losing their home to foreclosure. These incentives are:

  • Funds for relocating in the amount of a percentage of your unpaid balance.
  • Bank paid for appraisal
  • Closing costs paid by the bank
  • No deficiency judgement for the unpaid balance of the mortgage.

Pretty sweet deal, if I do say so myself.  This is a great deal not just for the seller, but also for the buyer because the prices are very competitive. I have 4 of these short sales myself.  The only catch is they go on the market for 120 days and if they don’t sell in that amount of time they get foreclosed on.

So, if you know anyone looking for a great deal on a well-kept home in Gainesville, FL, please contact me utilizing the “Contact me” sheet on the tab above.

CONGRATULATIONS and THANK YOU!

CONGRATULATIONS and THANK YOU!

“To move forward, a turtle must stick its neck out” – Unknown

NOTE: This special posting reflects an email Dave Liniger sent to all U.S. Associates on Wednesday, July 27:

I have extremely exciting news to share with you!

J.D. Power and Associates announced today that RE/MAX ranks highest in customer satisfaction, for both buyers and sellers, in its 2011 residential real estate survey.

That’s right – we’ve  earned the highest level of appreciation from BOTH groups of consumers, which is a remarkable statement about the Outstanding Agents in our organization.

I want to personally thank and congratulate every one of you for contributing to this prestigious recognition. It truly reflects your professional excellence, your enthusiasm for education, your commitment to distressed sellers, your individual drive, and many other qualities that serve the interests of your clients. Your efforts change lives, and those people have spoken.

Our team at Headquarters is working with J.D. Power and Associates to determine how we can use the results of the survey, as well as their name and  logo. As soon as possible, we will let you know what the guidelines are.

In the meantime, celebrate this incredible achievement and enjoy the fact that once again you’ve proven yourselves to be the best in the business.

Congratulations!

Dave

Published: 7/28/2011 12:49 PM

SELLERS; IF YOU WANT IT, ASK FOR IT!

SELLERS; IF YOU WANT IT, ASK FOR IT!

“Ask, and it shall be given unto you.”  –  Jesus Christ

There’s nothing more frustrating to a ready, willing, and seemingly able buyer than to lose an offer to another buyer — especially since the seller was not specific (down to the letter) about what he expected to receive.

Sure, there’s the list price; but in today’s fast-paced market, a buyer/ prospect may offer thousands more than the list price and STILL not be the lucky buyer who gets the property!

That’s why sellers should be as specific as possible with buyers in what they want to receive and achieve in a successful offer.

Let’s tackle the major elements the seller should be prepared to address with serious buyers. I suggest that sellers (or their real estate agent) prepare a “Suggested Contract Requirement” sheet to give to buyers, outlining what they expect in the following:

Loan pre-approval
By now, it should go without saying that buyers without loan pre-approval shouldn’t be competing in the current market; but sadly, some are. That’s why it’s important for the seller to specify that buyers be pre-approved for loans ample enough to fund the purchase price, AND detail the type of loan and respective costs (if any) the seller would cover.

For example, a buyer might claim to be pre-approved for a mortgage of “x” amount. What she fails to disclose, however, is that it’s Veteran’s Administration (VA) financing and she expects the seller to cover her two discount points. On a $140,000 sales price (with zero down) that’s a hefty $2,800 for the seller.
Or what about the buyer who claims to have “cash” coming to him to fund the purchase (often coming from proceeds of an estate or settlement of a law suit.) The buyer’s funds are delayed. In order to close the sale, he must borrow the money, causing the seller a three-week delay in accessing his proceeds. Verifying the buyer’s funding (which is tougher to do in a “cash” sale) is vital for sidestepping potential delays for the seller.

Earnest Money
In the old, slower school of home buying a decade or more ago, buyers would offer a meager amount of earnest money or even a post-dated check with the idea that they could always up the ante if need be. In today’s market, more (rather than less) earnest money is advised in most situations. Not only does it subtly signify to the seller how financially motivated a buyer is, but can serve as a buyer’s first (and often only) shot at a strong first impression to the seller.
By letting prospective buyers know (in writing on the “Suggested Contract Requirement” sheet) the minimum amount of earnest money the seller is seeking, it places a strong buyer on equal footing with competitors. It also gives a heads-up that if you want a stronger foothold with the seller in this area, exceeding the suggested minimum amount is certainly in order! If a buyer structures an offer to include minimal contingencies like obtaining financing in a certain amount and the property appraising for at least the sales price, etc., earnest money would be at little risk of loss.

And what about contingencies? Should a seller require that buyers make all offers free of positively all contingencies if they’re serious about the property? Hardly. But keeping contingencies to a minimum (as we’ll see in Part II of this article) definitely gives buyers an added advantage over their competition and results in a smoother sale for you as a seller.

ARE YOUR UTILITY BILLS SKY HIGH? CHECK YOUR R-VALUES

ARE YOUR UTILITY BILLS SKY HIGH? CHECK YOUR R-VALUES
“A man’s life is what his thoughts make it.”  – Marcus Aurelius
I recently overheard a couple at a hardware store exchange words as they peered down over a massive pile of insulation marked with various R-factors. “Just what IS an R-factor?, queried the woman. “Well, it has to do with how well the insulation does its job—so I guess an R-factor is kind of like the home’s “utility I.Q.”

It’s an interesting analogy since insulation does make your home smarter where utility bills are concerned. But unfortunately, many people don’t properly upgrade the insulation in their home when and where they should. And, in warmer climates, home owners often sidestep the importance of proper insulation all together. How can you gauge if your home is properly insulated and how can it potentially cut hundreds of dollars annually off your utility bills?

The R-factor, simply put, is the measurement of how well insulation resists (thus, the “R”) heat flow. The higher the R-value, the better the insulating power. Heat (which is a form of energy) tends to gravitate towards cooler areas in the home (ie. the attic, the walls, the crawl spaces.) That’s why it makes the most sense to have these areas with ample, high-efficiency insulation.

But insulation isn’t just for controlling heat. Resistance works in reverse where cool air is concerned, keeping the warm air from flowing into spaces you’re trying to keep cool. That’s why home owners in warm climates need to know their home’s R-factors in order to keep a lid on their air conditioning bills.
What R-values are considered standard and how do they vary from climate to climate? Manufacturers clearly mark the R-value on the types of insulation they produce. Home owners can often use various types of insulation together to obtain a high R-value. (An example of this is hard-to-access exterior walls where insulation is blown in on top of existing insulation.) Standard R-values differ based on what part of the home you’re trying to insulate. For example, since the attic is the biggest area for energy loss, colder climates require values ranging from R-38 to R-49. But in the South, R-19 in the attic should be ample.

Most local building codes require an R-value of R-19 for exterior walls. But if a home is built using 2 x 6 studs, there’s enough space in the wall cavity to insulate up to a value of R-21.

A frequent cold air leak can be where the house meets the foundation. In fact, you can lose up to 20% of your home’s heating/cooling energy from the foundation area in an non-insulated or poorly insulated home. That’s why it’s important to insulate around the area where the house meets the foundation, not just in the basement walls.

Just because insulation is thick doesn’t mean it has a high R-value. Many manufacturers are now producing higher R-value in fiber glass products by merely increasing the density while keeping the thickness the same. Today you might see R-15 insulation in a wall where R-13 was previously the max due to physical constraints. The efficiency has changed while the physical size of the insulation remains the same.

The bottom line is that if your utility bills are calling “Uncle”, it’s high time you review the R-values in your home. Like the man at the hardware store said, they’re your home’s “utility I.Q.”

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