The Better Bargain: Foreclosure or Short Sale?

Short sales and foreclosures have flooded the housing market in recent years, and buyers are often drawn to the bargain prices but may be hesitant to jump into what usually is a difficult transaction and a long process. 

Bankrate.com recently tackled the question of “Which to Buy: Short Sale or Foreclosure?” in an article that helps buyers weigh the pros and cons of a distressed property. Experts note that the question largely depends on buyers' situations, how quickly they need a home, and their tolerance for fixer-uppers.

Foreclosure Pros and Cons
Buying a foreclosure is often faster than purchasing a short sale. Plus, buyers often can negotiate closing costs and price in foreclosure sales, Elaine Zimmermann, a real estate investor in Memphis, Tenn., told Bankrate.com. 

However, abandoned homes in foreclosure can deteriorate very quickly so the buyer may need to weigh the condition of the home and whether they want a fixer upper. Scarred walls and carpets and appliances that were damaged by the former owner are not uncommon in a foreclosure, says David Richardson, an inspector in the Detroit area who's certified by the American Society of Home Inspectors.

Short Sales Pros and Cons
A short-sale home is still owned by the occupant, so it tends to be in better condition than a foreclosure, experts say. 

"The short sale is, in my opinion, far better than buying a foreclosure because the home is generally in better condition because it's been occupied," says Gwen Daubenmeyer, a certified distressed property expert with RE/MAX in Detroit. "The utilities have been maintained, usually the lawn is maintained, those kinds of things."

But short sales often can take a longer time than a foreclosure to close. However, the federal Home Affordable Foreclosure Alternatives program, or HAFA, may be able to help speed up the short-sale process since it has created a timeline to hold mortgage lenders accountable, but still “it’s not perfect by any means,” Daubenmeyer says.

Source: “Which to Buy: Short Sale or Foreclosure?” Bankrate.com (June 2011) 

Which Vehicles Come Out on Top for Quality?

Lexus tops the list this year as the best brand for vehicles, according to the 2011 J.D. Power and Associates’ Initial Quality Study. Lexus’ LS sedan had the fewest reported problems of any vehicle in the first 90 days of ownership, the study found.

“Expected reliability continues to be the single-most-important reason why new-vehicle buyers choose one model over another," says David Sargent, vice president of global vehicle research at J.D. Power and Associates.

The Top 7 Vehicles

Here are the top ranked vehicles from J.D. Power and Associates’ 2011 Nameplate Initial Quality Study.

1. Lexus
2. Honda
3. Acura
4. Mercedes-Benz
5. Mazda
6. Porsche
7. Toyota

The Lowest Ranked Vehicles

Overall, "automakers are tweaking their engines and transmissions to maximize fuel economy, but their experiments have taken their toll in terms of the driving experience and quality ratings are suffering as a result,” Michelle Krebs, Edmunds.com senior analyst, told USA Today.

The brands that scored the worst for quality in the study were:
Dodge
Mitsubishi
Suzuki

View more of the study’s vehicle rankings at USA Today.

Couple Served Foreclosure Notice Via Facebook

For lenders who can’t find a defaulting home owner, they may turn to Facebook or other social networking sites to track them down. That’s what a lender in Australia did. The lender used Facebook to track the defaulting couple down and send them a foreclosure notice via the social networking site, AOL Real Estate reports.

The lender was unable to find a physical address or e-mail for a couple in Australia who defaulted on their six-figure mortgage. So the lender’s lawyer located them on Facebook, verifying the couple’s identities by matching up names, birthdates, and the fact that they “friended” one another.

Australian courts recently upheld the lender’s right to use Facebook to send foreclosure notices. The court ruled that the couple didn’t have any privacy protections on their Facebook accounts and were frequent visitors so it served as a reasonable way to send a notice.

While industry experts say they haven’t heard of lenders sending foreclosure notices via social networking sites in the United States, “it’s bound to happen,” Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, told AOL Real Estate. "The real concern the courts have is whether it's a fair notice that the person actually receives."

As long as it’s obvious the person is a frequent user of the site, legal experts say the ability to serve foreclosure documents via social network sites seems like a justifiable way to send a foreclosure notice.

Source: “Your Facebook Status: Foreclosed,” AOL Real Estate (June 17, 2011)

Read More:
Friend Power: Less Is Definitely More


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Why Home Sales Will Rise This Year

Why Home Sales Will Rise This Year

The first quarter ended with decent home sales activity, but the rest of the year should be even better. Here's why.
By Lawrence Yun
 
The first quarter ended with decent home sales activity, with existing homes selling at an annualized pace of 5.1 million. The remainder of the year should be better still for the following reasons:
More jobs
Rising stock market wealth
Rising apartment rents
Continuing high affordability conditions
Home values at historically justifiable levels
Investors looking to hedge against inflation
Foreigners buying U.S. homes on the cheap
 
Other potential contributing factors, although they’re not happening yet, are huge bank profits translating into more desire to lend and some reduction to market friction as lenders’ short sale approval processes improve and appraisals become less of an issue.
 
So, if existing-home sales either hold at the 5.1 mil lion pace of the first quarter or improve on that, then the annual sales tally will easily exceed the 4.9 mil-lion home sales we saw last year.
 
Still, the stars are not all aligned. There will be obstacles. High gas prices are a daily reminder that something is not right with the economy; that will hold back consumer confidence. Washington policy­makers are debating the ending of government guaranteed mortgages and requiring a minimum down payment of 10 to 20 percent on conventional mortgages, even though the FHA and VA mortgage programs have very low down payments and have yet to require a single dime of taxpayers’ money. And there will be attempts to chip away at the mortgage interest deduction by invoking class warfare—the " let’s go after the rich " approach.
 
At least through 2011, improving market developments should outweigh the negative impact imposed by Washington policymakers.xisting-home Sales ‘Rebenchmarking’
 
Learn how NAR plans to ensure the continued accuracy of its existing-home sales calculation in the years ahead: "How NAR Calculates Existing-home Sales"
 

Which Social Network Is Rated Most Important?

Nearly 60 percent of survey respondents say that it is important to have a LinkedIn account--more than any other social network, according to “S-Net (The Impact of Social Media),” a report from ROI Research Inc. of nearly 3,000 active social networkers.

And those surveyed say they use LinkedIn a lot, too. With those who have an active LinkedIn account, half of those surveyed say they visit the site at least weekly, and 20 percent visit the site at least daily.

“Factors including LinkedIn’s recent IPO announcement, the May uptick in national unemployment, and signs of a slowed market certainly contribute to LinkedIn’s attractiveness among social networkers,” says Daina Middleton, CEO of Performics, which released the survey results.

The survey also found:

•Social networkers listen to what their peers have to say about brands and businesses they like--or don’t. Sixty percent say they are at least somewhat likely to take action when a friend posts something about a product/service, company, or brand. Slightly more than half agree that others can influence business decisions made by companies and brands by sharing their opinions on social networking sites.

•Fifty-three percent frequently or occasionally use social networking sites to give feedback about a brand or business.

•The public is divided on using social networks to give and get advice about other companies. Fifty percent of respondents say they use social networks to give advice and another 50 percent say they use it to get advice about services and companies.

What's That '+1 Button' All Over the Internet?

Google recently launched the “+1 button” and you’ll spot it on a range of Web sites from YouTube and Blogger to the Washington Post and many others. Google added the +1 button to its search engine three months ago but is now making the “+1 button” available to other Web sites to add.

So what is it?

The button is similar to Facebook’s Like button. You click the +1 button when you think “this is pretty cool” or when you want to say “you should check this out” when viewing Web sites, according to Google.

The button gives you the ability to vote on Web sites and advertisements (the button can appear next to the headline of search ads), and the information is then used to tailor search results for you and your contacts.

For example, "with a single click you can recommend that raincoat, news article, or favorite sci-fi movie to friends, contacts, and the rest of the world,” writes Google software engineer Evan Gilbert in a blog post. “The next time your connections search, they could see your +1's directly in their search results, helping them find your recommendations when they're most useful."

You’ll need to be signed into your Google Account to see when friends and contacts have endorsed certain Web pages using the +1 button.

Google says it hopes the added button will help improve click-through rates for content and advertising and is encouraging Web site owners to add the button to their Web pages to get their search results to stand out more.

Source: “Google Rolls Out +1 Button for Web Sites,” TechSpot

On Housing, Don't Believe the Doom

On Housing, Don't Believe the Doom
Non-distressed properties sold by voluntary sellers have started to stabilize. That’s a sign that the worse could be over, Ajay Rajadhyaksha, the co-head of U.S. fixed income strategy at Barclays Capital, said in a research note on Friday.

An increase in voluntary sales over the summer should lead to another change in the mix of homes, in favor of non-distressed sales, and the aggregate index of home prices should stop declining and could even increase.

"In sum, there are many reasons to worry about the U.S. macroeconomic picture (the recent softening in the labor market, the U.S. fiscal picture, etc.) but the recent drop in U.S. home prices should not be one of them," according to Rajadhyaksha.

Source: “Don’t Believe the Doom on U.S. Housing,” CNBC.com, Patrick Allen (June 3, 2011)