Friday, June 8, 2012
4 ways to curb rising insurance costs
NEW YORK – June 8, 2012 – Homeowners’ insurance premiums have been on the rise lately with many homeowners seeing double-digit hikes and a rise in average annual premiums now over $1,000. Real estate professionals can help show their clients how they may be able to curb their homeowners’ insurance costs.
A recent article at Money Magazine offers the following tips:
Shop around. “If your rates rose 5 percent or more (in the last year), make sure to call the company for an explanation,” the article says. “Knowing whether the increase resulted from changes in your risk profile or from broad-based increases in the marketplace will help you negotiate and comparison-shop – which you should do at every renewal or at least every couple of years.”
Look for discounts. Bundling your home and auto insurance with the same insurance company could possibly save you up to 15 percent, for example. Insurers will also usually give a discount if you install a security system, storm shutters or new roof.
Evaluate the deductible. Most experts advise homeowners to go for the highest deductible they can afford in order to lower their premiums. But be sure to note that “many insurers are retooling deductibles from set dollar amounts to percentages, which can often represent a substantial change,” Money Magazine notes.
Base your coverage on the right number. Base your level on the recent per-square-foot replacement costs in your area, not on the home’s appraised value, says Kevin McCarty, president of the National Association of Insurance Commissioners. To obtain that information, check with the local homebuilders association.
Thursday, March 1, 2012
Buffett: ‘I’d buy up a couple hundred thousand’ homes
WICHITA, Kan. – March 1, 2012 – Warren Buffett, the billionaire investor and Berkshire Hathaway CEO, said on CNBC’s “Squawk Box” recently that he’d “buy up a couple hundred thousand” single-family homes if it was practical.
Buffett said that’s because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now.
“Housing will come back, you can be sure of that,” Buffett wrote in his annual letter to shareholders recently.
Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon.
“People may postpone hitching up during uncertain times, but eventually hormones take over. And while ‘doubling-up” may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure,” Buffett said.
Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be “dead wrong.”
Source: “Housing Market Forecast Beyond 2012 From Warren Buffet,” International Business Times (Feb. 28, 2012) and “Warren Buffet on CNBC: I’d Buy Up ‘A Couple Hundred Thousand’ Single-Family Homes If I Could,” CNBC (Feb. 27, 2012)
Buffett said that’s because he believes purchasing a home with ultra-low mortgage rates and holding it for the long-term has become a better investment than stocks right now.
“Housing will come back, you can be sure of that,” Buffett wrote in his annual letter to shareholders recently.
Buffett forecasts an increase in household formations, as more people who moved in with their parents or family members during the recession look to move out and get their own home soon.
“People may postpone hitching up during uncertain times, but eventually hormones take over. And while ‘doubling-up” may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure,” Buffett said.
Buffett said the recovery in the housing market could vary quite a bit among local housing markets, however. He did not provide a timeline of when he expected a full housing recovery, admitting that his prediction last year that a housing recovery will take shape within the year turned out to be “dead wrong.”
Source: “Housing Market Forecast Beyond 2012 From Warren Buffet,” International Business Times (Feb. 28, 2012) and “Warren Buffet on CNBC: I’d Buy Up ‘A Couple Hundred Thousand’ Single-Family Homes If I Could,” CNBC (Feb. 27, 2012)
Wednesday, January 25, 2012
Selling a rented home can pose challenges
NORTH BETHESDA, Md. – Jan. 25, 2012 – Some homeowners turned into reluctant landlords and rented out their homes to earn extra income while the housing market was sluggish. But now some of these homeowners are ready to sell.
However, real estate agents often caution clients that trying to sell a home when a tenant still lives there can be tricky since many renters – who have no financial stake in the matter – aren’t always so eager to help market a home and keep it tidy and neat on their landlord’s behalf.
Nevertheless, “it’s pretty common in this market to be selling a home with a tenant in it,” Chris Hager, a real estate professional with Long & Foster Real Estate in North Bethesda, Md., told the Washington Times. “There are lots of reluctant landlords out there who opted to rent their property rather than sell it, and now they want to put it on the market. There’s the potential for conflict between the tenant and the landlord, especially if it was not made clear to the tenant from the beginning that the owners wanted to sell.”
Landlords should make a point to clearly communicate their intentions to sell, and not “sneak” the house on the market without telling the tenants first, real estate professionals say.
Landlords might want to offer a concession on the rent to tenants in exchange for them keeping the home in clean, good condition while it’s on the market – such as 10 percent off each month’s rent while it’s on the market. But be sure to communicate expectations for cleanliness, such as keeping the dishes out of the sink and making the bed. Experts also suggest setting established hours for showing the property to make it easier on the tenant.
“You never get a second chance to make a first impression, so it is particularly important to have the place in strong showing shape on the first and second weekends on the market,” says Nick Pasquini, broker-owner of Century 21 Redwood Realty in Washington, D.C., and Arlington and Ashburn, Va.
However, real estate agents often caution clients that trying to sell a home when a tenant still lives there can be tricky since many renters – who have no financial stake in the matter – aren’t always so eager to help market a home and keep it tidy and neat on their landlord’s behalf.
Nevertheless, “it’s pretty common in this market to be selling a home with a tenant in it,” Chris Hager, a real estate professional with Long & Foster Real Estate in North Bethesda, Md., told the Washington Times. “There are lots of reluctant landlords out there who opted to rent their property rather than sell it, and now they want to put it on the market. There’s the potential for conflict between the tenant and the landlord, especially if it was not made clear to the tenant from the beginning that the owners wanted to sell.”
Landlords should make a point to clearly communicate their intentions to sell, and not “sneak” the house on the market without telling the tenants first, real estate professionals say.
Landlords might want to offer a concession on the rent to tenants in exchange for them keeping the home in clean, good condition while it’s on the market – such as 10 percent off each month’s rent while it’s on the market. But be sure to communicate expectations for cleanliness, such as keeping the dishes out of the sink and making the bed. Experts also suggest setting established hours for showing the property to make it easier on the tenant.
“You never get a second chance to make a first impression, so it is particularly important to have the place in strong showing shape on the first and second weekends on the market,” says Nick Pasquini, broker-owner of Century 21 Redwood Realty in Washington, D.C., and Arlington and Ashburn, Va.
Friday, January 20, 2012
3 ways to sell a home that’s not selling
NEW YORK – Jan. 20, 2012 – Surveys suggest that a high number of real estate deals are falling apart due to financing issues, and today’s sellers might need to get creative if they want their property to sell. Options to consider:
• Sellers could back a second mortgage for the buyer at an amount that enables the buyer to meet the lender’s downpayment requirements, providing the lender agrees.
• Sell the home “subject to the existing mortgage,” which means the buyers take over the sellers’ existing mortgage payments for a specified time, after which time they must obtain a new loan. This arrangement relieves sellers of their mortgage debt and helps buyers with credit scores too low secure a traditional loan. And while it forces buyers to get a mortgage as specified in the contract, experts say banks will not foreclose if payments are made on time.
• Sellers willing to finance the sale can unload properties for a low downpayment by adding a sweat equity clause to the contract, which requires the buyers to bring the home into tip-top shape. The renovation details are written into the contract, and buyers must complete the repairs by the agreed-upon date to qualify for long-term seller financing.
Source: RealtyBizNews (01/16/2012) Robinson, Donna
© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688
Related Topics: Seller services
• Sellers could back a second mortgage for the buyer at an amount that enables the buyer to meet the lender’s downpayment requirements, providing the lender agrees.
• Sell the home “subject to the existing mortgage,” which means the buyers take over the sellers’ existing mortgage payments for a specified time, after which time they must obtain a new loan. This arrangement relieves sellers of their mortgage debt and helps buyers with credit scores too low secure a traditional loan. And while it forces buyers to get a mortgage as specified in the contract, experts say banks will not foreclose if payments are made on time.
• Sellers willing to finance the sale can unload properties for a low downpayment by adding a sweat equity clause to the contract, which requires the buyers to bring the home into tip-top shape. The renovation details are written into the contract, and buyers must complete the repairs by the agreed-upon date to qualify for long-term seller financing.
Source: RealtyBizNews (01/16/2012) Robinson, Donna
© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688
Related Topics: Seller services
Tuesday, December 20, 2011
New-Home Construction Bounces Back, Soars 9.3%
New-home construction and building permits — a future gauge of construction — surged last month, slowly helping to pull the new-home market out of one of its worst years for home building.
Builders broke ground on more homes in November, a 9.3 percent increase over October, reaching the highest level since April 2010, the Commerce Department reported Tuesday. Year-over-year, new-home starts were up 24.3 percent in November.
Home construction increased to a seasonally adjusted annual rate of 685,000 homes in November. However, while it’s an improvement, the rate is still below the 1.2 million home pace that economists consider healthy for the new-home sector.
November’s increase was mostly driven by construction of multi-family homes with at least two units, which soared 25.3 percent in November. Construction of single-family homes increased 2.3 percent for the month.
Building permits jumped 5.7 percent in November, the highest increase since March 2010, with the increase mostly driven by apartment construction permits.
Builders Feeling More Confident
Meanwhile, for the third consecutive month, builder confidence in the new-home market continued to edge up, according to the National Association of Home Builders/Wells Fargo Housing Market Index for December. The index is at its highest point since May 2010.
While the index reached 21 in December, it is still far below 50, a reading which indicates more builders view conditions as good rather than poor. The index hasn’t reached that point since the housing boom in April 2006.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."
Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders
Read More:
New-Home Building Soars 15% in September
Builders broke ground on more homes in November, a 9.3 percent increase over October, reaching the highest level since April 2010, the Commerce Department reported Tuesday. Year-over-year, new-home starts were up 24.3 percent in November.
Home construction increased to a seasonally adjusted annual rate of 685,000 homes in November. However, while it’s an improvement, the rate is still below the 1.2 million home pace that economists consider healthy for the new-home sector.
November’s increase was mostly driven by construction of multi-family homes with at least two units, which soared 25.3 percent in November. Construction of single-family homes increased 2.3 percent for the month.
Building permits jumped 5.7 percent in November, the highest increase since March 2010, with the increase mostly driven by apartment construction permits.
Builders Feeling More Confident
Meanwhile, for the third consecutive month, builder confidence in the new-home market continued to edge up, according to the National Association of Home Builders/Wells Fargo Housing Market Index for December. The index is at its highest point since May 2010.
While the index reached 21 in December, it is still far below 50, a reading which indicates more builders view conditions as good rather than poor. The index hasn’t reached that point since the housing boom in April 2006.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."
Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders
Read More:
New-Home Building Soars 15% in September
Tuesday, November 15, 2011
NAR: Gradual recovery for housing and economy in 2012
ANAHEIM, Calif. – Nov. 15, 2011 – Although the housing market struggled to maintain an even footing in 2011, gradual improvement is expected in 2012 and beyond, according to projections at the 2011 Realtors® Conference & Expo.
Lawrence Yun, chief economist of the National Association of Realtors (NAR), said home sales should be stronger. “Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently,” he said. “Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely. This demand could quickly stimulate the market when conditions improve.”
Yun projects growth in Gross Domestic Product to be 1.8 percent this year, then rising moderately at a rate of 2.2 percent in 2012. With job growth of 1.7 to 2.2 million next year, the unemployment rate is expected to decline to 8.7 percent by the second half of 2012. Mortgage interest rates should gradually rise from recent record lows and reach 4.5 percent by the middle of 2012.
“Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year,” Yun said. “Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.”
Existing-home sales are forecast to edge up about 1 percent this year, and then rise another 4 to 5 percent in 2012. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011.
Housing data
NAR says it is benchmarking its existing-home sales statistics, and it expects total sales to be lowered for recent years. However, it doesn’t expect many changes to previously reported percentage comparisons, median prices or the month’s supply of inventory. NAR expects to publish its improved measurement methodology soon.
“NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts,” NAR said in a release. “There will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.”
In the 2010 U.S. Census, the government stopped reporting home sales data, which NAR used as a benchmark. As a result, the association had to develop a new independent score to use as a baseline for its calculations. Preliminary data using the new benchmark will “undergo broad review shortly by professional economists and government agencies. After any issues that may surface in the review process are addressed, we will update monthly seasonal adjustment factors and publish revisions.”
Housing forecast
New-home sales are expected to be a record low 302,000 this year, rising to 372,000 in 2012. Housing starts are forecast to rise to 630,000 next year from 583,000 in 2011.
“Although a double-digit growth in new-home sales and housing starts sounds encouraging, the projections remain historically soft relative to long-term underlying demand,” Yun explained.
With falling inventory, the median home price should rise in 2012. “Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012,” Yun said. “Once home prices turn positive on a sustained basis, consumer confidence will rise and help the broader economy to improve,” Yun added.
Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy is under-performing. “Nearly two-and-a-half years since the end of ‘the great recession,’ the economy continues to operate well below its potential,” he said. “Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level.”
Peach said the current business cycle remains 7 percent below its peak and is longer than other recession cycles since 1953. He added the employment to population ratio is historically low, and there’s been a shift in the distribution of income, with corporate profits up strongly while employment compensation is down.
Peach believes there is a sizeable level of shadow inventory that will result in rising foreclosures. “My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a downpayment on a foreclosed home in the Fannie or Freddie portfolio,” he said.
© 2011 Florida Realtors®
Lawrence Yun, chief economist of the National Association of Realtors (NAR), said home sales should be stronger. “Tight mortgage credit conditions have been holding back homebuyers all year, and consumer confidence has been shaky recently,” he said. “Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely. This demand could quickly stimulate the market when conditions improve.”
Yun projects growth in Gross Domestic Product to be 1.8 percent this year, then rising moderately at a rate of 2.2 percent in 2012. With job growth of 1.7 to 2.2 million next year, the unemployment rate is expected to decline to 8.7 percent by the second half of 2012. Mortgage interest rates should gradually rise from recent record lows and reach 4.5 percent by the middle of 2012.
“Housing affordability conditions, based on the relationship between median home prices, mortgage interest rates, and median family income, have been at a record high this year,” Yun said. “Very favorable affordability conditions will dominate next year as well, which will probably be the second best year on record dating back to 1970. Our hope is that credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.”
Existing-home sales are forecast to edge up about 1 percent this year, and then rise another 4 to 5 percent in 2012. Based on NAR’s current projection model, existing-home sales would total 4.96 million in 2011.
Housing data
NAR says it is benchmarking its existing-home sales statistics, and it expects total sales to be lowered for recent years. However, it doesn’t expect many changes to previously reported percentage comparisons, median prices or the month’s supply of inventory. NAR expects to publish its improved measurement methodology soon.
“NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts,” NAR said in a release. “There will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.”
In the 2010 U.S. Census, the government stopped reporting home sales data, which NAR used as a benchmark. As a result, the association had to develop a new independent score to use as a baseline for its calculations. Preliminary data using the new benchmark will “undergo broad review shortly by professional economists and government agencies. After any issues that may surface in the review process are addressed, we will update monthly seasonal adjustment factors and publish revisions.”
Housing forecast
New-home sales are expected to be a record low 302,000 this year, rising to 372,000 in 2012. Housing starts are forecast to rise to 630,000 next year from 583,000 in 2011.
“Although a double-digit growth in new-home sales and housing starts sounds encouraging, the projections remain historically soft relative to long-term underlying demand,” Yun explained.
With falling inventory, the median home price should rise in 2012. “Home prices have yet to show a definitive stabilization pattern in most areas. Still, given an over-correction in prices, there likely will be moderate appreciation in 2012,” Yun said. “Once home prices turn positive on a sustained basis, consumer confidence will rise and help the broader economy to improve,” Yun added.
Richard Peach, senior vice president at the Federal Reserve Board of New York, said the economy is under-performing. “Nearly two-and-a-half years since the end of ‘the great recession,’ the economy continues to operate well below its potential,” he said. “Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level.”
Peach said the current business cycle remains 7 percent below its peak and is longer than other recession cycles since 1953. He added the employment to population ratio is historically low, and there’s been a shift in the distribution of income, with corporate profits up strongly while employment compensation is down.
Peach believes there is a sizeable level of shadow inventory that will result in rising foreclosures. “My idea is to allocate certificates to 2.5 million service members who served in Afghanistan and Iraq that could be used as a downpayment on a foreclosed home in the Fannie or Freddie portfolio,” he said.
© 2011 Florida Realtors®
Tuesday, November 1, 2011
7 Cities With Fewest Underwater Home Owners
DAILY REAL ESTATE NEWS | TUESDAY, NOVEMBER 01, 2011
Rochester, N.Y., has the fewest number of homes underwater in the country, according to an analysis by 24/7 Wall St., which culled CoreLogic data to recently identify the housing markets with the fewest number of underwater home owners.
Nationwide, 11 million households are considered underwater—meaning they owe more on their mortgage than their home is currently worth.
Here are the cities that are countering that trend and have the fewest number of underwater home owners, according to 24/7 Wall St.:
1. Rochester, N.Y.
Percentage of homes underwater: 3.41%
Home price change in last year: +0.25%
2. El Paso, Texas
Percentage of homes underwater: 3.89%
Home price change in last year: +5.73%
3. Albany-Schenectady-Troy, N.Y.
Percentage of homes underwater: 4.01%
Home price change in last year: -0.90%
4. Buffalo-Niagara Falls, N.Y.
Percentage of homes underwater: 4.22%
Home price change in last year: 3.92%
5. Fayetteville, N.C.
Percentage of homes underwater: 4.56%
Home price change in last year: +1.14%
6. Huntsville, Ala.
Percentage of homes underwater: 5.30%
Home price change in last year: -4.39%
7. Lancaster, Pa.
Percentage of homes underwater: 5.44%
Home price change in last year: -1.83%
See which other cities made the list.
Source: “10 Cities Where Mortgages Are Staying Afloat,” AOL Real Estate (Oct. 28, 2011)
Read More:
Survey Reveals Top 8 Best Places to Live
Rochester, N.Y., has the fewest number of homes underwater in the country, according to an analysis by 24/7 Wall St., which culled CoreLogic data to recently identify the housing markets with the fewest number of underwater home owners.
Nationwide, 11 million households are considered underwater—meaning they owe more on their mortgage than their home is currently worth.
Here are the cities that are countering that trend and have the fewest number of underwater home owners, according to 24/7 Wall St.:
1. Rochester, N.Y.
Percentage of homes underwater: 3.41%
Home price change in last year: +0.25%
2. El Paso, Texas
Percentage of homes underwater: 3.89%
Home price change in last year: +5.73%
3. Albany-Schenectady-Troy, N.Y.
Percentage of homes underwater: 4.01%
Home price change in last year: -0.90%
4. Buffalo-Niagara Falls, N.Y.
Percentage of homes underwater: 4.22%
Home price change in last year: 3.92%
5. Fayetteville, N.C.
Percentage of homes underwater: 4.56%
Home price change in last year: +1.14%
6. Huntsville, Ala.
Percentage of homes underwater: 5.30%
Home price change in last year: -4.39%
7. Lancaster, Pa.
Percentage of homes underwater: 5.44%
Home price change in last year: -1.83%
See which other cities made the list.
Source: “10 Cities Where Mortgages Are Staying Afloat,” AOL Real Estate (Oct. 28, 2011)
Read More:
Survey Reveals Top 8 Best Places to Live
Tuesday, October 25, 2011
Homeownership is Highest on Record
WASHINGTON – Oct. 25, 2011 – The homeownership rate is at its second-highest level on record, only behind the record high set in 2000, according to the U.S. Census Bureau, which began collecting homeownership data in 1890.
By region, the homeownership rate is:
• Midwest: 69.2 percent
• South: 66.7
• Northeast: 62.2
• West: 60.5
Nearly every metro area had more homeowners than renters in 2010. The metro areas with the highest homeownership rates were in Michigan and Florida. Monroe, Mich., had the highest percentage of owner-occupied units at 79.8 percent, followed by Punta Gorda, Fla., at 79.7 percent.
While the national homeownership rate remained high, the decrease in the rate from 2000 to 2010 by 1.1 percent – to 65.1 percent overall – is the largest decrease since the 1930 to 1940 period, the Census Bureau reported.
States with highest housing inventory
Meanwhile, housing inventory soared 13.6 percent to 15.8 million units from 2000 to 2010, growing the fastest in the South and West. The states with the largest percentage increase in housing units were:
Nevada: 41.9 percent
Arizona: 29.9
Utah: 27.5
Idaho: 26.5
Georgia: 24.6
Florida: 23.1
North Carolina: 22.8
Colorado: 22.4
Texas: 22.3
South Carolina: 21.9
Source: U.S. Census 2010 and “Homeownership Near Record,” Investors.com (Oct. 20, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
By region, the homeownership rate is:
• Midwest: 69.2 percent
• South: 66.7
• Northeast: 62.2
• West: 60.5
Nearly every metro area had more homeowners than renters in 2010. The metro areas with the highest homeownership rates were in Michigan and Florida. Monroe, Mich., had the highest percentage of owner-occupied units at 79.8 percent, followed by Punta Gorda, Fla., at 79.7 percent.
While the national homeownership rate remained high, the decrease in the rate from 2000 to 2010 by 1.1 percent – to 65.1 percent overall – is the largest decrease since the 1930 to 1940 period, the Census Bureau reported.
States with highest housing inventory
Meanwhile, housing inventory soared 13.6 percent to 15.8 million units from 2000 to 2010, growing the fastest in the South and West. The states with the largest percentage increase in housing units were:
Nevada: 41.9 percent
Arizona: 29.9
Utah: 27.5
Idaho: 26.5
Georgia: 24.6
Florida: 23.1
North Carolina: 22.8
Colorado: 22.4
Texas: 22.3
South Carolina: 21.9
Source: U.S. Census 2010 and “Homeownership Near Record,” Investors.com (Oct. 20, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Monday, October 10, 2011
30% of buyers denied or give up on mortgage
WASHINGTON – Oct. 10, 2011 – Credit has gotten tighter, and more buyers are being left out – or becoming so frustrated they give up. Last year, more than 2 million people were turned down for mortgages, according to the Federal Financial Institutions Examination Council.
About 30 percent of buyers are either denied a mortgage, or they drop out of the application process, the Mortgage Bankers Association estimates.
Biggest reasons for rejection:
• Insufficient income: Buyers cannot afford a $1 million home if they make $50,000 per year.
• Credit details. There are a lot of rules, and it’s not easy to understand what a bank wants. Overtime income, for example, only counts if documented for at least two years to some lenders. Rental income may only count if the borrower has a 30 percent equity stake in the building.
• Bad credit. If a credit score is somewhere around 620 to 660, depending on the bank, lenders say no almost automatically.
• Appraisals. If an appraisal is lower than an agreed-upon selling price, the lender balks.
• External problems. A lender could nix an application if the homeowners’ association has issues or the neighborhood has problems.
• Incomplete information. Paperwork problems – incomplete information, missing forms, etc. – bog down about 12 percent of applications.
And “it’s common to get turned down if you have a gap in employment history over the last two years,” says Erin Lantz, director of the Zillow Mortgage Marketplace.
Source: “Triggers for Rejection,” The New York Times (Oct. 6, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
About 30 percent of buyers are either denied a mortgage, or they drop out of the application process, the Mortgage Bankers Association estimates.
Biggest reasons for rejection:
• Insufficient income: Buyers cannot afford a $1 million home if they make $50,000 per year.
• Credit details. There are a lot of rules, and it’s not easy to understand what a bank wants. Overtime income, for example, only counts if documented for at least two years to some lenders. Rental income may only count if the borrower has a 30 percent equity stake in the building.
• Bad credit. If a credit score is somewhere around 620 to 660, depending on the bank, lenders say no almost automatically.
• Appraisals. If an appraisal is lower than an agreed-upon selling price, the lender balks.
• External problems. A lender could nix an application if the homeowners’ association has issues or the neighborhood has problems.
• Incomplete information. Paperwork problems – incomplete information, missing forms, etc. – bog down about 12 percent of applications.
And “it’s common to get turned down if you have a gap in employment history over the last two years,” says Erin Lantz, director of the Zillow Mortgage Marketplace.
Source: “Triggers for Rejection,” The New York Times (Oct. 6, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Thursday, September 15, 2011
10 States With the Highest Foreclosure Rates
DAILY REAL ESTATE NEWS | THURSDAY, SEPTEMBER 15, 2011
For the 56th straight month, Nevada continued to have the highest foreclosure rate in the country, where one in every 118 homes received a foreclosure filing during August, according to the latest figures from RealtyTrac.
Nationally, 1 in every 570 households received a foreclosure filing in August.
Meanwhile, five states accounted for 53 percent of the foreclosure activity in August, led by California. In California, 59,383 properties received foreclosure filings last month. The state saw a 55 percent month-over-month increase in default notices.
The following are the states that posted the highest foreclosure rates in August, according to RealtyTrac’s latest report:
1. Nevada
One in every 118 households received a foreclosure filing during August.
Total foreclosure filings in August: 9,677
2. California
One in every 226 households
Total foreclosure filings in August: 59,383
3. Arizona
One in every 248 households
Total foreclosure filings in August: 23,569
4. Georgia
1 in every 346 households
Total foreclosure filings in August: 11,743
5. Idaho
1 in every 348 households
Total foreclosure filings in August: 1,860
6. Michigan
1 in every 349 households
Total foreclosure filings in August: 13,016
7. Florida
1 in every 376 households
Total foreclosure filings in August: 23,569
8. Illinois
1 in every 424 households
Total foreclosure filings in August: 12,493
9. Colorado
1 in every 439 households
Total foreclosure filings in August: 4,933
10. Utah
1 in every 450 households
Total foreclosure filings in August: 2,119
By REALTOR® Magazine Daily News
Read More
Mortgage Defaults Soar 33%, Biggest Monthly Gain in 4 Years
For the 56th straight month, Nevada continued to have the highest foreclosure rate in the country, where one in every 118 homes received a foreclosure filing during August, according to the latest figures from RealtyTrac.
Nationally, 1 in every 570 households received a foreclosure filing in August.
Meanwhile, five states accounted for 53 percent of the foreclosure activity in August, led by California. In California, 59,383 properties received foreclosure filings last month. The state saw a 55 percent month-over-month increase in default notices.
The following are the states that posted the highest foreclosure rates in August, according to RealtyTrac’s latest report:
1. Nevada
One in every 118 households received a foreclosure filing during August.
Total foreclosure filings in August: 9,677
2. California
One in every 226 households
Total foreclosure filings in August: 59,383
3. Arizona
One in every 248 households
Total foreclosure filings in August: 23,569
4. Georgia
1 in every 346 households
Total foreclosure filings in August: 11,743
5. Idaho
1 in every 348 households
Total foreclosure filings in August: 1,860
6. Michigan
1 in every 349 households
Total foreclosure filings in August: 13,016
7. Florida
1 in every 376 households
Total foreclosure filings in August: 23,569
8. Illinois
1 in every 424 households
Total foreclosure filings in August: 12,493
9. Colorado
1 in every 439 households
Total foreclosure filings in August: 4,933
10. Utah
1 in every 450 households
Total foreclosure filings in August: 2,119
By REALTOR® Magazine Daily News
Read More
Mortgage Defaults Soar 33%, Biggest Monthly Gain in 4 Years
Friday, September 9, 2011
Where Home Prices Have Dropped the Most
California cities have seen their home values drop by the largest percentage in the last five years, with some metro areas posting losses of up to 67 percent in that time period. California cities occupied six of the top 10 metro areas with the largest drops, according to a recent Zillow study based on its home-value estimates and Zillow Home Value Index.
Overall, "there will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” says Stan Humphries, Zillow’s chief economist. “There are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand."
The following are seven cities that have seen home values drop the most since the housing boom, according to Zillow:
1. Merced, Calif.
July 2011 Zillow Home Value Index: $106,514
Zillow Home Value Index 5 Years ago: $328,813
Value difference (by percent): -67.6%
2. Modesto, Calif.
July 2011 ZHVI: $128,777
ZHVI 5 Years Ago: $352,599
Value difference: -63.5%
3. Stockton, Calif.
July 2011 ZHVI: $150,061
ZHVI 5 Years Ago: $404,036
Value difference: -62.9%
4. Las Vegas
July 2011 ZHVI: $117,084
ZHVI 5 Years Ago: $303,656
Value difference: -61.4%
5. Vallejo, Calif.
July 2011 ZHVI: $190,521
ZHVI 5 Years Ago: $468,071
Value difference: -59.3%
6. Salinas, Calif.
July 2011 ZHVI: $282,289
ZHVI 5 Years Ago: $664,404
Value difference: -57.5%
7. Daytona Beach, Fla.
July 2011 ZHVI: $95,193
ZHVI 5 Years Ago: $220,436
Value difference: -56.8%
See what other cities made it in the top 10 list.
Source: “Five Years After Housing Market Peak, Bumpy Road Toward Stabilization Underway As Home Values Show Recent Rise in Many Markets,” Zillow (Aug. 9, 2011) and “10 Real Estate Markets With the Largest 5-Year Drop in Home Values,” Inman News (Sept. 8, 2011)
Read More
Zillow: Market to Reach Bottom Possibly by 2012
Overall, "there will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” says Stan Humphries, Zillow’s chief economist. “There are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand."
The following are seven cities that have seen home values drop the most since the housing boom, according to Zillow:
1. Merced, Calif.
July 2011 Zillow Home Value Index: $106,514
Zillow Home Value Index 5 Years ago: $328,813
Value difference (by percent): -67.6%
2. Modesto, Calif.
July 2011 ZHVI: $128,777
ZHVI 5 Years Ago: $352,599
Value difference: -63.5%
3. Stockton, Calif.
July 2011 ZHVI: $150,061
ZHVI 5 Years Ago: $404,036
Value difference: -62.9%
4. Las Vegas
July 2011 ZHVI: $117,084
ZHVI 5 Years Ago: $303,656
Value difference: -61.4%
5. Vallejo, Calif.
July 2011 ZHVI: $190,521
ZHVI 5 Years Ago: $468,071
Value difference: -59.3%
6. Salinas, Calif.
July 2011 ZHVI: $282,289
ZHVI 5 Years Ago: $664,404
Value difference: -57.5%
7. Daytona Beach, Fla.
July 2011 ZHVI: $95,193
ZHVI 5 Years Ago: $220,436
Value difference: -56.8%
See what other cities made it in the top 10 list.
Source: “Five Years After Housing Market Peak, Bumpy Road Toward Stabilization Underway As Home Values Show Recent Rise in Many Markets,” Zillow (Aug. 9, 2011) and “10 Real Estate Markets With the Largest 5-Year Drop in Home Values,” Inman News (Sept. 8, 2011)
Read More
Zillow: Market to Reach Bottom Possibly by 2012
Thursday, August 25, 2011
White House Weighs Mass Refinancing Plan
DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 25, 2011
The White House is considering a housing proposal that would allow millions of home owners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.
“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.
Many home owners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.
“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.
The White House is also considering other options to try to stimulate the housing market or save home owners from foreclosure. Such options include more changes to its refinancing programs so more home owners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.
Source: “U.S. May Back Refinance Plan for Mortgages,” The New York Times (Aug. 24, 2011)
Thursday, July 28, 2011
Bank: ‘We’ll reduce your loan, you share future appreciation'
NEW YORK – July 28, 2011 – Ocwen Financial Corp., a servicer of residential mortgages, launched a new loan modification program to reduce the principal on a mortgage for delinquent borrowers, but the borrowers must agree to let loan investors share in future appreciation of the home’s value when the market recovers.
Through the Shared Appreciation Modification program (SAMs), Ocwen will write down the principal of the loan to 95 percent of the home’s current market value. The amount written down will then be forgiven in one-third increments over a three-year timespan, as long as the homeowner remains current on the modified mortgage.
Then, “when the house is later sold or refinanced, the borrower must share 25 percent of the appreciation with the investors that own the loan; borrowers keep 75 percent of the gain,” the company notes.
Loan modifications will be available only to homeowners in negative equity.
“Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity,” says Ocwen CEO Ronald Faris in a public statement about the program. “That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too. Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity.”
The program, which is expected to be rolled out into 33 states, is one of the first principal reduction programs started by a private company.
Source: “Ocwen Unveils New Principal Reduction Program,” HousingWire (July 26, 2011) and “Ocwen Offering Mortgage Modifications That Restore Equity for Underwater Borrowers,” GlobeNewswire (July 26, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Through the Shared Appreciation Modification program (SAMs), Ocwen will write down the principal of the loan to 95 percent of the home’s current market value. The amount written down will then be forgiven in one-third increments over a three-year timespan, as long as the homeowner remains current on the modified mortgage.
Then, “when the house is later sold or refinanced, the borrower must share 25 percent of the appreciation with the investors that own the loan; borrowers keep 75 percent of the gain,” the company notes.
Loan modifications will be available only to homeowners in negative equity.
“Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity,” says Ocwen CEO Ronald Faris in a public statement about the program. “That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too. Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity.”
The program, which is expected to be rolled out into 33 states, is one of the first principal reduction programs started by a private company.
Source: “Ocwen Unveils New Principal Reduction Program,” HousingWire (July 26, 2011) and “Ocwen Offering Mortgage Modifications That Restore Equity for Underwater Borrowers,” GlobeNewswire (July 26, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Monday, July 11, 2011
Second chance for owners who lost homes
WASHINGTON – July 11, 2011 – More than 2 million homeowners who were foreclosed on or were in the process of a foreclosure during 2009 or 2010 can now ask for a review of their case, banking regulators announced this week. Banking regulators say ex-homeowners who might be eligible will receive a letter from their lender explaining their rights.
The move is to help identify homeowners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.
Homeowners who ask for the review will receive a letter explaining their rights.
Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if homeowners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.
The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices.
Source: “Foreclosed Home Owners May Seek Case Reviews,” USA Today (July 8, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
The move is to help identify homeowners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.
Homeowners who ask for the review will receive a letter explaining their rights.
Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if homeowners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.
The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices.
Source: “Foreclosed Home Owners May Seek Case Reviews,” USA Today (July 8, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Friday, July 8, 2011
Adding office could increase home value
PHILADELPHIA – July 8, 2011 – Remember when the “experts” said that most Americans would telecommute from home offices to work every day?
Hasn’t happened, although ever-evolving technology has made the notion more viable. Think laptops, netbooks, printers, smartphones, and tablets, networked through a wireless router to a high-speed Internet connection.
Thanks to wireless technology, you don’t even need a physical home office – although if you are counting on an income-tax deduction, the IRS requires that space be dedicated to that purpose.
Don’t need the deduction? Then “the home office is everywhere,” said Steve Melman, director of economic services at the National Association of Home Builders.
About 2 percent of U.S. workers – the self-employed and unpaid volunteers excluded – consider home their primary workplace, the Telework Research Network says. It estimates that 20 million to 30 million people work from home at least one day a week.
That’s hardly everyone, though it is more than the Bureau of Labor Statistics’ 2001 figure of 19.5 million.
Two additional factors have had a huge effect on the number of home offices: the flagging economy and an overall demand for affordability that has resulted from it.
Members of the home builders’ group were surveyed at the end of 2010 about what new homes might look like in 2015, Melman said.
The consensus: Homes will be smaller, and “people will be looking for real value, with the walk-in closet and the laundry room at the very top of the list of features.” Most future homebuyers (read: younger buyers) will use the portability of electronic devices to “make the most of less square footage.”
That’s a far cry from the home-office-as-emerging-trend of the 1990s, when telecommuting depended on having a work space that could accommodate, in addition to desk and chair, a telephone, a desktop computer, a modem, a printer, a file cabinet and storage for floppy disks (remember those?).
When the need for data speed overwhelmed standard wiring, Category 5, an advanced system providing Internet access at speeds 200 times faster, required owners of older homes to rip open walls to upgrade their service. Newly built homes had the less expensive advantage, until wireless technology leveled the playing field.
Today, for about $60, a single-band wireless router allows you to create a building-wide network of computers, printers, and other devices linked to a single Internet source – a cable modem.
Access to the router can be made secure within the network, so you can do online financial transactions safely. Some cable-modem providers offer free antivirus software that can be downloaded to each computer through the network. Every computer can be networked through a single printer, wireless or not.
But all routers are not created equal, and online shopping is a good idea. An excellent guide can be found at http://is.gd/lggFIj. Most manufacturers offer free upgrades to their firmware, the internal programs that run these devices, so keep in touch with their websites.
If you run a business from home, or take a lot of work home, you probably will want dedicated space somewhere – a quiet somewhere. Design the space for yourself, keeping the costs within a reasonable budget, rather than with resale in mind.
In 2007, Remodeling magazine’s annual Cost vs. Value report said a home-office renovation would return 56.1 percent of your investment at sale time. This year, that was down to 45.8 percent.
If you’ll be working for long periods in your home office, think ergonomically. A good source of information about furniture and design is at http://is.gd/epQjQA. Lighting a home office is tricky. The American Lighting Association offers tips at http://is.gd/l8GUls.
You’ll need plenty of grounded electrical outlets and a surge protector for your equipment – one with a high joule rating (the higher the rating, the longer protection will last) – with phone-line and coaxial-cable jacks, too. Get a printer with copier, fax, and scanner functions.
Choice of computer is up to you – shop for the best deal, warranty protection, and service guarantee. If you will be doing a lot of conferencing from your home office, a Web camera is a must.
Depending on how much data are involved in your job, an external hard drive of 250 gigabytes or more should be weighed against online backup for a fee, as discussed in PC magazine at http://is.gd/XZr601.
The problem with technology, of course, is that it evolves faster than our thinking about how to use it. “Remember, even the computer experts had no idea what to do with email,” Melman said.
Copyright © 2011
Hasn’t happened, although ever-evolving technology has made the notion more viable. Think laptops, netbooks, printers, smartphones, and tablets, networked through a wireless router to a high-speed Internet connection.
Thanks to wireless technology, you don’t even need a physical home office – although if you are counting on an income-tax deduction, the IRS requires that space be dedicated to that purpose.
Don’t need the deduction? Then “the home office is everywhere,” said Steve Melman, director of economic services at the National Association of Home Builders.
About 2 percent of U.S. workers – the self-employed and unpaid volunteers excluded – consider home their primary workplace, the Telework Research Network says. It estimates that 20 million to 30 million people work from home at least one day a week.
That’s hardly everyone, though it is more than the Bureau of Labor Statistics’ 2001 figure of 19.5 million.
Two additional factors have had a huge effect on the number of home offices: the flagging economy and an overall demand for affordability that has resulted from it.
Members of the home builders’ group were surveyed at the end of 2010 about what new homes might look like in 2015, Melman said.
The consensus: Homes will be smaller, and “people will be looking for real value, with the walk-in closet and the laundry room at the very top of the list of features.” Most future homebuyers (read: younger buyers) will use the portability of electronic devices to “make the most of less square footage.”
That’s a far cry from the home-office-as-emerging-trend of the 1990s, when telecommuting depended on having a work space that could accommodate, in addition to desk and chair, a telephone, a desktop computer, a modem, a printer, a file cabinet and storage for floppy disks (remember those?).
When the need for data speed overwhelmed standard wiring, Category 5, an advanced system providing Internet access at speeds 200 times faster, required owners of older homes to rip open walls to upgrade their service. Newly built homes had the less expensive advantage, until wireless technology leveled the playing field.
Today, for about $60, a single-band wireless router allows you to create a building-wide network of computers, printers, and other devices linked to a single Internet source – a cable modem.
Access to the router can be made secure within the network, so you can do online financial transactions safely. Some cable-modem providers offer free antivirus software that can be downloaded to each computer through the network. Every computer can be networked through a single printer, wireless or not.
But all routers are not created equal, and online shopping is a good idea. An excellent guide can be found at http://is.gd/lggFIj. Most manufacturers offer free upgrades to their firmware, the internal programs that run these devices, so keep in touch with their websites.
If you run a business from home, or take a lot of work home, you probably will want dedicated space somewhere – a quiet somewhere. Design the space for yourself, keeping the costs within a reasonable budget, rather than with resale in mind.
In 2007, Remodeling magazine’s annual Cost vs. Value report said a home-office renovation would return 56.1 percent of your investment at sale time. This year, that was down to 45.8 percent.
If you’ll be working for long periods in your home office, think ergonomically. A good source of information about furniture and design is at http://is.gd/epQjQA. Lighting a home office is tricky. The American Lighting Association offers tips at http://is.gd/l8GUls.
You’ll need plenty of grounded electrical outlets and a surge protector for your equipment – one with a high joule rating (the higher the rating, the longer protection will last) – with phone-line and coaxial-cable jacks, too. Get a printer with copier, fax, and scanner functions.
Choice of computer is up to you – shop for the best deal, warranty protection, and service guarantee. If you will be doing a lot of conferencing from your home office, a Web camera is a must.
Depending on how much data are involved in your job, an external hard drive of 250 gigabytes or more should be weighed against online backup for a fee, as discussed in PC magazine at http://is.gd/XZr601.
The problem with technology, of course, is that it evolves faster than our thinking about how to use it. “Remember, even the computer experts had no idea what to do with email,” Melman said.
Copyright © 2011
Tuesday, June 28, 2011
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)
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)
Monday, June 27, 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.
“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.
Wednesday, June 22, 2011
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
Browse all of today's news
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
Browse all of today's news
Friday, June 10, 2011
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"
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"
Thursday, June 9, 2011
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.
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.
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