Friday, March 1, 2013
Thursday, February 14, 2013
#1 Again for 2012! Why RE/MAX? Check it out!
Averaging more than 4 million consumer visits a month, remax.com
remained the most visited U.S. real estate franchise website in 2012.
And that's good news for RE/MAX agents who have received more than 12
million free leads from the site since 2006.
Data
provided by Experian Hitwise shows that remax.com attracted 52.5
million visits – nearly 28 percent more than the nearest competitor,
century21.com, and more than twice as many as fifth-place kw.com.
The remax.com traffic was up nearly 6 percent over 2011 when it also outdistanced all other U.S. real estate franchise websites.
Download the 2012 comparison chart (JPG, PDF) showing remax.com ahead of nine competing websites, including coldwellbanker.com, weichert.com and prudentialproperties.com.
Consumer
visits to remax.com are bolstered by RE/MAX advertising, principally on
TV. The visits, in turn, generate free leads for RE/MAX agents that are
distributed through LeadStreet.
Since
Hitwise introduced the total-visits metric in November 2009, remax.com
has been No. 1 among real estate franchise websites 36 of 38 months
through Jan., 2013. Experian Hitwise has the world’s largest sample of
online consumer behavioral and search intelligence, and monitors more
than 10 million U.S. users.
Wednesday, February 13, 2013
How to Pay Down Your Mortgage Correctly
Refinance to a 15-Year Mortgage Term
It's
pretty common for people to initially sign a traditional 30-year
mortgage, meaning you have 30 years to pay back the amount owed.
However,
if you can afford higher monthly payments, then you'll want to
seriously consider refinancing to a shorter term loan, which generally
has a lower interest rate, according to the Federal Reserve's mortgage
refinancing guide, published on their website.
What's
more, with a 15-year loan, "you pay off your loan sooner, further
reducing your total interest costs. The trade-off is that your monthly
payments usually are higher because you are paying more of the principal
each month," the Federal Reserve adds.
As
you can see, with a shorter-term loan, you'll pay off your mortgage
faster, and save a ton of money in interest. That's a win-win situation,
right?
Make Extra Payments, When Possible
Did
you receive a raise or fall into some unexpected extra cash? Well,
instead of spending it right away, consider making an extra mortgage
payment or simply increasing the amount you typically pay.
Just consider this advice from the website of Massachusetts's Office of Consumer Affairs&Business Regulation:
"If
you are unable to send a full extra monthly payment at one time,
increase the monthly payment you are sending. To achieve the greatest
benefit, the increase should be at least 1/12th of a normal monthly
principal and interest payment."
And
even if you can't do this every month, every little bit can help if
you're smart about it, says Mitchell D. Weiss, an adjunct professor of
finance at University of Hartford's Barney School of Business.
"When
you pay more than your loan requires, and when you designate extra
payments to be applied against the principal balance of your loan, you
end up reducing that balance at an accelerated rate," he says.
Weiss
emphasizes that the key is to direct whatever extra payments you make
to be applied against the principal, or the total amount borrowed.
Protest Your Property Taxes and Examine Your Insurance
"Your
monthly mortgage payment includes four things: your principal,
interest, property taxes, and insurance - which is collectively called
your PITI," says Paula Pant, founder of AffordAnything.com, a money
management website.
Most
people tend to focus on the principal and interest when they're looking
to pay down their mortgage faster, says Pant. The amount you pay in
property taxes and insurance, however, is often overlooked and this
could be a big mistake.
Why?
Because "if your property tax rate was set during the heady boom days
of 2007, you might be paying taxes based on an assessment that's no
longer valid," Pant says.
For
that reason, "it's worth it to protest the assessment with your county
to see if your rate should be re-adjusted to reflect today's lower home
values," adds Pant.
However,
this does not mean you need an appraisal. In fact, Pant says that is
one of the most common misunderstandings about how property taxes are
charged.
Instead,
you should have an assessment done by the county, as they're the ones
that determine your tax rate, she says. To get the process started, call
your local county line or send them an email with your intentions.
If
your property taxes are lowered after the assessment, you can continue
to make the same monthly payment, and more of your money will be applied
towards the principal and interest, which will help you pay down that
loan much faster, says Pant.
Source: Yahoo Real Estate
Monday, February 11, 2013
How to Build a Nest Egg
Everyone
needs to save--especially business owners. Sure, we all dream that our
enterprises will prosper and flourish, but the reality is that there are
sure to be plenty of rainy days in the future.
Smart entrepreneurs set money aside to weather those storms.
Take
me, for instance. For the past five years, I've earned six figures from
my business. This year I'll be lucky to earn five. I gave up a
high-paying gig, and now my monthly income doesn't come close to
covering my expenses.
But
I'm not panicked. In time I'll earn more money; meanwhile, I can live
off my nest egg. You see, over the years, while I was making much more
than I needed, I socked away money in savings.
As
a result of my forward thinking, I'm able to focus on the big picture
ahead instead of freaking out over day-to-day expenses. It's a sweet
feeling and one you can enjoy yourself--if you take action now.
How Much to Save
The standard recommendation from financial advisors is to save 10 percent of your income. That's a nice guideline, but the truth is that each person's situation is different. I have three recommendations.
The standard recommendation from financial advisors is to save 10 percent of your income. That's a nice guideline, but the truth is that each person's situation is different. I have three recommendations.
- Always save something, even if it's just $20 a month. Starting small will turn saving into a habit.
- Aim to sock away 20 percent of your after-tax income. This will be easier once you realize that paying off debt and contributing to your retirement plan counts toward that goal.
- If you're in a position to sock away even more, go ahead and save as much as possible. I encourage people to save until it hurts, a sort of financial version of "No pain, no gain."
Where to Save
Don't just put the money into an account that pays 0.01 percent interest. There are ways to earn a return on your nest egg.
Don't just put the money into an account that pays 0.01 percent interest. There are ways to earn a return on your nest egg.
- Open
an online high-yield savings account. ING Direct, Ally Bank, EverBank
and other institutions offer interest rates far above the national
average. And by moving your savings online, you'll keep that money
separate from your checking account and therefore make it harder to use
for impulse buys.
- Explore reward checking accounts from a small, local bank or credit union. These accounts usually offer higher rates than online savings accounts--if you meet certain requirements, such as making a minimum number of debit-card purchases each month and agreeing to receive statements electronically.
Building
a buffer of savings in the bank is like buying business insurance.
Thanks to the cash cushion I built up over the years, I now know that I
can cope with whatever the economy throws my way.
Source: www.entrepreneur.com
Friday, February 8, 2013
How to Choose the Right Real Estate Sales Professional
Buying
real estate is complex, and it’s imperative to select a competent,
honest agent who will skillfully represent your best interests
throughout the entire process of selecting, negotiating and closing on
your property.
Here are several things to look for and consider when selecting the real estate professional to represent you in a transaction:
Experience
Real
estate is a learn-by-doing process, and an experienced agent should be
closing at least five to seven property transactions per year. Every
transaction is complex, and each agent obtains new and relevant
“training” on each deal. So ask each agent — you should interview at
least three — how many transactions they’ve closed in the past 12 months
and several years. If they have not closed that many, ask who is
guiding them as they learn the business and what professional training
they had to prepare them to assist you.
References
References
You
also want to get references from the sales professionals’ recently
closed transactions. Then take the time to call those references to ask
how the agents performed. You will learn a lot by listening to what
their past customers have to say. Google their names, too, and check the
state for licensing information and any disciplinary information.
Time to work with you
An
agent who has too many clients may be too busy for you and may not be
right for you, either. Make sure they have the time to sit with and
educate you, show you lots of properties and are willing to write offers
on properties that you would like to buy. If they have too many clients
at once, service to you may suffer. So make your best judgment.
Location
Make
sure they know the location, location, location in which you want to
purchase property. Some agents are going to be familiar with the entire
county and can talk to you about each neighborhood. Find a sales
professional who is very knowledgeable about your targeted location.
Help you protect yourself
Will
they help you make smart decisions? This is the largest purchase you
are ever going to make, and your real estate professional should be
well-versed in and advise you on how to do your “homework” when buying a
property. Does buying make financial sense? Did you get a fair deal on
your mortgage? Have you looked at the HOA documents, title abstract or
plat? Are you procuring the right insurance for the proper amount? A
good agent can guide you in these areas and should be on your side in a
transaction.
The
sales professional you use should be someone you trust and feel can do a
great job helping you evaluate homes and get a property under contract.
They should also help you navigate the escrow and closing process and
negotiate in your best interest, whether it is the price, repair
requests or other contract terms.
Source: Fox Business
Source Link: http://goo.gl/Zocww
Wednesday, February 6, 2013
No Money Down Mortgages are Back
Its
100% financing the same strategy that pushed many homeowners into
foreclosure during the housing bust. Banks say these loans are safer:
They're almost exclusively being offered to clients with sizable assets,
and they often require two forms of collateral the house and a portion of
the clients investment portfolio in lieu of a traditional cash down
payment. In
most cases, borrowers end up with one loan and one monthly payment.
Depending on the lender and the borrower, roughly 60% to 80% of the loan
can be pegged to the homes value while the remaining 20% to 40% can be
secured by investments. On a $2 million primary residence, for instance,
the borrower could get a $2 million loan, which would require a pledge
of assets in an investment portfolio to cover what could have been, say,
a $500,000 down payment. The pledged assets can remain fully invested,
earning returns as normal, without disrupting the clients investment
goals. While
these affluent clients may be flush with cash, this strategy allows
them to get into a home without tying up funds or making withdrawals
from interest-earning accounts. And given the markets gains combined
with low borrowing rates in recent years, some banks say clients are
pursuing 100% financing as an arbitrage play where the return on their
investments is bigger than the rate they pay on the loan, which can be
as low as 2.5%. Some institutions offer only adjustable rates with these
loans, which could become more expensive if rates rise. In most cases,
the investment account must be held by the same institution that's
providing the loan.
These
loans also provide tax benefits. Since borrowers don't have to liquidate
their investment portfolios to get financing, they can avoid the
capital-gains tax. And in some cases, they can still tap into the
mortgage-interest deduction. While
these loans make up a small portion of banks overall lending, demand
for them has been rising. BNY Mellon Wealth Managements mortgage team
says it experienced a 10% increase in requests for 100% jumbo-mortgage
financing involving clients investment portfolios in 2012 compared with a
year prior. BOK Financial, which offers up to 100% financing just to
medical doctors through its private-banking divisions in eight states,
including Arizona, Oklahoma and Texas, says there has been a roughly 25%
increase (or about 100 more borrowers) in this lending from a year ago.
Also, at Citi Private Bank, applications have been growing over the
past two years. Demand is two to three times what it normally is, says
Peter Ferrara, managing director of the private banks residential real
estate.
Some
banks are using this product to lure in clients, such as BOK Financials
offer, which is available to new physicians. To provide the loan, the
bank must first receive proof that the borrower has cash or investments,
like stocks or mutual funds, that equal 10% of the borrowed amount.
What to consider before signing up:
Portfolio restrictions. The
amount clients can borrow against investment accounts will depend on
what the portfolio comprises. In most cases, they can get up to 95% if
the account comprises cash, up to about 80% if its bonds, and between
50% and 75% with stocks.
Relationship pricing. To
get the lowest rate, clients who already have significant assets at a
particular bank should consider applying for 100% financing there.
Underwriting standards. Borrowers
will still need to pass regular underwriting requirements, including
having a high credit score, a low amount of overall debt and
documentation of substantial income/assets. Source: Marketwatch
Tuesday, February 5, 2013
RE/MAX National Housing Report: Broad-based Housing Recovery in Full Swing
For
the fourth month in a row, the RE/MAX National Housing Report is
showing an increasing Median Home Price. In May, home prices were
6.1percent higher than those in May 2011. Home sales also
rose above the mark set last year by a significant 12.8 percent. With 42
surveyed metros showing increases in both sales and prices, the
recovery of 2012 appears to be taking hold in all regions of the
country.
For
11 months in a row, home sales have exceeded the level of the same
month a year ago. Inventory continues to fall significantly lower than
the previous year, with a 26.6 percent drop from May 2011. The related
Months Supply and Days on Market figures are also trending lower.
Clearly,
2012 is the year the housing industry has been waiting for; theres a
broad-based recovery taking hold, says Margaret Kelly, CEO of RE/MAX,
LLC. This recovery may not bring improvement in all sectors to all
markets at the same time, but most markets across the country are
experiencing the best selling season theyve seen in years.
Transactions- Year over Year Change
In the 53 markets surveyed for the May RE/MAX National Housing Report, closed transactions rose 12.6 percent from the previous month and 12.8 percent from the same month last year. May is the 11th consecutive month to report home sales at a higher level than the previous year. Strong sales trending higher each month are driving an undeniable recovery in all regions of the country. Of the 53 metro areas surveyed, a record 48 saw sales higher than one year ago, and of those, 38 saw double-digit increases including: Burlington, Vt. +39.3 percent , Albuquerque, N.M. +35.8 percent , Boston, Mass. +29.3 percent , Chicago, Ill. +28.1 percent , Nashville, Tenn. +27.1 percent , and Raleigh-Durham, N.C. +25.7 percent.
In the 53 markets surveyed for the May RE/MAX National Housing Report, closed transactions rose 12.6 percent from the previous month and 12.8 percent from the same month last year. May is the 11th consecutive month to report home sales at a higher level than the previous year. Strong sales trending higher each month are driving an undeniable recovery in all regions of the country. Of the 53 metro areas surveyed, a record 48 saw sales higher than one year ago, and of those, 38 saw double-digit increases including: Burlington, Vt. +39.3 percent , Albuquerque, N.M. +35.8 percent , Boston, Mass. +29.3 percent , Chicago, Ill. +28.1 percent , Nashville, Tenn. +27.1 percent , and Raleigh-Durham, N.C. +25.7 percent.
Median Sales Price
The Median Sales Price of homes sold in May was $166,500. This price marks a 4.1 percent rise from the median in April and a 6.1percent increase from May 2011. May also marks the fourth month in a row to record a year-over-year increase. Of the 53 metro areas included in the May RE/MAX National Housing Report, a record 46 experienced price increases over last year, with 9 metro areas seeing double digit gains including: Phoenix, Ariz. +34.5 percent , Detroit, Mich. +23.1 percent , Boise, Idaho +23 percent , Denver, Colo. +14.8 percent ,Miami, Fla. +14.3 percent, and San Francisco, Calif. +11.9 percent.
The Median Sales Price of homes sold in May was $166,500. This price marks a 4.1 percent rise from the median in April and a 6.1percent increase from May 2011. May also marks the fourth month in a row to record a year-over-year increase. Of the 53 metro areas included in the May RE/MAX National Housing Report, a record 46 experienced price increases over last year, with 9 metro areas seeing double digit gains including: Phoenix, Ariz. +34.5 percent , Detroit, Mich. +23.1 percent , Boise, Idaho +23 percent , Denver, Colo. +14.8 percent ,Miami, Fla. +14.3 percent, and San Francisco, Calif. +11.9 percent.
For more information, visit www.detroitmetrorealestate.com.
Source: RISMedia
Wednesday, January 30, 2013
Why is my FICO credit score falling?
For
the past five years, my FICO credit score has been above 825. This
month, I checked my credit score again, as I do annually, and it dropped
to the 755 range. Nothing has changed, except that I applied for and
received six new credit cards in less than three months. They all are
cash-back rewards cards. What happened?
-- Pat
-- Pat
Dear Pat,
Your FICO credit score fell because you opened those six credit cards in a short time. Every time you open an account, you're allowing creditors to pull your credit report, and you're lowering the average age of your credit accounts.
Your FICO credit score fell because you opened those six credit cards in a short time. Every time you open an account, you're allowing creditors to pull your credit report, and you're lowering the average age of your credit accounts.
Both of those actions will sink your score.
Here's
how it works: When you apply for a new credit card, a lender will pull
your credit report and score. This is called a "hard" credit inquiry,
and it'll hurt your score. (It doesn't hurt your score, by the way, when
you pull your own credit report. It also doesn't hurt when an employer
pulls your credit report or when a lender pulls your credit report for
marketing purposes. Those are called "soft" inquiries.)
If
you have several hard credit inquiries in a short amount of time, the
damage to your credit score increases dramatically, says Anthony
Sprauve, spokesman for myFICO.com, the consumer education division of
FICO.
"Our
data shows that someone opening multiple credit accounts in a short
period of time is at a higher risk for default," he says.
It's
unclear how much a hard inquiry -- or several of them -- will hurt your
credit score. It depends on the cardholder, Sprauve says. Typically,
the higher your credit score, the harder it gets hit by any credit
transgression, he says. Consumers with low credit scores will find that a
hard inquiry doesn't hurt their already low credit score by the same
amount.
The
damage from these hard inquiries will lessen over time as long as you
manage the new credit responsibly. That means paying your bills on time
and keeping the balances below 20 percent of the total available credit,
Sprauve says.
New
credit accounts also hurt your FICO credit score by lowering the
average length of your overall credit history. The average age of all
your accounts, the age of individual accounts and the length of time
since you used certain accounts all contribute 15 percent to your FICO
credit score. As the accounts age, and if you manage them responsibly,
those new accounts will eventually boost your credit score.
So
be careful with those credit card offers. While it's attractive to sign
up for rewards credit cards, especially since many of them offer cash
bonuses for new cardholders, do so with prudence and only when you need
new credit.
"In
addition to paying bills on time and keeping revolving credit balances
low," Sprauve says, "the third most important thing a person can do to
improve their credit is only open new accounts when necessary."
Source: Yahoo Finance
Monday, January 28, 2013
Prices are up, but homes are in short supply
The
supply of homes for sale has been shrinking for six months and shows no
improvement so far in January a bad sign for buyers. New listings of
existing homes for sale were down 14% year-over-year in the first two
weeks of January, according to Realtor.com, which tracks 143 markets
nationwide.
In
Phoenix, where prices were up 24% in November from a year earlier, new
listings through the first three weeks of January hit their lowest level
in 13 years, says Mike Orr, real estate expert at the W.P. Carey School
of Business at Arizona State University.
That's bad news for buyers, and it means "prices need to go up more" to bring more sellers to market, Orr says.
Nationwide,
the supply of existing homes for sale fell to 4.4 months in December,
based on the current monthly sales pace, says the National Association
of Realtors. That's the lowest level in more than seven years. A
six-month supply is generally considered balanced between buyers and
sellers.
Home
prices in November were 7.4% higher on average than a year earlier,
according to CoreLogic. Real estate experts had expected that rising
prices would spur more sellers trapped by years of falling prices.
Instead,
January's listing data "is the same sad story," says Glenn Kelman, CEO
of online brokerage Redfin. If sellers don't have to sell, "they're
holding on, thinking they'll wait for prices to go up even more."
Redfin's
data, covering 19 major markets mostly in the West, shows new listings
down 29% the first two weeks of January vs. last year.
Scarce
sellers aren't the only driver of shrinking supplies. There are fewer
distressed properties for sale. Foreclosure sales were down 7% through
the first nine months of last year from the same period in 2011,
RealtyTrac says.
Meanwhile,
demand is up. Existing home sales were up 9.2% last year, NAR's
preliminary data show. New-home sales rose almost 20% in 2012, the
government reported Friday, while supply fell to 4.9 months in December
from 5.4 months a year before.
New
home construction is still weak. In each of the past three years,
builders completed fewer than 500,000 single-family homes. That's less
than half the number built annually between 1993 and 2007, according to
the Census Bureau.
Home
builders would need to double production this year to alleviate the
tight supply, estimates Lawrence Yun, NAR's chief economist. That's not
expected. Home supplies nationally will stay at about the five-month
level much of the year, Yun predicts. Some markets are far below that.
California's supply of existing single-family homes for sale stood at
2.6 months in December, the California Association of Realtors says.
"Nobody
is selling because no one has anywhere to go," says Barbara
Hendrickson, of Red Oak Realty in Berkeley, in the San Francisco Bay
Area, which had a 1.8-month supply in December.
The
low supply is feeding bidding wars. One of Hendrickson's clients
recently lost a bid despite offering $130,000 above the home's $775,000
asking price, Hendrickson says.
Whether
the supply of homes for sale will expand to meet rising demand is a
"big question for the market" in 2013, says Jed Kolko, economist with
real estate website Trulia.
This year is also the first since the housing bust began that falling inventories are not necessarily a good thing, he says.
Listings may still swell in time for the busy spring selling season, says Stan Humphries, Zillow economist.
He
says listing activity next month will be key. If it doesn't pick up by
then, the spring season is likely to bring a lot of price increases, he
says.
Source: USA Today
Wednesday, January 23, 2013
What's Up in Today's Blog: Home Values See Largest Annual Gain Since 2006
U.S. home values in 2012 rose 5.9 percent over 2011, according to data in Zillow's latest Home Value Index (HVI).
The 5.9 percent appreciation rate is the largest annual gain since August 2006, near the peak of the housing bubble.
While
the market still has some ground to cover before its completely healthy
again, Zillow said in a release that 2012s appreciation rate far
exceeded yearly rates of appreciation typically associated with healthy
markets, which can expect annual home value appreciation of roughly 3
percent on average.
Looking
ahead, the Zillow Home Value Forecast projects an appreciation rate of
3.3 percent in 2013, more in line with historic norms.
In
addition, the fourth quarter of 2012 saw home values rise to an average
$157,400, up 2.5 percent over Q3, according to the fourth quarter
Zillow Real Estate Market Reports.
Of the 30 largest metros covered in the HVI,
only Cincinnati and Chicago failed to report annual and quarterly
increases in the fourth quarter, Zillow said. Of the 366 total metros
analyzed, 254 (69 percent) registered annual home value gains in 2012,
while 278 (76 percent) experienced quarter-over-quarter appreciation.
Though
the recovery in home values appears to be widespread, its not balanced
among metros, Zillow said. According to the report, growth rates ranged
from a high of 22.5 percent yearly appreciation in Phoenix to a low of
0.2 percent depreciation in Cincinnati and Chicago. Seven of the top 30
largest metros posted annual home value appreciation of 10 percent or
higher.
We
expected 2012 to be a good year for housing, and it delivered in
spades, said Zillow chief economist Dr. Stan Humphries. Strong demand
paired with limited inventory in many markets helped fuel a robust and
often rapid recovery in overall home values, good news for homeowners
after years of poor performance.
While
home value appreciation is expected to slow down in 2013, Humphries
said the anticipated 3.3 percent annual appreciation rate is more
sustainable. That said, consumers should be careful to temper their
expectations accordingly.
Its
important to be cautious moving forward, even as we celebrate the
undeniably positive end to 2012, and be careful that consumers dont grow
to expect such high appreciation as the norm, Humphries said. Buying a
home should be a long-term decision, and these swings between a deep
housing recession and higher-than-normal appreciation rates can give
consumers whiplash and cause some to lose sight of that.
As
home values rose throughout 2012s fourth quarter, foreclosure activity
declined, with 5.22 out of every 10,000 homes nationwide facing
foreclosure in December (down 2.2 homes per 10,000 year-over-year and
1.2 homes quarter-over-quarter). The share of foreclosure re-sales
dropped to 12 percent, down 4 percent from the end of 2011 and 0.3
percent from the third quarter.
Meanwhile,
national rents fell 0.6 percent from the third quarter to the fourth;
however, rents were up 4.2 percent year-over-year in 2012. The Zillow
Rent Index stood at $1,274 at the end of December.
Source: DSNews
Friday, January 18, 2013
Consumer Confidence Presses on Despite Fiscal Uncertainty
Improving news on housing and employment has given a lift to consumer confidence, despite fiscal cliff drama, according Freddie Macs U.S. Economic and Housing Market Outlook for January.
The report noted the 155,000 jobs that were added in December and the overall gain of 1.86 million jobs for all of 2012.
Freddie Mac expects the U.S. economy to see another two million news jobs in 2013, which would eventually lower the unemployment rate. However, the projection was based on the assumption that uncertainty over fiscal policy debates in the first quarter wont derail the economic expansion, the report stated.
The GSE also highlighted the increase in home sales, and said over the first 11 months of 2012, homes sales have climbed 9 percent from the same year ago period. The GSEexpects sales to display similar gains in 2013.
As we begin 2013, the economy is undoubtedly at a better place now than at this time in 2012. And despite the clouds of fiscal uncertainty facing the country, positive jobs reports and the strengthening housing market continue to be the bright spot as we begin the New Year, said Frank Nothaft, Freddie Mac VP and chief economist.
Although the Conference Boards consumer confidence index took a hit in December, falling to 65.1 from Novembers 71.5, Freddie Mac noted some positives.
Regardless, consumer confidence is up from its Great Recession low, and as consumer attitudes on the economic outlook improve, more potential homebuyers will emerge and feel financially secure in making an offer to purchase a home, the report stated.
To answer the question of the role of policy uncertainty in influencing the economy, Freddie Mac pointed to research by economists from Stanford University and the University of Chicago.
According to the research, increases in policy uncertainty precede declines in economic growth and employment.
For instance, increases in policy uncertainty equal to the increase observed from 2006-2011 could cost the US economy up to 2.3 percent in lost GDP and 2.3 million fewer jobs, the report explained.
With the Consumer Financial Protection Bureaus release of a finalized qualified mortgage rule, Freddie Mac says some of the uncertainty regarding mortgage lending guidelines may have cleared.
Source: DSNews
Wednesday, January 16, 2013
Four Tips For Making Smart Real Estate Moves In 2013
Working With A Buyer’s Agent Can Help You Find A Home In A Low Inventory Market.
One of
the biggest issues in the real estate market across the country is that
houses are being snapped up before interested buyers have a chance to
act. What should you do when the home you have fallen in love with is
listed as contingent or pending? Should you take a chance? There’s no
hard and fast rule because every home sale is different and every agent
is different. Depending on the home and the offer, a backup offer may be
welcomed or ignored.
If you see a house you love but it’s out of your price range, add it to your saved searches on Realtor.com anyway. That way you will know if the price drops and the home that was once only a dream could become a reality.
Doing The Two House Juggle Is Tougher Than Ever.
If you
have to sell your house before buying a new one, you may be at a
disadvantage. “In a hot market it’s often a deal killer to include in
your offer to buy a new home, a contingency to sell your existing home.
Sellers will simply take their pick of offers not burdened by such a
contingency,” says Lee Dworshak. Depending on your local market it may
make sense to put your existing house on the market before you begin the
hunt for a new home. An agent can advise you on whether or not this
makes sense for you based on the average time on market for homes in
your area. If your financial situation allows it, you could also rent
your current house out if it doesn’t make sense to sell currently.
Haggle With Care.
Knowing
what to offer can often be a delicate dance. Too low and may ruin the
deal forever and not seem like a serious potential buyer. Too high and
you may miss out on a chance to save some money. Sometimes even if a
house seems overpriced, you may have to walk away.“In the end there are
only a couple of things that matter to a seller. First and foremost is
what they are putting in their pocket. I knew one seller that waited
five years until the market finally caught up to his price. I never even
talked to the guy about listing, because he wanted so much. About six
or seven other agents had his home listed over that time period, but
only the last one sold the home. I just suggest making your best offer,
and move on. Oh, the second thing sellers like is an easy closing, so
make the offer as-is and get your inspections and financing tied up as
quickly as possible, “ advises David Welch, Realtor® with Re/Max 200
Realty.
Bear
in mind also that there may be other factors influencing the price that
the sellers have put on the home . There is a reason that agents often
put the words “motivated seller” in a listing description. The truth is
that not all sellers are desperate to sell immediately. “If the sellers
do not have to move, they will not be incented to take less than they
want. If the sellers have that much “into” the home, they will not want
to take less. Comps are what buyers use, but sellers always have a
reason why their house is better than the comps. One technique I find
helpful is to present a very reasonable offer with a cover letter (or in
person if possible) extolling the virtues of the home and saying how
wonderful it is but expressing concern that the appraisal process might
hamper the realization of the price. I then provide comps, excellent
evidence of financial strength, and end by saying: “We realize we may
not be the right buyer for your lovely home, but we would certainly love
to be the new owner.” That last point makes the sellers think twice
about who WOULD be the right buyer,” says Linda Walters, a Realtor® with Sage Realty.
Timing Your Life Is As Important As Timing The Market.
It’s
easy to drive yourself mad trying to predict the market. Should I buy
now, should I sell now? Is there a right time of the year to buy or
sell? The only truth is that when it is right for you, it is right for
you. Make your decisions based on your financial and personal situation
not on what you think may or may not happen. “It is very difficult to
time exactly when it is best to sell… so I always recommend to clients
and friends to sell when you know you want to sell. Traditionally,
springtime is a very popular time of year to sell one’s home, as the
weather enables potential buyers to travel and view listings on weekends
with their families. The price of the property is based on income,
location, and condition,” states Arlene Gonnella, a Realtor® in Short Hills New Jersey.
Source: Realtor.com
Saturday, January 12, 2013
Should Young People Buy Homes?
If there's anything we've learned in the past few years about real estate, it's that property doesn't always go up in value. And because it doesn't, you shouldn't just buy property and assume that you're going to earn equity and wealth from that ownership.
Instead, buying a home should be a personal decision based on your life and financial situation.
So if you are young, should you buy real estate? The answer, as with many things, is that it depends. But for the vast majority of young people, the answer is probably no. Here's why.
Real Estate is Long-Term
We buy real estate in order to hopefully earn wealth and improve our lot in life. The most likely way that you will earn real estate wealth is by owning property for long periods of time, preferably a decade or greater. This long-term ownership does not coincide with the habits and traits of most young people. So if you're not very sure you will own a property for a long time, let a landlord deal with the inherent risks, pains and issues of real estate ownership.
Not Settled in a Career
At a young age, you rarely know whether you'll be living in the same area for a long time. People are very mobile these days, including switching jobs, getting job transfers, changing careers, going back to school, etc. If you buy a property and have to sell it due to a career move in a few years, you're most likely going to lose money on your real estate ownership.
Can't Afford a Place You Love
Additionally, you might not have the financial resources to afford a place that you really love, and you'll end up buying in anticipation that you'll earn equity and trade up in a few years. Now you probably will trade up in a few years, but you probably won't earn any equity. In fact, you'll likely lose money -- primarily due to steep transaction costs. The better way to go is to save your money for several years and buy a place you really love when you have the savings and income to be a homeowner.
Not Settled in Life
You finish school, get a job and work a few years. Then you realize you've got to move somewhere else, "see the world," if you will! That house you bought would hinder your ability to relocate, and if you did move, you'd probably lose money.
So if you are young, wild and free -- and not sure of your 5- to 10-year plan -- you'll probably do better as a renter.
When might it make sense to buy young? If you're sure you'll own the property a long time, then it's probably a good idea to buy. Just make sure you can comfortably afford the payments along with all your other bills. Also if you want to be in the landlord business and plan to convert the property from a personal residence to a rental, then buying at a younger age would be a smart move for you.
Just ask yourself before you decide whether to buy real estate, "Am I sure my ownership will be for the long haul?"
So if you are young, should you buy real estate? The answer, as with many things, is that it depends. But for the vast majority of young people, the answer is probably no. Here's why.
Real Estate is Long-Term
We buy real estate in order to hopefully earn wealth and improve our lot in life. The most likely way that you will earn real estate wealth is by owning property for long periods of time, preferably a decade or greater. This long-term ownership does not coincide with the habits and traits of most young people. So if you're not very sure you will own a property for a long time, let a landlord deal with the inherent risks, pains and issues of real estate ownership.
Not Settled in a Career
At a young age, you rarely know whether you'll be living in the same area for a long time. People are very mobile these days, including switching jobs, getting job transfers, changing careers, going back to school, etc. If you buy a property and have to sell it due to a career move in a few years, you're most likely going to lose money on your real estate ownership.
Can't Afford a Place You Love
Additionally, you might not have the financial resources to afford a place that you really love, and you'll end up buying in anticipation that you'll earn equity and trade up in a few years. Now you probably will trade up in a few years, but you probably won't earn any equity. In fact, you'll likely lose money -- primarily due to steep transaction costs. The better way to go is to save your money for several years and buy a place you really love when you have the savings and income to be a homeowner.
Not Settled in Life
You finish school, get a job and work a few years. Then you realize you've got to move somewhere else, "see the world," if you will! That house you bought would hinder your ability to relocate, and if you did move, you'd probably lose money.
So if you are young, wild and free -- and not sure of your 5- to 10-year plan -- you'll probably do better as a renter.
When might it make sense to buy young? If you're sure you'll own the property a long time, then it's probably a good idea to buy. Just make sure you can comfortably afford the payments along with all your other bills. Also if you want to be in the landlord business and plan to convert the property from a personal residence to a rental, then buying at a younger age would be a smart move for you.
Just ask yourself before you decide whether to buy real estate, "Am I sure my ownership will be for the long haul?"
Source: Zillow
Thursday, January 10, 2013
5 Types Of Buyers Will Be Rushing Into The Housing Market In 2013
With
the housing market bottoming in 2012, economists and other experts are
becoming increasingly optimistic about the U.S. housing market in 2013.
From
John Burns 2013 Real Estate Consulting: "Assuming our leaders in DC
come to some sort of agreement that keeps the economy growing and
interest rates low, which seems like the most reasonable assumption,
here is what will happen,"
- Investors: Investors and, yes, even flippers will continue to grow in numbers as they realize housing is the best risk-adjusted return on their money.
- Boomerang buyers: Foreclosed homeowners, who are currently renting homes, will come back in droves. In Phoenix, they are paying $1,300 in rent for a home whose mortgage payment would be $1,000. That situation is not sustainable. The Federal Housing Administration and Department of Veterans Affairs have low down payment programs with insurance premiums that push rates near 5.0%. Those payments are still very affordable.
- Entry-level buyers: First-time homeowners, who have been sitting on the sidelines waiting for a sign of the bottom, will hear about price increases in their desired neighborhood and rush to become homeowners.
- Move-down buyers: Empty nesters and retirees, who have plenty of equity in their existing home, will buy a home that is more suitable to their current lifestyle, which may or may not include adult children as well as their aging parents.
- Moveup buyers: The price appreciation that occurred in the last year has already lifted 1 million underwater homeowners above water with future price appreciation to lift them even more.
All good signs.
Source: Business Insider
Saturday, January 5, 2013
Inspect The Inspector - and the Inspection Company
Choosing the right inspection company can be just as important as choosing the right home. HouseMaster offers some great tips on what to ask when shopping for a quality service.
My inspector doesn't have a guarantee, but says he never had a problem and would fix anything that went wrong. Isn't that good enough?
No. Any house inspector with a good track record should be willing to provide a guarantee in writing to avoid any miscommunications should a post-sale problem arise.
No. Any house inspector with a good track record should be willing to provide a guarantee in writing to avoid any miscommunications should a post-sale problem arise.
In our area, house inspectors are licensed. Will that guarantee I get a quality inspection?
While licensing is a good first step, it won't guarantee you get a good inspector. Most licensing programs do not require on-going training, provide any technical assistance or require malpractice insurance. Even in areas where licensing exists, you should look at an inspector's qualifications beyond the licensing requirements.
While licensing is a good first step, it won't guarantee you get a good inspector. Most licensing programs do not require on-going training, provide any technical assistance or require malpractice insurance. Even in areas where licensing exists, you should look at an inspector's qualifications beyond the licensing requirements.
My inspector says he doesn't need insurance because he's never had a problem. Should I accept that?
A well-trained inspector will not experience significant problems, but you should never use a house inspector without insurance. A proven track record of quality inspections actually makes it much less expensive to maintain this insurance. Inspectors who are new to the inspection industry or those who have a spotty track record may not have access to this type of coverage. You'll find that the most reputable of inspection firms carry Errors and Omissions insurance.
A well-trained inspector will not experience significant problems, but you should never use a house inspector without insurance. A proven track record of quality inspections actually makes it much less expensive to maintain this insurance. Inspectors who are new to the inspection industry or those who have a spotty track record may not have access to this type of coverage. You'll find that the most reputable of inspection firms carry Errors and Omissions insurance.
My agent suggested an inspector and told me her experience with him has always been good. Can I rely on her recommendation?
Regardless of where you learn about an inspector, you should check them out yourself. Most real estate professionals encourage this as well. Ask if the inspector has any literature on his firm or a web site. Call the inspection company and ask questions. This way you are certain you are comfortable with your choice of inspector.
Regardless of where you learn about an inspector, you should check them out yourself. Most real estate professionals encourage this as well. Ask if the inspector has any literature on his firm or a web site. Call the inspection company and ask questions. This way you are certain you are comfortable with your choice of inspector.
My inspector rates things in either functional or not functional condition. Is this enough detail for a good inspection report?
While all house inspectors use relatively broad terms, the term "functional" covers a very wide spectrum of conditions. Is the system functional but in need of repair or is it functional and expected to last many more years? These are important considerations to make when considering future repair and maintenance costs.
While all house inspectors use relatively broad terms, the term "functional" covers a very wide spectrum of conditions. Is the system functional but in need of repair or is it functional and expected to last many more years? These are important considerations to make when considering future repair and maintenance costs.
Source: Housemaster.com
Friday, January 4, 2013
Metro Detroit's $1 million homes: almost 150 sold in 2012 as demand soars
Few would have thought that in metro Detroit's long-suffering housing market -- still down markedly from its 2005 price peak -- that million-dollar homes would enjoy a surge in sales this year unlike any in recent memory.
Real estate experts say the high-end boom in metro Detroit is a promising sign for a broader and sustainable housing recovery, though it's no guarantee, they told the Free Press.
There were 148 recorded sales of $1 million-plus residences in Oakland, Wayne and Macomb counties from Jan. 1 through last week. That's a 66% increase from a year ago and the highest number sold at that price point since the Realcomp multiple listing service organized the million dollar-and-above category in 2003. Year-over-year sales data for the entire market is not out yet, but as of November, increases for home sales across all price points in the three counties was up just 6% compared with the same time frame a year ago.
At the high end of the market, Realtors boosted sales with high-earning businesspeople in finance, autos and health care industries relocating this year from places such as Chicago and New Jersey as the Michigan economy continued to rebound.
Realtors also sensed a brighter economic outlook among members of southeast Michigan's executive class.
"These people feel better about the economy, about their businesses, about Michigan, and they have the wherewithal to purchase these high-end homes," said Ronni Keating, a Realtor with SKBK Sotheby's in Birmingham who handles many top market clients.
She has been advising those clients to sell because "you really can get some good prices now because the demand is so strong."
All but 16 of the sales this year were in Oakland County, including the chart-topping $4.5-million deal in Bloomfield Township and a $3.9-million castle-like mansion with nine bathrooms on a private peninsula that Sergio Marchionne, the Chrysler and Fiat CEO, snapped up in February.
In Wayne County, $2.2 million bought a 1930s colonial on Lake St. Clair and $1.3 million fetched a home in Grosse Pointe Shores with a backyard tennis court and a rare indoor saltwater pool.
What boosted sales
Real estate insiders attribute the 2012 high-end boom to a confluence of factors that proved just as true for lower-priced homes in the suburban market.
• Pent-up demand from buyers who postponed upgrading homes in the economic downturn.
• Low mortgage rates helped buyers who needed and qualified for financing.
• Slimmer inventories of for-sale, move-in-ready homes pushed up prices, persuading sellers to enter the market.
• More discouraged sellers in the $1-million-plus market swallowed some pride and gave up on prices that made better sense a decade ago.
Nearly all 10 top sales in the three counties were below listing price, according to data compiled by Real Estate One in Southfield. One example: a seven-bedroom English manor near a country club in Grosse Pointe Farms that sat on the market for a year and a half. Eventually, it sold for $1.1 million, or $500,000 below listing price.
"Sellers start out wanting the old number. They fight, they fight, they fight," said Chris Knight of Coldwell Banker Weir Manuel in Plymouth. "Eventually, they either take it off the market because they don't have to sell. And if they have to sell, then they give up and they start dropping."
All the bells and whistles
Ryan Blair and his longtime girlfriend, Kasie Head, are on a Michigan mansion hunt.
The couple and their young son are renting a penthouse at the Fifth Royal Oak as they search for a lakefront home in suburban Detroit.
Blair, 35, has started several West Coast businesses and is the CEO of Troy-based ViSalus, a marketing firm for nutrition products and energy drinks. The California native authored the 2011 memoir "Nothing to Lose, Everything to Gain: How I Went from Gang Member to Multimillionaire Entrepreneur."
Head, 31, said they're looking for a home with "all the bells and whistles" amenity-wise, ideally even a basketball court. They are willing to pay as much as $5 million or more, she said.
"We have the luxury of having multiple homes, and we want our home in Detroit to be cozy, where we spend Christmas and the holidays and where it will just feel like home," said Head, an interior designer.
Yet it has been a challenge finding waterfront property that is relatively new construction, she said. Other crucial qualities are privacy and quiet.
Their other residences are a house in Los Angeles' Hollywood Hills neighborhood and an apartment on Manhattan's Upper East Side.
"L.A. and New York have such a fast-paced beat to them, we want this place to be a place of serenity," she said.
The couple loved an Orchard Lake house with its own orchard and helipad that happened to be near the house of rock star Bob Seger. But the property would have needed significant and time-consuming renovation work. They once hoped to be moved in before year's end, although their search will now continue in 2013.
"We've been able to find quite a few homes that appeal to us, we just haven't found the perfect one yet," Head said.
Not all the way back
Several Realtors anticipate the strong interest in their high-end listings will carry over into next year.
"We just listed one for $1.2 million, and three years ago, nobody would even have looked at it," Knight, the Plymouth Realtor, said of a residence in Northville. "I've already had seven showings on it in nine days, and that's around Christmastime."
Katherine Broock Ballard of Max Broock Realtors in Birmingham sold three of Oakland County's top 10 residential listings this year, including a Tudor-style mansion in Bloomfield Township with floor-to-ceiling windows and 7 acres of manicured grounds. "If it's between $1 million and $2 million and it's something good -- it's gone," she said.
Yet despite this flurry of sales, sellers who expect to fetch the bygone prices of a decade ago are risking disappointment. Rising sales coupled with fewer homes on the market lifted prices from their doldrums, but values are still far below peak.
Across the broader metro Detroit home market, prices were 20% below 2000 levels this fall and 37% from the late 2005 price peak, according to Standard & Poor's/Case-Shiller Home Price Index.
Realtor Kevin Conway of Hall & Hunter in Birmingham had the top home sale of the year in Macomb County: a gated estate in Washington Township with a palatial staircase, interior balcony, an outdoor pool and two garages that could fit up to seven cars -- three for regular use, four that are collector's items.
The residence sold for a relative bargain at $1.2 million, considering how the previous owners put more than $3 million into it, Conway said.
Such good deals for buyers were more common in 2010 and 2011, when luxury sellers had less leverage.
But events unfolding at the national level may have added a dash of urgency to this year's market, especially in the million-plus segment. The new year could well bring higher income taxes and capital gains rates for occupants of these homes, and perhaps another economy-wide slowdown if there is no agreement in the fiscal cliff negotiations.
"The sellers and the buyers both had the same train of thought," Conway said of the $1.2-million estate. "They thought it was better to get something done in 2012 than in 2013."
Contact JC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter: @JCReindl.
Source: http://www.freep.com/article/20121230/BUSINESS04/312300212?odyssey=mod%7Cdnmiss%7Cumbrella%7C1
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