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Mortgage giant Fannie Mae announced that it is willing to play “Let’s Make a Deal” with homeowners who are behind on their mortgage payments.

According to CNBC, Fannie Mae will give homeowners, who are in default on their loan, the option of renting the home and staying put for up to one year.  To be eligible, the homeowner must sign over the deed to the property.

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Great news for home buyers, sellers and owners, alike.  The homebuyer tax credit has been expanded to include step up buyers, who have owned a home for 5 years.  It also extends the tax credit through the end of 2010.  

GREAT NEWS! 

It appears that Senate Democrats have recognized the tremendous value of the First Time Homebuyers Tax Credit and odds are it will be renewed soon. At this time, it is believed that the credit will allow anyone purchasing a home, by April 30, 2010, to participate and receive the full credit available.

The credit will continue until the end of 2010, but the amount of tax credit will drop by 2 percent every 90 days.  The graduated benefit should help the housing market recover into and through the 2010 summer selling season.

Here is the text of the story as reported in Bloomberg News today:
Senate Democrats on Board with Credit Extension

Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit.  The latest version extends the program to home sales signed not closed by April 30. Purchasers would have another 60 days to close the sale.  The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut slightly to a $7,290 cap.  Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.
Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)

3 Short Real Estate News Items of Interest.

1. Good news for US Housing.  For those of you still searching for a BOTTOM in the real estate market, we hit it in January 2009.  A double bottom, in fact.  Take a look at the CHART.
2. China raised its minimum down payment requirement to 40 percent, in an effort to slow down the overheated housing market in Hong Kong.  Conversely, in the US, we still offer financing with NO Money Down, when the tax rebate is combined with FHA or VA financing.  Quite startling in light of the lessons we learned from subprime loans.
3. Uncle Sam Added 5 Percent to Home Prices.  Government interventions in the housing market have inflated home prices at least 5 percent higher than they would have been.  Artifically low interest rates, $8000 tax credits, push for loan modifications and efforts to stall foreclosures may have created a false bottom.  Since the props won’t last forever, the risk of price decline in the future is significant. 

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 The stock market is back to 10,000, the level it reached in 1999.  Sales of existing homes were up a whopping 8 percent, to the highest level seen in 2 years.  The news is abuzz about an extension of the First Time Buyer Tax Credit….But, is it time to “Party like it’s 1999″???

Here is a snapshot of Friday’s real estate news.  You decide.

1. A record number of people snapped up bargains in September.  The median price of a home sold in the US fell to 174,000, down 9 percent from $191,200 one year ago.  Note: The significant price drop could be blamed in part to the First Time Buyer Tax Credit which favors the lower priced homes.
2. Keep in mind that the homes counted as “sold” in September were actually purchased in June, July and August.  No doubt the push to buy this summer had something to do with the expiring $8000 Tax Credit.
3. 70 percent of all homes closed in September were foreclosures or distressed property.
4. 80 percent of the homes closed, were sold for less than $250,000.  The market above $250,000 has stalled and inventory is rapidly growing.  And, the more expensive the home, the slower the market.
5. The biggest sales gains (not price gains) were seen in the hard hit cities of Miami and Orlando.  Sales in Miami were up 71 percent from last year, Orlando 65 percent.  Note: Prices are still falling dramatically in the Sunshine state.  In Miami and Orlando prices declined more than 30 percent from last year;  Tampa prices fell to $133,000, down 17 percent.
6. Sales of existing homes were down nearly 20 percent in Atlanta and Birmingham.  Local Realtors blame job loss for lack of activity.
7. Prices were flat or up a bit in some cities:  Dallas, Houston, San Antonio; Tulsa; Jackson, MS and Washington DC.

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Not surprisingly, real estate industry lobbiest are attempting a full court press as they make a final push for extension of the first-time buyer tax credit.   

And, it’s little wonder.  The IRS estimates that 1.4 million homebuyers have claimed the credit through August, and the Realtors Association estimates the credit was crucial in pushing 355,000 of those buyer’s off the fence.   

If the real estate industry gets it’s way and the amendment passes, the $8000 tax credit would be extended to June 30th, 2010 and it would allow more taxpayers to qualify for the subsidy.  The amendment would increase the income limit to $150,000 for a single filer and $300,000 for a couple, up from the current limit of 95,000 and $170,000, respectfully.

The Pro’s: Why Vote “Yea”

1. Lenders are still in trouble, as more people default or fall behind on their mortgages.  Experts predict an additional 1.5 million foreclosures in 2010, increasing supply and further eroding prices and demand. 
2. Dems and Rep like it.  The proposal was introduced by a GA Republican, Johnny Isakson, and it is also supported by Democratic heavy-weights.  House speaker Nancy Pelosi and Senate Majority Leader Harry Reid support the extension, President Obama hasn’t taken a position for either side.
3. Still too Many Houses.  Although the supply of existing homes on the market has fallen from 1-5 months down to 8.5 months, a healthy market has only 5-6 months supply of house.
4. Unemployment is Rising.  With national unemployment levels at 10 percent, and some states reporting a far higher number, extending the taxpayer subsidy of housing market would likely create and preserve jobs.  In addition, people out of work usually means more loan deliquency, foreclosures and further downward pressure on pricing.

The Con’s:  Why Vote “NAY”

1. The Cost to the Taxpayers.  The extension comes with a heavy price tag of $16.7 BILLION over 5 years.
2. As bad as Sub-Prime.  Opponents argue that the subsidy has artifically propped up the prices of inexpensive homes, targeted by first-time buyer’s, thereby creating another potential mini-bubble in affordable housing.
3. Both Opponents and real estate industry admit that most people who claimed the $8000 deduction, would have purchased a home anyway due to historical low rates and steep price declines.
4. Fraud.  The IRS has identified over 100,000 cases of fraud involving the tax credit.  On Thursday, the House Ways and Means Committee is scheduled to take a closer look.
5. Did we mention the cost to taxpayers is $16.7 BILLION?

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Case Shiller just released its latest report on the state of the residential estate market.  The good news is that home prices are falling more slowly.  The bad news is that that we have a little ways to go.

What the Numbers Show:

• Through August, 2009, the price of an average home sold in the US fell approximately 13 percent, year over year, from 2008 levels.
• Home prices have now dropped to 2003 valuation levels, wiping out 6 years of home appreciation.
• Since the peak in 2006, average home prices are down 33 percent.

What Do the Numbers Say About the Future??

• Prediction:  The “average” home price will likely fall more than 13 percent by year end.  Reason:  Home prices are always at their highest in the spring and summer.  Families move during this time of year and they buy the largest, most expensive properties.  As a result, Summer home sales skew the “average” price upward in the fall, but only temporarily.
• Prediction:  Home Sales will suffer a downturn due to the expiration of the $8000 First Time Buyer’s Credit.   So far this year, 350,000 buyers have been persuaded to purchase because of this incentive.   To read more about the success of the 1st Time Home Buyers Tax Credit, CLICK HERE.

Our Crystal Ball:  The pace of the fall is slowing, but the expiration of the tax credit and the ”shadow inventory” of another 1.5 Million foreclosures will continue to put downward pressure on the market in 2010.  As a result, we predict that 2010 home prices will decline 6-7 percent.  The upside is that nearly all buying risk is out of the market.  Interest rates are at historical lows.  Any increase in rates would erase the possible gain a buyer would achieve from correctly timing the exact bottom…even if the timing were perfect. 

Bottom Line:  If you plan to buy a home within the next year, now is a great time.   Chose the best home, in the best location and the one that you can easily afford.  Live and enjoy the home for at least 5 years and you will likely be patting yourself on the back for a job well done.

Thank you for visiting InfoTube.net homes for sale and lease FREE website.  We have been in the business of connection Sellers and Buyers for 20 Years.  Chances are that we can Help You, too!!

The $8000 Tax Credit for first time home buyer’s (people who have not owned a home in the last 3 years) expires on November 30, 2009.    With the expiration date drawing near, the Realtor and builder lobby groups are pushing lawmakers to extend the program for another 6 months.   If they are successful, it will cost taxpayers of nearly $15 BILLION.  

“Yea” or “Nay”???    Before we cast our vote, we decided to find out whether the tax incentive successful or not?  Specifically, did it persuade people to jump into the market?   Would it be a good investment for taxpayers going forward?

According to a poll conducted by Zillow, the tax credit was persuasive.

• 18 percent of home buyers said the tax credit was the main reason they pushed to buy a home before November 30, 2010.
• Based on the number of first time buyer’s in the marketplace, a 6 month extension could persuade another 335,000 (18 percent) buyers to buy a home of their own.
• If the first time buyer credit is extended, home sales would likely increase 5 percent.  Without it, sales would be down as much as 2 percent.
• Only 31 percent of first time buyers said the credit had no influence on their decision to purchase. 
• 69 percent of buyers said the tax credit was important in motivating them to buy a home this year.

Thank you for visiting InfoTube.net homes for sale and rent website.  If you have an opinion about extending or expanding the tax credit for homebuyer’s we would love to hear from you.  Click the Comment link below.   Your privacy is completely protected.

  

In August, InfoTube warned its readers about the New Wave of Foreclosures that would be pounding the market, further driving up inventory and eroding prices.  Today, we learn that the Wall Street Journal agree’s with our accessment of the future market conditions for real estate.

Excerpt from the Wall Street Journal: 

“The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market . . . Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due.

As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages.

Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier.”

What this means for Home Seller’s:  Time is not your friend.  The shadow of inventory of distressed property will continue to place downward pressure on home prices.  Based upon our years of experience, we predict that home prices will fall an average of 7 percent in 2010.  

If you need to sell your home, DO NOT chase the market down.  Price your property aggressively, then market the home to as wide an audience as possible.  To learn about the best way to reach the mass buying market, CLICK HERE. 

Thank you for visiting InfoTube.net.  We have been connecting buyers with sellers since 1989.  We can help you, too.

Bank of America, along with other lenders, report that a huge wave of new foreclosures will flood the market, once again.  The second wave in foreclosures is due to the slowing of the loan modification program and the new release of properties that the banks have been holding.

Currently, 1.5 million homes are in foreclosure.  More Worrisome…an additional 3.5 - 4 Million home loans are “Seriously” delinquent or are in default.   Many of these loans are newer, high quality loans that have fallen into trouble due to job losses.  Job losses mean no income, so modifying or saving the loan is not an option for these homeowners.

Buyer Alert:  The $8000 Tax Credit for Buying a Home Expires in Only 90 Days.  If your loan does not close on or before November 30, 2009, you lose $8000 Grand.  Period.   With loans currently taking 90 or more days to close, you must buy a home now, in order to qualify.

Thank you for visiting InfoTube.net.  We have been in the business of helping buyers and sellers for 20 years.  We can help you, too.

Record low interest rates, combined with deeply discounted home prices, have bottom fishers swimming frantically, in search of the perfect deal on the perfect home.  But, before you strike, beware.  Read our 5 Tips to Avoid Getting Hooked in a bad way.

1. 1.  Think Long Term:  This is a market for smart bottom fishers, not flippers.  In this market, our advice is that you should plan to buy a home to live in, then hold it for 3-5 years, at the minimum.  Our reasoning, first, prices have not fully stabilized at these levels.  Secondly, there is no indication that prices will rise any time soon.  Last of all, we are still facing a rise in foreclosures in 2010, which will keep downward pressure on the market. 
2. It’s All About the Local Market:  We have all heard the golden rule of successful real estate investing…Location, Location, Location.  In other words, if you have a choice between a bigger home in an ‘iffy’ area, or a smaller home in a better one, always pick the the Good Location.  Remember, when comparing locations, real estate markets are entirely a Local matter.  There are big differences within neighborhoods, zipcodes, school systems and suburban towns.  Focus on the hottest area’s and the ones that are conveniently located near major employment centers.  In rough sea’s, these area’s will always rebound the fastest and appreciate the most. 
3. Be Wary of Foreclosures:  While some foreclosures may be a great buy, many of these properties are “cheap” for good reasons.  Many of the homes weren’t great to begin with and most have been terribly neglected.   Carefully look for mold, water penetration, structural problems, missing appliances, soiled carpets and flooring underlayments, broken windows and glass, strange odors and any evidence of illegal drug trade.  Also, never get emotionally attached to a foreclosure home.  Banks are notoriously hard to deal with and they can take forever to respond to offers.  Some buyer’s report a wait of several months before the bank approved an offer, or not.
4. Get Pre-Qualified for a Loan:  Submit your letter of loan approval with any offer you make on a home.  Banks always require a letter of pre-qualification before considering a bid, as will any serious seller.  With proof of funds in hand, you will be taken much more seriously by all seller’s, and you will in the end, get a much better deal on the house.   Getting Pre-Approved for financing is no lose proposition.
5. Don’t Take Chances.  Buyer’s are in the drivers seat and a lot of great values are available, but please don’t overspend.  The job market and general ecomony are uncertain.  Make sure you can afford the property, even if you find yourself in a bad or unexpected situation.  Even the perfect property can turn into a nightmare, if you can’t reasonably afford it. 

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Low Appraisals and Appraisal problems are causing a lot of headaches for sellers, buyers and agents.  For a look at one customer’s problem with an appraisal and some practical solutions to solve the matter, CLICK HERE.

Thank you for visiting InfoTube.net.  We invite you to place a Free Property Listing or Search for some great deals on our site.  We have listings seen no where else and we have NO dead links or come on ad’s.

If you are selling a home that qualifies for FHA financing, you are required to complete a Transfer Disclosure Statement (TDS), before the buyer’s loan can close.  With closings taking up to 90 days to happen, it is imperitive that you don’t hold up your sale.   See the criteria below to determine if you need to complete this form.

1. If the home qualifies for FHA financing, and you occupy the home, you MUST complete this form in order to sell your property.
2. If you are advertising your home as a “short sell” and live in the home, you MUST complete this form in order to sell your property.
3. For those homes listed by an agent or broker, the agent only has to request the form from the seller 3 times and they are off the hook.
4. This form is not required for non-owner occupied housing (ie: foreclosures and bank owned).

With the first time buyer tax credit expiring in a couple of months, you don’t want to lose a sale because you have not completed this simple form.  Make sure you complete it and provide it to all buyer’s.

Thank you for visiting InfoTube.net.  We are here to help you buy and sell real estate.  Post a Free Ad on our website or Search our database, in complete privacy, for some great deals on houses.  Home sales are definitely picking up, don’t let the end of the selling season pass you by.   Have a great weekend and happy selling!!

A recent news article by Reuters states that “The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011.”  

Meaning? Half of us will be upside down, underwater, or whatever you want to call it over the next 2 years?  Pretty scary.  How do they know that?   One indicator they use may be the Shadow Inventory of Homes, which will eventually enter the market place over the next 3 years. 

So, what is a Shadow Inventory of Homes and How Does it Affect Future Home Values?  Technically, a property is not in foreclosure until the lenders files against a deliquent loan.   Lenders are purposefully not filing to foreclose, in order to control the present inventory by keeping homes off the market.  This creates a Shadow Inventory of Homes in Default.  Why do they do this?  Simple economics, really.   Less supply creates more demand (ie: higher prices) for the property they already have for sale.

Since, we know lenders are holding back the number of homes that should be in foreclosure, how many “shadow” distressed properties will come into the market in the future?  Truefully, we can’t know the exact number.  That is the reason it is referred to as a Shadow Inventory.  We can all see that the problem is lurking out there, but we can’t identify the exact numbers or the amount of future damage because “only the shadow knows…”.

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InfoTube has been blogging that Something is Wrong with real estate appraisals for quite some time now.   A new rule, called “Home Valuation Code of Conduct”, which went into effect on May 1st, has derailed sales and wrecked havoc on homeowners and buyers, with the worst possible timing.

The intent of the new rule for loan funding was to eliminate inflated appraisals.  Lawmakers found that lenders, such as Washington Mutual, pressured appraisers to inflate values in order to make more money on higher priced loans.  Although accurate appraisals are necessary to prevent fraud, the policy has had unintended, devastating effects on the entire real estate industry.

Take the case of the Mann family from San Jose, CA.  David and Penny Mann decided to sell their downtown Victorian home in order to move to a retirement community closer to their children and grandchildren.  They knew the market was tough, but they priced the home to sell and they were rewarded with back to back offers.   They accepted an offer for $560,000 from an excited young couple, buying their first home.

The Mann’s home appraised for full value, but it was deemed to be invalid, because it was done before the new rule took effect.  The second appraiser,  sent by an appraisal management company, came in $100,000 below the contract price, resulting in the buyer being turned down for their loan.  After the initial tears and panic, both parties did some frantic research.  They discovered that the appraiser didn’t live in San Jose and had never worked there.  Both buyer and seller decided to take action versus lying down and rolling over.

The buyer’s, a lawyer and student, toured at least 40 homes before buying the Mann’s house, and had lived in San Jose their entire lives.  They knew that the 100 year old home was perfect for them and they insisted that the management company send an appraiser, from the 408 area code to value the property.  The 33 year old lawyer said, “I am an educated person.” …”I’ve lived in the Bay Area my whole life”.  “I had no question it was worth $560,000, plus.  Neither did my agent or the mortgage broker or the first appraiser.  “Nor, as it turned out, did a third appraiser”,… who valued the property at the full sales price.

After all the drama, buyer and seller recently celebrated their victory at the Mann house.  The first time buyer’s brought the wine.  The Mann’s provided fresh peaches from the tree in the backyard.   Finally, a happy ending.

Unfortunately, not all victims of the new appraisal law are as fortunate as these couples.  75 percent of Industry professionals said they have had at least one low appraisal problem since May 1st, with the average loss being around $13,000.  In addition, 90 percent of real estate professionals site that at least one transaction had fallen apart because of the new law.

Something is definitely wrong, but you can take action:

To read more about what you can do if you are the victim of a low ball appraisal, Click Here.

To sign a petition to repeal the law, Click Here.  Gary Miller, Rep from California is co-sponsoring legislation.

Thank you for visiting InfoTube.net homes for sale and lease website. If you have experienced a financial loss due to the new law, please leave a comment in the space below. Your identity is completely confidential.

Homeowners can always place a Free Property Listing on InfoTube.net. Thousands of home buyers search our site for their dream home.

A frequent question we receive about correctly pricing a home is “Should we use Comparable Listing Prices or Comparable Sales Data to correctly price our home?”

The answer is overwhelming, Comparable Sales Data.

Looking at the prices of listed property is a big mistake, when determining the correct asking price for a home.  Take a moment and think about it.  If the neighbors list price was motivating, the property would be Sold, not Still for Sale. 

Always use accurate a Comparable Market Analysis (CMA) to correctly price your home.   A CMA features only properties that have sold for all cash or a funded loan.  This is important because many properities aren’t appraising or closing for anything near their “under contract” price.   In our declining market, a home that is worth $250,000 today, may only be worth $220,000, 60 days later when it closes.   Appraisers are aware of this fact and generally appraise very conservatively these days.

Click here To Read more about Appraisal Problems and What you Can do About it.

To obtain accurate Sales data about competing properties in your neighborhood, visit your local county tax assessor website.  Or, research MLS data which can be viewed at sites like zillow.com.

Thank you for visiting InfoTube.net.  We are here to help you sell your home.  Feel free to place a free property listing on our site or search for a great value on your dream home.