Archive for the ‘Real Estate’ Category
How to Handle a Low Appraisal
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.
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Trends in Housing Have Changed, Permanently
It seems everyone these days is looking for a bottom in the housing market, or a sign of normalcy, as we’ve known it. The truth may be that housing will never return to what normal has been in the past. The reason isn’t the just the economy or tighter lending standards, it’s may be simple demographics.
Please consider why trends in housing may have changed, Permanently.
- Baby Boomers: The baby boomers (born 1946-1964) are the largest and spendiest generation in American history, and their 40 year shopping spree is coming to an end.
- McMansion Glut: Boomers are buying fewer single family homes and they are getting rid of the suburban McMansions they purchased when their children lived at home. Evidence already shows that boomers favor 2 and 3 bedroom condo’s over 4 or 5 bedroom houses. The Boomer trend to a smaller house, combined with fears of gas prices and long commutes, mean that the big house in the burbs is not the ideal dream house or location that is has been in the past.
- Baby Boomers, Again: Boomers are reorganizing their finances. After the stock market crash, and with retirement approaching, fewer boomers will be purchasing vacation and second homes.
- Generation X: The generation born between 1965-1976 will be unlikely to bid up home prices. First, there are only 44 million X’ers compared to 76 million boomers. Secondly, they are not as wealthy as their parents, and they are deeper in debt, due in part to college loans.
- Migration Back to City Life: Due to our aging population, smaller family size and energy costs, people are returning to urban area’s that have not been overbuilt and offer quality of lifestyle.
- Permanent Changes: The days of buying a huge home on a big lot, and paying for it with a 2 hour commute, may be ending. This trend could mean that owners in McMansion communities, with little to no public transportation, will havetrouble finding buyers. Some people predict that the large, single family homes, located miles from urban centers, will be subdivided into inexpensive housing for low and moderate income families, as the car lovers who moved to the burbs return back to the convenience of city life.
One thing that is certain is that change happens. As environmental, economic, political and cultural forces change the way we live, our view of residential home investing will change, too.
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Home Insulating Paint Additive
Green News Alert: A new paint additive, Insuladd, developed by the government, cuts energy costs and reduces mold and mildew.
Insuladd insulating paint additive increases the “Mean Radiant Temperature” of any home or office and provides energy savings by reflecting and dissipating heat. Reports show an average decrease in utility bills of 20 percent (and, as high as 40 percent for in some homes) after a home or building has been painted with the additive.
Product Features:
- Increase the R value by making paint insulating.
- It is safe and non-toxic
- It can be applied to roofs, walls and ceilings. Interior or exterior.
- It works in hot or cold climates.
- Reduced heating and cooling costs, while increasing comfort.
- It prevents mold and mildew by blocking moisture and condensation.
- It can be added to any house paint.
- Can be used for all residential or commercial paint applications
Tips for Using the Product:
- Add the mixture to your paint, then stir throughly before applying.
- If you want a satin or gloss finish, add Insuladd to the primer coat and first coat. Apply a finish coat without the additive.
- If you want a high gloss coat on trim, don’t use the additive.
- Insuladd will leave a very slight texture to the walls that can be felt, but usually isn’t visable. It may hide cosmetic defects such as gouges, dents and surface imperfections if 2 coats are applied.
- Insuladd is ideal for light colored paints and you will notice no change in the color of your paint.
- If you are using a dark paint, Insuladd may lighten the color by up to one shade. If this is a problem, tint the paint one shade darker at purchase.
- Don’t pour the mixture into a one gallon paint can to avoid overflow. The additive will overfill a full gallon of paint. Pour the paint into a 5 gallon can, add additive and mix. Left over paint with additive can be stored in the original container for touch ups.
Paint, insulate, save money on energy bills, increase the comfort of your living space, prevent mold and mildew. What’s not to love.
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Tip for Faster Closings
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.
- If the home qualifies for FHA financing, and you occupy the home, you MUST complete this form in order to sell your property.
- 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.
- 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.
- 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.
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Check out HGTV’s Real Estate Intervention
I have been watching HGTV’s “Real Estate Intervention” for a few weeks now. As a real estate professional for the last 25 years, I give this program a Big 2 Thumbs up!! If you are buying or selling real estate, this program is a must see. Check it out on Thursday nights at 10:30E/9:30C on HGTV.
The HGTV Synoposis of the Show is: In this current real estate market, pricing is everything. And the best way to really find out how much your house is worth is to check out the competition. Real Estate Intervention takes motivated sellers on a tour of other listings in the same area and same price range. They’ll get to see firsthand who their competition is and whether they’ve priced their house right. Does the competition have better closets? Granite counters? A bigger backyard? Which home is the best value for the dollar? We’ll help them determine the best way to get top dollar — and in the end we’ll see which home sells first!
Bonus: Do you want to be on TV??? If you are confused about how to price or market your home and want objective advise, can contact HGTV and be on the show. Click this link to contact HGTV. and tell them InfoTube.net sent you.
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What Location Really Means to Homebuyers
We’ve all heard the sage advise “Location, Location, Location” when it comes to successfully selecting a good piece of property. But, what is truly important to buyers as they search for their ideal Location?
Seller’s, the answer may surprise you! It isn’t being near fancy restaurants, parks, churches or friends and family.
The Top 5 Things Buyers Look for in a Great Location are:
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#1 - Being Close to Work. By far, the most popular choice among homebuyers when selecting a home to buy.
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#2 – Splitting the Distance to Work between Spouses. Runner up for most important factor in buying a home– an ideal location must be about half way between your job and mine.
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#3 – Good Schools. No Surprise Here, other than we thought it would be #1. It’s Not. Could it be that a lot of buyer’s don’t have kids?
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#4 - Entertainment. Convenience and having fun things to do nearby the home is still important to buyers.
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#5 – Friends and Family. It made the list, but certainly isn’t a major factor for buyer’s looking for a good location.
(In case you’re wondering, Safety wasn’t apart of the location poll, because staying alive and robbery free is important to all of us. It is assumed that if you don’t feel safe, the commute time really doesn’t matter to you.)
Why does this information matter to home sellers??? This insight gets to the heart of what people will sacrifice for and what they will not. It seems that the true hunt for location is not based on prestige or having nearby boutiques, its one that allows for a balance between life and work.
Home Seller’s can profit from this knowledge by knowing their town, and by asking the buyers where they work and how they live. Smart seller’s learn where nearby large employment area’s are. They know the easiest, fastest or least traveled routes to major job centers and area’s of interest. They know about the neighborhood school district and the drive time to school, if the buyer has children. And, most importantly, they convey this information to the buyer, in the order of importance.
The Bottom Line is: If you find a home that is in a good neighborhood and close to your job, you will usually end up finding all the other things that are important to you, too. Now, show and sell.
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Today’s Article of Interest for Real Estate Lovers: 3 Reasons that Interest Rates will Stay Low.
What is the Shadow Inventory of Homes?
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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Nominee’s for Worst Contractor of 2009
We are starting a Darwin-like award for the building and contracting industry. Here are the nominee’s for Worst Contractor of 2009, so far. If you have an entry, please email your picture to the address shown below. Believe me, we need all the chuckles we can get!!
Entry #1:
Look honey, the two car garage you’ve always wanted.
No, we’re not kidding and someone even hung drapes. Ugh, I’m getting seasick just looking at it.
Can anyone say surveillance contractor for the government? Hey, we’ve spotted a spider web in zone 5.
Do you want a printed receipt? Click Yes or No.
Unless you can top this, we may have the Winner of the Bad Contractor Award for 2009. But, we are still accepting entries until December 31st.
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June 2009 New Home Sales Info and Charts.
Click Here to see the latest news on new home sales. The easy to read charts, with comments, give instant insight to the housing market.
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Protect Your Vacant Home and Yourself.
The housing recession/depression and the long number of days on the market, means that many people need to move to a new location, before they sell their home. If you are facing this situation, please be aware of some special problems and concerns regarding vacant property before you decide to move on and leave your home behind.
- Insurance. Insurance companies place a higher risk, therefore cost, to insure vacant property. As many owner’s have also discovered, vacant homes are targets for thiefs, vagrants and vandals. In addition, vacant properties are more likely to suffer damage from fire and water. Add in the higher liability of “No one lives there…let’s play” and it is no wonder that the cost to insure a vacant home is substantially more expensive. Talk to your insurance agent, before you move out, to determine the best protection for the money.
- Protect Your Property. It’s a good idea to install a monitered security system in a vacant property. If the service moniters fire, smoke and theft, it can lower your insurance premiums. Also, don’t forget to install new batteries in all smoke detectors. You should also have a friend or neighbor check the property on a regular basis.
- Create the Illusion of Occupancy. Ask a neighbor to park their car in your driveway. Stop mail and newspaper service, or make sure someone collects it. Install timers on lights. Leave some window treatments and furniture in the home. Keep the lawn, landscape and home exterior maintained at all times.
- Rent it Out. Renting the home will insure it is occupied and the rent will offset the costs of carrying the property. The insurance will need to change to a rental policy, but rental insurance is much cheaper than the premium for vacant homes.
- Let a Friend Live in the Home. If you don’t want to tie the house up by renting it, consider letting a trusted friend or family member live in the home until it sells. If you don’t know anyone, hire a housesitter. Either way, the home remains occupied and vacancy problems are averted.
- Don’t Sneak. If your home is vacant for longer than your insurance policy allows, you could save a ton of money by sneaking. But, don’t. First, insurance fraud is a serious matter. Secondly, if your vacant home is damaged or totaled, the insurer can and will challenge your claim. Don’t commit fraud. The little bit of money you may save is just not worth it.
Thank you for visiting InfoTube.net, a Free Homes for Sale and Rent website. The market is certainly showing some positive signs. We have better than expected sales across the entire country, price declines have lessened, rates are low and banks are lending. If you need to buy or sell, InfoTube.net is the place to be.
Home Appraisals. Something is Wrong.
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.
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10 Signs of a Bottom in Housing
For those of us searching for signs of a bottom in the housing market, the writing is now on the wall. The charts are bottoming out and leveling off.
10 Noteworthy observations and signs include:
- The rate of REO’s (real estate owned by the bank) coming onto the marketplace has slowed across the country.
- In May, sales prices for existing homes rose 3 percent from April levels.
- The number of Sold Homes surged in California, Nevada, Arizona and other hard hit area’s of the nation.
- Even in Las Vegas, the epicenter of the crash, sales prices are firming and seller’s are receiving near full asking price, albeit at a 50 percent discount to pre-crash levels.
- Inventory levels of existing and new homes has fallen in recent months.
- The doomsayers were wrong about runaway inflation and rising rates. 30 year fixed interest rates remain at a very attractive 5.5 percent and banks are lending money.
- Stocks of pubically traded home building companies have moved off their bottoms and are trading within a sustainable uptrend range.
- The number of housing starts increased for the first time in months. Since financing for speculation homes is hard, if not impossible to obtain, we assume these homes are already sold before construction begins, signaling demand.
- Large home builders are starting to acquire select tracts of land for future development.
- The rate of borrowers receiving notice of foreclosure has seen a meaningful decline of late.
Finally, we have a glimpse of light at the end of a long tunnel. While the market will surely continue to experience difficulties, news indicates that the worst may well be behind us.
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Should You Use List Prices or Sales Data when Pricing Your 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.
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Bad Strategy for Home Sales
Question: What is the worst home selling strategy ever???
Answer: ”Let’s test the market”. “Let’s throw it up for sale at a high, unrealistic price and just see what happens…”
Testing the market…whatever that really means is the worst idea, ever. Buyer’s don’t live in a fantasy world. And, if they did, their home buying fantasy is finding a mansion for $100.
“Testing the market” by overpricing a property means that the listing loses its ”honeymoon” period. As a rule, properties receive more interest and more showings in the first 30 days, than they will ever see again. Why? Buyer’s who haven’t found the right home, rush to see new listings as soon as they appear on the market. And, new buyer’s coming into the market always look at new listings first.
If you overprice your home during the honeymoon, chances are high that it will sit on the market for a long time, eventually becoming a “stale” listing. It is possible to stir up more interest later by substantially dropping the price, but seller’s can never again recreate the attention the property would have received, had it been priced right when it made its debut.
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Pricing Your Home. What you paid doesn’t matter.
Big Mistake. A big mistake that home seller’s make is that they often set their asking price, based on what they paid for the property. For example, I hear frustrated, unsuccessful sellers justify overpricing their homes by rationalizing that ”We are asking $265,000 because we paid $250,000 and want to break even.”
The truth is, what you paid for your home doesn’t matter to anyone except you. While it is painful to admit a financial loss, don’t dig yourself in even deeper by thinking that someone else will pay for your mistake. They won’t. And, their lender and appraiser won’t, either
Real estate is just like the stock market. The Buyer determines the price they will pay, not the seller. For example, if you bought Citibank at $120 per share and its now trading at $3.00, then $3.00 is what the asset is worth. The fact you paid $120 a share is irrelevant to buyers in the marketplace. The situation is exactly the same for real estate.
If you want or need to sell a piece of real estate, forget about what you paid for the asset. The only thing that determines today’s value is what a buyer would be willing to pay today. To determine the realistic, current value of your home, research what other homes like yours have actually SOLD for by searching on your local, county property tax database or websites like Realtor.com or Zillow.com.
Thank you for visiting InfoTube.net. House are selling, but only the homes in the best location, condition and price. The summer selling season is rapidly passing by and its time to get serious. If not, you may find that home values are even lower next year. To reach 10 million home buyer’s each month, call us for an MLS and search engine listing for your property. You won’t find a better way to let the world know your home is for sale and time is passing you by.