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| 0c8a0c21-88d5-45bb-9ea5-adfd56688604 | | Pending Home Sales Stabilize, Remain Above Year-Ago Levels | Pending home sales have leveled from a market swing driven by response to the home buyer tax credit, according to the National Association of Realtors®. The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in December, increased 1.0 percent to 96.6 from 95.6 in November, and remains 10.9 percent above December 2008 when it was 87.1. In November, the monthly index had fallen by 16.4 percent from surging activity in preceding months. Lawrence Yun, NAR chief economist, said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.” | NAR | | | 50777eee-e866-445a-8f04-5f61b237e547 | | How To Sell In A Buyer's Market | (CBS) These are trying times -- or worse -- for most people trying to sell their homes.
The market is titled decidedly toward buyers -- prices are down 20 percent or more in many areas from a year ago -- and there's no end to the freefall in sight.
So, experts agree, this is primetime for buyers.
And, says financial journalist Vera Gibbons, there's plenty they can do to assure they get bang for their buck even beyond what current market conditions indicate they should -- perhaps as much as 25-to-35 percent off the asking price!
She doled out plenty of pointers on The Early Show Monday:
While some sellers are more willing to work with buyers then they have been previously, some are still kidding themselves, hoping to get top dollar for homes that aren't in pristine condition. But many are now adjusting to the new reality that it's a tough market out there.
Buyers are getting pickier and pickier: They know they're in the driver's seat and, if a seller says 'No, thanks,' they just move on to the next property, with so many houses available.
Five things you should know about when negotiating to buy a home:
Size up the seller
Buyers need to find out as much as possible about the seller, starting with the first visit. Are they in a hurry to sell? Have they already bought another home? Are they relocating? If so, they're going to be more likely to accept a lower offer than someone who isn't, particularly if they don't have a big, outstanding mortgage on the property. If the seller owes the bank nearly the full value of the home, they are not going to be all that flexible!
Bottom line: the more informed you are as a buyer, the better you do your homework in advance, the better off you'll be in terms of negotiating, if it comes to that.
Timing is everything: Find out how long the home has been for sale
If it's been on the market a long time -- more then 90 days -- chances are, it's priced too aggressively and the seller has either rejected lowball offers (that's what comes in when an asking price is too high), or they simply haven't had any offers!
Research comparable homes
Buyers really need to know the market -- that's the key to all real estate purchases. The market is so localized that prices are going to vary from one town to next, even if the homes are similar. So, find what homes in the area are going for, what condition the house is in, how many square feet it is, when it was built, the school district is like, etc
A good Web site to go to for "comps" is Zillow.com. There are more than 80 million properties on there, with their estimated selling price. All you have to do is type in a location to find out what homes have sold for recently.
Also, just take a look around. If you see a lot of "For Sale" signs, prices are going to be competitive. The larger the inventory of unsold homes, the more leverage you have to make an offer that's 15-20 percent below the asking price.
Request other financial incentives; ask for other concessions
There are still quite a few sellers who are in denial, insisting they get their price. And if they're not willing to budge on price, try asking for other things -- buyers are requesting all sorts of things:
1) They're asking sellers to pay for closing costs.
2) They're asking for a longer escrow period or to split escrow costs.
3) If the house is in need of serious repairs, buyers are asking for cash toward fixing/renovating it.
4) Buyers are very picky, and in many cases, they are getting their way!
Never mind the listing price
All a list price is, is what the seller hopes to get. True value may not be reflected in the list price, which is why you have to do your own analysis before you make an offer. If you lowball and it's rejected, so be it. In this environment, savvy home buyers are making offers they know the seller will reject. And while they may reject an offer now, they may also accept or counter-offer down the line.
A savvy buyer is someone who's done his or her homework. They're armed with information about the area, about homes in the area, what they're going for in various neighborhoods, how much they can knock off the price for a lame kitchen, etc. They're seeing a lot of properties and have a feel for what they can, and can't, get away with in terms of offers.
When working with a real estate agent, keep in mind that, in many markets, they're desperate, and may try to sell you something you don't really want.
After seeing a home, don't contact the owner or broker to express interest. This is almost a game like dating -- when you wait a certain amount of time before calling after the first date! Agents or sellers will probably call you! Brokers are acting as desperate as sellers are. As a buyer, sit back and wait -- they'll find you, and they will pressure you. Time is on the buyer's side. Don't act too interested
All in all, a savvy buyer does his or her homework. They're armed with information about the area, about homes in the area, what they're going for in various neighborhoods, how much they can knock off the price for a lame kitchen, etc. They see a lot of properties and have a feel for what they can, and can't, get away with in terms of offers.
| CBS News | http://www.cbsnews.com/stories/2008/07/24/eveningnews/main4291776.shtml | | cf9f5850-6875-4a88-8676-cfab131099c2 | | The trick to getting a mortgage fixed | NEW YORK (CNNMoney.com) -- More than 3,000 times daily, struggling homeowners call the foreclosure Help Hotline for advice on how to save their homes. And so begins the complicated and time-consuming foreclosure prevention process. Working together are mortgage servicers - the companies that manage the loans - and the borrowers, with foreclosure prevention counselors often acting as go-betweens. "The common objective is to fix the loan," said Alan Goldberg, vice president with the home owner assistance division of Genworth Financial, a mortgage insurer that has collaborated with servicers in completing more than 2,800 workouts in the first quarter of 2008. But what's best for a borrower isn't always best for the lenders, who weigh the cost of every workout against the cost of foreclosure. Whether or not a homeowner gets help boils down to the numbers. If keeping an at-risk borrower in their home is going to cost the lender more than a foreclosure will, that homeowner is usually out of luck. The good news is that foreclosures are expensive - at least $50,000 according to the Center for Responsible Lending. A frank discussion The first step in the workout process is to document the borrower's financial situation. Servicers request details about a borrower's income, as well as what the family spends on food, clothing, car payments, credit card debt, and student loans, according to Cleveland-based foreclosure prevention counselor Mark Seifert. Homeowners have to submit copies of pay stubs, bank statements, and utility bills to back up their claims. "Servicers are also asking for things like hardship letters stating what the emergency was that caused them to miss payments," Seifert said. To stay in their home, borrowers almost always have to cut back on other expenses. "We'll tell someone they have to get rid of that $600 SUV payment if they want a workout," said Wesley Justice, a vice president for loss management for AIG United Guaranty, a mortgage insurer. Counselors often suggest homeowners cancel extras like cell phones and cable television, and stop eating out. After a new, tighter budget is been established, the workout team comes up with a number: the dollar amount left after all reasonable expenses have been deducted from income, with about $200 set aside for emergencies. "[Borrowers] need to have the ability to pay all their expenses and have a little left over," said the director of loss mitigation for one servicer. (The servicers we contacted chose not to be quoted directly.) So if a homeowner has $3,000 in monthly income, $1,400 in household expenses and puts aside $200, that leaves $1,400 for a housing payment. The magic number That's the number the servicer uses to determine whether a borrower can get a workout and keep their home. Not everyone can afford to stay in their home, even with a change to the terms of their mortgage. Sometimes, whether it's because a borrower is just in too deep or because a household's income sees a steep drop due to a job loss, there just isn't any reasonable solution. "I could give someone a 0% interest rate and they still wouldn't be able to afford the loan," said Goldberg. Those borrowers are urged to sell or do a deed-in-lieu of foreclosure, in which the lender takes possession of the property. The counselor or servicer compares a borrower's monthly housing allowance with a range of available solutions, looking for the option that will cost the lender as little as possible. "You wouldn't just jump to giving away the farm," said the director of loss mitigation. "You give them [borrowers] what they need, no more." Ideally lenders want to just put borrowers on a repayment plan, which allows them to make up missed payments, without altering the terms of the loan or reducing the revenue that these loan generate for investors. These plans generally work best to get homeowners back on track after unexpected expenses, like medical bills, derail their finances. Repayment plans can also help people who are living beyond their means but could afford their home if they pare unnecessary expenses. A new loan Other workouts, for borrowers with bigger problems, involve restructuring the terms of the loan. These mortgage modifications require sacrifices by investors, since some the loan's value has to be written down. Investors accept this if the alternative, foreclosure, would be even more costly. One option is to extend the length of the loan, from say 30 years to 40 years, which would knock about $100 a month off the payment on a $200,000 mortgage. Other at-risk borrowers may be able to afford payments at the teaser interest rate on their adjustable rate mortgages (ARMs), but not at the higher, reset rates. A $200,000 loan at 6% might cost $1,200 a month, but if that rate resets to 8% the payments climb to $1,570. For them, a rate freeze keeping the payment at $1,200 may be the answer. "We do the five-year freezes," said the director of loss mitigation, "but most of out modifications are two-year freezes. If there's still a problem, we promise to do another two years after that." Some homeowners may need their principal reduced as well, say from $200,000 to $160,000, to make payments affordable. That's an expensive fix and offered only as a last resort. In these cases, some servicers are hoping to recover their principal by stipulating that they will be entitled to collect the difference between the old mortgage balance and the new, lower balance if home prices recover and the home is sold. "This is catching on quickly," said the director of loss mitigation. Another big factor in whether someone gets a workout is where they live. If the home is in an area where housing markets are in free-fall, like Las Vegas, servicers will try harder to keep borrowers in their home, since it would be very hard to sell the property. In better markets, however, a house will sell fairly quickly at a good price, the math may favor foreclosure. One thing is for sure: If a borrower is fortunate to get an offer for a workout, the servicers isn't going to negotiate beyond that, says the director of loss mitigation. By that point, workouts have already gone up the line for approvals from the mitigation specialists to department managers and directors to sign off on. | CNN Money | http://money.cnn.com/2008/06/05/real_estate/art_of_workout/index.htm?section=money_realestate | | 76f48e35-bdd3-4769-978e-d4cd1b0bc933 | | We redid our kitchen for $6,000 | How do you afford stainless steel and stone on an almond-bisque- and-laminate budget? For Augie and Emmeline Harrigan of Milford, Conn., the answer was to preserve those elements of the existing kitchen that were still in good shape, cut out labor costs by doing the work themselves, and shop sales and Craigslist. "To stay within the $6,000 we allotted for the project, gutting the whole kitchen was not an option," says Emmeline. By keeping the basic layout and painting the oak cabinets rather than replacing them, the couple saved big right off the bat. Augie took a carpentry course and spent many nights trying out his new skills. Emmeline trolled the Internet and roamed big-box stores in search of well-priced replacements for their tired appliances, disco-era vinyl flooring, and coordinating laminate countertops. Her first find was a one-year-old stainless-steel Bosch range on Craigslist for a third of its original price. The next biggie: granite countertops from Costco. "The truth is, you just have to know where to look," says Augie. "See those canisters by the sink? Only five bucks." What They Saved: $3,500 on cabinets and $2,200 on range and hood. The pro-style range by Bosch was on Craigslist for just $700, compared with $2,000 for a new one, and was still under warranty. A bigger score was the used 30-inch vent hood from Viking, which was just $100, versus $1,000 retail. The oak cabinets look like new after a few coats of oil-based paint in Soft Chamois by Benjamin Moore. What They Saved: $740 on counter and backsplash and $890 on faucet and dishwasher. Granite counters from Costco were a splurge at $3,600 (with installation), but a $200 rebate lessened the blow. Augie saved $450 on the cost of a new subway tile backsplash (just $136 for 20 square feet at Lowe's) by doing the installation himself, following a step- by-step video on thisoldhouse.com. The brushed-nickel faucet, found for $150--30 percent off its $220 retail price - is by Water Ridge. It complements a new Blanco sink and a stainless-steel LG dishwasher, which Emmeline bought with a Home Depot gift card she got by cashing in American Express Membership Rewards points. What They Saved: $1,045 on Dutch door The wooden Dutch door, which cost just $50 on Craigslist, got a makeover with red paint. By leaving the top portion open, Augie can work in his home office and still keep an eye on his kids in the kitchen. What They Saved: $775 on cart and bamboo floor The granite-topped cart was just $75 on Craigslist. And the sleek flooring beneath it - 375 square feet of ebonized bamboo - was leftover from a local job site. Emmeline paid $750, or half what it would cost to order the boards directly from the maker, Premium Green Color Studio. | CNN Money | http://money.cnn.com/galleries/2008/real_estate/0806/gallery.kitchen_remodel.toh/index.html?section=money_realestate | | 2d236fed-d3bb-4ac1-aa10-d1463e3a5558 | | Why it's not too late to refinance. Rates have crept up from recent lows, but even now, a refi can be a smart move. | Earlier this year, when mortgage rates dipped below 6% for the first time since 2005, homeowners rushed to refinance costlier loans. In fact, more than six out of 10 mortgage applications so far this year have been for refis. But lately mortgage rates have been on an uptick - the average 30-year fixed mortgage hit 6.2% by the end of February, up from 5.6% a month earlier. Have you missed your chance to nab a cheaper home loan? Not necessarily. Rates are still near historical lows, and besides, these days there are some compelling reasons to refinance beyond a lower rate. Here's how to tell if a refi makes sense for you. You have an ARM or a jumbo loan Refinancing could still be a good move if you have adjustable rate mortgage (ARM) that's due to adjust this year, as 2.2 million homeowners do. True, your first adjustment may not feel so bad - a 4.5% rate may jump to 6%. But if inflation is coming back, as many economists believe, next year's markup could be grim - maybe 7% or higher - and you'll face the possibility of another increase every year thereafter. With fixed rates at 6.2%, is saving a quarter point or so worth the anxiety? If you don't think so, refinance into a 30- year fixed-rate loan now. Another option, if you're likely to move in a few years: a five-year hybrid ARM. With recent rates around 5.6%, you'll likely save money - now and later. You may also benefit from a refi if you have a large loan. Jumbo mortgages, normally about a percentage point higher than smaller loans, are about to get cheaper thanks to a new law that will hold the rate of some jumbos (loans of $417,000 to $730,000, depending on where you live) near that of all other mortgages. Home prices are falling in your city If property values in your area are plummeting, you may find it tougher to refinance later on. You'll need at least 10% equity in your home (20% or more is better) to be approved for a refi in today's credit-crunchy environment. To calculate your equity, get an estimate of your home's current value at zillow.com or find out what comparable homes have been selling for from a local broker. Your equity is what you have left over when you subtract your loan balance from your home's price. You look good to lenders You'll need a fairly pristine credit record to land a competitive rate - a FICO score of at least 680 to qualify and a score of 740 or higher for the best deals, says Keith Gumbinger, president of mortgage tracker HSH Associates (get your score for $16 at myfico.com). You run a greater risk by waiting If you have a jumbo mortgage, you'll probably want to hold out until the summer, when banks will likely start rolling out lower-cost jumbo loans. But if you are postponing a refi in hopes of future rate cuts, keep in mind the lessons of the past month, says Doug Duncan, outgoing chief economist of the Mortgage Bankers Association: Fixed mortgage rates won't necessarily follow the Fed's lead. Bottom line: If you can get a good deal now, take it. | Money Magazine | http://money.cnn.com/2008/03/10/real_estate/risk_refinancin.moneymag/index.htm?section=money_realestate |
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