FHA to Announce Significant Changes to Loan Programs

In October, the Federal Housing Administration (FHA) announced that its capital reserve fund had fallen below the congressionally mandated level of 2%. Although FHA has two reserves, the capital reserves and a cash reserve, with combined assets of $30.4 billion Congress and the Administration have called for changes to strengthen FHA.

FHA will announce major changes to ensure its long-term financial soundness. FHA is trying to balance three fundamental objectives: 1) financial soundness — ensuring that its capital ratio returns above 2 percent, 2) fulfilling its mission of serving borrowers not adequately served by the private sector and 3) facilitating the recovery of the housing industry and the over-all economy.

NAR has crafted an issue brief outlining the changes to FHA. FHA will be transformed over the next few years. The changes outlined in the briefing document are the beginning of the process with additional changes expected during the tenure of FHA Commissioner Dave Stevens.

http://www.realtor.org/wps/wcm/connect/dd4ce500410d816592d4b208069f8e0c/government_affairs_fha_issue_brief_011510.pdf?MOD=AJPERES&CACHEID=

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Standardized Short Sale Process Will Benefit All Parties

by Bob Hunt

www.MyNvaHomes.com

www.RealtyTimes.com

Two years ago the National Association of Realtors® formed a task force to address the vexing issue of short sales. A multitude of members had complained of lengthy and often incomprehensible processes that – although they varied in detail from lender to lender – all seemed to share the characteristics of being inefficient and irrational. Upon completing its studies the task force issued recommendations that the short sale process be standardized among lenders, that common forms be used, and that fixed time frames be adopted for various phases of the short sale process.

Fast forward to November 30, 2009 when the Treasury Department announced the Home Affordable Foreclosure Alternatives (HAFA), a program that features – you guessed it – standardized short sale procedures, common forms, and fixed time frames. The program is directed to lenders and servicers participating in the Home Affordable Modification Program (HAMP). It applies to non Freddie Mac or Fannie Mae loans. It covers liens on a borrower’s principal residence up to an amount of $729,750 (higher if the property is 2 – 4 units).

HAFA is meant to help borrowers who either do not qualify for a HAMP loan modification or who have been unable to keep up their payments under such a plan. A major time-saving feature of the HAFA program is that the financial information already gathered in the loan modification application will be used to determine eligibility for the short sale program.

Prior to approving a borrower to participate in a HAFA short sale the servicer must determine the minimum acceptable net proceeds that the investor will accept. Each servicer must develop a written policy, consistent with investor guidelines, for making that determination. Then, once a borrower has been approved for the short sale program, the net requirement may not be increased for at least 120 days.

A borrower’s approval is expressed in a standardized Short Sale Agreement (SSA). The SSA must be good for at least 120 days. No foreclosure may take place while the agreement is in effect. The SSA requires that the property be listed and actively marketed with a “licensed real estate professional who is regularly doing business in the community where the property is located.”

Within three business days of an executed purchase agreement, the borrower is to submit a Request for Approval of Short Sale (RASS), which is also a standard form. Within ten days of receipt of a completed RASS, the servicer must indicate approval or disapproval. The approval cannot be contingent on a lowering of the real estate commission that had been agreed to. Also, the approval cannot require a closing in less than 45 days. Again, no foreclosure may take place during the period approved for closing.

One of the common hang-ups in short sales is the matter of junior liens. HAFA takes this into account, although perhaps not to a degree than junior lien holders might wish. The servicer may “authorize the settlement agent to allow up to an aggregate of $3,000 of the gross sale proceeds as payment(s) to subordinate mortgage/lien holder(s) in exchange for a lien release and full release of borrower liability.” Each lien holder may be paid up to 3% of their unpaid balance, but the aggregate of such payments may not exceed $3,000. They are paid up to 3% in order of their priority.

HAFA has financial incentives for all parties. The borrower receives a $1,500 relocation allowance, paid at closing. The servicer receives $1,000 for administrative costs. The investor will be paid one dollar for every three that had been paid to junior lien holders. If $3,000 had been paid to juniors, $1,000 would be paid to the investor.

The HAFA program will not apply to all loans, but it will cover a lot of them. Hopefully, it will bring a little more order and sanity to the process.

Published: January 26, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Washington Report:

Washington Report: FHA Tightening Standards

by Kenneth R. Harney

www.MyNvaHomes.com

www.RealtyTimes.com

FHA is tightening up its standards for home buyers - but the changes are not as tough as some analysts had feared - especially on downpayments.

FHA commissioner David Stevens outlined the agency’s new underwriting policies last week, including an increase in the “upfront” mortgage insurance premium charged all borrowers, and a decrease in the amount of financial inducements a home seller can provide a buyer.

The tightening of the rules come in the wake of findings by an independent auditor last Fall that FHA’s insurance fund capital reserves have fallen far below the congressionally-required minimums.

HUD Secretary Shaun Donovan promised in response that FHA would take steps early this year to begin building up its reserves with higher premium revenues and ratchet up its credit standards for some borrowers.

Under the new plan, which will take effect shortly, FHA applicants will be charged a higher entry fee on insurance: An upfront premium of two and a quarter percent (2.25%) of the loan amount, instead of the current one and three quarters (1.75%)percent premium.

On a $200,000 home purchase with a $193,000 loan amount, the new premium will add about $965 to an FHA borrower’s costs.

There will be no immediate increase to FHA’s current annual insurance premiums of zero point fifty five percent (0.55). But Stevens said the agency plans to ask Congress for a higher limit on annual premiums, which get tacked onto borrowers’ monthly mortgage bills.

Once FHA gets Congress’s okay, Stevens said he expects to boost the annual premiums and reduce the upfront premiums. That, in turn, will lower the cash borrowers need to bring to the table, and stretch out the higher premium charges over multiple years.

Stevens also announced that applicants with FICO credit scores below 580 will now have to make downpayments of at least 10 percent, up from three and a half percent currently.

That change shouldn’t have much of an impact, however, since most of the largest lenders offering FHA mortgages already require a minimum credit score of 620 for all applicants.

Now for the good news on downpayments: Though mortgage industry analysts had expected FHA to raise its minimum cash down requirement to five percent, Stevens said 3.5 percent will remain the standard.

On the other hand, Stevens also announced that the agency is lowering its “seller concessions” ceiling from six percent to three percent, effective immediately. Concessions include contributions at settlement from the seller to the buyer to help cover loan fees and closing costs. Critics say the concessions often get lumped onto the house price — thereby raising FHA’s loss exposure.

Published: January 25, 2010

by Kenneth R. Harney

www.MyNvaHomes.com

www.RealtyTimes.com

FHA is tightening up its standards for home buyers - but the changes are not as tough as some analysts had feared - especially on downpayments.

FHA commissioner David Stevens outlined the agency’s new underwriting policies last week, including an increase in the “upfront” mortgage insurance premium charged all borrowers, and a decrease in the amount of financial inducements a home seller can provide a buyer.

The tightening of the rules come in the wake of findings by an independent auditor last Fall that FHA’s insurance fund capital reserves have fallen far below the congressionally-required minimums.

HUD Secretary Shaun Donovan promised in response that FHA would take steps early this year to begin building up its reserves with higher premium revenues and ratchet up its credit standards for some borrowers.

Under the new plan, which will take effect shortly, FHA applicants will be charged a higher entry fee on insurance: An upfront premium of two and a quarter percent (2.25%) of the loan amount, instead of the current one and three quarters (1.75%)percent premium.

On a $200,000 home purchase with a $193,000 loan amount, the new premium will add about $965 to an FHA borrower’s costs.

There will be no immediate increase to FHA’s current annual insurance premiums of zero point fifty five percent (0.55). But Stevens said the agency plans to ask Congress for a higher limit on annual premiums, which get tacked onto borrowers’ monthly mortgage bills.

Once FHA gets Congress’s okay, Stevens said he expects to boost the annual premiums and reduce the upfront premiums. That, in turn, will lower the cash borrowers need to bring to the table, and stretch out the higher premium charges over multiple years.

Stevens also announced that applicants with FICO credit scores below 580 will now have to make downpayments of at least 10 percent, up from three and a half percent currently.

That change shouldn’t have much of an impact, however, since most of the largest lenders offering FHA mortgages already require a minimum credit score of 620 for all applicants.

Now for the good news on downpayments: Though mortgage industry analysts had expected FHA to raise its minimum cash down requirement to five percent, Stevens said 3.5 percent will remain the standard.

On the other hand, Stevens also announced that the agency is lowering its “seller concessions” ceiling from six percent to three percent, effective immediately. Concessions include contributions at settlement from the seller to the buyer to help cover loan fees and closing costs. Critics say the concessions often get lumped onto the house price — thereby raising FHA’s loss exposure.

Published: January 25, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

How to Repair Your Home Without Damaging Your Wallet

by Phoebe Chongchua

www.MyNvaHomes.com

Some homeowners have a long laundry list of to-do repairs and, interestingly enough, many of those items don’t get addressed until (or if at all) it’s time to sell the house. In hot real estate markets, repairs are sometimes not done before the sale. Remember bidding wars over properties that needed work? Well, today sellers are looking for the advantage that makes their home stand out. Even though housing inventory declined toward the end of last year, it’s expected to rise as more foreclosures tumble into the marketplace this year.

While fixing up a home to sell can be costly, there are some ways to reduce the damage to your wallet. Cheryl Reed from Angie’s List spoke to me about important repairs that shouldn’t be overlooked. They are: changing your furnace air filters regularly, fixing leaky faucets/toilets, repairing caulking issues in the bathroom and defective electrical outlets/wiring.

“Our experts in the heating ventilation air conditioning industry tell us that 60 percent of all their service calls start because it’s a dirty filter issue. If you have a dirty filter, it affects the efficiency of your furnace,” says Reed. She says that it’s a simple and easy repair that improves the air quality and saves you money.

“You can save about $100 a year if you just change those filters when you should.” She recommends checking your air filter every time you get your energy bill. “If it’s dirty and you can tell, you can see it; just switch it out. You can buy a number of air filters ranging from moderately good to really expensive and high efficiency, in terms of cleaning the air. You have a number of different options, depending on your budget,” says Reed. She also says, depending on health conditions of those living in the home, changing filters more frequently might be necessary. The second repair is annoying and easy to spot. “If you’ve got a leaky faucet or running toilet, that’s going to cost you,” says Reed. “If you don’t get it fixed you’re going to be paying more and more. It can also lead to mold damage. It can lead to a loss of your cabinetry—the flooring in your cabinetry can be rotted away and that can affect your floor underneath and the walls. So you can have a big issue if it’s not fixed soon,” says Reed.

If there are problems with your home when you begin to show it, buyers will spot them. Reed says, “People who come to your house to check out whether they’re going to buy it or not are looking really closely and they’re listening really closely too.” With plenty of housing inventory on the market, buyers are likely to move on if they feel the house needs a lot of repairs.

“You have to put forth your best impression. These small relatively inexpensive fixes are really important,” says Reed.

Dirty tiles and damaged caulking can send a message to buyers that the house may be in need of even bigger repairs. “You’re first going to have an aesthetic issue and second that’s an indication that you’ve got a problem that could lead to mold and nobody wants mold in their house anywhere at all—it will grow if you don’t have proper seals in your bathroom,” says Reed.

“Those are things that you can see every day—sometimes we get so used to seeing them that we forget about them,” says Reed. However, buyers don’t.

Reed offers this advice, “Pretend you’re going to try to buy your own home; what do you see that you wouldn’t tolerate?” She says it’s worth it to take the steps to fix the problems. Buyers don’t want to fix those problems any more than sellers do. Check for defective outlets. Electrical problems are not only irritating but also can be very hazardous. “An electrical fire can destroy your home,” says Reed.

Who should do the job? Of course, saving money is always key. Reed says some of these repairs might be suitable for a handyman but she cautions homeowners to be sure that the level of the repair matches the expertise of the person you hire.

“You’re going to pay more in the end if you don’t check out the person you hire to help you. Make sure that person has a good reputation and if it’s required for him or her to be licensed in your area, you really should [use] a licensed person, even if it’s more expensive,” says Reed. Reed says, you may pay more but you’ll get the job done right the first time.

Published: January 22, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Defaulted Mortgages

by Kenneth R. Harney

www.RealtyTimes.com

www.MyNvaHomes.com

Smart investors continue to prove that when it comes to troubled commercial real estate, it makes a lot of sense to buy defaulted mortgages from the bank, rather than wait for the bank holding the notes to foreclose.

Once you own the nonperforming notes, then you become the lender, you’re in the driver’s seat, and you can foreclose and take over the property yourself — often on unbeatable terms.

A San Francisco-based private equity investment group showed how that’s done late last month, when it acquired ten prime, cash-flowing apartment buildings in or near San Francisco for just fifty cents on the dollar.

Tribeca Companies, a privately-held investment group, acquired nine buildings in sought-after neighborhoods like Pacific Heights and the Van Ness corridor, plus another building in Burlingame -from international banking firm UBS, which provided the original financing on the properties for Lembi Group.

Until recently, Lembi was San Francisco’s largest apartment owner with a 300 building portfolio and 8,000 units.

Tribeca took over $62 million worth of nonperforming mortgage notes from UBS for an all-cash payment of $31 million. Immediately after closing, Tribeca filed for foreclosure against Lembi - effectively giving it control of the ten buildings.

A spokesman for Tribeca told Realty Times last week that the deal illustrates the company’s “opportunistic” strategy of acquiring high-quality assets in prime locations by targeting defaulted commercial notes that lenders are prepared to sell at deep discounts to face value.

Lembi Group, which defaulted on $300 million worth of loans during 2008, handed over 50 buildings securing these loans to UBS, which has since been attempting to dispose of them in package deals.

Ironically, Lembi’s strategy during the past decade had been opportunistic as well: It acquired dozens of buildings, persuaded or paid tenants to leave, then renovated units to produce higher rental revenues.

The problem with Lembi’s approach was that its purchases were highly leveraged –sometimes with loan to value ratios of 95 percent. UBS was its major financing partner.

When Lembi ran into financial difficulty, it reportedly stopped making payments , triggering its default problems with UBS.

A spokesman for Tribeca told Realty Times that the ten buildings have a 95 percent occupancy rate, and “are in great condition.” Though market analysts assume Tribeca will hold the buildings as rental investments, the spokesman said the long-term strategy has not yet been made public.

Whatever that strategy turns out to be, though, this much is certain: Anytime you can get prime, cash-flowing real estate in a magnet city like San Francisco for fifty cents on the dollar - you’ve done exceptionally well.

Published: January 8, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Generating Wealth by Understanding the Complexities of Bank REOs
by Peter L. Mosca www.RealtyTimes.com

www.MyNvaHomes.com
[Note: To follow is an excerpt of a radio show interview conducted by Peter L. Mosca, host of Income Property Investment Talk dot com, with Scott Griffith, President ERA Griffith Realty and co-founder of Rescue LLC, a real estate consulting firm that helps banks stabilize and develop a plan for the disposition of REO properties. Griffith details the ‘dos and don’ts’ for success and talks about his experiences over the years developing his REO business. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/120909.]

 Mosca: Is right now an excellent opportunity to get into real estate?

Griffith: Yes, this is a time to be making an investment. Clearly the prices have reached a low point, not to say they won’t go lower but there certainly are many opportunities available at this time.

Mosca: Has anything changed since you were on the panel on Distressed Assets that I moderated at the NAR Conference in San Diego?

Griffith: What I’ve learned in the last month or so is that banks as sitting here in their last quarter of the year trying to evaluate whether they need to take write offs on their books with the REO properties, prior to the end of the year to change their balance sheets or if their going to sit on them. More and more banks wish to show some sense of stabilization or profitability and many are taking the position of keeping them on their books until after the first of the year. Even though we’re looking at three weeks left of the year, there are some opportunities that may still be right there for someone to grab if they are able to perform immediately, but there may also be a lot more activity after the first of the year as the banks say “OK” its time to finally get these off our books this coming year.

Mosca: Some people say we’re going to get bombarded by commercial REO coming to the market and then other people say that is not going to happen. What do you think?

Griffith: The economists are quite split on it but there’s a lot of indication that there’s going to be a lot of loan renewals coming due this coming year, a huge percentage actually, and that those are going to trade a lot of REO property. At the same time the FDIC recently said that owners could renew commercial loans without going through a reappraisal and then telling the people that they need to bring money to the renewal process.

Mosca: Scott let me just back track a minute and go to the beginning level with this particular market and ask you to identify or define what an REO is versus a foreclosure. What is the difference between the two?

Griffith: A property in foreclosure is at the early stages of the financial institution or whoever is foreclosing taking it back. That is the process of foreclosure. At the final part where the title has passed to the person foreclosing, it becomes real estate owned and frankly what we’ve found in financial institutions is that they’re looked at two totally different ways. Once they are on their books they are looking to try to dispose of them as quickly as possible and they feel rewarded for getting them off their books. While they are in the foreclosure process, they are trying to get back the money that they have already loaned out and they are not as interested maybe in negotiating the price. Once they’ve agreed on a price, they want it off their books as quickly as possible to demonstrate they’re doing everything they can to get it off their books. We’ve even found that because banks typically use separate staffs for the two, the people who are working on the short sale process, if they’ve accepted the number of prices below what their lien was for, those people’s jobs are in jeopardy. The person, who gets it in REO, as long as they can get it off the books, is a hero. So they end up being more stable in their jobs. It’s a fascinating world.

Mosca: Is that why the process is so slow?

Griffith: Clearly, an organized bank is handling a lot of REO property. They have a specific methodology that they want to follow and they want everybody to follow. If they tell you what they are and if you choose to try to short cut it or your buyer wants to do it a slightly different way, they will reject them outright. They are bankers first and they’re trying to get rid of property second. They have processes they want to follow. There’s a second aspect of their decision process that relates to the value they believe the property is worth because of appraisals or what they’re carrying on their books. Just because you feel you have a grasp on the market, doesn’t mean that they’re going to agree with your market price even when you believe you’re right.

Mosca: Is it a good idea for brokers and agents to talk to the lending industry and start doing BPOs as a way to increase not only your exposure but eventually lead to securing some property listings?

Griffith: Yes, I agree with that. I think that to be able to start to get some of the REO business the banks and the financial institutions are going to look for leaders in the real estate community that they feel can demonstrate knowledge. The best way to do that would be to get in there and demonstrate your knowledge in the first area by showing how you establish value. Now BPOs are not a very lucrative business for REALTORS but it will lead you to be able to develop one, a relationship with that organization hopefully, and then secondly, maybe be able to help allow you to demonstrate some of your professional expertise. When it comes time you’ll be on the top of the list to be discussed for the possible sale of those properties.

Mosca: If you continue to do well with one particular institution, would it then lead to doing them for others?

Griffith: It’s a logical segway to be able to say, “ Here’s my resume.” It’s like all businesses, its an ability to build a resume but you have to start somewhere and maybe the best place to start is demonstrating your knowledge through your ability to establish value through BPOs. The best way is to produce. Banks want to see regular reporting. They want to see the activity. Of course, they’d like to have results. Everyone wants results but being informative and keeping them informed is crucial to having you be front of mind and also demonstrating that your doing the work that you promised to do. They have systems for grading you and keeping track of exactly what you’re doing. Some will then take it to the next step and grade you as to your price, to the price that you listed and the timetable. There have been stories of people losing business because of one or two bad properties that just took forever. The professional who has a well-refined system in place is going to do the best. This is all about having good systems and good reporting and good follow up. Without those you’re going to get one chance and it’s much like restaurant business. There are many opportunities for other people. One bad meal can put you out of business. You have to be very careful.

Mosca: Systems, reporting and follow up. Is there anything on the market right now or are these internal systems that you develop on your own?

Griffith: There are industry providers out there but most experienced professionals have systems set up. The whole process that makes this work is communication. You need to talk to the people your working for and find out what they are looking for and how they want reporting. You have to refine your skills and the best way to refine your skills is from others and with others, and sharing. We all do better when we share information. For the professional looking for how to get into this market, there are a lot of opportunities for all aspects of the REO. Its not just the bank all of a sudden decides that they’re going to list the property. There’s managing the property, there’s stabilizing the property when the bank gets it back, there’s all sorts of other areas of opportunity, which open up as you get into this market. Bankers are truly bankers and they typically don’t have these. They have to hire all these services to get done. It gives the professional more areas to be able to meet face to face with the bank and represent them.

Mosca: So, ancillary work for banks and lending institutions is a way to increase business?

Griffith: Absolutely. The more services you can provide, whether you’re partnered with somebody or whether you’re going to do it yourself, the more marketable you’ll be for a new relationship with a bank or financial institution of this REO property because they have enough things to think about without having to think about all the minutia for every single property and every single property requires all sorts of management aspects.

Mosca: I’m guessing that if I’m an investor and I have those particular skills, this might be something that I can get into as well?

Griffith: Absolutely, it is the direction to go because for many in certain areas it’s a very challenging market. You’ve got to be looking at how many other options you can create. And again, don’t rule out the option of partnering. Somebody may be much more skilled at it but if you can agree that you’ll work together, why not create that coalition and work together.

Mosca: Scott a couple of times throughout the program I mentioned a company called Rescue LLC. I think at this particular time the way the conversation is flowing and what we’re talking about in terms of increasing or looking to increase your business or maybe setting up a side business, it might be a good idea for you to give us what I call a past, present, and future look about Rescue LLC. Why did you start it, where is it today, and what are you hoping to accomplish in the future with Rescue LLC?

Griffith: We are in Michigan and there was a recognition that the market was certainly going south fast with the economy. Me and a number of friends of mine who are leading developers and builders looked at the situation and realized we had a lot of information we could provide, and we could help out our friends who were bankers who were struggling with the amount of property they were going to get back. We thought that we ought to take advantage of the knowledge that we had and put together a consulting firm, which we could then offer them some services on helping to position their properties. The problem with an appraisal is that it gives you a flash of where the market was in comparison to other properties at a certain time point but it doesn’t say, “ How are you going to get out of this property?” It just says what the value could or should be. We felt that there needed to be some more sophistication to the process of determining the value and the exit strategy for the property and typically the people we knew who were bankers were great at their job but weren’t necessarily good at that part.

Mosca: Are you reaching out to other states or regions? Is this something you plan on taking nationwide?

Griffith: What we’re finding is that nothing anymore is just local. We are now talking to other brokers throughout the country who might want to also link up and learn some of the information that we’ve learned and share their information and give some unity to the name so that when people go looking they can look up Rescue LLC and find a name that’s familiar with them. They may wish to learn how we set up the management arm for our business because the banks were seeking that, helping them understand how we set up a program to stabilize properties. They may want to also just to talk to us about our experience so far in actually getting in the door with banks and offering our services to them.

Mosca: So, it’s not just about the property sometimes. Is it?

Griffith: Exactly. We’ve found that we’ve had to stretch ourselves. Luckily by having a partnership of builders and developers we have the ability to have those people already at our fingertips that think that way. They were thinking that way before I had to learn to think that way. One of our bank presentations we’ve made to the Michigan Bank Association, and key statement was don’t do nothing. Bad grammatics but the reality of it is that just sitting on it isn’t going to get it done and having no plan to get rid of it is not going to get it done. You need to have a plan and that’s where the professionals we’ve become and others go in and give them a plan, give them something, a plan to put their hat on.

Mosca: If an investor came up to you and said, “ Hey Scott, you know I’m thinking REO.” What would you say to that investor?

Griffith: The first thing you’re going to want to state to them right out front is they’re going to want to do homework. They’re going to have to be prepared to go do market research. I don’t care how they’re going to buy, whether they’re going to go to an auction, or whether they’re going to go into the local bank. They’re going to need to be ready to do homework and have a facility to do homework. That means they’re probably going to have to partner with some sort of professional who has access to real estate data and so forth so that they can make the investment that makes sense. Just because it’s REO doesn’t mean it’s going to be the right piece for you. You may want to change it or reposition it in the market and you may not be able to do that without knowing more about the financials of the market. Do homework and have resources available. It isn’t just a gift on a platter to you when you walk in.

Mosca: In other words you don’t have to assume what’s called inherent risk. You can actually do some due diligence ahead of time?

Griffith: The secret to any good investment is to take the risk out of it. The way to take the risk out of this one is to do the homework but you’re going to do it all yourself or you’re going to have to partner with someone who has the access to the information to reduce your risk.

Mosca: What do you say when hear the words ‘lowball offers?’

Griffith: Everybody has their definition and I’m sure we all know stories or heard a story about somebody who got this phenomenal deal but at the end of the day the banker is trying to realistically get rid of their property in a reasonable amount of time. They have an obligation to maximize the return for the corporation. It’s the corporate assets you’re playing with. To think that you can make a lowball offer and the bank will take it is totally a misnomer. In fact, many either won’t or can’t consider offers below a certain level that may have been established by an appraisal. We’ve been seeing banks actually ask for a second appraisal. So, you really need to get to as few conditions and as few contingencies as possible to make yours the best piece. Obviously at the end of the day, price is always trump. It’s about buying right but it doesn’t mean you have to buy at the lowest point.

Mosca: What is your golden nugget?

Griffith: The whole concept of the REO is a golden nugget for the investor. The investor needs to be in a position to be able to perform on it, and that may be to get you in a liquid position, to have the cash and be able to perform and be a credible buyer.

Published: January 7, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Mortgage Rates Start the New Year Slightly Lower Than They Ended the Old Year

www.RealtyTimes.com

www.MyNvaHomes.com

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.09 percent with an average 0.7 point for the week ending January 7, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 5.01 percent.

The 15-year FRM this week averaged 4.50 percent with an average 0.7 point, down from last week when it averaged 4.54 percent. A year ago at this time, the 15-year FRM averaged 4.62 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, unchanged from last week when it averaged 4.44 percent. A year ago, the 5-year ARM averaged 5.49 percent.

The 1-year Treasury-indexed ARM averaged 4.31 percent this week with an average 0.6 point, down from last week when it averaged 4.33 percent. At this time last year, the 1-year ARM averaged 4.95 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.) “Mortgage rates eased slightly this week after rising consecutively through December,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year.”

“As the economy strengthens further and the Federal Reserve (Fed) decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates. However, the federal funds futures market does not anticipate any Fed action until the second half of 2010.”

Published: January 8, 2010

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

December 11, 2009

Timing is everything…

I am often asked what is going to happen with interest rates and my typical response, “If I knew the answer to that question, I would own my own island in the Caribbean and I would no longer be in the Mortgage lending business.”

Typically that answer is not accurate because no one has a crystal ball as to what might happen in the economy and all the other things that affect mortgage rates.  Today, however, we do have some insight because of some actions that were taken by the Federal Government to reduce mortgage interest rates in the US.

Many people think that interest rates are tied to the rise and fall of the stock market or more often that rates are tied to the Federal Funds Rate which closely impacts the prime lending rate in this country.  This is not the case.  Interest rates are tied to the bond market which invests in mortgage back securities, and very simply, if the price of bonds goes up, the interest rates on mortgages will come down.  It is simply economics, the higher demand for bonds that invest into mortgage back securities, the lower the yield for return.

So why can we now predict something that we have been unable to predict before? 

Back when the stock market began its decline, many of the investors who pulled their money out of the stock market did not flood the bond market as they typically would and we did not see a decrease in mortgage interest rates.  The Federal Government was in the middle of trying to shore up the housing market and what they found was that all of the huge investors were taking money out of the stock market and investing into treasury bonds because they were not sure if mortgage back securities were a safe investment. 

The Federal Government made the decision to invest into mortgage back securities and did so in a big way.  This strategy worked, other investors begin to pull out of the treasury bonds and join the Federal government in buying bonds that invested into mortgage back securities.  As the demand increased, we began to see interest rates come down.  When all of this started, interest rates were around 6.5% for 30 year mortgages.  We have seen rates drop all the way down to 5% or less over the past year.  The Federal government now needs to restructure all of its debt it has accumulated over the past two years, so they have announced that they will stop investing into mortgage back securities by the end of March 2010.  This single activity will reduce the demand for bonds, thus lowering the price of bonds which will drive up the yield and alas we will begin to see interest rates go up.

This may be the last, best time to buy or refinance for many years to come.  Combine these low rates with the homebuyer incentive that ends in April and the fact that home prices seem to have stabilized and are poised to increase – we have the triple play in real estate. 

If you have an adjustable rate mortgage or a current interest rate of over 5.5% - you should immediately evaluate your opportunity to refinance. (For many, the current value of their home does not permit them to refinance – if your original 1^st trust was below $417,000, you still may be able to refinance despite the current value of your property). 

On the other hand, if you have been thinking about buying your first home or moving up – don’t wait for the typical summer buying market – do it now!  Take steps before interest rates go up; tax incentives disappear and before prices go any higher on real estate. 

 Doug EngerSenior Mortgage ConsultantWells Fargo Home MortgageM8604-021                                            12701 Fair Lakes CircleFairfax, VA  22033(703) 502-1357 Tel(301) 237-2400 Cell1-866-622-0792 Faxengerteam@wellsfargo.comwww.dougenger.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Everyone in life wants to believe that they can do things better than the next person. Whether true or not, I shared this belief and to some extent, still do. However, at some point, you must decide what you Want to be good at. This is why we hire people to help us. Tiger Woods has 4 coaches, lawyers and doctors’ hardly ever answer the phone or do clerical work, and I would be willing to bet that Bill Gates does not write code for Microsoft. The business of Real Estate is a perfect example of this notion.

Lead with revenue and hold back expenses is a key principle for my company at Keller Williams and is a key principle to maximize profits through unnecessary expenses. To leverage oneself and ‘hand over’ responsibilities and/or duties can be tough for a personality that demands excellence. There is a point of diminishing returns on real estate duties and I would like to share with you a perfect example.

Here is the photographer that I have been using for quite some time now.

www.duytranphotography.com/

http://www.flickr.com/photos/duytranhomephotos/show

(For those that are hyper click sensitive, I have included the direct link) I pride myself in my photo taking abilities. Although I might feel like I am doing my clients a great service by purchasing a nice camera, taking classes in photography and looking for that great angle to show the home. As you can probably tell, I can’t compete with this quality.

Whether it is hiring some extra help around the house to spend more quality time with the kids or having “Jiffy Lube” service your vehicle, there are specialists that can help you keep your focus on what you do best. A am a Realtor, a marketing specialist, a contract and negotiation expert among other things, but I will most certainly never buy a $8k camera and am not planning on making a career change. My responsibilities’ and duties to my business and my clients made me realize that I can only do so many things at an expert level. Pick a few things you are really good at in life and delegate the rest to people that are willing and able.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Here is an EXCELLENT article that I found from VAR. These are some of the principles that are in “The Millionaire Real Estate Agent” by Gary Keller and are found in various training sessions from Keller Williams. Click the link below to find out more about KW and the Acrobat link is the article regarding the title. Hope you enjoy. www.YouDriveTheSuccess.com/

https://share.acrobat.com/adc/document.do?docid=baa0e127-c8dd-4162-b4e6-d9a0fd20ec46

Thomas Merical–CEO Keller Williams Fairfax Gateway

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

BREAKING NEWS: President Obama Signs Bill Expanding Homebuyer Tax Credit
11/06/2009 By: Carrie Bay
  President Barack Obama inked his approval of the bill extending and expanding the homebuyer tax credit incentive Friday morning.

The housing tax break, which was initially set to expire at the end of this month, is now available to buyers who sign a contract by April 30, 2010, and close by June 30.

The credit amount is based on 10 percent of the home’s purchase price. The maximum available to first-time buyers is $8,000. Other buyers, who’ve lived in their current residence for at least five years but want to relocate to a new primary residence can receive a credit of up to $6,500 – the incentive for these so-called “step-up” buyers will begin on December 1 of this year.
The income limits for both first-timers and step-up buyers is $125,000 for individuals and $225,000 for couples – up significantly from the current first-time buyer thresholds of $75,000 per individual and $150,000 per couple.

The tax break is only available on primary residences priced at $800,000 or less. Vacation or investment properties are not eligible. Beneficiaries who sell the home or stop using it as their primary residence within three years would be required to repay the credit.

“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter,” President Obama said at a national address in the White House Rose Garden Friday. “We want to give even more families the chance to own their own home.”

The expansion of the homebuyer tax benefit received widespread support from lawmakers, despite concerns over what it might cost the government in lost taxes.

The measure passed unanimously in the Senate earlier this week and cleared the House with a vote of 403 to 12.

President Obama assured the American people this morning that the homebuyer tax credit measure, which was attached to a larger bill extending unemployment benefits, would not increase the national deficit.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

www.RealtyTimes.com

www.MyNvaHomes.com

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.09 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Regionally, existing-home sales in the Northeast increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price in the Northeast was $234,700, down 7.0 percent from a year ago.

Existing-home sales in the Midwest jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price in the Midwest was $147,600, which is 1.0 percent below September 2008.

In the South, existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price in the South was $153,500, down 7.6 percent from a year ago.

Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

For more information on your local market, visit Local Market Conditions.

Published: October 27, 2009

Use of this article without permission is a violation of federal copyright laws.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

www.RealtyTimes.com

www.MyNvaHomes.com

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.09 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Regionally, existing-home sales in the Northeast increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price in the Northeast was $234,700, down 7.0 percent from a year ago.

Existing-home sales in the Midwest jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price in the Midwest was $147,600, which is 1.0 percent below September 2008.

In the South, existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price in the South was $153,500, down 7.6 percent from a year ago.

Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

For more information on your local market, visit Local Market Conditions.

Published: October 27, 2009

Use of this article without permission is a violation of federal copyright laws.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Investment Buying Tips

by Kenneth R. Harney

www.MyNvaHomes.com

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom “are just plain clueless, to put it bluntly,” says Robert Cain, a long-time rental market and real estate management specialist based near Tucson, Arizona.

“They see the price and they way, wow! I can buy that house and turn it into a rental,” says Cain, who lectures around the country and online about investing intelligently.

“But they don’t understand the local market, they don’t understand landlording, and don’t even necessarily visit the property,” Cain said in an interview last week with Realty Times.

For example, a property manager in Tennessee called Cain for advice recently. The manager had a simple question: “Should I fire my client?” who lives in California and purchased rental real estate 3,000 miles away in Tennessee — sight unseen because the low price made it sound like a steal.

But the property had a long list of defects requiring costly repairs, and it was slow to rent - causing the absentee owner-investor to blame the property manager for the cash drain.

“We see it constantly,” said Cain. “New investors think it’s easy. They buy on emotion, on low pricing, rather than buying with a disciplined plan.

What are some of the key rules for freshman class investors? Here are a few of Cains’ that have served him well since the early 1980s:

Number one: Due diligence is never optional. You’ve got to understand the local market - and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government’s plans for the area where you’re thinking of buying.

Number two: Buy with a written plan - that’s right, just like the large professional investors use, with an entry strategy and an exit strategy. How long are you going to hold onto the property, how much will it earn you during your period of holding?

And what’s the endgame - a sale to another investor? Conversion to condos? Tear it down and build something that’s closer to the underlying real estate’s highest and best use?

“Write it all down,” says Cain. That way you can analyze it better.

Number three: Calculate the actual costs of the property in advance - not just the bargain basement price, but how much you’ll need to fix it and feed it - the management costs, rental commissions, vacancy costs, taxes, to name just a few.

“If you don’t know these things up front,” says Cain, “you are flying blind. And there are no good surprises in real estate.”

Published: October 23, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

In The Millionaire Real Estate Agent, we declared you could be just three exceptional hires away from having the organization of a Millionaire Real Estate Agent. That’s still absolutely true. However, our ongoing research for both MREA and SHIFT has given us new insight into how these key positions evolve. Some of you got a sneak peak at Mega Camp 2009. For the rest, here’s a quick look at hiring and compensating a Showing Assistant.

Leverage is ultimately about focus. You hire talent to keep you focused on your most dollar-productive activities and they focus on everything else. After entrusting your admin and marketing chores to another person, you look for help on the buyer sales side of the business. Successfully showing homes can be extremely time intensive and help here should keep you focused on leads and listings. So who do you hire?

In the past, research pointed us to a licensed buyer specialist paid on a 50/50 commission split. Today, some successful agents are first hiring an unlicensed Showing Assistant to keep their costs of sale low and their productivity high.

A Showing Assistant can literally jump into the driver’s seat with your buyers while keeping you in the driver’s seat when it comes to converting buyer leads, getting signed agreements, identifying wants and needs and eventually writing and negotiating contracts. A good one should be able to successfully show homes to around three to four buyers a month while earning bonuses based on 25 percent of each deal. Based on a $5,000 average commission, a good Showing Assistant could earn $60,000 a year. This is a terrific opportunity for someone. Better yet, you get to stay focused and 75 percent of the buy-side income stays on your side of the ledger.

You are still looking for someone who has the ability to grow into your Lead Buyer Specialist. So when you have someone with the ambition and proven ability to succeed with a high volume of buyers over time, your Showing Assistant earns the right to be promoted to a licensed Buyer Specialist. Your Buyer Specialist would then handle buyers from the appointment to closing and now earn 50 percent of the commissions. Again, a good one should be able to handle three to four buyer sales a month without burning out.

Burnout is a key word. Once you have identified a great Buyer Specialist, you don’t want to lose them! When they burn out and walk out, guess who gets their job? You do. And you’ve already got a job.

When your business is generating enough leads on a consistent basis to push a great Buyer Specialist past their ability to successful manage them all, the Showing Assistant concept reenters the picture. Now your Buyer Specialist has the opportunity to hire a Showing Assistant of their own. The Showing Assistant is still paid on a 25 percent bonus; however, that money comes out of the Lead Buyer Specialist’s half of each commission. Effectively, you continue to earn 50 percent of each buyer transaction, while the Buyer Specialist earns 25 percent and the Showing Assistant earns the final 25 percent as a bonus. Any buyer transactions your Buyer Specialist closes without the help of a Showing Assistant would still be on a 50/50 split.

Now your Buyer Specialist might successfully help four buyers on their own and another four with the help of a Showing Assistant. That’s now eight closed buy-side transactions each month. And with an average commission of $5,000, your Buyer Specialist has the ability to gross as much as $180,000 a year while just personally showing three or four buyers a month!

Showing Assistants may come and go—each auditioning for a shot at being your Lead Buyer Specialist. But once you find one, hiring and managing Showing Assistants moves from your plate to theirs. You have found your leader for working with buyers. Any additional help needed to keep your buyer transactions on track becomes their issue and opportunity.

Showing Assistants can save you money on the frontend, reduce turnover on the backend, all the while providing the best possible service to your buyers.

Click here for a video highlighting The Organizational Model and MREA.

(with Jay Papasan)

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

10 LOW OR NO-COST STRATEGIES TO ATTRACT MORE BUYERS AND MOTIVATE SELLERSINCLUDING HOW TO CREATE BUYER URGENCY AND HELP BUYERS OVERCOME FEAR AND RELUCTANCE IN TODAY’S MARKET

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Unleash your productivity power through the daily discipline of lead generation Success begins with the Power of One, a precise focus on what matters most for your business – lead generation. This course teaches you how to close at least 36 transactions in 12 months by developing and maintaining a habit of 3 hours a day of lead generation. Lead Generation 36:12:3 builds on the principles and practices of KWU’s foundational course, CAMP 4:4:3, and is specifically designed for someone in the growth stage of their career - closing at least 16 transactions per year.
Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Seven Ways to Attract First Time Home Buyers Today

Published

by

on September 18, 2009

So with the clock ticking on the 2009 Home Buyer Tax Credit (which expires at midnight on November 30), how can you attract your unfair share of first time homebuyers? Here are a few ideas that can add a few closings to your list of things to be grateful for on Thanksgiving Day.

1. Create Urgency. In your marketing and prospecting, make sure potential buyers know there is still time and that they need to get moving today!

“Ms. Buyer, in this market, it can take 45 to 60 days to close on a home. So working backwards from the November 30 deadline, you’ll want to have an accepted offer no later than mid-October. That leaves only a handful of weekends to get you preapproved by a mortgage lender and identify the right first home for you. So you see we need to get started today to take advantage of this opportunity….”

Remember, they have 8,000 reasons to get moving.

2. Hold a First-Time Buyer Seminar. Work with other agents and your vendor network to make the presentation happen. The goal is to get face-to-face with potential buyers fast. You can host it anywhere—a library, community hall, school, place of worship or you can even turn an open house into a “First Time Homebuyer Tax Credit Info Center.”

3. Exchange E-books and Books for Appointments. Use a special e-newsletter to your sphere, a Facebook or Twitter post or a Craig’s List ad to offer free copy of our e-book “$8,000 Closer to Home” or the book Your First Home in exchange for a free, no obligation consultation.

4. Target Your Buyers. Take advantage of our First Time Homebuyer Surveys to target a select audience for your offers. For example, the KW survey indicates that 51% of those buying a first home with the tax credit are aged 25 to 30 and fully 46% are married. A quick look on Facebook tells me there are more than 31,000 Austinites between 25 and 30 years old who are engaged or married. How about a Facebook ad with the headline “There’s still time to claim your $8,000 Wedding Gift!” Offer the book as a hook for a free consultation.

It’s as easy as clicking on the advertising link on the bottom of your Facebook homepage and just follow the queues.

5. Trumpet the Opportunity. Average home prices have fallen back to Earth. Mortgage interest rates are at historic lows. Homes today are at their most affordable levels in terms of the monthly payments since the 1970s. Toss in the $8,000 tax credit and the door to home ownership has been kicked off its hinges. Does your sphere know this or have they been reading someone else’s headlines? Tell them. Our monthly This Month in Real Estate videos will back you up.

6. Know the Facts. Your potential buyers will have lots of questions. Share the First-Time Homebuyer Video and the one-page fact sheet to answer their questions and get them on the path to home ownership.

7. Create an Action Plan Today. To earn your unfair share of first-time home buyers before the deadline, put a plan of action in writing. It’s as simple as picking one or two strategies you can implement in the coming week and then blocking time on your calendar to make them happen.

My wife, Wendy, and I still own our first home, a small bungalow in Central Austin. About two weeks ago our renters contacted us and said they wanted to buy. Wendy guided them through the process and just this week they made an offer on a new construction short sale marked down about $60,000. In the end, they didn’t qualify for the tax credit but the deals to be had were too much to pass up!

So don’t let your buyers (or yourself) think it’s too late. It’s not. Act today and you can still have a full plate of closings come Thanksgiving weekend.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Washington Report: Tax Credit Changes

by Kenneth R. Harney

RealtyTimes

www.MyNvaHomes.com

The first major change to the $8,000 home buyers tax credit began moving through Congress last week, giving hope to real estate and building groups pushing for extension of the entire program before it expires Nov. 30.

House Ways and Means Committee chairman, Congressman Charles Rangel, a New York Democrat, combined several smaller bills into the “Service Members Home Ownership Act of 2009” late last week, with a floor vote expected this week.

The bill is intended to correct a flaw in the original tax credit legislation: By requiring buyers to occupy and own their first home for 36 months to fully qualify for the credit, the program creates serious problems when military, Foreign Service and intelligence agency personnel are transferred overseas.

During their absence, they are not occupants of their houses, and sometimes have to rent them out or sell. Any of these events make them ineligible to retain the $8,000 credit under current law. Ineligible buyers must then repay the credit to the IRS.

Oregon Congressman Earl Blumenauer, sponsor of one of the bills consolidated into Rangel’s, said “it is absurd that thousands of Americans serving our country, away from friends and family … must choose between their service work and home ownership.”

The Ways and Means committee’s bill would waive the repayment requirement when a service member must sell a home within the 36 month period because of a transfer to a new duty station or overseas, and would count service-related absences toward the 36 month requirement.

Another provision in the bill would extend the $8,000 credit for another year for personnel who may have missed out on claiming the credit because they thought they wouldn’t qualify due to an overseas posting.

The credit for these individuals would be extended to November 30, 2010 from November 30, 2009, provided the served outside the U.S. for at least 90 days during calendar year 2009.

The bill, which has bipartisan support, could be sent to the Senate for action as early as next week, Congressional sources told Realty Times.

More important for the housing market overall, however, is the precedent set by the bill’s extension of the credit for an extra year. It’s not a far leap from that position to a general extension of the entire $8,000 credit program to the same date.

The National Association of Realtors, National Association of Home Builders and the Mortgage Bankers Association jointly sponsored an ad campaign last week aimed at convincing Congress to give the credit program another year.

Realty Times will keep you on top of this fast-moving issue as it develops.

Published: September 21, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Real Estate Investment 101

by Broderick Perkins

RealtyTimes

www.MyNvaHomes.com

It could be a good time to invest in real estate, given the abundance of foreclosures and other distressed properties with reduced prices.

It could also be a bad time to invest in real estate, if you don’t know what you are doing.

There’s the rub.

“It’s a good time to invest, but it is difficult. Now when you go out to invest you are competing with a dozen offers. The investors are back,” says Chuck Cryder, the broker for Century 21 A Property Shoppe in Salinas, CA.

Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge.

Pretty much like buying any property.

If you’ve got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there.

However, both halves are pretty big halves.

The National Real Estate Investors Association says you’ve still got a lot of work to do.

Here’s how much.

• Buy your own home first. The general rule of thumb is that buying your own home will not only put a roof over your head, but also background you in the full experience of buying and owning property — financials, market conditions, maintenance and real estate professionals you’ll need along the way.

What’s more, your first home could later become your first investment property, a property in a market with which you are familiar.

“You could maintain your current residence as a rental and move up into a larger home or better location yourself. This keeps the basis on your original property intact, but gives you an opportunity to move should your life dictate,” says Kim DiBenedetto, president of the Monterey County Association of Realtors in Monterey, CA.

There is one exception to the buy-your-own-home-first rule says Cryder.

“If you live with Mom or the cost of your rental housing is low, stay there and purchase investment properties first. If you can rent way below market value, I wouldn’t disturb that,” said Cryder, who has been an investor since 1968, when he purchased his first property.

However, in today’s market, an existing stake in a home can have a down side.

“You will be required to put more money down, most likely a minimum of 25 percent and also have several months in reserves. If you are upgrading from your current residence, your lender will require a minimum of 20 percent equity in your current residence before they will loan to you for another property,” said DiBenedetto, also an agent with Coldwell Banker Del Monte Realty in Carmel.

• Go back to school. Turn to the Internet, reputable books, successful investment groups, college and university level courses, even your state’s real estate license program. You don’t have to actually get a license, but you can become just as educated as a licensed agent. Individual real estate investors, salespeople and others who you’ve met on the way to investing are also valuable educational resources.

• Get professional help. The same way you find any competent, trustworthy and honest professional is the same way to look for a mentor, investment partner with prior knowledge or investment group. Seek referrals from friends, family, professionals with whom you already conduct business, co-workers and others you trust who’ve had a satisfactory, successful real estate investing experience.

“Now, more than ever, you need the experience of a competent realtor and lender to guide you through the process,” said DiBenedetto.

• Learn your investment market. One market’s bubble could be one investor’s boom and another investor’s bust. A home in one market could give you vacation rental income in a half year sufficient to cover the cost of principal, interest, taxes, insurance, home owner association dues, upkeep and other costs, but still not appreciate. Another home in another market may not bring you sufficient rent in a year’s time to cover the cost of owning the property, but might appreciate more than enough to make up for your carrying costs over the long term.

The variables are endless and you’ll need to measure your capacity for risk against market conditions.

• Finally, while some experts say you’ll also need to develop an exit strategy in terms of unloading properties when they are no longer viable investments, Cryder says if you buy right and stick it out over the loan haul you won’t need an exist strategy.

“When you’ve got the goose that lays the golden egg, be satisfied with the golden egg,” he says.

Published: September 24, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

More Biz in a Tough Market: The One Question More Realtors Need to Ask

by Brian Hilliard

Realty Times

www.MyNvaHomes.com

Brian raises an interesting question that most Realtors aren’t asking when it comes to getting more business in today’s tough market.

With the market being as tough as it is, I’m often asked by Agents what they can do to get more business right away. And while I usually don’t like to answer a question with a question, I think in this case, a question is exactly what the Doctor ordered.

Here it is: Of all the people you’ve talked to this week, how many have you made feel like they should give you their business? In other words, a lot of times we can be so busy talking about what we’ve done, and are going to do for people, that we lose track of first creating an environment where this prospect (or Referral Partner) actually wants to work with us, or pass referrals in our direction. And when you think about it, that makes sense.

Because make no mistake about it: There are plenty of choices out there for people looking to buy a home. And if we accept the fact that you’re not the only Agent this person is talking to, then getting her to feel like she wants to work with you is absolutely crucial to closing the sale.

I’m talking about things like:

• Does she feel comfortable with your expertise in the area?
• Is she confident that you’ll do what you said you do?
• Does she feel “listened to”, even though she might be asking “stupid” questions?
• How confident is she that you’ll take care of her even after the sale?

All of this comes together to create a general “feel,” or “vibe” someone has about working with you. And the more positive you can make that initial feeling, the more likely you are to close the deal.

So what can you do to generate the right “feel”? Well, you’ll first want to make sure that you always “Do What You Said You Would Do.” That means sending out an email, returning phone calls in a timely fashion and showing up to meetings on time. A lot of times we can be so busy doing so many other things, that some of the “little stuff” can fall through the cracks.

And while that’s fine every once in awhile with people who know you, it’s an absolute killer during the introductory stages with a potential client.

I personally keep a small notepad on me at all times, and jot down little follow up items I need to take care of when I get back to the office. Things like, “send fax to Steve” or “email document to Sandy” all make the list.

That way when I get back to the office, I’ve got everything I need in one place (a small spiral notebook), and don’t have to worry about chasing around a bunch of sticky notes, or worse yet, letting something slip through the cracks.

Secondly, go out of your way to position yourself as a problem solver. In other words, if someone says they’re interviewing several Realtors™, and she’d like to talk to you about the possibility of working together, go out of your way to understand her situation and add value where you can.

As an example, instead of just going to the house and answering question after question about your credentials, have a few of your own that get at their situation and what they’re trying to do. Questions like:

• What made you decide to move,
• What do you like about this house that you’d like to see in your next home, and
• On a scale of 1-10, how important are the following areas in your next home: Proximity to work, size of yard, quality of school systems, and the amount of work you’ll have to do on it after you buy.

All of these are things that other Agents might not be asking, and shows the prospect that you’re already thinking ahead. What you really want is the prospect to think, “Wow! I never thought about that before. If Sally is already working this hard for us now – without even having a contract – then imagine what she’ll do when she’s actually putting her mind to it.” And they’ll think that not because you dazzled them with all of your credentials, but because you created an environment where they felt comfortable in trusting you with their largest personal asset. Which obviously means more business for you.

You’ll also want to take the time to listen to their situation – even if you think you’ve “heard it before”.

A lot of times we’ll be in such a hurry to show prospects how smart we are, that we forget to take a breath and actually let them get the words out on what they potentially need or want from an Agent.

However, by taking the time to listen to their situation, you’re showing that you really do understand where they’re coming from, and are in the best position to help them move forward. (Get it? “Move” forward?) Anyway, if you’d like some more ideas on how to get more business in today’s tough market, just email info@agitoconsulting.com (Subject: Today’s Tough Market), along with your name and zip code, and we’ll be sure to send out our free report right away.

Published: September 24, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: IRS Changes Policy

by Kenneth R. Harney

RealtyTimes

www.MyNvaHomes.com

Commercial and investment property owners who are facing problems refinancing mortgages because of credit market conditions and declining lease revenues may have just gotten some important help from the IRS.

In a policy change outlined last week, the IRS said it is aware that the global capital squeeze is hurting investors who own income real estate and are finding it difficult to stay current on loan payments.

To help ease the burden, the IRS said it would relax current tax guidelines on commercial mortgage bond securitizations to allow more modifications of loan terms.

Commercial real estate, including multifamily apartment projects, has been struggling for the past year.

According to the Mortgage Bankers Association, more building owners are falling behind on payments and seeing property valuations decline as the result of the recession. Between the second and third quarters of this year, the delinquency rate on loans held in commercial mortgage backed securities more than doubled, from 1.9 percent to 3.9 percent.

In its policy change, the IRS noted its tax rules governing commercial property bonds allow for certain levels of loan modifications within loan pools in cases of financial distress and imminent default by borrowers. These modifications include interest rate reductions, extensions of loan terms, and forgiveness of principal debt.

But because IRS’s technical rules clamp certain limits on the extent of modifications in a given loan pool, one or more “significant” modifications can terminate the special tax benefits that are crucial ingredients in commercial securitizations.

For certain types of bonds, there is even a 100 percent tax on all net income that is derived from “prohibited transactions.”

To permit greater numbers of modifications to occur without triggering prohibited transactions penalties, the IRS said it will lighten up on its rules and not challenge commercial mortgage bonds’ tax status in some cases where there is a significant risk of default by borrowers.

Though the IRS’s approach is intended to open the door to more modifications for investment property owners in need of relief, mortgage servicing experts were cautious in their initial reactions last week. Jan Sternin, senior vice president of the Mortgage Bankers Association for commercial financing, said that because of the complexity of commercial bond structures, “it will take some time for servicers to determine how much latitude they have to implement the new IRS rules.”

Bottom line for income property owners facing loan problems: Get in touch with your mortgage servicer sooner rather than later. Do not assume that a loan modification or refi is out of the question.

In fact, there may be more room for negotiations than ever before.

Published: September 18, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

RealtyTimes

www.MyNvaHomes.com

Freddie Mac’s reports that increases in sales of new and existing homes over successive months, and favorable reports on home prices during the second quarter reinforces the message that housing markets are stabilizing.

These latest developments signal a shift in the risks to the economy.

A growing threat to the economic outlook now comes not from housing but from the weak labor market, as the housing recovery and consumer spending cannot be sustained without growth of jobs and incomes.

The employment report for August underscored the risks, as the unemployment rate jumped to 9.7 percent, the highest in more than 26 years, and the economy continued to shed jobs for the 20th straight month, with nonfarm payrolls down 216,000.

Nevertheless, the weak labor market does not damp the prospects for a gradual economic recovery over the remainder of this year, followed by a return to trend growth during 2010.

Published: September 15, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Federal Hiring Boom Would Benefit D.C. AreaQuicker Rebound Expected With More Jobs, Home Sales and Office Leases

By V. Dion Haynes

Washington Post Staff Writer
Tuesday, September 8, 2009

If projections bear out that the federal government will hire up to 120,000 people for jobs in the region over the next few years, the Washington area economy could be on its way to a rebound faster than most of the nation. Such a hiring boom would have widespread benefits, economists who study the region’s employment and housing patterns said. It could reduce the region’s unemployment rate, now at 6.2 percent, if jobless people here are hired, and it could revive stagnant home sales if people outside the area are hired. Moreover, as agencies expand to accommodate more workers, they could opt to lease space, boosting the moribund commercial office market. Partnership for Public Service, a nonprofit that helps find candidates for federal jobs, released a report last week that listed projected hires for hundreds of agencies between now and 2012. In total, the government is expected to hire 600,000 people, including 19,071 nurses at the Department of Veterans Affairs, 9,800 Border Patrol agents, 3,774 criminal investigators for the Labor Department, 6,282 contract representatives at the Treasury Department, and 3,500 claims assistants and examiners at the Social Security Administration. The report, called “Where the Jobs Are,” focuses on 273,000 “critical needs” positions that are necessary for the operation of the agencies — 45,000 of which would be located in the Washington area. Federal spending represents 33 percent of the region’s economy, and a surge in hiring “is important for the economic foundation of this area,” said Max Stier, president and chief executive of the partnership.  The hiring is intended to replace retiring employees and fill positions created as agencies expand to oversee new initiatives, such as economic stimulus programs. Even before the report was published, some experts were projecting that employment in the region would pick up next year, with net job losses becoming net job gains. By the end of the year, the area is expected to experience a net loss of 21,000 jobs, said John McClain, senior fellow at the Center for Regional Analysis at George Mason University. But in the next few years, McClain added, the region is expected to see net gains in jobs: 23,900 in 2010; 34,900 in 2011; 42,000 in 2012; 47,600 in 2013; and 53,300 in 2014. “We will recover somewhat in 2010,” McClain said, adding that his forecast does not take into account the dramatic hiring projected by the report. “In 2012 and ‘13, we’re back to our long-term average growth.” “Our metropolitan economy will be first for having positive job growth. We will recover before the rest of the country,” he said, adding that he thinks the federal government will hire less than 120,000 because it doesn’t have the infrastructure for such mass hiring. To what extent the hiring boom benefits the region depends on whether a substantial proportion of new jobs would be created and whether many of them would be filled by jobless people in the region, scenarios that would reduce the unemployment rate. Officials at some of the agencies said they are recruiting in the region and around the world. But even an influx of hires relocating here could help by spurring demand for houses and apartments. Officials at the U.S. Agency for International Development said they plan to hire 1,690 people over the next few years, 550 of whom would work at the Washington headquarters. Most of the overseas and local positions are new, officials said, as the agency is doubling its foreign service staff who work on construction and diplomacy in developing countries. In addition to the civil service staff in Washington, “one-third of our foreign service workforce is stationed in Washington at any given time” for three years, said Ron Daniels, special projects officer for the agency. Many, he said, would be in the rental market “in short-term or long-term leases.” The Nuclear Regulatory Commission plans to fill more than 459 positions, largely to replace workers expected to retire in the next few years, said Miriam Cohen, deputy director of the agency’s human resources department. The bulk of the hires, she said, would be made for jobs at the agency’s headquarters in Rockville and a satellite office in Bethesda. “We need engineers who would be involved in the construction of new reactors,” Cohen said. Analysts said they expect the new jobs to drive demand for housing in the region, accelerating recovery of the market. July housing sales in the region were up 12.6 percent from the same month in 2008, according to the Center for Regional Analysis, and inventory shrank to 6.2 months in July from 11.5 months in January. “The job growth in D.C. will bring new people into the labor force and drive demand for apartments and houses,” said Frank Nothaft, chief economist at Freddie Mac. “That will have a ripple effect in [boosting interest in new houses] and creating construction jobs.” Gregory H. Leisch, chief executive of Delta Associates, a real estate and economic research firm in Alexandria, said several agencies, including the Justice and Treasury departments, have recently signed leases in the commercial office market to accommodate growth. He said he expects that trend to accelerate with the federal hiring, which could reduce the 47 million square feet of vacant space in the region.

The hiring “will translate into 2 to 3 million square feet of office absorption” by the federal government, he said.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Federal Hiring Boom Would Benefit D.C. AreaQuicker Rebound Expected With More Jobs, Home Sales and Office Leases

By V. Dion Haynes

Washington Post Staff Writer
Tuesday, September 8, 2009

If projections bear out that the federal government will hire up to 120,000 people for jobs in the region over the next few years, the Washington area economy could be on its way to a rebound faster than most of the nation. Such a hiring boom would have widespread benefits, economists who study the region’s employment and housing patterns said. It could reduce the region’s unemployment rate, now at 6.2 percent, if jobless people here are hired, and it could revive stagnant home sales if people outside the area are hired. Moreover, as agencies expand to accommodate more workers, they could opt to lease space, boosting the moribund commercial office market. Partnership for Public Service, a nonprofit that helps find candidates for federal jobs, released a report last week that listed projected hires for hundreds of agencies between now and 2012. In total, the government is expected to hire 600,000 people, including 19,071 nurses at the Department of Veterans Affairs, 9,800 Border Patrol agents, 3,774 criminal investigators for the Labor Department, 6,282 contract representatives at the Treasury Department, and 3,500 claims assistants and examiners at the Social Security Administration. The report, called “Where the Jobs Are,” focuses on 273,000 “critical needs” positions that are necessary for the operation of the agencies — 45,000 of which would be located in the Washington area. Federal spending represents 33 percent of the region’s economy, and a surge in hiring “is important for the economic foundation of this area,” said Max Stier, president and chief executive of the partnership.  The hiring is intended to replace retiring employees and fill positions created as agencies expand to oversee new initiatives, such as economic stimulus programs. Even before the report was published, some experts were projecting that employment in the region would pick up next year, with net job losses becoming net job gains. By the end of the year, the area is expected to experience a net loss of 21,000 jobs, said John McClain, senior fellow at the Center for Regional Analysis at George Mason University. But in the next few years, McClain added, the region is expected to see net gains in jobs: 23,900 in 2010; 34,900 in 2011; 42,000 in 2012; 47,600 in 2013; and 53,300 in 2014. “We will recover somewhat in 2010,” McClain said, adding that his forecast does not take into account the dramatic hiring projected by the report. “In 2012 and ‘13, we’re back to our long-term average growth.” “Our metropolitan economy will be first for having positive job growth. We will recover before the rest of the country,” he said, adding that he thinks the federal government will hire less than 120,000 because it doesn’t have the infrastructure for such mass hiring. To what extent the hiring boom benefits the region depends on whether a substantial proportion of new jobs would be created and whether many of them would be filled by jobless people in the region, scenarios that would reduce the unemployment rate. Officials at some of the agencies said they are recruiting in the region and around the world. But even an influx of hires relocating here could help by spurring demand for houses and apartments. Officials at the U.S. Agency for International Development said they plan to hire 1,690 people over the next few years, 550 of whom would work at the Washington headquarters. Most of the overseas and local positions are new, officials said, as the agency is doubling its foreign service staff who work on construction and diplomacy in developing countries. In addition to the civil service staff in Washington, “one-third of our foreign service workforce is stationed in Washington at any given time” for three years, said Ron Daniels, special projects officer for the agency. Many, he said, would be in the rental market “in short-term or long-term leases.” The Nuclear Regulatory Commission plans to fill more than 459 positions, largely to replace workers expected to retire in the next few years, said Miriam Cohen, deputy director of the agency’s human resources department. The bulk of the hires, she said, would be made for jobs at the agency’s headquarters in Rockville and a satellite office in Bethesda. “We need engineers who would be involved in the construction of new reactors,” Cohen said. Analysts said they expect the new jobs to drive demand for housing in the region, accelerating recovery of the market. July housing sales in the region were up 12.6 percent from the same month in 2008, according to the Center for Regional Analysis, and inventory shrank to 6.2 months in July from 11.5 months in January. “The job growth in D.C. will bring new people into the labor force and drive demand for apartments and houses,” said Frank Nothaft, chief economist at Freddie Mac. “That will have a ripple effect in [boosting interest in new houses] and creating construction jobs.” Gregory H. Leisch, chief executive of Delta Associates, a real estate and economic research firm in Alexandria, said several agencies, including the Justice and Treasury departments, have recently signed leases in the commercial office market to accommodate growth. He said he expects that trend to accelerate with the federal hiring, which could reduce the 47 million square feet of vacant space in the region.

The hiring “will translate into 2 to 3 million square feet of office absorption” by the federal government, he said.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Federal Hiring Boom Would Benefit D.C. AreaQuicker Rebound Expected With More Jobs, Home Sales and Office Leases

By V. Dion Haynes

Washington Post Staff Writer
Tuesday, September 8, 2009

If projections bear out that the federal government will hire up to 120,000 people for jobs in the region over the next few years, the Washington area economy could be on its way to a rebound faster than most of the nation. Such a hiring boom would have widespread benefits, economists who study the region’s employment and housing patterns said. It could reduce the region’s unemployment rate, now at 6.2 percent, if jobless people here are hired, and it could revive stagnant home sales if people outside the area are hired. Moreover, as agencies expand to accommodate more workers, they could opt to lease space, boosting the moribund commercial office market. Partnership for Public Service, a nonprofit that helps find candidates for federal jobs, released a report last week that listed projected hires for hundreds of agencies between now and 2012. In total, the government is expected to hire 600,000 people, including 19,071 nurses at the Department of Veterans Affairs, 9,800 Border Patrol agents, 3,774 criminal investigators for the Labor Department, 6,282 contract representatives at the Treasury Department, and 3,500 claims assistants and examiners at the Social Security Administration. The report, called “Where the Jobs Are,” focuses on 273,000 “critical needs” positions that are necessary for the operation of the agencies — 45,000 of which would be located in the Washington area. Federal spending represents 33 percent of the region’s economy, and a surge in hiring “is important for the economic foundation of this area,” said Max Stier, president and chief executive of the partnership.  The hiring is intended to replace retiring employees and fill positions created as agencies expand to oversee new initiatives, such as economic stimulus programs. Even before the report was published, some experts were projecting that employment in the region would pick up next year, with net job losses becoming net job gains. By the end of the year, the area is expected to experience a net loss of 21,000 jobs, said John McClain, senior fellow at the Center for Regional Analysis at George Mason University. But in the next few years, McClain added, the region is expected to see net gains in jobs: 23,900 in 2010; 34,900 in 2011; 42,000 in 2012; 47,600 in 2013; and 53,300 in 2014. “We will recover somewhat in 2010,” McClain said, adding that his forecast does not take into account the dramatic hiring projected by the report. “In 2012 and ‘13, we’re back to our long-term average growth.” “Our metropolitan economy will be first for having positive job growth. We will recover before the rest of the country,” he said, adding that he thinks the federal government will hire less than 120,000 because it doesn’t have the infrastructure for such mass hiring. To what extent the hiring boom benefits the region depends on whether a substantial proportion of new jobs would be created and whether many of them would be filled by jobless people in the region, scenarios that would reduce the unemployment rate. Officials at some of the agencies said they are recruiting in the region and around the world. But even an influx of hires relocating here could help by spurring demand for houses and apartments. Officials at the U.S. Agency for International Development said they plan to hire 1,690 people over the next few years, 550 of whom would work at the Washington headquarters. Most of the overseas and local positions are new, officials said, as the agency is doubling its foreign service staff who work on construction and diplomacy in developing countries. In addition to the civil service staff in Washington, “one-third of our foreign service workforce is stationed in Washington at any given time” for three years, said Ron Daniels, special projects officer for the agency. Many, he said, would be in the rental market “in short-term or long-term leases.” The Nuclear Regulatory Commission plans to fill more than 459 positions, largely to replace workers expected to retire in the next few years, said Miriam Cohen, deputy director of the agency’s human resources department. The bulk of the hires, she said, would be made for jobs at the agency’s headquarters in Rockville and a satellite office in Bethesda. “We need engineers who would be involved in the construction of new reactors,” Cohen said. Analysts said they expect the new jobs to drive demand for housing in the region, accelerating recovery of the market. July housing sales in the region were up 12.6 percent from the same month in 2008, according to the Center for Regional Analysis, and inventory shrank to 6.2 months in July from 11.5 months in January. “The job growth in D.C. will bring new people into the labor force and drive demand for apartments and houses,” said Frank Nothaft, chief economist at Freddie Mac. “That will have a ripple effect in [boosting interest in new houses] and creating construction jobs.” Gregory H. Leisch, chief executive of Delta Associates, a real estate and economic research firm in Alexandria, said several agencies, including the Justice and Treasury departments, have recently signed leases in the commercial office market to accommodate growth. He said he expects that trend to accelerate with the federal hiring, which could reduce the 47 million square feet of vacant space in the region.

The hiring “will translate into 2 to 3 million square feet of office absorption” by the federal government, he said.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

www.MyNvaHomes.com

www.FindaHomeSellaHomeNow.com

According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index, housing affordability remains near its highest level in 18 years.

“The increase in affordability, along with the $8,000 federal tax credit for home buyers, is stimulating demand, particularly among young, first-time buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “But to keep the recent upturn in home sales going into next year, Congress will need to extend the tax credit for another year and make it available to all buyers in an effort to encourage activity in the trade-up market.”  

The HOI showed that 72.3 percent of all new and existing homes sold in the second quarter of 2009 were affordable to families earning the national median income of $64,000, down only slightly from the record-high 72.5 percent during the previous quarter and up from 55.0 percent during the second quarter of 2008.

Published: September 1, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Communication Within a Team

by Dirk Zeller

RealtyTimes

www.MyNvaHomes.com

A well-functioning team must have strong and constant communication. Communication comes in many forms including written, verbal, and both inter-office and intra-office e-mail. In order for the team to be highly efficient, communication among the members of the team needs to be tracked to keep the team members accountable for their assigned tasks. In the tracking process, both the receiver and the sender create a record of the task.

There are four keys that you and your office can use to help the flow of information throughout the office: regular staff meetings, request forms, listing out questions, and being aggressive.

You are a leader, not a manager – there is a difference.

1. Regular Staff Meetings

Daily and weekly meetings strengthen communication with your team. The focus of the daily meeting is to set priorities for staff for the day. This meeting is an opportunity for you to coach and direct the members of the team. By not having daily meetings, you are allowing your assistant and the other members to set their own priorities, which may be different from yours. To be able to set your daily priorities with your team, you need to schedule fifteen minutes daily for a meeting between you, your assistant, and the other members of the team.

One of the frustrations assistants feel is being overwhelmed with work. An assistant who does not understand what the agent’s priorities are will feel even more overwhelmed with all the tasks that need to be completed. As the lead agent, you need to help the assistant define and determine what tasks need to be completed today and for the week. If you take ten minutes a day to walk through the priorities for the day, your assistant will be able to complete items in the order in which you want them done and will accomplish the most important tasks for the day and for the week. Daily meetings can mean the difference between business success and failure.

Weekly meetings with your assistant should focus on the overall goals and functions of the office. Use this meeting to look at and evaluate all of the activities scheduled during the week. This time will also be used to review the activities of the last month and to set new priorities for the month ahead.

There should also be weekly team meetings scheduled, which all members of the team are required to attend. These weekly meetings will allow all members to debrief their activities for the week and determine priorities for next week. It is a vital component of a strong team. It allows evaluation of the completed week and an investment in the new week. It provides a time for brainstorming to determine solutions for ongoing problems. It will also enhance the team-building spirit. This meeting will give the team an opportunity to put an exclamation point at the end of a great week.

2. Request Forms

Written request forms are crucial to an effective flow of tasks in the office. The requests are passed from one person to the next person in the team. These forms will enable you and your staff to set deadlines for you and for other members of your team. This information helps to avoid the occurrence of a “cold sweat night” – a mental wake-up call at 2 a.m. which finds you sitting straight up in bed, wide awake, wondering whether a particular task was completed or not. Once this happens, it becomes very hard to get back to sleep, since you cannot get that worrisome question out of your head. Many agents are using e-mail to direct assistants. I think that is a mistake in the short run. If you have a new assistant, use paper request forms. The tangible, physical paper carries a greater impact. It also doesn’t get lost in all the other spam e-mail we get. It also gives you a chance to check and see the progress on a regular basis. You can switch to the more efficient e-mail in a few months, once you are confident of their execution.

3. Listing Out Questions

The assistant should have their questions well organized, so that they can ask the agent all of their questions at the same time. The questions should be saved up and asked once or twice per day. This allows the assistant to stay focused on the tasks that they are completing. It also helps the agent to stay focused on sales without constant interruption. One appropriate time for the assistant to ask questions is during the daily meeting.

While the assistant is compiling their questions, they should also determine one or two solutions for each of the questions. This step gives the agent an understanding that the assistant is attempting to solve problems on their own, but they want to be sure what the correct solution is. It also it gives the agent an idea of possible solutions. Even if the agent then has to reject both solutions, the process of working out possible solutions and receiving the agent’s response to them will help the assistant understand why a solution will or will not work and why the task should be done in a particular way. This procedure gives the assistant an opportunity to learn how to solve the problem, so if it arises in the future, they will be able to handle it. This technique also reduces the chance the agent will get involved or take ownership of the situation. A good assistant will not allow their Champion Agent to engage emotionally with a problem. It hampers performance, and sales will drop.

4. Be Assertive

Another part of communication is being assertive. The assistant should be up front and direct with the agent or other team members if they need something explained further or if they are missing paperwork for the file. The assistant needs to be able to say, “I need this” and not feel shy about it. Agents will sometimes be focused only on the sales aspect of the business and will not be aware of the work being done behind the scene. The assistant needs to be able to let the agent and other team members know what is needed

Published: July 31, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

SPECIAL ALERT

NOVEC Asks Customers to Use Less Power This Week

 NORTHERN VIRGINIA—The Northern Virginia Electric Cooperative asks all of its customers to reduce their power consumption at work and home as much as practical between 2 p.m. and 6 p.m. this week. The reduction will help the Co-op avoid excessive peak-use charges and save customers money.“The amount of power customers collectively use during the five highest peak-use hours during the year determines the ‘peak demand charge’ the Co-op pays the following year,” explains Ken Blaylock, manager, NOVEC Substation and Telecommunications department.Blaylock says peak-use hours in summer usually occur in the afternoon when air conditioners work the hardest to cool, and in the early evening when families turn on lights, prepare dinner, wash dishes, and take showers and baths.“If customers use less electricity on the hottest days, they will help reduce the demand charges for next year,” Blaylock states “By shaving just 10 percent of their electricity use when temperatures soar, customers could realize a collective savings of about $4.7 million,” Blaylock estimates. In 2008, the average annual cost per customer for the peak demand charge was $335.NOVEC passes the savings onto customers through the Power Cost Adjustment Charge on their bills and through a program called CashBack.Tips for Reducing Peak Electricity Use

• Turn the thermostat up to 82 degrees — or turn it off — between 2 p.m. and 6 p.m. and at all times when no one is home. A programmable thermostat will make adjustments automatically. When family members are home, run fans; the air movement will make them feel cooler.
• Close window shades, blinds, and drapes to block the sun’s heat.
• Delay running the dishwasher, clothes washer, and dryer until late at night or early in the morning.
• Turn off all unnecessary lights, electronic devices, and appliances.
• Cook with a microwave oven instead of the stove and oven. Grill outdoors.
• Spend time in a finished basement where temperatures are cooler.
• Consider going to the library, mall or the movies where it’s cool, and turn off the air conditioner before leaving.

For more peak-use reduction tips, visit www.novec.com/peak15.Customers can make additional changes in their energy consumption habits to save more energy every day. These changes include:

• Replacing or cleaning the air conditioner filter if it is not clean
• Replacing Incandescent light bulbs, which produce 10 percent light and 90 percent heat, with compact fluorescent bulbs, which create little heat and last much longer, and turning off lights when leaving a room

Many more long-term energy-saving tips are available at www.novec.com/useitwisely15.NOVEC is a not-for-profit corporation that distributes electricity and energy services to approximately 142,000 customers in Fairfax, Fauquier, Loudoun, Prince William, Stafford, and Clarke counties and the City of Manassas Park. It is one of the largest electric distribution cooperatives in the nation. For more information, visit www.novec.com or call 703-335-0500 or 1-888-335-0500.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

www.MyNvaHomes.com

The National Association of Home Builders is reporting that Nationwide housing starts and permits posted substantial gains in June as home builders responded to improved market conditions and the impending expiration of the first-time buyer tax credit. These stats comes from the U.S. Commerce Department.

“The upcoming expiration of the first-time home buyer tax credit on December 1st is encouraging some builders to get homes started now so that they can be completed in time for clients to take advantage of this attractive buying incentive,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, there is still much concern about the difficulty of financing new-home production and continuing weakness in the job market.”  

Commerce reported a 3.6 percent gain in overall housing starts to a seasonally adjusted annual rate of 582,000 units and an 8.7 percent gain in permit issuance to 563,000 units.

“Today’s report was in keeping with our forecasts for some glimmers of improvement on the single-family side in the second quarter, and also with the results of our latest builder surveys,” said NAHB Chief Economist David Crowe. “Many remain very cautious, however, in the face of the severe tightening of credit for acquisition, development and construction financing and increased instances of low appraisals tied to improper use of distressed properties as comps, both of which threaten to derail a housing and economic recovery going forward.”

Published: July 21, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

VHDA 1ST Time Home Buyer – Tax Credit Plus Program

·       This loan has a built-in second mortgage to help cover the down payment and closing costs, with zero interest and no payments for the first 12 months.

·       The recent economic recovery legislation has created a tax credit incentive of up to $8,000 for first-time home-buyers. VHDA’s Homebuyer Tax Credit Plus loan lets borrowers take advantage of the federal First-time Homebuyer Tax Credit to finance the down payment and closings.

Choose the preferred payment plan:

·       Pay off the second mortgage-Build equity in your home.

·       Pay off the second mortgage over 29 years-Save the tax credit for a rainy day, home improvements or help pay existing debt.

·       make payments on the principal of the second mortgage before the repayment period begins; this will reduce the required monthly payments for the remaining 29 years on the second mortgage.

Program Features:

·       Affordable fixed-rate financing on both mortgages.

·       Repayment of the second mortgage begins one year after the first mortgage payment.

·       Interest rate of second mortgage: zero interest for the first year-beginning the 13th month, the same interest rate as the first mortgage.

·       Maximum loan amount: First mortgage-maximum FHA Mortgage

             Second mortgage-up to 5% of sales price (no cash back)

·       Loan must close no later than November 30, 2009.

Guidelines and Details

·       Time Limit: Loan must close no later than Nov. 30, 2009

·       Eligibility Requirements:  Borrowers must meet federal First-time Homebuyer Tax Credit requirements as well as VHDA’s requirements regarding first-time homebuyer status, income limits, and sales price limits.

·       Maximum Income:  The combined income of all household members may not exceed VHDA’s maximum income limits.

·       Maximum Sales Price/  The combination of the first and second mortgage

·       Total Loan Amount:  may not exceed VHDA’s sales price/income limits.

Re: Regulation Z – Federal Truth-in-Lending (TIL)

This is to inform every one of upcoming changes the Federal Reserve has implemented regarding the timing of TIL disclosures in order to be consistent with the new Mortgage Disclosure Improvement Act of 2008 (MDIA).  These changes apply to all loan applications received by the Lender on or after July 30, 2009. 

These changes apply to all mortgage lenders and may affect the settlement dates of loans.  The following is an overview of the new requirements:

·       An initial TIL (Truth in Lending) must be delivered to the applicant within 3 business days (excludes holidays and Sundays) of application AND at least 7 business days prior to settlement.

·       If the APR increases by more than 1/8th of 1% from the initial TIL, a corrected TIL must be delivered to the applicant at least 3 business days prior to settlement.

*** Settlement may not occur until both the 7 and 3 business day waiting periods have expired ***

It is therefore important to disclose to any potential applicants and the lender any fees that may be involved that could affect the APR (realtor, inspection, pest, etc.).

Caryn Grafton

Personalized Mortgage Lender

George Mason Mortgage

Office: 703-259-0746

Mobile: 703-786-5213

E-Fax: 703-738-7001

http://www.carynforyourmortgage.com/

4100 Monument Corner Drive I Fairfax I VA I 22030

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Determining When Prospects Become Clients

by Dirk Zeller

Realty Times

www.MyNvaHomes.com

How do you determine whether a prospect should become a client? What are the criteria of becoming a client? Have you created a series of questions to help you minimize the time invested, to determine if a prospect will meet your standard?

You need to create a systemized approach to determine if a prospect measures up to your specific criteria. This approach needs to be applied each and every time you come in contact with a prospect. I believe it doesn’t matter where the prospect comes from; he needs to be evaluated based on a standard. Even if the prospect is a referral from a “Raving Fan”, he still needs to meet the standard. If the prospect does not meet the standard, I would encourage you to gracefully decline the potential business.

There are eight questions that I used during my career in real estate to determine if a client would meet my standards. I will go through each question and explain why this question was important in making the decision of who to have as a client and who to pass on.

1. When is this prospect going to buy or sell? When is the prospect ready to move? The further out the move date, the lower the motivation of the prospect. You will have to follow-up more with the prospect, and you will have to invest more time to achieve a sale, if the moving date is far in the future. It is difficult to make a decent income chasing prospects that may buy or sell in the distant future.

2. Does the prospect have the ability to buy? Does the prospect have the cash down payment and is he able to be approved for financing? There are many Agents who show property to prospects for a week or two, only to find out they cannot buy. My suggestion is to find out if they are able to buy a home, before you even put them in your car. Require them to meet with your lender, or provide proof of being pre-approved from another lender, before you invest your time, effort, and energy in the prospects.

3. Does the client have reasonable expectations? This question is two-fold. Is the “wish list” of what the client thinks he can afford, and what he can actually afford, the same? Often buyers are not in the real world in regards to what they can afford to purchase. If you are chasing a prospect that is not in reality, you are truly wasting your time. In this situation you are going to either be the bad guy by telling him what he can really afford, or the client dumps you because you do not believe in his crusade. Either way, it is a difficult road to success and eventually leads to no commission.

The second part of this question is directed to the clients who try to beat the market. I always tried to avoid the seller who wanted more than fair market value for his property, and the buyer who wanted to steal the property. They both can be wastes of time for Agents. The odds are heavily weighted against this buyer and seller. You often will invest a tremendous amount of additional time to earn the same income. Not to mention, that often these people have the desire for an “I win - you lose” type of transaction. In my experience, those are the least enjoyable transactions to enter into, when one of the parties is only concerned about himself winning.

4. Does this prospect respect my time and me? Our time is our most precious commodity. Once it is gone we do not get it back. A prospect that does not value your time, by not keeping appointments and by showing up late, is clearly telling you that he does not value your service, or your time.

Often buyers and sellers will try to tell Agents what to do and how to do their jobs. They need to understand they are paying for your knowledge, advice, and professionalism. When they do not take your guidance, you need to decide if you want to continue to work with them. In my career, I chose not to do business with people who disregarded my guidance. If you acquiesce during the listing agreement period, once the listing expires you will still wear the black hat. The seller will still talk disparagingly about you and your service. How many times has this happened to all of us? I truly believe, if you are a professional REALTOR, your clients should regard your guidance, as they do that of their doctor, attorney, or accountant. I would not question my attorney or accountant’s guidance. It is rather presumptuous for me to think I know more than they do in their area of expertise. My best advice to Agents is to run away from this type of prospect quickly!

5. Am I being asked to compromise morally, or ethically, from my beliefs to make a sale? If we have to deviate from our business philosophy, we need to reevaluate this business relationship. Being able to stand tall and live with your decisions is better than any sale you might make. If a prospect requests you do something that would fall into a gray area, you should carefully evaluate it. What if the deal blows up, or the gray turns pitch black? Remember most buyers and sellers will immediately point the finger towards the Agents involved.

6. Can I create a satisfied client? Is this prospect the type of person who will never be satisfied? Do you want to be the next Agent he is complaining about? These are people who will never be satisfied, no matter what you do, or what level of service you provide. Remember people tend to know, enjoy, and develop friendships with people who are similar to themselves. Do you want more referrals like the current prospect? I urge you to carefully evaluate this question when you are determining who you want your current clients and future prospects to be.

7. Is the client willing to tell me the truth so I can help him? Sometimes people view us as the enemy, or as a necessary evil. Prospects can sometimes play “hide the ball” with an Agent. I think that open and truthful communication between the Agent and the client leads to a successful relationship and transaction. In the end it will lead to successful referrals. If a prospect can’t be honest with you, you should probably pass on him.

8. Is the commission that you will earn worth the trouble? Some Agents may be offended by this question. But the truth is, we are in this business to provide a service and to turn a profit. This is a question that must be asked every time. Are the dollars earned adequate for the time and effort you will be expending to put this transaction together and close? Maybe you would be better to invest the time to find a higher quality prospect or client. It is your time, so you are entitled to select in whom you invest your time.

It is all right to decide to go ahead and work with someone, even though you know the amount that you will earn may not be as high as compared to other transactions. In my career I entered into a handful of deals annually to help people. The key was, I accepted the fact that I would not be compensated for my time at my usual hourly rate, before I entered into the client relationship. I think that it is easier to accept when you understand it going into the relationship, rather than invest all your time, and then find out. It is easier when the choice is yours.

Develop your own list of questions to evaluate your prospects and clients. Make sure that the clients with whom you are spending and investing your time on measure up to the standard you have set. You will find an increase in your production and income, waiting around the corner, once the standard is established and met with all your clients.

Published: July 10, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Energy Efficiency

by Kenneth R. Harney

Realty Times

www.MyNvaHomes.com

For real estate investors buying houses at discount prices, it could be a hot new trend. Instead of simply doing the usual renovations, paint jobs and landscaping to turn around properties for resale or rental, growing numbers of investors are emphasizing energy efficiency improvements to increase market values and cut marketing times.

In Baltimore, A-Plus Neighborhood Homebuyers LLC is now acquiring central city rowhouses — spending thousands of dollars extra on eco-friendly upgrades they’d never done before — extra heavy insulation, bamboo flooring and high energy- efficiency appliances and lighting.

Three thousand miles to the west in Seattle, Aaron Fairchild of G2B Ventures is raising $50 million for the Efficient Real Estate Fund, the first limited partnership designed solely to buy urban houses at wholesale prices, perform major energy-efficiency retrofits on top of regular rehabs, then turn the properties around as rentals and for-sale houses.

In an interview with RealtyTimes, Fairchild said energy upgrades, documented by before and after audits, are a key new direction for investors, “even if it sounds like non-sexy stuff.”

Research studies have found that houses with high energy-efficiency ratings sell at premiums ranging anywhere from seven to 14 percent over comparable, non-efficient houses, and take fewer days on the market to sell.

He cited a recent study on Seattle-area single family houses constructed in 2007 or later and certified as “built green,” Energy Star and LEED (L-E-E-D), a top energy efficiency rating. “Green” certified properties of essentially the same size as non-certified units sold for seven and a half percent more per square foot and sold 24 percent faster - an average of 38 days versus fifty.

“It seems fairly obvious that if we spend two and a half percent extra” on renovations to achieve high energy efficiency,” said Fairchild, “that we will recapture much more than that” when the houses are remarketed.

“When you can show people that the house consumes less energy” and emits much lower levels of greenhouse gases — and you’ve got pre-renovation and post-renovation audits and operating numbers to prove it, “it only makes sense the property will have a competitive advantage in the marketplace.” Fairchild’s program is targeting houses in Seattle that can be acquired for 25 percent below current market value, primarily through short sales, bank-owned and pocket listing situations.

The renovations are intended to drastically lower energy usage and carbon emissions, and offer Energy Performance Scores from independent auditors.

Fairchild believes small and large-scale investors who ignore energy consumption and carbon emissions “are missing an important opportunity,” not only for profit, but to do the right thing for the planet.

Published: July 10, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Washington Report: Home Affordable Refinance Program

by Kenneth R. Harney

Realty Times

www.MyNvaHomes.om

The Obama administration’s latest expansion of its “home affordable” refinance program, outlined just before the July 4 holiday, could be huge news for tens of thousands of owners whose houses are seriously “underwater,” or where they’re worth a lot less than the mortgage balance owed on them.

Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.

Under the original rules for the program, the cutoff point was just five percent negative equity — or a “loan to value” (LTV) ratio of 105 percent.

Though an estimated 80,000 owners already have been refinanced by Fannie and Freddie, HUD Secretary Shaun Donovan and Treasury Secretary Tim Geithner decided that the 105% LTV limit left too many borrowers out of reach.

In some parts of California, Nevada, Arizona and Florida, 40 to 50 percent of home owners are now stuck with negative equities, according to industry estimates. In Las Vegas, 67 percent of owners are underwater.

Zillow.com estimates that nationwide, 22 percent of all owners have negative equity in their properties - many of them by more than five percent.

The newly-expanded “home affordable” program opens the door not only to lower monthly payments for seriously underwater borrowers, but also to the possibility of shorter loan pay-off terms to reduce mortgage principal debts much faster.

Here’s an example of how the expanded program could work:

Say your house is currently valued at $240,000, but your mortgage balance is $300,000.

You are underwater by 25 percent.

If your loan is owned or guaranteed by Fannie or Freddie, and you’re not behind on your payments, you should be eligible for a “home affordable” refi.

Say your current payments are eighteen hundred sixty dollars a month. By refinancing into a new 30-year, $300,000 loan at five and a quarter percent, you could cut your principal and interest payment to about sixteen hundred sixty a month - a $200 saving.

Or you could shorten your loan term from 30 years to say, 15 years or 20 years at five and an eighth percent. If you could handle the slightly higher monthly payments, you’d accelerate your principal paydown speed, build equity and go from underwater to above water much faster, even without local market value appreciation.

To take advantage, contact your loan servicer to see if your mortgage is owned by Freddie or Fannie. Or you can check online at either fanniemae.com/loanlook, or freddiemac.com/mymortgage.

Published: July 13, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

The 1031 Exchange in Today’s Market

by Peter L. Mosca

www.RealtyTimes.com

www.MyNvaHomes.com

[Note: To follow is an excerpt of an interview with Michael A. Anderson, CES, Certified Exchange Specialist. Michael is president of Exchange Services, LLC, an affiliate of Zions Bank that serves the QI needs of the affiliate banks and national customer base. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/052009.]

Mosca: Section 1031 of the Internal Revenue Code provides a series of different things for different types of investors. What is a 1031 tax-deferred exchange as it relates to the real estate investment and why is it so valuable?

Anderson: The point of owning real estate is to have it appreciate in value and if you want to change that or sell that property, you may have a substantial tax liability as a result through capital gains taxes, both state and federal. Section 1031 allows you to exchange one investment property for another and doing so appropriately defers the capital gains tax that might be due in such a transaction if it were a sale. As you near closing for the sale of your investment property, you have to decide whether to do an exchange or not before you actually close on your sale. As you near that point, you decide to call a qualified intermediary or QI like myself or any of my colleagues in the business and the QI will set up some documents for you which will convert your sale into an exchange. What that does is it transfers typically the right to receive the proceeds of the sale to the qualified intermediary, so when the sale closes the funds go to the QI to hold them for you while you go look for your replacement property. You have to acquire or identify your short list of replacement properties within 45 days of the sale and you have to actually close those properties you want to acquire within 180 days of the sale or the due date of the tax return for the year in which the sale took place including extension. Planning ahead always helps in life and this is another situation where planning ahead helps you avoid heartburn at the last moment.

Mosca: What separates or makes Zions Bank or your Exchange Services, LLC different or unique from the typical exchange provider?

Anderson: At Exchange Services, we use the qualified trust model, which means that we don’t own the funds. Typically the QIs in the past have used the safe harbor where the QI gets to own the funds in between and they get to do with it whatever they want in general. Under the qualified trust model, we create a trust for the taxpayer and the funds belong to the taxpayer but are restricted from their access according to the safe harbor for the qualified trust by means of the trust. We also invest the funds in separate bank accounts, which have the benefit of FDIC insurance.

Mosca: As an example, I am one investor of maybe 17 who has invested in a tenant in common property and that property is going to sell in September. I want to invest the gain again in another income property. What is the process from there?

Anderson: Basically what we do is compare some documentation to convert your sale to an exchange. Then, at the closing, the funds come to us and we hold them in a qualified trust account for your benefit while you go look for new property and you have up to 45 days to identify your short list and then you have up to 180 days to actually close on your replacement property.

Mosca: Another example, I am investor and I feel it does not make sense to exchange today with the way the market is and it is better to just pay the taxes. What do you say about that?

Anderson: Whenever you pay the tax, the tax money is gone and it is really hard to make up that loss from a return basis. Some people are saying tax rates may go up and there is a good chance that they will. We have even done some modeling here and it turns out that even if rates go up say to 35 or 39%; it’s hard to catch up once you pay that big chunk of capital gains tax. It doesn’t mean you shouldn’t do it in certain situations but it’s just giving yourself a handicap that’s hard to catch up with. A 1031 is a good way for people to create flexibility in their investor plans as they decide to go from one type of investment, say your duplex or into a TIC or other sort of vehicle. It’s a great way to do so without being penalized.

Mosca: One of the overriding themes of this program is the importance of relationships with experts in this business to success. Do you agree?

Anderson: This past weekend, I was at a conference of people in our industry — the Federation of Exchange Accommodators. We review there and talk to each other about what we are doing and about new authority and regulations and decisions on related parties and vacation homes and partnership return questions and it’s a fun time to get together and talk shop and catch up on things. It is important to look for people who have those professional qualifications and in our industry it for the Certified Exchange Specialist. I would encourage people to look for professionals as you say that are qualified and have made commitment to the industry.

Mosca: Mike, we are now in a global economy. Does the law apply to foreign properties?

Anderson: Generally, you can exchange domestic properties for domestic properties and foreign properties for foreign properties.

Mosca: Is there any discussion to change that or do you think it’s always going to stay domestic to domestic and foreign to foreign?

Anderson: It’s hard to know what Congress is going to do at any given time. There has not been as much pressure on that as there has been on other issues.

Mosca: What are some of the other issues coming up in the months or years ahead?

Anderson: There is concern about folks who are unwittingly involved as customers in failures and offering some sort of relief for them, especially those that lost a lot of money in capital and had to pay ‘boot.’ I’d like to see some support for those folks, but I don’t know what hope there is for that. Boot is income that is subject to tax; the tax liability is called boot in an exchange.

Mosca: Can you talk about some of the different ways to protect customer funds?

Anderson: Certainly. Some problems came as a result of honest mistakes and not necessarily unscrupulous activities. It happens either way. The most important thing is to understand who is holding your money, who they are, what their qualifications are, what their management strategy is, and what they’re holding strategy is. For example, there are three safe harbors the IRS allows for this kind of a procedure. One is the qualified intermediary, one the qualified trust, and the other, the qualified escrow. The qualified intermediary approach has been more common. Basically the qualified intermediary receives the funds and they are the qualified intermediary’s funds in the interim. The qualified intermediary can go invest those funds and if they pay that taxpayer 2% and they can make 4% or 5%, they keep the difference. Under the qualified escrow, qualified trust model the funds belonged to the taxpayer and are just held in escrow or in trust for the taxpayer. Again, in a situation where there is a bankruptcy or some question about who the funds belonged to, the qualified trust or the qualified escrow models are much clearer legally belonging to the taxpayer then the qualified intermediary approach. Most of the qualified intermediaries are very honest, very straightforward. It’s an actual layer of protection we give to our customers. We do not put them in pooled accounts. We put every single taxpayer in a different, separate bank account. Plus, we pay all the interest to the taxpayer.

Mosca: What is your golden nugget for today?

Anderson: Even though the economy has had some turbulence recently, don’t lose heart, look forward, be careful, think things through, don’t throw away your money needlessly, make good decisions, analyze, underwrite, ask questions, and we will all make it through this.

Published: June 18, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Residential Lots

by Kenneth R. Harney

www.Realtytimes.com

www.MyNvaHomes.com

It might sound a little surprising, but in investment real estate, residential lots are hot, especially in markets that saw the highest peaks and the worst busts during the past three years.

On Florida’s west coast, Gary Tasman of Cushman & Wakefield affiliate Commercial Property Southwest of Florida, says bulk purchases of developed building lots are “really brisk right now” with prices in some local areas nearly doubling from their low point.

The reason: Home builders are now looking ahead to 2010 and 2011. They see the rebound already taking shape. And they need well-located lots ready to go for the future construction they’re planning.

The best deals are bank-owned lots taken back in foreclosures from earlier, unsuccessful developers. They often come with bare-bones pricing, but Tasman warns that rising demand - from builders and investors - is putting pressure on those prices.

For example, in Cape Coral, some lots that once were selling at $5,000 to $6,000 now command $9.000 to $10,000 or more, Tasman told Realty Times in an interview last week.

In other boom-to-bust-to-rebound markets - Arizona and California for instance - similar land rushes are getting underway again.

Gregory Vogel, CEO of the Land Advisor Organization, based in Scottsdale, Arizona, says demand for bulk-sale, deep-discount residential lots is now, in his words, “nothing less than stunning.”

Publicly-traded builders are scooping up developed lots by the hundreds in REO transactions, he told Realty Times, and are then “land banking” them for their own building - or for resale to other builders or investors - in the coming several years.

In one recent sale, Communities Southwest bought 891 foreclosed single family lots from Bank of America for $8.3 million. A major land banker in its own right for the past two years, Communities Southwest now is marketing about 2,000 lots - primarily targeted at builders gearing up for better days ahead.

But there’s an important factor to keep in mind if you’re looking to invest in residential lots in the coming months: There is virtually no financing available for developed lots. So-called “A-D & C” loans - that’s acquisition, development and construction - are few and far between from banks or other conventional lenders.

So buying lots at deep discounts - attractive as it may be — is an all-cash investment activity. You go in with your own bucks. Or you partner with equity investors who know good timing when they see it.

Published: June 19, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Here are a few reasons that this is a great time to purchase in Northern Virginia now.

1)Existing Home Sales rose 5.1% in February to a seasonally adjusted annual rate of 4.72 Million units.  First-time buyers made up about HALF of this number during the month.  The first-time buyer tax credit will stimulate the lower-priced homes first and then will help those seller’s move up.

2)New home starts are down, there will be less new home sales, less inventory will lead consumers to purchase re-sale properties.

3)The housing affordabitly index hit an ALL-TIME high of 173.5.  This affordability will alllow those purchaser’s who could not buy before enter the market.

4)Mortgage rates are at a FIFTY YEAR LOW.  A home that is purchased at 6% for 360k is equal to a 400k home at 5%.

5)Although unemployment has risen, it is still extremely low relative to National trends and norms.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

In recent times many clients of mine have come to ask what the meaning of the different status’ they see in the Multiple Listing Service I provide to them, www.FindaHomeSellaHomeNow.com .  Here is a summary of the different status’ and what they mean.

Listing Status Categories

As you look through the property listings, you will notice the Multiple Listing Service displays each listing as to its “Status.” Here is the list provided by our area MLS (MRIS). 

·  ACTIVE - Indicates that the property is available with no contingencies, contract or application registered against it.

·  CNTG/KO - (Contingent with Kick Out) - Indicates that the property is available but has a contract with at least one pending contingency that includes a kick out clause.

·  CNTG/NO KO - (Contingent with No Kick Out) - Indicates that the property is available but has a contract with at least one pending contingency and the pending contingencies do not contain kick out clauses.

·  APP REG - (Application registered) - Indicates that the property is available but a rental application has been registered on it.

·  CONTRACT - Indicates that the property has a ratified contract with no pending contingencies. If the only remaining contingency is financing the status should be contract.

·  SOLD - Indicates that the property is sold and settled.

·  RENTED - Indicates that the listing has been rented.

·  TEMPORARY OFF - Indicates that the property is not available for showing. This status is for short term use and must have seller approval.

·  EXPIRED - Indicates that the listing agreement has expired.

·  WITHDRAWN - Indicates that the listing agreement has been terminated prior to its original date

If you have any questions regarding the status of a listing, or more Real Estate information in general.  Please feel free to email or call at any time.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

I have been getting tons of calls and emails regarding the $8000 Tax Credit towards down payment & closing. To clarify, only non-profits, government agencies (Federal, State & local) approved by FHA/HUD can offer the $8000 as a second lien for the buyer.  The $8000 can NOT be utilized towards the 3.5% down payment. The $8000 can be used towards any additional down payment or closing costs.  Enclosed is the HUD mortgagee letter guides Using First Time Homebuyer Tax Credit.

Example:  Purchase price $250k, down payment 3.5% $8750 – the $8750 MUST come from the buyer(s) OWN funds. The $8000 tax credit can be utilized to cover closing & pre-paids and any additional down payment.

Non-profits and other government agencies that are offering this will have their own guidelines as well.  The IRS has additional restrictions on income. Per IRS guides: The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Helping Clients Estimate Their Affordability Range

by Ralph Roberts

www.RealtyTimes.om

Traditionally, real estate and mortgage professionals have encouraged homeowners to stretch – to shop for homes at the upper end of their affordability range. We wanted them to maximize their investment, and we were seeing property values and incomes rise, especially for homeowners who were first starting out. It all made for a very sound investment in housing.

Recently, I have begun to question what an “affordable house payment” means. Even some of the major players in the mortgage lending industry have different ideas of what “affordable” means:

• U.S. Treasury: 31 percent front-end DTI (debt-to-income) ratio, and less than 55 percent back-end DTI
• FHA (Federal Housing Administration) Old: 29 percent front-end DTI, and 41 percent back-end DTI
• FHA New: 31 percent front-end DTI, and 43 percent back-end DTI
• Fannie Mae: 36 percent benchmark back-end DTI with a maximum of 45 percent with “strong compensating factors”
• Conventional loans: 28 percent front-end ratio, and a 36 percent back-end ratio My rule of thumb is a maximum 30 percent front-end DTI. This means that a homeowner’s monthly house payment or PITIA (principal, interest, taxes, insurance, and association fees) should be no higher than 30 percent of the gross monthly household income. For every $1,000 per month in household income, the homeowner should be able to afford $300 of house payment.

The trouble with these guidelines, even my guideline, is that they fail to take into account other mitigating factors. For example, couple with four children paying their own medical insurance premiums is probably going to be able to afford less house than a young couple with no children whose employers provide health insurance.

Likewise, a family that spends $400 per month to heat their home will have less money available for a house payment. Let’s look at a specific example. Suppose a family of four is pulling in about $6,000 per month. That’s $72,000 annually. To simplify, we’ll assume the family is debt free, except for the new home they are about to purchase. Based on a front-end DTI of 31 percent, the couple should be able to afford a monthly house payment of $1,860. That leaves them with $4,140 per month to cover everything else.

According to Ginnie Mae’s How Much Home Can You Afford? calculator, an annual gross household income of $72,000 can afford a monthly house payment of $2,235. This represents a 37 percent front-end DTI, which is outside most guidelines.

Before we encourage the couple to purchase a $200,000 plus house, let’s take a look at their current monthly budget. Assuming we were to sell them a house and saddle them with a $1,860 monthly mortgage payment, here’s where the rest of the money ($4,140) would be going each month:

Income taxes (28 percent) $1,160

Daughter’s college $1,000

Electricity (avg.) $250

Husband’s health insurance $160

Groceries $400

Auto insurance $180

Auto fuel $100

Auto license $28

Auto maintenance/repairs $200

Charitable contributions $100

Movies, TV, Internet $120

Medical/dental (un-reimbursed) $250

Clothing & shoes $80

Dining out $100

Gifts $50

Personal care $40

Pets $40

Total $4,258.00

Now, you wouldn’t exactly characterize this family as living large, yet if it had a house payment of $1,860, it would be seriously struggling every month to make ends meet.

What we as real estate professionals can learn from this example is that home financing eligibility guidelines are just that – guidelines, ballpark figures to get the conversation going. Mortgage lenders, real estate agents, and other professionals who are providing guidance to homeowners on how much house they can afford do their clients a grave disservice by using these general guidelines to make recommendations to specific families about how much house they can afford.

Currently, we are doing this all backwards. We tell homeowners how much house they can afford and then expect them to make the tough budget decisions to make that payment affordable. When the family still can’t afford their house payment, we assume they are overspending and send them to credit counseling to become further humiliated.

Perhaps a better way to qualify homeowners for mortgage loans is to start with the family’s existing budget and projections and develop a realistically affordable house payment based on current and projected net income and monthly expenses. Remember, every family’s situation is unique. We need to tailor their house payment to their budget, not the other way around.

Published: June 1, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Millions of Foreclosures, More Renters and Multi-Family Sales

by Michael Minervini

www.RealtyTimes.com

Look around and you may notice that 40% or greater of your marketplace is distressed properties. These properties may be comprised of short sales, foreclosures, REO’s and even owners about to go into pre-foreclosure status.

According to some accounts, there may be over 8,000,000 projected foreclosures in the United States for the year 2009. In fact, according to RealtyTrac there were nearly 750,000 foreclosures filed in the 4th quarter of 2008 alone. To further illustrate this point, nearly 15.25% of FHA mortgages were in default in the first half of 2008 and nearly 33% of all mortgages were in default in the first 3 quarters of 2008.

With these staggering numbers being realized throughout the country, many visionary agents are taking aggressive actions to stay ahead of the curve. You may have noticed an increased amount of agents in your marketplace specializing in short sales and foreclosures. Since the marketplace looks to remain full of these types of sales for the next several years, this may prove to be a wise endeavor.

New Focus on Multi-Family Investment Properties:

Another smart decision that many agents are making is to become proficient in all aspects of multi-family sales. Agents are quickly learning that there is an undeniable direct correlation between foreclosures and multi-family sales. The fact of the matter is that due to home foreclosures, the following positive effects are taking place in the multi-family market:

1. There is an abundance of former homeowners becoming tenants
2. Rental prices have stabilized in areas where rental prices were statistically dropping
3. Rental prices have increased in stronger metropolitan areas
4. As a result of these factors, vacancy rates in multi-family properties have decreased
5. Also due to these factors, the value of multi-family sales have increased

In essence, the multi-family market is benefitting from the downturn of the general market. This means that educated agents in the field of multi-family homes are reaping large gains. Agents today seeking to learn all that they need to know about multi-family properties are earning the “Multi-Family Specialist®” real estate designation. They are choosing to earn this certification so that they can react intelligently to the positive turn in the multi-family marketplace.

Educational Solution: Multi-Family Specialist® (MFS) is the only certification and designation available to real estate agents which is specifically geared toward multi-family properties. Multi-Family Specialist designees have the ability to differentiate themselves in this very competitive market. This is due to the fact that agents who previously only focused on single family sales can now confidently approach and target multi-family property owners and display the array of knowledge that they have in this specialized field. Additionally, MFS members can effectively demonstrate to investor purchasers their ability to translate facts and figures from an investment property to determine the true appeal of the subject property. Only until the introduction of this informative designation, many agents have avoided the multi-family market. By earning the MFS designation and adding this additional niche to their sales portfolio, agents are increasing their income dramatically. Earn the MFS designation today by logging onto www.MFspecialist.com and begin to tackle this untapped market today! Questions Answered:

Agents who earn the MFS designation will be able to respond intelligently to their client’s questions. Agent will be able to inform their buyer and seller multi-family clients about many important topics, such as:

• Determining the value of the investment property
• How to build value on their investment property
• How to obtain and retain tenants long term.
• How and when to sell their multi-family investment
• How to locate a multi-family property
• How to produce and understand a profit and loss statement
• The basics of 1031 tax deferred exchanges and much more!

Agents wishing to earn this powerful and timely designation can register for and take the online course at www.MFspecialist.com. The course is taken online in the comfort of your home or office and is done at your own pace. Agents will read course materials online with the assistance of the corresponding video that is segmented by chapter.

Published: May 27, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Wanted to share with you some valuable information that lenders must all abide by for Anti Flipping guides for purchase transactions:

 FHA LOANS:

·         Foreclosures: if currently owned by a bank as a Foreclosure there is no Title seasoning required, buyer can purchase and close anytime.

·         Private Investor Purchases Bank Owned/Foreclosure/Auction: If a private investor purchases a property from a bank/foreclosure/auction, and flips property, that investor must be on Title 90 DAYS before new purchaser can close.

·         Private seller to another Private seller, (no foreclosure or short sale): Current owner must be on Title 90 days before new purchaser can close

·         Short Sale: Current owner must be on title 90 days before new purchaser can close (most likely current owners already on title for more than 90 days)

CONVENTIONAL: No one standard flipping rule currently. However, most lenders will have internal flipping rules, that override Fannie Mae/Freddie Mac guidelines. If there has been a significant increase of value within a very short period of time, bank may request an independent field review of appraisal. Additional documentation may be requested if investor flips property and value is significantly increased. There are other additional requirements and each bank may have their own rules, so be vigilant of flips!

Got a call today with a very good question: Question:  “Can a buyer purchase a home after relocating with a short sale on previous home?” Answer: “No – they can’t purchase until 2 years pass and no other delinquencies happen on credit HOWEVER they should have…….”    See below: SOLUTION – FHA & VA will allow current homeowner’s to utilize rental income to offset mortgage if they are relocating. FHA & VA also waive the requirement of having to demonstrate 75% equity in current home to offset current mortgage. SUMMARY: If you are working with anyone relocating from another area (has to be a significant distance to qualify for relocation) and owns a home they can’t sell, they can rent existing property and may qualify for a new FHA/VA loan. The rental vacancy for this area is 15% (85% of total rental income can be used to offset mortgage per FHA guides). Must have signed lease and we may have to verify that deposit check or 1^st month’s rent check has cleared. Call me with any questions, or email any scenario you wish to discuss,

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

If you are serious about building a business, YOUR business, then you owe it to yourself to learn more about Keller Williams. We take great pride in building a career worth having, business worth owning, and lives worth living. If you want to launch into a supportive and professional environment that is uniquely creative, give us a call today.
Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Bank of America Short Sales

by Kenneth R. Harney

www.RealtyTimes.com

Investors looking to acquire houses through short sales just might be in for some good news.

One of the largest holders of second liens in the U.S., the Bank of America, says it’s relaxing its policy on payoffs connected with short sales.

That’s important because large banks have been major impediments standing in the way of thousands of short sales, demanding money for home equity lines and second mortgages that would otherwise be worthless if the short sale property went to foreclosure.

Bank of America had been among the least cooperative of all banks in agreeing to short sale payoff terms, according to industry critics.

The company’s policy was blunt: Pay us 10 percent of what the homeowners owed on the equity line balance or second mortgage, or we won’t sign off on the short sale, which is necessary for the deal to go through.

Now the bank has adopted what spokesman Terry Francisco told Realty Times is “a less arbitrary, more rational” policy.

“What we’re saying (to short sale proposals) is — give us an opportunity to participate and gain at least some of the savings” that will go to the first lien holder — the primary lender on the property — by avoiding the high expenses and losses of a foreclosure, according to Francisco.

Bank of America is now asking for five percent of the sale proceeds on the short sale, net of realty commissions, closing and other costs.

The bank believes that should open the door to more successful transactions, as well as more fruitful negotiations with buyers and sellers to avoid foreclosures.

But not all short sale market experts are convinced that’s the case. Raffi Tal, CEO of Los Angeles-based I-Short Sale, Inc., one of the largest players in the field, says Bank of America’s new policy “will still jeopardize” many short sales that involve its second liens.

The bank’s previous 10 percent policy meant they’d demand $20,000 on a $200, 000 equity line balance, or they wouldn’t bless the deal. But their new policy still means “they want $15,000 if the net proceeds are $300,000″ on a short sale, Tal told Realty Times — even though the economic value of their holding may in fact be zero.

Bottom line for investors: If there’s a Bank of America second mortgage or credit line on the house you’re after in a short sale, work the new numbers. At least some of the time you might be surprised that the answer from the big bank is now ‘yes.’

And watch for other major banks to follow suit.

Published: April 24, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Six Characteristics of Champion Teams

by Dirk Zeller

www.RealtyTimes.com

Through the years of research and working with teams and coaching them to the Champion Team level, there is a repeating pattern of what they possess, implement, and do. They are focused on results and actions unlike lower performing teams.

Standards

There is a set of standards of production, performance, and conduct for each position on the team. These are established by position first at the Champion Performer level, so the employee knows clearly what is expected. They have a target to shoot for since most will not be there yet.

A second set of standards for staff members needs to establish a pathway to the Champion Performer level. What do they need to do, learn, and improve on? What responsibilities must they take over in what time frame? For production assistants, what sales, prospecting, lead generation, lead conversion, and sales ratios must they attain over time to hit the Champion standard?

Accountability

This is an established system of accountability through written reports that must be handed in at regular intervals either daily for new or under-performing people or weekly for others who are on track or doing well.

Champion Team Rule – Performance improves faster when performance is measured and reported.

You must measure and report the performance of your team members. They need to know that you are watching and monitoring their activities. They must know that you are willing to hold them accountable to their commitments.

Cooperation

Everyone needs to be working toward a common set of goals. They all need to view the team win as the real win. They need to see that the individual win in their success or production, at the expense of everyone else, is a loss.

If there is an antagonist on the team, no matter how much they sell or produce in the administrative area, corrective action must be taken. If someone lowers the motivation of team members, a change is in order. If that person lowers your motivation, they need to be gone . . . now!

Caring

The best teams really care about each other and their clients. They cover, encourage, help, and support each other to achieve greater success. They care about the goals and objectives of the team and each other and work for a win for everyone on the team, the company, and the clients. They also band together during times of adversity to overcome all obstacles. You will never hear, “That’s not my job.”

Competitive

The purpose of a Champion Team is to win. The members of the team love to compete in the competitive game of real estate. All team members are competing to bring in more leads, provide greater levels of service to the clients, and position the team as the expert team and the only choice in the marketplace for real estate representation. Their philosophy is like Al Davis of the Raiders – Just win, baby!

Value is shared

Everyone aligns with the values of the team. They embrace the business vision, core values, and envisioned future of the team. They understand, agree, and desire to live the values of the organization, both in their personal lives and business lives. It’s as if the team is a tug-of-war team pulling in perfect harmony and unison to win the tug-of-war.

Published: April 24, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

The National Association of Home Builders is reporting that production of single-family homes is unchanged, despite falling housing starts.

“Today’s numbers are right on target with NAHB’s forecast, which anticipates that housing starts will bottom out in the second quarter, after new-home sales have stabilized,” said NAHB Chief Economist David Crowe. “Single-family starts remained virtually unchanged over the past three months, indicating that we are closing in on a bottom. Multifamily starts – which tend to bounce around from month to month — were responsible for the decline in total starts as they readjusted following a substantial gain in February.”  

Crowe noted that while builders have been seeing more sales office traffic and fielding more calls in recent weeks as consumers respond to historically affordable home buying conditions, many continue to grapple with a severe credit crunch for acquisition, development and construction financing (AD&C). “A substantial recovery in housing of the kind that’s required to help get the national economy back on its feet will not happen until the logjam in AD&C lending has been broken,” he cautioned.

Total housing starts were down 10.8 percent and multifamily starts were down 29 percent in March. The only region seeing a rise in starts was the Midwest, up 16 percent.

Published: April 22, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Can’t Sell Your Home? Why Not Rent it?

by Phoebe Chongchua

www.RealtyTimes.com

It may not always make sense to sell your home. If that’s the case, renting it could be a good option. But understanding the rental process and using expert help will alleviate extra stress.

Dr. Danielle Babb is the author of The Accidental Landlord. She shared five top tips for homeowners who are considering renting their home.

Emotionally disconnect from your home. As you can imagine, this can be a very difficult thing to do — especially if you’ve lived in the house for a long period of time and maybe your kids have grown up in it — but it’s an important step.

“It can cause some emotional distress and you may find yourself too attached for the new tenants liking and their privacy rights. When you make the decision to rent out your home, it needs to feel similar to how it would if you were selling it to someone else,” says Babb.

Screen your tenants. Don’t fast forward to thinking about having wonderful tenants in your home so much that you skip over the screening process. Attending to this process alone, can eliminate huge headaches in the future.

Babb cautions landlords about scams aimed at landlords who don’t screen. “There are actually “professional tenants” out there that do nothing but find susceptible landlords, usually those renting without a management company, that don’t screen tenants. They will give a deposit, and live rent free (not paying rent), knowing you won’t know what to do or how to kick them out,” says Babb.

She outlines several steps in her book that help landlords learn more about removing tenants but she says, “The most important thing is not to let the bad ones in to begin with.”

Babb says in her book as well as on the Landlord Protection Agency website there are screening worksheets that help landlords know what types of questions to ask and what red flags to look for.

“For instance, are they not taking care of their car? Maybe they won’t take care of your house either and make sure you call those references! Compare what they tell you to what is on their credit report, and make sure you do a credit and background check. Know who you are renting to, and don’t be afraid to say no,” says Babb.

Know the law. There are specific laws to protect the tenant. How much the tenant is protected differs greatly from state to state.

“The laws you must abide by are the laws the home is in. You have to tailor your lease or rental agreement to that state’s rules. You can easily find these on the Landlord Protection Agency site and then modify the lease agreement accordingly,” says Babb.

To learn more visit the LPA: thelpa.com

She says, “Common changes are how much notice you must give for them to vacate, the maximum deposit you can collect, and notifications for entrance.”

How much rent? “It’s easy to say, ‘Okay, I have $2000 in expenses, Ill charge $2100,’” says Babb.

But just like when selling your home, it doesn’t work that way.

“The market may only bear a rental comp of $1500. You have to make the decision if that $500/month is worth the long-term gain or whatever your initial reason was for holding rather than selling,” says Babb.

Real estate agents can be a great resource for helping to determine what the best rental price should be. They can show you homes in the area that are also for rent and, just as when selling, taking a look, or at least, driving by the homes gives you an idea about the competition.

“You may get more if you leave it furnished; sometimes you can lease furniture and up-charge and make a profit on it, particularly in areas where young families are starting out or college students frequently live. Just be sure you price it right — all of those extra months on the market eat into that profit or breakeven point. No matter what, be sure you collect a sufficient deposit — usually one months rent, plus a pet deposit and additional monies for other reasons, like appearing to be a risky tenant,” says Babb.

Who is responsible for what? Important, but tricky question. Depending on which side of the fence you sit, you, of course, may see this differently.

Babb says, “If something breaks, you have an obligation and lawful duty to fix it immediately if it affects quality of life or poses a hazard. But, if the tenant just wants something upgraded, that isn’t a requirement. You have to walk the line between having your tenant stay long term because you’re easy to work with and paying too much for little things. You can let the tenant make upgrades that they pay for if you wish.”

Babb adds that incentive programs also help a good tenant to stay longer. “For instance, I give my tenants a $25.00 or $50.00 off rent coupon if they pay 5 days early and pay direct deposit. This saves me considerable time.” She says landlords should beware of partial rental payments such as a tenant paying only $100. “If a tenant sends you a partial rental payment, say for $100, and you cash it, it may start the clock ticking all over again on evictions! These are the types of things that professional tenants do.”

Renting doesn’t have to be a scary process; it does have to be a well-researched and carefully planned process to ensure the best outcome for all.

Published: November 7, 2008

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Housing Most Affordable: May be Time to Move from Renting to Owning

by Phoebe Chongchua

www.RealtyTimes.com

Falling housing prices, historically low interest rates, and tax credits are creating an enticing environment for renters to convert to homeowners.

“We are still going to have a tremendous amount of foreclosures, price declines, and best opportunities to buy properties at amazing prices,” says Bruce Norris of The Norris Group.

If that sounds like a mixed bag of bad and good, indeed it is. Consumers have been inundated with news about a troubled real estate market. “If you look at the closings for California, 55 percent or more closings every month are lender-owned properties; that ratio has never existed before. So, the lenders are really dictating the prices at this point and there are so many [lender-owned properties] that the appraiser almost has no choice but to give that comp a lot of credence,” says Norris. But the good news, especially for those who have been wanting to take the plunge into homeownership is that markets across the country are ripe for choosing the most suitable home.

“The affordability has never been this high. So, in relationship to income, California is the cheapest it’s ever been. The fact that prices will still go down kind of means nothing to the person who is going to live in a house for quite a long time — partly because the interest rates are also historically low,” says Norris.

He points to his own daughter as an example. She is getting married this year and buying her own house for the first time.

“I think it’s a very bright decision. Do I think her neighborhood might go down for another year-and-a-half, yeah—and to that I say, who cares! She’s tying up an interest rate that’s probably under 5 percent for 30 years and that may be the real bargain,” says Norris.

Her fiancé owns a home but Norris and the couple agreed that her buying a home now is a good opportunity. So after the couple marries they will live in the home in order to receive maximum financial benefits. His daughter is using an FHA loan and putting $4,000 down on a $110,000 California home that was, at the height of the real estate boom worth, $330,000. She will then get a federal tax credit for $8,000 and she can receive that money (in as few as 10 days) now rather than waiting until she files her 2009 tax return. Best of all, the mortgage [payment] is less than it would cost to rent.

This is a trend that is playing out in many areas across the country. “Fortunately, the interest rates are national so you have that incredible interest rate that is forcing the [mortgage] payment below rent in many locations, including California. So the area that my daughter is buying in, her rent would be $1,100 and her [mortgage] payment is going to be about $825,” says Norris.

Norris says that, coupled with the federal tax credit for first-time homebuyers, is making renters weigh their options, “It really is an inducement for people to go from being a renter to an owner.”

“There are lots of areas that didn’t go up as much as California. Let’s pick an area, Texas, for instance, you have houses selling for $110,000 to $120,000 range and the rents there are also pretty high–$1,100 - $1,200 or so—so payments there are also a lot less if they own it,” says Norris.

“It’s most affordable right now, so you would think that everybody would want in, but real estate right now has a lot of fear attached to it and a lot of uncertainty about jobs,” says Norris.

Some markets such as California are working to help alleviate barriers to home ownership. The California Association of Realtors in April introduced the Housing Affordability Fund’s Mortgage Protection Program. There are specific eligibility requirements; talk to your Realtor for details.

“People who buy property in 2009 have a safety blanket now of six months of up to $1,500 payments per month that the California Association of Realtors, out of some fund that it has, will pay the people’s payments,” says Norris. He adds, “I’ve never heard anything like it.”

Norris says while these programs to entice renters to become buyers are attractive, he says make sure you’re ready to buy. He says there are specific habits that you should have in place before buying a home.

“You should already have developed a savings habit and you’re ready to buy a home because you have a little bit of money left over in case something goes wrong,” says Norris.

Another affirming reason to move from renting to buying comes from statistics from John Burns Real Estate Consulting in Irvine, California.

The company reports that 50 percent of the 76 metropolitan area markets across the U.S. that are tracked show that people can buy a house (after tax cost of homeownership considered) for less than they could rent one.

Published: April 10, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

Most have heard about the $8,000 tax credit for first time homebuyers. Here are a few tips to see if you are eligible and how to go about claiming it.

According to the National Association of Home Builders, you must have purchased a home from January 1 to December 1 of this year. To be considered a first time homebuyer, however, you only need to have not owned a home in the last three years. This is great news for those who have bought before, but have been out of the homeownership game for a while. The buyer must also “have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers.”

To claim the credit, buyers complete IRS Form 5405 to calculate the amount of the tax credit, and enter it on line 69 of the IRS 1040 income tax return. And you can only make a claim once the purchase of the home is complete.

More information on the first-time home buyer tax credit can be found at www.federalhousingtaxcredit.com.

Published: April 10, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Keller Williams Gets Agents, Brokers On Same Side Of The Table

by Blanche Evans

www.RealtyTimes.com

Profitability is the issue for both brokers and agents. When one makes more, the other makes less. Agents negotiate for bigger portions of the commission, yet they want more service from the broker. The broker wants agents to sell more and to recommend in-house ancillary services to consumers.

Are they adversaries or partners in each other’s success? Sometimes it’s hard to tell from the bitterness they show one another. Is there a better way?

The Keller Williams business plan puts brokers and agents on the same side of the table instead of negotiating against each other, explains Dave Jenks, vice president of research and development and dean of the Keller Williams University.

“Sometimes where people miss the point is they don’t take the big view,” says Jenks. “They stay in the nuts and bolts. We are excited to give them a big-picture look at what can happen to them in their real estate career. The issue about ownership is wealthbuilding.”

He says what prevents wealthbuilding is “Us VS Them” thinking.

“There are lots of complaints. I’m an agent and I think you are keeping too much of the money,” explains Jenks. “I can go down the street, and it will cost me half as much to be there because of the commission split. You don’t have enough staff. When I need a report or to put something in the MLS, I can’t get it done. This software is crap. We need better software. We need better fliers and information in our listing packages. We need a four-color brochure about how we are better. I need someone to help me design my own personal marketing.”

He continues, “A lot of traditional shops where owners keep more are starting to bill back, and the agent is saying you are nickel and diming me to death. You’re ripping me off for all these bill-backs. Why should I have an individual card for long distance calls? I have customers trying to reach me at night - how come someone isn’t here to answer the phone? I have been here seven years - why is my office so dinky? I need more space, and on and on.”

Broker/owners have their complaints, too. “Agents don’t appreciate what I do,” Jenks mimics. “They waste materials. They beat up on the staff. I keep putting supplies of brochures and if I did a trunk check, I’d be able to collect 5000 brochures that are getting warped and wet. What is happening to our lockboxes? We have 200 active listings and 300 lockboxes are unaccounted for? Agents want ads - I need my agents to get more listings.”

He says that if agents become owners, then they automatically want to be on the same side of the table as the broker/owner, especially while making decisions about how the brokerages’ resources are spent.

“You need to let agents make decisions with you,” suggests Jenks. “Brokers come up with a brilliant idea and change things in their office and change is always problematic if agents don’t have a say.”

Here’s how the Keller Williams plan works. Agents are paid as agents, but they have a second revenue stream as recruiters. Agents are paid a percentage of the production of their recruits and their recruits’ recruits - up to seven levels. The profits generated by the recruits can help pay agents beyond retirement and to the agents’ heirs after death. Any significant decision at a Keller Williams office must be made with a board of directors consisting of the owners and the agent leaders because they are given a stake in the success of the office through recruiting and through ancillary services which they also own part of.

“You have to be in top 20 percent of producers in the company, so that the decision making body is made of the people who do the most in production. That makes a lot of sense,” says Jenks

Then you have consensus between the owner and a body of agents, says Jenks. “The two things that I would say are fundamental is that the agent gets to keep more of the money, and if they have to spend money on their business, they get to choose how that money is spent.”

He explains, “If you are looking at another model where the brokers keep more, they have agents who expect more to be done for them, and they are justifying to the agent ‘That is the reason you want to be with us is because we do more for you. You don’t get as much commission, but we reduce your costs.’ We’ve found that the agent would rather spend the money than somebody else spend it for them. They get to promote themselves to a targeted client base instead of the company spending the money. They might spend the money differently, if it were their money to spend.”

“They can’t go spend the owner’s money but the owner’s decision needs to come by them when changes are made,” suggests Jenks, “then it is the leaders of the council who bring the idea back to the sales meeting. ‘Here’s what we decided and why.’ It is a good business decision-making system. It goes back to the original hook. It moves the agent more on the same side of the desk as the broker/owner and gives them a chance to understand why things are being run the way they are being run.”

Jenks report that profit-sharing was way up this year. “Through October, last year, profit-sharing was $6.3 million,” says Jenks, “and this year, it was $11.5 million, and it is on track to more than double in one year. Owner profits, and that is net profits (all losses against all gains) last year was $3.4 million. This year, it was $12.8 million. We have 284 offices. That’s about $50,000 profit per office, but that figure includes all offices, including 70 offices that just opened this year that aren’t profitable yet. Subtracting those losses, it is a net total.”

He says, “The trend that is important is the increase from $3.4 to $12.8 million in losses against gains. The average office total profit was $101,000. The top 25 office made $380,000. If owner profits have gone up that much in one year, that means that more and more, our model is working for people.”

So what are some ways brokers can get agents on the same side of the table?

“I call it the battle for company dollar and bottom line,” says Jenks. “From an owner’s point of view, that is what it is. You are battling how much can you justify having your agents pay you as a percent that you get to keep as company dollar and take the best to the bottom line. The struggle for most owners is the difficulty in getting agents to cooperate with them.”

A big issue is who pays for consumables. Keller Williams solves the problem with transaction coordinators, graphic artists and other professionals whose job it is to take the contract to closing. But how do you handle the people who waste resources?

“This is a bill-back-for-service model,” says Jenks. “The best offices are trying to run a similar model and we create an office environment where you can do that less expensively.”

So how do you get rid of the us VS them attitude? “You have to get your leaders to understand and trust how you keep your books,” suggests Jenks. “If they don’t know, they can think whatever they want, they see the broker’s success. If you are wiling to open your books and let them take a part in the finances of the company. the best producers will be the opinion leaders, and second you have to give them a reason to care. It is a relationship-based business. Owners who are respected and loved and trusted by agents have built an environment where agents aren’t working against them. It helps to give them a tangible financial reason to care about profitability of office. That is where sharing of profits gives that tangible evidence.”

Advises Jenks, “Another way is to teach them to run their practice like a business. As an owner, if you will step up and say, ‘My goal is to help you build your practice and I’ll teach you how to do it.’ Then take them as far as you can.”

Published: December 18, 2003

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Strong Segment of Market

by Kenneth R. Harney

www.RealtyTimes.com

Purchases of houses for investment purposes continued to be among the strongest segments of the real estate market last year — and accounted for more than one out of five of all home sales in 2008.

That’s a key finding of the latest annual study on second homes and investment purchases conducted by the National Association of Realtors.

The investor market share last year was 21 percent, the same as the year before, but down several points from the height of the housing boom in 2005 when it hit an all-time record of 28 percent.

Second homes and vacation property purchases, on the other hand, dropped last year to just 9 percent of the total market, down from 14 percent in 2006 and 12 percent in 2007.

What sort of properties were investors buying for rentals? Two out of three were detached single family units last year, while 22 percent were condos or duplexes. Eight percent were attached townhouses or rowhouses.

Investors kept their purchases pretty close to their home base — following the long-standing rule — “invest where you know the local market best.” Fifty four percent of all investment houses were located within 20 miles of the investor’s own home, and roughly two out of three were within 50 miles.

Investors also opted for considerably lower priced properties last year. The median sale price of a rental unit in 2008 was $108,000, according to the Realtors study. That compares with a $196,000 median for primary residences and $150,000 for second home and vacation properties.

During the boom years, by contrast, investors tended to buy much higher priced units, a median of $189.000 in 2004 compared with a median of $204,000 for vacation units.

Given last year’s credit crunch, more investors apparently avoided banks and mortgages altogether. Forty two percent paid all cash for their purchases, versus just 15 percent of buyers of primary residences and 31 percent of vacation home buyers.

Far larger numbers of investors bought their units in distress situations — one out of six was a foreclosure or trustees sale — which is no surprise given the huge numbers of R-E-O and auctions that dominated many local markets.

So what did the typical investor look like last year? They tend to be older — with a median age of 47 years compared with 37 for primary residence buyers.

But interestingly, they were not wealthier than other buyers. In fact, second and vacation home buyers had higher median household incomes — $97,000 - compared with $85,000 for investors.

Published: April 3, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Mortgage Rates Fall Again This Week, Hitting Another Record-Breaking Low

McLEAN, VA — Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent with an average 0.7 point for the week ending April 2, 2009, down from last week when it averaged 4.85 percent. Last year at this time, the 30-year FRM averaged 5.88 percent. The 30-year FRM has not been lower in the life of Freddie Mac’s weekly survey, which dates back to 1971 for the 30-year FRM.

The 15-year FRM this week averaged 4.52 percent with an average 0.7 point, down from last week when it averaged 4.58 percent. A year ago at this time, the 15-year FRM averaged 5.42 percent. The 15-year FRM has never been lower in the life of Freddie Mac’s weekly survey, which dates back to 1991 for the 15-year FRM.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.92 percent this week, with an average 0.7 point, down from last week when it averaged 4.96 percent. A year ago, the 5-year ARM averaged 5.59 percent. The 5-year ARM has never been lower in the life of Freddie Mac’s weekly survey, which dates back to 2005 for the 5-year ARM.

One-year Treasury-indexed ARMs averaged 4.75 percent this week with an average 0.6 point, down from last week when it averaged 4.85 percent. At this time last year, the 1-year ARM averaged 5.19 percent. The 1-year ARM has not been lower since the week ending September 29, 2005, when it averaged 4.68 percent.

“Mortgage rates followed other interest rates lower this week amid reports of slower economic growth” said Frank Nothaft, Freddie Mac vice president and chief economist. “The final estimate of economic growth in the fourth quarter was revised lower and personal incomes fell 0.2 percent in February, below the market consensus.”

“On a positive note, pending existing home sales rose 2.1 percent in February, marking the second increase in three months as potential homebuyers are taking advantage of historically low mortgage rates and falling home prices. Serving as a spur to sales, housing affordability reached an all-time high in February 2009 since the series’ inception in 1971, according to the National Association of Realtors®. By region, sales surged by nearly a third in the Northeast and Midwest, but fell in the West.”

Published: April 3, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

   Purchase & Renovate Financing           FHA 203k 

Ø  No limit on repair costs – statutory loan limits only – 3.5% down

Ø  Minor to major improvements including additions and structural work

Ø  Finance up to 6 months piti

Ø  Liberal qualifying

Ø  Licensed contractor or self-help ok

Ø  All FHA owner occupied only

 FHA 203k Streamline 

Ø  Up to $30,000 in repair costs – statutory loan limts – 3.5% down

Ø  Minor improvements, electrical, plumbing, flooring etc…no structural or additions

Ø  Reduced costs to borrower and improved pricing

Ø  No up-front HUD Consultant required – licensed contractor or self-help ok

  Conventional Renovation 

Ø  Owner occupied, 2^nd home, investment property

Ø  Conforming loan limits

Ø  10% down owner occupied, 20% down investors

Ø  Licensed contractor – self-help on exception basis

Ø  Minor to major improvements

All renovation loans require:

Contractor validation or self-help approval

Plans & specs with cost breakdown prior to closing

All loans allow mortgage payments to be financed

 Brian Foss

Home Mortgage Consultant

Renovation Specialist

304.876.2508 office

304.261.9240 cell

 Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

Recent statistics regarding mortgages have brought the reality of the mortgage market front and center.

According to the National Delinquency Report from the Mortgage Bankers Association (MBA) shows that more than 11 percent of all mortgages are either delinquent or in foreclosure.

This is up 1.26 percent from last year. This may seem like a small percentage — but that number equals 1.5 million homes.

This is even more incentive to quickly enact programs put into motion by the recent Obama Stimulus Plan.

Published: March 10, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Why to Buy a Home Now

by Phoebe Chongchua

www.RealtyTimes.com with www.MyNvaHomes.com

If you’re renting and wondering if you should buy a home, consider what bestselling author, David Bach, says, “The average homeowner is worth 35 times more than the average renter.”

He advises renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way they’re only buying as much home as they can afford.

The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you’re not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.

According to a MarketWatch news article, buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. “People can get a lot of what they need and almost all of what they want today,” said Jay Papasan, one of the authors of “Your First Home”.

While poor market conditions have created a troubling situation for some homeowners, the downturn has made the buying market ripe for others. The affordability of homes is better than ever. The National Association of Realtors’ housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.

How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you’re searching for a place to live for, at least, several years, buying now could be a good choice for you.

How much you can afford. Don’t let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don’t get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes — simpler living.

Mortgage rates drop to historical low. How much home you can afford is affected by mortgage interest rates that, right now, are highly appealing. Good credit, documenting your income, and a substantial down payment will make you a better candidate for the better mortgage rates.

Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures. Buyers can peruse the market and have the freedom to select the home they really want. If you’re interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy.

Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy improving and developing over the years.

Tax credit benefit. Last summer, the federal government started providing up to a $7,500 tax credit to buyers who have not owned a home in at least three years; the tax credit must be repaid within 15 years. But that figure may increase. The National Home Builders Association and National Association of Realtors are pushing for more significant help for all home buyers — not just those who are buying for the first time. The Senate, as part of a stimulus package, this month approved a temporary new tax credit to be applied to homebuyers’ tax bills. The credit would give buyers 10 percent of the purchase price of any home, up to $15,000. Alan Zibel of the Associated Press writes, “Anyone who buys a home within a year of the bill’s signature would qualify. To deter speculators, buyers must occupy the house as their main residence for at least two years.” At the time of this writing, the stimulus package had not yet gone to the White House.

Published: February 13, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Real Estate Outlook: Bottom in Sight?

by Kenneth R. Harney

www.RealtyTimes.com and www.MyNvaHomes.com

Signs of a cyclical turnaround for housing are on the upswing. Sales are up sharply in many of the hardest-hit markets, and prices are firming in many others.

And now, even some of the country’s previously most-bearish economists and media outlets are seeing the light.

Last week, Dr. Mark Zandi, chief economist for Moody’s Economy.com, surprised analysts by announcing that “the bottom of the housing downturn is in sight for the nation.”

Just days later the Wall Street Journal — which had been among the most pessimistic of major U.S. dailies — ran a prominent article with this headline: “For some, it’s finally time to dive into the housing market.”

The article focused on purchasers in Phoenix, Seattle and Connecticut who recently found that lower prices and affordable mortgage rates made ownership possible for them. They got what appear to be great deals.

The Journal quoted one Phoenix buyer who had just picked up a bargain-priced first home as saying, “six months ago, I didn’t think I would ever own a home. Now I do. It’s so perfect.”

It’s obviously good news that doom and gloom economists like Zandi and the Wall Street Journal are picking up on what’s happening in local real estate markets. More important for the larger market, though, is that they are in the position to spread the word to consumers that it’s now not simply a “good time to buy,” it’s also a safe time to buy.

Mortgage rates continue to hover near historic lows. According to the Mortgage Bankers Association, thirty year fixed rates last week averaged 5.2 percent, down from 5.3 percent the week before. Fifteen year rates average a flat five percent.

But don’t mistake the message here: The economy as a whole still is facing huge problems — unemployment at 7.6 percent, banks taking billions from the government, a stock market that’s still pumping out losses, household consumption down.

None of that is positive for real estate.

But here’s what may be developing: Just as housing’s troubles preceded the rest of the economy on the way down, there are increasing indications that housing could be out ahead on the national economic recovery.

Why? Because pent-up demand is strong, affordable financing is there for buyers with decent credit and a downpayment, and improved federal tax credit incentives make the equation even better.

Once more consumers grasp the fact that the worst is over for real estate, we just might see some very encouraging numbers in the months ahead.

Published: February 17, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Carla L. Davis

www.RealtyTimes.com

The new $789 billion stimilus plan could reach President Obama’s desk as early as Monday, this after both the House and Senate enter into final votes.

While a smaller dollar amount than originially suggested, this plan is aimed at aiding an economic and job market recovery.

Vice President, Joe Biden, spoke yesterday on the matter, noting, “I don’t think anyone looking at what’s going on in the economy can have any doubt about the depth of the problem we’re facing.  We’re long past that debate. … Just last month, in one month we lost 600,000 jobs in America. And all the evidence is that job loss is accelerating — accelerating, not decreasing, not slowing down. So we need to act, and we need to act now.”

President Obama thanked Congrees in a statement Wednesday, for coming together on a plan that “will provide immediate tax relief to families and businesses.”

The forward movement in Congress is thanks in part to compromises by both party sides.

The Recovery and Reinvestment Act of 2009 hits on 6 key issues:

1. modernize the nation’s infrastructure;
2. enhance America’s energy independence;
3. expand educational opportunities;
4. preserve and improve affordable health care;
5. provide tax relief; and
6. protect those in greatest need.

Published: February 13, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Carla L. Davis

www.RealtyTimes.com

The new $789 billion stimilus plan could reach President Obama’s desk as early as Monday, this after both the House and Senate enter into final votes.

While a smaller dollar amount than originially suggested, this plan is aimed at aiding an economic and job market recovery.

Vice President, Joe Biden, spoke yesterday on the matter, noting, “I don’t think anyone looking at what’s going on in the economy can have any doubt about the depth of the problem we’re facing.  We’re long past that debate. … Just last month, in one month we lost 600,000 jobs in America. And all the evidence is that job loss is accelerating — accelerating, not decreasing, not slowing down. So we need to act, and we need to act now.”

President Obama thanked Congrees in a statement Wednesday, for coming together on a plan that “will provide immediate tax relief to families and businesses.”

The forward movement in Congress is thanks in part to compromises by both party sides.

The Recovery and Reinvestment Act of 2009 hits on 6 key issues:

1. modernize the nation’s infrastructure;
2. enhance America’s energy independence;
3. expand educational opportunities;
4. preserve and improve affordable health care;
5. provide tax relief; and
6. protect those in greatest need.

Published: February 13, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Carla L. Davis

www.RealtyTimes.com

The new $789 billion stimilus plan could reach President Obama’s desk as early as Monday, this after both the House and Senate enter into final votes.

While a smaller dollar amount than originially suggested, this plan is aimed at aiding an economic and job market recovery.

Vice President, Joe Biden, spoke yesterday on the matter, noting, “I don’t think anyone looking at what’s going on in the economy can have any doubt about the depth of the problem we’re facing.  We’re long past that debate. … Just last month, in one month we lost 600,000 jobs in America. And all the evidence is that job loss is accelerating — accelerating, not decreasing, not slowing down. So we need to act, and we need to act now.”

President Obama thanked Congrees in a statement Wednesday, for coming together on a plan that “will provide immediate tax relief to families and businesses.”

The forward movement in Congress is thanks in part to compromises by both party sides.

The Recovery and Reinvestment Act of 2009 hits on 6 key issues:

1. modernize the nation’s infrastructure;
2. enhance America’s energy independence;
3. expand educational opportunities;
4. preserve and improve affordable health care;
5. provide tax relief; and
6. protect those in greatest need.

Published: February 13, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Washington Report: Non-Repayable Tax Credit

by Kenneth R. Harney

www.RealtyTimes.com

First time buyers will get an improved, higher, nonrepayable version of last year’s repayable $7,500 tax credit under Congress’s massive $789 billion economic stimulus package.

That in turn should lead to 500,000 additional home sales this year, according to new estimates prepared by the National Association of Realtors economics staff and provided to Realty Times.

With the credit eligibility period now extended to September 1, instead of the previous cut-off date of June 30, the 500,000 additional transactions will include purchases not only by direct users of the credit, but also replacement home purchases by sellers who are moving out …or moving up.

This year’s better tax credit should also generate huge amounts of “ripple effect” bang for the buck — $62,000 of additional economic activity for every house sold - or roughly $31 billion in incremental economic benefits, according to the Realtors’ projections.

Why? Because virtually every home purchase triggers other purchases and payments down the line — furnishings, appliances, remodeling, real estate commissions, moving expenses and the like.

Not everybody in Washington is happy with the new credit, however. The National Association of Home Builders pushed hard for a $15,000 credit for all purchases during 2009 — and got it inserted in the Senate version of the stimulus package.

But House and Senate conferees decided that was too costly in a bill that already had $280 billion in other tax benefits, and they cut it back to the smaller version passed earlier by the House.

Though the improved tax credit is drawing most of the attention, the stimulus package has a handful of other incentives and benefits for home owners. For example, it extends or expands all energy-related tax credits — for everything from energy efficient heating and airconditioning units, doors, windows and insulation - through the year 2010.

And the bill should produce a lot of additional economic activity aimed at “weatherization” of up to one million houses owned by moderate-income families — $5 billion worth of new subsidies, according to House Speaker Nancy Pelosi.

Still another big program in the package should create economic ripple effects in neighborhoods where there have been heavy numbers of foreclosures. The bill provides two billion dollars to buy up, renovate and either rent out or resell foreclosed and vacant houses.

The money will go to local governments, but the actual rehab, rental and resales work will flow to people in the private sector.

So if you live or work in an area that’s seen a lot of foreclosures, check in with your local housing and planning departments to see how you might fit in.

Published: February 16, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Should You Use an IRA LLC or Solo 401(K) to Invest in Real Estate?

by Phoebe Chongchua

http://www.realtytimes.com/ with http://www.mynvahomes.com/

Nobody would argue that there has been severe disappointment in the stock market performance. That has a lot of people looking for other options such as taking their retirement investment accounts into their own hands. Using the self-directed IRA allows you to enjoy the benefits of contributing to your retirement account while also being able to self-direct those funds into alternative assets such as real estate.

“The simplest way to invest in real estate with retirement accounts is with a self-directed IRA. An IRA has to have a custodian such as a bank or trust company that will hold the assets for the accountholder,” says Jeff Nabers, founder of IRA Association of American and CEO of Nabers Group. “You can open a self-directed IRA and then roll your retirement funds into it and then you can ask the custodian to go out and invest based on your wishes,” says Nabers.

While this method of using your self-directed IRA to invest in real estate is becoming increasingly more popular, it has its downside. “It can become cost-prohibitive,” says Nabers. He says the fees that custodians charge can add up very quickly. And he adds, “The custodians can be slow to react to an accountholder’s needs. Sometimes they might not let you do an investment because of their policies.” But Nabers says investors can create an IRA LLC (Limited Liability Company) which allows more freedom to invest in what and when they want. “You can pair your IRA with an LLC. The LLC is created and the IRA accountholder directs the custodian to invest some or all of its funds into the LLC. The accountholder then manages the LLC,” explains Nabers.

He says this method doesn’t require accountholders to get approval from a custodian to purchase real estate — with the IRA LLC the accountholders have complete checkbook control over their funds. However, Nabers says another retirement vehicle that investors are turning to is the Solo 401(k). This investment vehicle provides checkbook control, allows 10 times higher contribution limits than the IRA, and provides the ability to borrow money from your retirement account, and, generally, it helps you avoid the UBIT (Unrelated Business Income Tax) — a tax that is often created through leveraged real estate ownership. Unlike a self-directed IRA or IRA LLC, the Solo 401(k) allows you to be the actual trustee of the retirement plan directly. You manage the funds and you invest them in what you want. “In an IRA everything about how it works is laid out in a section of the Internal Revenue Service code. With a Solo 401(k), the section about how it works describes how it can work, but how the Solo 401(k) actually works is determined by the planned documents. So, all IRAs work the same but Solo 401(k)s can vary a lot from one plan to the next depending on how the plan documents are written,” says Nabers.

“You can set up a Solo 401(k) anywhere; what it comes down to is how flexible and capable the plan will be. You could set up a Solo 401(k) with a stockbroker and then you’ll invest only in stocks, bonds, and funds. Or if you decided to invest in a less restrictive platform, then you open a Solo 401(k) at another company but all that company does is send you a binder on your account and doesn’t offer any real help,” says Nabers.

Here are five things to look for before deciding to open a Solo 401(k):

1. Expertise and knowledge. It is extremely important to find a company that is highly experienced in setting up a Solo 401(k). As the stock market plummets, the industry of self-directed investing is growing rapidly. Companies are popping up all over the Internet. It’s crucial that you find a company that has expertise and knowledge in this highly technical field. Without the expert support and financial intelligence, your retirement funds could be in jeopardy.
2. Additional services provided. Make sure the company that you use to create your Solo 401(k) plan documents offers you additional resources. Some companies will set up your Solo 401(k) but not offer any additional educational information on important issues such as prohibited transactions.
3. Make sure the company provides an IRS opinion letter to ensure the Solo 401(k) will receive favorable tax treatment as a qualified plan.
4. Review the Solo 401(k) plan documents. Don’t just open the account without understanding the limitations of the planned documents. Remember, these planned documents can vary drastically so it’s critical to discuss your specific needs with the company before you elect to set up a Solo 401(k).
5. Look for document provider rather than custodian. Custodians are not required for Solo 401(k)s. In order to have direct possession of your asset, you will want to make sure the plan documents offer more flexible terms than a custodian’s. If you use a custodian you will likely not have direct control of your assets and may have to go through the custodian in order to execute a transaction. For more information on self-directing your retirement funds to invest in real estate, visit; nabers.com

Published: February 6, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Is A Mortgage Modification For You?

by Broderick Perkins

www.RealtyTimes.com with www.MyNvaHomes.com

Home loan modifications are designed to save homeownership, but they’ve also created a new mortgage maze pitted with “buyer bewares.”

Both government-sanctioned counseling agencies and local community service agencies concede they have been swamped recently by demand for loan modifications.

The demand stems from a proliferation of federal, state and local level foreclosure relief and bailout efforts from both government and the private lending industry.

Mortgage modifications have been around for years, but those recent relief efforts have raised the profile of the mortgage workouts as an alternative to foreclosures, short sales, auctions, and bankruptcy.

The demand has opened the floodgates of loan modification services now offered by real estate agents, mortgage brokers, attorneys, government agencies, lenders, and other professionals.

No matter where they start, homeowners seeking mortgage modifications are at the mercy of lenders. The workouts are often voluntary and, completed on a case-by-case basis, they frequently come without standardized procedures.

Caught in the lurch, homeowners are finding it tough to know when a modification will work and how to best obtain one. This story and a follow-up next week will shed some light on the subject.

What is a mortgage modification?

A home loan modification, granted only upon the existing lender’s approval, permanently reworks some of the terms of an existing mortgage in order to make the loan more affordable to the homeowner.

The strategy is typically designed for homeowners struggling to pay their mortgage, not for those who can pay their mortgage or are eligible for a refinanced loan.

Modifications are generally lender fee-free and involve the lender or loan holder lowering the interest rate and or changing an adjustable-rate mortgage (ARM) to a fixed rate mortgage (FRM) with a 30-year term. Some form of mandated homeownership counseling generally comes with the deal.

Less common loan modifications include adding missed payments to the loan balance and extending the term of the loan. Least common is getting the lender to reduce the principal or wipe out any second mortgages.

A mortgage modification is not a refinanced mortgage — a brand new loan written to pay off the old home loan.

“A mortgage is one of the most complex transactions there is. A loan modification is also a gray area for a lot of people. So of course people need someone to walk them through the process to tell them this is what you need and this is what you don’t need,” said Ginna Green, spokeswoman for the California office of the Center for Responsible Lending in Oakland.

Is a loan modification for you?

Greg Pennington, a San Francisco-based mortgage banking consultant and counselor with Parker-Pennington Enterprises, says a loan modification isn’t for everyone.

A loan modification may not be viable if:

• The modified loan comes with payments you still can’t afford.
• Your current interest rate is already low and there’s no room for the lender to lower it further.
• You can make the new payments, but the mortgage balance is greater than the value of your home and you don’t plan on staying put long enough to reverse the loan-to-value imbalance.
• You have not already missed payments on your mortgage or can’t show financial hardship due, say, to job loss, pay decrease, illness or interest rate increase.
• You have other properties, investments or assets that could be liquidated to cover your mortgage debt.
• A short sale (The lender forgives a portion of the debt owed if you can find a buyer), bankruptcy, auction sale, refinance or other approach, short of a foreclosure, is a better option.

“You can do a loan modification and not be aware of where you stand. You can get a loan modification for a home you don’t want to be in,” said Pennington.

A financial, housing or credit counselor can help you determine your best option. Just be prepared to hold down the fort for the 60 to 90 days or more it could take to complete the modification, due to potential complications and document processing times.

Next week: There are three basic ways to approach a mortgage modification, according to consumer advocates.

Published: February 5, 2009

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

DPAGroundSwell2 was launched today to coincide with the introduction of H.R. 600, FHA Seller-Financed Downpayment Reform Act of 2009, by Representative Al Green (D-TX). H.R. 600 is the 2009 version of last year’s bill (H.R. 6694) that would restore seller-funded downpayment assistance (DPA).  

Reformed DPA will help stimulate the housing market by providing working-class Americans with a path to homeownership and generate $150 billion in home sales this year. Purchasing a home now puts homebuyers in a position to build equity as markets recover.

If you are eager to learn about our DPAGroundSwell2 campaign, plan to attend our first virtual town hall of 2009 targeted for late next week. Look for our email invitation on Tuesday! CONGRESS INTRODUCES BILL THAT WOULD REINSTATE DOWNPAYMENT ASSISTANCE: NEHEMIAH RESPONDS

- Bill Would Broaden Opportunities for Sustainable Homeownership Without Government or Taxpayer Dollars -

Sacramento, CA, January 16, 2009 — The following statement was issued today by Scott Syphax, president and CEO of the Nehemiah Corporation of America in response to H.R. 600, a bill introduced in Congress that would reinstate seller-funded downpayment assistance (DPA). Prior to the October 1, 2008 ban on DPA, Nehemiah was the oldest and largest provider of downpayment assistance.

“There is an overlooked solution to today’s housing crisis and fortunately several members of Congress recognize the role DPA plays in getting us there. We commend Congressman Al Green [and additional members of Congress] for working tirelessly to support a bill (H.R. 600) that creates opportunities for sustainable homeownership, which serves as the cornerstone to strengthening a crumbling housing market and breathing life back into the economy. With foreclosures on the rise and banks maintaining their stranglehold on credit, DPA offers a simple solution without spending a single government or taxpayer dime according to the Congressional Budget Office. Further, it enables worthy families to take advantage of depressed home prices, therefore reducing the glut of homes on the market. We urge Congress to reach across the aisle and prioritize broadening opportunities for responsible homeownership in America by reinstating DPA.”

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

 Success with Short Sales
by Phoebe Chongchua-Realty Times

It may truly be the choosing of the lesser of two evils — short sale or foreclosure — but, if you have to get out of your home, finding a way to complete a successful short sale may provide the best outcome for a distressed homeowner.

Since I’ve covered short sales in previous columns, see Short Sale: May be Solution for Delinquent Homeowners, I am not going to focus on what they are but rather how to make them successful. Short sales are typically more difficult than a regular real estate transaction but they are better than simply walking away from a home and letting it foreclose.

These days, with foreclosures and short sales comprising nearly 40 percent of recent home sales, the National Short Sale Center (NSSC) is receiving more than 3,000 calls per month from homeowners across the nation. The company has already handled more than 1,000 short sales in all 50 states.

Nearly 12 million homeowners are upside down with their mortgages — owing more than their home’s value — and the number is growing. It’s estimated that number will increase to 15 million within a year’s time.

Travis Hamel Olsen and some partners opened the NSSC a few years ago. He says the short sale is a “win-win” situation. The bank ends up losing less money than if it ended up taking back the property and the homeowner’s credit is not damaged as much as from a foreclosure.

But the short sale process is not easy or financially pain-free. Some lenders will absorb the difference between what the outstanding mortgage is and what the home sells for in a short sale. However, other times the lender will seek to collect the difference from the homeowner.

If you’re considering a short sale, here are some tips that you should consider.

Get expert help.

This is a must. Short sales are difficult and negotiating through the process can be very stressful. You need guidance and the best available information that you can find. “There’s no charge for our services to the homeowner,” says Travis Hamel Olsen, President of National Short Sale Center. That’s because the NSSC is paid by splitting commission with the listing agent and the lender pays the company a closing fee that is authorized by the homeowner. For those fees, the company will help the homeowner navigate through rocky waters. “We will guide the homeowners, letting them know all the documents that they need to collect for their specific lender,” says Olsen.

Start the process as soon as possible.

Contrary to what some homeowners believe, you do not have to be delinquent to start or complete a short sale. “Don’t sign title over to anybody else to conduct a short sale for you,” cautions Olsen. He adds, “A lot of people will sign the deed of the property over to somebody to negotiate the property — that’s not needed.”

Submit a hardship letter.

Even though you’ll utilize the services of expert agents and short sale specialists, you’ll still need to do your part to help convince the lender that the short sale is the best outcome for all. The hardship letter explains to the lender why it is impossible for you to pay the full amount of the loan. It demonstrates your true financial hardship. Experts say you have to be careful if there is a big gap between your current income and the income you used to get the initial loan to buy the property. A large gap could point toward possible mortgage fraud, unless your financial circumstances have drastically changed.

Price the short sale competitively.

Usually, it’s best to price the property at or near market value. Keep it competitive says Olsen. He says a lot of people want to list the property at what the debt is but that is not usually successful. The good news is that Olsen says banks are more willing to negotiate. “We are seeing more approvals and consequently more closings every single month,” says Olsen.

The short sale can be a lengthy process, have, patience, quality experts on your side, and stay on top of what is needed from you to help close the deal. For more information on short sales visit: shortsalecenter.com.

Published: December 19, 2008

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Washington Report: New Congress and Fannie Mae

by Kenneth R. Harney

www.RealtyTimes.om

The Obama administration still has three weeks before taking over in Washington, but the new Congress arrives in town much earlier - January 6th.

Besides a massive economic relief package — which is expected to cost anywhere from $800 billion to $1 trillion and focus on job-producing projects like repairing roads and building bridges - there’s another key item on the agenda: What to do with Fannie Mae and Freddie Mac.

Both companies are mainstays of the U.S. home real estate market, accounting for more than half of all new mortgages. But both have come to financial grief and are operating under “conservator” arrangements run by the federal government.

That’s not technically bankruptcy reorganization, but it’s pretty close.

Given Fannie’s and Freddie’s importance to housing and the mess they’re in, Congressional Democratic leaders have already begun discussions on what to do with them.

Unlike the last Congress, where Democrats ran the committees but didn’t have the votes to overcome Republican opposition in the Senate, this year they pretty much can rule the roost.

So the ideas they’re discussing now have special importance for home buyers, sellers, builders, Realtors, investors and others involved in real estate.

Here’s a quick overview of some of the possibilities:

One option is to combine the two companies into a single financial entity. After all, they both perform similar functions, so why do we need two?

A second option is to slice off the public-service functions of the companies — support for low and moderate income single and multifamily housing — and turn them into some form of federally-controlled corporation.

At the same time, the purely private market operations of the companies could be spun off and sold to private investors. Here we’re talking about buying mortgage bonds and loan pools from banks and other lenders, and trading them.

According to the Washington Post, Lawrence Summers, the former Treasury secretary who’s slated to be President Obama’s chief economic adviser, favors cutting Fannie and Freddie into purely private and public pieces, with the federally-controlled portion assigned the job of guaranteeing mortgage bonds to keep money flowing into the home loan sector.

Still another concept under discussion would to turn Fannie and Freddie into public utilities. That means they’d be like the electricity and water companies — privately-run but serving essential public purposes and heavily regulated to make sure they do what they’re supposed to.

Wherever Congress comes down on all this, one thing’s for sure: Fannie and Freddie are going to look and perform very differently, sooner rather than later.

For taxpayers and borrowers, that probably will be a good thing.

Published: December 29, 2008

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Don’t Miss Tax Deductions On Your Real Estate Investment

by Phoebe Chongchua–RealtyTimes There are an estimated 11 million real estate investors in the U.S., according to IRS data. However, not all of them chose to be a real estate investor. Some accidentally became investors due to market conditions.

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Investor Report: Investor Policy Changed

by Kenneth R. Harney

http://www.realtytimes.com/

It was still under consideration when we first reported it weeks ago, but now it’s official: Fannie Mae has changed its controversial policy on investor units in condominiums.

In a memo to lenders last week, Fannie said that when new investors apply for financing to buy a condo unit, they won’t have to deal with its former rule whereby vacant, bank foreclosed and REO units were counted as non-owner occupied.

That’s important because Fannie’s long-time policy has been to bar new investor loans in buildings where less than 51 percent of the units are owned and occupied as principal residences or second homes. The idea is that there’s a greater risk of default in projects that have high numbers of investor units, with absentee owners renting out their units.

Under the revised policy — which was requested by the National Association of Realtors in November — Fannie says it will now count bank-owned REO units that are listed for sale, but are not rented, as if they are owner-occupied when computing the 51 percent ratio.

In buildings that still don’t meet that baseline occupancy test, Fannie says it will allow lenders to ask for waivers by submitting financial information about the project for individual review by Fannie.

In the same memo last week, Fannie Mae also outlined a series of other policy changes that could potentially affect condo investors. Tops on the list:

Number one, Fannie generally will not fund units in developments where more than 20 percent of the space is used for non-residential purposes. For example, if retail or office space exceeded one fifth of the total usable square footage in a project, the new rule would apply.

Second, Fannie will avoid projects where a “single entity” owns more than 10 percent of the total units. Examples of such owners include investor groups, partnerships, corporations, or individual investors.

Finally, Fannie generally won’t finance units in condo projects where it believes there are “excessive” sale or financing concessions being offered to buyers by developers or building owners completing conversions. These might include offers where developers pay purchasers’ principal and interest payments for long periods of time, or refund condo fees, taxes or home owner association dues.

Excessive concessions up front distort the underlying economics of projects, Fannie believes, and may attract buyers who can’t really afford the full payments.

Published: December 26, 2008

Thomas Merical

http://www.mynvahomes.com/

http://www.findahomesellahomenow.com/

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

With more job losses and worries over the economy, the National Association of Realtors is reporting that investment activity in commercial real estate is at a standstill.

Lawrence Yun, NAR chief economist, noted, “Although access to residential mortgages has improved, the opposite is true for commercial loans. We need liquidity for commercial mortgage-backed securities not only to free the market, but also to rollover existing debt. At the same time, the loss of jobs has had a significant impact on the demand for commercial space.”

For those with investment properties, the report also touched on residential rental units. “Annual rent is estimated to ease down 0.8 percent this year and decline another 4.0 percent in 2009.”

Retail rent is expected to decline as well.

Published: December 23, 2008

Thomas Merical

www.MyNvaHomes.com

www.FindaHomeSellaHomeNow.com

Blog@MyNvaHomes.com

Custom Closets

by Tara Darby

Realty Times

One of the most popular trends in home design is the creation of custom closet spaces. Over the past few decades, closets have grown in new-home construction, but whether you have a newer home with a walk-in closet or an older home with a reach-in closet, everyone can use a little help getting organized.

The trend in custom closets really began in the early 1980’s when a company emerged that was dedicated to creating storage solutions. California Closets has since become one of the best known companies for such projects. Not only did they introduce the specialty of organization but of functional style as well. These days there are countless businesses across the country that offer the same service and the possibilities range from simple and structured, to lavish and luxurious.

One of the reasons custom closets have become such a must-have especially in bedrooms, is that they reduce closet clutter (which can in-turn reduce stress) by improving the efficiency of the space. It also improves the aesthetic appeal of the closet which allows the homeowner to see it and treat it as another room in the home, rather than just a cramped space. And some realtors and homeowners believe that by adding more usable space to the home it can actually increase resale value.

If you’re looking to revamp your closet there are a number of directions to go. First, you should consider all the choices out there for maximizing space and then decide whether you plan tackle the project on your own or if you’d rather hire a professional.

Of course each custom closet varies greatly by the particular layout of the closet and specific needs of the homeowner. Some of the more basic elements include pullout drawers to store folded clothes, shoe racks or shelves, wired or solid shelving for stacking things, and tiered hanging bars for clothing. But what make each closet truly “custom” are the stylish and even decorative elements that come next.

Custom closets are meant to reflect the décor and color scheme that is present in the larger room surrounding it. Wooden veneers in dark or light stains or finishes can be added to the drawer and cupboard faces. Or you can choose frosted or clear glass to showcase what lies inside. Shelves can be colored to match the room and islands or other shelving units can even be fitted with more luxurious materials such as marble or granite. Storage baskets or bins are often used to give a uniformed look and can come in plastic, metal or basket weaves. And to top it off, mirrors and specialty lighting can be incorporated to make the space more inviting and user-friendly.

With the countless options out there, it’s easy to see why custom closets are an ever popular remodeling project. Not only does it make it easier to find what to wear in the morning, but it adds a creative and more personal touch to a place that in the past was overlooked.

Published: December 23, 2008

Thomas Merical

www.MyNvaHomes.com

www.FindaHomeSellaHomeNow.com

Blog@MyNvaHomes.com

Digitally Enhancing Home Values, Sales

by Broderick Perkins

Realty Times

Quantifying evidence virtual staging really hits home with buyers comes from a couple of likely sources, but the findings do mirror data from focus groups and other studies on the subject.

Easily considered self-serving data from visual marketing firm VHT, Inc. and digital virtual staging company PropertyPreviews.com, the survey nevertheless reveals that videos and photography used in home marketing can increase a property’s perceived value by tens of thousands of dollars.

According to their survey, video tours increased the perceived value of a home by nearly six percent, or about $30,000 on a $500,000 home, while professional photography increased the perceived value twice as much, by nearly $60,000.

VHT, which offers photography and video services and PropertyPreviews.com, which produces videos from photos online at no cost, surveyed 320 men and women between the ages of 35 and 54 with more than $75,000 in household income. Those surveyed were shown descriptions of homes in the $400,000 to $600,000 price range. Each property was shown with a description only or with a description and professional photography, unprofessional photography or video.

Those surveyed were then asked about their perceived value of the home; how likely they were to visit a home; and how quickly they thought the property would sell.

Those who viewed listing information accompanied by professional photography, valued the property at an average price of $460,735, an increase of 11.5 percent or $52,896 over the average perceived price of the description-only property, $407,839.

Those who watched a listing’s video valued the home at an average price of $432,329, an increase of 5.7 percent or $24,490, over the average perceived price of the description-only property, $407,839.

“While perceived value is not the same as what someone ultimately pays for a property, it sets the benchmark as to what this property is worth in a buyer’s mind compared to other homes in the same neighborhood. First impressions often have a big impact on a buyers’ decision-making process on which homes to visit and how much to offer,” said Brian Balduf, VHT’s CEO.

Survey respondents, were not professional real estate agents, but believed a home with professional photography was three times more likely to sell within the standard listing period than a home marketed with only descriptive information.

When asked how likely they were to visit the homes listed with professional photography, seven times as many respondents indicated that they were “very likely” to visit the home as those who said they were “very likely” to visit a home with only descriptive information.

“More than 84 percent of prospective home buyers start their search on the Internet, so the use of video to market a property is essential,” said Jeff Harris, General Manager of PropertyPreviews.com.

The study is in line with other reports that extol the value of virtual staging the use of digital images and photos to market a home. The technique is often used, hand-in-hand, with live, on-site staging.

After some impromptu focus groups, Freeland, WA-based online content expert Barbara Moran founded a virtual staging company, Virtual Staging to teach real estate agents what she and good Web designers already know: content — good, eye-catching and revealing content — remains king.

Moran has helped clients boost sales so much they rave, but fear going public about their location so as not to give up their competitive edge in their local market.

The National Association of Exclusive Buyers Agents cautions about staging that tricks the eye, but concedes honest staging can net sellers more cash and faster sales. The association says the relatively small expense of cleaning, decluttering, lightening and brightening, and other home staging efforts can generate an average sales price increase that can be more than the cost of staging.

Published: September 11, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Washington Report: Treasury Department Sidesteps

by Kenneth R. Harney

RealtyTimes

It was the biggest housing mystery in Washington last week: What happened to the Treasury Department’s much-ballyhooed plan to cut mortgage rates to four and a half percent to stimulate home buying?

Under the plan, Fannie Mae and Freddie Mac would buy loans at four and a half percent and the Treasury would subsidize the difference between that and market rates.

But last Tuesday, in an interview on the CNBC cable network, Treasury Secretary Henry Paulson basically said: Who me? We never announced any such plan. It got leaked prematurely.

Paulson also hinted that he would be reluctant to launch such an ambitious and potentially costly program without having the tacit support of the incoming Obama administration’s Treasury team.

The National Association of Realtors, which had proposed the rate buydown concept to Treasury weeks ago, again called for the federal government to find a way to lower rates to four and half percent.

Meanwhile, new reports surfaced that a second plan was being considered: Under this alternative, the 12 Federal Home Loan Banks around the country would offer cut-rate mortgages using money raised by bond issuances at 3 percent by the Treasury.

According to the Reuters news service, this concept is being pushed aggressively by the president of one of the banks — Alfred DelliBovi of New York — and is under active consideration by the bank system’s top regulator, James Lockhart, director of the Federal Housing Finance Agency.

The net effect of either plan would be the same to consumers: Sharply lower monthly mortgage costs. For example, here’s what a four and a half percent rate does to principal and interest payments compared with a note rate of five and half percent: On a $200,000 mortgage, the one point difference would reduce payments by $122 a month.

One a $300,000 loan, the savings would go to $183 a month. And on a $400,000 mortgage, costs would be lowered by $244 a month.

In his comments on CNBC, Paulson said his department would like to cut home buyers’ payments: “We’re continuing to look at (that),” he said, “and we wouldn’t be doing our jobs if we didn’t look at other ideas to reduce mortgage interest rates.”

Meanwhile, with market rates tumbling to five percent and below, a half point rate buydown could cost the government much less than originally estimated.

Then again — there’s always the possibility that to stimulate a REALLY big round of home buying, rates could be cut to 4 percent.

After all, it’s the holiday gift season … and the housing industry could sure use one.

Published: December 22, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Investor Report: 203(K) Rehabilitation Program

by Kenneth R. Harney

Real estate investors could regain access to an important FHA financing program that’s been closed to them since the late 1990s — provided HUD goes along with a proposal submitted recently by the National Association of Realtors.

In a letter to HUD Secretary Steve Preston, NAR president Charles McMillan asked the department to rethink its decision to bar investors from the 203(K) rehabilitation program, under which FHA insures a combined home purchase and renovation mortgage based on the after-repairs valuation of the property.

McMillan said reopening 203(K) to investors could play a key role in disposing of large numbers of vacant foreclosed houses that have been damaged by vandals or prior occupants.

“Many foreclosed properties are severely damaged after they are vacated, making them difficult to sell,” said McMillan. “Investors utilizing the 203(K) program could purchase dilapidated foreclosed properties for rehabilitation and conversion into rental units.”

Amending 203(K) restrictions “will benefit neighborhoods across the country,” he said, and give investors “access (to) credit that is unavailable (during) the current economic crisis.”

McMillan suggested the change could be temporary — ending with the expiration of HUD’s “Hope for Homeowners” program, under which FHA refinances seriously delinquent mortgages.

HUD imposed a moratorium on investor participation in 203(K) in 1996 after a series of scandals involving the program - bogus repairs, straw buyers and other abuses by speculators.

In his letter to Preston, McMillan acknowledged those earlier problems, but said HUD’s Inspector General had concluded that most of the abuses were connected with nonprofit groups and so-called “identity of interest” transactions.

McMillan proposed that both types of participation be prohibited under any limited return of investors to the 203(K) program.

Asked by RealtyTimes whether FHA might reopen the doors to investors, an official said that given the short time frame until the Obama team takes over at HUD - now barely a month - the agency is likely to leave the issue open for the next administration’s consideration.

The good news here: The incoming nominee for HUD secretary, Shaun Donovan, knows the 203(K) program well, and has direct experience with preservation of housing stock. Since 2004, Donovan has headed New York City’s department of housing preservation and development. Plus he served at FHA during part of the Clinton administration.

Donovan won’t require months of education to get up to speed on FHA programs, and the department should have a baseline decision on possible investor participation in 203(K) sooner, rather than later.

Published: December 19, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

In case you had not heard, on Tuesday the Federal Reserve lowered its key
interest rate to  0.25% — the lowest level ever “MSN”.  Several banks have
announced they are lowering their rate to 3.25% in light of the Fed’s
decision.  Typically the prime rate is 3 percentage points higher than the
fed funds rate  ”CNN MONEY”.  This will trickle down into mortgage rates
soon resulting in historic low mortgage rates.

Sincerely,

Thomas Merical

703-585-8240

www.MyNvaHomes.com

Blog@MyNvaHomes.com

Real Estate Outlook: Affordability Dramatically Improved

by Kenneth R. Harney

Realty Times

How you see the real estate market at the moment depends on what parts you look at. If you focus primarily on mortgage rates and core affordability measures, you may see the country in a recession, but there are some very positive forces at work in the housing sector.

On the other hand, if you look at widespread employment losses — 530,000 last month alone — along with rising personal and business bankruptcies, mortgage delinquencies and foreclosures at levels not seen since the 1930’s, you might ask: How can housing rebound if the overall economy is mired in such a mess?

And of course housing can’t bounce back significantly unless national and regional economic fundamentals begin to improve. But there’s at least an outside chance that housing could help in that whole process — and begin to get healthier as a result.

Here’s why: Number one — affordability has dramatically improved since the end of the boom.

Thanks to severe price rollbacks and near-record low interest rates, homes are more affordable to households with average incomes than they’ve been for almost a decade. Standard and Poor’s economist David Wyss calls affordability a major bright spot, and that’s confirmed by the Housing Affordability Index compiled by the National Association of Realtors.

Mortgage rates are an important part of that equation, and they dropped again last week — this time below five and half percent for 30 year fixed rate loans, according to the Mortgage Bankers Association.

Add onto this the Treasury Department’s reported plan to cut fixed mortgage rates for home purchasers to four and a half percent through a “buy-down” program, and you’ve got the potential underpinnings for serious increases in home buying just over the horizon.

Some economists project an increase in sales of 500,000 to 700,000 homes in the coming 12 months if mortgage rates are cut by a point, AND if the new Congress agrees to include a non-refundable tax credit of up to 10 percent of the purchase price of a home in the economic stimulus package expected in January.

The idea here is to stoke up housing sales and construction — and dozens of other industries through housing’s well-documented multiplier effect — the stimulus it gives through ripple effects into building materials, appliances, furniture among others.

This has worked before. Congress took precisely these two steps — interest rate reductions plus tax credits for home purchases - in the 1970s, and the program had far-reaching positive effects on jobs and the economy as a whole.

It could happen again — even if, on any given day, the picture looks a little grim.

Published: December 16, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Washington Report: The Bailout Debate

by Kenneth R. Harney

www.RealtyTimes.com

Bailouts, bailouts and more bailouts: That’s pretty much all they’re talking about up on Capitol Hill right now, but some of the bailouts have direct and potentially important impacts on home owners and real estate.

At a congressional hearing last week, House Democratic leaders put the Treasury Department on notice that if it wants to draw down the second half of the $700 billion mega-bailout package, it will have to commit to a massive program of mortgage modifications to keep thousands of homeowners out of foreclosure.

California congresswoman Maxine Waters put it this way to Treasury bailout chief Neel Kaskari: “Don’t come here and ask for another penny,” she said, “because if you do I am going to work 24 hours a day” to block you.

On the same day, Waters introduced legislation that would require the Treasury to adopt a plan advocated by FDIC chairwoman Sheila Bair to systematically lower payments and soften terms on tens of thousands of delinquent mortgages.

Congressional Democrats are angered by the Treasury’s main use for the first $350 billion of the bailout funds approved by Congress in October: Most of it’s been handed to banks, rather than using portions of the money to assist individual borrowers facing financial troubles.

Now the Treasury is talking about creating a new bailout program for home buyers and the building and real estate industries by cutting mortgage rates to four and a half percent.

The program could cost the Treasury billions in subsidies to pay for the rate “buydowns” — money that presumably would come from the second $350 billion left in the $700 billion fund.

So reportedly the Treasury is now working on some form of large scale loan modification plan — in part to gain access to some of the $350 billion.

But here’s a complication that surfaced last week: A new federal study found that more than half — 53 percent-of delinquent home owners who receive modifications on their loans RE-DEFAULT within six months. At that point, they’re back where they started - heading for foreclosure.

Since Bair’s plan would provide federal guarantees to lenders to lower their losses in the event of re-defaults after six months, Treasury officials believe it could cost many billions of dollars and still not prevent foreclosures.

Bair and her supporters argue to the contrary: If you modify a loan effectively, they say, not just lowering the interest rate but cutting the debt balance, you achieve more successful results and permanently keep owners out of foreclosure.

That’s the crux of the current bailout debate.

Published: December 15, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Homebuyer Survey Contains Valuable Information For Agents and Sellers

by Bob Hunt

RealtyTimes

One of the most useful research projects of the National Association of Realtors® (NAR) is the annual survey of homebuyers and sellers. The 2008 version (Profile of Home Buyers and Sellers 2008) became available in November of this year. The information is based on answers to an eight-page questionnaire mailed to 133,000 consumers who purchased a home between July 2007 and June 2008. (Names and addresses were provided by Experian, a company that maintains an extensive database of recent homebuyers that is derived from county records.) There was a 7.9 percent response rate.

In 2008, first-time homebuyers constituted 41 percent of the market. That is the highest proportion since 2001, when it was 42%. There are apparently a number of factors to explain this increase, one of which is that first-time buyers don’t have to sell a home before they can buy. Moreover, prices have been dropping while interest rates remain low by historical standards. Also, governmental policy changes, such as the tax credit for entry-level buyers, have no doubt played a role.

Six percent of buyers purchased a home that had been foreclosed or that was in the process of foreclosure. It can be expected that this type of purchase will probably represent a larger percentage when next year’s survey is done. In 2008 a full 56 percent of buyers did not consider buying a home in foreclosure. Of those who did consider making such a purchase, but did not ultimately do so, the primary reason (21%) was that they simply could not find a home that was right for them. Twelve percent did not purchase a foreclosure home because the process was too difficult or complex. Another twelve percent did not buy because the house was in poor condition.

Certainly the most useful information for sellers and their agents is to be found in the section on the home search process. While the survey results are not significantly different from those of recent years, the trends continue. For example, this year 69 percent of buyers said that they used the internet frequently during the search process, up from 60% last year. In 2003 that number was 42%.

Thirty-three per cent of buyers went to the internet as the first step in the home search process. 17 % contacted a real estate agent first, and 9% began by driving through neighborhoods looking for homes for sale.

Buyers use multiple sources of information in the process of looking for a home. Far and away the most used sources are the internet (87%) and real estate agents (85%). What is the third most used information source? Yard signs (62%).

Multiple Listing Service (MLS) websites were the primary source of information for buyers who used the internet in their search process. 60 percent of those buyers went to MLS sites. Of course, many went to a variety of different sites. 48 percent used Realtor®.com, 46% went to real estate company websites, and 43% went to sites hosted by individual agents.

While there is a lot of intriguing information about the sources of information used by prospective homebuyers, certainly the most relevant has to do with where they actually found the home that they ultimately purchased. It is still the case that, more than any other source, a real estate agent is responsible for informing the buyer about the home that is ultimately purchased. That is how 34 percent of buyers found their home.

But the internet is a very close second (32%). Moreover, the differences in less than a decade are fascinating. In 2001, 48 percent of buyers learned about their home through a real estate agent, and only 8 percent found their home on the internet. The times they have changed.

Some things though, remain persistently the same – or close to it. In 2001, a yard sign was the third most likely source of information leading to the home that was purchased (15%). And this year? Fifteen percent.

The 2008 Profile of Home Buyers and Sellers shows what works. It is a valuable resource.

Published: December 12, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Good News On Foreclosure Prevention Scorecard

by Phoebe Chongchua

RealtyTimes

Private mortgage insurance helped save families from foreclosures this year, claims Genworth Financial. The company recently released its Foreclosure Prevention Scorecard that touts that more than 11,000 homeowners were helped in the last 12 months.

The top 10 states where a form of a “workout” — (repayment plan) or loan modification — to avoid foreclosure occurred were Texas, Florida, Georgia, Ohio, Pennsylvania, Michigan, North Carolina, Illinois, New York, and Indiana.

“Foreclosure doesn’t benefit anybody. As a mortgage insurer, we’re trying to do our best to work with the borrower and keep that person in the home as well as work with the mortgage servicer and the investor so that all parties win,” says Alan Goldberg, Vice President Homeowner Assistance Program at Genworth Financial Mortgage Insurance.

Some borrowers believe that private mortgage insurance doesn’t benefit them, but the company’s Scorecard shows differently.

Chris Antonello, Senior Vice President of Marketing, Genworth Financial Mortgage Insurance discussed the Scorecard with me. It revealed that workouts increased 56 percent over the same period last year. Nationally, homeowners were helped mostly by repayment plans and loan modifications. Repayment plans accounted for 50 percent of all workouts, and loan modifications 32 percent. Antonello says that, nationally, 89 percent of homes were rescued. “Basically nine out of 10 homeowners that we deal with are able to stay in their home. The balance are people who either have to go through a short sale or deed in lieu — they do leave the home but it’s only 11 percent,” says Antonello.

“We’re also trying to highlight that a significant amount of these borrowers have monthly payments of under $1,000 which is important because people who need the help are getting it,” says Antonello. The scorecard shows that 53 percent of those helped have monthly payments under $1,000.

Goldberg says Homeowner Assistance Program works directly with the mortgage servicers and the borrowers when there is a problem. “If the mortgage servicer hasn’t put the borrower on a workout by the fourth month of delinquency, we start contacting the borrowers — and we have a whole campaign where we send them written material and a calling campaign to let them know that workout assistance is available and that we can help them avoid foreclosure.”

Goldberg’s team seeks to create a repayment plan that works for all or a loan modification.

“If borrowers cannot afford the house, then we help them to sell the house and still avoid foreclosure,” says Goldberg. He adds, “If they’re upside down, we would reduce the payoff on the loan, effectively paying the claim, so the difference between what the home sold for and what the payoff was, would be up to the amount of the loss assuming it didn’t exceed the amount of the coverage that we had.”

“It’s very important that we reach out to people who are struggling to let them know that mortgage insurance does provide this benefit. As they’re going through hard times, the more people we can save and keep in their homes the better and at the same time as they make new decisions they should consider mortgage insurance,” says Antonello.

For those who are looking for either a new loan or to buy a home, Antonello says he hopes the same mistakes aren’t repeated. “Part of what drove the problem was that it was en vogue to avoid private mortgage insurance. Instead a lot of people did piggyback loans — the 80-10-10 or 80-20 — so they were highly leveraged and now, when they’re running into a situation, they don’t have somebody like [Genworth and Homeowners Assistance] trying to help them,” says Antonello.

Antonello says, “One of the things with private mortgage assistance is that it not only gets you into the home sooner but it keeps you in the home and it’s less risky than other alternatives that are out there and we provide this service so that, if you do run into a problem, our Homeowner Assistance Program comes at no-added cost — it’s free protection — it’s already built into the premium that the borrower pays.”

Published: December 12, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Market Conditions

by Realty Times Staff

The latest report from the National Association of Realtors is reporting that pending home sales eased against a deteriorating economic backdrop but remain in a stable range.

Lawrence Yun, NAR chief economist, noted, “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range. We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market.”

Regionally, the South saw the biggest increase, at a 7.8 percent jump. The region the furthest behind last year’s numbers is the West — still down 17.4 percent from last year.

The pending home sales index could continue to rise as interest rates fall. Predictions indicate that the 30 year fixed rate mortgage could decline to 5.6 percent in the first quarter of 2009.

Published: December 11, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Just a reminder to all that FHA Down payment requirement as of January 1, 2009 will be 3.5%. 

If you have a ratified contract this month – but settlement date is after 12/31/08, make sure the buyer’s lender has pulled the FHA case number by 12/31/2008, to take advantage of 3% through this month. If any case number is pulled after 12/31/08 the down payment is 3.5% regardless of when client was pre-approved.

Please let me know if you have any questions.

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Long-Term Mortgage Rates Plummet; Short-Term Rates Fall But Not as Dramatically

McLEAN, VA — (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 5.53 percent with an average 0.7 point for the week ending December 3, 2008, down from last week when it averaged 5.97 percent. Last year at this time, the 30-year FRM averaged 5.96 percent. The 30-year FRM has not been lower since January 24, 2008, when it was 5.48 percent.

The 15-year FRM this week averaged 5.33 percent with an average 0.7 point, down from last week when it averaged 5.74 percent. A year ago at this time, the 15-year FRM averaged 5.65 percent. The 15-year FRM has not been since March 20, 2008, when it averaged 5.27 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.77 percent this week, with an average 0.6 point, down from last week when it averaged 5.86 percent. A year ago, the 5-year ARM averaged 5.75 percent.

One-year Treasury-indexed ARMs averaged 5.02 percent this week with an average 0.5 point, down from last week when it averaged 5.18 percent. At this time last year, the 1-year ARM averaged 5.46 percent.

“After Federal Reserve actions to increase liquidity in the mortgage market, interest rates for fixed-rate mortgages (FRMs) took a dive,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This week’s decline was the largest since the week of November 27, 1981, 2008, and 30-year FRM rates are now almost a full percentage point lower since the last week in October, 2008.”

“The recent plunge in rates contributed to the nearly 150 percent jump in conventional mortgage applications over the Thanksgiving week, led by almost a 300 percent surge in refinances, according to the Mortgage Bankers Association. Roughly three out of four mortgage applications were for refinance transactions, up from around half during the prior week.”

Published: December 5, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Market Conditions

by Realty Times Staff

Federal Reserve Chairman Ben Bernanke said yesterday that more must be done to help homeowners — and that help needs to include the government and banks stepping up to the plate. The Federal Reserve notes this is due to the fact that “credit conditions have tightened and asset values have declined, contributing substantially, in turn, to the weakening of economic activity.”

“Despite good-faith efforts by both the private and public sectors, the foreclosure rate remains too high, with adverse consequences for both those directly involved and for the broader economy,” Mr. Bernanke said in a speech in Washington. “More needs to be done.”

Part of his speech included a proposal from the FDIC — dealing with the affordability and monthly payments. The plan called for a restructuring of delinquent mortgages — with the government stepping in the share any losses this could bring lenders and servicers.

Another program dealt with, in part, refinancing mortgages into FHA loans. Bernanke concluded by saying, “Steps that stabilize the housing market will help stabilize the economy as well.”

Published: December 5, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

The Federal government is proposing a subsidy to Fannie, Freddie and FHA that might drive purchase mortgage interest rates down to as low as 4.5%.

Talk this up to your clients and let’s get people prepared. Tell you clients, that if this program comes out there will probably only be a limited amount of funds available and they need a property ready to write a contract on in order to gain access to these funds.

Please call me for details!!!!

Thomas Merical

www.MyNvaHomes.com

Blog@MyNvaHomes.com

703-585-8240

The Small House Movement

by Tara Darby

Realty Times

Is the “bigger is better” mentality fading in terms of real estate? Are the days of McMansions coming to an end? Well, it seems for some homeowners it is. There’s a new movement out there that’s creating quite a buzz among environmentalist and folks seeking a simpler life. It’s called the Small House Movement and it might just be the next small thing.

These homes bring a whole new meaning to up close and personal since most are less than 1000 square feet, some are even less than 100 square feet.

Gregory Paul Johnson, who is a founder of the Small House Society in Iowa City, says there are many reasons people are choosing to drastically downsize. Among the most practical motives are rising energy costs and the mortgage crisis. Basically, people want small homes because they cost less to purchase, maintain, and heat and cool.

And for those reasons, builders who specialize in these types of construction have seen an increase in their business this year. Brad Kittel, owner of Tiny Texas Houses in Luling, Texas, says he’s built 10 homes this year up from just four in 2007.

Jay Shafer of the Tumbleweed Tiny House Company based in California, says he’s sold five houses and 50 sets of plans, up from a yearly average of just one house. Although the growth appears modest at best, it still shows a growing demand for houses that minimize one’s footprint, both carbon and structural.

The Tumbleweed Tiny House Company creates homes ranging in size from about 70 to just over 800 square feet and cost anywhere from $20,000 to $90,000 to build. Even the owner Mr. Shafer has lived in a tiny house himself for over ten years. At 100 square feet, his house is smaller than many people’s closets. When asked about the appeal of the homes he said, “The small space is a symbol of something else. I think it’s a symbol of a desire for a more simple life.”

Even if you’re craving a simpler life yourself, don’t think you’ve got to sacrifice on style. The homes resemble cabins or birdhouses even with their wooden exterior and high pitched roofs. Sustainable materials and reclaimed lumber are incorporated into all the homes and The Tumbleweed Tiny House Company pride themselves on not using first life materials.

These homes are built on wheels, not a foundation like most new construction and because they are so tiny, they’re considered travel trailers and do not require a building permit. You can pretty much put one anywhere you can park an RV. They also come pre-wired for electricity, either an AC plug-in or a solar electric system, and they’re pre-plumbed and ready to be connected to public water and sewer systems.

The interior of the homes are completely finished in pine with stainless steel. The ceilings are vaulted to make it appear roomier and the bathrooms come complete with full shower, toilet and sink. The kitchens include a two-burner stove, an under-counter refrigerator, a bar sink, an instant hot water heater, and a propane boat heater. Storage is also an extremely important asset, as you can imagine. By utilizing overhead space and making otherwise unusable spaces functional, Mr. Shafer promises ample space for a simple lifestyle.

And of course these homes are very energy efficient; they are well insulated and super easy to heat and cool. In fact one small house owner in Olympia, Washington, boasts that even with rising energy costs, her worst monthly energy bill is about $8.00. That seems almost too good to be true, but Mr. Shafer attributes that to the careful attention that has been given to the light, warmth, energy efficiency and proportion of each and every home he builds.

As you can see, these itty-bitty residences have all the modern conveniences of larger homes, just built to a smaller scale. They’re something to consider if you’re looking for a change, literally a change of venue or you’d just like to see more of it in your pocket.

Published: December 2, 2008

Tara Darby is a head anchor for Realty Times. She began her career in television soon after her reign as Miss Alabama USA 2004. She also landed in the Top Ten lineup at The Miss USA Pageant and participated in a special Miss USA Fear Factor on NBC. Obviously fear was not a factor for her since she won the competition! Later, she appeared as a special guest on Larry King Live to share her experiences. After that the media opportunities grew and so did her love of the camera, and thus her career began. Since then she has hosted several shows including two national series, and a new home builder show.

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Real Estate Outlook: Sales Jump in Ailing Markets

by Kenneth R. Harney

RealtyTimes

It all depends on where you are right now in real estate, and whether you recognize the signs of the cycle bottoming out in some of the once-most distressed local markets.

Though the latest monthly sales numbers for existing homes were down slightly nationwide — 3.1 percent on a seasonally-adjusted basis — sales in some of the hardest-hit local markets are really taking off, according to the latest data from the National Association of Realtors.

Florida, once the east coast epicenter of boom and bust, is roaring back with big sales gains.

Overall sales of single family homes in Florida jumped by 15 percent for the latest month — up 5 percent for condos — compared with year-earlier levels.

In Palm Beach County, sales were up by 37 percent. In Ft. Myers by 44 percent, Miami 23 percent, and 35 percent in Charlotte County.

Some scattered, smaller markets saw sales explode by as much as 70 percent, according to a report in the Sarasota Herald Tribune.

In some of California’s most challenging markets, sales are also way up — and apparently heading higher. In Orange County — south of Los Angeles and close to ground-zero of the housing bust on the west coast — sales rose by 66.6 percent last month compared with the year before. And they were up by 62 percent year over year the month before.

This is the fourth straight month of significant sales increases for Orange County — a sure sign that something important is underway there.

And let’s be frank about what’s really going on.

It’s the same dynamic as in Florida: Prices have dropped sharply, bank foreclosures and short sales are dominating activity — and now houses are far more affordable than they were three and four year before.

In Orange County median prices were down by 27 percent year over year last month. In Florida, prices are also depressed — 24 percent lower than the year before. In Miami, the median is off by 30 percent.

Meanwhile the essential ingredient to turning low prices into rising sales — affordable mortgage money — continues to be a bright spot. Interest rates for 30 year fixed loans are hovering just above 6 percent, and are in the upper five percent range for 15 year loans.

As we’ve said before here at Realty Times, the stock market may be doing wild and crazy things on any given day.

But month after month, there are tangible indications that the housing cycle is beginning to come around.

You just have to be open to seeing them.

Published: December 2, 2008

Thomas Merical

www.MyNvaHomes.com

Blog@MyNvaHomes.com

Washington Report: Modifying Loan Terms

by Kenneth R. Harney

RealtyTimes.com

Modifying the mortgage terms of delinquent homeowners is one of the most debated concepts in Washington right now.

FDIC chairwoman Sheila Bair wants massive, across the board modifications — slashing hundreds of thousands of borrowers’ interest rates and monthly payments NOW — long before they fall into foreclosure.

House Financial Services committee chairman, Barney Frank, is threatening mortgage lenders with tough new regulations if they don’t modify customers’ loan terms quickly enough to keep them out of foreclosure.

Even the Bush administration has jumped on the bandwagon, calling for widespread loan fixes, even offering $800 cash incentives when loan servicers do so.

But here’s a politically sensitive question: How well do modifications really work?

Rob Dubitsky, a top researcher for Credit Suisse Group, says they’re not as effective as you might think.

In a study of reports from 19 major mortgage servicers, Dubitsky found that one third of all borrowers who received modifications fell back into serious delinquency within eight months, according to the American Banker trade publication.

For borrowers who received what Dubitsky called “traditional” medications to their mortgages — rate cuts or reworking of terms that added late fees and back payments onto borrowers’ principal balances — fully 44 percent RE-defaulted within eight months.

They either had to be given new and easier loan terms … or they simply went to foreclosure.

Only outright reductions of loan balances — something most lenders are reluctant to do - reduced the re-default rate significantly. But even then, Dubitsky found nearly one in every four borrowers later fell behind on payments.

None of this is a big surprise to long-time professionals in the default mitigation business. Joe Smith, president and CEO of Default Mitigation Management of Newport, Kentucky, says wholesale modifications — as advocated by FDIC’s Bair - are likely to lead to higher rates of later re-defaults and foreclosures.

Smith’s firm advocates more hands-on, individualized techniques to cure delinquencies, often involving counseling. Mass modifications without individualized underwriting and personal finance counseling, he says, “just pushes the problem down the road.”

But don’t hold your breath waiting for anybody in Washington — and certainly not the incoming Obama administration or Congress — to throttle back on their mass modification programs anytime soon.

And don’t expect them to do what’s politically much tougher: Ask banks to bite the bullet up front — write down principal balances early on so they don’t have to RE-modify vast numbers of mortgages - maybe over and over again — to keep owners out of foreclosure.

Published: December 1, 2008

Thomas Merical

www.MyNvaHomes.com

Blog@MyNvaHomes.com

Why Seller’s Can’t Live Without YOU!  

1. You are worth your commission: REALTORS® sell homes for more: 27% more according to the 2002 National Association of REALTORS® “Profile of Home Buyers and Sellers.” For a $100,000 home, that’s $27,000 more.
2. You are a legal expert: You know all the contracts, forms, disclosure statements backwards, frontwards, inside and out. If they did it solo, chances are high they’d miss something…that may be costly.
3. You are a professional: Like a doctor or lawyer, you’re worth your commission because you’re an expert. You live and breathe this stuff. Ask them how many people would defend themselves in a court of law? Or, how many people feel confident performing surgery on themselves? Neither should someone be expected to sell a home on their own. It’s best left to the experts.
4. You are a master of the market: You know the market and can price the homes competitively. Explain to them the importance of pricing right the first time and the danger of over-pricing.
5. You are a expert on financing: You know how to pre-qualify, qualify and point prospects in the right direction for financing. Unless they are lenders by trade, wish them good luck.
6. You are a specialist: You can handle criticism, objections and demands objectively and professionally…a must when trying to persuade someone a certain home is their dream home.
7. You are a negotiator: You know how to balance offers, counteroffers and negotiate contingencies that often will drive a FSBO bananas. Offer your batting average for selling homes at full asking price. If you’re good, they’ll think you’re a genius.
8. Finally, you are a network: Develop a list of the tasks that must be completed before closing, including all the inspections, insurance, permits and improvements, etc. Title it “The FSBO Nightmare.” Then explain to them you know all the right people and could have everything arranged in an afternoon. They’ll get the point.

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Techno-Selling

by Dirk Zeller

Realty Times

The real estate sales business, like all other businesses in the world, is in a techno-revolution. The new technology in the world has created tremendous changes and growth in our industry. Agents and companies are dramatically changing the way they do business to take advantage of this vast new frontier. And technology is moving at a faster rate everyday. As an Agent, you must prepare and learn to capitalize on this revolution.

The days where you could do your business out of a shoebox with 3 x 5 note cards is gone. The power of the computer age has made many of the things we did years ago obsolete. Agents need to set up their business to run like a true corporation to be successful in this millennium. With these changes, there are a few specific areas we need to evaluate.

In this millennium, contact management and customer service software systems have become more imperative for Agents. Agents will need to have tremendous amounts of information about their clients and potential clients. This information will enable them to become a valuable resource to their clients and, in turn, sell more to their clients. In addition, these Agents will receive more referral business because their service level has increased. In order to join these successful Agents, you will need to be able to keep in contact with your clients quickly, and more frequently, if you hope to create winning sales situations.

I firmly believe, based on the social-economic trends, in the future people will not move so frequently. The average years people spend in one home will increase. There will be fewer moves in people’s lifetimes. There are a few factors contributing to this trend. The first is desire of the American people to simplify their lives. In increasing numbers, people are reducing their monthly overhead. There are more single-income families because one of the parents is staying home with the children.

This reduction in gross income, caused by the loss of one breadwinner, reduces the discretionary income. Families are making decisions based on the value to the family unit and to the children, especially. They are realizing that living in a big fancy house does not have the same value as having Mom and Dad at home more often. A larger home does not always create a larger, more enjoyable lifestyle. This voluntary downsizing is currently a clear trend in our society.

The second key reason is the largest segment of the population has only one move left. The boomers are now seeking to enter the age of early retirement, while they are still active. The boomers are starting to evaluate where they will move next. They have more selection in the types, and variety, of housing, than all other preceding generations. I think this will be one of the most viable sections of the marketplace. We will see them sell the large family fortress. After that sale they will have many different areas and options of the type of housing they can choose, i.e., condos, townhouses, ranches, retirement communities galore, golf course communities, and 55+ communities. The builders and developers clearly see this group as the fastest-growing segment of the market. They are beginning to gear up for the eventual onslaught.

You need to be prepared to service the boomers by knowing the inventory available and amassing systems to take advantage of the onslaught. Position yourself for the changes today, do not be caught. The new technology will enable you to do more work and research. It will allow you to collect more knowledge and data in a shorter length of time. Not only do you need to have the technology, you need to use it. I regularly see too many Agents resisting change, rather than embracing change. You need to know how to squeeze the most value out of your software. You need to have the software, but you also need to use it. Not using the software is like not having it in the first place.

You must have a command of your contact management software. This software is the lifeblood of your business. It will enable you to create sales. There are many good software packages out there such as Act!, Top Producer, On Line software, or Goldmine. Each has its own particular strengths and weaknesses. Do your homework and carefully check out each one.

When you purchase software, you must evaluate the training that each one offers. If you cannot get good, solid training, do not buy that software. Some of the value of the software is learning it quickly and efficiently. If you are going to have to self-teach yourself, while you are trying to run your business, you will never fully utilize the software. You must be able to use the full power of the software to be able to bring the most success to your business.

Make sure your software has the power to network. I would advise you not to purchase software that does not network. If you expand your business beyond yourself, you will need the capabilities to network your computers. Also, do not buy software if the manufacturers say they are working on a network version that will be out soon. I had this experience with my primary contact management software. The manufacturer took over 18 months to complete the job. Every time I called them, they said completion was one or two months away. I made the mistake of waiting to switch and lost valuable time and dollars in the process.

The Internet is a way to augment your sales and listings. It will allow you access to more potential clients. There are a few basic needs to reap success out of the Internet. You need to create a quality web site, or you will be relegated to the bush leagues. Next, you need to spend the time and energy to constantly update and adjust your web site. If you have the same content you had months ago, people will stop re-visiting your web site. You want more than a one-time visit from people. You want people who regularly come back to view your properties and information and refer others to your web site.

You want to create the quintessential source of information on real estate in your area, via your web site. Create a section to share a piece of yourself with the visitor. Share your philosophy on selling and your mission statement. Remember that there are 50 bazillion REALTORS® on the World Wide Web. You need to make yourself stand out. Creativity will enable you to be selected and viewed differently than other Agents.

Work with a server company that will constantly help put you in the forefront of the search engine pages. If you are not in the right spot on the web you might as well not be there at all. The web is growing and changing at an alarming rate, so even if you are positioned right this week, in two weeks you might be out of the game because of changes on the web. You need to constantly review the search engines, your web page, and your competitors’ web pages.

This techno-revolution is changing many things in real estate, but the one thing that will never change is quality telephone and face-to-face sales skills. If you do not have the sales skills, the technology will only prolong the inevitable, and you will eventually be out of the business. The technology will help good salespeople become better and allow them to do more business. The techno-revolution will not cover up poor sales skills.

Highly skilled salespeople will always have the advantage. If you want to be included among them, the feeding of your mind is the best expenditure of money in your life. Your mind is the most valuable computer you will ever own. We often take the mind for granted because it comes as standard equipment that we do not buy or pay for. Just as we need to upgrade the hardware and software on our computer, we must upgrade our mind and sales skills. Techno-revolutionize your mind by studying the art of selling, the art of time management, and the art of understanding your business. These skills will take you further than all the fancy gadgetry of the 21st century. My biggest fear is that Agents will try to use technology to replace the sales skills. Technology will not replace the skill of selling, it will only enhance the skill. An exceptional salesperson in a dinosaur system can still achieve success in today’s world. A poor salesperson in a high tech system is still a poor salesperson. Poor salespeople are always paid at the bottom of the ladder. That fact will never change.

I encourage you to learn the new technology that will enable you to provide greater service to your clients and to do more transactions with less effort. Do not neglect the most valuable computer that occupies the six inches between your ears. If it is well trained, this one can network with anything and anyone at the drop of a hat.

Published: November 28, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Investor Report: 1031 TIC Bankruptcy

by Kenneth R. Harney (RealtyTimes)

The biggest financial fear about so-called “1031 TIC” real estate investment deals appears to be turning into reality: One of the largest “tenants in common” or “TIC” firms — with 8,300 individual investors and office and retail properties valued at $2.4 billion — has filed for Chapter 11 bankruptcy protection.

The firm, DBSI of Boise, Idaho, was part of an investment wave that followed a 2002 ruling by the IRS. That ruling said owners of commercial and residential income properties could fulfill the tax-deferral requirements of Section 1031 of the Internal Revenue Code by investing in tenants-in-common ventures.

Under Section 1031, investors who seek to avoid or defer capital gains taxes on their properties can exchange their interests for “like kind” real estate, provided they follow IRS guidelines.

In 2002, the IRS ruled that tenants-in-common arrangements — under which as many as 35 investors own fractional interests in individual properties — can qualify as vehicles for 1031 exchanges. For example, an owner of a small retail shopping strip might exchange into a TIC that owns a much bigger and more valuable downtown office building.

The tenants-in-common owners could thereby avoid immediate taxation of capital gains and end up with bigger and theoretically higher-quality real estate - tax free - in the process.

The TIC structure comes with built-in problems, however. Their fractional interests generally are not liquid investments — it’s tough to sell them if you need to pull out money..

Some critics also say TIC ventures pay too much for their commercial properties, and that investors have been charged excessive fees to participate.

DBSI managed the activities of dozens of office, retail and other commercial properties in 30 states, but says it got caught up in the real estate downturn and credit crunch.

Now its eight thousand-plus individual investors are stuck in illiquid TICs … and waiting to hear what happens to them next.

The DBSI bankruptcy comes on the heels of recent advisories from the Federal Trade Commission and the Treasury Department warning investors about potential dangers in 1031 exchanges.

Bottom line: Section 1031 exchanges — structured and facilitated by independent, qualified intermediaries — can be a great way for small scale and large investors to save on taxes.

TICs may also fit into the equation, but only if investors fully understand all the risks, including, now in the wake of the DBSI implosion, the possibility that their TIC may go belly up, leaving investors waiting in line at the bankruptcy court hoping for pieces of the remains.

Published: November 28, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

Market Conditions

by Realty Times Staff

The National Association of Realtors is reporting that existing-home sales declined on the heels of a strong gain in September as uncertainty and economic concerns increased in October.

Lawrence Yun, NAR chief economist, said consumer hesitation is understandable. “Many potential home buyers appear to have withdrawn from the market due to the stock market collapse and deteriorating economic conditions,” he said. “We have favorable affordability conditions, but we need more than that to give buyers with jobs the confidence they need. This is why a housing stimulus is so critical now to encourage more buyers to draw down the inventory and stabilize home prices. Without home price stabilization, there will not be an economic recovery.”

Total housing inventory at the end of October slipped 0.9 percent to 4.23 million existing homes available for sale, which represents a 10.2-month supply2 at the current sales pace, up from a 10.0-month supply in September.

Published: November 26, 2008

Thomas Merical

info@MyNvaHomes.com

www.MyNvaHomes.com

Tell All, Safest Way To Sell A Home

by Phoebe Chongchua

www.RealtyTimes.com

If you’re putting your home on the market, better be sure you’re ready to tell all — good and bad.

“The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of escrow and coming to the belief that the seller knew but didn’t tell them,” says real estate attorney, Peter Solecki of Winton & Larson, LLP.

Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial back in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home’s heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their four-year-old child survived. The seller was convicted of involuntary manslaughter. This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.

While certainly this isn’t a typical scenario. It gives good reason to pay attention to the details that you’re disclosing when selling your home. It’s not worth it to leave off some important details just because you think the home won’t sell or will sell for less money if you disclose any problems.

Reporting problems about your property prior to the sale of it can be done through various reporting mechanisms such as the Transfer Disclosure Statement (TDS). But Solecki says some disclosure reporting statements are written in the present tense, which creates a reporting dilemma for some sellers.

“The seller will look at the Transfer Disclosure Statement and say well there was something wrong but it’s not anymore; therefore, I don’t have to disclose it,” says Solecki. He adds, “If [sellers] haven’t disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it’s been disclosed, then the buyer can elect what to do with it.”

Chances are buyers won’t decide to do anything further says Solecki. He says this is because the problem has been disclosed by the seller and reported that it’s been fixed. The will allow the buyers to feel that the problem has been completely resolved and therefore will not hold up the sale of the home.

Reporting all problems with the home regardless of whether they have been fixed is the safest way to sell your home. Making sure you keep good records is vital because, as the years pass, many sellers forget about all the repairs they’ve done to the property.

“Every homeowner should have a file of everything they do to the house,” says Solecki. This file should be given to the buyers for them to review. The file should show all problems and how they have been repaired, complete with receipts.

Solecki says this is a step above what many states require a seller to do. “Even though legally there’s no real requirement to tell about fixed problems, those are as critical as the existing problems.” He says when you don’t report a problem, buyers generally learn about it from neighbors and then assume that you were not telling the truth when you sold the home. Fortunately, Solecki says most buyers tell the truth.

“They’re not going to hide stuff because any buyer is going to find out thirty seconds after the property closes because there will be a knock on the door from the next door neighbor, with a plate of cookies, who will tell the buyers everything that happened in the house for the last three decades,” says Solecki.

But many sellers resist disclosing problems for fear that their homes won’t sell. “That’s the fallacy. People think if I tell the truth about my house, a buyer won’t buy,” says Solecki. But he says if you sell the home with a problem and the buyer finds out after the close of escrow, the buyer will likely file litigation to resolve the problem—creating a huge headache.

If the seller properly discloses all issues with the home, then the buyer can make an educated decision to buy or not. “The fact is that the vast majority of buyers don’t walk away. They decide to buy a house because they’ve determined it’s the house for them. Once they’ve made that decision they usually find a way to make it work,” says Solecki.

So, when’s the best time to disclose? Right away. “The good real estate agents will get whatever negative information there is out there as fast as possible. Once buyers make a decision to go forward they will have made their decision based upon all these factors, including that one,” says Solecki.

When you tell all before you sell, you’re positioning yourself not only for a successful home sale but also a headache-free post sale. “[Not disclosing information] is the primary post-close-of-escrow issue because that’s what leads to significant damages which is what leads to lawsuits,” cautions Solecki.

Published: November 21, 2008

Thomas Merical

Blog@MyNvaHomes.com

www.MyNvaHomes.com

www.FindaHomeSellaHomeNow.com

Investor Report: Avoid Over-Improving

by Kenneth R. Harney

www.RealtyTimes.com

For investors looking to pick up and rehab houses for quick resales, the rules in today’s tough market are very different from a few years back.

Today’s number one precaution, say high-volume rehab investment specialists, is this: Avoid over-improving properties — or you’ll lose your shirt and take forever to sell.

Ed Rooney, a long-time investor based in northern Virginia — who has his own construction crews of carpenters, plumbers and electricians to renovate houses he buys — says the key to making money right now is to spend less on fix-ups — no more fancy kitchens and bathrooms — and get out quickly.

During the housing boom years, Rooney says he’d typically spend $35,000 to $50,000 rehabbing a property — installing cherry cabinets and granite counters — and took anywhere from 30 to 60 days to finish the job.

Now “it’s 12 to 15 days and anywhere from $4,000 to $19,000″ — and generally few if any of the fancy extras.

With foreclosures and short sales competing with everything that comes on the market, “you’ve got to be the lowest (asking) price in the area.” Ideally this is by a 10 to 15 percent margin “if you’re going to sell fast,” Rooney told Realty Times in an interview.

To accomplish that, you not only have to buy low to start, but be highly cost-efficient in the types of rehab improvements you make, your contractors, and your turnaround time.

On the west coast of Florida, long-time investor and author John Schaub, who has bought hundreds of houses since the early 1970s, says it’s essential that investors not become prisoners of “reproduction cost” formulas that used to work, but amount to over-improvements today.

“Although reproduction costs are often cited by appraisers and builders,” Schaub says smart investors now have to ask a very different question: “Would you reproduce this building in today’s (tougher) market?”

“When you look at house,” Schaub says in his latest “Strategies and Solutions” real estate advisory, “ask yourself: Is it OVER-improved for the area?” based on what’s selling or being built now?

“If a builder today can build a brand new house for $100 a square foot,” says Schaub, a house built years ago for $150 a foot (even though it has a fancy kitchen and bathroom) “is now worth closer to $100 a foot” — at least until buyers are willing to pay a premium again.

Excellent points to keep in mind.

“From House to Home”–The Realtor® Thomas Merical

Team Leader-KWR12 12700 Fair Lakes Circle, Suite 120Fairfax, Va 22033(cell)703-585-8240(fax)703-342-4303Info@MyNvaHomes.comwww.MyNvaHomes.com

Real Estate Outlook: Housing in Recovery

by Kenneth R. Harney

RealtyTimes

With all the turbulence and losses in stocks and bad economic news in the headlines lately, you can easily lose perspective on what’s really going on in the real estate sector.

For example, new mortgage applications increased last week by 12 percent, according to the Mortgage Bankers Association. Applications from people looking to buy houses with FHA loans were up by 15.3 percent, while applications from purchasers seeking conventional mortgages rose by six and a half percent.

How could that be, with all the grim economic news? Well, remember that there is a huge pent-up demand simmering away out there for housing — especially from first-time buyers who want to scoop up low-priced deals.

When fixed interest rates drop — and last week they were down by a quarter of a percentage point — those buyers start doing the math and getting into the market with offers.

Fixed thirty year rates fell from six and a half percent to 6.24 percent during the week. Fifteen year rates broke below six percent to 5.9 percent, down from 6.14 percent.

Another piece of positive news you may not have noticed: Pending home sales were higher than year-earlier levels for the second straight month — 1.6 percent higher than September 2007 .

Although pending sales contracts were down slightly for the month, in the western states they were up by 3.7 percent, and now stand at an extraordinary 39.7 percent higher than they were at the same time in 2007.

At the National Association of Realtors’ convention in Orlando, chief economist Lawrence Yun, warned the delegates not to expect a housing recovery overnight, certainly not with unemployment on the rise. But he projected a slow, steady, multi-year upward trend, with 5.02 million total sales this year, 5.3 million for 2009, and 5.6 million for 2010.

Already sales are up significantly in major markets in many parts of the U.S. Yun specifically mentioned the west coast of Florida, the Phoenix area, Virginia, Long Island New York, Kansas City, Minnesota and Idaho.

So here’s the key point to keep in mind as you try to make sense of the headlines: The stock market is NOT the housing market. It’s on a whole different set of tracks. And it’s been in a highly volatile state for more than a month.

Housing, on the other hand, has already endured its painful correction for

two and a half years … is now pretty much stabilized … and is slowing

moving toward its cyclical recovery.

Published: November 18, 2008

Thomas Merical

www.MyNvaLuxuryHome.com

www.MyNvaHomes.com

Blog@MyNvaHomes.com

Successful Marketing in Strange Times

by Michael Beck

RealtyTimes

These are strange times.

On one hand, people are still spending money. They’re buying cars, shopping for groceries, buying new clothes, going out for dinner, and going to the movies. You get the idea. But on the other hand, there’s this feeling of impending “doom.” It’s an anxiety created by the uncertainty about the country’s economic and political future, and more importantly, people have an anxiety about their own future and the future of their family.

And yet, life goes on. People are still living their lives. These people should be your clients. Understanding how people are reacting and making decisions will help us be more effective and successful in our marketing during these strange times. So let’s take a look at how all this turmoil causes people to think, act, react, and make decisions.

As I illustrate all of this, I’m going to assume you have a good product and/or service, and that it really can make a positive difference to your clients. I always find it easier to see other perspectives and adopt new strategies when we are not the subject of an illustration. So for purposes of this discussion, let’s use my “Prospecting Made Easy” program as the subject. It’s a good program and can make a positive difference to the people who apply the concepts and implement the strategies.

How would people react if I bombarded them with some “In-Your-Face,” “BUY! BUY! BUY!” marketing campaign? It’s easy to guess what their reaction would be. They’d have the same reaction that you and I would have. In fact, their reaction will be similar to what many of us do with TV commercials. WE TUNE OUT. We don’t even hear the message. In times when people aren’t as stressed out as they are right now, that approach will often produce results. But not in this environment. No matter how good my program is, hardly anyone would take the time to hear me out. It’s the same with you and your business. No matter how good your products and services are … no matter how good YOU are … if you go about your marketing wrong, people will tune you out.

Now let’s move to the other end of the spectrum. The other end of the spectrum is when we don’t market at all – allowing “nature to take its course”. Although that may sound silly and naïve, this approach is used by loads of people. Here’s what it looks like: It’s like sitting in your office and waiting for a newspaper or yellow page ad to work. Or it’s like waiting for satisfied clients to send prospects (referrals) your way. Or it might be something as passive as sitting in the office waiting for the phone to ring. Sound familiar? It’s not such a far-fetched scenario. I call this “passive” marketing.

Once again, going back to the example of my program, would I sell it by using these approaches? Maybe I’d sell one every so often, but not enough to make a living – even though my program works and can help people succeed! What happens in your business when you just rely on advertising or casual word-of-mouth? My guess is that your experience would be pretty much like mine would be. Some sales, but not many … .

So if aggressive, assertive marketing won’t sell our products/services, and a passive, low-keyed approach won’t work either, then what will? The marketing methods that are most effective – especially when people are a bit edgy — are those that don’t cause people to “push-back” or become defensive. These marketing methods, of course, are ones which are relationship-based. Relationship-based marketing is more personal, less pushy and more natural. Let’s once again use my program as our example. Remember, as we go through these illustrations, to envision how these marketing methods apply to you and your business.

It’s important to understand why so many people buy my programs. (Besides the fact that my programs are effective in helping professionals grow their business.) It’s because of the relationship I develop with them. How does someone go about building relationship (thereby getting known, becoming liked, and creating trust)? You do that by being seen in person and in print, by sharing insights and knowledge, by caring about others, and by being helpful.

In my experience, most people aren’t seen by enough people. They don’t network nearly enough. Too many professionals “hunker down” in their offices waiting for the phone to ring. Most people don’t generate enough exposure for themselves to build a reputation and as such, don’t get as much business as they’d like. (While it is possible to develop a name and reputation for yourself without actually getting out, it requires a serious, consistent effort of writing articles in newsletters, newspapers and magazines.)

This isn’t theory. My results are proof that this works. Professionals worldwide have bought my programs because they know who I am, and have come to like and trust me. Imagine what you could accomplish in your business if you got more people to know, like, and trust you. Unfortunately, most folks aren’t “naturals” at this. I know I wasn’t. But this skill can be learned and mastered. Being an effective networker – whether one-on-one or at some networking event – is easy to achieve, once you have an understanding of the dynamics that take place. Knowing the kinds of things to say and the kinds of things to avoid saying are the keys to successfully generating interest.

The keys to success in times like these are refining and mastering the basics of marketing. The basics of marketing are how to meet people, build rapport and connect with them, and establish credibility with them. It seems that in this day and age, we’re under so much pressure to produce that we’ve focused exclusively on leveraged, impersonal methods to find new clients. Many of us have forgotten how to connect with people and build relationships on a more personal level.

In tough economic times like the ones we’re in, the only way to successfully market is to find prospects through relationships – either by finding ways of meeting new people or by connecting with more referral sources in a meaningful way. When you implement consistent strategies for finding new clients by forging new relationships and strengthening existing ones, you’ll see your income stabilize and grow – even in strange times like these.

Written by Michael Beck, an executive coach, speaker & trainer. He is the nation’s leading expert on recruiting independent sales representatives, and helps executives and managers build and lead productive sales teams. For more information, and to receive his program: “Smart Recruiting Strategies in a Tough Market!” for FREE, please visit: www.XLeaders.com.

Published: November 19, 2008

Thomas Merical

www.MyNvaLuxuryHome.com

Blog@MyNvaHomes.com

Market Conditions

by Realty Times Staff

In a statement to the House Financial Services Committee today, the National Association of Realtors® recommended a four-point plan to stimulate home sales and stabilize housing valuations.

“The only way to overcome today’s economic turmoil is to motivate and encourage worried or cautious housing consumers to enter the marketplace,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Stabilizing the housing market will lead to a quicker and greater economic recovery. Our goal is to ensure there is a healthy market and sufficient capital to support mortgage lending to qualified borrowers.”

NAR developed the plan for consideration by the current lame-duck session of Congress, and for the 111th Congress and the new administration. The four-point plan’s principles are consumer-driven to help foster a housing recovery to support an economic rebound. The plan calls for eliminating the repayment of the first-time home buyer tax credit that was passed in the February stimulus bill, and to expand the tax credit to include all home buyers. The plan also recommends making the increased FHA and conventional loan limits permanent to stimulate home sales and stabilize prices. In addition, the plan urges that the Troubled Asset Relief Program be put back on track by targeting the funds for mortgage relief through a mortgage interest rate buy-down. Finally, the plan recommends finalizing legislation to prohibit banks from entering into the business of real estate brokerage and property management.

“The federal government must ensure there is sufficient capital to support mortgage lending not only in strong markets but also in tumultuous ones,” said McMillan. “Realtors® are frustrated with the current mortgage lending environment that places a variety of barriers on families who wish to buy a home, impeding sales and price stabilization. We look forward to working with the Congress and the new administration to transition out of current instabilities and move toward strong and stable financial and housing markets.”

Published: November 19, 2008

Thomas Merical

www.MyNvaLuxuryHome.com

Blog@MyNvaHomes.com

TWELVE REASONS TO LIST YOUR HOME FOR SALE IN NOVEMBER AND DECEMBER

1. There is less competition for buyers because many other Sellers take their homes off the market.
2. Buyers are more serious about buying during the end of the year because they usually have to move if they are looking then.
3. Your home may look better than it normally would when it is decorated for the holidays. 
4. We usually have the highest percentage of listings sold to listings taken during this time. 
5. You may receive more money for your home now because you have less competition from other listed homes. 
6. You may be able to obtain equity loan commitment more quickly. 
7. Buyers have more time to look at homes during the holidays, especially during vacations. 
8. January is traditionally the biggest corporate transfer month – and your home would probably be on the market right before then when Buyers would be scoping the web for possible homes. 
9. By listing during the holiday season, you could arrange to have a closing after the first of the year for beneficial tax purposes. 
10. When you sell during the winter, you have an opportunity to buy and move during the spring. 
11. You may have fewer showings, but those Buyers are usually better prospects. 
12. Corporate transferees who need to buy a home now can’t wait until spring.

Thomas Merical

www.MyNvaLuxuryHome.com

info@MyNvaHomes.com

Home Equity To The Rescue?

by Broderick Perkins

www.RealtyTimes.com

It may sound like mattress-stuffing financial advice, but if you have a home equity loan and hard times loom, you may want to drain that account and squirrel the money away where you can get at it when you need it.

Wait until a financial crisis arises and you lender may have decided to renege on your credit limit and there will be nothing you can do about it.

“Banks are reducing their commitment on home equity loans. If you think you will need it, it’s a good time to take advantage of it before it goes away,” said Bob Kresak, a certified financial planner and managing partner of the Founders Financial Network, Cupertino, CA-based financial planning and wealth management firm.

Advice to grab equity money and run also comes from the CMPS Institute, an organization created to certify mortgage bankers and brokers to counsel consumers on mortgage and real estate equity management, as well as on home loan origination.

“If you counted on an unused home loan line of credit for liquidity and safety, this is not a smart strategy, if you need it in this environment. Draw it all out now and put it an FDIC-insured account and have access to your money when you need it,” says Gibran Nicholas, chairman of the CMPS Institute.

Chief operating officer at the Santa Clara-based online mortgage brokerage Erate.com, Nancy Osborne calls the use-it-or-lose-it advice “pretzel logic.”

When it comes to equity loans, even when you do use it, you lose it. A home equity loan, by it’s very nature, is an equity-depleting loan. And equity loan payments begin, with interest.

“Home equity isn’t free money after all. Isn’t that our economy has been over-leveraged by debt what got us all in this mess in the first place?” asks Osborne.

Maxing out your home equity line of credit could also lower your credit score if only by a few points.

But consider this, if you have a home equity line of credit at, say $50,000 and you’ve used $20,000 and the lender decides to cut your limit to $20,000, it looks to the credit scoring computer like you’ve maxed out your home equity anyway.

Proponents insist the advice really isn’t a radical shift from the fundamentals. The new advice just allows you to keep your home equity loan in a more liquid state. And from Wall Street giants to Main Street homeowners, today, liquidity is key.

Home equity is the difference between the value of your home and your mortgage balance. In the past, lenders have allowed home owners to borrow against their equity so much so that the home owner could wind up with a combined first and second mortgage balance that was as much as 125 percent of the value of the home.

That was during fast appreciation days when lenders cranked out mortgages with assembly line like speed (and quality) and it was a good bet values would rise. With the home owner paying down the mortgage and home values rising, it was a cinch the value would quickly rise above the total mortgage balance.

Unfortunately, the boom-turned-bust housing market left many home owners twisting the wind with negative equity — a home worth less than the mortgage.

Risk averse lenders suffering the financial fallout are putting the kibosh on how much you can borrow against your equity, typically no more than 80 percent of your first and second mortgages combined.

Quincy A. Virgillio Jr., president elect of the Santa Clara County Association of Realtors says while an “equity depletion strategy” can be a way of saving an asset from declining value, it is risky business. He says equity use should come with a return that’s greater than the cost of borrowing.

“And that’s something that may be hard to achieve given the current yields that are being earned in today’s markets. It becomes an issue if the returns are eliminated or diminished, making this a risky proposition,” said Virgillio, also broker owner of the Mortgage Network in Campbell.

Nicholas concedes, “If you are not disciplined and you go out and blow the money, of course this (squirreling away equity money) is not a good idea,” said Nicholas.

Published: November 13, 2008

Thomas Merical

info@MyNvaHomes.com

www.MyNvaHomes.com

Investor Report: REO Scam Warning

by Kenneth R. Harney

RealtyTimes.com

The nationwide boom in foreclosures and bank-owned real estate (REO) property sales to investors is producing an unpleasant and sometimes dangerous side effect: Growing numbers of confrontations occur when investors visiting supposedly empty properties find them occupied — and the inhabitants don’t want to leave or let anybody in.

That was the message at the recent REOMAC bank-owned real estate convention in Hollywood, Florida from Rafael Dagnesses, REO director for Quantum Realtors in Los Angeles.

“Investors are especially vulnerable,” said Dagnesses, an eight year veteran of the L.A. Police Department and a marine for 16 years before that before becoming a real estate broker.

Foreclosure investors often have numerous properties to check out during a typical day, he said, but they don’t necessarily pay attention to problems that may be lurking inside supposedly empty houses.

For example, he said in an interview with Realty Times, even in higher-cost neighborhoods, scam artists are now tracking houses entering the foreclosure pipeline every day, and then renting those houses out as they become vacant — totally illegally.

They get hold of notices of default - or other publicly available reports of pending foreclosure actions — and then rent out the empty houses to tenants at bargain all-cash rents.

When investors or REO management agents later visit the property and find it occupied, the scammed “tenants” may feel threatened and respond with hostility to efforts to enter the house, according to Dagnesses.

In many cases, such visits in the L.A. area have resulted in physical confrontations — even gunshots and beatings.

Given the growing problem, Dangesses has put together a short list of security procedures for investors and realty agents dealing with REO properties.

1. Before heading out to see a foreclosed house, evaluate the potential risk of the neighborhood. Let an associate know your schedule and route.
2. Never enter an REO property without first checking the exterior perimeter to determine whether anyone has broken a window or back door to gain entry. At the front door, never enter a foreclosed house without first giving a loud “knock and notice.”
3. Number three: Even if you’re visiting a property in broad daylight, always bring a heavy clad flashight. Not only is it practical if the electricity has been turned off, but “it’s a good defensive tool” if you need it.

Bottom line, in Dagnesses’s view: Take common sense precautions. “You can’t make a lot of money investing in REO,” he says, “if you don’t take care of yourself.”

Published: November 14, 2008

Thomas Merical

info@MyNvaHomes.com

www.MyNvaHomes.com