H Group (Hobson Real Estate Group)

Home Remodeling (Cost vs. Value Report)

Phil Hobson — Tue, 23 Aug 2011 14:17:00 GMT

Before you begin your home remodeling project, reference the information in this link to see what projects produce the greater value.

http://www.remodeling.hw.net/2010/costvsvalue/division/west-south-central/city/dallas--tx.aspx

Phil Hobson
Prudential Texas Properties
www.hgrouphomes.com
(214) 659-3624

Dedicated to Going Green? Follow These 10 Easy Steps

Phil Hobson — Tue, 26 Apr 2011 18:14:00 GMT

RISMEDIA, April 26, 2011—Given the pressing environmental challenges facing the world, one day just doesn’t seem like enough to celebrate the earth and make long-term environmental changes. Why not use this month as inspiration and make a commitment to do environmentally friendly activities throughout the year?

Here are just 10 ideas, along with some online resources, that you could try.

Green your office–Establish a green team with colleagues to address ways to reduce your office’s impact. A recycling program is obvious. Other strategies could entail ridding the kitchen of disposable goods, replacing equipment that hogs energy, improving lighting and HVAC systems, installing a bike rack, and replacing grass around the office with a vegetable garden or native plants. For more information, visit www.greenyour.com/office.

Shop locally–Swear off buying stuff from faraway places, even if it saves some pennies. Just consider the impact that packaging and shipping your goods has on the environment. Instead, shop locally. Walking to shops saves energy and you also help neighborhood businesses thrive.

Make mini moves–Build new habits that will have an ongoing impact. Those could include the basics, such as switching to CFL bulbs, fixing water leaks (www.epa.gov/WaterSense), or cutting the phantom power at home.

Do an energy audit–Invest in an energy audit to figure out exactly how your house wastes energy. Even if you’re on a tight budget, commit yourself to making some of the changes the auditor suggests, and start setting aside money for costlier upgrades. Find an auditor at RESNET, www.resnet.us/trade/find-raters-auditors.

Go car-free–Reorganize your schedule so you can take public transit or walk to work and errands at least a day a week.

Become a locavore–Rely on local providers for your weekly produce by shopping at a farmers’ market or joining a CSA (Community Supported Agriculture) program. And when it’s time for gift giving, consider buying CSA memberships for friends and clients. www.localharvest.org

Share your knowledge–Offer to make a presentation to colleagues at a weekly sales meeting about green changes they can make. Or pass the torch to the next generation by organizing an environmental event at a school or with a Girl Scout troop.

Raise your profile–Whether it’s a community garden, a rails-to-trails group, or a transit improvement committee, get involved in your community. Your participation raises your profile and connects you with new prospective clients, and your efforts have a direct impact on improving your community.

Learn something new–Still fuzzy on the details of programs like LEED or Energy Star? Wondering about new rebates and incentives? Spend two hours each week getting up to speed on industry programs and trends. One resource for such education is the Green REsource Council’s Webinars, one of the many great benefits available to NAR Green Designees. All the Webinars are archived at http://greenresourcecouncil.org/webinars.cfm for deisngees, and they include sessions on Energy Star, EPA’s WaterSense, USGBC’s REGREEN , LEED for Homes, and NAHB’s Green Building Program.

Refer a colleague—Find out how much colleagues have benefitted by earning NAR’s GREEN Designation and urge others to get green education. Discuss the greater knowledge you have to advise clients and how the designation has allowed you to best prepare your business for a changing world in which consumers increasingly value an efficient, sustainable housing stock. Right now, the Green REsource Council is offering a discount on the online Core Course and Residential elective. Registrants can save nearly $100 off the original price of the online courses.

For more information, see http://GreenREsourceCouncil.org/Courses.cfm.

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Regulators, Banks Reach Deal to Correct Foreclosure Flaws

Phil Hobson — Sun, 17 Apr 2011 14:56:00 GMT

RISMEDIA, April 16, 2011—(MCT)—Federal banking regulators have reached agreements with the nation’s biggest mortgage lenders to address longstanding complaints that the foreclosure process is unfair to delinquent borrowers trying to stay in their homes.

The settlements with the nation’s largest banks are aimed at correcting what consumers and consumer groups say are fundamental flaws in the repossession process.

The agreements are the result of a review of bank practices begun last year by the nation’s biggest bank enforcers—the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. “The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy,” the OTS said in a statement.

John Walsh, acting comptroller of the currency, said in a separate statement that the enforcement actions announced by the agencies would go far in correcting foreclosure errors.

“These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,” Walsh said. “These reforms will not only fix the problems we found in foreclosure processing, but will also correct failures in governance and the loan-modification process and address financial harm to borrowers.”

The nation’s big regulators were widely criticized and accused of failing to prevent the unsafe lending practices that led to the housing bubble over the past decade. Now, many consumer advocates feel these regulators have not gone far enough to correct errors found in foreclosure practices.

As details of the plan began to leak out, these groups criticized the proposed agreements as being watered down. A fundamental complaint was that regulators were allowing banks to draw up their own plans for correcting their problems, giving the banks 60 days to do so.

A separate group of bank enforcers—a coalition of attorneys general from all 50 states as well as the Department of Justice and other federal agencies—are also seeking to settle with lenders. The group, led by the state attorneys general have issued their own demands in a detailed, 27-page term sheet and negotiations between them and the banks remain ongoing.

Consumer groups recently urged the federal regulators to join with the attorneys general. “While homeowners and communities continue to face breached contracts, obstruction and misrepresentations from servicers, the proposed consent orders provide no new directions or standards to the financial institutions subject to your supervision,” a coalition of advocates, including the National Consumer Law Center and the Center for Responsible Lending, wrote in a letter to the federal regulators. “Rather, the proposal permits the perpetrators of these abuses to design a plan to comply with existing laws and contracts. This is insufficient to halt the abuses.”

The agreements announced by the federal regulators required the mortgage servicers to improve their communications with borrowers and to limit the extent to which they can pursue foreclosure during the loan-modification process.

The agreements require lenders to ensure foreclosures are not pursued once a mortgage has been approved for modification, and it establishes a single point of contact for borrowers throughout the loan-modification and foreclosure processes.

The settlements also require lenders to establish systems to oversee their outside companies that conduct foreclosures and related services for the banks, including outside law firms. The big banks will be required to hire an independent company to conduct a review of all foreclosures conducted between Jan. 1, 2009, and December 31, 2010.

The banks also will be required to establish a process for homeowners who believe they have been improperly foreclosed on by the banks and a way for them to get financial remedy from these institutions.

Distributed by McClatchy-Tribune Information Services.

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Young Home Buyers Will Lead Housing Market Recovery, Says NAHB

Phil Hobson — Thu, 14 Apr 2011 16:01:00 GMT

RISMEDIA, March 21, 2011—Generation X—young families and adults ages 31 to 45—are likely to lead the home-buying recovery as it gets underway, according to real estate experts who spoke at an educational webinar produced by the National Association of Home Builders (NAHB) in partnership with Builder magazine.

These potential home buyers are most likely to think it’s a good time to get off the fence—and have strong opinions about the design features their new homes will include.

At 32% of the population of home-buying age—generally defined as those who are at least 30 years old, the Gen X population cohort isn’t the largest, but it’s the most mobile, said presenter Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, Calif. “They are in full force with their careers and they need to accommodate growing families,” she said.

In sharp contrast, even though they constitute 41% of prospective home buyers, Baby Boomers continue to wait for the market to improve, and their decisions to delay retirement also delay their decisions to downsize into a smaller home, Carmichael said.

Most of the 10,000 buyers and potential buyers in 27 metro areas that the consulting company surveyed were optimistic about a new home purchase, with between 85% and 89% saying that it was a good time to buy a home. Only 13% said they thought home prices would continue to fall, further evidence that it’s “not all about price,” she said. “They want something compelling, from a design or personalization standpoint,” said Carmichael.

In addition, though the average home size is shrinking, a majority of prospective buyers said they would like a bigger home than the one they have. “These are first-time buyers or younger families looking for more room to grow,” she said.

Seventy percent said that they were willing to pay $5,000 more for a green home, but those responding to the survey said that they expected new homes to already have many green technology features. They also said they would pay a premium for dark wood cabinets, a separate tub and shower and a fireplace in the living room, and more preferred a great room over formal spaces.

And while community amenities are important to Gen X buyers, 46% said they prefer a home in a large-lot, suburban development, versus the 21% looking for a traditional or “walkable” neighborhood.

Webinar panelist Heather McCune, director of marketing at Bassenian/Lagoni Architects in Newport Beach, Calif., also emphasized that design will be important in generating sales in the emerging marketplace. “The notion of ‘build it and they will come’ no longer works. Design matters,” she said.

McCune said buyers are looking for homes with a connection between indoor and outdoor spaces, even in colder climates, to create the perception of greater home size, even if the space is only usable for part of the year. They also want more storage, an open floor plan and flexibility in the garage.

“While Gen X numbers are smaller than the birth cohorts before and after them, their numbers have been enlarged by steady immigration,” said NAHB Chief Economist David Crowe. “Gen X may wait longer than their predecessors to establish their own household or buy a home because of the recent recession impacts, but the trends are still likely to occur as they have for past generations.”

This webinar was one in a four part series entitled New Horizons: Setting a Course for Success in the New Market. The series was sponsored by Simonton Windows and ThermaTru.

For more information, visit www.nahb.org.

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Banks Spruce Up Foreclosures to Boost Sales

Phil Hobson — Thu, 14 Apr 2011 16:01:00 GMT

By Mary Ellen Podmolik

RISMEDIA, March 19, 2011—(MCT)—Bill Schramm and Bethany Siwicki scoured property listings for three months before agreeing to see a home in Round Lake Beach, even though its online pictures didn’t look promising.

“It looked like a piñata blew up in there,” Schramm said. Every room was a different color, and the only way to tell the carpet once had been white was looking at the furniture marks.

But the home they visited bore little resemblance to the pictures. The walls were white, new carpet had been installed, and repairs made. The recently engaged couple immediately submitted an offer and are waiting to close on their first home purchase.

Sprucing up a home to sell it faster and for more money is a strategy frequently advocated by real estate agents. In this case, though, the seller is Wells Fargo Bank, and the home Schramm and Siwicki are buying is a foreclosure.

There are still plenty of dilapidated foreclosures on the market marred by water damage, mold, broken windows and missing plumbing fixtures, properties that hold little appeal except to investors and professional rehabbers.

But as the quality of foreclosures and the communities where they are located has improved, so, too, has interest in them by consumers. To entice those buyers and lessen their inventory of real estate owned foreclosed homes, commonly known as REOs, banks are spending thousands of dollars on some foreclosures. In addition to new paint and carpet, floors are being refinished, old windows are being replaced, and leaky roofs are being repaired.

The strategy benefits the banks and home buyers, who otherwise would have trouble securing mortgages on homes that a lender could term “uninhabitable” because of needed repairs. At the same time, it helps the broader real estate market because while the foreclosures still sell at a discount, it is not at the fire sale prices of unlivable properties.

For traditional home sellers, the trend of banks plowing money into foreclosures means they will have to be more realistic in their pricing, because the foreclosure for sale down the street may look a lot more inviting to prospective buyers.

“Foreclosures used to be fewer and far between,” said Ray Millington, an agent at Century 21 Roberts & Andrews. “The problem is, we say we’ll concede that sale, but what happens when another one pops up. It becomes an ongoing thing. It’s not like you have only one in the subdivision anymore.”

Real estate agents say they are having the same conversation with banks that they have with any seller, and it starts by identifying the target customer for a property. If the answer is an owner-occupant, agents recommend fixes that can range from a few thousand dollars of paint to $25,000 of kitchen upgrades. In the past, banks rejected such suggestions, viewing them as throwing good money after bad, but now some are heeding the advice.

Last month within the city of Chicago, 207 of the 472 single-family detached homes that sold were foreclosed properties. An additional 62 were short sales, transactions in which the homeowner sells the home, with the lender’s permission, for less than the amount owed on the mortgage. Combined, distressed properties in February accounted for 57% of all single-family detached sales and 46% of all condos, according to the Chicago Association of REALTORS®.

Fannie Mae repossessed more than 262,000 single-family homes nationally last year, and as of Dec. 31, its inventory of single-family REOs was almost 163,000.

Under its “first look” program that began in September 2009, Fannie Mae will only consider offers from owner-occupants or buyers like nonprofits during the first 15 days a home is on the market. Fannie sold nearly 29,000 homes to consumers under that program during its first year.

Buyers are jumping on the best REOs, and keen interest can lead to multiple offers. “The ones that are in good shape, people are snapping those up,” said Mike Stodola, an agent at Koenig & Strey Real Living. “The ones that are left are ones that need major work.”

Despite about $30,000 in improvements, the house Schramm and Siwicki will buy for $125,000 still needs work. The couple’s first project is to remodel the kitchen. “It’s probably the most hideous livable house you’ll see, but I can fix it,” Schramm said. “Nothing even comes close to this house in terms of value per dollar. There’s a ton of houses out there that cost less than $125,000. Do I want to buy them and move into them? No.”

It’s not just the house and the neighborhood that help lenders decide whether to make presale investments. It’s also the potential risk of vandalism. “There’s no sense of putting a furnace in there if it’s going to walk away the next day,” said Abe Rabah, of Great Street Properties.

In Barrington Hills, Ill., down the street from one well-appointed home listed for $890,000, is another property, a foreclosure that went on the market at $525,000. The Tudor-style home attracted some foot traffic but no serious consideration.

The house was removed from the market and almost $20,000 of updates and repairs are being made before it’s relisted. “We’re doing everything that is going to make the property look better, but also make it financeable,” said Connie Ritchie, an agent at RE/MAX Suburban. “When you walk in now, you say this is nice and clean. This is something I can work with.”

Distributed by McClatchy-Tribune Information Services.

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First-Time Home Buyers Prepare for Best Buyer’s Market in Recent History

Phil Hobson — Thu, 14 Apr 2011 16:00:00 GMT

RISMEDIA, March 18, 2011—While affordable housing prices, ample inventories, and historically low interest rates signal ‘buyer’s market’ for investors or move-up buyers in many U.S. markets, inexperienced first-time buyers may not know if the time is right to make a move into real estate.

“It’s not about timing the market. It’s about time in the market,” says Steve Berkowitz, chief executive officer at Move, Inc., a leader in online real estate. “Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Be confident about your own job security, down payment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. While homeownership may not be for everyone, it is the right choice for hundreds of thousands of people. Today’s housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities.”

To help first-time buyers know if they’re ready to look for the home of their dreams as we head into this year’s home-buying season, the experts at Move have created a ‘reality checklist’ designed to help them decide if the time is right.

Get your financial house in order
Before you decide to buy a home, it’s essential to make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn’t know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it’s important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don’t fall in love with a house you can’t buy
Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers. Look for special loans available from FHA and government sponsored loans for first-time home buyers that reduce the amount of money required to get into a home.

Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home-buying. Here are a few key terms from MortgageMatch.com to add to your vocabulary:

Bait rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.

Basis point: A term used in the mortgage industry which simply means 1/100th of 1%.

Closing costs: The fees required to process and close your loan. They’re a cash obligation running from 3-5% of the purchase price. Motivated sellers might pay a portion of these costs.

FHA: Federal Housing Administration, the Federal Government Agency that oversees the U.S. Housing market. FHA Loans are loans insured by the Dept. of Housing and Urban Development.

FRM and ARM: A Fixed-Rate Mortgage Loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are Adjustable-Rate Mortgages with variable interest rates that fluctuate based on an agreed-upon index.

GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.

TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.

Lis pendens: An official notice that there is a pending lawsuit over real estate.

Per Diem interest: Interest you pay per day, from the day you close to the last day of the month.

Underwriting/underwriting fees: Underwriting is a process the lender performs to qualify a borrower for a loan and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.

Warranty deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.

Mortgage Knowledge
While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac. “Buyers who prepare themselves financially before they start looking for a home will have a better chance of succeeding,” says Sue Stewart, senior vice president for Move, Inc. “If you want to land the best mortgage that fits your needs, start early, educate yourself on your financial situation, get your documentation together and find a lender you trust.”

Find a REALTOR® and go shopping
For those ready to buy, REALTOR.com® has the tools and tips to help you find a REALTOR® and, ultimately, the right home. Finding a licensed real estate professional in your area will make the process smoother and easier to understand. Once you find an agent, share your realistic budget and what you’re looking for in a home. Stay in constant contact with your agent and look for homes whenever you have a spare moment.

First-time home buyer resources
For more tips designed to help the first-time buyer navigate the home buying process, the experts at Move have provided an abundance of helpful information that’s just one click away:
-Reality checklist – Are you sure you’re ready to buy? Here’s how to know.
-How-to Guide: Buying Your First Home – Everything you need to know about buying a home
-Get Prequalified Now – Get prequalified for a mortgage before you begin shopping
-Realtor.com Blogs– Connect with REALTORS® to help you navigate the market
-MortgageMatch.com News – Answers questions about finances and mortgages
-Move.com Home Finance – Equips first-time buyers with tools, guides, advice, and more

If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.

For more information, visit www.move.com and www.Realtor.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Consumers Agree – It’s A Good Time to Buy Real Estate

Phil Hobson — Thu, 14 Apr 2011 15:59:00 GMT

RISMEDIA, March 25, 2011—According to the latest Spending and Saving Tracker from American Express, more than two in five (41 percent) of Americans said that it’s a buyer’s market for real estate. However, over 61 percent agree that a seller’s market is at least a year away.

Other findings:
• Homeowner confidence on whether they would receive the asking price for their home is nearly evenly split—43 percent said they are confident they would; 47 percent are not very or not at all confident.

• However, many homeowners—39 percent—are not willing to settle for less than the asking price, even considering the tough real estate market, in contrast to 23 percent who are willing and 38 percent who are not sure.

• To sell their home in the current market, 44 percent of homeowners note that they would be interested in including appliances, while 28 percent would consider offering to make requested repairs or allowing an allotment for repairs.

For more information, visit www.psbpr.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Vacation Home Sales Surge Higher

Phil Hobson — Thu, 14 Apr 2011 15:58:00 GMT

RISMEDIA, March 26, 2011—In a sign that the housing market is finally making a major move in a positive direction, vacation home markets—some of the most battered in the real estate downturn—are making a surge higher in many of the hardest hit areas of the nation. Condominium sales in Hawaii and Florida are surging higher even as some potential buyers remain hesitant about the economy.

Two month’s into the New Year, existing condo sales in Oahu jumped nearly 21 percent as the median prices on units moved 7 percent higher than year ago levels—a reversal of trends—according to the Oahu Realtors Association. Closed transactions of existing condos in Miami also soared 58 percent higher in February compared to a year ago.

Across Florida, sales jumped 29 percent on condos and 13 percent for single family homes as historically low mortgage rates and lower prices brought buyers back to the marketplace. Seven out of 10 sales were of either foreclosures or bank assisted short sales, and half of all sales were paid for in cash without bank financing.

As a result, home prices continue to plummet throughout most of the state. In Miami the median price of a home is down 23 percent from a year earlier, while condos are off 25 percent, despite a slight 3 percent increase in value during February. Some areas of Miami are, however, beginning to see price appreciation, especially along the highly demanded waterfront, where 67 percent of sales were non-distressed.

“Compared to a year earlier the median and average sales prices increased 12 percent and 22 percent respectively,” says Miami Realtor® President Ralph DeMartino.

“We are even seeing instances in certain neighborhoods with multiple offers above asking price,” says Jack Levine, the Realtors® chairman. While the Miami market shows growing signs of pulling out of its near six year downturn, Hawaii will have to turn the corner before its fortunes fully recover. But many areas of the state are demonstrating strong improvements.

Existing single family home sales are rising in Oahu and condo prices are higher, but doubts about the Hawaii market persist as a result of the massive disasters in Japan—which Hawaii is dependent on for much of its economy, including real estate purchases.

On the Big Island and Kauai prices on condos fell in February, mainly as a result of lower priced foreclosures selling even as sales surged 12 percent for the month. Sales were the strongest for single family homes. “We’re definitely seeing continual strengthening of the market as more buyers are taking advantage of low prices and low rates to buy second homes and vacation homes,” said Jeff Proster, president of Brookfield Homes in Hawaii.

For more information, visit www.housingpredictor.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Update on First Time Homebuyer Credit and Tax Refunds

Phil Hobson — Thu, 14 Apr 2011 15:57:00 GMT

RISMEDIA, March 26, 2011—The IRS recently released information on processing issues that are impacting a small percentage of tax returns involving repayment of the First Time Homebuyer Credit (FTHB), primarily involving 2008 home purchases. While most of these returns are processing normally, the IRS recognizes the hardship caused by delayed refunds, and it has assigned additional staff and resources to address the issues promptly.

It is important to note that taxpayer returns claiming a home purchase in 2010 are not affected, and those returns are being processed as are the vast majority of other homebuyer returns.

Here’s an update on the source of the processing issues:

1. Married Filing Joint taxpayers who received the FTHB credit on a 2008 purchase

There seems to be an identified processing issue primarily impacting refunds for married couples filing joint returns this year who received the First Time Homebuyer credit on their 2008 tax return. This credit was an interest-free loan, and must be paid back beginning this year under the provisions of the law.

This issue, related to Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, primarily impacts Married Filing Jointly taxpayers who filed their tax returns this year before Feb. 22. The IRS is working aggressively to manually process tax returns for this group of taxpayers. It expects most, if not all, of these refunds to be available by April 5, and others the following week. (The date assumes that there are no other issues with their return, and that their refunds are not subject to any offsets for unpaid federal taxes or other debts.)

2. Taxpayers who received the FTHB credit and are now reporting the sale or disposition of their home

3. Taxpayers who received the FTHB credit and are attempting to pay back more than the amount required (typically $500)

These two issues require changes to IRS’ core tax processing systems. The IRS is actively working on the development and testing of the required changes that will allow these impacted tax returns to be processed and appropriate refunds issued. The IRS does not currently have a definitive date for when these changes will be complete, although it will be in April.

What should taxpayers do?

The IRS understands that taxpayers affected by this issue are anxious to get the status of their refund. For those who have already filed, no action is necessary. They can check “Where’s My Refund” at www.IRS.gov for updates. Because the IRS is already aware of this issue and is taking corrective action, there is no need to call.

For those who have not yet filed and are making a repayment of a First Time Homebuyer Credit this year, there is a simple step taxpayers can take to help speed processing. Couples filing a joint return for tax year 2010 who received the credit on their jointly filed 2008 tax return should file two 5405 forms, one for each taxpayer. For couples filing a joint return for 2010 but who had a different filing status in 2008 and only one spouse received the credit, the IRS recommends filing one Form 5405 for the taxpayer who received the credit.

For more information visit www.IRS.gov.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Home Inspections an Essential Tool for Buyers

Phil Hobson — Thu, 14 Apr 2011 15:56:00 GMT

RISMEDIA, April 4, 2011—(MCT)—A home inspection often means the difference between a sale and no sale, even if the deal that results isn’t exactly what the owner expected. Buyers and sellers typically recognize the need for a home inspection. Still, it may put both sides of a sale on edge. Sellers fear the inspector will find something amiss that slashes the price. Buyers fear the house they want will have problems. Today, with so many houses for sale, inspections have become the chief tool for haggling over price.

“We are a coupon-clipping society,” with people trying to save every penny they can, says Noelle M. Barbone, manager of Weichert Realtors’ Media, Pa., office. “Real estate is no different.” Though he isn’t always aware how the negotiations proceed after his work is done, Harris Gross of Engineers for Home Inspection in Cherry Hill, N.J., says buyers were more apt to use an inspection report as leverage in this lean housing market than in the boom.

The buyer’s goal is to get the seller to pay for repairs or cut the price to reflect their cost. “The result depends on the financial position of the seller and the comfort zone of the buyer,” Barbone explains. Which means a lot is riding on the accuracy of the inspection and the quality of the inspector.

Home inspections are not intended to point out every small defect, though they can highlight the good points of a house, be sources of information, and educate buyers and sellers. Nor are they appraisals, which are used to determine a property’s market value.

The American Society of Home Inspectors emphasizes that an inspector “will not pass or fail a house,” but rather will describe its condition and indicate which components and systems may need major repair or replacement. That is especially important with older houses, where systems may not be up to the most modern standards.

The standard report covers the condition of the heating system; central air-conditioning system (temperature permitting); interior plumbing and electrical systems; roof, attic, and visible insulation; walls, ceilings, floors, windows, and doors; and foundation, basement, and structural components.

Trade groups such as the National Association of Home Inspectors (www.nahi.org) and the American Society of Home Inspectors (www.ashi.org/customers) offer virtual inspection tours on their websites so prospective buyers know what to expect.

Some larger inspection companies offer what Barbone calls “complete packages,” adding termite inspection and radon testing to the typical checklist. Although the cost varies by region, the standard inspection runs about $350 to $400 in the Philadelphia area, she says, with termite and radon testing pushing the total to $550 to $600. Add more to the price for larger houses.

Under the profession’s standards, the inspector is not required to advise whether you should buy the house. That’s a decision you must make based on factors including the inspection.

If a buyer has concerns about issues raised in the report—for example, a wet basement that has a “moldy” smell—the inspector typically suggests further testing by an expert. Buyers and sellers are generally aware of the parameters, Gross says, but at the start of an inspection, “I like to explain to the buyers what a home inspection is, what we will be doing, and what to expect.”

A prospective buyer should accompany the inspector on the house visit, taking a notebook or voice recorder and a camera for future reference, Weichert Realtors agent Diane Williams suggests.

Other criteria for what a home inspector cannot, or should not, say or do are spelled out in the codes of ethics and performance standards of such groups as the American Society of Home Inspectors, the National Association of Home Inspectors, the American Institute of Inspectors, and the International Association of Certified Home Inspectors.

Professional organizations can provide contact information for their members. Although real estate agents cannot steer you to an inspector, they often provide lists of several prospects for you to consider in addition to looking on your own.

Once the inspection is done, buyers, sellers, and their agents want to see the write-up as soon as possible. “I always complete the inspection reports the same day because the sooner you write it, the fresher it is in your mind,” Gross said. Plus, “I’m not thinking of the inspection report I have to write the next day, when I have other inspections.”

WHAT GETS INSPECTED: The standard inspection report covers the following:
• Heating system
• Central air-conditioning system (temperature permitting)
• Interior plumbing and electrical systems
• Roof, attic, and visible insulation
• Walls, ceilings, floors, windows, and doors
• Foundation, basement, and structural components.

HOME INSPECTOR 411:
Some things to consider before choosing an inspector:
• Credentials. Know whether your state requires that inspectors be licensed or affiliated with an association.
• Experience. Any prospect should have made enough inspections “to make you feel comfortable,” cautions Ronald J. Passaro of Danbury, Conn., a founder of the American Society of Home Inspectors. Has the inspector been in business long enough that you know he or she will still be there in a year, or five years, if you have questions or problems?
• Professional affiliations. These require adherence to codes of ethics and standards.
• Staff. If you have a problem or question, can you get in touch with someone when you call or email?
• Sample report. Is it concise, readable, and in layman’s terms, or is it a vague checklist that’s not tailored to your home?
• Other services. Does the prospect offer more than just the standard inspection, including radon and water testing?

Distributed by McClatchy-Tribune Information Services.

For more information visit www.philly.com.

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Buyer’s Market Spurs Confidence in Young Professionals and Affluent Homeowners

Phil Hobson — Thu, 14 Apr 2011 15:23:00 GMT

RISMEDIA, April 4, 2011—As the cold temperatures become a distant memory, and the spring selling season gains momentum, consumers have come to agree on one thing—now’s a good time to get off the fence and into the real estate market. This is the overall theme in the latest American Express Spending and Saving Tracker survey, a monthly survey that tracks the spending and saving habits of consumers in order to get an indication of what’s happening in the market. “This month’s Spending and Saving Tracker provided an up-to-date look at various consumer trends and gave us the opportunity to assess how consumers are feeling about the current market in addition to gauging homeowner confidence,” says Leah Gerstner, vice president of public affairs at American Express.

“This month’s survey points to the fact that consumers overwhelmingly feel that we are in the midst of a buyer’s market,” she adds. The data also points to the fact that a seller’s market is at least a year away, which is certainly positive news. While homeowners aren’t necessarily willing to settle for less than the asking price when selling their home, two of the biggest areas of interest in the latest survey deal with homeowners including home improvement projects on their to-do list, as well as the willingness to include concessions to get their home sold.

Home Improvements
“In looking at the results of our latest Spending and Saving Tracker survey, our thinking was that if consumers overwhelmingly view today’s market as a buyer’s market—which they do—they are likely to have plans to put more money into their home,” adds Gerstner. In fact, the survey found that about 64 percent of homeowners currently have home improvement projects on their to-do list for 2011. While the plans are in place, the amount that homeowners are budgeting to spend has gone down quite a bit from last year. “Homeowners are looking for better ways to stretch their dollars, and many are looking toward energy-efficient home improvements that will pay off in the long run.” The survey shows that among homeowners who are looking to go green, the most common items homeowners would spend their money on include energy-efficient windows and doors, insulation, roofing, heating and cooling systems as well as alternative energy systems.

Concessions
Another finding that stood out in the latest survey had to do with whether or not sellers were willing to make concessions to get their homes sold, especially in today’s market. While 44 percent of sellers were willing to give away appliances during a sale—the biggest concession among young professionals and affluent homeowners—another 28 percent said they would take care of requested repairs in order to get their home sold. “While a large majority of sellers are willing to make concessions to get their home off the market, the willingness to make concessions is down among young professionals when compared with the 2010 survey,” says Gerstner. “This is an important finding as it shows that young professionals are more confident in their ability to sell their homes today.”

“Homeowner confidence in today’s market has increased compared to last year,” says Gerstner. “In fact, the survey shows that the confidence level is pretty evenly split—42 percent of homeowners are confident they will get their asking price in today’s market, while 47 percent of homeowners aren’t that confident.” Even though home values continue to be on the low side, young professionals and affluent homeowners are seemingly more confident in today’s market.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Adjustable-Rate Mortgages May Be the Right Fit for Cautious Buyers

Phil Hobson — Tue, 15 Mar 2011 13:29:00 GMT

RISMEDIA, March 11, 2011—(MCT)—Loc Chau was looking for a super-low interest rate to finance his San Jose, Calif., condominium, a place he envisions living in for a few years. Super-low to him means below 4%. So he opted for an adjustable-rate mortgage insured by the Federal Housing Administration as an alternative to a 30-year-fixed rate mortgage.

In November, 30-year fixed-rate mortgages hit a 40-year record low, averaging 4.17%. But now, they are back in the 5% range.

“I don’t plan to stay here forever. History tells me I’ve averaged five years in each place I’ve purchased, and I don’t see any benefit to lock in a rate that is higher. I didn’t want to go with 30 years,” Chau said.

Adjustable-rate loans can provide lower payments than a fixed-rate loan for the first several years, but those savings can go away after the reset period kicks in. Payments can also rise sharply, leaving borrowers in a tough spot.

Typically, borrowers who get adjustable-rate loans try to either sell the home or refinance before the reset kicks in. The lower reset caps of an FHA adjustable-rate loan provides borrowers with more breathing room than conventional adjustable loans, which have higher reset caps.

Chau obtained a $343,000 FHA adjustable-rate loan with an interest rate of 3.77% and moved into his three-bedroom condo in January.

Chau said the lower reset caps of the FHA adjustable-rate loan will help avoid having a big reset rate if he is still in the home after five years. “To me, that’s a no-brainer. It’s not that much, I can live with it if I need to stay here another year or two,” said Chau, a fiscal and operations manager for the city of San Francisco. “It’s pretty decent.”

As with any real estate product, there are trade-offs when comparing loans.

Many conventional loans require a minimum 20% down payment, while FHA loans can be financed with a minimum down payment of 3.5%. FHA loans have a lower down payment requirement, but they also can take longer to process.

The higher mortgage insurance cost associated with an FHA loan can raise borrowing costs, said Steve Donahue, vice president of mortgage origination at San Jose, Calif.-based Technology Credit Union. This factor has to be weighed when considering their lower reset caps. “It’s important for prospective buyers talk to a qualified loan officer who can explain the difference between an FHA and conventional loan so they can really understand all the costs involved,” he said. “There are so many factors besides interest rates involved.”

Mortgage insurance, which is paid for by the borrower and protects the lender against default, is required when there is less than a 20% down payment. While mortgage insurance is tax deductible, depending on a borrower’s income, that tax break will go away after 2011.

A borrower who made a 10% down payment on a $277,500 home and financed a $250,000 loan with a 3.7% interest rate would have monthly mortgage insurance premiums of $98 on a conventional loan, compared to $177 on an FHA loan. There is also an upfront FHA mortgage insurance premium equal to 1% of the home’s purchase price, a cost that can be financed into the loan.

Starting April 18, FHA loans will see higher premiums for monthly mortgage insurance.

FHA adjustable-rate loans can be the right loan for borrowers who are now looking for low rates and a low down payment, and who may stay in the home for longer than five years, said Kevin Conlon, senior vice president of operations at Mason-McDuffie.

“It allows them to get into a home and qualify at today’s prices for those homes,” he said. “In the sixth year, a conventional adjustable-rate loan can go the lifetime limit. That can be a big payment.”

Rising interest rates have resulted in more people considering adjustable-rate loans, said Tara Nicholle-Nelson, consumer educator for San Francisco-based Trulia.com. “There’s something about that 4 percent interest rate. It seems like the Holy Grail of interest rates,” she said.

Still, she said, many borrowers are still shying away from adjustable-rate loans, which are viewed as one of the factors that created the housing crisis. Adjustable-rate loans are tied to financial indexes, which means when they reset at a future rate the new interest rate can be lower or higher.

“A lot of what was wrong with adjustable-rate loans, at the top of the market, was not the adjustable part of it. It was the interest-only or option ARM part of it,” she said, referring to loan features that allow borrowers to pay little or no principal. “Their payment is going way up because they were never making a full payment.”

Distributed by McClatchy-Tribune Information Services.

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Bank of America Launches Loan Modifications for Military Homeowners

Phil Hobson — Tue, 15 Mar 2011 02:14:00 GMT

RISMEDIA, March 14, 2011—(MCT)—Bank of America Corp. recently announced a mortgage modification program for military customers, including principal forgiveness for some struggling borrowers. The Charlotte bank said the program assists military members who are leaving active duty and having trouble making their mortgage payments.

The announcement comes as big banks are in settlement discussions with banking regulators and state attorneys general over their handling of foreclosures and modifications. The banks may face a requirement that they reduce principal for borrowers, a measure they’re resisting.

At a recent investor conference, Terry Laughlin, the Bank of America executive in charge of distressed loans, said principal reduction was no “panacea” because borrowers without sufficient income still can’t make payments. Chief Executive Brian Moynihan also painted it as a fairness issue, saying “when you start helping certain people and don’t help other people, it’s going to be very hard to explain the difference.”

Wells Fargo & Co. CEO John Stumpf recently stated that principal reduction is “not always the answer.” He expressed concern that such a mandate could encourage customers who are current on their loans to stop paying. Of Wells customers whose mortgages are “underwater,” there are more making their payments than not, he said. “It would make no sense to create an environment where people could be incented not to pay their debts where they could pay,” Stumpf said.

Stumpf said principal reduction isn’t priced into the $40 a month Wells makes servicing the average home loan for investors. He also said it would have a “huge impact” on Freddie Mac and Fannie Mae, the government-controlled mortgage giants that own half of the loans serviced by the San Francisco-based bank.

Principal reduction is a tool in the bank’s tool box, he said, but only for specific situations involving loans owned by the bank. So far, Wells has reduced customers’ balances by nearly $4 billion. Principal reduction has been an option for customers with Pick-A-Payment adjustable rate mortgages inherited in the bank’s purchase of Charlotte’s Wachovia Corp.

To make payments affordable, Bank of America’s new program will first reduce the amount owed on a borrower’s mortgage to as low as 100% of the home’s current market value. After that, the bank can also reduce the interest rate on the loan, as needed.

Starting April 1, Bank of America said, it also will offer a 4% interest rate on mortgages for active duty military members while they are under the protection of the Servicemembers Civil Relief Act, lower than the 6% that is required.

The bank said the modification program and the lower interest rates will initially be offered to customers with loans owned and serviced by the bank. It said it’s in discussions with investors in other mortgages that it services.

“Military men and women face extraordinary circumstances, and they make unique sacrifices for all of us,” said Laughlin in a statement. “For these reasons, we want this combination of tools to address their needs and help them when they need it most.”

Distributed by McClatchy-Tribune Information Services.

Unhealthy Homes Pose Real Danger to Millions of Families

Phil Hobson — Tue, 15 Mar 2011 02:13:00 GMT

RISMEDIA, March 14, 2011—Millions of U.S. families face health and safety hazards like mold, lead, pest infestation and the physical deterioration of their homes. These problems are particularly common among some of the nation’s most vulnerable populations: children, seniors, the disabled and low-income families.

To address these widespread issues, the U.S. Department of Housing and Urban Development (HUD), the U.S. Centers for Disease Control and Prevention, the U.S. Environmental Protection Agency, U.S. Department of Energy and the U.S. Department of Agriculture will host more than 3,000 national health and safety experts in Denver from June 20-23, 2011 at the National Healthy Homes Conference (NHHC). Under the theme, Leading the Nation to Healthy Homes, Families and Communities, this is one of the most comprehensive forums ever held on the issue.

“It’s time that we move from talk to action,” said HUD Secretary Shaun Donovan. “Our goal is to ensure that every home is designed, built, rehabbed and maintained in a manner that protects the health and safety of American families. This conference encourages the exchange of critical information and presents innovative approaches and solutions to reduce home-related hazards.”

The Conference will feature more than 150 educational sessions and workshops, allowing officials from the public health, housing, safety and environmental communities to collaborate and share ideas. Presentations will be made by representatives of more than 200 organizations, such as Habitat for Humanity, American Lung Association, National Center for Healthy Housing, AARP, National Association of Homebuilders and the Harvard School of Public Health.

“Building a Healthy Neighborhood” Volunteer Event Kicks-Off Conference Activities June 18-19

One of the highlights of NHHC takes place prior to the official start, when HUD and Rebuilding Together rehabilitate 25 homes in a Denver neighborhood on June 18 and 19. The event, called Building a Healthy Neighborhood, will bring together more than 300 volunteers to make the homes of local families safer and healthier. Volunteers may register at www.healthyhomesconference.org.

About the 2011 National Healthy Homes Conference

NHHC is one of the housing industry’s most comprehensive, progressive and educational forums on the issue of healthy, safe and sustainable homes. The conference is a federally-sponsored event, bringing together a wide range of health, housing and environmental professionals to work toward making housing healthy, safe and environmentally sustainable.

For more information, visit www.hud.gov.

New CRS Course Focuses on Buyer Side of Distressed Properties

Phil Hobson — Tue, 15 Mar 2011 02:12:00 GMT

RISMEDIA, March 14, 2011—Far too many REALTORS® avoid the distressed property market—which includes foreclosures and short sales—because they do not have the necessary skills, strategies or information they need to guide their buyer clients through one of these transactions successfully.

But distressed properties accounted for 34% of fourth quarter 2010 home sales, up from 32% a year earlier, according to data from the NATIONAL ASSOCIATION OF REALTORS® (NAR), and these homes sold at a discount of 10-15%. This presents a big opportunity for buyers and to those REALTORS® who are qualified to assist them through these often tricky transactions.

To prepare agents to serve this growing need, the Council of Residential Specialists (CRS) has developed a new course, Guiding the Buyer in the Distressed Property Market (CRS 112), that gives agents the practical tools and skills they need to counsel clients about distressed property transactions.

Building upon the success of CRS’s existing Short Sales and Foreclosures:
Protecting Your Clients’ Interests course (CRS 111), the new course’s program focuses on the buyer side of distressed property transactions. “This course is a direct response to market demand,” says CRS education director Mary Beth Ciukaj. “Agents realize that when more than one-third of all existing-home sales involve distressed properties, it’s time to learn how to serve consumer demand in that area. This course aims to help them do just that,” she says.

Developed and taught by senior instructors Frank Serio, CRS, and Leroy Houser, CRS, the course includes specific sales strategies which will help both new and experienced REALTORS® represent their buyers in the most professional manner possible. Course attendees will gain the knowledge they need as they build confidence in their ability to navigate the many complex processes involved in a distressed property transaction.

“At a time when so many residential properties are distressed, there’s a good chance that agents will work with a buyer client who wants to buy one of these homes in the near future,” says course co-author and 2011 CRS president Frank Serio, CRS. “Short Sales and Foreclosures: Protecting Your Clients’ Interests is the perfect course to teach agents the techniques they need to better serve these clients who must navigate the tricky transactions prevalent in today’s market.”

Upon successful completion of this course, REALTORS® will be able to:
-Counsel and prepare their clients to purchase a distressed property.-
-Find and select those distressed properties that meet their clients’ specific needs.
-Successfully prepare and negotiate an “offer to purchase” contract.
-Finance REO and short sale properties.
-Qualify and work with the listing agent in order to avoid unnecessary delays and problems.
-Successfully sell REO and short sale properties.

Guiding the Buyer in the Distressed Property Market (CRS 112) earns attendees eight units of CRS education credit toward the CRS Designation, and it has been approved as a qualifying core course for NAR’s Short Sales and Foreclosure Resource Certification (SFR).

For more information, visit www.crs.com.