10 Steps to Sanity for Home Sellers in a Nervous Market
RISMEDIA, Feb. 15, 2007-A. Sheila Anderson of OcalaResidential.com, Inc., licensed real estate broker, offers 10 tips to simplify selling a house in a nervous market. She is applying her experience to answering a question on the minds of many: being smart about buying or selling your house.
Perhaps you are facing a transfer, considering downsizing, or moving to a different area. Or you want the family and kids settled in time for the 2007-2008 school year.
Buyers and sellers may have the jitters from insurance, congestion, high taxes, declining real estate sales and fluctuating prices.
Whatever the case, housing prices remain near historical highs, if they are off a bit from last year's peaks and stay on the market longer.
"There's a lot more to selling your house than setting up a sign and waiting for buyers to come," Anderson says. "This is a business decision. Your goal is to make your experience as simple as possible-for you and the buyer."
The following 10 steps can get a seller started. It starts with attitude.
1. Detach emotionally from the property. Take the long view. Prepare for change. Simplify the surroundings. Wake up and pretend you are a guest in someone else's house. Make your bed in the morning. Put the dishes in the dishwasher right away. Distinguish your home from your house. Your home is in your memories and those of the family-a house is the bricks and mortar you are selling. This critical psychological step will make everything that follows easier.
2. Lose the clutter. Root out anything you don't need or use. Do it in steps. It will make moving day that much easier. As for non-priority items you wish to keep, put them in storage.
3. Present the front. Paint if needed. Trim the landscaping. Weed the grass. Plant some flowers. Clean out the side and rear yards. When you like what you see, take pictures.
4. Always be honest - with your buyer, and with the real estate broker. If there is a problem, tell them about it. They will be grateful for your candor and the deal will work more smoothly.
5. Make the house sparkle, especially the kitchen, bathrooms and your windows. Put jewelry, family pictures and personal mementos into storage, or in neatly stacked boxes in a corner of your garage.
6. Disappear when real estate agents show the property. Take a drive, go to a movie, or visit with friends when people are walking through the house. And take your animals with you. (Someone might have an allergy).
7. Get ready to show the house any time. Once it is on the market, it is always a good time to show the house - if you really want to sell it. That accidental visitor could well be your buyer.
8. Prepare a list of items the buyer might want to use - the lawnmower, the grill, the patio and porch furniture, the draperies. Mark them "for the buyer." It's a little touch, but a separate bill of sale can provide tax advantages for the buyer at closing time.
9. Keep your cool. Buyers and sellers both tend to go a little crazy during a sale. Don't get emotional; keep your sense of humor. This is a business transaction and is not personal. Some people will give you a low-ball offer. Don't get offended; give them a counter-offer you consider fair.
10. Consider getting out of the way at closing time. Let the broker and your attorney handle it.
The more professional and calm the deal stays, the better a shot you will have with the fewest surprises.
Wednesday, February 28, 2007
Daily Quote Wednesday, February 28, 2007
There are a thousand thoughts lying within a man that he does not know till he takes up a pen to write.
- William Makepeace Thackeray
- William Makepeace Thackeray
Tuesday, February 27, 2007
Freddie Mac to Refuse High Risk Mortgages
Daily Real Estate News February 27, 2007
Freddie Mac to Refuse High Risk Mortgages
Mortgage finance company Freddie Mac will no longer buy subprime mortgages that have a "high likelihood" of payment shock and foreclosure, the company announced.In particular, the quasi-government company will no longer invest in packages of mortgages that include the controversial 2-28 adjustable-rate variety, popular with borrowers who have damaged credit. Such loans let borrowers make low payments for the first two years. About four out of five mortgages to borrowers with blemished credit are 2-28 loans.In the future, Freddie Mac will only invest in mortgages that assume a borrower can make the highest possible mortgage payments. They also plan to introduce new products to help troubled mortgage borrowers, Richard Syron, Freddie Mac's CEO, said in an appearance on CNBC television.
Source: Reuters News (02/26/07)
Freddie Mac to Refuse High Risk Mortgages
Mortgage finance company Freddie Mac will no longer buy subprime mortgages that have a "high likelihood" of payment shock and foreclosure, the company announced.In particular, the quasi-government company will no longer invest in packages of mortgages that include the controversial 2-28 adjustable-rate variety, popular with borrowers who have damaged credit. Such loans let borrowers make low payments for the first two years. About four out of five mortgages to borrowers with blemished credit are 2-28 loans.In the future, Freddie Mac will only invest in mortgages that assume a borrower can make the highest possible mortgage payments. They also plan to introduce new products to help troubled mortgage borrowers, Richard Syron, Freddie Mac's CEO, said in an appearance on CNBC television.
Source: Reuters News (02/26/07)
Monday, February 26, 2007
Appealing an Assessment Can Be Worth It
Daily Real Estate News (Originally Published February 5, 2007)
Appealing an Assessment Can Be Worth It
Experts say appealing a tax assessment isn’t particularly difficult and it can significantly reduce what a home owner pays. Procedures are unique to each community, but Stanley J. Fineman, president of Wilkes Artis, a Washington D.C.-based real estate law firm offers this advice that is true everywhere.
Start by calling the tax assessors. Ask how the property is assessed and discuss your specific concerns.
Make sure the assessors have the correct physical description of the house, including the proper square footage and the correct number of bathrooms and bedrooms.
Tell the assessors about things that an inspection from the outside the home doesn’t reveal, such as the leaky basement, the crack in the foundation, or other problems that can’t be easily resolved.
Point out other homes in the neighborhood that are of a similar in size and quality, but have lower assessments.
Source: The Washington Post, Dina ElBoghdady (02/03/2007)
Appealing an Assessment Can Be Worth It
Experts say appealing a tax assessment isn’t particularly difficult and it can significantly reduce what a home owner pays. Procedures are unique to each community, but Stanley J. Fineman, president of Wilkes Artis, a Washington D.C.-based real estate law firm offers this advice that is true everywhere.
Start by calling the tax assessors. Ask how the property is assessed and discuss your specific concerns.
Make sure the assessors have the correct physical description of the house, including the proper square footage and the correct number of bathrooms and bedrooms.
Tell the assessors about things that an inspection from the outside the home doesn’t reveal, such as the leaky basement, the crack in the foundation, or other problems that can’t be easily resolved.
Point out other homes in the neighborhood that are of a similar in size and quality, but have lower assessments.
Source: The Washington Post, Dina ElBoghdady (02/03/2007)
Daily Quote February 26, 2007
To business that we love, we rise betime and go to't with delight.
- William Shakespeare
- William Shakespeare
Sunday, February 25, 2007
Daily Quote February 25, 2007
No one can sincerely try to help another without helping himself.
- Charles Dudley Warner
- Charles Dudley Warner
Inside the investment strategies of the very rich
Inside the investment strategies of the very rich
Thursday January 25, 9:49 am ET By Katie Benner, Fortune reporter
There's no question that hedge funds and private equity investments have dominated the business headlines for the last year. But does that mean that individuals are actually flocking to these high-risk, high-return funds?
Not as much as you might think. A recent study shows that 40 percent of millionaire investors surveyed had no allocation whatsoever in alternative investments, including private equity, hedge funds and commodities. Those who shy away from the investments say the products are too complex or that the risks associated with these investments are too high, says the report from Northern Trust, which provides financial services to high net-worth clients, including 22 percent of the Forbes 400 Richest Americans.
Instead, domestic equities dominate the portfolios overall, representing 43 percent of their assets, up from 41 percent in 2005. Millionaires reduced their exposure to real estate to 8 percent from 13 percent; and international investments increased to 10 percent from 8 percent.
About half of the high-net worth investors who do put money into alternative assets allocate 10% or more, and they told Northern Trust that they are attracted to the higher returns and diversification that these riskier investments hope to deliver. "Private equity funds are really investing on behalf of institutional investors -- and that means the pension funds for teachers, firemen and police officers," says one private equity insider.
And he's not just spinning a Mr. Nice Guy image for his own industry. Wealthy families accounted for 11 percent of the $154.3 billion raised by U.S. private equity firms in 2005, according to Dow Jones Private Equity Analyst. More than 70% of private equity capital came from public and corporate pension funds, insurance companies, endowments, foundations, and funds of funds, specialized vehicles that combine the assets of many small investors.
Additionally, Dow Jones said that U.S. investors accounted for 77 percent of the capital raised by private equity firms in 2005. With the bulk of private equity's money coming from pensioners, universities and our insurers, the actions of these cash-happy funds are of genuine importance to the comparatively cash-strapped masses. And the deep participation of such institutions may also explain why some politicians and regulators have been fighting for more industry scrutiny.
Among wealthy investors who did give money to alternative assets, Northern Trust found some striking generational differences. For example, 27 percent of GenX millionaires (i.e. ages 27 to 41) have exposure to the higher risk vehicles, compared with 17 percent of baby boomers, and only 11 percent of millionaires ages 61 and older. "Alternative asset class investments, particularly hedge funds and private equity, often have lock-up provisions and other limitations on liquidity," says Northern Trust chief investment officer John Skjervem. "Younger investors, presumably still working, can afford to invest a larger proportion of their portfolio in an illiquid, non-income producing asset class."
Lest we believe that the wealthy are throwing all their cash at high-risk, high-return investments, respondents overwhelmingly described their risk tolerance as "moderate." But among the "deca-millionaires," meaning households with more than $10 million in investable assets, 22 percent say they are aggressive investors; and younger, male investors claimed higher risk tolerance levels than older, female investors.
Moreover, millionaires are optimistic about the future, with 62 percent expecting annual market gains of 6 percent or higher. Only a tiny minority said they were bearish on the market, despite spirit- dampening trends like the worsening international crisis, growing budget deficits and the declining dollar. "Despite a discernable slowdown in U.S. economic growth in the second half of 2006 and a continuing steady stream of often disconcerting geopolitical headlines, investors continue to embrace risk across equity, fixed income and alternative asset classes with remarkable calm and tenacity," says Skjervem.
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Thursday January 25, 9:49 am ET By Katie Benner, Fortune reporter
There's no question that hedge funds and private equity investments have dominated the business headlines for the last year. But does that mean that individuals are actually flocking to these high-risk, high-return funds?
Not as much as you might think. A recent study shows that 40 percent of millionaire investors surveyed had no allocation whatsoever in alternative investments, including private equity, hedge funds and commodities. Those who shy away from the investments say the products are too complex or that the risks associated with these investments are too high, says the report from Northern Trust, which provides financial services to high net-worth clients, including 22 percent of the Forbes 400 Richest Americans.
Instead, domestic equities dominate the portfolios overall, representing 43 percent of their assets, up from 41 percent in 2005. Millionaires reduced their exposure to real estate to 8 percent from 13 percent; and international investments increased to 10 percent from 8 percent.
About half of the high-net worth investors who do put money into alternative assets allocate 10% or more, and they told Northern Trust that they are attracted to the higher returns and diversification that these riskier investments hope to deliver. "Private equity funds are really investing on behalf of institutional investors -- and that means the pension funds for teachers, firemen and police officers," says one private equity insider.
And he's not just spinning a Mr. Nice Guy image for his own industry. Wealthy families accounted for 11 percent of the $154.3 billion raised by U.S. private equity firms in 2005, according to Dow Jones Private Equity Analyst. More than 70% of private equity capital came from public and corporate pension funds, insurance companies, endowments, foundations, and funds of funds, specialized vehicles that combine the assets of many small investors.
Additionally, Dow Jones said that U.S. investors accounted for 77 percent of the capital raised by private equity firms in 2005. With the bulk of private equity's money coming from pensioners, universities and our insurers, the actions of these cash-happy funds are of genuine importance to the comparatively cash-strapped masses. And the deep participation of such institutions may also explain why some politicians and regulators have been fighting for more industry scrutiny.
Among wealthy investors who did give money to alternative assets, Northern Trust found some striking generational differences. For example, 27 percent of GenX millionaires (i.e. ages 27 to 41) have exposure to the higher risk vehicles, compared with 17 percent of baby boomers, and only 11 percent of millionaires ages 61 and older. "Alternative asset class investments, particularly hedge funds and private equity, often have lock-up provisions and other limitations on liquidity," says Northern Trust chief investment officer John Skjervem. "Younger investors, presumably still working, can afford to invest a larger proportion of their portfolio in an illiquid, non-income producing asset class."
Lest we believe that the wealthy are throwing all their cash at high-risk, high-return investments, respondents overwhelmingly described their risk tolerance as "moderate." But among the "deca-millionaires," meaning households with more than $10 million in investable assets, 22 percent say they are aggressive investors; and younger, male investors claimed higher risk tolerance levels than older, female investors.
Moreover, millionaires are optimistic about the future, with 62 percent expecting annual market gains of 6 percent or higher. Only a tiny minority said they were bearish on the market, despite spirit- dampening trends like the worsening international crisis, growing budget deficits and the declining dollar. "Despite a discernable slowdown in U.S. economic growth in the second half of 2006 and a continuing steady stream of often disconcerting geopolitical headlines, investors continue to embrace risk across equity, fixed income and alternative asset classes with remarkable calm and tenacity," says Skjervem.
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Saturday, February 24, 2007
Friday, February 23, 2007
Bernanke: Real Estate Hasn't Hurt Economy
Daily Real Estate News February 15, 2007
Bernanke: Real Estate Hasn't Hurt Economy
Federal Reserve Chairman Ben Bernanke on Wednesday provided his latest insights into the housing market as he addressed the Senate Banking, Housing and Urban Affairs Committee.
Although the topic of conversation was focused on the Fed's semiannual monetary policy report, he touched on real estate often. Here's what he had to say:
Housing slowdown hasn't hurt the economy: “The U.S. economy appears to be making a transition from the rapid rate of expansion experienced over the preceding several years to a more sustainable average pace of growth. The principal source of the ongoing moderation has been a substantial cooling in the housing market, which has led to a marked slowdown in the pace of residential construction. However, the weakness in housing market activity and the slower appreciation of house prices do not seem to have spilled over to any significant extent to other sectors of the economy.”
Rents to increase moderately: “The faster pace of rent increases last year may have been attributable in part to the reduced affordability of owner-occupied housing, which led to a greater demand for rental housing. Rents should rise somewhat less quickly this year and next, reflecting recovering demand for owner-occupied housing as well as increases in the supply of rental units. But the extent and pace of that adjustment are not yet clear.”
Lenders should consider risk of payment shock: “Just to note one action we've taken recently, along with the other federal banking agencies, we've issued guidance on nontraditional mortgages, mortgages that involve interest-only or option ARMs that may not be amortizing mortgages. And we've emphasized to the lenders that they should be, first, very careful in their underwriting. That is, they should ensure that the borrower is equipped to deal with payment shock, if interest rates go up; that they have sufficient income to meet higher payments. And secondly, that disclosures are adequate, so that the borrowers are fully informed about the nature of the contract that they're getting involved in.”
Inventory to normalize in 2008. “The predicate is that we have seen what we think or what we call tentative signs of stabilization in demand for housing. If, in fact, the demand for housing is stabilizing – and, again, we won't know that for sure, I think, until we see sales figures in the spring – then we should see from here a gradual decline in the months for sale inventory. The normal is, at least for the last eight to 10 years, four-and-a-half months of homes for sale. And my anticipation would be that we would get back toward that general level by the end of [2008] assuming that demand stabilizes.”
Source: Dow Jones Business News (02/14/2007)
Bernanke: Real Estate Hasn't Hurt Economy
Federal Reserve Chairman Ben Bernanke on Wednesday provided his latest insights into the housing market as he addressed the Senate Banking, Housing and Urban Affairs Committee.
Although the topic of conversation was focused on the Fed's semiannual monetary policy report, he touched on real estate often. Here's what he had to say:
Housing slowdown hasn't hurt the economy: “The U.S. economy appears to be making a transition from the rapid rate of expansion experienced over the preceding several years to a more sustainable average pace of growth. The principal source of the ongoing moderation has been a substantial cooling in the housing market, which has led to a marked slowdown in the pace of residential construction. However, the weakness in housing market activity and the slower appreciation of house prices do not seem to have spilled over to any significant extent to other sectors of the economy.”
Rents to increase moderately: “The faster pace of rent increases last year may have been attributable in part to the reduced affordability of owner-occupied housing, which led to a greater demand for rental housing. Rents should rise somewhat less quickly this year and next, reflecting recovering demand for owner-occupied housing as well as increases in the supply of rental units. But the extent and pace of that adjustment are not yet clear.”
Lenders should consider risk of payment shock: “Just to note one action we've taken recently, along with the other federal banking agencies, we've issued guidance on nontraditional mortgages, mortgages that involve interest-only or option ARMs that may not be amortizing mortgages. And we've emphasized to the lenders that they should be, first, very careful in their underwriting. That is, they should ensure that the borrower is equipped to deal with payment shock, if interest rates go up; that they have sufficient income to meet higher payments. And secondly, that disclosures are adequate, so that the borrowers are fully informed about the nature of the contract that they're getting involved in.”
Inventory to normalize in 2008. “The predicate is that we have seen what we think or what we call tentative signs of stabilization in demand for housing. If, in fact, the demand for housing is stabilizing – and, again, we won't know that for sure, I think, until we see sales figures in the spring – then we should see from here a gradual decline in the months for sale inventory. The normal is, at least for the last eight to 10 years, four-and-a-half months of homes for sale. And my anticipation would be that we would get back toward that general level by the end of [2008] assuming that demand stabilizes.”
Source: Dow Jones Business News (02/14/2007)
Wednesday, February 21, 2007
Daily Quote - February 21, 2007
There is no terror in the bang, only in the anticipation of it.
- Alfred Hitchcock
- Alfred Hitchcock
Tuesday, February 20, 2007
Appraisers Get Pressured to Falsify Findings
Daily Real Estate News (Originally Published February 2, 2007)
Appraisers Get Pressured to Falsify Findings
The pressure is on property appraisers to come up with the “right” number, say 90 percent of appraisers surveyed by October Research Corp., which publishes Valuation Review, an industry newsletter.
That percentage is much higher than it was in 2003, the last time the survey was conducted, when only 55 percent of appraisers reported attempts by others to influence their findings.
The current survey found that 68 percent of appraisers lost the client when they refused to fudge the numbers and 45 percent reported not being paid.
Seventy-one percent of appraisers blamed mortgage brokers for the pressure, while 56 percent said real estate practitioners pressured them.
Source: Washington Post Writers Group, Kenneth Harney (02/02/07)
Appraisers Get Pressured to Falsify Findings
The pressure is on property appraisers to come up with the “right” number, say 90 percent of appraisers surveyed by October Research Corp., which publishes Valuation Review, an industry newsletter.
That percentage is much higher than it was in 2003, the last time the survey was conducted, when only 55 percent of appraisers reported attempts by others to influence their findings.
The current survey found that 68 percent of appraisers lost the client when they refused to fudge the numbers and 45 percent reported not being paid.
Seventy-one percent of appraisers blamed mortgage brokers for the pressure, while 56 percent said real estate practitioners pressured them.
Source: Washington Post Writers Group, Kenneth Harney (02/02/07)
Monday, February 19, 2007
Foreclosures Hurt Neighborhood Home Values
Daily Real Estate News (Originally Published February 8, 2007)
Foreclosures Hurt Neighborhood Home Values
In testimony Wednesday to a U.S. Senate panel, the NATIONAL ASSOCIATION OF REALTORS® said abusive and predatory lending practices are putting our nation’s communities at risk.
Abusive lending practices cause families to lose their homes and savings when they’re forced to foreclose. Vacancies that result can deflate the value of surrounding homes, as well, NAR President Pat Vredevoogd Combs told the U.S. Senate Committee on Banking, Housing and Urban Affairs.
“High foreclosures of single-family homes are a serious threat to neighborhood stability and community well-being,” Combs said. “NAR supports responsible lending with increased consumer protections to ensure that the ‘dream’ our members help fulfill does not turn into a family’s worst nightmare.”
Stronger anti-predatory lending legislation and more consumer education on nontraditional mortgage products are needed to reduce foreclosure rates, she said. To help consumers learn more about risky mortgages, NAR and the Center for Responsible Lending developed a brochure, "Specialty Mortgages: What Are the Risks and Advantages?"*
“Real estate professionals have a strong stake in preventing predatory lending,” Combs said. “We have to make sure that while addressing predatory lending, the legislative and regulatory responses to lending abuses do not go too far and inadvertently limit the availability of reasonable credit for prime as well as subprime borrowers.”
— REALTOR® Magazine Online
* Email me at Denise@DeniseWells.com for a copy of the brochure "Specialty Mortgages: What are the Risks and Advantages?"
Foreclosures Hurt Neighborhood Home Values
In testimony Wednesday to a U.S. Senate panel, the NATIONAL ASSOCIATION OF REALTORS® said abusive and predatory lending practices are putting our nation’s communities at risk.
Abusive lending practices cause families to lose their homes and savings when they’re forced to foreclose. Vacancies that result can deflate the value of surrounding homes, as well, NAR President Pat Vredevoogd Combs told the U.S. Senate Committee on Banking, Housing and Urban Affairs.
“High foreclosures of single-family homes are a serious threat to neighborhood stability and community well-being,” Combs said. “NAR supports responsible lending with increased consumer protections to ensure that the ‘dream’ our members help fulfill does not turn into a family’s worst nightmare.”
Stronger anti-predatory lending legislation and more consumer education on nontraditional mortgage products are needed to reduce foreclosure rates, she said. To help consumers learn more about risky mortgages, NAR and the Center for Responsible Lending developed a brochure, "Specialty Mortgages: What Are the Risks and Advantages?"*
“Real estate professionals have a strong stake in preventing predatory lending,” Combs said. “We have to make sure that while addressing predatory lending, the legislative and regulatory responses to lending abuses do not go too far and inadvertently limit the availability of reasonable credit for prime as well as subprime borrowers.”
— REALTOR® Magazine Online
* Email me at Denise@DeniseWells.com for a copy of the brochure "Specialty Mortgages: What are the Risks and Advantages?"
Friday, February 16, 2007
Daily Real Estate News (Originally Published February 16, 2007)
Don't Cut the Price, Buy Down the Mortgage
As mortgage rates rise, here’s a sales incentive to consider.
Instead of cutting the price, a seller might want to consider paying points to reduce the buyer’s interest rate on the mortgage.
With a 2/1 buydown, the buyer gets a rate 2 percentage points below the market rate for the first year of the loan and one point lower in the second. Then the loan reverts to the market rate.
The 2/1 buydown costs about $4,380 on a $200,000 loan. In the first year, buyers would pay $225 less each month. In the second year, they would pay $109 less.
To match the first-year monthly payment without the buydown in this example, the seller would have to cut the price by $50,000.
Source: Kiplinger Personal Finance Magazine (03/01/07)
Don't Cut the Price, Buy Down the Mortgage
As mortgage rates rise, here’s a sales incentive to consider.
Instead of cutting the price, a seller might want to consider paying points to reduce the buyer’s interest rate on the mortgage.
With a 2/1 buydown, the buyer gets a rate 2 percentage points below the market rate for the first year of the loan and one point lower in the second. Then the loan reverts to the market rate.
The 2/1 buydown costs about $4,380 on a $200,000 loan. In the first year, buyers would pay $225 less each month. In the second year, they would pay $109 less.
To match the first-year monthly payment without the buydown in this example, the seller would have to cut the price by $50,000.
Source: Kiplinger Personal Finance Magazine (03/01/07)
Monday, February 12, 2007
6 Ways First-Time Buyers Can Prepare
Daily Real Estate News (Originally Published) February 6, 2007
6 Ways First-Time Buyers Can Prepare
A cooling housing market gives buyers, especially first-time buyers, more opportunities to snatch up a good deal. But just because there are good deals, doesn't always mean buyers are ready to make the leap.
These six tips will help prospective buyers find out if they are ready for homeownership.
1. Take a first-time home buyer class.
It will make repairing a credit score and shopping for a loan less stressful.
2. Be conservative.
Borrowing too much can mean stretching and even sacrificing — to the point that it’s hard to even keep a six-pack of beer in the fridge.
3. Organize documents.
First-time buyers should keep a pay stub, W-2, and bank and retirement account statements on hand to expedite the loan application process.
4. Get pre-approved.
Before starting the homebuying process, consumers should get pre-approved by at least one lender. Being pre-approved won't lock buyers in to a loan but it may save them the heartache of falling in love with a home they really can't afford.
5. Play house.
Every month, prospective buyers should bank the amount that they'd have to pay if they owned a home. It's good practice so they'll be ready for the real thing.
6. Consider all the costs.
It's not just a mortgage payment they have to worry about. Repairs, assessments, and other costs of homeownership can add up quickly.
Source: Star-Tribune, Kara McGuire (02/02/07)
6 Ways First-Time Buyers Can Prepare
A cooling housing market gives buyers, especially first-time buyers, more opportunities to snatch up a good deal. But just because there are good deals, doesn't always mean buyers are ready to make the leap.
These six tips will help prospective buyers find out if they are ready for homeownership.
1. Take a first-time home buyer class.
It will make repairing a credit score and shopping for a loan less stressful.
2. Be conservative.
Borrowing too much can mean stretching and even sacrificing — to the point that it’s hard to even keep a six-pack of beer in the fridge.
3. Organize documents.
First-time buyers should keep a pay stub, W-2, and bank and retirement account statements on hand to expedite the loan application process.
4. Get pre-approved.
Before starting the homebuying process, consumers should get pre-approved by at least one lender. Being pre-approved won't lock buyers in to a loan but it may save them the heartache of falling in love with a home they really can't afford.
5. Play house.
Every month, prospective buyers should bank the amount that they'd have to pay if they owned a home. It's good practice so they'll be ready for the real thing.
6. Consider all the costs.
It's not just a mortgage payment they have to worry about. Repairs, assessments, and other costs of homeownership can add up quickly.
Source: Star-Tribune, Kara McGuire (02/02/07)
Wednesday, February 7, 2007
Secrets to simultaneous real estate closings
Secrets to simultaneous real estate closings
By Dana Dratch • Bankrate.com
Selling one house and buying another is like putting yourself between a rock and a hard place.
If you set both closings within the same basic time frame you run the risk of ending up with two mortgages or much worse.
If you schedule them with sufficient time between to solve any closing problems you face the prospect of renting and moving twice.
This is not a rare occurrence -- the National Association of Realtors, or NAR, estimates 6.24 million homes were bought or sold during 2006, and unless you were a first-time buyer or kept your old house as an investment property, most of those transactions involved buying one house and selling another.
But there are steps you can take to protect your best interests.
A dual real estate transaction means you have two choices: a simultaneous closing or a staggered closing. With a simultaneous closing, you set these two transactions as close together as possible, often on the same day -- usually selling first and buying second. With a staggered closing, you build in some time between the two transactions -- days, weeks, months or even more.
First, the bad news
With a staggered closing, you incur the cost of renting in the interim. You may have to find a place to store some of your belongings and deal with the hassle and added expense of moving twice. You're losing the equity you could be building in a new home. And there's the ever present danger you'll fritter away the profits you've banked from the last sale before you can get into your next home.
A simultaneous closing also has disadvantages. If something goes wrong in the first transaction, you could find yourself in big trouble.
If the first closing fails and you don't walk away with a big fat check, you may not be able to close on the house you're buying. Which could mean you're defaulting on that contract and could lose your earnest money deposit -- often as much as 10 percent or 20 percent of the purchase price.
If this happens at the last minute you, of course, have nowhere to live and have to immediately arrange to have all your possessions put in storage. Obviously this situation could lead to many other expenses and inconveniences. If you're more fortunate, you could quickly arrange for an extra loan to enable you to close on the home you're buying and to cover the period in which you own two homes -- so-called "bridge" financing. At best, you would only have the burden of making two mortgage payments every month.
Kristina Grebener has seen the problem from the inside. When she and her family planned to buy a bigger house in their same Madison, Wis., neighborhood, they didn't anticipate any problems. The market was hot and properties were moving. They found the house they wanted, made an offer and set the closing date for late July, thinking they'd have sold their old house by the end of June.
But in the interim, there was "a cooling in the market," Grebener says. A lot of nearby homes went up for sale, and "the buyers weren't there to support that," she says.
The family closed on the purchase in July as planned, using a home equity loan on their old house to make the down payment on their new home. But they have yet to sell their first home or move. Counting the new mortgage payment, the home equity loan and double utilities, keeping the old house is costing the Grebeners an extra $2,600 each month.
"Every month I make a mortgage payment is lost money," she says. And while the family can afford it for now, it's putting a dent in their budget -- especially with kids just a few years away from college, she says.
"It's like a game of musical chairs," Steven Rick, a senior economist at the Credit Union National Association, says about coordinating closings. "It's a function of the housing market. Now that it's unraveling, you definitely do not want to be buying a home without selling yours."
Ron Phipps, a broker with Phipps Realty in Warwick, R.I., agrees.
"Very few people have the ability to own two properties with ease," he says. "For some people, the closing date is as pivotal as the money." So the goal is often to schedule the home sale first, then set the home purchase within the next 24 hours -- often for later that same day. "Doing simultaneous closings is really the goal."
But finding a buyer to close on your home at the exact minute you find a home to buy yourself isn't always easy. More often than not, you've found one without the other -- and that can make setting the closing date a tricky proposition.
"For real estate practitioners, this is always the hardest part of the transaction," says Phipps. "Typically, you have to have the house you're selling cleared out at closing." But just as often, "you need money from the first house to close on the second house."
Just like staggered closings, simultaneous closings should be carefully planned. "It needs to be done with good advice and the best precautions," says Dave Dalzell, a regional vice president of the NAR and the owner/broker of Abilene, Texas-based Dalzell Realtors.
Another potential downside of a simultaneous closing: If the buyers know you're in a time crunch, they can use it to squeeze you for extra considerations at the last minute -- like getting you to pay for decorating upgrades or more of the sale costs.
A Fort Lauderdale, Fla., couple told Bankrate they were "held-up" by the buyers of their home in this manner. "An inspection had showed a slight leak in a shower and so we had it repaired by a licensed plumber a few weeks before closing. To make sure it was done right, we had the entire shower removed, a new shower pan installed and the entire bathroom retiled. At the closing table, the buyer said he wouldn't accept the repair because it had not been done by someone of his choosing and refused to close. This was the third delay in closing, and the buyer knew that we had to close on our new home that day or lose a $20,000 deposit. In the end, we had to give the buyer a $5,000 credit to get him to close. It was highway robbery."
"It can wreak havoc if something goes wrong with the first part of the transaction," says Phipps. And nine times out of 10, if something does go wrong it will be with the first sale, not the second, he says.
The time constraints can also pressure you to gloss over closing details that may need further examination. This is one instance when it can really pay to have your own private closing attorney review the records ahead of time and either attend the closing with you or be available by phone to handle any last-minute questions or complications.
Before you agree to a simultaneous closing, analyze your buyer.
Some Factors to Consider:
· Who are the buyers?
· Are they financially sound?
· How stable are they?
· How firm is the offer?
· What are their repair requests?
· What is their personal situation? (Do they have to move to the area by a certain deadline or can they take some time?)Are they indecisive and undecided or do they really need the home?
Do the old gut-check test, too. What do you really think of these people? Are they fiscally and emotionally sound? Are their requests reasonable? And are you getting a fairly consistent message from their camp or do their needs, demands and dates keep changing?
Look at your side of the table, too. What are your resources and risks? Can you get interim financing if you need it? Exactly how much would it cost? Do you want to put your stuff in storage and rent for a month or two? How soon must you close or move?
Dalzell remembers one friend (not a client) in another state who called for advice when his closing went awry. When the two of them put a pen to paper, Dalzell demonstrated that the man's interim financing option would only add $500 to the cost of the deal.
"That's why you have to analyze all of it," he says. Ask yourself: What's the worst that can happen? And put a number on it. Then consider: What's the best that can happen? And put an estimate on that.
So which is safer -- the simultaneous closing or a staggered version?
"There's a risk no matter what you do," says Dalzell. "There's no easy way to do it."
What you can doBut there are some steps you can take.
1. Specify contract terms. First, if you have to sell a home to buy your next home, put that into your contract. That way, if your first closing doesn't occur you will have the choice of whether you still want to close on the purchase. In a market dominated by sellers, this sort of contingency clause will rarely be accepted, but in a buyer's market sellers will be more likely to accept this as a condition of sale.
2. Select date carefully. Next, put a little thought into the actual closing date. Sometimes, buyers or sellers want to close in a specific number of days and will pick a date without looking at a calendar -- which can create confusion if it falls on a weekend, says Phipps. Instead, pull out the calendar. "Set it for a date you can make things happen," says Phipps. In case you need some missing piece of paper or additional information, close on a weekday and don't set it for the very end of the month. "The end of the month is crunch time for mortgage companies, title companies and escrow companies," says Phipps. "Pick another day." And set it for early in the day," he says. "Don't try to do simultaneous closings at 3 and 5 in the afternoon."
3. Have a plan B. If you schedule a simultaneous closing, have a backup plan for what you do if the first closing doesn't go off as planned.
4. Be an early bird. The real secret of any closing -- simultaneous or staggered -- is to get as much as you can done in advance. You don't want everything being done in the last 24 hours," says Dalzell. "You want to back things up as far as you can." And that includes everything from repairs and final inspections, to reading the closing documents and negotiating moving dates. Many times a sale is contingent on a professional home inspection. Get that out of the way right after the offer is accepted. That way, if the inspector finds a problem, you have time to either fix it or rework the price well before you have to actually close. "It doesn't make sense to create challenges close to the closing," Phipps says.
5. Line up your money. At the same time, finalize the financing, says Phipps. Then, when those two steps are complete, do the title search.
Dana Dratch is a freelance writer based in Atlanta.
By Dana Dratch • Bankrate.com
Selling one house and buying another is like putting yourself between a rock and a hard place.
If you set both closings within the same basic time frame you run the risk of ending up with two mortgages or much worse.
If you schedule them with sufficient time between to solve any closing problems you face the prospect of renting and moving twice.
This is not a rare occurrence -- the National Association of Realtors, or NAR, estimates 6.24 million homes were bought or sold during 2006, and unless you were a first-time buyer or kept your old house as an investment property, most of those transactions involved buying one house and selling another.
But there are steps you can take to protect your best interests.
A dual real estate transaction means you have two choices: a simultaneous closing or a staggered closing. With a simultaneous closing, you set these two transactions as close together as possible, often on the same day -- usually selling first and buying second. With a staggered closing, you build in some time between the two transactions -- days, weeks, months or even more.
First, the bad news
With a staggered closing, you incur the cost of renting in the interim. You may have to find a place to store some of your belongings and deal with the hassle and added expense of moving twice. You're losing the equity you could be building in a new home. And there's the ever present danger you'll fritter away the profits you've banked from the last sale before you can get into your next home.
A simultaneous closing also has disadvantages. If something goes wrong in the first transaction, you could find yourself in big trouble.
If the first closing fails and you don't walk away with a big fat check, you may not be able to close on the house you're buying. Which could mean you're defaulting on that contract and could lose your earnest money deposit -- often as much as 10 percent or 20 percent of the purchase price.
If this happens at the last minute you, of course, have nowhere to live and have to immediately arrange to have all your possessions put in storage. Obviously this situation could lead to many other expenses and inconveniences. If you're more fortunate, you could quickly arrange for an extra loan to enable you to close on the home you're buying and to cover the period in which you own two homes -- so-called "bridge" financing. At best, you would only have the burden of making two mortgage payments every month.
Kristina Grebener has seen the problem from the inside. When she and her family planned to buy a bigger house in their same Madison, Wis., neighborhood, they didn't anticipate any problems. The market was hot and properties were moving. They found the house they wanted, made an offer and set the closing date for late July, thinking they'd have sold their old house by the end of June.
But in the interim, there was "a cooling in the market," Grebener says. A lot of nearby homes went up for sale, and "the buyers weren't there to support that," she says.
The family closed on the purchase in July as planned, using a home equity loan on their old house to make the down payment on their new home. But they have yet to sell their first home or move. Counting the new mortgage payment, the home equity loan and double utilities, keeping the old house is costing the Grebeners an extra $2,600 each month.
"Every month I make a mortgage payment is lost money," she says. And while the family can afford it for now, it's putting a dent in their budget -- especially with kids just a few years away from college, she says.
"It's like a game of musical chairs," Steven Rick, a senior economist at the Credit Union National Association, says about coordinating closings. "It's a function of the housing market. Now that it's unraveling, you definitely do not want to be buying a home without selling yours."
Ron Phipps, a broker with Phipps Realty in Warwick, R.I., agrees.
"Very few people have the ability to own two properties with ease," he says. "For some people, the closing date is as pivotal as the money." So the goal is often to schedule the home sale first, then set the home purchase within the next 24 hours -- often for later that same day. "Doing simultaneous closings is really the goal."
But finding a buyer to close on your home at the exact minute you find a home to buy yourself isn't always easy. More often than not, you've found one without the other -- and that can make setting the closing date a tricky proposition.
"For real estate practitioners, this is always the hardest part of the transaction," says Phipps. "Typically, you have to have the house you're selling cleared out at closing." But just as often, "you need money from the first house to close on the second house."
Just like staggered closings, simultaneous closings should be carefully planned. "It needs to be done with good advice and the best precautions," says Dave Dalzell, a regional vice president of the NAR and the owner/broker of Abilene, Texas-based Dalzell Realtors.
Another potential downside of a simultaneous closing: If the buyers know you're in a time crunch, they can use it to squeeze you for extra considerations at the last minute -- like getting you to pay for decorating upgrades or more of the sale costs.
A Fort Lauderdale, Fla., couple told Bankrate they were "held-up" by the buyers of their home in this manner. "An inspection had showed a slight leak in a shower and so we had it repaired by a licensed plumber a few weeks before closing. To make sure it was done right, we had the entire shower removed, a new shower pan installed and the entire bathroom retiled. At the closing table, the buyer said he wouldn't accept the repair because it had not been done by someone of his choosing and refused to close. This was the third delay in closing, and the buyer knew that we had to close on our new home that day or lose a $20,000 deposit. In the end, we had to give the buyer a $5,000 credit to get him to close. It was highway robbery."
"It can wreak havoc if something goes wrong with the first part of the transaction," says Phipps. And nine times out of 10, if something does go wrong it will be with the first sale, not the second, he says.
The time constraints can also pressure you to gloss over closing details that may need further examination. This is one instance when it can really pay to have your own private closing attorney review the records ahead of time and either attend the closing with you or be available by phone to handle any last-minute questions or complications.
Before you agree to a simultaneous closing, analyze your buyer.
Some Factors to Consider:
· Who are the buyers?
· Are they financially sound?
· How stable are they?
· How firm is the offer?
· What are their repair requests?
· What is their personal situation? (Do they have to move to the area by a certain deadline or can they take some time?)Are they indecisive and undecided or do they really need the home?
Do the old gut-check test, too. What do you really think of these people? Are they fiscally and emotionally sound? Are their requests reasonable? And are you getting a fairly consistent message from their camp or do their needs, demands and dates keep changing?
Look at your side of the table, too. What are your resources and risks? Can you get interim financing if you need it? Exactly how much would it cost? Do you want to put your stuff in storage and rent for a month or two? How soon must you close or move?
Dalzell remembers one friend (not a client) in another state who called for advice when his closing went awry. When the two of them put a pen to paper, Dalzell demonstrated that the man's interim financing option would only add $500 to the cost of the deal.
"That's why you have to analyze all of it," he says. Ask yourself: What's the worst that can happen? And put a number on it. Then consider: What's the best that can happen? And put an estimate on that.
So which is safer -- the simultaneous closing or a staggered version?
"There's a risk no matter what you do," says Dalzell. "There's no easy way to do it."
What you can doBut there are some steps you can take.
1. Specify contract terms. First, if you have to sell a home to buy your next home, put that into your contract. That way, if your first closing doesn't occur you will have the choice of whether you still want to close on the purchase. In a market dominated by sellers, this sort of contingency clause will rarely be accepted, but in a buyer's market sellers will be more likely to accept this as a condition of sale.
2. Select date carefully. Next, put a little thought into the actual closing date. Sometimes, buyers or sellers want to close in a specific number of days and will pick a date without looking at a calendar -- which can create confusion if it falls on a weekend, says Phipps. Instead, pull out the calendar. "Set it for a date you can make things happen," says Phipps. In case you need some missing piece of paper or additional information, close on a weekday and don't set it for the very end of the month. "The end of the month is crunch time for mortgage companies, title companies and escrow companies," says Phipps. "Pick another day." And set it for early in the day," he says. "Don't try to do simultaneous closings at 3 and 5 in the afternoon."
3. Have a plan B. If you schedule a simultaneous closing, have a backup plan for what you do if the first closing doesn't go off as planned.
4. Be an early bird. The real secret of any closing -- simultaneous or staggered -- is to get as much as you can done in advance. You don't want everything being done in the last 24 hours," says Dalzell. "You want to back things up as far as you can." And that includes everything from repairs and final inspections, to reading the closing documents and negotiating moving dates. Many times a sale is contingent on a professional home inspection. Get that out of the way right after the offer is accepted. That way, if the inspector finds a problem, you have time to either fix it or rework the price well before you have to actually close. "It doesn't make sense to create challenges close to the closing," Phipps says.
5. Line up your money. At the same time, finalize the financing, says Phipps. Then, when those two steps are complete, do the title search.
Dana Dratch is a freelance writer based in Atlanta.
Tuesday, February 6, 2007
Daily Quote - February 6, 2007
Leaders are the ones who keep faith with the past, keep step with the present and keep the promise to posterity.
- Harold J. Seymore
- Harold J. Seymore
Monday, February 5, 2007
What's Hot and What's Not in Home Design
Daily Real Estate News January 9, 2007
What's Hot and What's Not in Home Design
A nationwide survey of 923 real estate professionals by Mark Nash, real estate author of 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), includes a list of home features that are popular among buyers and those that are so 2006.For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children. According to the survey, here are what home buyers want in 2007:
Glass tile. When retooling the bathroom or the kitchen, trendy remodelers choose glass tile over ceramic because of its reflective qualities.
Engineered stone compounds. Engineered stone compound is this year’s kitchen must-have and best of all it’s less expensive than granite.
Wrought iron. Make the back yard look classy with a wrought-iron fence.
Colorful trim. When repainting trim around shutters, doors, and window frames, go for bright and bold.
His-and-her home offices. Complete with fiber-optic cables for Internet connectivity.
Extra storage space. This extra space buyers prefer in the form of linen closets, pantries, and luggage rooms.
Home trends that were strictly 2006:
Bowl-shaped, above-the-counter sinks. Nobody can keep them clean.
Glass kitchen cabinet doors. They look great in magazines, but lousy in real life.
Bamboo wood. It dents and scratches easily and warps in humid weather.
Source: MarketWatch, Marshall Loeb (1/14/07) and Washington Post, Kirstin Downey (01/06/07)
What's Hot and What's Not in Home Design
A nationwide survey of 923 real estate professionals by Mark Nash, real estate author of 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), includes a list of home features that are popular among buyers and those that are so 2006.For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children. According to the survey, here are what home buyers want in 2007:
Glass tile. When retooling the bathroom or the kitchen, trendy remodelers choose glass tile over ceramic because of its reflective qualities.
Engineered stone compounds. Engineered stone compound is this year’s kitchen must-have and best of all it’s less expensive than granite.
Wrought iron. Make the back yard look classy with a wrought-iron fence.
Colorful trim. When repainting trim around shutters, doors, and window frames, go for bright and bold.
His-and-her home offices. Complete with fiber-optic cables for Internet connectivity.
Extra storage space. This extra space buyers prefer in the form of linen closets, pantries, and luggage rooms.
Home trends that were strictly 2006:
Bowl-shaped, above-the-counter sinks. Nobody can keep them clean.
Glass kitchen cabinet doors. They look great in magazines, but lousy in real life.
Bamboo wood. It dents and scratches easily and warps in humid weather.
Source: MarketWatch, Marshall Loeb (1/14/07) and Washington Post, Kirstin Downey (01/06/07)
Sunday, February 4, 2007
Daily Quote - February 4, 2007
If every Super Bowl viewer flushes their toilet at half time, more than 300 million gallons of water will be consumed.
-EPA
-EPA
Saturday, February 3, 2007
Daily Quote - February 3, 2007
A successful person is one who can lay a firm foundation with the bricks that others throw at him.
- David Brink
- David Brink
Protecting Consumers from Banks Entering Real Estate Brokerage is NAR Priority
For more information, contact:
Mary Trupo, 202/383-1007, mtrupo@realtors.org
Protecting Consumers from Banks Entering Real Estate Brokerage is NAR Priority
WASHINGTON, January 05, 2007 -
Pat Vredevoogd Combs, president of the National Association of Realtors® , hailed the actions of the 110th Congress for quickly moving forward with key legislation that NAR believes will ensure that the nation’s real estate industry remains competitive.
H.R. 111, the Community Choice in Real Estate Act, was introduced Thursday in the House by its sponsors Congressmen Paul Kanjorski (D- Pa.) and Ken Calvert (R-Calif.). Fifty cosponsors were added on the first day of Congress.
NAR has repeatedly communicated to Congress its longstanding support for keeping banks as impartial providers of credit and not permitting them to control all aspects of real estate transactions. NAR noted that putting real estate brokerage into the hands of banks would leave consumers with fewer choices and higher costs.
“Realtors® provide extensive personal attention to consumers during the lengthy process of buying a home. It would be difficult for banks to provide that type of counsel because of conflicts with their other business objectives,” said Combs. “We thank Representatives Kanjorski and Calvert for introducing H.R. 111 and gathering bipartisan support for it. We look forward to working with them towards its passage, and ensuring the vigorous enforcement of the law that prohibits the mixing of banking and commerce.”
Enactment of H.R. 111 would keep real estate brokerage and management clearly defined as commercial activities and not financial matters, ensuring that the separation of banking and commerce continues as mandated by the Gramm-Leach-Bliley Act.
“Without passage of this legislation, we are concerned that national bank conglomerates will continue their attempts to enter into the real estate industry, putting both competition and the nation’s economic health at risk,” said Combs. “The U.S. economy depends on a strong real estate market and a healthy banking industry. However, attempts by the Federal Reserve and Treasury to redefine real estate as a financial activity would have harmful effects resulting in less competition, higher costs for consumers, and give competitive advantages to the banks.”
The National Association of Realtors® , “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
###
Mary Trupo, 202/383-1007, mtrupo@realtors.org
Protecting Consumers from Banks Entering Real Estate Brokerage is NAR Priority
WASHINGTON, January 05, 2007 -
Pat Vredevoogd Combs, president of the National Association of Realtors® , hailed the actions of the 110th Congress for quickly moving forward with key legislation that NAR believes will ensure that the nation’s real estate industry remains competitive.
H.R. 111, the Community Choice in Real Estate Act, was introduced Thursday in the House by its sponsors Congressmen Paul Kanjorski (D- Pa.) and Ken Calvert (R-Calif.). Fifty cosponsors were added on the first day of Congress.
NAR has repeatedly communicated to Congress its longstanding support for keeping banks as impartial providers of credit and not permitting them to control all aspects of real estate transactions. NAR noted that putting real estate brokerage into the hands of banks would leave consumers with fewer choices and higher costs.
“Realtors® provide extensive personal attention to consumers during the lengthy process of buying a home. It would be difficult for banks to provide that type of counsel because of conflicts with their other business objectives,” said Combs. “We thank Representatives Kanjorski and Calvert for introducing H.R. 111 and gathering bipartisan support for it. We look forward to working with them towards its passage, and ensuring the vigorous enforcement of the law that prohibits the mixing of banking and commerce.”
Enactment of H.R. 111 would keep real estate brokerage and management clearly defined as commercial activities and not financial matters, ensuring that the separation of banking and commerce continues as mandated by the Gramm-Leach-Bliley Act.
“Without passage of this legislation, we are concerned that national bank conglomerates will continue their attempts to enter into the real estate industry, putting both competition and the nation’s economic health at risk,” said Combs. “The U.S. economy depends on a strong real estate market and a healthy banking industry. However, attempts by the Federal Reserve and Treasury to redefine real estate as a financial activity would have harmful effects resulting in less competition, higher costs for consumers, and give competitive advantages to the banks.”
The National Association of Realtors® , “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
###
Friday, February 2, 2007
Fed Likely to Hold Off on Rate Cuts
Daily Real Estate News - Originally Published January 29, 2007
Fed Likely to Hold Off on Rate Cuts
When Federal Reserve policymakers meet on Tuesday, economists predict that interest rates will be left alone, according to a survey by USA Today.
Economists previously thought the Fed would cut rates in early 2007. However, their tune is changing as recent data suggests the economy is faring better than was expected given the slowdown in housing.
The Fed has left interest rates unchanged since June 2006, after raising them 17 times over two years.
Most of the economists surveyed do not expect a change in interest rates until the fourth quarter, when they think a quarter-percentage-point cut is likely. But opinions vary.
For example, economists at The Conference Board and Bear Stearns predict rates will be higher at the end of the year than they are now.
Timothy Rogers, the chief economist for Briefing.com in South Natick, Mass., says it’s too close to call.
"It could go either way right now. Anyone who comes out and says he knows which way things are going is full of malarkey," he says.
Source: USA Today, Barbara Hagenbaugh and Barbara Hansen (01/29/2007)
Fed Likely to Hold Off on Rate Cuts
When Federal Reserve policymakers meet on Tuesday, economists predict that interest rates will be left alone, according to a survey by USA Today.
Economists previously thought the Fed would cut rates in early 2007. However, their tune is changing as recent data suggests the economy is faring better than was expected given the slowdown in housing.
The Fed has left interest rates unchanged since June 2006, after raising them 17 times over two years.
Most of the economists surveyed do not expect a change in interest rates until the fourth quarter, when they think a quarter-percentage-point cut is likely. But opinions vary.
For example, economists at The Conference Board and Bear Stearns predict rates will be higher at the end of the year than they are now.
Timothy Rogers, the chief economist for Briefing.com in South Natick, Mass., says it’s too close to call.
"It could go either way right now. Anyone who comes out and says he knows which way things are going is full of malarkey," he says.
Source: USA Today, Barbara Hagenbaugh and Barbara Hansen (01/29/2007)
Thursday, February 1, 2007
Pending Sales Index Affirms Market Stabilization
Daily Real Estate News February 1, 2007
Pending Sales Index Affirms Market Stabilization
Pending home sales are higher, affirming the stabilization that is occurring in home sales, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, based on contracts signed in December, rose 4.9 percent to an index of 112.4 from an upwardly revised level of 107.2 in November, but is 4.4 percent lower than December 2005.The monthly gain was the biggest increase since March 2004 when the index rose 6.9 percent. A steady narrowing from year-ago readings has been observed since last July when the level of unsold housing inventory peaked at an all-time high.David Lereah, NAR’s chief economist, says a moderate rise in existing-home contracts is a welcome relief.“Some of the monthly gain may be weather related, but it appears buyers are becoming more comfortable, sensing the timing is good and that their local market has bottomed out,” he says. “I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity. 2007 promises to be the fourth-best year on record.”The upturn was broad based, with all regions showing an increase.
The PHSI in the Northeast jumped 8.1 percent in December to 89.9 but was 4.8 percent below a year ago.
In the West, the index rose 5.3 percent to 112.2 but was 4.9 percent below December 2005.
The index in the South increased 4.3 percent to 129.8 but was 4.2 percent lower than a year earlier.
In the Midwest, the index was up 3.2 percent in December to 103.2 but was 4.3 percent below December 2005.
The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
— NAR
Pending Sales Index Affirms Market Stabilization
Pending home sales are higher, affirming the stabilization that is occurring in home sales, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Pending Home Sales Index, based on contracts signed in December, rose 4.9 percent to an index of 112.4 from an upwardly revised level of 107.2 in November, but is 4.4 percent lower than December 2005.The monthly gain was the biggest increase since March 2004 when the index rose 6.9 percent. A steady narrowing from year-ago readings has been observed since last July when the level of unsold housing inventory peaked at an all-time high.David Lereah, NAR’s chief economist, says a moderate rise in existing-home contracts is a welcome relief.“Some of the monthly gain may be weather related, but it appears buyers are becoming more comfortable, sensing the timing is good and that their local market has bottomed out,” he says. “I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity. 2007 promises to be the fourth-best year on record.”The upturn was broad based, with all regions showing an increase.
The PHSI in the Northeast jumped 8.1 percent in December to 89.9 but was 4.8 percent below a year ago.
In the West, the index rose 5.3 percent to 112.2 but was 4.9 percent below December 2005.
The index in the South increased 4.3 percent to 129.8 but was 4.2 percent lower than a year earlier.
In the Midwest, the index was up 3.2 percent in December to 103.2 but was 4.3 percent below December 2005.
The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
— NAR
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