The uptrend in existing-home sales continues, with January sales rising for the third consecutive month with a pace that is now above year-ago levels, according to the National Association of REALTORS®.
Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 2.7 percent to a seasonally adjusted annual rate of 5.36 million in January from a downwardly revised 5.22 million in December, and are 5.3 percent above the 5.09 million level in January 2010. This is the first time in seven months that sales activity was higher than a year earlier.
Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” Yun said. “The extremely favorable housing affordability conditions are a big factor, but buyers have been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”
A parallel NAR practitioner survey2 shows first-time buyers purchased 29 percent of homes in January, down from 33 percent in December and 40 percent in January 2010 when an extended tax credit was in place.
Investors accounted for 23 percent of purchases in January, up from 20 percent in December and 17 percent in January 2010; the balance of sales were to repeat buyers. All-cash sales rose to 32 percent in January from 29 percent in December and 26 percent in January 2010.
“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.
All-cash purchases are at the highest level since NAR started measuring these purchases monthly in October 2008, when they accounted for 15 percent of the market. The average of all-cash deals was 20 percent in 2009, rising to 28 percent last year.
The national median existing-home price3 for all housing types was $158,800 in January, down 3.7 percent from January 2010. Distressed homes edged up to a 37 percent market share in January from 36 percent in December; it was 38 percent in January 2010.
NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said the median price is being dampened by unusual market factors. “Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” Phipps said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”
Total housing inventory at the end of January fell 5.1 percent to 3.38 million existing homes available for sale, which represents a 7.6-month supply4 at the current sales pace, down from an 8.2-month supply in December. The inventory supply is at the lowest level since December 2009 when there was a 7.3-month supply.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.76 percent in January from 4.71 percent in December; the rate was 5.03 percent in January 2010.
Single-family home sales rose 2.4 percent to a seasonally adjusted annual rate of 4.69 million in January from 4.58 million in December, and are 4.9 percent higher than the 4.47 million level in January 2010. The median existing single-family home price was $159,400 in January, down 2.7 percent from a year ago.
Existing condominium and co-op sales increased 4.7 percent to a seasonally adjusted annual rate of 670,000 in January from 640,000 in December, and are 7.9 percent above the 621,000-unit pace one year ago. The median existing condo price5 was $154,900 in January, which is 10.2 percent below January 2010.
Regionally, existing-home sales in the Northeast fell 4.6 percent to an annual pace of 830,000 in January from a spike in December and are 1.2 percent below January 2010. The median price in the Northeast was $236,500, which is 4.0 percent below a year ago.
Existing-home sales in the Midwest rose 1.8 percent in January to a level of 1.14 million and are 3.6 percent above a year ago. The median price in the Midwest was $126,300, which is 3.2 percent below January 2010.
In the South, existing-home sales increased 3.6 percent to an annual pace of 2.02 million in January and are 8.0 percent higher than January 2010. The median price in the South was $136,600, down 2.1 percent from a year ago.
Existing-home sales in the West rose 7.9 percent to an annual level of 1.37 million in January and are 7.0 percent above January 2010. The median price in the West was $193,200, down 5.7 percent from a year ago.
The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of REALTORS®.
1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
Also released today are historic data revisions. Each February, NAR Research incorporates a normal review of seasonal activity factors and fine-tunes historic data for the past three years based on the most recent findings. Revisions have been made to monthly seasonally adjusted annual sales rates for 2008 through 2010, as well as the inventory month's supply data; most revisions are minor with little or no impact on previous characterizations of the overall market. There are no revisions to monthly home prices or raw inventory data (beyond normal prior-month revisions).
Note on Benchmark Revisions: All major statistical data series go through periodic reviews and revisions to ensure that sampling and methodology keep up with changes in the market, such as population changes in sampled areas, to ensure accuracy; we have been examining the existing-home sales data for any issues since late 2010. NAR began its normal process for benchmarking sales earlier this year; there will be no change to median prices. In the past we’ve benchmarked to the decennial Census, most recently to the 2000 Census, because it included home sales data. However, the data are no longer included in the Census, so we’re looking at more frequent benchmarking using a new approach with independent sources to improve our process and modeling. As always, we are consulting with various outside housing economists, government agencies and academic experts for a consensus on the methodology; NAR is committed to providing accurate, reliable data. Publication of the revisions is expected this summer.
2Distressed sales, first-time buyers, investors, all-cash transactions and data for contract cancellations, etc., are from a survey for the REALTORS® Confidence Index, scheduled to be posted March 14.
3The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Total inventory and month’s supply data are available back through 1999, while single-family inventory and month's supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).
5Because there is a concentration of condos in high-cost metro areas, the national median condo price generally is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for February will be released March 21, the Pending Home Sales Index for February is scheduled for March 28, and the 2010 Vacation and Investment Home study will be published March 30; release times are 10:00 a.m. EDT.
Information about NAR is available atwww.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
Wednesday, February 23, 2011
Wednesday, February 16, 2011
8 Tips for Adding Curb Appeal
Curb appeal has always been important for home sellers. With the vast majority of today’s home buyers starting their search on the Internet, the appearance of your property is more critical than ever. You only have a few seconds to catch their attention as they scroll through listings online to get them to stop and take a closer look.
But the role of curb appeal goes beyond just making a good first impression. The way your house looks from the street can impact its value. It can also shorten the time it takes to sell your house.
We asked real estate agents, appraisers, home stagers, landscape designers, and home inspectors which curb appeal projects offer the most value when your house is on the market, both in terms of its marketability and dollars. Here is what they told us:
1. Paint the house.
Hands down, the most commonly offered curb appeal advice from our real estate pros and appraisers is to give the exterior of your home a good paint job. Buyers will instantly notice it and appraisers will note it on the valuation.
“Paint is probably the number one thing inside and out,” says Frank Lucco, managing partner of Houston-based IRR-Residential Appraisers and Consultants. “I’d give additional value for that. If you’re under two years remaining life (on the paint job), paint the exterior because it tends to show wear badly.”
Just make sure you stay within the range of accepted colors for your market. A house that’s painted a wildly different color from its competition will be marked down in value by appraisers.
2. Have the house washed.
Before you make the investment in a paint job, though, take a good look at the house. If it’s got mildew or general grunge, just washing the house could make a world of difference, says Valerie Torelli, a California real estate agent with a background in accounting.
Torelli specifies pressure-washing—a job that should be left to professionals. Pressure washing makes the house look “bright and clean in addition to getting rid of unsightly things like cobwebs, which may not be seen from the yard but will detract from the home’s cleanliness when seen up close,” she says.
The cost to have a professional cleaning should be a few hundred dollars—a fraction of the cost of having the house painted.
3. Trim the shrubs and green up the yard.
California real estate agent Valerie Torelli says she puts a lot of emphasis on landscaping, such as cutting down overgrown bushes and replacing them with leafy plants and annuals mulched with beautiful reddish-brown bark. “It runs me $30 to $50,” says Torelli. “Do you get a return on your money? Absolutely. It sucks people in.”
You also don’t want bare spots. Take the time to fertilize the yard, throw out some grass seed, and if need be, add some sod.
4. Add a splash of color.
It could be a flower bed of annuals by the mailbox, a paint job for the front door, or a brightly colored bench or an Adirondack chair. “You can get a cute little bench at Home Depot for $99,“ Torelli notes. “Spray paint it bright red or blue and set it in the yard or on the front porch.”
It’s not a bad idea, but don’t plan on getting extra points from an appraiser for a red bench, says John Bredemeyer, president of Realcorp in Omaha. “It’s difficult to quantify, but it does make a home sell more quickly,” Bredemeyer says. “Maybe yours sold a couple weeks faster than the house down the street. That’s the best way to look at these things.”
5. Add a fancy mailbox and house numbers.
An upscale mail box and architectural house numbers or an address plaque can give your house a distinctive look that stands out from everyone else on the block. Torelli makes them a part of her exterior makeovers “I’ve gotten those hand-painted mailboxes,” she says. “A nice one runs you $40 to $50.” Architectural house numbers may run as high as a few hundred dollars.
6. Repair or clean the roof.
Springfield, Va.-based home inspector and former builder Reggie Marston says the roof is one of the first things he looks at in assessing the condition of a home. He’ll look at other houses in the neighborhood to see if there are a lot of replaced roofs and see if the subject house has one as well. If not, he’ll look for curls in the shingles or missing shingles. “I’m looking at the roof for end-of-life expectancy,” he says.
You can pay for roof repairs now, or pay for them later in a lower appraisal; appraisers will mark down the value by the cost of the repair. That could knock thousands of dollars off your appraisal. According to Remodeling Magazine’s 2010-2011 Cost vs. Value Report, the average cost of a new asphalt shingle roof is about $21,500.
“Roofs are issues,” Lucco says. “You won’t throw money away on that job. You gotta have a decent roof.”
Stains and plant matter, such as moss, can be handled with cleaning. It’s a job that can often be done in a day for a few hundred dollars, and makes the roof look like new. It’s not a DIY project; call a professional with the right tools to clean it without damaging it.
7. Put up a fence.
A picket fence with a garden gate to frame the yard is an asset. A fence has more impact in a family-oriented neighborhood than an upscale retirement community, Bredemeyer says, but in most instances, appraisers will give extra value for one, as long as it’s in good condition. “Day in a day out, a fence is a plus,“ Bredemeyer says. Expect to pay $2,000 to $3,500 for a professionally installed gated picket fence 3 feet high and 100 feet long.
8. Perform routine maintenance and cleaning.
Nothing sets off subconscious alarms like hanging gutters, missing bricks from the front steps, or lawn tools rusting in the bushes. It makes even the professionals question what else hasn’t been taken care of.
“A house is worth less if the maintenance isn’t done,” Lucco says. “Those little things can add up and be a very big detractor. When people say, ‘I’d buy it if it weren’t for all the deferred maintenance,’ what they’re really saying is, ‘I’d still buy it if you reduce the price.’”
Georgia-based freelance writer Pat Curry has covered housing and real estate for consumer and trade publications for more than a decade, including covering new home sales and marketing for BUILDER, the magazine of the National Association of Home Builders.
Read more: http://www.houselogic.com/articles/8-tips-adding-curb-appeal-and-value-your-home/#ixzz1E8SV9mAI
But the role of curb appeal goes beyond just making a good first impression. The way your house looks from the street can impact its value. It can also shorten the time it takes to sell your house.
We asked real estate agents, appraisers, home stagers, landscape designers, and home inspectors which curb appeal projects offer the most value when your house is on the market, both in terms of its marketability and dollars. Here is what they told us:
1. Paint the house.
Hands down, the most commonly offered curb appeal advice from our real estate pros and appraisers is to give the exterior of your home a good paint job. Buyers will instantly notice it and appraisers will note it on the valuation.
“Paint is probably the number one thing inside and out,” says Frank Lucco, managing partner of Houston-based IRR-Residential Appraisers and Consultants. “I’d give additional value for that. If you’re under two years remaining life (on the paint job), paint the exterior because it tends to show wear badly.”
Just make sure you stay within the range of accepted colors for your market. A house that’s painted a wildly different color from its competition will be marked down in value by appraisers.
2. Have the house washed.
Before you make the investment in a paint job, though, take a good look at the house. If it’s got mildew or general grunge, just washing the house could make a world of difference, says Valerie Torelli, a California real estate agent with a background in accounting.
Torelli specifies pressure-washing—a job that should be left to professionals. Pressure washing makes the house look “bright and clean in addition to getting rid of unsightly things like cobwebs, which may not be seen from the yard but will detract from the home’s cleanliness when seen up close,” she says.
The cost to have a professional cleaning should be a few hundred dollars—a fraction of the cost of having the house painted.
3. Trim the shrubs and green up the yard.
California real estate agent Valerie Torelli says she puts a lot of emphasis on landscaping, such as cutting down overgrown bushes and replacing them with leafy plants and annuals mulched with beautiful reddish-brown bark. “It runs me $30 to $50,” says Torelli. “Do you get a return on your money? Absolutely. It sucks people in.”
You also don’t want bare spots. Take the time to fertilize the yard, throw out some grass seed, and if need be, add some sod.
4. Add a splash of color.
It could be a flower bed of annuals by the mailbox, a paint job for the front door, or a brightly colored bench or an Adirondack chair. “You can get a cute little bench at Home Depot for $99,“ Torelli notes. “Spray paint it bright red or blue and set it in the yard or on the front porch.”
It’s not a bad idea, but don’t plan on getting extra points from an appraiser for a red bench, says John Bredemeyer, president of Realcorp in Omaha. “It’s difficult to quantify, but it does make a home sell more quickly,” Bredemeyer says. “Maybe yours sold a couple weeks faster than the house down the street. That’s the best way to look at these things.”
5. Add a fancy mailbox and house numbers.
An upscale mail box and architectural house numbers or an address plaque can give your house a distinctive look that stands out from everyone else on the block. Torelli makes them a part of her exterior makeovers “I’ve gotten those hand-painted mailboxes,” she says. “A nice one runs you $40 to $50.” Architectural house numbers may run as high as a few hundred dollars.
6. Repair or clean the roof.
Springfield, Va.-based home inspector and former builder Reggie Marston says the roof is one of the first things he looks at in assessing the condition of a home. He’ll look at other houses in the neighborhood to see if there are a lot of replaced roofs and see if the subject house has one as well. If not, he’ll look for curls in the shingles or missing shingles. “I’m looking at the roof for end-of-life expectancy,” he says.
You can pay for roof repairs now, or pay for them later in a lower appraisal; appraisers will mark down the value by the cost of the repair. That could knock thousands of dollars off your appraisal. According to Remodeling Magazine’s 2010-2011 Cost vs. Value Report, the average cost of a new asphalt shingle roof is about $21,500.
“Roofs are issues,” Lucco says. “You won’t throw money away on that job. You gotta have a decent roof.”
Stains and plant matter, such as moss, can be handled with cleaning. It’s a job that can often be done in a day for a few hundred dollars, and makes the roof look like new. It’s not a DIY project; call a professional with the right tools to clean it without damaging it.
7. Put up a fence.
A picket fence with a garden gate to frame the yard is an asset. A fence has more impact in a family-oriented neighborhood than an upscale retirement community, Bredemeyer says, but in most instances, appraisers will give extra value for one, as long as it’s in good condition. “Day in a day out, a fence is a plus,“ Bredemeyer says. Expect to pay $2,000 to $3,500 for a professionally installed gated picket fence 3 feet high and 100 feet long.
8. Perform routine maintenance and cleaning.
Nothing sets off subconscious alarms like hanging gutters, missing bricks from the front steps, or lawn tools rusting in the bushes. It makes even the professionals question what else hasn’t been taken care of.
“A house is worth less if the maintenance isn’t done,” Lucco says. “Those little things can add up and be a very big detractor. When people say, ‘I’d buy it if it weren’t for all the deferred maintenance,’ what they’re really saying is, ‘I’d still buy it if you reduce the price.’”
Georgia-based freelance writer Pat Curry has covered housing and real estate for consumer and trade publications for more than a decade, including covering new home sales and marketing for BUILDER, the magazine of the National Association of Home Builders.
Read more: http://www.houselogic.com/articles/8-tips-adding-curb-appeal-and-value-your-home/#ixzz1E8SV9mAI
Monday, February 14, 2011
Your Guide to Outdoor Maintenace
In the South, high heat, excessive humidity, and driving rains can punish your home’s exterior and other outdoor features on your property. By performing regular inspections and preventative outdoor maintenance, a homeowner can avoid much pricier repairs down the road. Here are some of the key areas that certified home inspectors focus on when examining the exterior of a house and surrounding property.
Grading
Maintaining a proper grade or slope away from the home is crucial. But the South’s clay-heavy soils can pose challenges to that endeavor, says Bob McDonough, a certified home inspector with Atlanta’s National Property Inspections.
“Clay soil shrinks when it dries out, causing the earth to separate from the foundation,” he explains. Water that seeps into those cavities can find its way into basements. If it freezes, it can cause cracks in the foundation.
Prevention can be as simple as filling these gaps with soil as soon as they appear. If the soil surrounding the foundation doesn’t slope away from the home, additional fill dirt may need to be brought in. Neglecting this task can be expensive: $3,000 or more to stabilize a bowed block foundation, and more than $10,000 to replace it.
Doors and windows
Leaky doors and windows not only decrease a home’s comfort and efficiency, they can invite moisture, insects and rot, says McDonough. Routinely check caulking and weather stripping to ensure tight seals. Inspect wood sills and trim for peeling paint, insect damage, and moisture penetration.
Fogging in double-pane windows is a sign that the seal has failed, resulting in the loss of insulating qualities. The window will need to be repaired or replaced. Cracked window panes, missing storms, and ripped screens should be replaced or repaired.
Decks
Decks on Southern homes are often 20 to 30 feet off the ground due to hilly terrain, notes Earl Beahm, president of the Atlanta chapter of the National Association of Certified Home Inspectors. For that reason, safety is paramount. Check to see that railings and stairs are firm and secure. Closely inspect the bolts that connect the deck to the house.
Hammer or screw popped nails and screws back in place. Posts need to be monitored for rot at the soil line. Wood decks benefit from annual cleanings and sealing.
Septic systems
Just because septic systems are underground doesn’t mean they can’t be monitored from the surface. Trouble typically presents itself in the form of foul odors and visible seepage. An average family of four should have their system inspected and pumped every three to five years.
Air conditioning & heat pump
Air conditioners get a lot of use down South, so it’s important to keep them in peak condition. Leaves, debris, and shrubbery allowed to grow too close to the unit can decrease the system’s efficiency, notes Patrick Cloninger, a certified home inspector with Knoxville’s Pinpoint Home Inspections. Remove loose debris and yard waste, and cut back shrubbery so that it’s at least 2 feet away from the unit.
Check to ensure that the concrete pad is level, as a shifting base can damage the unit. Inspect the insulation on the copper refrigerant line, which prevents condensation and increases efficiency. Get the system serviced by a pro every couple years.
Irrigation systems & spigots
In spring, sprinkler heads should be checked for proper working condition. A weak or nonfunctioning sprinkler is likely a sign of a split line or popped connection.
With the system running, examine that all areas of the landscape are receiving equal amounts of spray. Heads that are spraying excessive amounts of water on driveways and sidewalks should be adjusted or replaced. Cost: $3 to $15 per replaced head, $2 to $5 for a coupling to repair a leak. Allow two hours to check the system.
A hard freeze often catches Southerners unprepared. In spring, take care that garden hoses are disconnected in the event of sudden frost. In the fall, exterior spigots should be drained and garden hoses disconnected and stowed. Homeowners with automatic lawn sprinkler systems should drain the lines and shut off the water source. Water that’s left in the lines and allowed to freeze can crack hoses or burst pipes.
Fences and gates
Wood fences generally require more attention than their chain-link and vinyl counterparts. Every other year or so the wood should be painted or sealed, unless the wood is left to weather naturally.
All wooden fences should be inspected for rot and insect damage every few months. Popped boards need to be nailed back in place; warped ones should be replaced. Pay special attention to posts, which are susceptible to rot.
Although largely maintenance free, chain-link and vinyl fences should be examined regularly for proper functioning. A sagging panel, crooked door hinge, or misaligned latch likely signals a shifting post. The South’s clay-heavy soils have a tendency to expand and contract with changes in moisture content, putting pressure on fence posts. The cost of replacing a post is $7.50 to $15 for a 5-foot cedar post.
Vinyl fences will need to be cleaned at least once a year. Throughout the growing season, remove vegetation with a trimmer along the base of the fence to prevent damage from climbing weeds.
Garages and outbuildings
Vegetation should be pruned at least 3 feet away from buildings to prevent mold, pest infestation, or damage to siding from high winds. Large tree limbs should be trimmed to prevent them from touching the structure. Cost: $15 for a pruning saw and $10 for pruning shears. Allow 1 to 2 hours for pruning.
Inspect the underside of garage and outbuilding roofs for water damage, which can point the way to a roof leak. Small cracks in the foundation should be filled with the appropriate caulk. Maintain a proper grade around the buildings to ensure sufficient drainage. This may require the addition of soil.
Twice a year, check the automatic reverse safety feature on the garage door to make sure it works properly, urges Cloninger. Check to see that the door has no bent casters and that it rolls smoothly in the tracks. Perform a visual check of bolts for snugness. In the case of attached garages, proper weather stripping at the base of the door can greatly improve a home’s energy efficiency.
Read more: http://www.houselogic.com/articles/your-guide-outdoor-maintenance-south/#ixzz1DxJZ28uo
Grading
Maintaining a proper grade or slope away from the home is crucial. But the South’s clay-heavy soils can pose challenges to that endeavor, says Bob McDonough, a certified home inspector with Atlanta’s National Property Inspections.
“Clay soil shrinks when it dries out, causing the earth to separate from the foundation,” he explains. Water that seeps into those cavities can find its way into basements. If it freezes, it can cause cracks in the foundation.
Prevention can be as simple as filling these gaps with soil as soon as they appear. If the soil surrounding the foundation doesn’t slope away from the home, additional fill dirt may need to be brought in. Neglecting this task can be expensive: $3,000 or more to stabilize a bowed block foundation, and more than $10,000 to replace it.
Doors and windows
Leaky doors and windows not only decrease a home’s comfort and efficiency, they can invite moisture, insects and rot, says McDonough. Routinely check caulking and weather stripping to ensure tight seals. Inspect wood sills and trim for peeling paint, insect damage, and moisture penetration.
Fogging in double-pane windows is a sign that the seal has failed, resulting in the loss of insulating qualities. The window will need to be repaired or replaced. Cracked window panes, missing storms, and ripped screens should be replaced or repaired.
Decks
Decks on Southern homes are often 20 to 30 feet off the ground due to hilly terrain, notes Earl Beahm, president of the Atlanta chapter of the National Association of Certified Home Inspectors. For that reason, safety is paramount. Check to see that railings and stairs are firm and secure. Closely inspect the bolts that connect the deck to the house.
Hammer or screw popped nails and screws back in place. Posts need to be monitored for rot at the soil line. Wood decks benefit from annual cleanings and sealing.
Septic systems
Just because septic systems are underground doesn’t mean they can’t be monitored from the surface. Trouble typically presents itself in the form of foul odors and visible seepage. An average family of four should have their system inspected and pumped every three to five years.
Air conditioning & heat pump
Air conditioners get a lot of use down South, so it’s important to keep them in peak condition. Leaves, debris, and shrubbery allowed to grow too close to the unit can decrease the system’s efficiency, notes Patrick Cloninger, a certified home inspector with Knoxville’s Pinpoint Home Inspections. Remove loose debris and yard waste, and cut back shrubbery so that it’s at least 2 feet away from the unit.
Check to ensure that the concrete pad is level, as a shifting base can damage the unit. Inspect the insulation on the copper refrigerant line, which prevents condensation and increases efficiency. Get the system serviced by a pro every couple years.
Irrigation systems & spigots
In spring, sprinkler heads should be checked for proper working condition. A weak or nonfunctioning sprinkler is likely a sign of a split line or popped connection.
With the system running, examine that all areas of the landscape are receiving equal amounts of spray. Heads that are spraying excessive amounts of water on driveways and sidewalks should be adjusted or replaced. Cost: $3 to $15 per replaced head, $2 to $5 for a coupling to repair a leak. Allow two hours to check the system.
A hard freeze often catches Southerners unprepared. In spring, take care that garden hoses are disconnected in the event of sudden frost. In the fall, exterior spigots should be drained and garden hoses disconnected and stowed. Homeowners with automatic lawn sprinkler systems should drain the lines and shut off the water source. Water that’s left in the lines and allowed to freeze can crack hoses or burst pipes.
Fences and gates
Wood fences generally require more attention than their chain-link and vinyl counterparts. Every other year or so the wood should be painted or sealed, unless the wood is left to weather naturally.
All wooden fences should be inspected for rot and insect damage every few months. Popped boards need to be nailed back in place; warped ones should be replaced. Pay special attention to posts, which are susceptible to rot.
Although largely maintenance free, chain-link and vinyl fences should be examined regularly for proper functioning. A sagging panel, crooked door hinge, or misaligned latch likely signals a shifting post. The South’s clay-heavy soils have a tendency to expand and contract with changes in moisture content, putting pressure on fence posts. The cost of replacing a post is $7.50 to $15 for a 5-foot cedar post.
Vinyl fences will need to be cleaned at least once a year. Throughout the growing season, remove vegetation with a trimmer along the base of the fence to prevent damage from climbing weeds.
Garages and outbuildings
Vegetation should be pruned at least 3 feet away from buildings to prevent mold, pest infestation, or damage to siding from high winds. Large tree limbs should be trimmed to prevent them from touching the structure. Cost: $15 for a pruning saw and $10 for pruning shears. Allow 1 to 2 hours for pruning.
Inspect the underside of garage and outbuilding roofs for water damage, which can point the way to a roof leak. Small cracks in the foundation should be filled with the appropriate caulk. Maintain a proper grade around the buildings to ensure sufficient drainage. This may require the addition of soil.
Twice a year, check the automatic reverse safety feature on the garage door to make sure it works properly, urges Cloninger. Check to see that the door has no bent casters and that it rolls smoothly in the tracks. Perform a visual check of bolts for snugness. In the case of attached garages, proper weather stripping at the base of the door can greatly improve a home’s energy efficiency.
Read more: http://www.houselogic.com/articles/your-guide-outdoor-maintenance-south/#ixzz1DxJZ28uo
Friday, February 11, 2011
Mortgage rates continue upward climb
Freddie Mac says 30-year fixed-rate mortgage rates averaged 5.05 percent this week, up from 4.8 percent last week. That’s the highest rate since April.
A 15-year fixed mortgage averaged 4.29 percent, up from 4.08 percent last week.
Adjustable-rate mortgages also rose with a one-year ARM averaging 3.35 percent.
“Long-term bond yields jumped on positive economic-data reports, which placed upward pressure on mortgage rates this week,” says Frank Nothaft, chief economist at Freddie Mac (OTCBB:FOMC).
Meanwhile, the National Association of Realtors says the median price of an existing home rose in most cities during the fourth quarter. That wasn’t the case in Charlotte for January. The Charlotte Regional Realtor Association the average sales price was $188,147 in January, down 3 percent from December.
Charlotte Business Journal
Date: Friday, February 11, 2011, 9:39am EST
A 15-year fixed mortgage averaged 4.29 percent, up from 4.08 percent last week.
Adjustable-rate mortgages also rose with a one-year ARM averaging 3.35 percent.
“Long-term bond yields jumped on positive economic-data reports, which placed upward pressure on mortgage rates this week,” says Frank Nothaft, chief economist at Freddie Mac (OTCBB:FOMC).
Meanwhile, the National Association of Realtors says the median price of an existing home rose in most cities during the fourth quarter. That wasn’t the case in Charlotte for January. The Charlotte Regional Realtor Association the average sales price was $188,147 in January, down 3 percent from December.
Charlotte Business Journal
Date: Friday, February 11, 2011, 9:39am EST
Wednesday, February 9, 2011
Kannapolis' Center City Master Plan Unveiled
After months of thoughtful development, the City of Kannapolis is ready to release its new Center City Master Plan. This document has been prepared to provide the City of Kannapolis with a prioritized set of goals for the ongoing development and revitalization of the Center City.
Beginning with a joint meeting of the Kannapolis City Council and Planning Commission, this document will be shared with the public during a few different public input sessions. For more information on these sessions, contact Planning Director Ben Warren.
The plan and its recommendations are intended to complement and support, not supplant, other efforts that the City has undertaken in the furtherance of the redevelopment of the area following the departure of Pillowtex and the establishment of the North Carolina Research Campus.
The Center City has experienced drastic changes in the past decade. Once home to the expansive Cannon Mills textile manufacturing complex (later Pillowtex) and a thriving retail/factory outlet base that focused on home furnishings and textiles, today’s Center City is an emerging hub for scientific research.
This transformation has dramatically changed the face of the Center City. No longer is the landscape dominated by industrial buildings with their smokestacks towering over the mill houses that lie in their shadow, no longer do hundreds of cars drive in and out of the Center City at shift change, and no longer do the streets bustle with shoppers seeking bargains on high quality textiles and home furnishings. There is new energy around the emergent NC Research Campus in Center City and new priorities are required to support its development and success.
This plan will be used to focus the efforts of the City on those projects and issues that can make the most positive impacts on the future of Center City. And like all good plans, this is a living document that will need to be evaluated and updated as time passes to account for changing realities in the economy, City priorities and to account for the growth of the Center City.
To read the plan, please click here
http://www.cityofkannapolis.com/article_2011_01_28/CenterCityMasterPlanDraft20110126.pdf
Beginning with a joint meeting of the Kannapolis City Council and Planning Commission, this document will be shared with the public during a few different public input sessions. For more information on these sessions, contact Planning Director Ben Warren.
The plan and its recommendations are intended to complement and support, not supplant, other efforts that the City has undertaken in the furtherance of the redevelopment of the area following the departure of Pillowtex and the establishment of the North Carolina Research Campus.
The Center City has experienced drastic changes in the past decade. Once home to the expansive Cannon Mills textile manufacturing complex (later Pillowtex) and a thriving retail/factory outlet base that focused on home furnishings and textiles, today’s Center City is an emerging hub for scientific research.
This transformation has dramatically changed the face of the Center City. No longer is the landscape dominated by industrial buildings with their smokestacks towering over the mill houses that lie in their shadow, no longer do hundreds of cars drive in and out of the Center City at shift change, and no longer do the streets bustle with shoppers seeking bargains on high quality textiles and home furnishings. There is new energy around the emergent NC Research Campus in Center City and new priorities are required to support its development and success.
This plan will be used to focus the efforts of the City on those projects and issues that can make the most positive impacts on the future of Center City. And like all good plans, this is a living document that will need to be evaluated and updated as time passes to account for changing realities in the economy, City priorities and to account for the growth of the Center City.
To read the plan, please click here
http://www.cityofkannapolis.com/article_2011_01_28/CenterCityMasterPlanDraft20110126.pdf
Tuesday, February 8, 2011
New-Home Recovery Seen as Post-Super Bowl Selling Season Starts
Homebuilder executives and economists predict a post-Super Bowl bounce in demand for residential construction as Americans turn their attention from football to another national pastime: house hunting.
The chief executive officers of six of the 10 largest U.S. homebuilders cited the potential of a sales comeback in the spring, traditionally their strongest season, during conference calls in the last four weeks. Housing forecasts from Fannie Mae and the Mortgage Bankers Association show the new-home market will begin a rebound that will last through at least 2012.
A revival in demand for new houses after record-low sales in 2010 may bolster a U.S. economy that’s 19 months into a recovery. Residential construction is a key factor in gross domestic product because it requires the manufacturing of home components such as stoves, cement, tile and furnaces. Richard DeKaser, an economist at Boston-based Parthenon Group, said he expects the homebuilding industry will this year make its first positive contribution to GDP since 2005.
“The spring market is going to be the first test of the proposition that there’s an underlying improvement in new-home fundamentals,” DeKaser said in an interview. “If we don’t see the needle move, it will be very discouraging.”
New-home sales probably will rise 20 percent to 385,000 this year, said David Crowe, chief economist for the National Association of Home Builders in Washington. Fannie Mae, the world’s largest mortgage buyer, projected an 18 percent gain, and the Mortgage Bankers Association estimated a 10 percent advance, according to forecasts posted on their websites.
‘Much Better’ Season
D.R. Horton Inc., the second-biggest builder by revenue, is “locked and loaded” to meet an upswing in demand, Chief Executive Donald Tomnitz said on a Jan. 27 conference call. The 62-year-old CEO, a former banker and U.S. Army captain not known for rosy predictions, said he is “anticipating a much better spring selling season” than last year.
The optimism couldn’t have come at a darker moment for the new-home market. The number of newly constructed houses sold per month fell to 20,000 in November, the fewest of any time in 47 years of Commerce Department data. The tax credit that boosted sales at the start of last year is gone, and cut-rate prices on foreclosures are drawing buyers to existing properties.
Tougher loan requirements by banks may also limit demand. At 2010’s end, lenders tightened mortgage credit standards by the most in three years, according to the Federal Reserve Senior Loan Officer Survey. Borrowing costs also are on the rise after the average rate for a 30-year fixed mortgage fell to a record 4.17 percent in November, based on data from Freddie Mac.
After Super Bowl
Spring is a popular time to buy because house hunters often want to have their home finished by July or August, before the start of the U.S. school year in September, said John Burns, CEO of John Burns Real Estate Consulting Inc. in Irvine, California. The weekend after the Super Bowl is traditionally when prospective buyers start looking, he said in an interview.
“If that’s a good weekend for the builders, then we’re going to have a good spring, and if we have a good spring, we’ll have a good year,” Burns said. “That’s the way it’s played out for years.”
In 12 of the last 14 years, the annual peak in new-home sales occurred in March or April, according to Commerce Department data. The exceptions were 2003, when the March start of the Iraq War captured Americans’ attention and caused people to delay house hunting, and 2009, when the tax credit that originally expired in November boosted demand later in the year.
Sales are counted by the Commerce Department at the time of contract, while homebuilders book revenue once the transaction is completed.
Good, Not Great
“The contracts the builders will be writing in the next few weekends will be a leading indicator of their closings for later in the year,” Burns said. “It’s probably going to be a good year -- not a great year.”
Residential investment probably will increase 9.6 percent in 2011 after five years of declines, based on the median forecast of 30 economists at a Federal Reserve Bank of Chicago symposium in December. Housing starts likely will jump 17 percent to a three-year high of 688,000 in 2011, led by a gain in the construction of single-family houses, said Crowe of the National Association of Home Builders.
“The sales pace for new homes will improve as we move through the spring, unless something comes along to derail the economy,” said James Wilson, director of research for JMP Securities LLC in New York. “Demand seems to be coming back.”
Economic Contribution
The real estate market’s collapse reduced residential investment’s share of the economy to 2.2 percent in 2010’s fourth quarter, the lowest since records began in 1946, from a 55-year peak of 6.3 percent in the last three months of 2005, according to the Bureau of Labor Statistics. Housing that year was a larger contributor to GDP than national defense spending.
A rise in homebuilding will help boost jobs for workers who construct houses and also for people in industries supplying the appliances that go into them. About 430,000 residential building jobs evaporated after the housing crash began in 2006 -- a 43 percent decline in four years -- while appliance manufacturing jobs fell 17 percent in the same period, according to the Bureau of Labor Statistics. The overall economy lost 7.8 million jobs, or 5.7 percent of the workforce, after reaching a 2007 high.
The drop in values after the crash will create roadblocks for potential buyers who have their own properties to sell, said Thomas Lawler, a housing consultant in Leesburg, Virginia.
Price Decline
Home prices in December were 27 percent below the all-time high of July 2006, according to the National Association of Realtors. That has resulted in about a quarter of homeowners with mortgages owing more than their property is worth, according to CoreLogic Inc. in Santa Ana, California.
“Traditionally, one of the strongest parts of the new-home market is the trade-up buyer,” Lawler said in an interview. “A lot of people who would like to trade up don’t have equity in their homes.”
For those who are able to move, and can sell their current residence, new houses have a draw that existing homes don’t have, according to Parthenon’s DeKaser. They fulfill the dream of many people to build from the ground up, he said.
“That’s the strongest thing this segment has going for it -- some people attach a premium to having a home that no one else has lived in, with all new walls and new floors,” he said. “Even if they can get an existing home for cheaper, they’re willing to pay the price for new.”
Source: Bloomberg Businessweek
The chief executive officers of six of the 10 largest U.S. homebuilders cited the potential of a sales comeback in the spring, traditionally their strongest season, during conference calls in the last four weeks. Housing forecasts from Fannie Mae and the Mortgage Bankers Association show the new-home market will begin a rebound that will last through at least 2012.
A revival in demand for new houses after record-low sales in 2010 may bolster a U.S. economy that’s 19 months into a recovery. Residential construction is a key factor in gross domestic product because it requires the manufacturing of home components such as stoves, cement, tile and furnaces. Richard DeKaser, an economist at Boston-based Parthenon Group, said he expects the homebuilding industry will this year make its first positive contribution to GDP since 2005.
“The spring market is going to be the first test of the proposition that there’s an underlying improvement in new-home fundamentals,” DeKaser said in an interview. “If we don’t see the needle move, it will be very discouraging.”
New-home sales probably will rise 20 percent to 385,000 this year, said David Crowe, chief economist for the National Association of Home Builders in Washington. Fannie Mae, the world’s largest mortgage buyer, projected an 18 percent gain, and the Mortgage Bankers Association estimated a 10 percent advance, according to forecasts posted on their websites.
‘Much Better’ Season
D.R. Horton Inc., the second-biggest builder by revenue, is “locked and loaded” to meet an upswing in demand, Chief Executive Donald Tomnitz said on a Jan. 27 conference call. The 62-year-old CEO, a former banker and U.S. Army captain not known for rosy predictions, said he is “anticipating a much better spring selling season” than last year.
The optimism couldn’t have come at a darker moment for the new-home market. The number of newly constructed houses sold per month fell to 20,000 in November, the fewest of any time in 47 years of Commerce Department data. The tax credit that boosted sales at the start of last year is gone, and cut-rate prices on foreclosures are drawing buyers to existing properties.
Tougher loan requirements by banks may also limit demand. At 2010’s end, lenders tightened mortgage credit standards by the most in three years, according to the Federal Reserve Senior Loan Officer Survey. Borrowing costs also are on the rise after the average rate for a 30-year fixed mortgage fell to a record 4.17 percent in November, based on data from Freddie Mac.
After Super Bowl
Spring is a popular time to buy because house hunters often want to have their home finished by July or August, before the start of the U.S. school year in September, said John Burns, CEO of John Burns Real Estate Consulting Inc. in Irvine, California. The weekend after the Super Bowl is traditionally when prospective buyers start looking, he said in an interview.
“If that’s a good weekend for the builders, then we’re going to have a good spring, and if we have a good spring, we’ll have a good year,” Burns said. “That’s the way it’s played out for years.”
In 12 of the last 14 years, the annual peak in new-home sales occurred in March or April, according to Commerce Department data. The exceptions were 2003, when the March start of the Iraq War captured Americans’ attention and caused people to delay house hunting, and 2009, when the tax credit that originally expired in November boosted demand later in the year.
Sales are counted by the Commerce Department at the time of contract, while homebuilders book revenue once the transaction is completed.
Good, Not Great
“The contracts the builders will be writing in the next few weekends will be a leading indicator of their closings for later in the year,” Burns said. “It’s probably going to be a good year -- not a great year.”
Residential investment probably will increase 9.6 percent in 2011 after five years of declines, based on the median forecast of 30 economists at a Federal Reserve Bank of Chicago symposium in December. Housing starts likely will jump 17 percent to a three-year high of 688,000 in 2011, led by a gain in the construction of single-family houses, said Crowe of the National Association of Home Builders.
“The sales pace for new homes will improve as we move through the spring, unless something comes along to derail the economy,” said James Wilson, director of research for JMP Securities LLC in New York. “Demand seems to be coming back.”
Economic Contribution
The real estate market’s collapse reduced residential investment’s share of the economy to 2.2 percent in 2010’s fourth quarter, the lowest since records began in 1946, from a 55-year peak of 6.3 percent in the last three months of 2005, according to the Bureau of Labor Statistics. Housing that year was a larger contributor to GDP than national defense spending.
A rise in homebuilding will help boost jobs for workers who construct houses and also for people in industries supplying the appliances that go into them. About 430,000 residential building jobs evaporated after the housing crash began in 2006 -- a 43 percent decline in four years -- while appliance manufacturing jobs fell 17 percent in the same period, according to the Bureau of Labor Statistics. The overall economy lost 7.8 million jobs, or 5.7 percent of the workforce, after reaching a 2007 high.
The drop in values after the crash will create roadblocks for potential buyers who have their own properties to sell, said Thomas Lawler, a housing consultant in Leesburg, Virginia.
Price Decline
Home prices in December were 27 percent below the all-time high of July 2006, according to the National Association of Realtors. That has resulted in about a quarter of homeowners with mortgages owing more than their property is worth, according to CoreLogic Inc. in Santa Ana, California.
“Traditionally, one of the strongest parts of the new-home market is the trade-up buyer,” Lawler said in an interview. “A lot of people who would like to trade up don’t have equity in their homes.”
For those who are able to move, and can sell their current residence, new houses have a draw that existing homes don’t have, according to Parthenon’s DeKaser. They fulfill the dream of many people to build from the ground up, he said.
“That’s the strongest thing this segment has going for it -- some people attach a premium to having a home that no one else has lived in, with all new walls and new floors,” he said. “Even if they can get an existing home for cheaper, they’re willing to pay the price for new.”
Source: Bloomberg Businessweek
Friday, January 28, 2011
Weichert.com Earns International Award for Website Excellence
January 25, 2011 // Franchising.com // MORRIS PLAINS, N.J. – Weichert, Realtors recently received the Bronze Award in the Real Estate category of the 10th annual International iNOVA Awards competition for its website, Weichert.com. The iNOVA judges concluded that Weichert.com, one of the nation's most visited real estate sites, sufficiently surpassed the required criteria in all areas of the competition.
"We are pleased to receive yet another honor for our customer website," said Jim Weichert, president and founder of Weichert, Realtors. "An award of this degree helps validate Weichert.com as a trusted, convenient and comprehensive online source for potential home buyers and sellers."
The iNOVA Award symbolizes the energy of numerous disciplines that inspire corporate website excellence. The mission of the iNOVA Awards is to recognize and promote achievement in creative web design, originality of content and functional performance. Gold, Silver, Bronze, and Honors awards were presented to the top third scoring entries. Websites were evaluated for content, design, and technology. Preliminary judging was carried out by international panels of web developers, designers, site builders and interactive media specialists.
Last summer Weichert.com received the Interactive Media Awards (IMA) Outstanding Achievement Award, earning a score of 465 out of a total possible score of 500 points.
Weichert.com regularly attracts more than 3 million visitors each month and consistently ranks as a top site among all real estate companies for the length of time that visitors spend at the site, according to HitwiseÒ, which monitors the activity of major Web sites.
Weichert has nearly 18,000 sales associates in more than 500 company-owned and franchised sales offices in key markets throughout the U.S. A family of full-service real estate and financial services companies, Weichert helps customers buy and sell both residential and commercial real estate, and streamlines the delivery of mortgages and home and title insurance. For more information, Weichert's customer service center can be reached at 1-800-USA-SOLD or at Weichert's Web site, www.weichert.com. Each Weichert franchised office is independently owned and operated.
"We are pleased to receive yet another honor for our customer website," said Jim Weichert, president and founder of Weichert, Realtors. "An award of this degree helps validate Weichert.com as a trusted, convenient and comprehensive online source for potential home buyers and sellers."
The iNOVA Award symbolizes the energy of numerous disciplines that inspire corporate website excellence. The mission of the iNOVA Awards is to recognize and promote achievement in creative web design, originality of content and functional performance. Gold, Silver, Bronze, and Honors awards were presented to the top third scoring entries. Websites were evaluated for content, design, and technology. Preliminary judging was carried out by international panels of web developers, designers, site builders and interactive media specialists.
Last summer Weichert.com received the Interactive Media Awards (IMA) Outstanding Achievement Award, earning a score of 465 out of a total possible score of 500 points.
Weichert.com regularly attracts more than 3 million visitors each month and consistently ranks as a top site among all real estate companies for the length of time that visitors spend at the site, according to HitwiseÒ, which monitors the activity of major Web sites.
Weichert has nearly 18,000 sales associates in more than 500 company-owned and franchised sales offices in key markets throughout the U.S. A family of full-service real estate and financial services companies, Weichert helps customers buy and sell both residential and commercial real estate, and streamlines the delivery of mortgages and home and title insurance. For more information, Weichert's customer service center can be reached at 1-800-USA-SOLD or at Weichert's Web site, www.weichert.com. Each Weichert franchised office is independently owned and operated.
Monday, January 24, 2011
NC Legislature Advances New Rules for HOAs
By Matt Tomsic, Star-News, Wilmington, N.C.
Jan. 20—A General Assembly House committee approved a draft bill Wednesday that would provide more stringent rules governing how home owners associations conduct business.
Member of the House Select Committee on Home Owners Associations debated the draft legislation and added to it during its final committee meeting.
Rep. Jennifer Weiss, D-Wake, said the draft legislation should get bipartisan support when it’s introduced to the General Assembly.
“I’m hoping it will be legislation that Democrats and Republicans will work on together,” Weiss said.
She also said the legislation provides more protections for home owners who are governed by a home owners association.
The draft bill, entitled the Planned Community Act, would create additional factors HOA boards would have to consider when determining to enforce covenants; require boards to open their meetings and records; and change the lien and foreclosure process. The legislation will also require the Attorney General’s Office to collect complaints lodged against home owners associations.
If the law is enacted, home owners association board members will have to consider if the covenant or rule is inconsistent with the law, if it’s justifiable to spend association resources to punish the violator and if it’s in the association’s best interest to enforce the covenant, among other criteria, when determining whether to penalize home owners who violate covenants.
The draft bill also requires board meetings to be open and gives home owners recourse if the board ignores a request for a special meeting from 10 percent of the association’s home owners. In that case, the home owners can notify the rest of the community and hold the meeting without the board. The draft law also requires associations to keep “detailed records of receipts and expenditures,” accounting records, minutes of all meetings, financial statements and tax returns and copies of current contracts, among other records.
The board also has to make those records available after a 15-day notice from a lot owner or home owner.
The draft bill also changes the process associations can use to file liens and foreclose on a home. The bill requires assessments to be 90 days late before an association can begin the lien process, and the board must offer home owners a payment plan for past due bills. The draft bill requires the board to vote on foreclosing on a specific lot or home. The board also can’t begin foreclosure proceedings unless the debt is past due and the home owner refused to accept a payment plan.
Committee members also made changes to the draft legislation during the meeting, requiring parallel changes to be made to the Condominium Act, tasking the Attorney General’s Office with keeping and tracking home owner complaints, defining payment plans, clarifying that late fees stop when a payment plan is adopted and requiring boards to keep meetings of executive, or closed, sessions.
Weiss said she and co-chairman Rep. Bill McGee will find co-sponsors to the bill and eventually introduce it during the General Assembly’s session.
She thinks the draft bill has good transparency measures.
“We’ve got a lot of work ahead of us to keep this legislation moving forward,” Weiss said. “We’ve taken a big step with this proposal.”
Jan. 20—A General Assembly House committee approved a draft bill Wednesday that would provide more stringent rules governing how home owners associations conduct business.
Member of the House Select Committee on Home Owners Associations debated the draft legislation and added to it during its final committee meeting.
Rep. Jennifer Weiss, D-Wake, said the draft legislation should get bipartisan support when it’s introduced to the General Assembly.
“I’m hoping it will be legislation that Democrats and Republicans will work on together,” Weiss said.
She also said the legislation provides more protections for home owners who are governed by a home owners association.
The draft bill, entitled the Planned Community Act, would create additional factors HOA boards would have to consider when determining to enforce covenants; require boards to open their meetings and records; and change the lien and foreclosure process. The legislation will also require the Attorney General’s Office to collect complaints lodged against home owners associations.
If the law is enacted, home owners association board members will have to consider if the covenant or rule is inconsistent with the law, if it’s justifiable to spend association resources to punish the violator and if it’s in the association’s best interest to enforce the covenant, among other criteria, when determining whether to penalize home owners who violate covenants.
The draft bill also requires board meetings to be open and gives home owners recourse if the board ignores a request for a special meeting from 10 percent of the association’s home owners. In that case, the home owners can notify the rest of the community and hold the meeting without the board. The draft law also requires associations to keep “detailed records of receipts and expenditures,” accounting records, minutes of all meetings, financial statements and tax returns and copies of current contracts, among other records.
The board also has to make those records available after a 15-day notice from a lot owner or home owner.
The draft bill also changes the process associations can use to file liens and foreclose on a home. The bill requires assessments to be 90 days late before an association can begin the lien process, and the board must offer home owners a payment plan for past due bills. The draft bill requires the board to vote on foreclosing on a specific lot or home. The board also can’t begin foreclosure proceedings unless the debt is past due and the home owner refused to accept a payment plan.
Committee members also made changes to the draft legislation during the meeting, requiring parallel changes to be made to the Condominium Act, tasking the Attorney General’s Office with keeping and tracking home owner complaints, defining payment plans, clarifying that late fees stop when a payment plan is adopted and requiring boards to keep meetings of executive, or closed, sessions.
Weiss said she and co-chairman Rep. Bill McGee will find co-sponsors to the bill and eventually introduce it during the General Assembly’s session.
She thinks the draft bill has good transparency measures.
“We’ve got a lot of work ahead of us to keep this legislation moving forward,” Weiss said. “We’ve taken a big step with this proposal.”
Rate on 30-Year Fixed Mortgage Rising
NEW YORK—Rates on the 30-year fixed mortgages rose slightly this week, following increases in Treasury yields.
Freddie Mac says the average rate rose to 4.74 percent this week from 4.71 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.05 percent from 4.08 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasury bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
A service of YellowBrix, Inc.
Freddie Mac says the average rate rose to 4.74 percent this week from 4.71 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year loan slipped to 4.05 percent from 4.08 percent. It reached 3.57 percent in November, the lowest level on records starting in 1991.
Rates have changed little in the new year after spiking more than half a percentage point in the last two months. Investors sold off Treasury bonds during that stretch, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.
A service of YellowBrix, Inc.
Friday, January 21, 2011
Understanding the Pre-Approval Process
By Karin Beuerlein, FrontDoor.com | Published: 1/28/2008
Loan shopping is as intricate a process as house shopping, and the terminology is often confusing. The terms "pre-qualification" and "pre-approval" sound like the same thing, but they're not. And in fact, neither pre-qualification nor pre-approval means a bank actually has to give you the loan.
Clear as mud, right? Don't worry -- the loan approval process is fairly straightforward, as long as you understand a few key points:
•Pre-qualification is the first step you can take -- but it's not mandatory. If you want a ballpark idea of how much a bank will loan you so that you can shop within your price range, pre-qualification is a quick and easy way to find out. Most banks and credit unions will do this over the phone, and your credit history will usually not be checked. A loan officer asks you about your income, assets, debts and projected down payment and then calculates what kind of loan you'd likely qualify for. The process takes just a few minutes.
•Pre-approval is more involved and usually requires an appointment. In this step, the lending institution gathers all the information it requires to offer you a loan, and your credit report will be checked; you may be charged a fee for this at the time of the appointment. You'll need to bring some items with you to document your identity and your assets:
1.A copy of your most recent bank statements (this includes your daily checking account as well as any money market, savings or other accounts)
2.Your most recent W-2 (or entire tax return if you're self-employed)
3.Proof of IRAs or retirement accounts and their current balances
4.Ditto for any stocks or mutual funds you own outside of retirement accounts
5.Your driver's license
6.The most recent month's paystub(s) from your job
7.An application fee (this depends on the lender)
•The result of the pre-approval process is the good faith estimate. At the end of the pre-approval process, if the bank looks you over and likes what it sees, you'll receive what's called a good faith estimate (GFE), which is a brief document spelling out the likely terms of the loan, including the interest rate, loan type (fixed-rate, adjustable and so on) and closing costs.
•The pre-approval step may be a bit time-consuming, but you'll need to complete it with a few lenders in order to comparison-shop. Without a GFE, you can't truly compare terms among lenders. And it pays to compare -- for a loan as large as a mortgage, little things like the interest rate make a big difference. To negotiate for a great interest rate, reduced closing costs, or lender-paid private mortgage insurance, you have to make lenders compete with each other. (Lining up GFEs is also a good way to spot lenders who charge unnecessary fees.) So don't just accept the first offer you get -- make sure it's a good one by soliciting several in a short time period. Don't worry about nicking your credit score with several loan applications, because credit scoring recognizes multiple checks in quick succession as part of the loan-shopping process and does not penalize you.
•Pre-approval does not mean the bank guarantees you the loan. It just means that you're approved to get loan -- unless something goes wrong. Commitment to the loan generally comes after the bank has had the house in question appraised to make sure the price you're paying isn't higher than the home's market value. This protects them in case you default on the loan, which would leave them in the red even if they evicted you and sold the property. Banks also check to make sure the home has a clear title and that you've insured it for replacement value.
Loan shopping is as intricate a process as house shopping, and the terminology is often confusing. The terms "pre-qualification" and "pre-approval" sound like the same thing, but they're not. And in fact, neither pre-qualification nor pre-approval means a bank actually has to give you the loan.
Clear as mud, right? Don't worry -- the loan approval process is fairly straightforward, as long as you understand a few key points:
•Pre-qualification is the first step you can take -- but it's not mandatory. If you want a ballpark idea of how much a bank will loan you so that you can shop within your price range, pre-qualification is a quick and easy way to find out. Most banks and credit unions will do this over the phone, and your credit history will usually not be checked. A loan officer asks you about your income, assets, debts and projected down payment and then calculates what kind of loan you'd likely qualify for. The process takes just a few minutes.
•Pre-approval is more involved and usually requires an appointment. In this step, the lending institution gathers all the information it requires to offer you a loan, and your credit report will be checked; you may be charged a fee for this at the time of the appointment. You'll need to bring some items with you to document your identity and your assets:
1.A copy of your most recent bank statements (this includes your daily checking account as well as any money market, savings or other accounts)
2.Your most recent W-2 (or entire tax return if you're self-employed)
3.Proof of IRAs or retirement accounts and their current balances
4.Ditto for any stocks or mutual funds you own outside of retirement accounts
5.Your driver's license
6.The most recent month's paystub(s) from your job
7.An application fee (this depends on the lender)
•The result of the pre-approval process is the good faith estimate. At the end of the pre-approval process, if the bank looks you over and likes what it sees, you'll receive what's called a good faith estimate (GFE), which is a brief document spelling out the likely terms of the loan, including the interest rate, loan type (fixed-rate, adjustable and so on) and closing costs.
•The pre-approval step may be a bit time-consuming, but you'll need to complete it with a few lenders in order to comparison-shop. Without a GFE, you can't truly compare terms among lenders. And it pays to compare -- for a loan as large as a mortgage, little things like the interest rate make a big difference. To negotiate for a great interest rate, reduced closing costs, or lender-paid private mortgage insurance, you have to make lenders compete with each other. (Lining up GFEs is also a good way to spot lenders who charge unnecessary fees.) So don't just accept the first offer you get -- make sure it's a good one by soliciting several in a short time period. Don't worry about nicking your credit score with several loan applications, because credit scoring recognizes multiple checks in quick succession as part of the loan-shopping process and does not penalize you.
•Pre-approval does not mean the bank guarantees you the loan. It just means that you're approved to get loan -- unless something goes wrong. Commitment to the loan generally comes after the bank has had the house in question appraised to make sure the price you're paying isn't higher than the home's market value. This protects them in case you default on the loan, which would leave them in the red even if they evicted you and sold the property. Banks also check to make sure the home has a clear title and that you've insured it for replacement value.
Friday, January 14, 2011
Thursday, January 6, 2011
Wednesday, January 5, 2011
Americans Still in Love with Home Ownership in 2011
WASHINGTON (December 27, 2010)—2010 has been a year of real estate contrasts. The market has seen a gradual stabilization of sales and prices, yet challenges facing the nation have led some to question the value of home ownership for families, communities, and the country.
“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” said NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy.“
In the first half of the year, the extended $8,000 first-time home buyer tax credit and expanded home $6,500 tax credit for repeat buyers helped encourage sales and stabilize home prices. Home buyers in 2010 have also benefited from historic affordability levels, with the combination of record low mortgage rates coupled with rising household incomes. The NAR Housing Affordability Index currently shows that a median-income family with a down payment of 20% has 184.2% of the income required to purchase a median-priced home.
“Low interest rates mean real money for today’s home buyers,” said Phipps. “Buyers who purchased a median-priced home five years ago with an FHA mortgage requiring a 3% down payment would have a monthly mortgage payment of $1,650. With today’s interest rates and median home prices, that same buyer would pay $1,150 per month—a $500 savings. That’s a savings of $6,000 per year.”
Despite record affordability and buyer incentives, rising foreclosure rates and concerns about proper foreclosure procedures led some to question whether owning a home was a good personal decision.
“Home ownership didn’t create the foreclosure crisis—Wall Street greed and irresponsible lending practices did,” said Phipps. “The decision to own a home is a very personal one, but over the long term, owning a home is one of the best ways to build long-term wealth, in addition to providing numerous social benefits that include reduced crime rates, improved childhood education, and increased stability. After all, a fixed-rate mortgage might last 15 to 30 years; renting is forever.”
Government support of programs and initiatives that encourage home ownership have also been called into question. The deductibility of mortgage interest is one example, with critics suggesting that the mortgage interest deduction primarily benefits the wealthy, while in fact, the MID benefits primarily middle- and lower income families—almost two-thirds of those who claim the MID are middle-income earners. Sixty-five percent of families who claim the MID earn less than $100,000 per year, and 91% who claim the benefit earn less than $200,000 annually.
“The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” said Phipps. “For example, a family who bought a home this year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4%, could save nearly $3,500 in federal taxes when they file next year. That’s money they could use to pay down other debts, supplement their children’s college savings account, or put into savings themselves.”
Despite current economic challenges, most Americans still aspire to the dream of home ownership.
According to a survey conducted earlier in the year by Bankrate.com, 90% of respondents said they had no regrets buying their current home. And just this month, a Fannie Mae survey found that most Americans—both those who currently own their homes and those who rent—strongly aspire to own a home and to maintain home ownership.
Source: NAR
“People are passionate about the American dream of home ownership, and this passion underscores how important home ownership is to our nation,” said NATIONAL ASSOCIATION OF REALTORS® President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Owning a home has long-standing government support in this country because home ownership benefits individuals and families, strengthens our communities, and is integral to our economy.“
In the first half of the year, the extended $8,000 first-time home buyer tax credit and expanded home $6,500 tax credit for repeat buyers helped encourage sales and stabilize home prices. Home buyers in 2010 have also benefited from historic affordability levels, with the combination of record low mortgage rates coupled with rising household incomes. The NAR Housing Affordability Index currently shows that a median-income family with a down payment of 20% has 184.2% of the income required to purchase a median-priced home.
“Low interest rates mean real money for today’s home buyers,” said Phipps. “Buyers who purchased a median-priced home five years ago with an FHA mortgage requiring a 3% down payment would have a monthly mortgage payment of $1,650. With today’s interest rates and median home prices, that same buyer would pay $1,150 per month—a $500 savings. That’s a savings of $6,000 per year.”
Despite record affordability and buyer incentives, rising foreclosure rates and concerns about proper foreclosure procedures led some to question whether owning a home was a good personal decision.
“Home ownership didn’t create the foreclosure crisis—Wall Street greed and irresponsible lending practices did,” said Phipps. “The decision to own a home is a very personal one, but over the long term, owning a home is one of the best ways to build long-term wealth, in addition to providing numerous social benefits that include reduced crime rates, improved childhood education, and increased stability. After all, a fixed-rate mortgage might last 15 to 30 years; renting is forever.”
Government support of programs and initiatives that encourage home ownership have also been called into question. The deductibility of mortgage interest is one example, with critics suggesting that the mortgage interest deduction primarily benefits the wealthy, while in fact, the MID benefits primarily middle- and lower income families—almost two-thirds of those who claim the MID are middle-income earners. Sixty-five percent of families who claim the MID earn less than $100,000 per year, and 91% who claim the benefit earn less than $200,000 annually.
“The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” said Phipps. “For example, a family who bought a home this year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4%, could save nearly $3,500 in federal taxes when they file next year. That’s money they could use to pay down other debts, supplement their children’s college savings account, or put into savings themselves.”
Despite current economic challenges, most Americans still aspire to the dream of home ownership.
According to a survey conducted earlier in the year by Bankrate.com, 90% of respondents said they had no regrets buying their current home. And just this month, a Fannie Mae survey found that most Americans—both those who currently own their homes and those who rent—strongly aspire to own a home and to maintain home ownership.
Source: NAR
Tuesday, January 4, 2011
414 Brook Avenue Open Sunday, January 9, 2 - 4 p.m.
Please join us for a tour of this beautiful 4 bedroom, 2 1/2 bath home in Mountain Brook Estates! Open Sunday, January 9, 2 - 4 p.m. Questions? Please call Debbie Little at 704.506.6943. See you there!
Tax Benefits of Homeownership
The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
Assume:
$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)
______
$12,577 = Total deduction
Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)
Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.
10 Ways to Prepare for Homeownership
1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process. Call Weichert, REALTORS – Craven & Company at 704.788.1122 for all your real estate needs!
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process. Call Weichert, REALTORS – Craven & Company at 704.788.1122 for all your real estate needs!
Could Rising Mortgage Rates Spur Housing Rush?
Mortgage rates have been rising ever since November 2010, when lows of 4.42 percent were reported. Bankrate.com recently reported a rise to 5.02 percent in 30-year fixed rate loans, which is the second time in three weeks rates have crossed the 5 percent mark--many experts say signaling the end to the 4 percent mortgage rate era.
Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.
Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.
The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.
After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.
Lawrence Yun, chief economist of the National Association of REALTORS®, doesn't foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.
"It's less about rates than it is about underwriting standards ... If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy," Yun said.
Source: “Kiss 4% Mortgage Rates Goodbye,” CNNMoney.com (Dec. 30, 2010)
Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.
Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.
The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.
After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.
Lawrence Yun, chief economist of the National Association of REALTORS®, doesn't foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.
"It's less about rates than it is about underwriting standards ... If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy," Yun said.
Source: “Kiss 4% Mortgage Rates Goodbye,” CNNMoney.com (Dec. 30, 2010)
Thursday, September 30, 2010
State is investigating GMAC's foreclosure procedures
The state Attorney General's Office is examining GMAC Mortgage for "questionable tactics" that may have led to undeserved foreclosures on some homeowners.
The mortgage giant replied that a "procedural error" in its foreclosure process was addressed months ago, and the error did not result in inappropriate foreclosures.
In a letter sent to GMAC this week, state Assistant Attorney General Philip Lehman said the state has received information indicating that GMAC Mortgage employees "routinely signed off on large numbers of [foreclosure] affidavits" without properly reviewing them.
On Friday, four days before the state's announcement, GMAC Mortgage released a statement saying it had discovered a "procedural error" in "certain affidavits required in certain states."Read more: http://www.newsobserver.com/2010/09/29/708313/state-is-investigating-gmacs-foreclosure.html#ixzz111Fnyh7u
www.WeichertCraven.com
PROFESSIONAL DESIGNATIONS:
GREEN, National Association of REALTORS Sustainable Property Designation
EcoBroker, Premiere Green Designation Program for Real Estate Professionals
GRI, Graduate REALTOR® Institute
ePro, National Association of Realtors Internet Certification Program
QSC, Quality Service Certified
Please think of the environment before printing this email. Appreciate it!
*Paper fills up 30-40% of American landfill space*
All communications herein are merely for purposes of negotiating and in no way constitute a valid and enforceable contract.
Tuesday, June 15, 2010
Join Debbie Fink and Ford Craven for a Broker Open House June 15!
This is today! Come and see us for lunch, dessert and prizes! Thanks!
Ford Craven, REALTOR
www.WeichertCraven.com
PROFESSIONAL DESIGNATIONS:
GREEN, National Association of REALTORS Sustainable Property Designation
EcoBroker, Premiere Green Designation Program for Real Estate Professionals
GRI, Graduate REALTOR® Institute
ePro, National Association of Realtors Internet Certification Program
QSC, Quality Service Certified
Please think of the environment before printing this email. Appreciate it!
*Paper fills up 30-40% of American landfill space*
All communications herein are merely for purposes of negotiating and in no way constitute a valid and enforceable contract.
---------- Forwarded message ----------
From: Weichert, REALTORS - Craven & Company <barbijones@weichert.com>
Date: Mon, Jun 14, 2010 at 3:26 PM
Subject: Join Debbie Fink and Ford Craven for a Broker Open House June 15!
To: fcraven@weichert.com
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From: Weichert, REALTORS - Craven & Company <barbijones@weichert.com>
Date: Mon, Jun 14, 2010 at 3:26 PM
Subject: Join Debbie Fink and Ford Craven for a Broker Open House June 15!
To: fcraven@weichert.com
| | |||||||||||
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Weichert, Realtors - Craven & Company | 845 Church Street North | Suite 201 | Concord | NC | 28025 |
Monday, March 15, 2010
Federal Program to Encourage Short Sales
Beginning April 5, the Obama administration will encourage delinquent borrowers to avoid foreclosure and instead give up their homes in short sales by streamlining the process.
The program will offer a cash payment to the home owner, as well as to the servicer and second-lien holder; and protect borrowers from future lender lawsuits for the unpaid mortgage balance.
To curtail fraud, lenders will have to consult real estate practitioners to assess home value and minimum acceptable offer; they then must accept any offer that is equal to or higher than that.
Source: The New York Times, David Streitfeld (03/08/10)
The program will offer a cash payment to the home owner, as well as to the servicer and second-lien holder; and protect borrowers from future lender lawsuits for the unpaid mortgage balance.
To curtail fraud, lenders will have to consult real estate practitioners to assess home value and minimum acceptable offer; they then must accept any offer that is equal to or higher than that.
Source: The New York Times, David Streitfeld (03/08/10)
FHA Head: Don't Raise Down Payments
Now is not the time to raise the downpayment requirement on a Federal Housing Administration loan, warns FHA Commissioner David Stevens.
Stevens, testifying before a committee of the U.S. House, said his agency would probably insure 300,000 fewer home loans per year if the mandatory down payment was raised from 3.5 percent to 5 percent — a 40 percent increase.
Congress has been considering various ways to put FHA on a sounder financial footing. Besides increasing the downpayment requirement, another suggestion under discussion is raising the upfront mortgage insurance premium to 2.25 percent of the loan amount, up from 1.75 percent currently.
The National Association of REALTORS® also opposes the proposal to raise the mandatory down payment for an FHA loan. The FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices, said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity.
“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said. “It’s important to note that higher balance FHA loans perform better than lower balance ones. While some argue that higher balance loans put taxpayers at risk, such loans actually strengthen the program and reduce risk to the fund.”
Explaining that FHA has played an important role in the recent housing and economic crisis by filing the gap left by private lenders, McMillan said FHA insured almost 30 percent of single-family mortgages in 2009 and more than 50 percent of first-time buyer loans. “Historically, FHA’s market share has hovered between 10 and 15 percent of all loans. And when the private market is strong enough to return, we welcome a reduced FHA market share,” he said.
McMillan said NAR was also concerned that FHA wanted to decrease seller concessions to 3 percent. Reducing seller concessions could put homeownership out of reach for many buyers, he said, because it could require buyers to pay more at closing.
Stevens, testifying before a committee of the U.S. House, said his agency would probably insure 300,000 fewer home loans per year if the mandatory down payment was raised from 3.5 percent to 5 percent — a 40 percent increase.
Congress has been considering various ways to put FHA on a sounder financial footing. Besides increasing the downpayment requirement, another suggestion under discussion is raising the upfront mortgage insurance premium to 2.25 percent of the loan amount, up from 1.75 percent currently.
The National Association of REALTORS® also opposes the proposal to raise the mandatory down payment for an FHA loan. The FHA remains financially strong because it has taken steps to ensure solid underwriting standards and responsible lending practices, said Charles McMillan, NAR immediate past president, in testimony before the House Subcommittee on Housing and Community Opportunity.
“As the leading advocate for housing issues, NAR believes that one of the best ways Congress can help strengthen FHA is to quickly consider and pass legislation that would make current loan limits permanent,” McMillan said. “It’s important to note that higher balance FHA loans perform better than lower balance ones. While some argue that higher balance loans put taxpayers at risk, such loans actually strengthen the program and reduce risk to the fund.”
Explaining that FHA has played an important role in the recent housing and economic crisis by filing the gap left by private lenders, McMillan said FHA insured almost 30 percent of single-family mortgages in 2009 and more than 50 percent of first-time buyer loans. “Historically, FHA’s market share has hovered between 10 and 15 percent of all loans. And when the private market is strong enough to return, we welcome a reduced FHA market share,” he said.
McMillan said NAR was also concerned that FHA wanted to decrease seller concessions to 3 percent. Reducing seller concessions could put homeownership out of reach for many buyers, he said, because it could require buyers to pay more at closing.
Wednesday, March 10, 2010
Fewer Sellers Are Cutting Prices
The prices on 19 percent of homes for sale as of March 1st have been reduced at least once, the lowest percentage in the last year, according to Trulia.com.
In October and November, when the market was feeling the effect of the tax credit, 26 percent of sellers cut their asking prices.
“Better pricing is leading to less time on the market, less price reduction, and in a lot of markets we're starting to see bidding wars on lower end properties," said Ken Shuman, spokesperson for Trulia.
Trulia calculates that these U.S. cities experienced the biggest decline in price reductions from Feb. 1, 2010 to March 1, 2010:
* Charlotte, N.C.
* Colorado Springs, Colo.
* Houston
* Raleigh, N.C.
* Jacksonville, Fla.
* Albuquerque, N.M.
* Tucson
* Omaha, Neb.
* San Antonio, Texas
Source: Trulia.com (03/09/2010)
In October and November, when the market was feeling the effect of the tax credit, 26 percent of sellers cut their asking prices.
“Better pricing is leading to less time on the market, less price reduction, and in a lot of markets we're starting to see bidding wars on lower end properties," said Ken Shuman, spokesperson for Trulia.
Trulia calculates that these U.S. cities experienced the biggest decline in price reductions from Feb. 1, 2010 to March 1, 2010:
* Charlotte, N.C.
* Colorado Springs, Colo.
* Houston
* Raleigh, N.C.
* Jacksonville, Fla.
* Albuquerque, N.M.
* Tucson
* Omaha, Neb.
* San Antonio, Texas
Source: Trulia.com (03/09/2010)
Thursday, March 4, 2010
Claim Your Homebuyer Tax Credits
Whether a first time homebuyer or a longtime owner, you may be eligible for a homebuyer tax credit if you meet IRS guidelines.
Do You Qualify?
* You meet IRS income and homeownership rules.
* You sign a binding contract by April 30, 2010.
* You close on a home purchase by June 30, 2010.
Do You Qualify?
* You meet IRS income and homeownership rules.
* You sign a binding contract by April 30, 2010.
* You close on a home purchase by June 30, 2010.
Some first-time buyers and longtime owners may be able to claim a federal homebuyer tax credit on a principal residence bought in 2009 or early 2010. Eligibility depends on a number of factors, including income, homeownership status, and the exact purchase date of the home.
To be considered a first-time buyer by the IRS, you mustn’t have owned a home for the three years prior to your purchase. Longtime owners must have lived in their homes for five consecutive years during the past eight years. Revised rules apply to those who buy between Nov. 7, 2009, and April 30, 2010. Buyers who made purchases on or before Nov. 6, 2009, are covered under an older set of guidelines.
New rules for first-time homebuyers
First-time buyers who purchase a home between Nov. 7, 2009, and April 30, 2010, may be entitled to a federal tax credit worth 10% of the sale price or $8,000, whichever is lesser. Income restrictions apply. The tax credit for joint filers begins to phase out at a modified adjusted gross income of $225,000 ($125,000 for individual taxpayers). The credit disappears entirely at $245,000 for joint filers ($145,000 for individuals).
While first-time buyers must enter into a binding contract to purchase a principal residence by April 30, the closing can take place as late as June 30, 2010. The home can’t cost more than $800,000.
Qualifying purchases in 2009 can be claimed on your 2008 or 2009 return. File an amended return for 2008. Purchases in 2010 can be claimed on your 2009 or 2010 return. To get the credit for the 2009 tax year on a purchase that closes after April 15, 2010, either request an automatic filing extension or file an amended 2009 return.
The first-time homebuyer tax credit is “refundable,” according to Ken Burstiner, a CPA at Weiser LLP in New York City. That means you can earn it even if you owe no federal tax, the credit exceeds your total tax liability, or you have little income. Claim the credit on IRS Form 5405, which should take less than an hour to fill out. It’s a good idea to consult a tax adviser. H&R Block’s average fee to prepare a tax return is $187.
Old rules for first-time homebuyers
First-timers who bought a home between Jan. 1, 2009, and Nov. 6, 2009, may also be eligible for a federal tax credit worth up to $8,000. A tax credit reduces your tax bill or increases your refund dollar for dollar. In general, whether under the old rules or the new rules, you’ll be required to repay the full value of the credit to the IRS if you don’t maintain the home as your principal residence for three years.
First-time buyers subject to the old rules face tighter income limit. The phase-out kicks in for joint filers when modified adjusted gross income hits $150,000 ($75,000 for individual taxpayers). It disappears entirely at $170,000 for joint filers ($95,000 for individuals). Married filing separately taxpayers can claim only up to half of the $8,000 credit.
First-time buyers in 2008 were subject to a different tax-credit program. Homes purchased after April 8, 2008, and before Jan. 1, 2009, were eligible for a credit worth the lesser of $7,500 or 10% of the home’s purchase price. Income limits and phase-out ranges were the same as those for first-time buyers between Jan. 1, 2009, and Nov. 6, 2009.
The biggest difference between 2008 and 2009 was that the tax credit in 2008 really functioned as an interest-free loan that must be paid back over 15 years. The first of the annual installments should come due on the 2010 tax return filed in 2011. With few exceptions, if your home ceases to be your main residence during those 15 years, you have to pay back the outstanding amount with the subsequent tax return.
Tax credit for longtime homeowners
If you’re a longtime homeowner—meaning you’ve lived at your principal residence for five consecutive years out of the last eight—you may qualify for a homebuyer tax credit worth up to $6,500. You must purchase a new principal residence between Nov. 7, 2009, and April 30, 2010. Like the first-time homebuyer tax credit that applies to these dates, you can settle as late as June 30, 2010, as long as you have a binding contract by April 30.
The same $800,000 cap on the purchase price applies to longtime homeowners, as do the same income restrictions. The credit begins to phase out for joint filers at modified adjusted gross income of $225,000 ($125,000 for individuals), and disappears at $245,000 ($145,000 for individuals). Married couples filing separately are eligible for up to half of the $6,500 credit.
For both first-time and longtime buyers who want to claim the tax credit for a purchase made after Nov. 6, 2009, the IRS requires proof. Attach a copy of the settlement statement you received at closing to your return. You must be at least 18 years old.
Other restrictions and provisions
As long as they serve as principal residences, single-family homes, townhouses, co-ops, and condos are all eligible for a tax credit. Mobile homes may be eligible for the credit, even if the land itself is leased. Owning a vacation home or rental property doesn’t disqualify you as a first-time homebuyer, but you do have to make it clear such properties were never your principal residence.
You won’t be eligible for the tax credit if you’re buying from a close relative. For example, if your mother goes into a nursing home and you buy her house from her, you can’t claim the credit. Close relatives include parents, grandparents, children, grandchildren, your spouse, and your spouse’s family.
This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.
Richard J. Koreto, a freelance writer, is the former editor of several professional financial magazines and the author of “Run It Like a Business,” a practice management book for financial planners. He and his wife own a pre-Civil War house in Rockland County, N.Y.
Saturday, February 27, 2010
IRS Clarifies What's Needed to Claim Tax Credit
The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.
While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.
The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”
For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.
Source: Washington Post (02/20/2010)
While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.
The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”
For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.
Source: Washington Post (02/20/2010)
Foreclosure Bargains Getting Harder to Find
Home buyers hoping to snag a really good deal on a foreclosed home are finding it increasingly difficult because supply is shrinking.
The number of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.
Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.
Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.
Source: The Wall Street Journal, James R. Hagerty (02/23/2010)
The number of foreclosures that are available for sale nationwide fell to 617,000 in December, down from 845,000 in November 2008, reports Barclays Capital.
Not only have attractive homes in popular neighborhoods already been snapped up, but also government help for distressed buyers is delaying more foreclosures.
Demand is driving up prices. Investors say typical prices have climbed from 75 percent of appraised value to 85 percent or higher when there are bidding wars.
Source: The Wall Street Journal, James R. Hagerty (02/23/2010)
Bankers: The End of Foreclosure Crisis Is Near
The Mortgage Bankers Association is seeing signs that the foreclosure crisis is ending.
“The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement.
Brinkmann said that normally there is a large spike in short-term mortgage delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.
Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said.
“[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.
Source: Mortgage Bankers Association (02/19/2010)
“The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” says Jay Brinkmann, MBA’s chief economist, in a published statement.
Brinkmann said that normally there is a large spike in short-term mortgage delinquencies at the end of the year because of high heating bills and holiday expenditures. This year, there was not only no spike, but the 30-day delinquency rate actually fell from 3.79 percent to 3.63 percent.
Thirty-day delinquencies have historically been a leading indicator of serious delinquencies and foreclosures, Brinkmann said.
“[This] gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.
Source: Mortgage Bankers Association (02/19/2010)
Thursday, February 25, 2010
Could the Tax Credit Be Extended Again?
The pressure is increasing on Congress to renew the homebuyer tax credits for a third time.
The first $7,500 tax credit was passed in 2008 and required first-time buyers to repay the credit over 15 years. A few months later in 2009, Congress expanded the credit to a maximum of $8,000 that didn’t have to be paid back.
At the end of last year, Congress extended the benefit again until April 30 with an extra two months on top of that to close. A new credit of $6,500 was added for move-up buyers, too.
Now representatives of the housing industry are lobbying for another extension. Some experts, including Mark Zandi, chief economist at Moody’s Economy.com, who supported the earlier credits, think the time has come to let it go.
“It’s worn out its benefit,” he says. “If you extend it again, it isn’t going to do much, and what you’re doing is providing a tax break to folks who bought anyway.”
Source: The Wall Street Journal, Nick Timiraos (02/22/2010)
The first $7,500 tax credit was passed in 2008 and required first-time buyers to repay the credit over 15 years. A few months later in 2009, Congress expanded the credit to a maximum of $8,000 that didn’t have to be paid back.
At the end of last year, Congress extended the benefit again until April 30 with an extra two months on top of that to close. A new credit of $6,500 was added for move-up buyers, too.
Now representatives of the housing industry are lobbying for another extension. Some experts, including Mark Zandi, chief economist at Moody’s Economy.com, who supported the earlier credits, think the time has come to let it go.
“It’s worn out its benefit,” he says. “If you extend it again, it isn’t going to do much, and what you’re doing is providing a tax break to folks who bought anyway.”
Source: The Wall Street Journal, Nick Timiraos (02/22/2010)
Wednesday, February 24, 2010
Housing Affordability Hovers Near Record-High Level
WASHINGTON, Feb. 17—Nationwide housing affordability, bolstered by favorable interest rates and low house prices, closed out the year near its highest level since the series was first compiled 18 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI).
The HOI showed that 70.8% of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5% set during the first quarter of 2009. That’s up from 62.4% during the fourth quarter of 2008.
“Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “With interest rates still hovering at low levels and the economy beginning to rebound, the federal housing tax credit will encourage even more first-time and repeat home buyers to enter the market and help further stabilize housing and the economy by creating new jobs, stimulating home sales, and reducing foreclosures.”
Tuesday, February 23, 2010
Nationwide median appraisal fees
With new FHA guidelines requiring participating lenders to ensure that appraisers are paid "reasonable and customary" fees, a la mode, inc. recently developed an online resource called the Appraisal Fee Reference (AFR). Using the data from verified and validated appraisals, the Appraisal Fee Reference reports the median appraisal fees for each of the 3,221 counties and districts in the fifty states, the District of Columbia, Puerto Rico, and Guam.
For compliance with HUD's new 2010 RESPA rules and the revised Good Faith Estimate, the AFR gives a lender a defensible basis for estimating closing costs on a GFE for loans using independent fee appraisers. As for the actual report, the February 2010 edition of the AFR reveals that the most expensive counties to get an appraisal were not in the major cities. Instead, counties in Alaska, Hawaii and Wyoming dominated the 50 most expensive locations.
Of the locations with the lowest fees, appraisers in Ohio were represented disproportionately, with 18 of the bottom 50 slots being taken by counties in the state. Four nearby states -- Pennsylvania, Kentucky, Illinois, and Wisconsin -- also had three to four counties each in the bottom 50.
For compliance with HUD's new 2010 RESPA rules and the revised Good Faith Estimate, the AFR gives a lender a defensible basis for estimating closing costs on a GFE for loans using independent fee appraisers. As for the actual report, the February 2010 edition of the AFR reveals that the most expensive counties to get an appraisal were not in the major cities. Instead, counties in Alaska, Hawaii and Wyoming dominated the 50 most expensive locations.
Of the locations with the lowest fees, appraisers in Ohio were represented disproportionately, with 18 of the bottom 50 slots being taken by counties in the state. Four nearby states -- Pennsylvania, Kentucky, Illinois, and Wisconsin -- also had three to four counties each in the bottom 50.
First November-to-December increase in home prices since 2004
The key findings of the December 2009 RPX Monthly Housing Market Report released today by Radar Logic Incorporated include the following:
· The RPX Composite price increased between November and December for the first time since 2004.
· The 25-metropolitan-area transaction count increased 44% relative to December 2008.
· Sales of foreclosed homes increased as a percentage of total sales during early December. This reversed the trend during the prior two months, when sales of distressed homes decreased as a share of total transactions.
The RPX Composite price increased in December 2009 on a month-over-month basis, marking the first time it has increased during the month of December since 2004. The RPX Composite tracks housing prices in 25 of the largest U.S. metropolitan statistical areas (MSAs).
On a month-over-month basis, the composite price for housing markets in the Northeast increased by 2%, while the Midwest composite decreased by 5%. The West composite price remained flat month over month, as price increases in San Francisco, Denver and, surprisingly, Las Vegas were offset by price declines in the other western cities. The composite price for the South also remained essentially flat month over month.
Home sales, as indicated by RPX transactions counts, increased in all 25 metropolitan areas covered by the report relative to a year prior. Home sales across all 25 cities have increased 44% year over year.
· The RPX Composite price increased between November and December for the first time since 2004.
· The 25-metropolitan-area transaction count increased 44% relative to December 2008.
· Sales of foreclosed homes increased as a percentage of total sales during early December. This reversed the trend during the prior two months, when sales of distressed homes decreased as a share of total transactions.
The RPX Composite price increased in December 2009 on a month-over-month basis, marking the first time it has increased during the month of December since 2004. The RPX Composite tracks housing prices in 25 of the largest U.S. metropolitan statistical areas (MSAs).
On a month-over-month basis, the composite price for housing markets in the Northeast increased by 2%, while the Midwest composite decreased by 5%. The West composite price remained flat month over month, as price increases in San Francisco, Denver and, surprisingly, Las Vegas were offset by price declines in the other western cities. The composite price for the South also remained essentially flat month over month.
Home sales, as indicated by RPX transactions counts, increased in all 25 metropolitan areas covered by the report relative to a year prior. Home sales across all 25 cities have increased 44% year over year.
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