10 Things Buyers Need to Know

Buyers spend a lot of time looking at properties online, touring homes, and talking to me, their real estate agent. They’re laser-focused on finding the best home that meets their needs. The problem is, buyers sometimes don’t take the long view of a property. They’re only looking at a home as a potential buyer — and not as someone who, years down the road, may also have to sell the property. Given that homes are such a big investment, there should be a little inside your head, picking away at your options and decisions. I want you to make the right decision so take a look at these 10 suggestions....

The 8 Top Home-Selling Mistakes You Should Avoid

It’s a challenging market for home sellers right now. Buyers have a lot of options—and they don’t have to buy what you’re selling. Your house is likely just one located in a sea of for-sale signs, so you can’t be sloppy about putting it on the market. Luckily, we’ve rounded up the dos and don’ts that will help you collect thousands (if not hundreds of thousands!) for your place. Don’t … ask for too much money.

Yes, you know what you paid for the house. But that doesn’t mean that it’s still worth that amount—or that it’s appreciated in value since you bought it. “Your house is only worth what the market is willing to pay you,” says Chris White of the White and Weeks Team.

Fiscal Cliff Bill a Benefit for Homeowners

The tax law passed by Congress this week to avert the "fiscal cliff" turned out pretty well for the real estate industry.First, the Mortgage Forgiveness Debt Relief Act of 2007, which was scheduled to expire on Dec. 31, 2012, has been extended through the end of 2013.This means that homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale of their principal residence during 2013 may exclude up to $2 million of forgiven debt from their taxable income.Had this law not been extended, income tax would have had to be paid on such forgiven debt -- making short sales and loan modifications less attractive to some distressed homeowners than foreclosure and bankruptcy.
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Are appraisers falling behind on home value increases?

Are some appraisers failing to see the improvements in real-estate values in local markets that have recently bottomed out and turned positive? Chris White says several recent offers on his listings have appraised lower than their true value. Fortunately he's been able to provide more data for the appraiser to review and increase the value.

When multiple bids push a house price thousands of dollars above what the seller is asking — not unusual in neighborhoods where demand is particularly robust — are appraisers still coming in with values below the agreed-upon contract number?

Yes. Growing numbers of loan officers and real-estate agents say appraiser reluctance to report local appreciation is becoming a significant complication in sales transactions.In a new poll of its members, the National Association of Realtors found that 33 percent of them reported appraisal problems during the month of May.
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Buying a home won’t get much cheaper

The White and Weeks Team has recently reviewed their client's home purchase and sale statistics for 2012. According to Chris White, "We're seeing a slight rise in prices and multiple offers are slowly increasing. 2012 will most likely be the last chance to purchase bargain homes."

Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable -- but it won't stay this way for much longer. Stuart Hoffman, chief economist for PNC Financial Services (PNC, Fortune 500), said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores. "Foreclosures are definitely down and the move is to short sales", says Chris White.


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New Rules to Speed-up Short Sales

The Federal Housing Finance Agency laid out new rules aimed at speeding up the short sale process, a move that could keep many homes from falling into foreclosure. In a short sale, the bank that holds the mortgage must agree to accept a price for the home that is less than what is owed.

Even though short sales are considered a better alternative to foreclosure, banks often take so long to review and approve short sales that the deal falls apart and homes get repossessed. "Delays in approving short sale requests remain a significant challenge for realtors and consumers and often results in canceled contracts and the property going into foreclosure," said the president of the National Association of Realtors.

The organization attributed much of the closing problems to extended lender response times. Some agents said that lenders even foreclosed on the homes before a short sale could close.

Buying Cheaper than Renting in 98 of Top 100 Major U.S. Markets

Buying is more affordable than renting in 98 out of the nation's 100 largest metropolitan areas — even in New York, Los Angeles and Boston, according to real estate company Trulia's rent vs. buy index.The index is based on asking prices for rental units and homes for sale on the company's website between Dec. 1, 2011, and Feb. 29.

“As rents rise and prices stagnate, homeownership is becoming even more affordable, but rising rents create a dilemma for people who can’t afford to buy yet,” says Jed Kolko, Trulia’s chief economist. “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face.”Homeowners are choosing, or being forced, to rent rather than buy even though the latter is cheaper in key markets Trulia reviewed.
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Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.Banks are now lending amounts up to 3.5 times borrower earnings.

Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages over the past six months, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to recent RMBS Performance Metrics from Fitch Ratings.

According to Fitch, foreclosure start rates for severely delinquent RMBS loans have stayed above 10 percent since September — a rate they have not reached since November 2009 — and have been working their way toward their 14 percent average between 2000 and 2010.“Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year,” states Diane Pendley, managing director of Fitch Ratings.

Freddy Mac Adds Washington to Winter Sale Locations

Freddie Mac has expanded its winter REO sales incentive program to the states of Alaska, Kansas, Kentucky, Missouri, Oregon, and Washington. That makes the promotional offer now active in 33 states and the District of Columbia.

“We’re expanding our winter promotion to focus additional incentives to encourage strong sales activity in our ‘cold weather’ states over the next several months,” said Chris Bowden, VP of HomeSteps.

Offers must be received by HomeSteps between November 15, 2011 and January 31, 2012, with escrow closed on or before March 15, 2012. This offer is valid only on HomeSteps homes sold to owner-occupant buyers.

The program also extends additional incentives to these owner-occupant buyers. Freddie Mac will pay up to 3 percent of the final sales price towards the borrower’s closing costs. Some homes are also eligible for a two-year Home Protect limited warranty that covers electrical, plumbing, air conditioning, heating, and other major systems and appliances.

Quicker Approvals

Banks are not only approving more short sales, they’re doing it in less time. In the second quarter, short-sale homes, also known as pre-foreclosures, sold an average 245 days after default, down from 256 days in the previous period, according to Irvine, California-based RealtyTrac. That reversed three straight quarters of increases.

"I use an attorney practice specializing in convincing the banks that a short sale benefits them as well as the seller. Our ratio of closed short sales outbeats other local agents", say Chris White, RE/MAX Metro and Eastside.

White House Considers Underwater Refinancing Relief

The White House is considering additional measures to slow the foreclosure crisis and aid homeowners, including a proposal that would allow underwater homeowners to refinance mortgages, despite a lack of equity in their homes.

As many as two million underwater homeowners could be helped under the proposal, which was first offered by California Democratic Senator Barbara Boxer. The effort would remove barriers that have halted millions of upside down homeowners from refinancing and save many additional homeowners from foreclosure.

The provision would remove refinancing limits on homes that are upside down on mortgages or owe more than their home’s current value. The bill gained momentum when a Republican Senator joined Boxer as a co-sponsor. Senator Johnny Isakson (R-GA), who ran one of the country’s largest independent real estate brokerages, joined Boxer to sponsor the proposal in Congress.

Teaming Up to Fight Short Sale Fraud

In a short sale, Freddie Mac agrees to accept less than a full payoff of a mortgage when the borrower is unable to sell their home for enough to pay off their entire loan. Freddie Mac short sales have risen from about 4 percent of completed workouts in 2000 to nearly 14 percent in 2010.Short sale fraud, also on the rise, enters the picture when real estate professionals fail to disclose affiliations with other parties involved in the transaction to rig sales at a low price and hide better offers from Freddie Mac and the distressed home seller. Then, after the house is sold, the fraudster can flip it a few hours later for the better price and walk away with the profitable difference.By concealing the higher offer, short sale fraud worsens losses to home sellers, Freddie Mac, and taxpayers.

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Short Sales Surge

Bank assisted short sales of homes surged in the second quarter of the year as buyers snapped up discount priced properties at some of the lowest mortgage rates in decades. The surge in home purchases from pre-foreclosures account for an eighth of all residential sales, but represent less than a quarter of all U.S. home sales.

Short sales, in which banks cooperate with mortgage holders to sell at a price for less than what is owed on the mortgage had an average sales price of $192,129, according to RealtyTrac. The figure represents a discount of about 21% under homes that are not foreclosures or short sale properties.
The surge in sales may be a major step for the housing market, troubled by record foreclosures and declining home values in most areas of the country. High unemployment and underemployment levels make it nearly impossible for more than a third of all U.S. households to qualify to purchase a home.

10 Ways Your Agent is Successful with Short Sales

1. Get educated. "Education is the first step," says Chris White. "I have the CDPE ; you need this kind of training if you’re going to speak confidently and intelligently about the process." Remember that this is someone’s financial future in your hands, so you need to know what you’re doing, or you should refer the lead on to a Short Sale specialist.

2. Team up with experienced agents. If you’re new to Short Sales, it’s wise to find an agent who is doing them and is willing to partner up with you to share expenses and responsibilities. Not only will you learn the process and become better prepared, you’ll also minimize the chances of fudging your first few sales if you have a skilled mentor. "Fortunately I've successfully closed over 50 Short sales for my clients", says White.


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Are Short Sales Still a Good Option?

I get asked all the time about the short sale process. Is it a good idea? How bad does it damage your credit? Why does it take so long? While the process can be extremely lengthy at times, overall it is still a good idea for those in a specific situation.

We all know that market values on the majority of homes has dropped and in some cases quite significantly. If you are willing to take a loss on your home and want out of your current situation then a short sale is a great idea.
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America's Foreclosure Crisis: What It Means for Your Mortgage

Bank of America announced last month it would freeze foreclosures in all 50 states, as concerns mounted over the legal basis for home repossessions. JP Morgan Chase and Ally Financial also halted foreclosures in 23 states, and other banks are considering following suit. Some congressional Democrats want a nationwide freeze on repossessions — a move the White House opposes.  Here's an instant guide to America's mortgage mess:

What is a Deficiency Judgment?

Your credit may suffer for years to come, but most people aren’t worried about the distant future. A more pressing problem can be a deficiency judgment. The bank might bring legal action against you to try and collect what they couldn’t collect in foreclosure. Deficiency judgment are court orders that make you personally liable for unpaid debt such as when a home’s selling price at foreclosure auction is not enough to cover the loan balance. Let’s take a closer look at what deficiency judgments are and whether or not you should expect one.


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New Consumer Website for Borrowers

Mortgage company Fannie Mae is introducing a website to help consumers who are struggling to avoid foreclosure learn about ways to get help. The government-controlled company has launched www.knowyouroptions.com. It is designed to provide easy-to-understand definitions of mortgage industry terms and online calculators that help consumers determine whether they can qualify for a refinanced mortgage or a loan modification.
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Why short sales make sense even if you have to file a bankruptcy.

The way to determine if you should do a short sale while in bankruptcy is to ask yourself this one simple question; Even though my creditis going to be damaged now, do I want to own a home again sometime in the future? If the answer is yes, then you should seriously consider the idea of doing a short sale regardless of a bankruptcy filing.
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Homeowners, A Shortcut To Short Sales Is Coming

The Obama administration last week introduced a program to encourage lenders to forgive some of the mortgage debt owed by homeowners. The purpose is to help people remain in their homes and reduce foreclosures. But the housing crisis is so huge that no one initiative can solve it all. So another kind of help is on the way. It's aimed at homeowners who can't afford to remain in their homes and instead want to sell them.
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Walk Away from Your Home? But Who’s Chasing You?

Is walking away really an option when facing foreclosure? A recent opinion piece in the Wall Street Journal; When It’s Ok to Walk Away From Your Home, gives advise that could lead down a scary alley. If you walk away, who might be chasing you? Unless the deficiency is released in writing by the lender, it can haunt you.
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Fannie Looks to Level Foreclosed-Home Playing Field

Fannie Mae announced a program aimed at helping ordinary home buyers compete with investors for foreclosed homes. Under the program, dubbed First Look, Fannie plans to consider offers only from potential owner-occupants and certain public-housing entities during the first 15 days in which a foreclosed home is on the market.

New Foreclosure Rules In Washington Assist Homeowners

The predominant method to foreclose a residential property in Washington is through a non-judicial foreclosure proceeding. The law has been in effect for many years with relatively few major changes overall.  However, in its last session, the Legislature in Washington added a whole new section to the statute that changes the method of foreclosure dramatically for certain homeowners. Lenders are now required to provide credit counseling to certain homeowners