Mortgage Rates Make Abrupt Move Upward

The 30 Year Conventional mortgage rate has moved above 5% from a low of 4.250% a few weeks ago and the 15 Year Conventional rate is above 4% for the first time since the end of July. This is attributable to many things (read my 'Mortgage Rates Make A Move' post from December 3). Also, economic news in the last few days has brought market concerns over stronger economic growth that could lead to an increase in inflation. This has added fuel to the fire in the rise in mortgage rates.

This is a very strong move in just a few days to say the least. It looks like the bond market is VERY oversold at the moment. I still think rates will dip again in late January or mid February when bargain buyers enter the market. Do I think we will see a 30 Year at 4.250% again? No. I do think we could see 4.500% though.

There are definitely a lot of people who missed the opportunity to refinance. When mortgage rates are at or near record lows for so long people seem to get complacent that the rates will continue to stay low. The bottom line is those looking to refinance are late to the party at this point and may have to wait a few months. When and if rates drop they need to lock immediately!

Those looking to purchase a home should not delay based on higher rates. What should be most important to potential buyers is whether they have a job, are confident they’ll keep it and are sure that the home is affordable to them. Not only will rates probably increase later in 2011 underwriting will also become more stringent. Those who qualify for a mortgage today may not qualify in a few months. Rates are still at great levels and it is a Buyers market.

 

Money Available for Purchasers of Distressed Properties

Money remains available through the REALTOR® Association of Greater Fort Lauderdale’s Broward Home Improvement Program (B-HIP) to help buyers improve their homes. 
Up to $500 per household is available to assist moderate and lower income families that have purchased distressed properties with the purchase of missing or damaged household appliances or costs associated with exterior improvements to their property. 

This program presents a great opportunity for the RAGFL REALTOR® community to help homebuyers, reduce blight and improve the curbside appeal of local communities.

 

Broward County New Mortgage Credit for First Time Homeowners

Currently, Broward County offers a Mortgage Credit Certificate (MCC) to first-time homeowners. An MCC is a federal income tax credit designed to assist a person seeking affordable homeownership. With an MCC, the qualified home buyer is eligible to write off a portion of the the annual interest paid on the mortgage as a special tax credit, not to exceed $2,000, during each year in which they occupy the home as their principal residence. The portion or amount of the tax credit is equal to the annual mortgage interest paid multiplied by the mortgage credit rate (30%. This credit reduces the federal income taxes of the buyer and has the potential of saving the MCC holder thousands of dollars over the live of the loan.

How does a Home Buyer qualify and apply?

the Home Buyer must purchase a home with Broward County, Florida and may not have owned a home as their primary residence in the last three years. There are exceptions that apply to target areas. Home buyer's household income and the purchase price must not exceed the maximum limits set by the program. The Home buyer must occupy the home as a principal residence and must apply for the MCC through a participating lender. In addition, the buyer must complete a pre-purchase home buyer education course.

Home buyers should apply for the MCC at the same time they make a formal application for a mortgage loan. Funds are available on a first-come, first-serve basis.

Information provided by Jim Monniger, First Trust Mortgage.

2/2 Palm Aire Condo Just Sold for $105K

Properties are moving in Palm Aire. This luxury 2/2 condo sold September 30 for $105K. Owners fixed condos to sell. This unit had a brand new kitchen and baths, painted and freshly carpeted. Keep your eyes open for similar deals. Sellers realize that they need to get the condo in excellent condition to sell to the discerning buyer. Call Kirk if you are looking in Palm Aire or the surrounding area.

Finding a House More Easily

Realtors are not clairvoyant. So, the more information or self discovery you can do before you contact a realtor, the better. Here are a few tips on helping the buyer narrow down their property search.

- Get pre-approved before you speak with a realtor. Remember, just making the payments isn't enough. You will have to prove the funds for a downpayment for the loan and closing costs. You may need to have an inspection and other out-of-pocket expenses to cover, so make sure you consider that in your purchasing equation. Also, the property may need some work, allocate funds for the immediate improvements necessary upon closing.

- Drive around neighborhoods and identify those street you general like and dislike. A city may have 50 neighborhoods that would be potential options for you, so check out properties on the Internet and drive by them. Once you check out the area, you will can have an intelligent discussion with your realtor about where you want to live.

- Discuss the timing of your closing. Do you need to be in a place in one month or one year? The Realtor can direct you to the proper options and the best deals.

- Get a realistic grasp of what your dollar can buy. Websites like Realtor.com, Trulia.com and other home search sites can help you accurately determine what the amount of money you have available will purchase. Once a customer came into the office with a printout of a property that had a typo in the listing that stating the 6/6 house in a very exclusive section of town was priced at $100K. There was at least on "0" missing from the end of that number. The woman insisted on seeing it, but after a call to the agent, she realized it was mismarked. Realtors know the true value of a house and let you know if the property is truly a deal or not.

- Create a list of "must haves", "would like to haves" and "don't wants" for the agent to use in the search process. Make sure you don't get too specific. Too tight of search criteria can eliminate viable properties. For example, if you insist on a 3-stall garage and there is a property that has a 2-stall and carport that may be suit your needs, you would eliminate that possibility by the narrowing the search criteria too far.

Good luck on finding a home and remember to do your research. Even with the help of a Realtor, the final decision is up to you.

A Few Easy Ways to Take the Headache out of Moving

Moving from one house to another is always a challenge, but it doesn’t have to be a nightmare. Here are some simple tips on how to get it done with minimal stress and strain.

• Look at all the alternatives: hiring a moving company, for example, versus renting a truck and doing it yourself. Whichever alternative makes most sense for you, get bids from more than one vendor.
• A few days before the moving company is scheduled to arrive or you’re supposed to pick up your rental truck, call to confirm that everything is on track to happen when it’s supposed to:
• Prepare your change of address cards in advance and send them out as soon as it’s appropriate to do so. The post office, utilities, companies and people you do business with, city hall, friends, relatives – all should be notified of your move.
• Get an early start on packing by concentrating on seldom-used items first. Each box should have its contents and the room those contents belong in written on it clearly.
• Take a hard look at things you seldom or never use and throw away as many of them as you can. The more you throw away, the less you’ll have to move. Every item you throw away is one less item to clutter up you new home.
• Use your extra towels and linens to protect breakables. When your supply of these things is exhausted, crumpled newspaper makes an excellent substitute. Write “Fragile” on all appropriate boxes.
• Put your valuables (such as jewelry) and important documents (birth certificates, car titles, etc.) aside in some safe place where they won’t be misplaced.
• When the house is empty, go back for a thorough final inspection. Check closets, crawl spaces, basement, attic, out-of-the-way nooks and crannies of all kinds. Have a second person make the same inspection separately.
• Clean your new home thoroughly before moving in. It’s infinitely easier that way.
• Decide in advance where you want the heavy furniture. Changing your mind after the movers have departed is no fun – especially for your back!
• Locate all fuses, circuit breakers, and water/gas and electrical valves. Record the meter readings and check the smoke detectors.
• List the phone numbers of the local police and fire stations, doctors, nearby hospitals, etc. Put a copy of your list near each phone.

Above all, plan, plan, plan and plan some more. Make a schedule you can live with, and then stick to it. Preparation and forethought will help you to keep everything under control and finish the move with your sanity and your nervous system intact.

Negotiating Strategies for Today's Market in Florida

Determining what you should bid on a property has turned into a much more involved process today than it was 6 months ago. Here are some tips:

Regular Sale. A regular sale is where an individual or entity owns the property and is selling it outright. This situation allows for the most downward pricing negotiation currently. If a 5-10% concession in the price is achieved the buyer is doing great. If the buyer tries to "low-ball" an offer, the seller may not counter or the counter may be minimal in nature. Don't expect the seller to come back with the midpoint of the gap between the buyer's offer and seller's counter. Just because you feel a property isn't worth the price, doesn't mean the seller agrees with that.

Short Sale. The bank that is providing the concession to the seller expects to get market value from the property, not 5 cents on the dollar. Bid market value. If not the buyer may be 4 months into the deal and have a rejected or countered offer from the bank. A smart buyer bids with 5% lower of the market value. That way the bank may see the offer as close enough.

Foreclosure. Many foreclosures (bank-owned properties) are put on the market a below-market value, but they are actually selling for market value or higher. Be careful not to get caught in the bidding frenzy of a property. Most bank owners require a 10 days waiting period after the property is on the market to get multiple "highest and best" offers. For lower priced foreclosures, a buyer may want to put a higher than asking price bid in on the property. (Investors have now upped the amount of money they are spending to get prime properties, so investors and owner occupied buyers are competing for the same properties.

As the market has bottomed, prices are not as negotiable as in a descending marketplace. Look for other concession than price to pretty the deal.

Good News for Buyers with a Loan

As a sign that lenders what to get back into the Florida market, 95% financing is once again available for the purchase of a SFD (Single Family Detached) PRIMARY RESIDENCE. (I.e. Condos, Townhouses & "Attached" Properties, Second Homes and Investment Properties are NOT eligible)

Of course the guidelines pertaining to credit scores and debt to income ratios are strict but who cares, it is VERY good news!

APPRAISAL PROBLEMS??? Think "Home Path" and "Home Path Renovation" properties. They DO NOT require an appraisal. First Trust Mortgage is one of the FEW lenders in South Florida approved for the "Home Path Renovation" mortgage program. Home Path Renovation is similar to the FHA 203(K) program but is for home path properties in need of repair.

LISTING AGENTS - ROOF PROBLEMS / REPAIR ISSUES ????? Think 203(K). Do NOT shy away from the 203(K) because of bad rumors. The secret to success is a knowledgable and experienced mortgage broker

Provided by Jim Monninger, Mortgage Consultant, First Trust Mortgage Corporation

Foreclosure Market in Florida Burgeoning

As seen on AOL.com
South Florida Speculators Outbid Average Homebuyers
By Lisa Selin Davis Jul 30th 2010 @ 5:01PM

You'd think that now would be the time to pick up a bargain home in South Florida. After all, there are more than 96,000 foreclosures to choose from, and that's just from the first six months of 2010, according to the Miami Herald: "Distressed properties are still dominating the market, with more than half of all homes and condos sold last month at some stage in the foreclosure process."

Floridians with modest nest eggs who were priced out of home ownership during the boom should be able to get their hands on a sweet little slice of subdivision now that prices have plummeted. Right?

Not exactly. It turns out that investors are opening their purse strings, too, beating regular buyers to the punch.

"Cash-happy investors have been scooping up these bargain basement deals at a fast clip, often before middle-income buyers can get financing," according to the Herald. The nest egg can't compare to the deep pockets of developers, speculators and investors who can self-finance, especially in the wary world of mortgage lending. And foreclosed homes tend to sell for 25 less than their non-foreclosed counterparts, hard for the cash-in-hand to resist.

While it's bad news for middle class Americans who thought they'd finally get a piece of the real estate pie, it's decent news for the Florida economy. Median sales prices in Miami-Dade county are still down from a year ago -- 4 percent lower -- but they're 3.4 percent higher than they were in May. Sales are up from a year ago, and single-family home prices are slightly higher.

The real mystery is what the investors will do with the homes. Buyers tend to be more patient, willing to wait decades to see their home values appreciate, whereas investors prefer to see a quick return on investment.

Will the homes sit empty, waiting for a new round of bank-approved buyers? Or will those middle class buyers who missed out on the first round be willing to pony up a little more for a property they missed out on initially?

We'll have to tune in next quarter to see.

Inexpensive Property Prices Stabilizing

Being six months behind the market is a tough position for buyers. We're seeing an increase in individuals looking for the 2 bedroom $50,000 condo in a nice neighborhood. One could have found that property 6 months ago, but now they are getting VERY rare in Ft. Lauderdale. They still exist, but are typically on the market less than a week and usually have something wrong with them. (location, high maintenance fees, structural problems, etc.)

So what is the best buy today? "Short sale" properties seem to be priced the cheapest because realtors are avoiding them. Most buyers are too impatient to stick with the closing process and break the contract before approvals. HOWEVER, the bank expects the property to go for market value, so offers need to be reasonable. Appraisals are the biggest issue in successfully closing the deal.

Foreclosures at the $50K level have turned into price wars. So if you are a buyer looking at a $50K-type property, expect that the property will go for 10% or more higher than asking price. The smart buyer will consider all types of properties on the market, because deals are only deals if they exceed your buying expections.

Appraisals: A Catch 22

Appraisals are becoming the bane of the Real Estate world. Banks that have customers in the short sale mode are over estimating the value of the property to assure that they get the greatest dollar value for the property. Foreclosures are undervaluing property, then putting an overly attractive price tags on a property which then results in price wars on undeserving properties. Mortgage lenders are undervaluing properties and offering insufficient financing for properties.

The buyer and sellers are the ones who lose in this writhing market. Most realtors are have a difficult time advising customers on how to bid for a property. If the customer bids too much, they may get the property, but can't get a loan. Conversely, if a customer bids too low, the offer is rejected by the foreclosure bank which typically doesn't counter offer, just accepts the highest and best.

Currently no convenient answer exists as to what the buyer or seller should do. However, the first step in either buying or selling your property is to ask your realtor for comparables of the property. For a seller, it may be worth the $200-400 to have an appraisal done that can be included in the MLX listing. (That is if it supports your asking price.) For buyers, have your realtor explain their purchasing strategy on how to best get the property you want. (Negotiating has a different strategy than bidding.)

Short Sales, Foreclosures and Regular Sales

As a buyer, what do you need to know about the differences between regular sales, foreclosures and short sales? Each has its advantages and challenges. This posting will discuss just a few of the differences between the properties and why one may be better choice for you than another.

Offers placed with regular sales of non-distressed properties tend to move the fastest. An owner is presented with the offer and makes a yes/no decision immediately. This sale allows for a bit of negotiating on terms or price. However, sometimes sellers have an unrealistic expectation of the value of their home and this factor can sometimes create a impasse in the negotiating. If a buyer needs to get a purchase a price within a restricted time frame with controllable parameters, the regular sale may be a better choice when looking at properties.

When sale price is the over-riding concern, a foreclosure may be the best route. However, foreclosures are set up for bidding, not negotiating. So buyer needs to put forth his/her best offer up front. For the early part of 2010, most properties under $75K have been in a price war, verse and low bid type scenerio. For a cost conscious buyer a foreclosure may be a good purchase. However, there is typically a lot of handyman work required. The time and build out costs of bringing that property up to standard may in the long run cost more than if you purchase a regular sale. Many foreclosures are not allowing financing or even inspection periods. All these elements factor into the buyers decision.

Short sales are the nemesis of realtors. Closing can take up to a year--if it closes at all. Parameters are dictated by the bank and buyers are at the mercy of everyone else. But with the price wars happening in the foreclosure market, the short sale may be the best deal. Often short sales have the owners living in the property, so the property may be difficult to show and deter less patient buyers from considering it. Be forewarned that short sales are a very long roller coaster ride. Banks are trying to expedite the short sale process, but there are still lots of delays and frustrations. The property could devalue over the life of the short sale closing which may make a buyer's offer a bit high at the end. However if the price increases in value, the bank will try to renegotiate the property before closing (always higher, never lower!)

Ask your realtor to clarify the differences to you and which would be best for you to consider in your unique situation.

Fannie Mae Requires Last Minute Credit Report

Fannie Mae is implementing a new guideline effective 6/1/2010 which requires banks to pull an ADDITIONAL credit report on borrowers just prior to closing.

What this means: Potentially if a borrower's middle credit score drops by just 1 point the file could be send back to underwriting and delay the closing for up to one week. In the worst case, a borrower's credit score could drop below the minimum requirement and cause the file to be denied or reduce the score below a cut off point for a particular interest rate making the rate INCREASE at the last minute.

Solution: Put ALL credit cards in a safety deposit box and DO NOT use them until after closing. In addition, keep away from places that may INQUIRE into a borrower's credit (I.e furniture and home improvement store and worst of all car dealers). With all the new guidelines from banks, borrowing money is getting increasing more difficult and adhering to the bank's rules is imperative.

Provide by: Jim Monninger, First Trust Mortgage, Jim@FirstTrustMortgage.biz

Century 21 Hansen Consolidates Ft. Lauderdale Offices: Kirk Nicklas Moves Location

As of May 24, 2010, Century 21 Hansen merged their Commercial Blvd. and Wilton Manors offices into a larger space that will provide 7-day service to buyers, sellers and cooperating realtors in the Ft. Lauderdale area. This move was made in an effort to streamline the organization, as well as expand the availability and diversity of talent. Kirk Nicklas will move from the Wilton Manors location to the new location. His new address is 3010 E. Commercial Blvd., Ft. Lauderdale, FL 33306. His cell number will remain the same: 954.547.3146. Please take a moment to correct your records. Thank you for your business.

How to Determine the Price of Your Home

Why is it that some homes sit on the market for a year while others sell like hot cakes? Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is perfecting a technique that’s as American as apple pie: comparative shopping.

Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Marketing Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables” that have sold in the area within the last six months. Typically, the agent is able to recommend a realistic price range that will ensure you top dollar.

However, factors such as the amount of time needed to sell your home can alter the agent’s price recommendation dramatically.

Assuming a seller has sufficient time to market the home, here are a few small steps a seller and real estate agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer and other factors, such as the economy, could cloud your view of how much your home is really worth.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a neighborhood or within a one-mile radius of your house. Once complete you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help an agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer. If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale.

Pending Home Sales On An Upswing

Pending home sales increased in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of Realtors.

NAR’s Pending Home Sales Index rose 5.3% in February, and is 21.1% above March 2009. This follows an 8.3% increase in February. The PHSI measures real estate deals for which a contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

NAR chief economist Lawrence Yun said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

Regional Results
The PHSI in the Northeast declined 3.3% March but remains 27.2% higher than March 2009. In the Midwest, the index increased 1.2% and is 18.5% above a year ago. Pending home sales in the South jumped 12.7%, which is 28.3% higher than March 2009. In the West, the index rose 1.9% and is 8.8% above a year ago.

Source: NAR

Tax Credit Awareness and Eligibility

•Eighty-four (84) percent of first-time buyers are aware of the first-time home buyer tax credit and 64 percent of those who state they are in the market for their first home say they qualify for this credit.

•On the first-time seller side, an equal 84 percent are aware of the move-up/repeat home buyer tax credit yet only 33 percent say they qualify for this credit.

Survey results provided by Century 21 Corporate

Low Mortgage Rates But How Accessible Are They?

•The majority of first-time buyers (79 percent) and sellers (86 percent) believe mortgage rates are either somewhat or very affordable right now. Again, due to their experience, sellers are more likely than buyers to find the current rates very affordable (35 percent of sellers vs. 21 percent of buyers).

•The low interest rates have influenced 46 percent of owners to sell their home for “move up” reasons and another 43 percent to change neighborhoods.

•Most respondents feel that getting a mortgage today is either somewhat difficult or very difficult (87 percent of first-time buyers and 82 percent of first-time sellers). Because many may be going through the process currently, buyers were significantly more likely than sellers to find the process very difficult vs. not difficult at all.

Survey Results provided by Century 21 Corporate

Home Price Effects on First-Time Buyers and Sellers

•More than 80 percent of buyers believe now is a good time to buy a home.

•First-time home buyers rated the three most influential factors in their decision to enter the market and buy a home as current housing prices (66 percent), followed closely by both the home buyer tax credit (63 percent) and low interest rates (60 percent).

•Finding a home within a buyer’s price range is extremely important (95 percent), as is a neighborhood’s safety (90 percent).

•The top two factors influencing the first-timers’ decision to sell their homes were personal/family reasons and current housing prices – both of which were cited as motivating factors by 48 percent of first-time sellers.

•Most likely due to their experience, approximately half of first-time sellers (54 percent) think home prices are more affordable now than compared to this time last year.

•In fact, the current home prices have influenced 50 percent of sellers to “move up” and 37 percent to change neighborhoods.

•Sellers are mainly concerned about losing money on the sale of their home and receiving offers near their asking price.

•Approximately half of all first-time home buyers (48 percent) and sellers (53 percent) anticipate housing prices will increase over the next year.

Survey Results provided by Century 21 Corporate

Short Sales Updates--RobertoandAssociate.com

- All new Bank of America/Countrywide short sales must be submitted using their "Equator" system. This system should expedite the tracking of short sales.
- NEW short sales seem to be more efficiently handled by the lenders and servicers. There are still delays with the investor part of the process. The older files (more than 3 months in processing) are still taking longer to complete.
- If Wachovia owns the loan in their portfolio and it is not owned by an investor, they are "Fast Track"ing them and buyers can get answers within weeks. "Fast Track" is their internal short sale processing system. If it is part of this system, no hardship letter or financials are needed.
- Sellers do NOT need to be late to be considered for a short sale--but they must show hardship to the lenders.
- Each short sale is dependent upon the cooperation and completeness of information requested from sellers for the lenders, the efficiency of the loss mitigator assigned to the file, the policies and systems in place with the lender (servicer), the investor (AmTrust needs FDIC approvals which may take months), the contract offer price, the value (correct or not) of the BPO (Broker Price Opinion) obtained by the lender, the BPO's physical inspection vs. computer values, the seller's financial hardship, the amount of the delinquent association dues and other factors. All these elements must align. As a result, the process takes
time and research to clear or negotiate.
- "Release of Mortgage" on an approval letter does not mean release of deficiency or release from the "Note". Sellers need to talk with their attorney for clarification.

How to Determine the Price of Your Home

Why is it that some homes sit on the market for a year while others sell like hot cakes? Frustrated sellers will blame a bad market, while a good real estate professional will tell you that many times, a slow sale is often attributed to the listing price.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a better chance of being sold quickly.

The secret is perfecting a technique that’s as American as apple pie: comparative shopping.

Although comparing houses with different styles, square-footages and locations is challenging, real estate professionals still feel it’s one of the best methods to use when determining a home’s market value.

A responsible real estate agent will effectively evaluate a home’s worth through a process known as Comparative Marketing Analysis (CMA). Taking a look at assets, such as a swimming pool, bigger than normal living spaces, a fantastic view, adjacent city parks and other attractions, the agent will begin to compare your home with similar properties, called “comparables,” that have sold in the area within the last six months. Typically, the agent is able to recommend a realistic price range that will ensure you top dollar and a reasonably

However, factors such as the amount of time needed to sell your home can alter the agent’s price recommendation dramatically.
Typically, people should check with real estate offices in the community to determine the typical duration that listings are on the market. Sales associates will explain that the marketing “norms” vary with prices and properties. Based on this criteria, the agent feels confident that he or she will be able to sell it for a price that both you and the buyer will be happy with. However, if you’re under time constraints because of unexpected job changes or moving agreements you’ve made on another property, this will narrow your chances of selling the home for top dollar in the market.

Assuming you have sufficient time to market the home, here are a few small steps you and your agent can take to finding the right price for your property.

The best comparisons can be made with similar homes that have been sold within the last 45 days as opposed to the standard six months. Any longer and other factors, such as the economy, could cloud your view of how much your home is really worth.

Another good benchmark is to review the selling prices of homes that have just been sold and are pending closes. Most MLS services provide information on deals pending that most real estate agents should be able to shore with you.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house. Once completed you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about what you see as the home’s greatest strengths and biggest weaknesses will also help an agent get a better feel for how to best evaluate (or assess) and market your home. Think of your home as if you were the buyer. If your home is listed at the right price, you’re well on your way to a speedy and fruitful sale.

Establish Realistic Goals When Shopping for Property

With the Internet espousing $20,000 single house foreclosure deals, the public's expectations of what is available on the market is quite warped. Recently, I showed a property that was listed for $39.9K. Most of the townhouses in the area were going for $80K or more, so this unit was a real deal. After viewing the property, there was only about $5K in repairs. So the property truly was an amazing deal--at $39.9K. My customer hesitated to "make a decision" and lost the deal, however within 4 days there were 11 cash offers at significantly more money than the listing price. Eventually, the property sold for $80K and the "deal" turned out to be just like a regular sale. But for all the naive internet shoppers, the listing changed their perception of the marketplace, because they don't follow up to find out what the real sale price is verses the listing price. Today, inexpensive properties are going through price wars.

As realtors we are seeing more gimmicks to try and delude individuals into believing that there are unbelievable deals. Typically, the $40K properties that we see as realtors are missing all the appliances, terribly located, mold problems, critter infested, missing or damaged walls or other major renovations needed. There ARE deals, but remember the deals are relative. If a property was selling for $2 million and it is listed for $1.2 million in move-in condition, it's a deal. If a property was listed for $79K a couple years ago and now is $50K which requires lots of work. That's not as good of a deal.

Another reason many buyers have unrealistic goals is that they see a friend's property that they just finished renovating. The friend paid $150K for the property and put in $70K in upgrades. When the buyer asks the friend what did you pay for it. The natural response from the friend is to say $150K, but the reality is that in its current shape, the property is worth $220--with months of living in upheaval during renovation.

As buyers, set expectation in reality. Don't expect that all the units in a condo are going to go for the same price as the 30-year old, original condition, short sale price. All properties in the same building aren't work the the same price. (Most sellers think their property is the best in the complex!!)

To also put South Florida in perspective, there are only a few places in the US where the weather is nice all year round. Hence South Florida is one of the most desirable places in the US to live. When people move to Florida they want to be near the water and amenities. All these factor add value to the property. So if you want sand-access with your beach front property, you will pay more money than if you choose to live 5 miles from the beach.

For more information on what a buyer should expect to pay when purchasing in the Fort Lauderdale area, contact Kirk Nicklas at 954.547.3146.

Remodeling Your Home: Home Much is Too Much?

The classic way for homeowners to increase the value of their house is by remodeling existing rooms or adding on to its current plan.

Some choose to build recreation rooms and studies while others add new appliances, fixtures and cabinets to enliven rooms and make their home more attractive to future buyers.

But, when should you decide to stop sinking money into a home and buy a bigger place? And how much rehab is too much when it comes time to recovering remodeling costs through a home sale.

For instance, if you’ve just spent $1,000 remodeling your living room and didn’t expand your small bathroom, the chances of increasing the number of interested buyers are slim.

With these concerns in mind, Century 21 sales associates offer a few tips for those struggling to add value to their home.

First, always protect the character of your home. Nothing sticks out more than a new addition that is in a completely different architectural style. Be consistent. Recognize your home’s character and stay within its framework.

The most financially rewarding areas to remodel are usually the kitchen and bath. Newly re-done cooking spaces and cabinets can attract more buyers and may command a slightly higher price for the home than a comparable one on the market. Simple repairs that are made to last will bring you the biggest returns upon sale.

Enlarged bathrooms are the most popular attraction for new home buyers, according to the National Kitchen and Bath Association. Today, the most popular additions for younger buyers are sunken whirlpool baths and showers. But be sure to install modest, solid amenities. It’s easy to quickly over-spend on bathroom fixtures.

Buyers are, by convention, more interested in above-ground living space – not basements, yards and walkways. Swimming pools can be a poor investment if installed for the sole purpose of increasing a home’s value; it’s rare that a pool’s cost will be recovered in a home sale. It can also be a negative feature for potential buyers with very young children.
Replacing worn carpeting, tiles and wood floors can give your home an immediate advantage over similar properties in the area. Updating paint colors in all areas of your home can also prove beneficial.

However, it’s recommended that you use neutral colors, such as gray, beige and off-white when adding new floor and wall coverings. Fewer buyers will then turn away because of differing tastes.

Stay simple with your remodeling and look at your home as though you were the buyer. Chances are that if you find the upstairs bedroom could be brightened by a larger window, potential buyers will probably feel the same.

Don’t go overboard. Concentrate on improving two or three deficiencies in your home. More than likely, the time and money you spend adding quality to your home.

Flipping Out on New FHA Regulation

Information provided by Jim Monninger, Mortgage Specialist, Jim@FirstTrustMortgage.biz

On January 15, 2010, FHA made some changes to the June 7, 2006 anti-flipping policy on property flipping.

For the past 3 1/2 years HUD has not allowed the resale of a property within 90 days due to flipping concerns. While the initial intent was to prevent the rapid escalation of the price of homes through questionable flipping of properties, it is now hindering the sale of homes since prices have fallen and more properties are the subject of foreclosure.

While there were several exemptions to the rule, almost all applied to Banks and Financial companies. This change will directly impact the small investor who buys properties cheaply and repairs them for resale.

Currently many HUD or Lender Repo's are sold "As Is" without warranties or repairs. Many of the foreclosed homes are purchased by investors who have the means to repair the homes but may not purchase the homes due to the 90 day holding requirement to sell to a new FHA Buyer and the cost and risks associated. These buyers have to account for the longer holding time and potential risk of vandalism. Thus the homes tend to sit vacant longer and hinders community stabilization and revitalization.

Beginning February 1, 2010, sellers that meet the new requirements may be able to sell the property prior the old 90-day rule. The sales must be an arms-length transaction. The seller must hold title to the property (i.e. no double closing). There must not be prior evidence of flipping on the property and special rules apply if the increase from the sellers purchase price the buyers purchase price is greater than 20%.

This is a positive change from HUD. Homes may stay vacant less and buyers have more options. These transactions will be under more scrutiny but they can now get completed

With FHA case numbers pulled on or after 4/5/2010 the UFMIP (Up Front Mortgage Insurance Premium) increases from 1.75% of the loan amount to 2.25% of the loan amount. The good news is that it is still financed as an addition to the base loan amount.

Another bit of good news is that the 6% seller contribution will continue for another few months and the talk of increasing the FHA minimum down payment from 3.5% to 5% has been but on indefinite hold

The following link is the link to the FHA condo search website:

https://entp.hud.gov/idapp/html/condlook.cfm

Fannie Mae Announces 3.5 Percent Seller Assistance on HomePath® Properties

WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. "Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help," said Terry Edwards, Executive Vice President of Credit Portfolio Management. "Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home." Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.
	Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
	Fannie Mae Resource Center Telephone 1-800-7FANNIE (1-800-732-6643)

FHA Announce Changes

The upfront mortgage insurance premium (UFMIP) will increase to 2.25 percent up from 1.75 percent. Contrary to reports, FHA will continue to allow the financing of the UFMIP.

Borrowers with a credit score below 580 will be required to have at least a 10 percent down payment. The minimum down payment will remain at 3.5 percent for all other borrowers.

FHA will seek legislative authority to increase the annual premium (currently capped at .55 percent). Over time, increasing the annual premium may allow FHA to reduce the upfront premium.

Seller concessions will be reduced to 3 percent from 6 percent.

HUD takes action to speed resale of foreclosed properties to new owners

(From Florida Association of Realtors News) WASHINGTON – Jan. 18, 2010 – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan announced a temporary policy that will expand access to FHA mortgage insurance to allow for a quicker resale of foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties or properties resold through private sales.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” says Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan says.

Acquiring, rehabilitating and reselling foreclosed properties to prospective homeowners often takes less than 90 days in today’s market; and FHA’s 90-day rule can adversely impact buyers if a seller is unwilling to hold a property 90 days thanks to holding costs and the risk of vandalism.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” says FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on Feb. 1, 2010, and be effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping,” the waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

• Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website:
http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

New Short Sale Regs in Brief

Short sales are becoming an attractive options for homeowners who are significantly upside down with their loans and want to avoid foreclosure. As a result, banks are now being overrun with requests to consider approving the short sale for the individual owner. Lenders/investors are bickering over what dollar amount the bank will need to satisfy the defaulting loan. Short sale deals are turning into drawn out processes for homeowners and buyers. Some deals can take over a year to complete.

On the positive front, new federal guidelines will give lenders a 10-day limit to respond to offers. Hopefully, opening the log jam caused by banks -- allowing buyers to close on properties quicker without as much frustration.

The new U.S. Treasury rules will include financial incentives to sellers and lenders, and will figure prominently in Broward County's market as the housing slump continues into a fifth year.

However, many real estate agents question that the guidelines will be enforced, Conversely, bankers are concerned that the 10 business days will not be enough time to reply to offers.

Nearly half of approximately 838,000 single-family mortgage holders in Palm Beach, Broward and Miami-Dade counties are "under water," meaning they owe more than their homes are worth, according to third-quarter data from Zillow.com, a Seattle-based real estate firm.

Frustrated buyers often renege on the deal during the delays, or worse houses depreciate significantly from the original offer and make the offer unattractive to the buyer. In some cases, lenders require that borrowers share in the financial loss, holding up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn. Sometimes, the lenders who are often not based in the community believe a property is worth much more because the comparables indicate higher value, even though the local realtors understand the true market value. For example, in eastern Ft. Lauderdale, the quality of houses can change from street to street, making a similar sized house not truly comparable.

In addition to a 10-day deadline, the Treasury rules call for sellers to receive $1,500 moving allowances, and the sellers will not have to repay any of the debt.

Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing up to $3,000 in short sale proceeds to be distributed to less senior lenders.

The 83 loan servicers participating in the Obama Administration's Home Affordable Modification Program, including Bank of America and JPMorgan Chase, are required to follow these guidelines for all borrowers who request short sales or who did not complete loan modifications.

The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which represent about half of all U.S. mortgage debt. The two government-run mortgage companies are working to finalize their own guidelines.