HOMES ARE SELLING AGAIN!!!

What the Housing Rebound Means for You
By Amanda Gengler, Money magazine writer
Oct 6th, 2009

Homes are selling again, but the market today is divided by price point. Your best strategy depends on where your home sits on that spectrum.
(Money Magazine) -- Home sales are rising. Builders are buying lots. And prices are no longer in free fall. After so much pain, there are signs of life in the housing market.

But the "recovery" is far from universal. In many cities cheaper homes are selling fast -- but mid-range properties are still lingering, and high-end homes are gathering dust. "The luxury market still looks ugly," says economist Joshua Shapiro at economics consultancy MFR. If you're selling or buying, your strategies should depend on the value of the home you want or own.

The bottom tier (hot)
The lowdown: A big chunk of the 1.9 million post-boom foreclosures have been among the least expensive 35% of homes. Bargain prices on these foreclosures and a new tax credit of up to $8,000 for first-time buyers have lured investors and would-be homeowners back to the market, even in hard-hit areas, says Pat Lashinsky, CEO of online brokerage ZipRealty.
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Sales of homes between $100,000 and $250,000 are up 9% from a year ago. Meanwhile, many banks halted foreclosures earlier this year while waiting for details on the Obama administration's foreclosure-prevention plan. Greater demand combined with less supply is providing a strong spark to the market. "Buyers in most areas are now going up against multiple offers," says Lashinsky.

Buyers: See homes the first day they're listed, and if there's one you want, submit an offer immediately, says Phoenix realtor Susan Ramsey. Don't expect a deep discount; prices for lower-end homes are stabilizing. Put down 20% or more, if you can, to compete with cash-rich investors. Offer not accepted? Check in with the seller's agent a few more times; many deals fall through.

If you aren't under pressure to move, keep in mind that the supply crunch is probably temporary. The foreclosure rate is expected to stay at record highs for the rest of the year, and as prices stabilize, more sellers will jump back into the market.
Sellers: Forget trying to compete with foreclosures on price. Some buyers will pay more for a home in move-in condition, so spruce yours up and sell that fact hard in your marketing materials.

Many of the other listings are likely to be short sales in which the bank agrees to accept a price below what the owners owe on their mortgage. Since short sales can take months, offering a quick, flexible closing date will give you another advantage -- and attract first-time buyers aiming to take advantage of the tax credit before it expires at the end of November.

The middle tier (cool)
The lowdown: Demand is soft. That's because the likely buyers are trying to trade up -- difficult for people who bought in the past five years, because they have so little equity. In fact, about a third of all homeowners with a mortgage owe more than the home is worth, according to First American CoreLogic.

Buyers: Unload your current home first, so you know what you can afford to spend on a new place. When you find a home you like, offer 10% less than the asking price -- a realistic discount for a lukewarm market, says realtor Ramsey.

Sellers: If you have to move soon, it's all about standing out from the pack. If your home is sitting on the market, go for one big price cut instead of slowly ratcheting down. A bold move will attract attention and prevent the listing from going stale. Offer to cover closing costs, and since many buyers will be short on cash after the purchase, throw in some necessary improvements, such as new carpeting, blinds, or painting.

If your home is in the half-million-dollar range, try to set the price at a level that doesn't require a jumbo loan, normally $417,000 or less (up to $729,750 in pricey areas). The difference between a $400,000 conforming loan and a $420,000 jumbo loan is several hundred dollars a month. Finally, if you can hang in there, know that prices will likely start to recover within the next 12 to 18 months, says economist Shapiro.

The top tier (cold)
The lowdown: The recession and the credit crunch have almost shut down the top 10% of the market, says Joel Naroff, president of Naroff Economic Advisors. Fewer people can afford a luxury property, and since banks are hesitant to underwrite supersize loans, it's tough to finance them.

Moreover, foreclosures are rarer at this price level, and homeowners, unlike banks, are reluctant to slash their price. Given all that, the prices on high-end homes will probably fall another 10% until the market hits bottom, says Mark Zandi, chief economist at Moody's Economy.com.
Buyers: Get pre-approval before you shop: Jumbo mortgages are tougher to qualify for, require larger down payments (as much as 30% to 40%), and cost nearly a percentage point more than smaller loans. And ask for freebies: While sellers often balk at low-ball offers, they should be willing to negotiate, including paying closing costs and other extras. "You can set the terms," says ZipRealty's Lashinsky. If the seller refuses, move on.

Sellers: You'll need to seriously undercut the competition. (Your agent can provide comparable sales figures for the past three months.) You may want to finance the deal yourself. And motivate buyer's agents with a larger cut of the deal -- a total of 4%, says Sacramento realtor Larry Henderson. It may be painful, but the price of your home is likely to fall further if you wait -- and recovery for your market is a ways off.

One Out of Three loans denied

Report from Federal Reserve reveals 1 in 3 loan applications denied in 2008; Lenders raised standards

According to a recent article written by Alan Ziebel, AP Real Estate Writer, on Wednesday September 30, 2009, 4:52pm EDT, Ziebel wrote that one out of three borrowers who applied for a mortgage last years was denied. This was attributed to lenders keeping their standards tight during the mortgage crisis.

Overall the Federal Reserve said the denial rate for all home was about 32 percent in 2008 and about the same in 2007 but up 29% from 2006.

All loans backed by the Federal Housing Administration soared to 21 percent of all loans made last year from less than 5% in both 2005 and 2006.

Ziebel stated that for black borrowers, more than half of all loans were FHA-insured, more than tripled a year earlier. For Hispanics, that number shot up to 45 percent, more than four times as high as in 2007. That was troubling news for consumer advocates.

John Taylor, chief executive of the National Community Reinvestment Coalition, a consumer group in Washington said, “I’m hard-pressed to believe that many of those borrowers couldn’t have been served by the private sector…it implies that the industry has shut down in service this population.”

High-priced loans with rates at least 3 percentage points above the rate for prime loans, shrunk to nearly 12 percent of the market form a high of 29 percent in 2006. This figure is believed to reflect unusually low interest rates during the recession, the report said, and understates the disappearance from the market of high-priced subprime loans to make borrowers with poor credit.

According the mortgage industry, lenders say they are not discriminating by race, and are making adjustments based on borrowers’ risk profile - - such as their credit score and the size of their down payments.

Jay Brinkmann, chief economist of the Mortgage Bankers Association says, “You still have a certain degree of risk-based pricing in the market.”

Lenders dramatically scaled back on the amount of so-called “piggyback” mortgages, in which borrowers used second mortgages to avoid making a 20% down payment. Those loans have virtually disappeared from the market: Only 98,000 were made last year, down from 1.3 million annually in 2006.

The data, collected from nearly 8,4000 lenders, is required under the Home Mortgage Disclosure Act of 1975,

I thought I had seen it all!

Well besides putting out fires and dealing with one particular obnoxious and difficult Buyer's agent, I was able to close on three properties this week and have three more scheduled in the next month. Everyday is always different and every transaction takes on a life of its own.

Just when I think I've seen or heard it all, it never ceases to amaze me what good old Murphy can do to your day.

Oh...I think I will ask Murphy to go visit that difficult Buyer's agent I mentioned!

Getting it Right...A Triple Combination

Today besides showing homes to clients have been getting all the preliminary players ready for a transaction with a seller/buyer so that all parties will be able to close, fund, lease back for a certain period of time until the the party selling their home to my seller/buyer can move into their new home so three parties will not have to move twice!

I feel like I am in a football game!

Trying to orchestrate four closings before the end of the month to be on target for Presiden'ts Club but of course a Realtor doesn't always hold all the cards to dictate to all the parties involved about the importance of closing all these deals before the end of the month!!!! All lenders have had in their office for almost 45 days and boy can some stretch it to the very last minute!

Getting it Right!

Boy is this ever an all consuming job in trying to get a website up, joining facebooks, twitter, twatter and chatter....(made those up) but then I get all kinds of email saying so and so in now following you on twitter and I can't even remember my log on information so I know whoever is following me right now is at a BIG road block!

Anyway, give me some time and eventually I will make all this come together and work for me, meanwhile...All in the Day of a Realtor right now is pretty much frantic and busy!

Time flies when you are having fun...

Can you believe I just put under contract my client that I have had on my database and working with since April 21, 2008. She was looking for a condo or townhome close to her work and we would go out and see homes and then she would disappear for three months or more with no communication. I called her my Hudini Client.

We finally got her pre-qualified and went out and looked at a condo project in NSL this last week that I have been trying to show her for the last year and found a great buy on an existing condo/townhome that was one of the first in this project division built in 2006.

I have never seen such a happy client. She is walking on cloud nine and is so excited it is fun to watch. It is perfect for her and her current life style and this way she is building equity instead of paying out her hard earned money to a landlord.

I got her a sensational price for the area with sellers paying closing costs so she is set to go for many years.

Such a wonderful way to end the day in writing up a contract that is accepted several hours later and just in time since another offer came in right after ours! I love when the magic seems to flow and everything falls into place.

If I can say anything to my clients and those first-time homebuyers, you better buy now and if you see a home you like, make an offer immediately because it will not be there when you decide you do, as homes that are reasonably priced are selling very fast.

The 8K tax incentive ends December 1st, 2009 and that means that you have to have your HUDS and all funded and recorded before this date. It is taking a minimum of 45 days for close and it is going to get really touchy and a scranble this next month as Lenders are going to be bogged down again with all the buyers rushing to get their home closed before the deadline!

A word to the wise.

Just another day

Well after having a fun and unusal settlement yesterday, I have been busy catching up this morning with all my clients on my RE farm and platform and preparing for a listing appointment for this afternoon. Such a busy week it makes my head spin!

Just learned that another client will be closing a month earlier so that is great!!!! Four more on the burner to close over Sept - Oct. So lots of irons in the fire.

After that I am going to take a break then start in on my clients who will be ready to buy the first of the year. It is never ending but always a lot of fun and very rewarding to see my clients happy.