Monday, March 26, 2012

Now's the Time to Buy and Sell: More Evidence


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. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

Wednesday, March 21, 2012

Sellers: A MUST read article!


Sellers: This is a great insight into the psychology of a buyer and why we Realtors talk about "staging" so much! Looks like a great blog in general!

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10 Home Staging Tips to Make Your Listing Look like a Model Home

What is it about Model homes that make them so appealing? Is it the freshness of all new; is it the sassy paint colors, the perfectly placed furniture, art and accessories or the beautiful groomed backyard that makes you want to plop right down on that comfy club chair? Well…. Yes to all the above. A builder hold hosts to an array of skilled professionals to make that Model beautiful. From blue print to drawer pulls that Model home is meticulously planned.


Beyond the nicely placed furniture, Model homes are the current reflection of the home environment needs of the target market of the Builder. They are a turn-key product, designed & packaged for the desires of perfect buyer.

Models homes are lovely because they have the latest and the greatest, are fresh and new and are meticulously detailed. Psychology, more than decorating is applied to make them look so fabulous. From architecture to floral arrangements, Model homes are planned with “YOU” in mind.

So how can you make your next listing as appealing as a Model Home? – Here are 10 ways.

1.) Clean. Those nice angled vacuum lines, gleaming windows, and perfectly manicured lawns in Model homes speak to a potential buyer – You don’t have to do a thing. Translate that into - A little elbow grease goes a long way. A super clean home says “turn-key” to the potential buyer. Have every inch of the home, blind slats to porch light glass, super clean and perfectly coiffed. According to a national 2011 survey done by Real Estate based Home Gain (www.homegain.com,)  a $290.00 cleaning investment gives a $1990.00 price increase, or a 586% return!

2.) Fresh & Smells Good. People buy homes on emotion, and your 5 senses are a direct path to your brain. If a home smells and looks “funky,” “doggy,” “smoky,” or if the stove is coated with cooking gone bad – The home is off their list. Just like you would detail your car to sell, invest in clean and spotless carpets, patched, repaired and freshly painted walls and new appliances if the old have seen better days. Be wary to skip this step and take the low road with room refreshers, candles and stove burner covers – Potential buyers are not fooled.

3.) Color. Any advertising executive will tell you color is a key to properly packaging a product; and a listed home is just that, a product. Throw away the off-white manta of old school home staging rules – Welcome to the era of HGTV. Using color is a powerful and inexpensive way of making that home stand out from the rest, and with so many decorating TV shows boasting the benefits of color, you better get hip to hues. From 1st Web impressions to curb-appeal, color is a strong emotional tug for the potential buyer. Update yourself on the latest color trends in wall color, appliance, fixtures, etc… and apply it to your target buyer. For home staging, use earthy, calm tones for the bigger areas such as wall color and add pops of saturated colors in the details; such front doors, accessories or annuals.

4.) Make Space. The joy of a Model home is the acres and acres of unused storage space & beautifully organized closets. Reduce, organize, upscale and edit all the home’s spaces when it comes to closets and storage areas. If the home’s price point dictates, upscale the closets with custom organizing options.

5.) Clear a Path. Consider that many people with be walking through the home. Make sure traffic patterns, entrances and exits are well established. Too much furniture, undefined entrances and awkward walkways confuse and discourage buyers from moving about the property. Follow a Model Home’s lead and create a concise walking pattern for potential buyers starting at curbside to back fence.

6.) Lovely Layouts. From the landscape to furniture placement, take a clue from Models homes that continuity and flow make for a good mix. Create curb appeal with nicely maintained landscaping, added annuals and perennials, an inviting stoop and well groomed walk and driveways. Inside, make sure each room depicts what its function is, enhances the highlights of the room (i.e. fireplaces or upgrades,) and allows the buyer to envision themselves in the space.

7.) Set the Mood. Create ambiance and character in the home with well thought out placement of sensory and lifestyle components. Soft music, lighting on dimmers, candles lit, and fresh floral are all great ideas for Broker or Open houses. If you have concern about candles, battery operated candles that even have timers built in are now readily available. Stage the dining room table tastefully, or set the stage in a back yard with a detailed patio retreat. Offering helpful lifestyle hints has always been in the Model Home arsenal and always is a huge hit.

8.) K.I.S.S. On the opposite note, don’t over accessorize, go over-board with the lifestyle tips or create “store bought theme” rooms (i.e. Chef-with-a-Hat Kitchen or Anniversary Bathtub vignette complete with Champagne bottle and fake ivy.)

9.) Appeal to a Target Buyer. Model home Builders hire tony Marketing companies that create campaigns to market that home. Consider "WHO” the ideal buyer that will be interested in the property is, and market the property accordingly. From advertising photos to furniture, consider who will find this appealing and desirable.

10.) Market, Market, Market. Model Homes have great marketing incentives inside and out. From clear address markers, great signs, to small exit giveaways, to an exit survey - Market that listing to the fullest.

Tuesday, January 31, 2012

Great Article on what Warren Buffet thinks about buying a home now

Sometimes it would be really convenient to know what a financial advisor with an amazing track record would advise that we do with our money. Well, here you go! And the advice is free!

What Does Warren Buffet Think About Buying A Home?

by The KCM Crew on January 30, 2012
Warren Buffet is seen by many as the greatest investor of our time. When he speaks, people listen. Like anyone else in his position of influence, he is criticized by some for using his bullhorn to promote his own business agendas at times. That makes it very interesting when we occasionally learn of how he privately advises those closest to him.
Such a situation occurred this week. Debbie Bosanek, Warren Buffet’s secretary of 37 years, recently purchased a second home in Surprise, Arizona.
In an article in the Omaha World Herald, Mrs. Bosanek discussed her reasons for purchasing a second home and the personal advice she received from Mr. Buffet.
“I just thought it was time to buy a home. Warren tells me that it will be the best opportunity in my lifetime. Mortgage rates are low and prices have dropped dramatically…I share Warren’s view about the future of America, and we believe that our country will do just fine. I’m happy to make this investment.”
The greatest investor of the last century privately has told the people closest to him that buying a home right now will be the best opportunity in [their] lifetime”.
That’s good enough for us. How about you?

Thursday, November 3, 2011

14 Post-Recession Real Estate Terms - Translated

I'm re-posting this article I found on Trulia.com - great site for real estate info, by the way. I don't know how many times I've given my speech entitled "Why Short Sales Aren't Short", but this article briefly addresses that as well as many other terms you may run across in today's real estate market.

By now, you’ve probably heard the age-old rules of thumb about translating home listings from real estate lingo to plain English: ‘cozy’ = tiny, ‘needs TLC’ = needs massive repairs, and ‘all original details’ could mean beautiful moldings or moldy linoleum, depending on the home.
Almost everything about the real estate market has changed over the last few years, though, so we thought it was time to provide you with an updated real estate lingo decoder that accounts for those changes in the market. (That's a picture of Ralphie getting his decoder ring in the mail, by the by.)
To that end, here are 14 line items of real estate jargon, divided into 2 buckets and decoded for the post-recession house hunter.
Bucket #1: Transaction signals.  Distressed properties – foreclosures and short sales - make up about a third of the homes currently on the market, and these transactions have their own unique flow, timelines and challenges compared with “regular” equity sales.  So, it only makes sense that listing agents have developed a set of abbreviations to brief prospective buyers on what they can expect and should be prepared for if they make an effort to buy such a home, with just a glance at the listing:
1.       REO:   Real estate owned by the bank/mortgage servicer, this acronym refers to homes that were foreclosed and repossessed by the former owner’s bank.  It also signals that buying this property will involve doing a deal with the bank; possibly dealing with a different escrow timeline, offer process or contract forms than a non-REO sale; and almost always taking the place in as-is condition, among other things.  Oh, yeah – and it might also involve one more thing: a great deal.
2.       S/S, Subject to bank approval:  What once stood for stainless steel is now being used to describe a short sale – a property whose seller anticipates will net them less than they owe on the home.  Short sales are often described as “subject to bank approval,” which simply points out the obvious truth about these transactions, that the seller has very little control over whether the bank will allow the transaction or what price and terms the bank will approve of, and that the transaction might very well take the better part of your natural life could take 6 months or longer to close.  Talk to your agent for more details about short sales, and to determine how you can tell the success-prone short sales from those that are less likely to close.
3.       Pre-approved short sale:  Many knowledgeable agents say no short sale is truly “pre-approved” unless and until the bank looks at a specific buyer’s offer and the seller’s financials at the same time, but some listing agents designate a short sale as “pre-approved” when a previous short sale application was approved at a given price, but fell out of contract for some other reason.
4.       Motivated seller:  This is a perennial term in listing parlance, but against the backdrop of the current market, translates to something like, “Have mercy on me.”  I kid – this phrase often signals a seller’s flexibility in pricing and/or urgency in timing.
5.       Coveted:  In a word, “expensive.”  No, seriously, even on today’s market, many locales have a neighborhood (or a few) which have been relatively recession-proof, have been fairly immune to the foreclosure epidemic and have seen home values continue to rise. If you see the word ‘coveted’ in a listing, chances are you’re house hunting in that sort of neighborhood, or there’s something about the individual property the home’s seller is trying to position as unique and desirable, as compared to competing listings (i.e., the view, location of the lot, or floor plan).
6.       BOM, often accompanied by “No fault of the house:”  Homes go in and fall out of escrows on today’s market constantly, often due to things the seller has no control over.  BOM indicates a home that was in contract to be sold, but is now “Back on the Market.” “No fault of the house” may describe a situation in which the buyer lost interest in the home after a long short sale process or failed to get final loan approval, as contrasted to a situation in which the home’s inspection turned up deal-killing problems or the property failed to appraise at the purchase price.
7.       Not a short sale, not a foreclosure.  Sellers on “regular” equity transactions are often more negotiable on items like price and repairs, and are certainly able to close the transaction (i.e., let the buyer move in) sooner than sellers of REOs and short sale properties.  Some also pride themselves on having maintained their homes in better condition than the distressed homes on the market.  For buyers that seek quick certainty and closure, non-distressed homes can be especially attractive.
Bucket #2: All about the Benjamins.  The government’s role in financing homes has grown exponentially over the housing recession, so the alphabet soup of government housing and home financing agencies, their guidelines and programs is now more important to understand than ever.
8.       OO/NOO:   Owner-Occupied and Non-Owner Occupied – You’ll see this on listings in two different ways.  First, the vast majority of home loans must comply with government loan insurance guidelines, including guidelines around how much of a condo complex must be owner-occupied (i.e., 75 percent, minimum, in most cases).  Also, some bank-owned property sellers will consider offers from owners who plan to occupy the property if they buy it as much as a week or 10 days before they will look at NOO or investor offers.
9.       FHA:  Short for the Federal Housing Administration, which backs the popular 3.5 percent down home loan program. FHA guidelines also include somewhat strict condition and homeowners’ association dictates, so if  a home’s seller notes that they are not taking FHA loans, they might be saying that the property has condition or other issues which disqualify it for FHA financing.
10.   Fannie, Freddie:  Fannie Mae and Freddie Mac, federally controlled company/agency hybrids that now back most non-FHA (conventional) home loans, and thus provide the guidelines most Conventional loans must meet, including guidelines around seller incentives like how much closing cost credit a buyer can receive.
11.   DPA/DAP:  Down-Payment Assistance or Down-Payment Assistance Program
12.   FTH/FTB: First-time homebuyer/First-time buyer – cities, states and large employers like universities tend to be the last bastion of these programs which offer mortgage financing or down payment assistance, usually to people who have not owned a home in the relevant city or state anytime in the preceding 3 years.
13.   HUD:  The federal department of Housing and Urban Development, which governs the guidelines for FHA loans, acts as a seller of homes which were foreclosed on and repossessed for non-payment of FHA-backed loans, and publishes the Good Faith Estimate and settlement statement forms every buyer and borrower will be provided at the time they shop for a loan and close their home purchase, respectively.
14.   HFA:  Short for Housing Finance Administration, this acronym refers to a loose body of state and regional agencies which offer an array of financing and counseling programs that varies by state, from down payment assistance for first time buyers to the Hardest Hit Funds that offer foreclosure relief assistance and principal reducing loan modifications to unemployed and underwater homeowners in the states hardest hit by the foreclosure crisis.

Thursday, September 8, 2011

What Qualities to look for in a Listing Agent

A reader asked what people should look for in a great listing agent. I started answering this question months ago and kept delaying posting this on my blog because I wanted it to be perfect. But I just need to answer the question. So here goes!
 
Here's my list and it really doesn't differ much from selecting a buying agent even tho the tasks do differ, especially at the beginning of the process. And since you asked me there will be a couple shameless plugs for MY service! :-) When interviewing for a great agent, ask your friends and family for referrals and don't feel bashful about asking for references. I have clients offer to give me references all the time.
 
Comprehensive Service - When does your listing agent's service start? When you sign the listing agreement? If that's the case you're already at a disadvantage. Before I knew better that was the case for me. Now, with 13 years of experience in real estate I've learned a few things ;-) My service starts from the day a new client contacts me - or it can if they want it to. People who are thinking about selling their homes are gathering information but they're usually not "ready" to put it on the market and the task for some of getting it ready can be very overwhelming. I have an email campaign called "10 Days to Top Dollar" that I share with my sellers. It's a checklist designed to help them view their home like a buyer would. It helps them do those little things that you might otherwise not think of. That's just one example. I also help with getting the home staged so it shows as well as possible and referring the sellers to any tradesmen whose service they need - ie, carpet cleaners and installers, chimney sweeps, contractors, handymen, septic pumpers. But comprehensive service is one way I show my sellers we're on the same team!
 
Experience - First off in this market the home has to be priced right (or close enough to get buyers in the door). Experience in pricing and getting the home staged properly is essential. After negotiating you MUST have an agent who has experience getting lots of homes through the whole entire sales process in this current market. There will be problems. There will be things that happen that no one saw coming. The process has gotten infinitely more complicated and frustrating the last few years. Your agent can't throw their hands up or be talked into something by the other agent that's not in your best interest. Getting through the tough stuff and having a network of specialists to help w the process is essential. In 13 years I've only had 2 transactions that got through the inspection process that didn't successfully close. I DON'T give up. My philosophy is that if the seller wants to sell and the buyer wants to buy, there IS a way as long as we all keep communicating and treat each other with respect and problem-solve together.
 
Negotiating Skill - The next 3 things, for me, are all interrelated. Negotiating starts from the first time I speak with another agent. I'm the voice for my client. I give only the information that will help my client's position. The negotiating skills or lack thereof can cost you thousands of dollars. I employ many different techniques to benefit my client's position.
 
Communication Skill - I hate to be in the dark. I assume my clients are the same way. You need to find a Realtor who will stay in touch with you. I strive to strike the correct balance between letting my clients know about what's happening without weighing them down with too many worrisome details. It's my job to keep all that straight.
 
Agent Reputation  - This is a bonus that can't be taught. But I enjoy an excellent reputation among other agents. That's a huge benefit for my buyers and sellers because other agents want to do business with me. They know I keep on top of the time frames and will do at least my fair share in the transaction. They know I have the experience to keep the transaction on track. So when I'm representing the seller they benefit because agents want to show and sell my listings. When I'm working for a buyer if I'm writing an offer that is competing with other offers, my excellent reputation gives me and my clients a distinct advantage.
 
I hope that's helpful. Please don't hesitate to contact me about your specific situation. Every person, home, and transaction is unique.