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Thursday, December 13, 2007

HUD Incentives

The Department of Housing and Urban Development (HUD) has announced new incentives on Ohio HUD-owned properties that will make them more affordable for homebuyers. This program started November 15:

Ohio homebuyers will be able to purchase a HUD home with a $100 down payment when they use financing insured by the Federal Housing Administration (FHA). In addition, homebuyers can obtain a $2,500 sales allowance at closing that can be used towards closing costs, to make repairs to the home or to pay down on the unpaid principal balance of the mortgage.
If the borrowers do not use FHA-insured financing they can still qualify for a $1,000 sales allowance to be used for the payment of closing costs.

Source: TBR News

Tuesday, December 4, 2007

Well-Water Homes: What to Investigate

A house that relies on well water can be a turnoff to some buyers. But before buyers shun these homes completely, here are some things that real estate professionals can help them investigate:

• Is it drinkable? Most mortgage lenders require a water potability test before closing a loan on a property. Beyond that, the buyer should consider a professional inspection and possibly more testing for potential contaminates.

• Do some official research. It's a good idea to look at the "well log" or "drilling report" from the county health department or environmental services office. These logs include information like construction date, contractor's name, drilling method and materials used, depth of the well, geological formations encountered, gallons per minute drawn, and distances from structures or septic fields when the well was built. These logs will also include any servicing or repair work done.

• Visual inspection. Inspect the well visually. Ideally, the well should be higher than surrounding ground. Look for pooled surface water around the well, which can indicate drainage problems.

• Look around. Are there potential sources of contamination — barnyards, septic systems, or ponds uphill from the well? Nearby underground gas tanks also can be a problem.

Source: Realtor® Online

Saturday, November 24, 2007

Eliminate Income Tax on Foreclosed Properties

Eliminating 'Phantom Tax' on Foreclosures Gets a Boost

The House Ways and Means Committee voted to change a law that forces home owners to pay an income tax on mortgages that have been forgiven or foreclosed, a move that the NATIONAL ASSOCIATION OF REALTORS® has long supported.

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement relieves the borrower of the obligation to pay some portion of his or her debt. If the property is sold at foreclosure or is sold for less than the amount borrowed, that difference is considered income and is subject to the tax.

“Changing the IRS code for these situations will relieve a tax burden for families who are already in financial distress and are most likely unable to pay additional taxes,” says NAR President Pat V. Combs, who supported the House committee’s action in moving the Mortgage Cancellation Tax Relief Act, H.R. 3648, forward. NAR has pursued repealing the “phantom tax” law since the early 1990s.

Action on this legislation comes at a good time, too — when many families are being affected by the resetting of interest rates on subprime mortgages and the ongoing rise in foreclosures.

H.R. 3648 would ensure that any mortgage debt secured by a principal residence will not be taxed. “The relief proposal addresses a fundamental unfairness that affects the lives of those who find themselves in truly unfortunate circumstances,” Combs says. “We must all work together to prevent the dream of homeownership from becoming a nightmare.”

The legislation includes a provision to safeguard against abuses. The provision, similar to one that already exists for commercial real estate owners, would treat commercial and residential property equally. NAR also supports the proposed offset, which tightens the requirements for taking advantage of some tax benefits while retaining all of them.

Source: Realtor® Magazine 9/27/07

Saturday, September 29, 2007

Lifespan for home systems and appliances

Item Expected life (years)

Central A/C 15+
Window A/C 10
A/C compressor 15

Forced-air furnace 15
Gas or oil furnace 18

Gas water heater 11 to 13
Electric water heater 14

Microwave ovens 11
Electric ranges 17
Gas ranges 19
Gas ovens 14
Exhaust fans 20

Refrigerators 17
Freezers 16
Dishwashers 10

Disposal 10
Trash compactors 10

Clothes washers 13
Dryers 14


Source: National Association of Home Builders

Tuesday, September 18, 2007

Which Improvements Payback?

COST VS VALUE REPORT

According to the Cost vs. Value Report*, replacing your vinyl siding is the least expensive way to add value and increase the selling price for your home. Replacing wood windows and performing a minor kitchen remodel ($17,000 or less) tie for second place on the list of high-impact home improvements to help you sell. The third most profitable home improvement to add value to your home is a bathroom makeover ($12,000 or less).

Project Job Cost Resale Value Average
Vinyl Siding Replacement $9,134 $7,963 87.2%
Window Replacement (Wood) $11,040 $9,416 85.3%
Minor Kitchen Remodel $17,928 $15,278 85.2%
Bathroom Remodel $12,918 $10,970 84.9%
Window Replacement (Vinyl) $13,120 $11,109 84.7%
Two-Story Addition $105,297 $87,654 83.2%
Major Kitchen Remodel $54,241 $43,603 80.4%
Attic Bedroom Remodel $44,073 $35,228 79.9%
Basement Remodel $56,724 $44,685 78.8%
Deck Addition $14,728 $11,307 76.8%

Know Your Neighborhood
Before you decide which home improvement project adds the most house value, do a little competitive research by finding out what features are popular with other homes in your neighborhood. If most houses in your neighborhood are about 15 to 20 years old but have upgraded kitchens with contemporary countertops, tile flooring, and stainless steel appliances, you’ll net a better return if you invest in a minor kitchen remodel. By knowing your neighborhood, you’ll get a better sense of what projects are the best home improvement values for your dollar.

Know Your Region of the Country
Not only should know your neighborhood but you should also know your region. Consider a remodeled basement which, nationally, offers 78.8% ROI; widely popular with buyers in some parts of the country (in the Pacific, it nets a 92.7% ROI), remodeled basements are not as popular in other parts of the country (in
New England, its ROI is only 61.9%). To help you sell now, know what buyers in your area prefer.

According to the Cost vs. Value Report, each part of the country has unique home improvement values.

ROI=Return On Investment

Source Realtor Magazine

Wednesday, August 22, 2007

Don't Let an Empty House Jeopardize a Sale

More home sellers are leaving their properties completely unfurnished while they sit on the market. Some argue that an empty house lets prospective buyers more easily picture their belongings in the space, take measurements, and examine recent improvements.

However, real estate brokers warn that empty homes must be well maintained, as overgrown lawns could lead buyers to wonder what interior components have been neglected as well. They recommend that sellers keep vacant dwellings clean and in top-notch condition, as flaws cannot be camouflaged by furniture.

Some buyers seek out empty homes because they believe the owner is desperate to make a sale. Sellers unable to generate buyer interest are urged to bring in some furnishings to create a lived-in look.

Source: Virginian-Pilot, Joanne Cleaver (08/18/07)

Need help staging your home? Contact Scott Snyder, I can help!

Tuesday, August 21, 2007

Home Owners Fight IRS on Foreclosure Tax

When a home owner goes through foreclosure or a short sale, the Internal Revenue Service considers the amount of the loan that was forgiven to be income for the debtor. That bill can come as a sickening surprise for those who believed that they had finally crawled out from under debt.

Some people in this predicament are fighting the IRS — and winning. And even borrowers who still have to pay can negotiate lower payments with the IRS, tax experts say.

The first step is to get knowledgeable legal and tax help, advises Kurt Eggert, a professor at Chapman University School of Law. This is not the time to file your taxes on your own, he says.

In some cases, an experienced tax attorney may able to show that the original loan process was so flawed that the borrower is not liable for taxes at all. Or a borrower who can demonstrate that she is insolvent also may be able to escape the tax, too.

Source: The New York Times, Geraldine Fabrikant (08/20/07)

Friday, August 17, 2007

You Are NOT Alone

YOU’RE NOT ALONE IF YOU’RE HAVING
TROUBLE PAYING YOUR MORTGAGE

The housing boom led to a record homeownership rate of
nearly 70 percent, but some homeowners now face problems
making their mortgage payments and can’t refinance their
loans. Over the last few years, lenders invented new types of
mortgages to help families buy their first homes and refinance
their existing mortgages. Many of these mortgages helped
families without cash for a down payment, or with less-thanperfect
credit, qualify for loans known as “subprime” loans.

Subprime loans have a higher interest rate and higher costs,
such as prepayment penalties. A very popular, widely available
mortgage product is the hybrid adjustable rate mortgage
(ARM). Hybrid ARMs have an initial period with a lower
interest rate (“teaser rate”) followed by significant increases
over the remainder of the loan. The hefty payment increase is
often called “payment shock” because the borrower is surprised
by the size of the increase and can’t afford the new payment.

If you are having trouble paying your mortgage for any reason,
or expect problems, you should work with experts and your
lender to find a solution now. If you fall behind and don’t take
action, the lender will foreclose on your home. If that happens,
you may lose your home and all of the money you have already
invested in it. The sooner you act, the better the chances you
will avoid foreclosure.

The Center for Responsible Lending estimates that 2.2 million
American households with subprime mortgages have lost or
will lose their homes as monthly payments rise on high-risk
mortgages. These families stand to lose as much as $164 billion
of equity in their homes.

MORTGAGES WITH “PAYMENT SHOCK”
Mortgages like these can give you a “payment shock”:
• 2/28 and 3/27 Mortgages. A 2/28 or 3/27 adjustable rate
mortgage gives the borrower a fixed payment for the initial
two- or three-year period before adjusting the mortgage up as
often as every six months. After the initial “teaser rate” period,
your mortgage payments typically adjust up every six months.
• Interest-Only Mortgages. An interest-only mortgage lets
you pay only the interest on the loan for the first 5 or 10
years and nothing to pay off the loan amount (principal).
After the interest-only period, the mortgage requires much
higher payments covering both interest and principal that
must be repaid over the remaining years of the loan.
• Payment Option Adjustable Rate Mortgages. Payment
option mortgages let the borrower decide how much to pay
each month. You can even pay less than the interest, and add
the unpaid interest to the total amount of principal you owe.
Or you can pay just the interest or an amount sufficient to
pay off the loan in 15 or 30 years. These mortgages can have
an especially big payment shock.
Be careful if your mortgage has any of the following features:
• A “teaser rate” or “no interest” period that expires and leads
to a big jump in your monthly payment.
• An option to pay less than the full interest due in any given
month. Taking that option makes the amount you owe go up
instead of down, since the interest you don’t pay is added to
your loan balance.
• An adjustable interest rate with very high or no limits on the
amount your payment can go up.
• A payment that doesn’t include an amount for paying
property taxes and homeowners insurance. This means
you may be hit with big bills you didn’t expect.

If you’re in trouble, call 888-995-HOPE

Source: National Association of Realtors®

Wednesday, August 8, 2007

What Buyers are Shopping For

NAR's latest home buyer preference survey, which reports responses from buyers who purchased homes in 2006, asks buyers about the importance of 75 home features and room types.

Priorities for today’s home buyers include:

• Air conditioning: three out of every four respondents surveyed ranked this as “very important.”
• Master bedroom walk-in closet: 53 percent of buyers rated this as an important feature in a home.
• Hardwood floors and granite countertops: each gained 7 percentage points in popularity since the 2004 survey; 28 percent and 23 percent, respectively, of buyers labeled these home features as very important.
• Cable/satellite TV-ready: 46 percent, a growth of 6 percentage points from the 2004 survey, said this was important.
• Energy efficiency: especially among new-home buyers — 65 percent of new-home buyers said energy efficiency home features are very important compared to 39 percent for buyers of existing homes.
• Home buyers in the Midwest viewed central air conditioning as a priority.
• Two-thirds of buyers in the Midwest valued an oversized garage.

Buyers also said they're willing to pay more for these extras. For example, 65 percent of buyers said they would be willing to pay a median $1,880 extra for a home with central air conditioning. One out of four buyers also was willing to pay a median of $4,760 more for waterfront property.

More than half of buyers over 65 wanted a separate shower enclosure in the master bathroom, compared to only one-fourth of buyers ages 25-34.

Also, older buyers placed a higher priority on energy efficiency home features than did younger buyers — 63 percent of buyers 75 and older said it was very important, but only 32 percent of buyers who were 18-24 agreed.

Real estate practitioners see hundreds, if not thousands, of houses with their buyer clients every year and know exactly what buyers are looking for in a home, says NAR President Pat V. Combs. “This insight is one more way REALTORS® add value to the real estate transaction,” Combs says.

— REALTOR® Magazine

Tuesday, August 7, 2007

U.S. Farmland Prices Set Record Highs

The price of U.S. farmland has risen to a record high of $2,160 an acre in 2007, up from $1,900 in 2006, the Agriculture Department reports.Land prices rose the most in the West and the South, rising 17.8 percent in the Mountain states and 17.6 percent in the Southern plains. The Midwestern Corn Belt rose 13.1 percent and the Northern Plains jumped 14.4 percent.In the Northeast, the average cost per acre reached $5,000, up from $4,500 a year ago.States with the largest increases were:

Wyoming: 24.4 percent
Utah: 23.2 percent
Nevada: 22.2 percent.

The USDA attributed the increase in farm real estate values to strong commodity prices, outside investments, favorable interest rates, and continued commercial and residential development.

Source: Reuters News (08/03/07)

Friday, August 3, 2007

Why Homes Don't Sell

Many sellers found themselves in a precarius position last year as they were unable to sell their homes as inventory levels increased and home sales continued to decline. As market behavior changed, sellers began to acquiese to necessary price decreases, but often not before weeks turned to months and market prices declined further. There’s something about a market decline–everybody is affected. Real estate agents spend thousands of dollars on marketing and advertising and often lost their listings to other agents, home inspectors, insurance companies, title companies, and still others faced declining transaction volumes. What a mess! While the mortgage industry began to see an increase in refinance transactions, the companies faced an increasing number of consumers defaulting on their mortgage notes resulting in foreclosures. There is an increasing number of REO (bank-owned) property on the market.
Here are several reasons why homes don’t sell…

•The house is overpriced. Buyers ultimately determine the market value of a home. Overpricing is the primary reasons that homes don’t sell. When the price is too high, buyers and their agents will put the house on the backburner especially if the price appears to be unreasonable. The evidence of this will be be few or no showings. The result–weeks maybe months on the market with no offers.

•Poor showing condition. The next most common reason why a house may not move is when it doesn’t show well. Quick tips: Eliminate or reduce clutter, clean everything and everywhere including floors and carpes—demonstrate pride of ownership, paint (professional vs amateur finishes), and make sure that everything is in working order. Your real estate agent or for more challenging jobs, a professional stager, can give you the best tips for preparing your home to show well.

•Curb appeal. If the house looks ugly on the outside, they’re going to keep going! Keep the grass cut and the hedges trimmed. Power wash the front stoop and the house if needed. Paint the trim work and repair any dry rot repairs. If it looks good outside, they’ll definitely come inside!
Location. The price of the house may need to be adjusted up or down based on whether its location is desirable–a cul-de-sac is more desirable than a main street. A house that backs to trees is more desirable than one that backs to another house. What are the options in that community?

•Market conditions. In a hot market with low inventory, everything will say. Buyers will make it work–they’ll clean it, they’ll repair it, they’ll make it work. In a “cold” or buyer’s market, everyone is offering incentives to entice buyers and builders may be “giving” away fully loaded spec homes to get their unit sold. Sellers are competing against new construction, vacant homes, and other homes on the market.

What now?
The good news is that sales activity is picking up as prices stabilize and sellers start to make some changes. The buyers are out there but they have been very skeptical about buying now vs waiting until the market “bottoms out.”
Utilize the support of a good Realtor to get your home seen and sold. Real estate professionals know how best to operate in different market conditions. We also maintain an extensive network to other real estate agents and can market and communicate with them directly to get our properties in front of their buyers. We will show you how to best position your home for the best price and fastest sale despite the market conditions.

Author: Lorrie Hunter
Source: Realtor.com

Wednesday, August 1, 2007

Desired Home Features

Are you are preparing your home for sale, planning to remodel, or shopping for a new home? Find out what is important in today's housing market, and make choices that contribute the most value and enjoyment for the money.

Home Styles
Old world styles are popular. French, English, Tuscan and Spanish homes with stone or stucco walls, tile roofs, iron fixtures, heavy beams and rustic floors are in demand. A sense of historic connection resonates with buyers today.
The Craftsman style, built in the early 1900's, is back. Features of this style, such as cobblestones, deep eaves, tapered columns and wide trim, favor the handmade look over mass produced.
Farmhouses and country homes are perfect remodel candidates and prototypes for new homes. Native materials, wood windows, simple floor plans, and warm colors connect with nature and earlier times.
The retro look is fashionable. Ranch styles and split levels built in the 1950's are perfect for sleek remodels, and fit with fashionable furniture styles.
Urban modern is everywhere. Modern open plans make use of color, tile, glass, and experimental materials such as plastic and metal.

Floor Plan
The preferred ceiling height is about 9'-11'. Two story ceilings are out. In small rooms these feel like towers.
Many floor level changes are not desirable.
Most buyers today want four bedrooms, and at least two living areas. Formal dining rooms are still in demand.
Formal living rooms are often converted to studies, libraries, or guest rooms.
Media rooms are a sought after feature when price range allows.
The visual and spatial connection between kitchen and family room is firmly established.
Cabinet space is required for large televisions and wall space for the newer flat screens.
Three car garages are needed, especially in areas without basements.
Structured wiring is important today for internet, phone, cable and sound. Desk space for computers is required.
Good access to the outdoors is something buyers look for. French doors combine access with light. Sliding glass doors are not as favored.
Abundant storage is needed for today's lifestyle. People have lots of stuff. Huge master closets, pantries, laundry rooms, and extra storage closets are expected.
On the other hand, very spare lofts are perfect for some lifestyles. Simplified spaces are an antidote to today's complex lifestyle.

Kitchens/Baths
Most buyers are savvy about kitchen design and appreciate good work spaces with easy access to range, refrigerator and sink. Lots of counter space, deep drawers, two sinks, nearby extra refrigerator, and butler's pantries are all desirable features.
Stainless appliances are going strong. In urban modern styles, white or colored appliances are back. High end homes conceal some appliances as cabinetry.
Eat-in kitchens are a basic requirement for most buyers.
Antique tables or cabinets are being refurbished and used as bath cabinets. Kitchen cabinets that look like furniture are a great look.
Granite, marble or stone counters are popular. However, granite tops added to 1980's cabinets do not go over well. Consider your architectural style before adding features.
Concrete countertops are perfect for ultra modern, but most buyers shy away from them.
Wide, cabinet depth refrigerators have a built-in look, and are not as expensive as the true built-in type.
Large rustic tiles, stone, concrete or wood floors have a warm, functional appeal.
Subway tile (3" x 6") is popular in bathrooms and on kitchen backsplashes.
Patterned cultured marble and laminate are out. Slippery, white floor tile is out.
Trim
Wide, baseboards (6"+) and door and window trim (4"+) are key features in old European and American styles.
Craftsman style doors - simple square frames with flat panels - work well with both old and modern looks.
Iron or heavy wood entry doors make strong statements that buyers love.
Rustic finishes on hardware, such as brushed nickel, oil rubbed bronze, weathered brass, and other non-shiny finishes are the popular choices.
Rustic wood beams or wood covered ceilings create a hand crafted, primitive look that buyers like.
Wrought iron gates, stair rails and light fixtures compliment the rustic style.
Stair rails in ultra modern homes may be wire, pipe or painted metal.
Front porches and covered patios are always a strong selling point. Outdoor fireplaces are popping up everywhere.

Floors & Walls
Distressed wood floors that look old are valued. Simple wood boards are sometimes laid down with cracks exposed. Re-claimed wood is very desirable.
Bamboo floors are popular, especially in modern style homes where light colored floors are desired.
Concrete floors - often stained and scored are popular. These go well with the modern look, and are used in Craftsman and rustic European styles too.
Colorful laminate floors are a good fit with mid-century modern. Laminate floors that look like wood are out. Parquet floors are out, unless hand crafted.
Framed or hung mirrors are preferred, although plate glass works in ultra modern styles. Mirrors used on walls or ceilings are a turn off.
Colors are in, but soft is the word. Soft greens, yellows, earth tones and creams create a serene background that fits many styles. Complex colors, with more colors in the mix, are sought after. Deeply saturated colors, such as plums and reds, are used in moderation.
Flat paint on walls hides flaws and creates a designer look. Shiny is out. Soft whites are safe for trim.
Faux finishes are out. Often these do not turn out as well as expected, and are difficult to maintain.
The same (or similar) wall color through adjoining spaces creates a more spacious feeling.
Historic paint colors such as sage greens, beiges, muted yellows, and grays work well on the exterior. Bold or harsh colors are a turn-off to most buyers.
Wallpaper is problematic and harder to change than paint. Very often it does not fit the buyer's taste.
Heavily textured walls and popcorn ceilings are totally out.

Lighting & Plumbing Fixtures
Buyers want more windows, natural light, and a greater connection with the outdoors.
People today are more discriminating about the quality of light. Windows on two sides of the room balance the lighting and reduce glare.
One light in the middle of the room will not do. Under cabinet task lighting is appreciated. Security lighting is important. Wall sconces offer soft ambient lighting. Recessed cans provide area light. Dimmers help to control the lighting.
Light fixtures are a decorative element in all styles. Clean, modern fixtures, such as pendant lights, recessed cans, and wire string lights compliment the urban look.
Retro fixtures are interesting decorative features in 1930's craftsman and 1950's ranch styles.
Industrial metal fixtures are in. The un-decorated, industrial look of metal or stainless steel is in.
Heavy drapes are out. They are too pretentious, and, well, heavy. Light cotton, linen or silk drapes are in. Or, wood blinds. Or nothing.
Retro woven wood blinds have made a comeback. Mini blinds are very yesterday.
Bath fixtures are finished in rustic bronze, nickel, or chrome. Old style two-handled faucets and farmhouse sinks are in style. Bath sinks may be glass bowls, granite, stone, stainless or traditional china. Cultured marble is out.
All free standing tubs are in. Pedestal and wall hung lavatories are in.

Energy Efficiency
With fuel costs going up, energy efficiency is definitely in. Buyers want high efficiency AC, good insulation, low-e glass, programmable thermostats, double pane windows, and ceiling fans.
Effective passive solar orientation is a great advantage. It shows a smart planning and use of natural solar energy.
Instant hot water is a perk that buyers like, as are drinking water filters.
No one wants foil on windows or stick-on window film.
Light is in demand. Don't close blinds. Do remove solar screens when they are not needed, such as under patio roofs, porches or shade trees.
Screened porches are back. They create a multi purpose space that is both indoors and outdoors, and keep mosquitoes away.

source: Broker/Agent News