Real Living Houston Home Sales Blog

Finance News: Housing Crisis to End in 2012 as Banks Loosen Credit Standards

2012-02-27T09:30:00.001-06:00

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 generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

BY: KRISTA FRANKS

What Happens When You Walk Away From Your Home?

2012-02-26T16:59:00.000-06:00

Real Estate Advice

It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust.

Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

They were carrying a loan of $260,000 on their original home alone, meaning they were well 'underwater,' owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an "anchor around our necks," she says, threatening to gobble up all their retirement savings and leave them with nothing.

The couple made a difficult call: They would do a 'strategic default,' and simply stop paying the old mortgage. "We really had to wrestle with it," said Perkins, 60. "We had worked all of our lives to build good strong credit, and we're proud people. But it came down to, 'Can we keep doing this?' We had to say 'No.'"

As the housing bust drags on, many homeowners are thinking like Perkins. Almost 11 million homes are now underwater, says financial information provider CoreLogic. Around 3.5 million homeowners are behind in their payments and another 1.5 million homes are already in the foreclosure process, according to online marketplace RealtyTrac.

As banks start to work through their backlog of distressed properties, the New York Federal Reserve estimates that 3.6 million foreclosures will take place during the next couple of years.

So, the question is: Does it make sense to keep paying a massive mortgage, knowing that it might be decades before a home regains its prior value? Or is that akin to - as columnist James Surowiecki recently wrote in the New Yorker - "setting a pile of money on fire every month"?

"I constantly get the saddest e-mails from people saying, 'I've exhausted all my life savings, my retirement is gone, and now I have to default,'" said Jon Maddux, CEO of YouWalkAway.com,

a foreclosure agency that helps clients with strategic default (and charges a fee for it). "But if they had seen the writing on the wall a couple of years earlier, stopped paying the mortgage and stayed in the home throughout the whole process, they would be in a much better financial position."

Moral Quandary

There's a moral component to that decision, of course. People naturally feel embarrassed about breaking a contract and not paying their bills; no one wants to be branded a deadbeat. But remember that companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process. Even the Mortgage Bankers Association itself, in a flourish of irony, arranged for a short sale of its Washington headquarters.

It's not personal; it's business. So think of strategic default as a business decision, and do a cold-eyed cost-benefit analysis of whether it makes sense for you, advises Carl Archer, an attorney with Maselli Warren in Princeton, New Jersey.

"People think it reflects on their integrity, and say 'I wasn't raised this way,'" said Archer. "But the more businesslike attitude is to say that there's a contract, there are penalties for violating that contract, and sometimes it just makes financial sense to break it."

The penalties largely revolve around your credit record, which admittedly gets blown up in the near-term. For a few years you can likely forget about qualifying for a mortgage or a car loan. When lenders are ready to take a chance on you again, you'll have to pay for the privilege, with stiff interest rates due to your default history.

What Happens to Scores

Charlotte Perkins watched her credit score go from a pristine 800 to 685, dropping every time she missed a payment. Credit-scoring firm FICO estimates that someone with a 680 score would see that number sink between 85-100 points after a strategic default, and someone with 780 could crater 140-160 points.

Not desirable, of course, but not the end of the world either. For Perkins, for instance, she already had a loan on her Ford Escape, and the mortgage on her new house, before she even started the default process. She hasn't seen any changes on her credit cards since, in terms of limits or interest rates.

Now that the previous home was auctioned off in December, she can start slowly rebuilding her credit, a process that should take about seven years.

Strategic default isn't a decision to be taken lightly, of course. If everyone did it, the housing market -- and the banks -- would be in much worse shape than they already are.

The following are some of the issues to keep in mind:

1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.

2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called 'non-recourse' states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they're only able to sell the property for $200,000). In other states they can pursue the difference, in theory - which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.

3. Use the interim to save like a demon. If you're in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. "Save money as if you were still paying the mortgage," says Archer. "If you don't, then you'll run out of both time and money, and then you'll be in a real tough spot."

4. Know the tax implications. Historically, if you have a debt that's forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though - so if it's not extended, you could potentially face a tax bill for the difference.

5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.

"Strategic default is not an easy decision, and there's a cost either way," said Gerri Detweiler, director of consumer education for Credit.com. "Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you're finally at the point where enough is enough."

By Chris Taylor | Reuters – Mon, Jan 30, 2012 4:43 PM EST

Only 13 of the Top 100 U.S. Metros Have Bounced Back...

2012-02-11T20:43:00.000-06:00

Photo Credit

Thirteen of the nation's 100 biggest labor markets have regained all of the jobs that slipped away during the recession. The other 87 are still fighting to break even.

On Numbers used preliminary U.S. Bureau of Labor Statistics data to estimate 2011 private-sector employment levels for all 100 markets. Those estimates were then compared against the official figures for 2006, the last full year before the recession's onset. The results can be seen in the database below.

Houston was the most prosperous metro over that five-year span. It had 2.10 million private-sector jobs in 2006, a base that expanded to an estimated annual average of 2.21 million in 2011. The resulting gain: 109,700 jobs.

Just four other markets -- three of them in Texas -- added more than 25,000 private-sector jobs between 2006 and 2011: New Orleans (up 39,400), Austin (up 37,900), Dallas-Fort Worth (up 36,000) and San Antonio (up 25,200).

Ten metros, on the other hand, are still at least 100,000 jobs below their 2006 levels.

The biggest private-sector deficit exists in Los Angeles, which had 432,000 fewer jobs last year than in 2006. Also on the negative side are Chicago (down 238,800 jobs), Detroit (down 217,700), Miami-Fort Lauderdale (down 182,900) and Phoenix (down 181,400).

The database also translates these five-year changes into percentages, with New Orleans registering the biggest gain (up 9.70 percent) and Cape Coral-Fort Myers, Fla., suffering the largest drop (down 19.46 percent).

Yesterday's version of On Numbers offered one-year employment comparisons for the same 100 markets, while tomorrow's entry will take a broader 10-year view.

ARTICLE BY: The Business Journals by G. Scott Thomas

Date: Tuesday, February 7, 2012, 1:00am EST

Celebrating Our Successful Team

2012-02-03T12:21:00.000-06:00

We would like to give a special thanks to all of our real estate agents who were able to attend our office meeting and award presentation on Thursday, January 26th. We enjoyed a wonderful meeting, great breakfast, and an inspiring lecture by Kimberly McCampbell of The McCampbell Team. We are very pleased to say that our office increased 17% in closed volume from 2010 to 2011, our top 3 agents closed for $5,000,000 each in 2011, and two of our agents won national Top Agent Awards!

It was evident during our award presentation that 2012 is truly going to be an excellent year for Real Living Houston Home Sales. We will continue to have regular agent training, technology training, and professional training provided by our corporate trainers throughout the year and hope that all of our agents will continue to take advantage of those benefits.

Here's a recap of our award winners! And the winners are...

Richard Falgout - Diamond Award for Premier Service (One of only 3 agents from Texas to win this fantastic achievement!)

Connie Ward - Top 100 Agent Award, #9 in closed units for 2011 with 98 sides closed (national award)
Connie Ward - Top 100 Agent Award, #57 in closed volume for 2011 (national award)

We were also proud to hand 10 awards to our agents for mult-million dollar production for 2011. Our multi-million dollar producers are:

Sharon Higgins
Darryl Luedke
Kimberly McCampbell
Linda Peters
Chanel Sharayha

Keep up the great work, team! We are so happy to have all of our agents on board with the Real Living network. You can learn more about our office and agents at www.RealLivingHoustonHomeSales.com and www.facebook.com/RealLivingHouston

Houston Economy Faster-Growing in North America

2012-01-25T09:30:00.000-06:00

Powered by a booming energy business, the Houston regional economy grew faster last year than any other in North America, the Brookings Institution reports.

Houston and Dallas were the only two major metropolitan economies on the continent to rank among the world's most robust in 2010-2011. The findings underscored a larger global shift away from traditional power centers, primarily to Asia, Latin America and Eastern Europe.

"Large, mature metro economies like Tokyo, New York and London still have a lot of firepower, but high-performance metros like Shanghai, Istanbul and Santiago continued to close the gap last year," Emilia Istrate, a Brookings analyst who co-authored the study, said in a statement.

The Global MetroMonitor rankings use such factors as population, employment and per-capita income to present a snapshot of the world's economic might. The report released Wednesday calculated Houston to be No. 19 globally in terms of growth and Dallas No. 36.

No other region in North America finished in the top 40 among the largest 200 metro areas, which account for half the world's economy despite being home to just 14 percent of its population. In fact, the report from Brookings' Metropolitan Policy Program showed 90 percent of the fastest-growing economies now lie outside the U.S. and Western Europe.

Study co-author Alan Berube said Houston's $311 billion economy benefited from high oil and gas prices and a relatively strong housing market. To maintain growth, the area should continue to look for ways to diversify, he said.

Berube cited Las Vegas, which ranked near the bottom on the report, as a region overly reliant on a single industry, gambling. When that suffered, it dragged down the entire economy.

Despite the disparities in growth globally, the report found widespread agreement that the global economy remains in need of mending. Jobs and income had yet to surpass pre-recession levels in more than half of the areas studied.

Houston was one of the few North American metros in which both income and employment grew "much faster" than the year before.

By Travis Alford, Houston Chronicle

Houston Area Home Sales Rising Steadily

2012-01-24T11:27:00.003-06:00

The fiery housing market of a few years ago may be long gone, but home sales and prices were hotter last year than in 2010.

Single-family home sales were up 4 percent for the year while the median price inched up 0.7 percent to $155,000, the Houston Association of Realtors said today in a monthly report.

Housing activity was up during the last seven months of the year compared to 2010 when sales dropped off after the homebuyer tax credit expired.

“We spent a good part of the year struggling to accurately gauge the market because we were comparing to accelerated sales in 2010 that resulted from the homebuyer tax credit,” Wayne Stroman, the association’s new chairman said in a statement. “Once we distanced ourselves from that period, we saw clear indications of a healthy market with a balanced supply of housing inventory and strong pricing—conditions that put Houston in an enviable position compared to many housing markets around the country.”

For the past seven months, area home sales have been on the rise.

December sales were up 7.2 percent over the previous year. The single-family home median price — the figure at which half of the homes sold for more and half sold for less — rose 1.9 percent to $160,000.

Article from the Houston Chronicle

Fannie Mae Sees 2012 Home Sales Up 3.5% to 4.74 Million

2012-01-18T09:00:00.001-06:00

The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.

The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.

Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.

"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior," Duncan said in a release. "Unfortunately, we expect this momentum to slow as we move through the first half of the year."

The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012.

The Federal Housing Finance Agency home sales price index, excluding refinances, could dip 1.1% for 2012 from a year before, according to the forecast. Economists predicted the 2011 index would finish 4.6% lower than 2010.

Mortgage originations as dollar volume could see a decline as well in 2012, largely on a steep drop in refinances. The Fannie report said total originations will fall to $1.01 trillion in 2012 from a predicted final 2011 tally of $1.36 trillion. Economists expected refinancing to plummet to $540 billion from $894 billion.

Purchase mortgages, however, will rise to $471 billion in 2012 from a estimated 2011 total of $464, according to the report.

Total single-family outstanding mortgage debt will likely drop 1.3% to $10.14 trillion in 2012.

For the U.S. economy as a whole, Fannie researchers predicted real GDP would increase 3.3% in the fourth quarter to finish the year at 1.7% growth. Economists forecast 2.3% GDP growth for 2012 and 2013.

Article by Andrew Scoggin Housing Wire

FHA is Still Funding House Flips

2012-01-17T11:27:00.000-06:00

Waiver for 90-day resales extended through 2012

Image via Dig Home Design

For the second year in a row, the Federal Housing Administration is extending a temporary waiver of its "anti-flipping" rule, meaning homebuyers relying on FHA-insured financing will continue to be able to buy homes that have changed hands in the last 90 days.

The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.

In extending the waiver through 2012, FHA said all transactions must continue to be arms-length. In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will apply only if the lender can document the justification for the increase in value, FHA said.

FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed. Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.

In February 2010, the Obama administration waived the waiting period for resales -- including homes purchased and rehabbed by private investors -- in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.

It often takes less than 90 days to acquire, rehabilitate and sell properties, the Department of Housing and Urban Development said at the time. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, HUD said.

Article by Inman News

Federal Tax Credits for Consumer Energy Efficiency

2012-01-13T11:40:00.001-06:00

HOMEOWNERS: When filing your 2011 tax returns, don't forget to check to see if the energy efficient items in your home qualify for a tax credit! Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit. Check out the Energy Star website to find out if your products qualify for a tax credit.

Happy Saving!

From your local real estate professionals at Real Living Houston Home Sales.

4 Predictions About 2012 Real Estate Market

2012-01-06T09:30:00.002-06:00

With 2012 nearly upon us, many of us will be spending this week reviewing the events of 2011 and setting resolutions, goals or visions for what we'd like to accomplish next year.

It will come as no surprise that the most common New Year's resolutions fall into the categories of getting organized and getting fit -- physically and financially.

Financial fitness includes getting your real estate business in order. But you can't set up your real estate plans for the year in a vacuum. They must be done in context of what's going on in the market. Here are four predictions about what that market context will look like in the coming year:

1. Even more foreclosures

While I'd like to claim crystal-ball credit for this one, it doesn't take heightened powers of prediction to foresee an uptick in the rate of home repossessions in 2012. Last fall's robo-signing debacle and the ongoing legal fallout from it created a massive backlog in the foreclosure pipeline, meaning that banks are taking many months, even years, to actually foreclose on mortgages in default.

Earlier this year, the New York Times reported that the additional hurdles New York state courts are requiring banks to leap in the wake of the robo-signing revelations, like additional settlement meetings with the homeowner to see if a modification can be brokered, have created a backlog of foreclosures that it would take 62 years to clear, at the current rate of foreclosure.

It's pretty clear that in 2012 and beyond, the banks will work through those backlogs. The inevitable result will be an increase in foreclosures.

2. REOs and short sales will become the new normal

If you even know anyone who has house-hunted in the past couple of years, you've likely heard tales of the high-drama high jinks -- super-long escrows, first-time buyers being bested by investors' cash offers, banks resistant to negotiating for repairs -- that take place in the course of a distressed property sale.

In the coming year, distressed home sales will continue to represent an increasing share of homes on the market. So, buyers will shift from considering whether to buy a short sale to understanding that they must be educated and prepared to do a deal with a seller, a bank (to buy an REO) or a hybrid of the two (to buy a short sale) to access the full selection of homes on the market.

This, in turn, will empower buyers to make smart decisions about what to offer and what to expect on any listing they like, as well as to set smart priorities and make realistic comparisons between listings based on their own personal priorities around timing, certainty and seller flexibility.

3. So-called 'smart cities' will do well

This year, a number of housing markets saw double- or even triple-dips in home values. In others, pricing stayed relatively flat. However, in areas where technology powers the economy, home values prospered along with the industry. Silicon Valley real estate, for instance, saw fierce competition among buyers as the young employees of companies that went public like used their newly stocked bank accounts to buy their first homes.

I recently talked with Jed Kolko, chief economist for real estate search site Trulia, and his 2012 forecast was that so-called "smart cities" will continue to have hot real estate markets next year. But Kolko defined smart cities much more broadly than the California tech hubs. Other tech centers like Austin, Texas, and the Massachusetts suburbs of Cambridge, Newton and Framingham all made Kolko's list, as did Rochester, N.Y. (a town known for its highly educated, highly skilled work force).

4. Consumers will get 'hopeless'

I mean hopeless in the best of all possible ways. For years, buyers and sellers have been waiting for that singular event to occur that would cause a quick market recovery. But 2012 will mark the fifth or sixth year of the real estate recession, depending on who you talk to. I predict that those consumers who have not already done so will drop unrealistic hopes for a fast return to the heady real estate fortunes of the subprime era. Instead, people will make their real estate plans based on:

today's low home prices, rather than the fantasy of what could happen if the market miraculously came back;
assumptions of very low, or no, appreciation in home values for years to come; and
very conservative estimates of their own finances and how they will grow.

As a result, buyers won't break their necks to hurry and buy before prices uptick; rather, they'll save and plan to buy when it makes the most sense for their finances. Homeowners will do the same; they will either refi, remodel and be content where they are for the long haul, or decide their homes no longer fit their lifestyles and their finances, divest of them and move on. But the good news is, people will make these decisions based on what is or is not sustainable for their lives and their finances, and not based on inflated hopes about what the market will or will not do.

BY TARA-NICHOLLE NELSON, TUESDAY, DECEMBER 27, 2011. Inman News®

Mortgage Rates Fall to Record Lows

2012-01-05T14:13:00.001-06:00

Image via CNN Money

NEW YORK (CNNMoney) -- Mortgage rates sunk to record lows again this week.

The average rate on the 30-year fixed mortgage fell to 3.94%, matching the all-time low hit in early October, according to Freddie Mac's weekly mortgage rate survey. Meanwhile, 15-year fixed-rate loans hit a new record low of 3.21%, surpassing the record set on October 6.

Five-year adjustable rate mortgages also plumbed new depths, hitting 2.86% for the week.

"We've been hanging around record lows for a few months now and we finally hit another one," said Keith Gumbinger of HSH Associates, a provider of mortgage data.

Low-interest mortgages will be available at least through mid-2012, according to Freddie Mac's chief economist, Frank Nothaft.

Where Homes Are Affordable

The low rates can translate into big savings for home buyers. Five years ago, a home buyer would have been lucky to land a 5% rate on a 15-year loan. On a $200,000 mortgage, that would have meant the borrower would have paid $1,582 a month. Should a borrower land a 3.2% rate on a $200,000 loan now, the monthly mortgage payment would come to $1,400 -- a savings of $182 a month.

How Fannie Mae Spruces Up Foreclosures

Mortgage rates tend to closely track Treasury bond yields, which have also been very low lately. For the past three months, 10-year Treasury notes have often fallen below the 2% mark as bond investors steer clear of Europe and its debt woes and buy U.S. Treasuries instead.

Parents Helping Kids Buy Homes

"There's been a flight to quality out of Eurobonds and into Treasuries," said Gumbinger. On Thursday, the 10-year Treasury stood at 1.92%.

The rock-bottom interest rates, combined with the lowest housing prices in years, have made home buying extremely affordable right now. Although most borrowers are looking to refinance existing loans rather than buy.

10 Cheap Homes for Sale by Uncle Sam

Last week, mortgage applications climbed 4.1%, driven by a surge of home buyers trying to refinance to record-low rates. According to the Mortgage Bankers Association's latest Market Composite Index, close to 80% of loan applications were to refinance existing loans.

Source: CNN Money
First Published: December 15, 2011: 11:38 AM ET

12 Ways to Sell Your Home in this Crappy Market

2012-01-04T09:30:00.002-06:00

To buy or sell in 2012, what with Armageddon coming and all? Absent any ancient Mayan wisdom on real estate strategies, let’s just hope the real cataclysmic event in the real estate market already has passed, even if the rubble from the bubble remains.

A stubborn overstock of households with loans higher than their value will continue to restrain prices and create some major obstacles for sellers in 2012, a year that’s shaping up to be another homebuyer’s market. In fact, recent studies indicate that more than 20 percent of all residential roperties with a mortgage are still underwater, hinting that many foreclosures and workouts are still to come.

However, even the most conservative forecasts call for growth in home sales in 2012, with some select pockets around the country already busting out where there are competitive offers on new listings. More than one-third of home resales were made to first-time buyers in 2011 — another good sign.

Meanwhile, here are 12 tips for 2012, aimed largely at the group that needs the most help — home sellers.

1) Price it right from the get-go

The old-school strategy of real estate sellers crossing their arms and holding out for a better offer will be brushed off by most homebuyers. Consider that of the homes that took four months or more to sell in the past year, almost half of their owners accepted less than 90 percent of the asking price, according to the National Association of Realtors. For a gauge, have your agent produce the latest comparable sales including short sales and foreclosures as well as a recent summary of sales prices versus original list prices. But be wary that such information doesn’t reflect the homes that failed to sell.

2) Put your best footage forward

Prep, paint, stage, scrub, improve, repeat. Efforts can include caulking, plastering, planting flowers, adding potted plants, making the windows spotless, pressure washing that oily driveway, edging the walks, trimming the bushes and trees, and mending the fences. None of these is excessively capital-intensive, but when applied en masse, they say “buy me.”

3) Be flexible

I’m not saying bend over backward to accommodate real estate buyers. Bend forward and sideways, too. Be ready to negotiate and offer extras such as closing costs, paid property taxes, remodeling work (or a cash credit), appliances, paid condo association/homeowner association dues, a few months of mortgage payments or even seller financing. Home sellers who’ve been on the sidelines and who advised their agents to ignore offers by lowballers don’t have that luxury now. Instruct your agent to listen intently to prospective homebuyers’ misgivings about the home and adjust accordingly and immediately.

4) Trump your techno-fears

Hire a listing agent steeped in mobile platforms. Sellers and buyers are routinely using Facebook and other social media to sell and seek, not to mention dozens of online selling sites. Some owners are even making YouTube videos to showcase their homes, making it easier to quickly link to potential buyers via email. There’s also an abundance of smartphone apps cropping up to review real estate listings and refine searches.

5) Don’t fall prey

Fraudsters are targeting distressed homeowners with “deals” that can sound perfectly legit. Some offer loan modifications for upfront fees while others offer fee-based “help” in navigating government housing assistance programs, sometimes claiming they’re attorneys.

There are also con-artist “investors” compelling desperate owners to sign over their homes with quitclaim deeds in return for a typically empty promise to remain there indefinitely. Others are telling former owners they can get their homes back for a lump sum. Be forewarned: Never sign blank documents or documents with blank lines.

If you’re unsure of an offer, have an attorney or other trusted adviser look it over. Keep in mind that a law barring firms — except attorneys — from charging upfront fees for mortgage relief or mortgage modification took effect in 2011. It’s called the Mortgage Assistance Relief Services Rule.

6) Finance 101

Realize it’s harder to qualify for loans these days. Credit records are under greater scrutiny, and lenders are often demanding a 20 percent down payment and some pricing flexibility from the sellers, especially if the lender’s appraisal doesn’t reach the asking price.

Consider cash offers, even if they’re not the highest. Reject too-low offers from homebuyers gently and with encouragement, telling them they’re oh-so-close. You don’t want to give away the farm, but you don’t want to give it back to the bank either. These days, meeting halfway usually means meeting buyers on their half.

7) Be your own spokesperson

Agents once advised home sellers to retreat from view during showings, lest they disclose something unsavory or otherwise botch the deal. That’s changed. If you can control your ego and emotions and come off as an earnest, flexible seller, you can serve as your best spokesperson. Be ready to answer would-be buyers’ questions about the neighborhood and area schools. Be careful about making verbal promises!

8) Flight to quality

Worried about durability? Buyers who place a heavier focus on brick or concrete-and-steel housing may find they’re more enduring, safer and quieter.

Are you worried about sustaining value? Buy near a prestigious hospital, university, large government employer or newly vibrant central business district. These entities typically aren’t going away, and the demand for good housing around them won’t either.

9) Expand your buying universe

There’s still an overabundance of well-priced inventory out there, which means you needn’t immediately narrow your search to the first house you fancy. That’s especially the case with short sale homes, which can be a nightmare to close in a timely manner. There are some for-sale gems that need only a little polishing.

Shop around. Don’t dismiss foreclosures and other bank properties, pre-foreclosures, auction homes, for-sale-by-owner or lease-to-own homes. Pick at least three favorites and work from there.

10) ‘Site unseen’ equals shortsightedness

Are you perplexed by the home valuation you did on your place on the website of a large, seemingly reputable real estate organization? Puzzled how that valuation can be 25 percent or more above or below a firsthand appraisal you’ve had done? Well, value estimates on these sites can vary widely, sometimes by hundreds of thousands of dollars, even by the admission of the companies themselves. There are way too many variables in the valuation game to give too much credence to blind, algorithm-based estimates that are impersonally calculated. Nothing beats a nuanced firsthand professional appraisal.

11) Expand your buyer’s due diligence

Aside from the financial details, contracts, disclosures and protections you typically tend to as you prep to buy a home, add these to the list:

Hire a title company to check the house for liens and tax arrearages.
Hire you own inspector. Don’t use the seller’s!
Have the inspector check for unpermitted work such as illegal room additions and garage conversions.
Consider the overall energy efficiency of the home with an energy audit.
Be sure property lines are accurate. If there’s any question, hire a land surveyor to research the original deed and to stake out the property’s lines and your neighbors’ property lines to avoid future disputes.

12) Make a quality-of-life due-diligence checklist

Go to the National Sex Offender Public Website at Nsopw.gov to search for neighborhood predators.
Spend some time around the neighborhood and briefly interview neighbors. Determine if there are noisy neighbors, signs of gang activity, nocturnal barking dogs, indigent lingerers, frequent loud parties and/or suspicious nighttime visits. Are there lots of rental homes? Is the block a cut-through point during rush hour? Does the school bus go past the block? Is there a restrictive homeowners association?
Determine what types of buildings can be constructed on vacant lots adjacent to the neighborhood. This helps avoid unpleasant future surprises. Is there constant noise from a nearby highway or busy street? Are there odors from nearby industrial plants?

This post originally appeared at Bankrate.

Pending Home Sales Rise Again in November, Highest in Year-and-a-Half

2012-01-03T10:17:00.004-06:00

Source: WordPress

Dec. 29, 2011

Pending home sales continued to gain in November and reached the highest level in 19 months, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 7.3 percent to 100.1 in November from an upwardly revised 93.3 in October and is 5.9 percent above November 2010 when it stood at 94.5. The October upward revision resulted in a 10.4 percent monthly gain.

The last time the index was higher was in April 2010 when it reached 111.5 as buyers rushed to beat the deadline for the home buyer tax credit. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high,” he said. “Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage.

“November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead,” Yun added.

Pending home sales are not affected by the recently published rebenchmarking of existing-home sales because the index uses a different methodology based directly on contract signings, and is adjusted for seasonality.

The PHSI in the Northeast rose 8.1 percent to 77.1 in November but is 0.3 percent below November 2010. In the Midwest the index increased 3.3 percent to 91.6 in November and is 9.5 percent above a year ago. Pending home sales in the South rose 4.3 percent in November to an index of 103.8 and remain 8.7 percent above November 2010. In the West the index surged 14.9 percent to 121.2 in November and is 2.9 percent higher than a year ago.

Source: NAR

7 Timesaving Tips for the Holidays

2011-12-19T15:20:00.001-06:00

Between dinner parties, family get-togethers, gift buying and winter recitals, time is at a premium during the holiday season. The good news is that you can take some timesaving measures to make your holidays as stress-free as possible.

1. Carve out a budget ahead of time. Holiday expenses go beyond the cost of gifts. Factor in food, travel, decorating and other holiday-related expenses to get a more realistic figure.

2. Be an informed shopper. The free Google Shopper app for iPhone and Android includes a barcode scanner, detailed product information and offers from local businesses.

3. Avoid mall crowds by shopping online. Use a price comparison site like Price Grabber to research the best deals. Look for specials like free shipping, and make sure you allow enough time for delivery — online shopping isn’t ideal for last-minute gift buying.

4. Grocery shop strategically. Avoid weekend jaunts to the store. Instead, shop on Monday or Tuesday, when it’s less crowded. If possible, shop alone so you can get what you need and get out. Never shop without a list. Grocery stores are designed for distractions, and this is especially apparent during the holidays.

5. Factor in extra time for travel. If you’re bringing gifts to your destination, consider mailing them ahead of time to avoid extra luggage. This is especially important if you’re flying, as many airlines now charge a fee for check-in luggage and discourage bringing wrapped gifts on board.

6. Forget about cooking from scratch. Decide what occasions require homemade dishes, then give yourself permission to bring store-bought cupcakes to the neighborhood get-together.

7. Do less. That’s right — cut back on your commitments. Examine your priorities before the holiday season kicks off and you’ll probably find that “attend every function” and “keep the guest bathroom spotless” are not on the list. We may not be able to create more time, but we can limit ourselves to the activities that make us most fulfilled during the holidays.

This article is compliments of American Home Shield.

Brookfield Acquires Prudential Real Estate & Relocation Services

2011-12-12T20:38:00.001-06:00

Brookfield Residential Property Services (“Brookfield”), a Brookfield Asset Management Inc. affiliate, recently announced it has purchased Prudential Real Estate and Relocation Services (“PRERS”), a recognized leader in employee relocation and real estate franchising, from Prudential Financial, Inc.

This transaction creates a new industry powerhouse and establishes Brookfield RPS as the #3 player in the North American residential real estate brokerage market with almost 80,000 real estate agents and 2,800 locations. The expanded scale of our combined businesses will ensure that we remain at the forefront of the industry and positioned to provide the leading-edge tools and technologies that real estate agents need to grow their businesses.

Real Living is the 3rd largest real estate franchise in the U.S., named "fastest-growing franchise in the U.S." for the past two years. With this recent acquisition, Real Living's top growth will continue for a 3rd consecutive year. Stay tuned for more information from the staff at Real Living Houston Home Sales... And watch us GROW!

LED Holiday Lights vs. Old-fashioned Bulbs

2011-11-28T12:53:00.003-06:00

Thank you for visiting our blog. We hope you enjoyed your Thanksgiving! Now that Thanksgiving is over, many of us are decorating our homes for the holidays. Here are 6 need-to-know tips to help you decide between LED holiday lights vs. old-fashioned bulbs when decorating your home.

1. LED holiday lights save you money. LED lights use at least 90% less energy than traditional holiday lights, according to the U.S. government’s Energy Star program.

That results in a $50 energy savings for the average family during the holidays, says Avital Binshtock of the Sierra Club in San Francisco.

Put it into perspective: The amount of electricity consumed by one 7-watt incandescent bulb could power 140 LEDs—enough to light two 24-foot strings, says Energy Star.

2. But LED lights typically cost more than old-fashioned holiday lights.

GE 100-bulb string of Energy Star-certified LED white lights: $18.97 at Lowe’s

GE 100-bulb string of conventional white lights: $8.97

But shop around because a growing number of retailers are offering sales on LED holiday lights and, if you can’t find a sale before the holidays, you can certainly find one after. Plus, prices will surely go down as these lights gain traction.

3. LED holiday lights last and last. LED bulbs can keep your season bright for as long as 100,000 hours, says Cathy Choi, president of Moonachie, N.J.-based Bulbrite, which manufactures LED and regular bulbs. That’s substantially longer than the life of your old holiday light strings.

4. You can string a BIG strand of LED lights. Safety wise, you shouldn’t connect more than three traditional light strings, but you can connect up to 87 LED holiday light strings, totaling a whopping 1,500 feet, Choi says. So blow your neighbor's display away by cocooning your house in lights:

You won’t have to buy as many extension cords.

You can take your holiday lighting display further away from the outlet.

5. LED lights reduce the risk of fire. They stay cooler than incandescent bulbs, according to Energy Star.

6. How about that hue? Some people stick with their old lights because they don’t like the brighter hue that white LED holiday lights emit. But Choi says manufacturers now offer a “warm white” bulb that more closely mimics the glow of an incandescent light. Be sure to read the label to choose a bright or warm white and to ensure what you’re purchasing is Energy Star-certified.

Colored and color-changing LED holiday lights are more vibrant than conventional lights, making your display easier to see from the street, Choi says.

By: G. M. Filisko

Houston Home Sales on the Rise Again

2011-11-07T18:09:00.003-06:00

Houston Business Journal by Jennifer Dawson, Reporter
Date: Tuesday, October 18, 2011, 11:53 CDT

The sales of Houston single-family homes rose in September by 16.9 percent, marking the fourth consecutive quarter for increased sales.

A total of 4,635 single-family homes sold in September, compared to 3,965 homes sold the same time a year before, according to multiple listing service data analyzed by the Houston Association of Realtors.

The median single-family home price last month was $157,500 — the highest median price ever recorded for a September in Houston, HAR reported. That’s 1.6 percent higher than the $155,000 median sales price in September 2010.

The Houston market has 6.8 months’ worth of inventory, the lowest level since May 2010.

The inventory figure means it would take 6.8 months to sell all of the single-family homes on the market based on recent sales activity. Six months’ worth of inventory is reflective of a healthy market.

The inventory amount dropped 11 percent last month in comparison to the 7.7 months’ worth of inventory recorded last September.

“The combination of increased closed and pending sales, fewer active listings and strong pricing suggests that we are entering the fall home-buying season on strong footing,” Carlos Bujosa, HAR chairman and vice president at Transwestern said in a statement.

Total property sales increased 15.9 percent when comparing Septembers. A total of 5,469 properties valued at $1.1 billion sold last month.

Townhouse and condominium rentals increased by 30 percent year over year, while single-family home rentals rose 17.4 percent.

Source: Houston Business Journal