Today?s market presents a difficult mix of conditions for many sellers. The housing market dipped in recent years in response to recession conditions and continues to struggle.
Accessing credit is challenging. Many of today?s lenders require hefty downpayments of at least 20 percent along with excellent credit scores for the best rates. Many homeowners with ?good? credit may indeed find themselves wholly unable to procure a mortgage.
Some homeowners find themselves selling out of necessity instead of a true desire to move. They may be facing foreclosure or have had sizable decrease in their household income and now need to size down.
Making selling even more challenging is the fact that home prices have been on the decline. Many homeowners may be surprised to find their home is now worth less than they bought it for 10 years ago. Prices are now at 2003 levels in many areas of the country.
If a homeowner bought during the peak of the market, during the boom years, they may find they now own a house worth a fraction of what they paid.
How do you know if now is the time to sell?
First, be sure to solicit the advice of a local real estate agent. They have access to mountains of statistics for your area, including how long homes are taking to sell, what neighborhoods are hot, median prices, and so much more.
Find out what your home is worth in the current market. This will help you decide whether you can afford to sell or what kind of loss you mind be facing if you are needing to sell now.
Once you have armed yourself with solid stats, it?s time to evaluate your own financial standing. Do you have the money to make a move?
Moving is expensive. You will have closing costs totally thousands of dollars. You?ll need to have money ready for the buying process, including downpayment cash, closing cash, and money for incidentals like home inspections and u-haul and storage rentals.
Think about your motivating factors. Why are you wanting to sell? Some people need to sell. They may have been relocated or need to follow job. The recent recession has left other families needing to sell to avoid foreclosure. Families also outgrow their homes and need to size up.
Consider social effects of a move, too. Will your children be changing schools? Will you be moving away from friends and family? Recent studies have shown that owning a home can bring the owner better health, better wealth, and a more stable household. Uprooting a family can affect those benefits.
Selling a home is a large financial and emotional decision. If the conditions are favorable in your area, then selling can be a great idea. Be sure to do your research and consider all of your options. Whether you decide now is the time to sell or not, it?ll be the right decision for you.
Copyright ? 2011 Realty Times. All Rights Reserved.
January 2, 2009
Selling Your Home in a Declining Market by Richard Daskam
Selling a home in a declining market starts with a proper attitude and finding the right Realtor? who is optimistic and knows the right sales techniques in this tough market. Even though most people and economists are down on the housing market (feel it is depressed, that the economic recovery isn't going to happen in the next few months, and consumer confidence is down), it doesn't mean that you can't sell your home.
The truth of the matter is many people will sell their homes between now and this summer. While many sellers and real estate agents take a reactive approach to market conditions, those sellers who take a more proactive and realistic approach to the market will be the ones who sell their homes. These are the sellers who take advantage of this market and move up to their dream home! First, be honest about appraising the condition of your home.
The key to successful selling in a 'declining market' is pricing your home at today's market value, having your home in tip-top condition and being able to work with a prospective buyer on financing needs and terms. Don't let your ego or pride get in the way when determining a price for your home. Put yourself in the buyer's shoes and walk across the street. Curb appeal to a new buyer is a very important and is many-times overlooked.
Secondly, take a leisurely walk through your home jotting down the little things you might do to spruce it up. New carpeting, a fresh coat of paint, new light fixtures, mirrors, etc., are items that will give your home more emotional appeal and does not cost too much. Put away the clutter throughout the home. Rooms free of clutter will appear bigger and the new buyer can visually 'move into' your home much easier. Remember, new buyers are not buying your furniture.
Finally, be patient. The real estate market has changed considerably since the last run-up where homes sold in hours or days. We are now experiencing a more "normal market" where homes take 90-120 days to sell. Remember, inventories are at an all-time high right now. Bank foreclosures are all around you and many buyers will have difficulty qualifying for a new loan. Lenders also have very strict guidelines now and consumer confidence is very low. Allowing for a normal marketing period will do a lot to alleviate your impatience when you have few showings of your home or a lack of offers to review.
A good Realtor? will keep you abreast of market changes, activity on your home and others in the neighborhood, while maintaining a "teamwork" concept that is paramount for a successful sale. Properties need ample time to be exposed to the public and finding the right buyer requires a good understanding of the market as well as sales values. In all honesty, there are no easy answers but one thing is for certain, even in the worst markets, there are people selling homes and taking their equity!
For special reports and money saving tips when buying or selling real estate, log onto: FindRichardOnline.com.
Copyright ? 2009 Realty Times. All Rights Reserved.
September 17, 2008
HELOC Hassles by Marylyn B. Schwartz
If you are one of the hundreds of thousands of people who have a HELOC (Home Equity Line of Credit,) you may have already discovered (much to your dismay) that the funds in the account are no longer accessible to you. The account was summarily suspended by the lender without prior notice. If, per chance, you wrote a check on the account and paid other expenses from that withdrawal, you may also have found that those checks bounced or at least were sent back by the lender as "unable to be honored."
Often that line of credit is there as a cushion or hedge against unforeseen expenses or emergencies. Yikes, how could that security blanket be taken away in an instant when the account was paid on time and in good standing? (This article has nothing to do with accounts that are delinquent and canceled as a result of that circumstance.) How could a bank place you the homeowner in the dubious position of writing what amounts to bad checks (that's fraud) albeit without your knowledge?
Well, they can and they are!
Having been one of the walking wounded placed in this precise situation, it occurred to me to do some homework and find out who else may be feeling the pain, how is it possible and how prevalent is the situation?
Survey says that bank after bank is opting out of the HELOC business, if only for the next 24, or so, months until they can reevaluate the market or cutting back substantially on the number of accounts on the books. This is another side effect of the banking/real estate troubles we know all too well.
The long and short of how it is being justified is simple. The bank utilizes a computer model, a so-called "proven automated valuation method," to estimate the home's value. If they find that the valuation does not support the amount of the loan's face value, they suspend the line of credit.
For example, Chase uses the services of Trans Union (they are more than a credit reporting service) to determine the value of their properties. It is important to note that a suspension is not equal to the closing of the account. If you want to remove the lien, you must contact your bank and officially close the account. It is wise to do so, as the bank will most likely not reevaluate the value of the home for 24+ months. Why keep the account open when it is, for all intents and purposes, void?
This process begs a couple of questions:
What if the owner already has some of the loan's balance owing? The bank will then freeze the balance of the equity line and the owner will continue to pay back the outstanding balance as agreed when the loan was made.
What ratios are used to determine the loan(s) to property value? In CT Chase is using 65%, and in NY they use 75%. Other banks are using similar ratios. In other words, if you have loans/liens, primary or otherwise, that total more than these percentages as a portion of the value of the home, your HELOC is subject to suspension. Example: The bank determines that your NY home is valued at $350,000; therefore your loans cannot exceed $262,500. If you have a mortgage of $200,000 and a HELOC of $80,000, you have exceeded the loan limits.
Is there an appeals process for the homeowner who does not agree with the bank's valuation? Yes, however the owner is asked to provide a formal appraisal (not broker price opinion) demonstrating the current market value. In all instances known, this is/was done at the owner's expense. The bank will determine its course of action upon review of the appraisal. The appraisal does not guarantee reinstatement of the loan or a portion of the loan, as the case may be.
How can the bank suspend the loan if checks are outstanding? Read the small print 3; . It is always about the small print! Somewhere in your loan agreement the bank states that the lender's rights include reduction or suspension of the loan anytime there is a question as to the value of the property. Protecting the bank's assets is of primary importance. Let's face it. If the bank were to send you a letter saying that as of one week from today we are suspending your HELOC account, it is my guess that there would be lots of folks taking out every cent before the fact.
It is probably just too bad for you if the effective date of the suspension occurs before a check clears. While the bank has the option to honor or return checks received for payment after the suspension date (regardless of when checks were dated,) pretty much count on checks getting returned as not honored. Risking that you can remove funds immediately after the suspension notification is received and have the check clear is walking a very thin line.
What if your line of equity was not suspended to date and you want to write a check on the account prior to the bank possibly taking action to suspend the account? Remember that any check you write against your equity account becomes a loan that must be paid according to the terms of the agreement. If making the payments is not within your budget, then be wary of increasing your debt load, especially in challenging times.
Only you know if taking out equity from your home is a wise move. Property values have decreased and often, due to present economic realities, the bank is correct in worrying that people will use their lines of equity for day-to-day living expenses. Consider what happens if and/or when the owner wants or needs to sell the property and finds he/she owes more than the home is worth. It is happening everywhere. Not only is the bank at risk, the owner is as well. This is not by any means a legal opinion. However, it begs the question that if an owner were to write a check against a property HELOC and for any reason it could be proven that the owner knew the equity in the home was not there to support the added lien, the bank may have recourse against the owner for some kind of deception or fraud3; Just food for thought!
It is truly a sign of the times that we are worrying about issues that would never have even been contemplated four years ago. Back then, we were not paying $4.50 a gallon for gas, cutting coupons daily, cutting back on lattes nor having "stay-cations" versus vacations3; Back then, it was Camelot. So, if you were counting on that HELOC as your security blanket, you may want to reconsider and go out and get a teddy bear.
Copyright ? 2008 Realty Times. All Rights Reserved.
August 1, 2008
What To Do When You're Facing Foreclosure by Phoebe Chongchua
It's a situation facing hundreds of thousands of people and the numbers are growing rapidly. Foreclosures aren't just happening to people who over-leveraged themselves and got into risky loans. They are happening to homeowners who are getting divorced, facing health issues, needing to relocate for a job, and numerous other reasons. Regardless of how you may end up falling behind on your mortgage, knowing what to do next is critically important.
I spoke with Carla Douglin, a leading expert in the field and CEO and founder of The Douglin Group and Foundation, to learn more about solutions to the ever-growing problem. Her foundation gives free seminars and workbooks to the public for homeowners facing foreclosure.
There is a lot of information out there about foreclosures, but one thing that the news media tends to tout as being the first action step should actually be postponed, why?
"A lot of the news media is talking about the first thing you need to do is contact your lender. However, if homeowners who are facing foreclosures contact their lender first, the first person they interact with is the customer service agent who may threaten them and tell them 'We're going to foreclose on your home right away' and scare them into not taking action. If they get to a loan mitigation person and they are talking to them, they may agree to a workout that they cannot afford just to get the phone calls to stop. However, if they agree to a workout they cannot afford and they miss a payment, the homeowners have essentially lied to their loan agency and that's not something good."
Homeowners generally fall into a panic mode shortly after they realize the severity of their foreclosure circumstances. What do you recommend they do first?
"People need to back up, really stop panicking. 3; They need to look at their finances, look at their income, look at their expenses, and any liquid cash and then call their lender with that information so that they can workout something that's really going to help them and not break them."
What can homeowners say to their lenders to help influence them to work out a mutually beneficial arrangement?
"If you have gone through the steps of understanding what your deadlines are and then facing your finances and you still see that you're short, that's where you do need to communicate with your lender and say 'I need to work out some other agreement with you because right now I don't have it.'"
How receptive are lenders when homeowners say they can't pay their mortgage?
"What people are finding is that lenders are willing to work with them. It will take a whole lot of persistence on the part of homeowners. They really need to make sure that they're not intimidated by the conversation they need to have with their lender but they need to step up and say 'I am not going to be able to make this. What can we do to suspend the payment or lessen the payment or modify the payment until I get back on my feet?'"
Homeowners should also look for other sources of money. Where can they find this help?
"There are some employers who have a five-thousand-dollar loan that they are able to give their employees with low interest. They can pay it back through their pay over time; that's one. Two, there are grant programs through housing counselors like HUD; there are grant programs that are available to people who are going through foreclosure. Homeowners can reach out and be able to get some money that way."
You advise homeowners to also think outside of the box to help come up with money; what are those creative strategies?
"A lot of people are taking in boarders and renting out rooms. Some people are renting out their entire house and they are staying with family so that they can make the mortgage payment. These are all things that homeowners need to do-think a little bit outside of the box when it comes to a solution. Another thing is, with the gas prices being as high as they are and people having to commute back and forth to work, you may want to ask your employer if you can cut down to a telecommuting schedule and think about selling your car."
"There are plenty of other alternatives and people just need to look for them and apply them as quickly as possible."
Looking for solutions to an emotionally and financially draining situation such as a foreclosure is fatiguing and frustrating. However, if you realize there are options then you can begin to build momentum to rectify your situation. Ultimately, it's critical to consult with experts on this matter, to be open about your financial dilemma, and to seek help immediately. For instance, real estate agents can either help you sell your home in a short sale, if necessary, or rent it out to help you pay your mortgage. Trying to do it alone can be a painfully disastrous experience -- seek the help you need.
Copyright ? 2008 Realty Times. All Rights Reserved.
December 28, 2007
Washington Report: Capital Gains Takes on Change by Kenneth R. Harney
Hardly anybody noticed it, but Congress tucked away a valuable bit of holiday cheer for real estate when it passed its final tax bill of the year.
It was the first substantive change in years to the generous capital gains rules governing sales of principal homes.
Most homeowners and real estate professionals can recite these rules in their sleep: Married, joint-filing sellers of houses can exclude up to $500,000 of gain, and single-filing sellers can take up to $250,000 3; provided they've used the property as a principal residence for a cumulative two of the previous five years.
But what happens when a married home owner dies? Does the surviving spouse still qualify for the full $500,000 -- or does she or he only get to exclude $250,000?
The answer from the IRS has been this: you only get the full $500,000 if you sell during the tax year in which you were married and filing a joint return. Otherwise, the tax code sees you as single, and then you're limited to $250,000.
In other words, if your wife or husband died in June of 2007, you can only claim the full $500,000 benefit if you sell before December 31, 2007.
After that, as long as you remain unmarried, you're capped at the $250,000 limit for single taxpayers.
As a practical matter, most surviving spouses inherit their husband's or wife's share of the property at what's known as a "stepped up" tax basis, with no capital gains tax liability at the current market value.
But here's the problem: Some surviving spouses complain that they feel rushed into sales by the current tax rules. This is especially true for people who've lost their loved ones during the final few months of the year.
With everything else going on, they don't want the additional pressure of having to make the decision to sell the family home quickly. They want more time. Fair enough.
Well, now they've got it. Legislation signed into law before the holiday recess gives surviving spouses two full years to qualify for the $500,000 exclusion -- even though technically they're single.
And who says Congress doesn't have a heart?
Since your tax professional may not be familiar with this yet, here's the official citation: The bill is H.R.3648. The capital gains change is in Section 7.
Copyright ? 2007 Realty Times. All Rights Reserved.
January 8, 2007
Increase the Odds of Selling Your Home by Cleaning Out Clutter by Phoebe Chongchua
Several years ago, when my father passed away and family members and I had to clean out his entire home, I recognized the importance of the phrase "less is more." Whether you're getting ready to put your home on the market or you simply want to get a fresh start in 2007 -- clearing clutter is the answer.
Realtors will tell you when they show buyers a cluttered home, no matter how lovely it could be, prospective buyers just can't picture it and will usually pass or make an offer for much less than the seller thinks the home is worth. Yes, packaging matters. It matters when you're buying a product in a store and it matters when you're selling your home.
Think about the way model homes are packaged for display. There's so little in them; yet they look just perfectly appealing. Of course, that's not how any of us really live. But it's how consumers want to see the home. The fact is, maybe we could live with a little less -- at least while our home is on the market. After all, much of the clutter ends up collecting dust! And since you are moving, packing up some of your belongings before you actually move out (or even getting a tax credit for donating items to a charity) will help you when you finally sell your home and are ready to move.
Even if you're not in the market to sell, clearing clutter will give you a sense of freedom (and the ability to eventually accumulate more). Since the holidays just passed, you probably are already bombarded with stuff and maybe even wondering where to put it all.
The problem is many of us have a hard time letting go of things. So clutter builds up fast and furious and undoing the clutter becomes a frustrating task. But it doesn't have to be. Here are some tips on de-cluttering. Wouldn't it be nice to have a home that when you stepped inside you felt a sense of spaciousness -- everything seemed to have a place rather than items jammed into every last inch of the room? Cabinets and closets closed properly -- not like when you've gone on a three-week vacation to Italy and now you have to sit atop your luggage and tug roughly on the zipper to get it closed.
De-cluttering is a project that once you take the time to unload a few items, you often find they're never missed. And consider this, studies have shown that people waste several weeks a year looking for misplaced items that are buried beneath clutter. So let's get started.
First, don't de-clutter by making more room for clutter. As crazy as this is, true pack rats merely move their clutter from one location to another throughout the year without ever throwing anything out. When one area is too cluttered, they add shelves or even room additions to house their clutter.
Start with non-emotional items and rooms. You're less likely to have trouble throwing out things if you don't have an emotional attachment to them. Do you really need 12 different measuring cups? But here's a tip, I don't recommend throwing out your spouse's trinket collection (no matter how tempted you are) without first consulting him/her. Otherwise, you might end up listing your home by divorce default! Instead, start with your own stuff and lead by example.
Next go to the bathroom cabinets. Get rid of old prescriptions and products that you rarely use.
Clean out the clutter from under the bed. There are likely items that you haven't used in years underneath the bed just collecting dust. Nothings worse than viewing a home and the buyer lifts a corner of the bed's dust ruffle to reveal a mixture of clutter, dust, and pet hair -- yuck!
Walk-in-closets are so named because you should be able to move about in them. But some people have them overflowing. Buyers can't even squeeze inside, nor would they want to in that condition. So, the desirable walk-in-closet now becomes a negative for the buyer. Chances are there are clothes in your closet that probably haven't been worn in a long time.
Clearing clutter not only makes your home appealing to others, it's a richly satisfying feeling to create a sense of organization and space. And just think what you could do if you didn't have to spend weeks looking beneath clutter to find something you've misplaced.
Copyright ? 2007 Realty Times. All Rights Reserved.
December 22, 2006
Sellers Could Lose Waiting for Buyers to Make Offers by M. Anthony Carr
One of the biggest mistakes sellers make in a buyers market is trying to price their houses with a "cushion" in the asking price for negotiation room. In the current market where most sellers find themselves, it's all back to price, condition and location.
Pricing the house from the start is the first offensive strike the seller possesses in his arsenal. The best way to determine price in our market is to start looking at two categories of real estate: solds and actives.
Properties that have sold in the last 30 days provide you a picture of what price range pulled in offers 60 days ago. By looking over those properties, you'll know if you're headed in the right direction with your price. Then, after seeing what's pulled in offers, look at where the competition is priced -- and price lower than the lowest price. If the trend is headed downward over the last 12 months the motivated seller will get in front of that price trend and sell for less than everyone.
This can be an emotional ordeal for sellers. The seller who approaches the sales price of a house like the asking price of a used car -- where negotiation and give-and-take is expected -- will also be calling the movers sooner and get through the transaction with the least amount of emotional turmoil.
Condition is the second part of this equation that sellers have control over in today's market. Folks -- it's got to look new. Period. Here are the steps that MUST be taken for a successful sale.
New paint. Everywhere. Don't leave one room unpainted. Paint is the cheapest, yet most effective way to give a house a face lift.
New carpet/flooring. This addition along with No. 1 makes people drop open their mouths with, "Wow."
Replace the small things. It's the attention to detail that can make a big difference for the buyers. New faucets throughout, new hardware on the doors, and new switches/plugs/plates take the house from just "cleaned up" to new.
Deep clean. I always have to mention this because a lot of sellers still just don't get it. It's still amazing to me how many people will leave a house in the "un-" condition. Unvacuumed, undusted, unwashed. Invite friends over for a deep cleaning or hire it out. This is a must, no questions asked.
Do you do windows? Well, somebody better. Get all the windows cleaned and caulked. The house may look great from the inside, but if you can't look outside because of the dusty film over the glass, steps 1 ? 4 could be for naught.
Finally, location is what buyers are looking for. I saw a listing the other day that was obviously connected to a realistic agent and seller. It was a lot of house for the price with the 1-plus acre lot -- and it was "priced for location," because the house backed to a very busy 4-lane highway. The comps in the neighborhood were nearly $100,000 more.
While you may not be able to do anything about the location of your listing, you can definitely spin the benefits of where it's located. Near commuter routes means the house is next to big highways, but for some shoppers they just want to get home quick after work and this is going to be a benefit -- but only if you market it that way.
Sell the lifestyle of the house as much as the amenities of the house itself. With prices dropping in some areas, headlines such as "Quit Commuting," "Walk to Everything," and "Cut Your Gas Bill" are becoming more and more enticing. The third- to one-acre lot doesn't look as good after the 75-minute commute. Some commuters are looking to move back in to the work centers.
Market to buyers outside the community who would find your neighborhood attractive. It's amazing how many buyers don't mind a busy 2-lane street -- when they've been overlooking the Beltway for years. Remember to market the benefits that you liked about the house when you bought several years ago.
Copyright ? 2006 Realty Times. All Rights Reserved.
10 Ways To Make Your Home More Salable
There's little doubt that the real estate marketplace is now in transition. Sale volume has begun to weaken and in many markets the days of quick sales and multiple offers are going or gone.
"The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they've seen in the last five years," says David Lereah, NAR's chief economist. "Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year."
Translation: Homes are not selling as quickly as before -- that's good news for buyers. Sharp increases in value are moderating -- that's also good for buyers. Values are not falling -- that's great news for sellers.
Meanwhile, the National Association of Home Builders says that permits for new construction for February fell by 3 percent when compared with a year earlier.
Neither the existing nor new home unit declines should trouble anyone. These changes follow record year after record year, a pace that's not sustainable. The good news is that the changes are modest rather than manic.
The catch is that a softer marketplace means sellers will have to fight harder to get top prices and quick sales. Here are 10 ways to get more out of your local marketplace.
Go for the junk -- and get rid of it. A house with less stuff looks bigger and roomier. If what you want to throw out can have value to others, see if you can help by donating goods to local charities.
Price within reason. Trying to sell a home for $700,000 when like homes go for $525,000 is a non-starter. The days of "testing" the market with huge price increases is finished in many areas. Overprice and you won't be competitive.
Use the best local broker you can find. Experience, connections and reputation can be a real edge when marketing a property.
Require your broker to have a marketing plan that makes sense for you and your property. The technique that sells one property may not be appropriate for another, so find the approach that's right for you.
If the home doesn't sell within a reasonable time period, think about changing the deal rather than lowering the price. In other words, rather than cutting the price from $500,000 to $480,000, instead keep the $500,000 price and offer a 2 percent "seller contribution" to help a buyer pay for closing costs. This approach is cheaper ($10,000 in closing cost help rather than a $20,000 price reduction) plus it gets to the real need of many buyers, closing assistance.
Have a home equity line of credit in place -- even if you don't expect to sell for several years. This way you can have funds available if you want to buy a replacement home while the current property is being sold. Just be aware of the risk -- if your current home does not sell in a reasonable period you could face lots of mortgage payments.
Make sure everything works -- and nothing leaks. Expect buyers to ask for a home inspection and be prepared to make reasonable repairs if requested. Remember that it may be better to upgrade an electrical service box than to look for a new buyer.
Find out what buyers thought after a showing or open house. Don't take negative comments personally. Look for ideas that can help you make a better impression with the next prospect.
Beware of buyers who want you to take back financing. At a time when loans with little or nothing down are available from every lender, don't go into the banking business and take back a loan when there is less risk to you with an outright sale.
Don't get upset with small inconveniences. If a prospect wants to see a home with little notice or at an odd hour, don't worry about it. It's better to show the property than to have a home which is both undisturbed and unsold.
Written by Peter G. Miller
Joann Scaduto - ABR, CRS, e-PRO, GRI
Prudential Fox & Roach Realtors
653 Skippack Pike Blue Bell, PA 19422 Licensed in PA, Lic. # RS182620L
There's little doubt that the real estate marketplace is now in transition. Sale volume has begun to weaken and in many markets the days of quick sales and multiple offers are going or gone.
