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ArchivesMarch 2008Make up your mind to be happyCliff Baird, PhD, the developer of The RealSTAR Online Recruiting System, has the following advice on how to make your life happy - starting now. Stop Waiting for Your Happiness Decide that there is no better time than right now to be happy about life. During this period of reorganizing, rebuilding and redirecting your real estate career, you need to create peace of mind about where you are headed. You need to focus on the truth about the future and how to get there. Fear is not your native soil. The only way we can attempt to predict the future is to see it in the light of history. For those of us who have endured the past storms of real estate, we can say with certainty that it will pass quickly. There are those among us who succeeded when interest rates were higher than 20%. We survived and thrived-and so can you. It’s your choice! The happiest of people don’t necessarily have the best of everything. They just make the best of everything they have. Check Yourself for Positive Thinking -Surround yourself with those who think positive. You may not think others have that much power over your train of thought, but they do.
6:13 PM - Mar. 31, 2008 - comments {0} - post commentTax Rebate - Save or SpendThe government's Economic Stimulus Plan has been in the news a lot lately, and the $168 Billion package is intended to jumpstart the economy by distributing tax rebates that should be arriving in your mailbox as early as spring. The question is: what should you do with your rebate check? The info below can help you estimate how much you'll receive, consider your options, and start planning now so you're prepared. HOW MUCH MONEY WILL YOU RECEIVE? The amount you receive ultimately depends on how much you make. For instance, individuals with adjusted gross incomes up to $75,000 will receive a rebate check of $600. If you're married filing jointly and earn up to $150,000, you can expect to receive $1,200. Those who earn at least $3,000 but don't pay taxes will receive about half as much—$300 for individuals or $600 for married couples filing jointly. If you make more than $75,000 as an individual or $150,000 as a married couple, your rebate check starts to shrink. That doesn't mean you're out of luck... most high-income taxpayers will still receive a check. But you can plan on receiving $50 LESS for every $1,000 you earn over those limits. Finally, if you have children, you can expect to receive a $300 credit for each child. SO...WHAT SHOULD YOU DO WITH YOUR REBATE? Do Nothing...At Least for Now — Don't start mentally spending those dollars just yet. At the minimum, you should hold off until you file your 2007 tax return. That's because the gross income listed on your 2007 return will actually determine how much you'll receive. And unless you absolutely need to, try not to spend the money at all until you have it in hand. Too often, we make purchases on the credit card or with money from savings with the intention of paying it back...only to have some other expense come up in the meantime. To avoid falling into this trap, make a commitment to yourself to wait for the check to arrive before you spend it. Don't Overspend — Regardless of how much you receive, make a budget and stick to it. We all know how easy it is to go to the store with a specific amount in mind, only to walk out over budget. In this case, not only could you end up spending your entire rebate check, but may actually come out negative by spending additional money that could be budgeted for your regular bills. Consider NOT Spending At All —The government is issuing these tax rebates with the hope that Americans will help bolster the economy by spending it. However, "spending" isn't always the best plan. If you have high-interest credit cards or other loans, use the rebate to help pay down the debt...and get out from underneath those payments sooner! If your debt load isn't very high, consider saving the rebate check in an interest-bearing account, funding or starting a college savings plan, or even putting the money in a retirement account that will earn you more and more money as time goes on.
6:02 PM - Mar. 29, 2008 - comments {0} - post commentNew front entry = quick sale-When it comes to purchasing a home, buyers do judge a book by its cover, according to a new survey of real estate agents commissioned by JELD-WEN® Windows & Doors. The JELD-WEN Real Estate Agent Community Trends (REACT) survey found that curb appeal is essential to getting buyers in the door and fostering a sale. Specifically, 82% of agents said they have had buyers decline to look at the interior of a home based on the exterior appearance. “This research speaks volumes about the importance of window and door curb appeal when it comes to home sales,” said Elizabeth Souders, product manager with JELD-WEN. “It confirms that windows and doors play a major role in the overall home value.” Other findings from the REACT survey include: - 90% of respondents felt a buyer’s first impression of the front entry was important to their ability to sell a home; 91% of agents agreed that a prospect’s impression of a home’s outer shell is equally important as the interior. Sixty-five percent of agents in the REACT survey said that the number of buyers looking for universal design features, such as a master bedroom on the main floor, has increased in the last few years. Given the importance of the front entry in the sale of a home, agents were shown pictures of an average 2,000-square-foot home and asked to estimate its value in their area. When shown the same home with updated entry and garage doors, agents estimated the property to be worth an additional $16,000 5:16 PM - Mar. 27, 2008 - comments {0} - post commentFreezing HELOC's and other mortgage issuesTy Mann of Visionary Lending Corporation has been our lender of choice for several years. Just so you know it isn't happening only to you, here is his story of having his HELOC frozen by his lender.
There is more bad news in the mortgage industry, this time it is from the Mortgage Insurance Companies. The Mortgage Insurance Companies have come out with their own zip code list that they consider to be a declining area. Unfortunately, for the most part it is all of the Denver Metro Area. Even if a property address is accepted by Fannie Mae or Freddie Mac, the mortgage insurance companies will not insure it, unless 5% is put down. Since every Fannie Mae or Freddie Mac loan at 100% financing has mortgage insurance, regardless of whether it is Lender Paid or Borrower Paid, this option is eliminated. The 80/20 is basically a thing of the past for now, because 2nd mortgage companies are only doing an 80/15, especially with 1st time home buyers.
What options are left?
There is still alternative financing out there, but the rates are high and there will more than likely be a soft pre-pay penalty. The best option left is probably going to be FHA. Nehemiah Down payment assistance is still available, although a judge is ruling today on whether to continue to allow it or not. If it is still allowed though, we have to get the seller to donate 6% for closing costs and down payment which is getting more challenging. Secondly there is the CHAC or CHFA down payment assistance through Colorado, but that has income restrictions for borrowers.
FYI- For any of you that have a HELOC on your house and use it, be careful because investors are freezing them so you can’t draw money against it. It happened to me, because they consider my area declining. I had to get an appraisal to support that the value is still good to access my funds again. The appraisal supports it has appreciated a good amount since we bought it. I say this to prove no area is immune to this issue.
12:49 PM - Mar. 25, 2008 - comments {0} - post commentSell it fast!In a market where frustrated home sellers must endure 150 or more days to sell their homes,Express Homebuyers has discovered a sure way to sell its homes in an average of 35 days. What makes this company unique is the fact that Express Homebuyers buys homes in any condition in as little as seven days. The company then renovates the homes to standards above neighboring properties and prices the homes just below others in the market. This allows them to sell their homes in an average of 35 days. Brad Chandler, president and founder of Express Homebuyers, shares six tips for those seeking to sell their homes quickly.6 Tips for Selling Your Home Fast in Today’s Market 1. Price your home aggressively — Look at the other homes in your neighborhood that have sold in the past three months (except for distressed sales) and price your home below the lowest sales price. If there are active listings in your neighborhood the price you select must also be below that of the most comparable home to yours. 2. Make your home the neighborhood showplace — Updated kitchens and baths are what hook most new home shoppers. Look to install granite countertops, stainless steel appliances, and new ceramic or hardwood floors. Carpets should be as nearly new as possible. Add a new coat of paint to your home’s interior and exterior. 3. Enhance Your Home’s “Curb Appeal” — Avoid the appearance of a “drab” yard by planting colorful flowers in selected locations. Seed or plant sod in areas lacking grass. Make certain the yard is mowed, edged and mulched. 4. Clutter Must Go — Even the most up-to-date house will look disorganized if it is filled with unnecessary furniture. Remove all furniture you do not absolutely need. Also, remove personal items (including family photos and portraits). Prospective buyers want to imagine a house with their own things in it, not yours. 5. Make Certain Your Home is Properly Staged — Consider hiring a professional to “stage” your house before prospective buyers begin coming through your door, especially if your house has been vacant for a while. A professional stager will generally charge between $1,000 and $2,000, and arrange home furnishings so that prospects can more easily envision their own furniture in the house. At the same time, an experienced stager can add a touch of class to your home. 6. Don’t Forget Financial Incentives — Offer buyers’ agents a four percent commission rather than the traditional three percent, along with closing cost assistance to buyers. Closing cost assistance is especially attractive now that credit has tightened significantly and 100% loans are next to impossible to obtain. Homes that take months to sell often require the asking price to be cut multiple times. Additional costs to the seller include continuing mortgage payments, utilities, taxes and insurance, repairs and other associated costs. Following the six tips outlined above can help to greatly reduce the amount of time it takes to sell a home in today’s market. 12:23 PM - Mar. 23, 2008 - comments {3} - post commentThis year's hot decorating tipsOur good friends at Lowe's have these 9 tips for updating and decorating your house this year - some at little to no cost! Color your world. Update window treatments. If your windows need a makeover, lighten them up with simple drapery panels. Lowe’s has a collection of drapes, blinds, shades and swags in the latest colors and fabrics. Now you can order special order window treatments online by clicking here Rearrange the furniture. Create a new look without spending a dime! Map things out on paper before you start moving pieces around, especially the heavy ones.
New countertops can transform a kitchen or bath, without having to remodel the entire room. And you don’t have to spend a fortune: affordable laminates now come in styles that look amazingly close to real granite, marble and quartz.
12:15 PM - Mar. 21, 2008 - comments {0} - post commentMinimize the threat of winter firesAlthough spring is approaching, for most parts of the country, it’s still the coldest time of the year, meaning that everyone’s trying to find ways to stay warm. However, with home heating costs burning a hole in consumers’ wallets, this can present a challenge, which is a big reason that nearly two-thirds of all residential fires occur during the winter months, according to the National Fire Protection Association. This results in billions of dollars in property damage as well as thousands of injuries and deaths each year.Fires can originate from many sources: too many electrical devices plugged into an outlet, portable heating devices, or roaring fireplaces. However, there are many precautions homeowners can take to keep the home fires burning safely. The use of alternative heating devices is a significant source of many winter fires. “Fire departments and organizations such as the American Red Cross are at their busiest during the winter,” said Mike Convery, vice president and chief claim officer for MetLife Auto & Home. “Alternative heating devices, such as a space heater or wood stove, can be attractive cost-saving alternatives, but they increase the likelihood of a home fire occurring, if used improperly.” The good news is, many fires are preventable, if the proper precautions are taken. To help minimize the likelihood of a fire occurring in your home, consider the following: Keep a tight-fitting screen on your fireplace and obtain a professional inspection annually before use. You should also have your chimney cleaned on a regular basis to remove any debris. If you have a wood-burning stove, make sure there is ample clearance between the stove and any combustible materials. Burn only dry, well-seasoned wood, and dispose of the ashes in a closed metal container outside the house. Do not burn trash in the stove - this can start a chimney fire. Never let a wood fire burn unattended or overnight. With any type of heater, such as an electric space heater or portable kerosene heater, use common sense. Always keep the heater away from flammables and - although it may be tempting, especially in snow-prone areas - never accelerate the drying of clothes by placing them on top of the heater. Think twice, and use a drying rack instead. Have your heater serviced per the manufacturer’s instructions. “The best defense is preparation,” said Convery. “Within our Claim Department, we see many winter-related claims that could have been avoided. To help avoid a tragedy, it’s important to review the basics of fire safety. It only takes a few minutes and it could save a life.” 12:08 PM - Mar. 19, 2008 - comments {0} - post commentIt ain't easy being green...Or myabe it is easier than we think. On this St Patrick's Day, the Alliance to Save Energy gives us 10 tips. ”Going green” and “reducing your carbon footprint” are all the rage, but these trendy concepts are nothing new for the Alliance to Save Energy. That’s because you can’t be green without minimizing your energy use; and energy efficiency has always been and remains the quickest, most cost-effective way to use less energy - and the amount of pollution you produce. The added benefits: While lowering your household energy bills, energy efficiency doesn’t require sacrificing comfort or convenience, and it will increase your indoor comfort. It’s just a matter of taking simple steps with your home and vehicles and employing today’s widely available, easy-to-use energy-efficiency technologies. You’ll not only ease the strain of today’s high energy prices on your household budget, you’ll also shrink the greenhouse gases and other global warming pollutants you spew into the atmosphere. Here are the Alliance to Save Energy’s Top 10 Ways to be More Energy Efficient and Green in 2008: 10) Remember when your mom would ask, “Do you think we own stock in the electric company?!” Take her sage advice and turn off lights, computers, TVs, stereos, etc. when you are done using them. 9) Green means clean - air filters, that is. Clean or replace HVAC filters regularly, whether you have a central heating and/or cooling system or window air conditioners. 8) Don’t let “vampire energy use” - AKA “standby power” - suck your wallet dry. Instead, look for the ENERGY STAR label on electronics - TVs, VCRs, CD players, DVD players, cordless telephones, and more that continue to use less electricity in the “off” mode to keep display clocks lit and memory chips and remote controls working. 7) Keep on rolling - efficiently - down the highway. Keep your tires properly inflated to improve gas mileage by about 3.3%. You could save more than 20 gallons of gasoline per year, which amounts to about $60 per car annually and about $120 per typical two-vehicle U.S. household with gasoline at $3/gallon. Added benefits: Extended tire life and avoidance of more than 390 pounds of CO2 production per vehicle yearly. 6) “Show the love” to your car by keeping it in good working order. Fixing a car that is noticeably “out of tune” or has failed an emissions test can improve gas mileage by an average of 4%. That amounts to nearly 25 gallons of gasoline per year, or savings of about $80 per vehicle per year or about $160 per household. Added benefit: Savings of nearly 500 pounds of C02 per vehicle, or 1,000 pounds per household. 5) Generate light, not heat, with ENERGY STAR qualified lighting such as compact fluorescent light bulbs (CFLs). Energy-efficient lighting products use 3/4 less energy than standard incandescent lighting and last up to 10 times longer. So despite their higher up-front cost, they yield lifetime savings of up to $50 per bulb. Added benefit: CFLs generate 70% less heat than incandescents, so they don’t add to the summer heating load that your AC needs to cool down. 4) Don’t waste money and pollution by heating or cooling an empty house. When installed and properly programmed to follow your daily and weekly patterns, a programmable thermostat can cut heating and cooling costs by about 10% - enough, in most cases, to pay for the device within one season and then yield home energy savings of about $150 a year. Added benefit: When the thermostat “remembers for you” to adjust the temperature when no one is home, you come home to a comfortable house yet have not wasted money or polluted unnecessarily. 3) Reach for the stars - the ENERGY STARs, that is. ENERGY STAR qualified products can cut related electricity costs by up to 30%. More than 50 categories of products are now labeled with this government “seal of approval” for energy efficiency. In addition to electronics and lighting (see tip numbers 8 and 5), they also include appliances, HVAC systems, windows, and more (see www.energystar.gov for a complete rundown). 2) Don’t waste money and energy heating and cooling the great outdoors, either! Make sure you have the proper amount of insulation for your climate, and seal leaks around doors and windows to cut your heating and cooling bills by up to 20%. With home energy costs estimated at $2,200 for the average U.S. household in 2008, and just over half of that going for heating and cooling, those savings can amount to about $225. Added benefit: Eliminate drafts and hot and cold spots for greater indoor comfort. 1) Slow down and save! Each 5 miles per hour you drive over 60 mph costs you about 20 cents more per gallon of gasoline. And aggressive driving habits - speeding, rapid acceleration and braking - can lower gas mileage by a whopping 33% at highway speeds and 5% around town. But driving sensibly can save up to 200 gallons of gasoline per year at highway speeds, or about $600 per car and about $1,200 per household with gasoline prices at $3/gallon. Added benefit: Avoiding up to 4,000 pounds of CO2 per car/8,000 per household. 12:03 PM - Mar. 17, 2008 - comments {1} - post commentDon't let those stains get you downRemoving stains can be a daunting task, especially if it’s a tough stain that you haven’t had luck with in the past. Below are some simple solutions to removing common stains. Many of these solutions can be found at grocery stores or your local pharmacy.
Please see the following precautions prior to removing stains.
Candle Wax - Place stained article between folded paper towels. Iron at low temperature. Replace papers and iron again. Continue changing papers and ironing until no wax remains. Sponge with a dry cleaning solvent, such as Carbona, Energine, K2R or Goddards, or petroleum distillate-based cleaners such as OOPS!.
Grass – Make a paste of powdered enzyme laundry detergent and water and apply it to the stain and let it sit in a warm place for at least 30 minutes. Wipe off excess detergent. Then with an eye dropper, apply a solution of one part white vinegar or ammonia to two parts water. Blot until all of the stain has been removed. Rinse in cool water and launder as usual.
Ballpoint Ink – Wipe off any excess ink and allow it to fully dry. Set the affected area face down on a clean towel. Spray the backside of the stain with hairspray, rubbing alcohol or nail polish remover. Blot the backside with a clean cloth removing as much ink as possible. Apply laundry pre-treatment and wash as usual.
Red Wine on Carpet – Blot the stain with paper towels or clean cloth. Combine 1 teaspoon of carpet cleaner or dish soap and 1 cup of hydrogen peroxide in a small bowl. Soak a clean sponge in the mixture, squeeze out the excess and gently blot the stain with the sponge. The stain should lift out completely. Then sponge the stained area with warm water and pat dry with a clean towel.
Lipstick – Blot any excess lipstick, and then with your finger, rub dish soap on the stain. Since lipstick is oil based, it’s best to use detergents that remove grease. Rinse with warm water, then wash. Don’t dry the article in the dryer in case the stain doesn’t fully come out, this way you can take it to a professional cleaner.
Rust – pots and pans – Cut a potato in half lengthwise and dip the inside in baking soda or salt. Wet the rusty pan and rub the potato on the rust spot and rinse.
Clothing – Lay the clothing on paper towels. Cut a lemon in half and squeeze the juice to saturate the stain (bottled lemon juice works too). Set the piece of clothing with the paper towels in the sun and the stain should disappear.
Berries – Boil a quart or more of water in a teakettle. Take the garment and pull it as taught as possible over a bath tub or sink. Then while the water is still very hot, hold the teakettle as high above the fabric as you can and pour the water in a steady stream directly on the berry stain. This should push the berry stain out completely.
Mud on Carpet – Remove any loose or wet mud. Make a paste with powdered detergent and water and rub it on the stain with a cloth. Let it sit for 10-15 minutes. Rinse out the cloth, removing all of the solution, in hot water. Rub the clean cloth on the stain in a circular motion until the stain disappears.
Not sure what the stain is exactly? There are some solutions you can use to treat mysterious stains.
Fels-Naptha – This bar soap is available at discount stores and grocery stores. It works well on clothes, upholstery as well as treating poison ivy! Caldrea Stain Remover – Works best on organic stains.
Goo Gone – For adhesive removal. Works well on skin and most fabrics.
For more stain solutions visit: www.ehow.com, www.chemistry.co.nz/stain_frame.htm, http://home.howstuffworks.com/how-to-remove-stains-and-spots.htm
12:52 PM - Mar. 15, 2008 - comments {0} - post commentMake SURE it's the IRS you're talking toAlong with the tax man comes the inevitable new breed of scam artists. Be on guard - criminals who want your personal information use this hectic and confusing time of year to prey on unsuspecting individuals. Watch out for unscrupulous scammers, who are sending emails that appear to be from the IRS. The content of the emails are often written to persuade you to link to a website that will allow you to update your data or receive important information. Remember, these phony emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, to offer a larger refund, or sometimes, ironically, to protect you from identity theft or loss of privacy. There are some simple steps you can take to avoid falling prey to one of these scams. Always Be Suspicious of Emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to phishing@irs.gov. Double Check the URL Address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is "phishing" for information. So always, always double check the actual URL address before you type any information in the site. Exercise Extreme Caution with Attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information--often without you even knowing! In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will rarely, if ever, ask you to divulge personal information via email. 12:46 PM - Mar. 13, 2008 - comments {0} - post commentMoving your carFor many families, a car is the second largest investment they have ever made. Getting that investment safely to a new home is an important component of a smooth move. Moveadvocate.com gives us several options:What are my options for transporting a vehicle? A vehicle can be moved with your household goods or with a separate auto transport company. To ship your car most efficiently and cost-effectively, it’s important to know about the different shipping techniques, such as open and closed trailers. The model of the car, as well as the intended destination, will help determine the type of trailer you will need. What is an open trailer? An open trailer is the more popular and frequently used trailer. It carries anywhere from 10-12 vehicles at a time. Advantage: Open trailers are less expensive than closed trailers. The cost is determined by the weight of the vehicle. Disadvantage: Open trailers are subject to the elements (i.e. rain, snow, wind, dirt and dust). What is a closed trailer? A closed trailer is a vehicle that has a covered freight area. It is commonly used for shipping expensive or classic cars that need to be protected. If you wish to protect your car from wind-blown sand and heat, this is your best option. Advantage: The car is well-protected from the elements of nature. Disadvantage: Closed trailers cost more. Remember, the cost is determined by the weight of the vehicle. Is my car insured? The company that transports your vehicle(s) should provide adequate insurance to protect against driver negligence. Ask for a copy of the “Certificate of Insurance” and familiarize yourself with the types of coverage provided. Consult with your current auto insurance agent to determine whether you need supplemental coverage. Turning your vehicle over to the carrier. Prior to handing over your car to a driver or transport company, be sure you receive an “Original Inspection Report.” This report provides: pick-up and delivery information, current mileage, and most importantly, shows the condition of your car at time of pick-up (pre-existing scratches and dents, cracked glass/mirrors, general paint condition, etc.). Accepting your vehicle for delivery. At the time of delivery, inspect your vehicle thoroughly and compare the condition and mileage against the “Original Inspection Report.” Many transport companies also provide a copy of this report at time of delivery. If there are discrepancies, note them as exceptions and be sure the driver signs it. NEVER accept your vehicle at night if you cannot verify the report condition and without being signed by the driver. What’s in your trunk? As of 1990 the Department of Transportation ruled that you may not load any items in a vehicle other than clothing. Auto transporters are not licensed to carry household goods or personal items. Damage to your vehicle due to household goods shifting or breaking is not covered by insurance. 12:41 PM - Mar. 11, 2008 - comments {0} - post commentLet the foreclosure freeze help youRobert Shemin, wealth building coach and author, says one of the most important secrets to becoming wealthy is getting out of debt. And the only way to get out of debt is to take action.“The new freeze on foreclosures is the perfect opportunity for everyone who has too much real estate debt or is facing foreclosure or is in foreclosure to take action now and turn a negative money situation into a positive wealth-building opportunity,” says Shemin. “Stop looking at those massive mortgage payments, take advantage of this gift and call your lender right away.” Shemin, who is himself a real estate multi-millionaire, offers these action steps to take advantage of the foreclosure freeze: 1. Call your lender with the end result you want firmly in mind. Know what you can afford and how much less you want to pay and ask for it. 2. Have back up documentation. Banks and lenders love paperwork. If your home has gone down in value have copies of three comparable sales from the Internet or local realtors. Solid proof can help you favorably renegotiate your loan or interest rate. 3. Prepare a basic financial statement showing your assets and liabilities as proof to the lender of what you can or cannot afford. 4. Try for a short sale agreement. Ask the lender to agree to discount or reduce the debt so the property can be sold below what you owe if you get an offer. 5. Ask about refinancing the loan or lowering payments. The most important thing is to take action and communicate with the lender immediately. Make sure you are talking to a decision maker, who can make a final decision to change, alter, or modify your loan. Finally, be patient but persistent. Banks and lenders are on overload, recognize that it may take you two or three months and dozens of phone calls to get the result you want. But no matter how long it takes it’s worth it if you can get lower payments or interest rates. You’ll end up with less stress, less debt and more money in your pocket. 12:35 PM - Mar. 9, 2008 - comments {0} - post commentProject Lifeline announcedCountrywide Financial Corp. has announced that it was partnering with the community advocate group, ACORN (Association of Community Organizations for Reform Now) to expand relief for its borrowers who are facing foreclosure. The Bush administration followed up with its own foreclosure relief expansion plan - “Project Lifeline” - giving distressed homeowners an additional 30 days to work out more affordable payment options with their lenders.The new program is designed to help all homeowners who are having trouble making their monthly mortgage payments, instead of restricting assistance to those with high-interest, subprime loans. Project Lifeline was developed through the collaborative efforts of six of the largest lending institutions in the United States, which collectively service nearly half the mortgages in the U.S. The banks that have agreed to participate in the program so far are: Citigroup According to this new program, lenders will contact homeowners who are more than 90 days delinquent in their mortgage payments and offer them the option of delaying the foreclosure for 30 days while they explore options for making the mortgage more affordable. Who does not qualify? - Homeowners already in foreclosure. Both of these expanded relief programs are steps in the right direction, both for homeowners and for neighborhoods and communities. Hopefully, more mortgage lenders will follow suit to cover 100% of those who are in jeopardy of losing their homes and their equity as a result of foreclosure. 12:28 PM - Mar. 7, 2008 - comments {0} - post commentShould I rent it out?Rob Massey is the founder of RentalHouses.com and vice president of industry development for Rentals.com. He has the following commentary about this age old question. Over the years, I have taken over the management of many houses that had been on the market for sale but, because of a weak sales market, remained unsold and vacant. In nearly all cases-from a cash flow standpoint-renting out a house in this situation is preferable to leaving it vacant. But many factors should be considered first. Coming from the seller, it always sounds so simple: “I can’t sell my house, so at least I can get it rented and slow the loss of dollars paid to my mortgage company and paid for taxes and insurance.” Well, not so fast. Was the house properly prepared for sale? If so, will those preparations be enough for renting it out? When ready to put it back on the market, will the seller have to do anything to the house to make it salable? If so, the damage deposit will cover those costs, correct? Renting out a house that has been for sale for an extended period due to weak market conditions is certainly an option that should be considered. However, there are additional factors that may affect whether or not renting is the best option for your property: 1) Sellers should be aware that many rental market cycles are similar to sale market cycles. In some parts of the country, sales slow down during the fall and continue to decrease until after the first of the year. This is also true with the rental market in many of these same areas. So to assume that a home will be easy to rent once the sale-market peak has passed is not usually true. 2) Get prepared. Getting a home ready for the rental market is a critical part of renting. If the home was not properly prepared for the sale market, then it will likely not be ready for the rental market either. In fact, I believe that with renting, preparation is even more important. It is vital not to overlook this very significant factor in renting out a house. 3) Sellers should be conscious of the fact that if the house is in great shape with new carpet and fresh paint, it will need some of the same tasks when it’s time to put the home back on the market. Hopefully, the carpet won’t need to be replaced, but it will need to be cleaned. The walls will need to have a fresh coat of paint, or at least a touch-up, and the cleanliness of the house will have to be addressed. So, in many cases, the house has to be prepared for the market twice. 4) People looking to rent don’t care about the cost of the mortgage, taxes, insurance, or management fees. They will be willing to pay the market rent and no more. If a seller must cover all of these expenses in order to rent, he or she will likely be better off reducing the sale price further and cutting his or her losses with a lower sale price. There are no guarantees when it comes to renting. The tenant may have some bad luck and not be able to afford the rent, and many components of your home are always at risk for a malfunction. Steady income from a single-family rental home is certainly no guarantee. 5) Anything that is provided in a rental home must work. Sellers should realize that just because they opted not to repair and use a component of the home, it doesn’t mean that they don’t need to fix or replace that item for a tenant. All appliances in the home at the time of renting should be operational. Renting out a house that won’t sell is certainly a great option for some situations. However, it does not apply to every case. Smart agents need to inform their sellers to carefully weigh their options prior to committing to renting out a house that they really want to sell. 12:08 PM - Mar. 5, 2008 - comments {0} - post commentShort Sale 101You've heard about short sales. This article by Steve Stovall of Star Real Estate explains the ins and outs. First and foremost, a Short Sale is not a method of correcting a mistake in judgment made by a unfortunate homeowner in a difficult Real Estate market. All short sales must be qualified and approved by the loss mitigation department of the lender or lenders involved. A qualified Short Sale must be justified with cause. A few examples of justifiable cause are: Illness of a borrower or co-borrower that qualified for the loan and because of such illness can not continue to make payments. This example would, of course need to be accompanied by a doctor's statement of permanent or long term disability. Frivolous reasons will not be approved by the bank. For example, if you quit your job or were fired for just cause; refinanced or acquired a loan with an accelerating payment, high interest rate or negative amortization; ran your credit cards up to the max and can't afford all your monthly payments; bought a new car or other large purchase and can't make all your payments; or decided to separate from a spouse or significant other co-mortgagor without a divorce or legal separation; you would probably not qualify for a Short Sale. The lender would likely foreclose, but each case is weighed on its own merit. You may want to contact the lender and explain your unique situation. Once you've decided to move ahead with your Short Sale, it is very important to hire an agent with experience in the area. Your real estate agent and escrow officer can make or break a Short Sale transaction. Loss mitigation departments are overloaded with files, and your choice of representation will definitely help to smooth the process. Pick your agent in the same way you would pick an Attorney or Doctor if you had a serious matter facing you. An experienced agent will have a good working relationship with a good escrow officer, title officer, home inspector, etc. About 10% of the agents in the field today are doing about 90% of the business; it would be a good idea to use one of the better agents to help you affect a successful Short Sale. Now that you've decided to move ahead with your Short Sale and you've selected an agent, you'll need to prepare a package for the lender. Included in your Short Sale package, it will be necessary to include but not necessarily be limited to the following items: 1) A letter from the borrower requesting the lender to consider your Short Sale. This letter should be prepared in a professional manner outlining the reasons why you feel that you are a qualified candidate and include all documentation that will help justify your cause. Keep the letter brief, to the point and as professional as possible. 2) Provide your past two years tax returns, all current bank statements for the most recent two months, and two recent pay check stubs from all borrowers. Also include any documentation from employers regarding pay modifications, pink slips, etc. 3) A letter from your agent regarding the current situation in your particular marketplace along with a current BPO (Brokers Price Opinion) showing comparables that are accurate within the past 90 days. Also include a copy of the MLS printout and a copy of your Listing Agreement and Agency Agreement. Your agent should also include an estimated seller's net sheet showing the potential loss at time of projected closing. It would be a good idea for the seller to contact the lender via telephone prior to submission of the before mentioned package. The lender will likely hold on to the package pending submission of an offer acceptable to the borrower—be prepared to send a shadow package at that time. Upon successfully negotiating an offer with a potential buyer, send the accepted offer along with a lenders pre-approval letter for the potential buyer ahead to the lender. If you have more than one loan on the property, send the above information to only the lenders that will be affected by the short sale. Also, be reasonable in your values, i.e. if your property is worth $700,000 according to recent comparables—price it accordingly. Over or under pricing your property will only complicate the issue. The lender will scrutinize and verify all information very carefully. Put together a fair and reasonable package and you'll have a fair chance of successfully completing your qualified short sale transaction. As a buyer of a short sale, you'll be at the mercy of all the intricacies of the short sale. It's important to remember that the lender is unlikely to allow any further loss than is necessary. There are very few "killer deals," lenders are trying to not lose any more money than is necessary. Be prepared to pay a reasonable price, also be prepared to wait 60-90 days to close. Also, you could get to day 89 and the lender could deny the sale; you'll have no recourse. Have your agent pre-qualify the purchase, to the best of their ability, prior to submission of your offer. With good representation, common sense, and a little luck all parties can succeed in a Short Sale Transaction. 5:20 PM - Mar. 3, 2008 - comments {1} - post commentIf you have to ask, you probably can't afford itAccording to the Wall Street Journal online, representatives of the estate of Leona Helmsley have decided to list her Greenwich, Conn., mansion for $125 million. That’s a big price tag, even for Greenwich, an affluent New York suburb sometimes dubbed the hedge-fund capital of the world, and it would be among the highest prices ever asked for a Northeast home. The listing agent, David Ogilvy of Christie’s Great Estates, is expected to begin showing the home at the end of February, a person close to the talks said. Known as Dunnellen Hall, the estate of more than 40 acres was at the center of Mrs. Helmsley’s 1989 federal tax-evasion trial, when she was accused of illegally billing her company for more than $3 million of property renovations. The former model, dubbed the “queen of mean,” served 18 months in federal prison. She died in August at age 87. The 1918 Jacobean-style manor house of more than 20,000 square feet, with 10 bedrooms, sits on one of the highest points in the Greenwich backcountry and has views of Long Island Sound. There’s also a carriage house and pool house. The estate must be sold, according to terms of Mrs. Helmsley’s will, which left the bulk of her billionaire real-estate holdings and property to a trust, $12 million to her dog and comparatively little to her closest relatives. The real estate includes a majority interest in the Empire State Building. Last month, Christie’s auction division announced it will sell selected contents of Mrs. Helmsley’s homes in a series of sales this year. With many of Greenwich’s older homes demolished, Dunnellen Hall is one of the few intact historic estates left in town, says Anne Young, an archivist with Greenwich’s Historical Society. Industrialist Daniel Grey Reid paid the then-enormous sum of $1 million to build the home for his daughter. It has marble floors, limestone walls and 15th-century fireplace mantels. There are indoor and outdoor pools, a koi pond and a walk-in silver vault. To sell the home, Christie’s is likely to reach out directly to Greenwich billionaires and may try to coordinate with the auction house. Last year, Christie’s placed banners advertising a $135 million Aspen, Colo., ranch in the company’s New York headquarters. Few residential deals have topped $100 million. Last year, hedge-fund manager Bruce Kovner spent $83.3 million assembling a 15-acre swath of oceanfront bluff in California’s Santa Barbara County, and has agreed to pay more for seven adjacent acres. Also last year, investor Ron Baron paid $103 million for 40 acres of oceanfront land in East Hampton, N.Y.
5:03 PM - Mar. 1, 2008 - comments {0} - post comment |
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