MATT'S WEEKLY BLOG

 

Welcome to my weekly blog! Every week I'll share what I feel is an important part of the real estate industry. As always, if you're ready to buy or sell a home or have any questions, you can call me at (907) 244-1876.

 

 

9-2-2010

Google Invests in Low-Income Housing

Google Inc. is investing $86 million in a tax-credit fund to finance the construction of 480 low-income housing units.

The developments will be spread among seven communities in the West and Midwest to provide housing for low-income families and senior citizens. The housing will include units with as many as four bedrooms, according to a prepared statement.

"Our investment … allows us to further our goal of providing relief to people who otherwise may not have access to quality housing," says Brent Callinicos, a Google vice president.

Source: Dow Jones Newswires, Francesca Freeman (08/31/2010)

 

8-26-2010

Fannie Mae to Prohibit 'Appraisal Cutting'

Fannie Mae is banning a common practice known as "appraisal cutting," starting next week.

When lenders selling loans to the firm challenge a valuation, the underwriter will have to contact the appraiser directly; if the lender is unable to settle the dispute, its only option will be to order a second appraisal.

Lenders will be unable to simply cut the value of the appraisal or shop around for the best appraisal.

Source: American Banker, Kate Berry and Marc Hochstein (08/26/10).

 

8-19-2010

Three Reasons to Buy a Home Now

Stocks are up 50 percent from the March 2009 bottom. Some commodities have risen dramatically. The only asset class left in the cellar is real estate, says Michael Murphy, editor of the New World Investor stock newsletter.

As a result, Murphy is advising investors to buy now for these three reasons:

• Desperate sellers: Both home owners and lenders are eager to unload a flood of foreclosed and underwater properties. Buyers with the patience to push through these complex deals can save a bundle.

• Little competition. Because most people don’t have what it takes to negotiate their way through short sales and REOs, patient investors are winners.

• Low rates. Mortgage rates are at their lowest level in 40 years. If you believe inflation is inevitable, lock in now.

Source: MarketWatch, Michael Murphy (08/19/2010)

 

8-12-2010

NAR: Homeownership, Stable Communities Linked

Home owners are more active in their communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness when compared to renters, according to leading research. A new report from the NATIONAL ASSOCIATION OF REALTORS®, Social Benefits of Homeownership and Stable Housing, explores the impact of stable housing and the positive social outcomes resulting from homeownership.

“Homeownership is in investment in your future – home is where we make memories, build our lives and feel comfortable and secure,” said Vicki Cox Golder. “Owning a home has long-standing government support in this country because homeownership benefits individuals and families, strengthens our communities, and is integral to our nation’s economy.”

NAR’s study identifies research from government, industry, and academia that identified the relationship between homeownership and stable communities. Home owners move far less frequently than renters, and therefore are embedded into the same neighborhood and community for a longer amount of time. This allows for social cohesion, ultimately resulting in social benefits and stronger communities.

“REALTORS® care as much about keeping families in their homes as they do about helping them find the home of their dreams,” said Golder. “Social benefits do not arise solely from ownership, but also from greater housing stability and social ties associated with less frequent moves among home owners.”

Several research studies cited in the NAR report have found that homeownership has a significant impact on educational achievement. For instance, the decision by teenage students to stay in school is higher for those raised by parents who are homeowners compared to those whose parents are renters. Access to economic and educational opportunities are also more prevalent in neighborhoods with high rates of homeownership. Furthermore, studies have shown that changing schools frequently due to moving impacts negatively a child’s educational outcome.

Civic participation is another social benefit resulting from homeownership and stable housing. Home owners are proven to be more politically active and are more likely to vote in local elections compared to renters. In addition, homeowners have a higher membership in voluntary organizations.

Studies have shown that home owners are more likely to believe that they can do things as well as anyone else, and they self-report higher ratings on their physical health. “The research shows that home owners report higher self-esteem and happiness than renters, resulting in better overall health, both physically and psychologically,” said Golder.

When it comes to property, home owners have more invested both financially and emotionally. Property crimes affect home owners directly, but nonviolent property crimes can impact the property values of the entire neighborhood. Therefore, home owners are more motivated to deter crime by forming and implementing voluntary crime-prevention programs. In addition, it is easier for home owners to recognize perpetrators in stable neighborhoods because of extensive social ties. Unstable neighborhoods often display social disorganization which can lead to higher levels of crime.

Along with protecting their home and neighborhood from crime, home owners spend more time and money maintaining their home than renters. Neighbors also influence other home owners to improve their property, resulting in a better overall quality of the community.

“Homeownership certainly contributes to positive social outcomes, but those outcomes are truly a result of stable housing communities,” said Golder. “With strong social ties and a cohesive community, home owners can enjoy not only the long-term financial benefit of owning a home, but also a more satisfying life – which is what’s really at the heart of the American Dream.”

Source: NAR

 

8-5-2010

20-Year Mortgages Cut Interest Significantly

Buyers with the ability to stretch a little might consider a 20-year fixed-rate mortgage instead of the traditional 30-year, suggests CBS Money Matters’ financial adviser Ray Martin.

Martin points out that a $200,000 mortgage with a 30-year term and an interest rate of 4.75 would have a monthly payment of $1,043 and the total interest over the life of the loan would be $175,600.

The same mortgage with a 20-year term at 4.5 percent would have a monthly payment of $1,265 with total interest over the life of the mortgage of $103,670.

Young home buyers planning to have children will have their 20-year mortgage paid off by the time their kids enter college, a big financial advantage, Martin points out.

Source: CBS, Ray Martin (08/04/2010)

 

7-29-2010

Loan Officer Registry Coming in January

Bank loan officers are now required to add their names and fingerprints to a national database so it will be easier to identify unethical lenders.

Federal regulators approved these requirements Wednesday and the registry is expected to begin operating next January. Banks will have 180 days to comply.

A similar registry already exists for mortgage brokers.

Source: Associated Press, Alan Zibel (07/28/2010) 

 

7-22-2010

Wall Street Reform Encourages Safe Loans

The new financial overhaul law that President Obama signed into law is still being dissected, but some regulations that affect homebuying and mortgages have already been defined. Here are the key tenets:

• Lenders must prove that borrowers can afford their mortgages. Government guarantees will be voided if lenders don’t demonstrate that they have thoroughly investigated a borrowers’ ability to pay.

• Banks and other entities that pool mortgages and sell them to investors must keep at least 5 percent of the investments on their own books – an incentive to avoid poor quality loans.

• Low-risk mortgages, mostly 30-year fixed-rate loans, are exempt from many regulations. That should encourage lenders to put homebuyers into “plain vanilla” mortgages.

• Bonuses for brokers based on the cost of a mortgage are banned.

Source: Associated Press, Daniel Wagner (07/21/2010)

 

7-15-2010

More Homes Accommodate Multi-Generations

Building and modifying homes to accommodate multiple generations is increasingly popular as more Americans struggle to accommodate both their older parents and their grown children under the same roof.

The National Association of Home Builders’ International Builders Show this year featured a single-level residence with a master suite at each end.

"The grandparents' suite included universal design elements along with a small kitchenette," says Stephen Melman, director of economic services at the NAHB. "The concept for this home was that the parents could get help with their kids from the grandparents, while the grandparents benefited by having household maintenance chores and meals taken care of for them.”

Melman said that it is difficult to predict whether this trend will diminish when the economy improves, but he pointed to the growing number of ethnic groups where multi-generational living is expected as a sign that the trend may stick.

Source: Washington Times, Michele Lerner (07/09/2010)

 

7-8-2010

 

Billions of Dollars are Missing. Is Some of it Yours?

 

 

	Would you be surprised to learn that Billions and Billions of dollars are missing...just waiting to be found by the rightful owners? What happens to this money...and how can you get it back if it's yours? Here's the scoop. Why Is the Money Lost? When individuals move and forget to change their address, companies or banking institutions cannot contact them. So any property left behind is turned over to the state as "unclaimed property." The state then acts as a custodian of the property until the rightful owner claims it. Where Does the Money Come From? The most common types of unclaimed property include bank accounts and safe deposit box contents; stocks, mutual funds, bonds, and dividends; un-cashed checks and wages; insurance policies, CDs, trust funds; utility deposits and refunds; and escrow accounts on home loans. Is Some of This Money Yours? To determine if you have any unclaimed property with the state, jump on the web and visit www.unclaimed.org. Click on the state that you live in, and you will be directed to the appropriate website. You will either be able to perform a quick immediate search online, or a few states give you the information on how to just contact them directly to inquire. If you have lived in several states, do a quick search for each, since the funds will be held in the state they originated. But Be Careful... Be cautious of solicitations by mail or email that require you to pay a fee to obtain information about unclaimed property. You may end up paying a fee and receiving no information about unclaimed property, just the contact information for the state. Any unclaimed property information can be obtained free of charge by visiting the above listed website. What about money in Canada, or Federal money such as IRS returns, Savings Bonds, or Federally insured Credit Union accounts? While you're on www.unclaimed.org, just hit "links" at the top of the page to search these resources as well. By taking a minute to do a quick search, you may find out you're a bit richer than you think. Pass this article on to your friends, family members, or colleagues...but be sure to remind them to include you in their celebration if they find their missing stash of cash!

 

 

7-1-2010

Why Use a REALTOR^®?

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

 

Courtesy of REALTOR.com 

 

 

6-24-2010

Inmates Get $9.1 Million in Home Buyer Credits

More than 1,200 prison inmates, including 241 serving life sentences, applied for and received first-time hom ebuyer tax credits, according to a Treasury Department report released Wednesday.

Treasury said many filed multiple claims, even some outside the alloted time persiod, and received help from paid preparers. Altogether they fraudulently received $9.1 million in tax credits with $1.7 million going to prison lifers.

The report also identified 2,555 filers who received $17.6 million for homes that they purchased before the tax credit program began. It flagged 206 filers who sought credits on multiple properties and were awarded $1.4 million.

In addition, 34 employees of the IRS were nabbed for filing illegally for the credit.

Source: CNNMoney, Aaron Smith (05/23/2010)

 

6-17-2010

Effort to Extend Tax Credit Closing Deadline Gains

The U.S. Senate voted Wednesday to extend the home buyer tax credit closing deadline to Sept. 30, giving an estimated 180,000 buyers who met the contract deadline of April 30 extra time to close the transaction. The extension was added to a bill to pay for jobless benefits, which still must pass.

The NATIONAL ASSOCIATION OF REALTORS® estimates that one-third of qualified applicants have been notified that they will be unable to close by the deadline. The Mortgage Bankers Association says delays are caused largely by the volume of transactions.

The overall bill, once it passes the Senate, must be approved by the House.

Source: Associated Press, Andrew Taylor (06/16/2010)

 

6-10-2010

Wildlife and greenery is a major asset to any home. Here's a few tips on how to make the most of the friendly neighborhood moose or resident eagle.

Be Ready. While camera phones are not ideal camera equipment they work in a pinch. Just know the image quality will be compromised in any print advertising. The important thing is to be ready when an opportunity presents it's self.

Rule of Thirds. Imagine dividing your picture area into thirds horizontally and thirds vertically. Where the lines intersect are the "thirds" - the area next to the direct center of the frame. Center your subject on one of the "thirds" to give more interest and movement to your photo.

Composition. A meandering stream and a curled fern frond all give strong lines to the composition. Some items are triangular, round, square, etc. A butterfly is triangular, a leaf oval. Look at the scene you want to photograph in terms of balance of line and shape.

Post Your Photos. Even the most beautiful photo is useless if it isn't used. Make sure to upload your photos.

 

- FROM JOHN MONTGOMERY NEWSLETTER

 

6-3-2010

FHA: Loan of Choice for Most Buyers

The vast majority of potential home buyers – 87 percent – plan to use a Federal Housing Administration home loan to finance their purchases, according to a new survey from the Home Buying Institute, a consulting service.

In a survey of 12,000 home shoppers, two-thirds first-time buyers – nearly 54 percent – said they preferred an FHA loan because it requires a small down payment. The remainder chose an FHA loan for these reasons:

• 19.2 percent thought the qualification process would be easier.
• 13.5 percent said they didn’t think they could qualify for a conventional mortgage loan.
• 7.7 percent said they had bad credit.
• 5.8 percent said their income was too low to qualify for a conventional loan.

Source: Home Buying Institute (06/04/10)

 

 

5-27-2010

Mortgage Rates Might Not Be Low for Long

The near-record low mortgage rates seen during the past few weeks may not be around much longer.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgage rates, says Stephen Stanley, chief economist at Pierpont Securities LLC.

The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared to a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.

In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.

“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” says Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, N.C., who formerly worked at the Fed in Washington.

Source: Bloomberg, Bob Willis and Anthony Feld (05/28/2010)

 

 

5-20-2010

Why Use One Real Estate Licensee?

Many I talk to believe it's advantageous to use many real estate Licensees in their search for a home. In my experience, it is more advantageous to use one, even if it's not me. Of course if the Licensee you're using isn't performing, then by all means, firing them is probably a good idea. Why stick with one?

First, we all have access to the same information. It is unlikely that other Licensees have a list of different properties then the next Licensee in the same territory. Of course it's always possible that somebody has a pocket listing, but in most cases we all have the same information.

Second,  one Licensee can show you virtually any listed property. If it's in Alaska MLS, we can show it to you no matter who it's listed by. We all participate in MLS and you do not have to call the Listing Licensee to view their listed property.

Third, but you want the Listing Licensee to show you the property because they know more about the property. The Listing Licensee puts most relevant information into the MLS listing and disclosures of which all Licensees have access to. Also, remember this, the Listing Licensee is working for the Seller, and in most cases established a relationship with that Seller long ago. Their loyalties in most cases will lie with the Seller. Do you really think they can represent your best interests?

Last, one word, loyalty. If you don't show loyalty to a Licensee, will they really be loyal to you. Licensees aren't usually waiting around hoping that the person using ten different Licensees will call. They are out showing their loyal clients property.

If you need somebody who is loyal and has an impeccable reputation in the real estate industry in Alaska, why not give me a call. If you don't like my services, simply walk away. It's as simple as that. My number is 907-244-1876. E-mail address is mkane@gci.net.

 

5-13-2010

10 Big-Impact, Low-Cost Remodeling Projects

 

Working with sellers who have some—but not unlimited—cash for upgrades? Here are budget-minded enhancements you can suggest to make their home stand out.

1. Tidy up kitchen cabinets.

"Potential buyers do open kitchen cabinets and look inside," says Morrissey. "Home owners can add rollout organizing trays so when buyers peek in, they feel like there’s lots of room for their stuff." 

2. Add or replace tile.

"By retiling very inexpensively, you make a room look way cleaner that it was," says Javier Zuluaga, owner of Home Repairs and Remodeling LLC in Tempe, Ariz. "Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash or add a new one. We also use inexpensive tile to upgrade bathrooms." 

3. Add a breakfast bar.

When a wall separates a kitchen from a family room, suggest cutting out an opening to create a breakfast bar. "In one home, there was a cutout in the wall between the kitchen and living room," explains Matthew Quinn, a sales associate at Quinn’s Realty & Estate Services in Falls Church, Va., who handles estate and real estate sales for family members whose loved ones have passed away. "We left the structure of the cutout, added an oversized granite breakfast bar, and put chairs in front of it. That cost about $600." 

4. Install granite tile instead of a slab.

"Everybody is hot for granite kitchen countertops, but that can be a $5,000 upgrade," says John Wilder, a general contractor and owner of Fence and Deck Doctor in New Castle, Ind. "Instead, home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money." 

5. Freshen up a bathroom without retiling.

"With a dated bathroom, I recommend putting in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300," says Wilder. "And instead of replacing the tile, the existing grout can be lightly scraped and regrouted, which leaves a haze that can be buffed out and will make the tile look brand new. Also install glass shower doors. A French door adds a lot of panache and elegance for $250, and people will notice the door, not the tile. With all that, you’ve done a bathroom remodel for $1,000 to $2,000." 

6. Freshen up the basement.

"If home owners have cement block or poured concrete walls in the basement, suggest they have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint," recommends Wilder. "They can then add a top coat to add color. They can also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon." 

7. Add a room.

Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall. "One time, we closed off a half-wall to an office and added a door to the other side of the room, thus creating another bedroom," says Quinn. "That $400 procedure, which took a contractor one day, netted about $40,000 in the sales price." Zuluaga has also added bedrooms inexpensively. "In a two-bedroom house, there was an archway that led to a third room that was used as a den," he explains. "It had a dry bar where there would have been a closet, so we took out the dry bar and created a closet so the owners had a third bedroom."

8. Spruce up cabinet fronts.

Suggest home owners update tired-looking kitchen cabinets. Reconditioning is the least expensive move for under $1,000. "If the wood is starting to look shabby from use or contaminants in the air, we take out the nicks and scratches, recondition it with oil, and put new hardware on," explains Heidi Morrissey, vice president of marketing and sales at Kitchen Tune-Up in Aberdeen, S.D. For $1,500 to $4,000, owners can replace the cabinet doors and drawer fronts, and for $4,000 to $12,000, they can have all the cabinets refaced. "With refacing, owners can change the color of the cabinets by replacing the door and having a new skin put on the boxes," says Morrissey. "If they have oak cabinets today, they can have cherry the next day." 

9. Replace light fixtures.

"In a foyer and in bathrooms and kitchens," says Wilder, "replacing overhead light fixtures provides a lot of pop for a little money." If the kitchen has track lighting, Zuluaga suggests the home owner spend $450 to $600 to have an electrician replace it with recessed canned lights on a dimmer switch to add ambience. For about $700, Zuluaga also suggests installing pendant lights over a kitchen island or peninsula. 

10. Tech-up the garage.

"Sometimes we replace the garage door opener with a remote touchpad entry system," says Zuluaga. "That costs about $425 and makes it look like a high-end system."

-Courtesy of G.M. Filisko a freelance writer for REALTOR® magazine

 

5-6-2010

Taking Advantage of Interest Rates

The interest rate is sitting around 5% right now. There have been rumblings that this rate is about to explode in the near future. If you're really considering buying a home, the time is now while the rate is still historically low. Many people I talk to are waiting for the right time to buy and I believe that time is now. I wouldn't look at all the foreclosures to prevent you from making a decision. Many of those foreclosures came about because people did not use fixed rate loans, and loans were so easy to get that they were given out to just about anybody. If you can lock into a historically low rate, why wouldn't you? If you're looking to buy or sell a home in Alaska, and take advantage of these fantastic rates, don't hesitate to call me at 907-244-1876.
 

4-29-2010

Service Members Get Extra Year for Tax Credit

Members of the U.S. military, foreign service and intelligence communities have another year to purchase a home and claim the home buyer tax credit.

Any service member who is or has been on extended duty for 90 days or more between Jan. 1, 2009 to April 30, 2010, has until April 30, 2011, to sign a sales contract and until June 30, 2011, to close on the property. Both the $8,000 first-time and the $6,500 repeat home buyer tax credits are included in the extension.

The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they receive government orders to move.

Source: The National Association of Home Builders (04/26/2010)

 

4-22-2010

How Delinquencies Impair Credit Scores

Fair Isaac, which developed FICO scores, used a comparison between two people to explain how mortgage delinquencies affect credit scores.

Fair Isaac derived these numbers from a theoretical calculation based on hypothetical borrowers – one with an initial score of 680 and one with an initial score of 780. FICO scores range from 300 to 850.

The hypothetical person behind the 680 score had six credit accounts, while the person with the 780 score had 10. The consumer with the 780 score had no missed payments other than the mortgage; the 680 example had two late payments before they failed to pay the mortgage.

After a mortgage delinquency, the two scores would look like this:

• After 30-day delinquency, 680 score drops to 620 to 640; 780 score declines to 670 to 690.

• After 90-day delinquency, 680 score falls to 595 to 610; 780 score goes to 645 to 665.

• After foreclosure, short sale, or deed-in-lieu, 680 goes to 575 to 595 and 780 drops to 620 to 640.

• After bankruptcy, 680 drops to 530 to 550; 780 declines to 540 to 560.

Source: CNN, Les Christie (04/22/2010)

 

4-15-2010

 

The Appraisal

 

Most likely, you will receive an offer where the Buyer is funding the home sale with some type of loan. If that is the case, the Lender will probably require a property appraisal. The appraisal is done by an appraiser who will determine value for the Lender. This person must be on the banks approved appraiser list. The appraiser is working for the bank and must use valid comps in order to determine the value of the property. Depending on the type of loan, the appraiser may require certain repairs and or code upgrades. You as a Seller can have an appraisal done before you place the property on the market, but it’s probably smarter to wait until after you receive an offer. Instead I can determine estimated value so that when you do get an offer, the most recent home comparables are available. This enables you to receive current market value for your home.

If you haven’t already taken advantage of my free market analysis or you would like an update, feel free to call or e-mail me. In addition, if you know somebody who is thinking about buying or selling, please give them my information. Have a great day!

  

4-8-2010

How to Get the Extended Home Buyer Tax Credit

You’ve decided to purchase a home and take advantage of the Extended Home Buyer Tax Credit. Here's what you have to do to get your benefit:

1. Close on your home purchase between November 7, 2009 and April 30, 2010, or have a binding written contract in place by April 30, 2010 with a closing date no later than June 30, 2010.
   
2.  Decide whether to: 
   • apply the credit to your 2009 tax return, filed on or before April 15, 2010;
   •  file an amended 2009 return; or, 
   • apply the credit on your 2010 return, filed on or before April 15, 2011.
     
3. Attach documentation of purchase to your return.

Documentation of Purchase

Details concerning the precise documents required to confirm your purchase have not yet been released. When this information becomes available, we will include instructions and links to the appropriate forms.

When to Apply the Credit

Buyers purchasing homes on or before December 31, 2009 may claim the credit on their 2009 tax returns.

Buyers purchasing in 2010 will have the option to:

•  Claim the credit on their 2009 return, even if the purchase is completed after December 31, 2009;
•  File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
•  Claim the credit on their 2010 tax returns.

Applying the Credit to Your 2009 Taxes

You will need to do three things to claim the credit on your 2009 tax return:

1. Fill out Form 5405 to determine the amount of your available credit;
2. Apply the credit when you file your 2009 tax return or file an amended return;
3. Attach documentation of purchase to your return or amended return.

 ARTICLE COURTESY OF NATIONAL ASSOCIATION OF REALTORS

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