This real estate market reminds me of those road trips we took as a family when the children were young ... always impatient and asking, "Are we there yet?" That's the question on all agents' and clients' minds ... have we hit the bottom of the market and when do we start up again?
And the best answer is ... maybe. After every downturn there is an upturn and we're more than ready for that. According to the most recent numbers, the median sales price increased nationwide in March for the second month in a row, the biggest monthly jump since June 2005. The months' supply edged up to 9.8 from 9.7 but the raw inventory actually declined for all types of homes. The Federal Housing Finance Agency also reported that home prices rose 0.7% in February, the second month in a row that prices rose putting them up 1.7% for the last two months. Again, the biggest gain since 2005. And, March New Home Sales came in at 356,000 annual rate, a small decline from February but better than expected. And, according to the same source, inventory levels continue falling, down to 46.0% from their mid-2006 peak and at the lowest level since 2002.
So, what do the numbers mean? It shows, in my opinion, that we're "bouncing along the bottom" of this housing market and I believe we're looking toward a slow recovery starting this summer. Short Sales and REO sales are now dominating the market but there are still real "Sellers" out there that need to move and have some equity positions so they can sell without having to negotiate with the bank.
As for Buyers who've been waiting for the best deals ... they are out there NOW. My serious suggestion is to get off the fence and get in the game. Interest rates may never be lower and housing prices are unbelievable. Gentlemen and Ladies ... start your engines!
Thursday, April 30, 2009
Friday, April 24, 2009
WHAT'S THE DIFFERENCE?
Foreclosure, Deed in Lieu, Short Sale ... what's the difference and what's the impact on your life and credit score?
Foreclosure is where an owner's right to their property is legally terminated, usually because of default in loan payments. Property is purchased back by the bank at a public auction held on the courthouse steps (or a sheriff's sale in some cases). The bank will usually start the bidding at the auction at the amount currently owed on the property in most cases and anyone who bids over that amount may then purchase the property. They must have financing in place and put up a security deposit and close within a specified period of time. Most states will then zero out any deficiency balance owed by the owner. A Foreclosure is usually the most devastating on a person's credit record and will negatively impact it as much as 280 points plus it will remain on the record for a longer period of time thereby crippling a person's chances of buying anything in the near future.
Deed in Lieu is where an owner can avoid the foreclosure by voluntarily surrendering their property back to the bank by signing over the deed for satisfaction of the debt. This allows the bank to take possession sooner than is possible through a foreclosure action and saves the bank the foreclosure costs. We've seen many cases of this recently where owners simply put their keys in the mailboxes and walk away; however, they must legally do this by signing off the deed and going through a paperwork process. This has less impact on the credit rating but will still cause some negative results.
Short Sale is where the owner is able to sell the home prior to the foreclosure action at an amount of money that is less than owed. There must be a negotiation with the lien holder(s) to agree to take a payoff which is less than owed and must be completed prior to the auction date on the property. Lenders, especially in this market, seem to be more agreeable to accepting a Short Sale as property values have decreased throughout the country and frequently the property is certainly worth less than owed. Snagging a Buyer that is willing to pay over value on the property at a foreclosure auction is not a frequent occurrance, so it is in the best interests of the Lender to negotiate rather than incur the foreclosure expenses. Again, this will have a negative impact on a person's credit rating but not as bad as the formal forclosure. Many real estate agents and escrow companies are well versed in how to proceed with a short sale and are willing to help as Lenders will always agree to include a commission as part of the process.
If you'd like more information on these topics, please don't hesitate to call or e-mail us.
Foreclosure is where an owner's right to their property is legally terminated, usually because of default in loan payments. Property is purchased back by the bank at a public auction held on the courthouse steps (or a sheriff's sale in some cases). The bank will usually start the bidding at the auction at the amount currently owed on the property in most cases and anyone who bids over that amount may then purchase the property. They must have financing in place and put up a security deposit and close within a specified period of time. Most states will then zero out any deficiency balance owed by the owner. A Foreclosure is usually the most devastating on a person's credit record and will negatively impact it as much as 280 points plus it will remain on the record for a longer period of time thereby crippling a person's chances of buying anything in the near future.
Deed in Lieu is where an owner can avoid the foreclosure by voluntarily surrendering their property back to the bank by signing over the deed for satisfaction of the debt. This allows the bank to take possession sooner than is possible through a foreclosure action and saves the bank the foreclosure costs. We've seen many cases of this recently where owners simply put their keys in the mailboxes and walk away; however, they must legally do this by signing off the deed and going through a paperwork process. This has less impact on the credit rating but will still cause some negative results.
Short Sale is where the owner is able to sell the home prior to the foreclosure action at an amount of money that is less than owed. There must be a negotiation with the lien holder(s) to agree to take a payoff which is less than owed and must be completed prior to the auction date on the property. Lenders, especially in this market, seem to be more agreeable to accepting a Short Sale as property values have decreased throughout the country and frequently the property is certainly worth less than owed. Snagging a Buyer that is willing to pay over value on the property at a foreclosure auction is not a frequent occurrance, so it is in the best interests of the Lender to negotiate rather than incur the foreclosure expenses. Again, this will have a negative impact on a person's credit rating but not as bad as the formal forclosure. Many real estate agents and escrow companies are well versed in how to proceed with a short sale and are willing to help as Lenders will always agree to include a commission as part of the process.
If you'd like more information on these topics, please don't hesitate to call or e-mail us.
Monday, April 20, 2009
Tax Relief on Short Sales and Foreclosures
For the Homeowners who are experiencing a "Short Sale" or Foreclosure proceedure where the proceeds from the sale are less than the amount owed, here's some tax relief benefits for you. In the past, the forgiven debt (the amount owed on the property less the amount for which the property was purchased) had to be treated as taxable income on your tax return. But, now through 2012, that forgiven debt will NOT be taxed as income. There is a limit of up to $2 Million of forgiven debt on a principal residence. You do not have to put the amount on your tax form, even if you receive an IRS Form 1099 from the Lender.
Tax credits are actually some of the best form of tax relief for they are direct dollar-for-dollar reduction of your tax liability. And, for first-time homebuyers taking advantage of the $8,000 tax credit for purchasing (see previous blog), if the credit is larger than your tax liability, you will receive a refund! As always, check with your tax professional for further information.
Tax credits are actually some of the best form of tax relief for they are direct dollar-for-dollar reduction of your tax liability. And, for first-time homebuyers taking advantage of the $8,000 tax credit for purchasing (see previous blog), if the credit is larger than your tax liability, you will receive a refund! As always, check with your tax professional for further information.
Thursday, April 16, 2009
$8,000 Home Owner Tax Credit
Well, tax day 2008 is behind us now, but it's never too late to start looking toward 2009. And, if you're a first-time Home Buyer, the new Economic Stimulus Package is tailor made for you! There are a few conditions to being able to receive the tax credit and you should always consult with your Tax Professional; however, if you are a couple filing jointly and earn less than $150,000 in adjusted gross income for 2009, you may be eligible. You must find, purchase and close on the home by November 30, 2009. THE TAX CREDIT GOES AWAY ON DECEMBER 1, 2009. So get started today.
And, what a great market to find a home! Prices are low, low, low. Interest rates are at an all time low. Inventory is big, big, big and Builders are out there offering all sorts of incentives to purchase their product. You can add upgrades at little or no additional cost and some builders are even offering to match the stimulus with an $8,000 credit toward your closing costs.
However, there are drawbacks. Mortgage Companies are being a little fussier about lending money and you no longer have to just pass the mirror breath test to get qualified. Also, you will need to have some money for down payment and you need a decent credit rating. But money is out there at unbelievable rates and worth at least trying to get pre-qualified. Call us if you need referral to a good lender and take advantage of this once-in-a-lifetime opportunity.
And, what a great market to find a home! Prices are low, low, low. Interest rates are at an all time low. Inventory is big, big, big and Builders are out there offering all sorts of incentives to purchase their product. You can add upgrades at little or no additional cost and some builders are even offering to match the stimulus with an $8,000 credit toward your closing costs.
However, there are drawbacks. Mortgage Companies are being a little fussier about lending money and you no longer have to just pass the mirror breath test to get qualified. Also, you will need to have some money for down payment and you need a decent credit rating. But money is out there at unbelievable rates and worth at least trying to get pre-qualified. Call us if you need referral to a good lender and take advantage of this once-in-a-lifetime opportunity.
Tuesday, April 14, 2009
ENTER FOR A CHANCE TO WIN $221,000
Just a reminder to everyone to be sure to sign up for a chance to win $221,000 toward a new home in the "Path to your Dreams" Sweepstakes from CENTURY 21. You can enter once a day from your e-mail address until May 16, 2009. There will be 8 second prizes of $5,000 cash, one each in every CENTURY 21 region of the country. And, you may win an "instant" prize of a $10 gift certificate from participating vendors. Just go to the website at www.century21.com/sweepstakes to enter. Good luck!
Thursday, April 9, 2009
Beware of Foreclosure Scams
As if we didn't have enough to worry about ... there are now some marginal companies out there who are choosing to prey on the hapless homeowner who is facing foreclosure and wants to try to modify their mortgages. If you want to try to reduce your mortgage payment or work out some solutions with your mortgage company, help is free! There is never a fee to get assistance or information about the Federal Plans to help. You can go to MakingHomeAffordable.gov to obtain a HUD-approved housing counselor to help you navigate the bureaucratic waters.
BEWARE OF ANY PERSON OR ORGANIZATION that asks you to pay a fee in exchange for housing counseling services. Do not pay, walk away!
BEWARE OF ANYONE who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign, walk away. The only one who can help you "save" your home is your mortgage company.
NEVER SUBMIT YOUR MORTGAGE PAYMENTS to anyone other than your mortgage company without their approval.
If you have any questions or concerns about how to proceed, check the website above or you can always give us a call for our opinion or suggestions. We want everyone to be in a home they can afford and not lose it in foreclosure.
BEWARE OF ANY PERSON OR ORGANIZATION that asks you to pay a fee in exchange for housing counseling services. Do not pay, walk away!
BEWARE OF ANYONE who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign, walk away. The only one who can help you "save" your home is your mortgage company.
NEVER SUBMIT YOUR MORTGAGE PAYMENTS to anyone other than your mortgage company without their approval.
If you have any questions or concerns about how to proceed, check the website above or you can always give us a call for our opinion or suggestions. We want everyone to be in a home they can afford and not lose it in foreclosure.
Subscribe to:
Posts (Atom)
