by The Real Estate Briefings Blog

The spring and summer months are traditionally the busiest times of year for the residential real estate market. Weather is more cooperative and many families like to move while the kids are on their summer break.

But in recent years spring, for many regions, has meant more homes on the market, but also more buyers, fierce competition and an increase in prices.

If you’re in the market for a house this spring, there are a number of steps you can take to try to give you the advantage over other home buyers.

If you’re going to work with a real estate professional, get started early. Interview three or four, get references and let the person you choose know exactly what you’re looking for.

Get your loan pre-approved. This way you will know how much the bank is willing to loan you and it shows the sellers you are serious and ready to make an offer.

Figure out how much you have for a down payment. First time home buyers will typically pay approximately 6% down. If that’s not an option, there are many loan programs that accept down payments of five or three percent. And don’t forget closing costs, which will often run two to seven percent of the property’s purchase price.

Be ready at a moment’s notice. If you’re in an especially tight market, you need to be ready to make an offer as soon as the realtor finds something you like.

When looking at houses, look at positives not negatives. There are major factors you won’t be able to change like the neighborhood, proximity to work and schools, basic floor plan or the size of the back yard. Painting, new carpet or tiles will always be an option.

Get homeowners insurance quotes now. Since you should have already had your credit report checked by getting pre-approved, insurance companies will use this same report to determine what your premium will be and even if they will insure you. If you already have renter’s insurance or another type of home owners insurance, it will be easy to transfer it to the new home.

by Les Christie – CNN Money

Buying a home is now more affordable than it has been in the last twenty years.

Thanks to continued declines in home prices and rock-bottom mortgage rates, the National Association of Home Builders/Wells Fargo Housing Opportunity Index hit a record level of affordability.

According to the index, 75.9% of all new and existing homes sold during the three months ended Dec. 31 could have been comfortably purchased by families earning the national median income of $64,200.

That was the highest percentage recorded in the 20-year history of the index, and a sharp increase from just three months earlier when 72.9% of all homes sold were considered affordable.

Unfortunately, being able to afford a home and actually being able to buy one are two different matters entirely. According to Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla., potential home buyers are still finding it difficult to land mortgages.

“While today’s report indicates that home ownership is within reach of more households than it has been for more than two decades, overly restrictive lending conditions confronting home buyers and builders remain significant obstacles to many potential home sales,” he said.

Those who do land a mortgage, will be able to take advantage of rates that seem to hit a new low every week. This week interest rates for 30-year loans averaged a record low of 3.87%, according to Freddie Mac.

by The Real Estate Briefings Blog

Enhancing the curb appeal look of your home from a street perspective is a great way to attract potential buyers. After all, the appearance of your home is like a major plus for people driving through your neighborhood or who see your house in a real estate magazine. By putting in a little extra effort, you can improve your home’s curb appeal and increase your chances of a sale.

You probably live in the house you are trying to sell, and so you are familiar with its appearance. Chances are, you don’t see the small cracks or peeling paint the same way someone seeing your home for the first time would. Starting from a position on the street, take a close look at your home. What stands out? What looks wrong? Does the tree in front need pruning? Perhaps a shutter needs to be repainted? Maybe the porch light fixture is broken.

These are generally small tasks that don’t take a lot of time or money to repair, but they can make or break the curb appeal of your home. It may help to take a photograph of your home from the street to see if that gives you a new perspective.

Here are some areas to consider when sprucing up your home for increased curb appeal:

• You will have more potential buyers if people can find your house. Your house number should be displayed in a prominent location and illuminated so that it is easy to read. This is extremely important in the evening and during the winter when daylight is limited. If your house is set back a fair distance from the street, consider installing your number on a gate, pillar or fence post that is easy to see.
• The exterior, including eaves and troughs, should be neat, clean and in good repair. Downspouts should have extensions to take water away from the foundation to avoid pooling.
• A neat lawn enhances your home. It should be freshly cut, weeded, and edged. Flower beds should be weeded and cultivated, hedges trimmed, and garden debris removed. If your lawn isn’t in good shape, it needs to be improved, and professional help may be desirable. Any areas that require new grass should be sodded rather then re-seeded to ensure a finished appearance. At the same time, be sure the sidewalks and patios are weeded and clean. If you are trying to sell during the fall or winter, when your yard may not look its best, make sure that all dead material is removed from yard and leaves are raked off the lawn. Store shovels and other equipment in a shed or other out-of-sight location.
• The entryways should be neat and clean as well. Small touches such as repainting the door and facings will give the home a tremendous boost. The doorbell and door hardware should be in good repair.

Your home is an investment, and by taking a little time to put it in top form, you will get a higher return on that investment when you decide to sell. Even if you are not in the best of locations, the look of your own neat and tidy home will be more appealing.

by Janice Revell, Contributor – Fortune Magazine

Between slumping prices and low mortgage rates, it’s a good time to look for real estate bargains. But thanks to tightened lending standards, legions of young would-be homebuyers aren’t exactly in a position to take advantage of the opportunity. That’s where their parents come in: One in three first-time buyers received either a gift or a loan from their families to help buy a home in 2011, according to the National Association of Realtors.

Such a move can provide significant financial benefits to child and parent alike. But you need to proceed carefully to maximize the tax and estate-planning advantages and avoid unpleasant family conflicts.

The most straightforward way for a parent to lend a hand is to simply give your child some cash. There is a limit, however, to how much money the federal government will let you give away tax-free in any one year. In 2012, a taxpayer can give $13,000 to an individual without triggering so-called gift taxes. Married couples may underwrite their child to the tune of $26,000 a year. Howard Hook, a financial planner with Access Wealth Planning in Roseland, N.J., points out that you can go over that limit, but you’ll have to file a gift tax return and the amount will be counted toward the total you’re allowed to give away tax-free during your lifetime. (For taxpayers who die in 2012, that amount is $5.12 million, but barring congressional action, it will drop to $1 million in 2013.)

Besides giving cash outright, you might also opt to lend money to your child — and you can offer terms far more generous than any bank’s. To make sure the money is considered a loan and not a gift for tax purposes, you’ll need to charge interest based on the IRS’s “applicable federal rate” minimum for various loan maturities. But those rates are well below the going market levels: As of January, the minimum interest ranged anywhere from as low as 0.19% for loan terms of three years or less to 2.63% for loan maturities of over nine years. You’ll have to pay income taxes on the interest earned. Still, your return will probably top what you’d otherwise get these days with a low-interest CD or money market.

A family lender also has lots of flexibility in setting payment terms. For instance, you could stipulate that your child make interest-only payments each month, then pay off the principal in a lump-sum balloon payment at the end of the loan’s term. You can even forgive part of the loan’s principal each year, using the $13,000 annual gift tax exclusion, says Carol Kroch, head of wealth planning at Wilmington Trust.

by the KCM Crew – KCM Blog

by The Real Estate Briefings Blog

Many people are looking for ways to increase their retirement income. For most of these individuals, their homes are the greatest asset. A large portion of the aging population has failed to plan effectively in order to have sufficient savings at retirement. We always think we have time. They now are looking to real estate to supplement their retirement income.

Real estate values are very unpredictable, especially now with the decrease in real estate markets. Prices have been falling for some time and completely flat in others. It will take some planning to get the most from selling your real estate to supplement your retirement.

Be Realistic. To plan effectively, you must be realistic about the price you may get for your home. Real estate is an up and down market, so you should assume a traditional real estate market for valuating your home, with gains in value equal to the inflation rate. At retirement, you will have the same purchasing power you currently have. If gains in real estate values are better than the inflation rate, then you will have more. Just don’t count on it.

Get the Most from Your Real Estate. People used to work hard to pay off their mortgages for homes they planned to raise their children in and retire. Since 1989, the number of people 65 and older with mortgage debt has nearly tripled, adjusting for inflation. Making payments on real estate in retirement years will likely deplete your savings and retirement income faster than anything else.

Downsize Your Home. If you are living in a home that is larger than what you need, do not hold on to it for sentimental reasons. Selling the larger home for a smaller one can give you a smaller mortgage payment than you currently have or possibly even having no mortgage at all for the smaller place. It also means less physical upkeep by you, as well as less maintenance and repair costs in the future during retirement. Remember that there are some costs in selling, moving and new home renovation that must be deducted from the sale proceeds.

Sell the Extra Real Estate. If you have a second home or vacation real estate that will not be your retirement residence, consider selling this extra real estate now, putting the sale proceeds into your retirement savings. You can put the mortgage and annual upkeep payments for this property into your retirement savings, too.

Reverse Mortgages. Although this has been around for some time, we are hearing a lot about them lately. Such mortgages give you 50 percent or more of your home’s value with no mortgage payments, which are collected by the lender at your death or if you sell the real estate. Do your research well on reverse mortgages.

The main reasons to pay off your mortgage include decreasing expenses during retirement, building more equity in order to live on it later and saving money on interest rates. Paying off your mortgage is a good thing to do, regardless of what the real estate market is doing.

Warren Buffet is seen by many as the greatest investor of our time. When he speaks, people listen. Like anyone else in his position of influence, he is criticized by some for using his bullhorn to promote his own business agendas at times. That makes it very interesting when we occasionally learn of how he privatelyadvises those closest to him.

Such a situation occurred this week. Debbie Bosanek, Warren Buffet’s secretary of 37 years, recently purchased a second home in Surprise, Arizona.

In an article in the Omaha World Herald, Mrs. Bosanek discussed her reasons for purchasing a second home and the personal advice she received from Mr. Buffet.

“I just thought it was time to buy a home. Warren tells me that it will be the best opportunity in my lifetime. Mortgage rates are low and prices have dropped dramatically…I share Warren’s view about the future of America, and we believe that our country will do just fine. I’m happy to make this investment.”

The greatest investor of the last century privately has told the people closest to him that buying a home right now “will be the best opportunity in [their] lifetime”.

That’s good enough for us. How about you?

by The Real Estate Briefings Blog

Selling a house has many facets. But there is one room in a home that will sell a house faster than any other. This particular room is considered the heart of the home and is most often the focal point of any activity.

This is the place where you sit early in the morning with your spouse, drinking coffee and talking about the day ahead. It’s also the room where you work with your children on their homeowork. This room is where family gathers to enjoy the time together, laughter and good smells.

This room is the kitchen. Most people will want to look at the kitchen before anything else when looking at potential homes to buy. That’s because it is the heart of the home. Some think it’s the living room but it really is not.

No one really wants an outdated or tiny kitchen. But there are things to do to a kitchen that will make it warm and inviting and much more appealing than just a little room.

Repaint the kitchen in neutral colors. This way it can be decorated to anyone’s taste. Update the appliances to more modern and energy efficient ones. More people today are concerned with conserving energy and this will be a big draw to selling a home.

Change the drawer pulls in the kitchen to reflect the new modern look. These are inexpensive but can bring a unique touch to any kitchen. Update the faucets. Faucets have a wide price range but you can still find very nice faucets for less than you think.

And finally, remove the clutter. A clean, streamlined kitchen will make the kitchen look bigger and showcase it to it’s best advantage.

by The Real Estate Briefings Blog

There is a difference between getting Pre-Qualified & Pre-Approved. A Pre-Approval is a document from the lender that confirms to the borrower a loan up to a certain amount based on a completed loan application, credit check, and possibly tax returns and employment verification. This Pre-Approval goes much further with a seller when submitted with an offer as opposed to a Pre-Qualification letter.

A Pre-Qualification is a document from a lender that basically just states that they will give you a loan based on your meeting with the lender and the information you give them about your financial situation. Neither document are an absolute guarantee that the lender will extend the loan money one or more months down the road. A reason for this is that a financial situation can change a lot before the closing date for a loan.

It’s imperative that buyers in escrow understand that they may be subjected to last minute credit checks and funds verifications during the process. As long as you remain conservative throughout your escrow period when buying a house and keep your job through that period of time, and no purchasing any credit items, your pre-approval letter from your lender is most likely a given. Remember, pre-qualifying & pre-approving is not a binding contract requiring the lender to extend the loan, nor is it a requirement for you to take on the loan. It’s simply your first real step in preparing to submit offers.

If you are wondering why you just can’t do this at the last minute, lenders do not close on mortgages until you have found the home you want to purchase. The pre-qualification enables you to see your buying power, and your pre-approval enables you to quickly get started on the home buying process.

It is more difficult to qualify for a loan because the lenders have become much more conservative in the mortgages. But a balanced combination of credit, job history, tax returns and debt analysis will land you the loan you’re looking for.

Now that we have discussed the important reasons for getting qualified, choose three good lenders and shop them all for rates and qualification letters. The beauty is that you can get qualified anywhere, and it does not require you to use that lender for your mortgage. This allows you to keep researching for that perfect rate. Rates are constantly changing, so find a rate that fits your loan.

by Mia Lamar – Wall Street Journal

Rates for fixed mortgages moved higher over the past week amid positive signals from the long-suffering U.S. housing market, according to Freddie Mac’s weekly survey of mortgage rates.

“Fixed mortgage rates ticked up this week as the housing market ended 2011 on a high note,” said Freddie Mac Chief Economist Frank Nothaft, noting encouraging data like a report that existing home sales rose 5% at the end of the year to 4.61 million houses, the largest amount since May 2010.

The 30-year fixed-rate mortgage averaged 3.98% for the week ended Thursday, up from 3.88% the previous week, though below 4.8% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.24%, up from 3.17% last week and below 4.09% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARM, averaged 2.85%, up from 2.82% last week and below 3.7% a year ago. One-year Treasury-indexed ARM rates averaged 2.74%, matching the prior week and below 3.26% last year.

To obtain the rates, 30-year and 15-year fixed-rate mortgages required an average 0.7 percentage point and 0.8 percentage point payment, respectively. Five-year and one-year adjustable rate mortgages required an average 0.7 percentage point and 0.6 percentage point payment, respectively. A point is 1% of the mortgage amount, charged as prepaid interest.