{Pending Home Sales Continue To Rise}

The Pending Home Sales figure took a jump in March as home sales continue to grow via enticingly low mortgage rates and a tax credit set to expire shortly.  A 5% increase is indicated throughout the month of March, but the PHSI is still nowhere near its peak in the 4th quarter of 2009. October 2009 is a comparable period to March 2010 in that it marked the 1-month deadline before the home buyer tax credit’s initial expiration date, which was then extended to a later date. 

That being said, home buyers nationwide are experiencing a change in activity as multiple offer scenarios are not uncommon and those homes that are competitvely priced fall into contract rather quickly. The increase in March’s PHSI is having a negative impact on the housing inventory which, in turn, is causing prices to rise in most markets.

Today’s homebuyers should consider making an offer sooner rather than later. Looking at the data privded by NAR below, it appears that the best time to find a “deal” on a home is still in February.

For additional information on surging home prices, view the clip below.

{Free Yogurt!!!}

Stay cool in these warm summer months with a refreshing cup of froyo.  Print out and complete the form below to claim your free Red Mango yogurt!!! 

{Growing Economy Means Higher Rates}

Mortage interest rates are at an all time low, but analysts expect them to start climbing soon.  30 year fixed rates may rise to 6%  by December and to about 6.5% at the end of 2011, according to the National Association of Realtors.  Macroeconomic factors--such as the continuing high U.S. budget deficit and the recent improvement in home sales--are all contributing factors to the climb. 

Additionally, if the U.S. government if facing problems with borrowing funds and has to increase interest rates in order to attract investors to purchase U.S. debt, then the remainder of the private sector will also have to absorb the cost of higher interest rates. 

Fortunately, relatively benign consumer price inflation will prevent lender rates from skyrocketing.   Although rates are set to increase modestly, it is also an indicator of the current direction of our economy.

{10 Tips For Water Conservation}

With the slumping economy and devalued home loans, many of us are looking for ways to save resources.  Water conservation is not only easy on our wallets, but also necessary during a time when water shortages worldwide has become a tragic reality.

Below are 10 money saving ideas to assist your family in utilizing this precious resource more responsibly.

1.  Sprinkler Use.  To make your sprinklers as efficient as possible, try to use them during the coolest hours of the day, either during the morning or evenings.  This helps to minimize evaporatin due to heat.  And adjust your sprinklers so that you aren't watering the sidewalk or driveway.

2.  Rain Sensors.  Install this tool on your irrigation controller.

3. Responsible Landscaping.  Consider a Southwestern design that uses many drought resistant plants, supplemented by rocks and stones.

4.  Washing Dishes.  Have one side of your sink filled with soapy water to wash dishes, and then fill the other side of  your sink with clean water for rinsing.  This prevents you from having a steady stream of water running while you rinse.

5.  Washing Clothes.  Energy Star rated applianced reportedly use 30-50% less water, not to mention provide you with incredible energy savings.

6.  Water Level.  Be sure that your laundry load size matches the load setting so that the amount of water used is adjusted accordingly. 

7.  Cleaning The Drive.  Consider using a broom instead of a hose to clean your driveway and sidewalks.  Recent statistics report this small change can save 80 gallons of water each time.

8.  Low Flush Toilets.  These efficient toilets use around 1.6 gallons a flush, as opposed to 3.5 with standard toilets, which saves you up to $100/year in utility costs.

9.  Water Efficient Showerhead.  Very inexpensive and can save up to 750 gallons of water each month.

10. Pools.  Pools can have leaks which are hard to detect.  Use a grease pencil to record the water level of your pool and then check back in 24 hours to see if the water level has remained consistent.

If you have any other money saving ideas that can be easily implemented around the home, feel free to share them here!!!

{Short Sales/Foreclosures On The Horizon}

Several weeks ago I had participated in a class held by Ron Ricard of IPX 1031. The emphasis was placed on short sales and foreclosures and how to manage your portfolio more efficiently. This man is very knowledgeable on 1031 exchanges and any chance I get to attend one of his informative sessions, I don't hesitate.

Due to the detailed nature of the class, this post will be a brief account of what was discussed. It is to be used merely as a guideline when working with sellers or buyers in position to short sale on their home or to purchase a short sale/REO property.

S/S Listing --> pre-qualify your sellers

1: Test their commitment level by setting up an appointment to meet at the office rather than their home. If this is a problem, question their commitment to you and to the process.

2: Discuss their payment schedule. How far behind are they on their payments? Based on their answer, you will be able to decipher whether there is in fact time to sell the property. If they just received the NOD, there is time. If they are going to auction TOMORROW... let them go.

3: Check to see whose name is on title and bank note. i.e. if the mother co-signed the loan for her daughter and the mother's name is on the note but the daughter's name is on the title... the bank will not distinguish between the two and will treat both individuals equally. The name on the note is slightly more important than the name on the title report.

4: Find the number of liens on the property. This information should be available on the title report and the type of lien will determine the fluidity of the transaction. i.e. mechanic liens are difficult; however, IRS liens are much easier to work with.

S/S Addendum --> have the following information in writing

1: There are no guarantees.

2: Seller will receive no money at the end of the transaction.

3: Credit will be damaged. The extent of the damage depends largely on how it was reported to the credit agency, how late the payments are and any other debts the seller may have incurred during this process. Usually when sellers stop making payments on their mortgage, this carries over to other debts damaging their credit even further.

4: S/S --> credit can be repaired within a 24 month period. Deed in lieu of foreclosure --> credit can be repaired in a 4 year period. Foreclosure on a primary residence --> credit can be repaired in a 5 year period. foreclosure on an investment property --> credit can be repaired in a 7 year period.

5: There will be tax liabilities due to the cancellation of debt income. The important thing to understand about this is if the original loan still exists on a primary residence, there will be a non-recourse loan which counters the cancellation of debt income. If the home has been refinanced or HELOC or was an investment property, there will be a recourse loan.

6: For liability purposes, realtors should at all time recommend their sellers to speak with a lender about a loan modification program.

What Is Needed:

1: Copies of last mortgage payment.

2: Prelim report. Confirm NOD and see who is on title and note. Get the updated report occasionally in the event of any changes.

3: Authorization to release information to speak to the bank on the client's behalf.

4: List of lien holders.

5: S/S package. Put the loan # of each page.

6: Hardship letter.

7: Tax returns, payments, records of assets ect. Keep only the copies and give the originals back to the owners. Make several copies and give the bank only the copy because it is guaranteed the forms at some point will be lost.

Questions To Ask Bank:

1: Do you own this loan or are you servicing this loan?

2: Is your authority delegated? Can they make immediate decisions themselves, or must they speak with the lender?

3: Where are you located? This is important for time difference purposes. Make all calls to the bank at 9 AM when the rep is in a better mood and will be the most helpful.

S/S Listing:

1: Come up with price. Conduct your own BPO and take the high end of that BPO and reduce the price 3% every 10-14 days.

2: The bank will also conduct their own BPO and/or appraisal in the coming weeks. Be there when they do it and walk them through the property so they understand the rational behind your numbers. Bank will often give the realtor an "approval" price, not the BPO. This price is typically 5-10% higher and will need to be negotiated.

3: Cash for cooperation. Slightly different then cash for keys. The seller will continue to stay in the property, maintain it ect and when they leave, the bank agrees to pay up to 1% of the sale price.

Additional Terms:

1: Short pay. Some properties are on the brink of a short sale depending on what the home actually sells for. If it sells for less then the loan amount, say by $10k, the sellers can pay the difference or go through the short sale process.

2: Full settlement language. The sellers will be able to walk away once the deal is closed lien holders cannot come after them for money after the fact.

Important Information For Buyers:

1: This is a long process, lasting anywhere from 3-6 months on average, so stay patient.

2: Make sure the loan amount on the approval letter from the lender matches your offer price.

3: Some banks may at times ask the buyer for additional money to close the deal. Depending on the source, the realtor must get permission from the first mortgage holder to do this.

To discuss any of these items in more detail, please visit my website at www.stephanieleehomes.com for contact information.

{Boom Era Home Prices May Not Recover Until Year 2025}

According to Fiserv, Inc., markets that were most impacted by the house bubble bust, including metro areas located within California, Florida, Arizona and Nevada, won't see home prices return to pre-crisis levels for another 15 years. Additionally, major urban centers, such as the great Northeast region as well as the industrial Midwest, may need to wait at least a decade until prices return to their earlier peaks.

Soaring levels of unemployment affiliated with the recession and the steep decline in manufacturing jobs has greatly reduced housing demand and prices in many metro areas, including Michigan, Indiana and Ohio. Such markes, at the epicenter of job losses in manufacturing, are not expected to return to peak levels for another five years, and potentially more than a decade.

Although many parts of the country were negatively affected by the housing bubble, some markets that never experienced a large decline in prices are well positioned for a quick comeback within the next few years. These cities include, but are not limited to, Pittsburgh, PA; Columbia, SC; and several metro areas in Texas, Washington and upstate New York.

What these statistics indicate is that this market holds many unforeseen opportunities to both buyers and sellers alike. Homebuyers are in position to receive many incentives to purchase their first home, such as federal and state tax credits and record low interest rates. Likewise, if purchasing a new construction home, home builders are very eager to negotiate purchase price and additional credit. Sellers, on the other hand, have less competition with low inventory driving prices up and bringing multiple offers in. Homeowners who purchased their residence at the peak, depending on the area in which you purchased (Remember, not all cities were equally impacted; there still exist pockets of thriving communities.), may find it more cost effective to cut the losses short and unload an unprofitable property, assuming you've already spoken with a tax advisor and lender.

{Mortgage Delinquencies Temporarily Decline}

According to recent data, mortgage delinquencies fell 8.6% in March, which is encouraging for the current dire state of the U.S. housing economy.

Although the numbers show signs of improvement, the mortgage sector is not out of the hole as mortgage delinquencies usually decline in February and March due to tax refunds. More than 320,000 loans that started the year current were at least 60 days past due at the end of March. It is estimated that more than 3.6 million homes will undergo foreclosure between 2010 to 2012 because borrowers are unable to fulfill their loan obligations.

While it is hopeful that many borrowers (more than 230,000 to date) are receiving assistance from the Obama administration's foreclosure prevention program and other modification efforts, it is uncertain as to how many will remains in their homes once their loan has been modified.