Distressed Properties - Myrtle Beach

2012-10-18T08:10:00.000-07:00

Sunny Forecast For The Real Estate Market, Optimism Growing Among Some

2012-07-10T12:10:00.002-07:00

The real estate market has had an ominous cloud looming for a long while with sunshine trying to break through. Now, according to a recently released second quarter survey by HomeGain, optimism is growing and a sunnier forecast is anticipated by some.

The survey results are taken from a pool of more than 400 agents and brokers and 1,700 homeowners. Perhaps not surprisingly the optimism is a bit unequal. Regarding the general direction of home values, about 48 percent of industry professionals expect home values to increase compared to only 27 percent of homeowners. However both percentage figures are up from first quarter 2012.

The outlook for the next two years? The forecast, according to the belief of those surveyed, gets even better. Real estate professionals (82 percent) and homeowners (59 percent), both believe home values will increase in the next couple of years. However, a small percentage group, 6 percent of real estate professionals and 15 percent of homeowners, think the exact opposite.
Meanwhile, 14 percent of industry professionals are warning to prepare for yet another decrease in home values. The percentage shoots up to 24 percent of homeowners who agree with this prediction.

Forecasting no change: 38 percent of real estate professionals and 49 percent of homeowners expect home values to remain the same over the next six months.

In a press statement, Louis Cammarosano, General Manager of HomeGain said, “Optimism among real estate professionals spiked in the second quarter. Real estate professionals are optimistic about home prices in the short term and especially optimistic in the coming two years with 82 percent of real estate professionals and 59 percent of homeowners expecting prices to rise.”

But where are these anticipated increases in home values expected? The survey results show expected increases are scattered throughout the country. Here are the lists of the top 10 states where home values are expected to increase in the next six months, according to real estate professionals and homeowners.

Real estate professionals expect increases in home values in the next six months: Virginia, Arizona, Colorado, California, Texas, Florida, Massachusetts, Ohio, New York, and Georgia.
Homeowners expect increases in home values in the next six months in: Arizona, Colorado, Oregon, Texas, Pennsylvania, Virginia, Maryland, Washington, Florida, North Carolina.
As for declining home values in the next six months, real estate professionals expect the following top 10 states to get hit hardest in this order: Pennsylvania, Ohio, New York, Georgia, Maryland, Florida, Colorado, Virginia, Texas, and California.

Homeowners think the top 10 states to experience a decline in home values in the next six months will look like this: Illinois, North Carolina, California, Oregon, Georgia, New Jersey, New York, Maryland, Pennsylvania, and Florida.

Breaking down the information. If you're planning to sell your home, be sure to showcase your home's features. As buyer confidence builds in the real estate market, it's important as a seller to think like a potential buyer would. See your home from a buyer's perspective. Before you put your home on the market make it as "buyer-focused" as possible which means the following things should be implemented: de-cluttering, maintenance repair, home staging, and curb appeal. The more you make your home "buyer-focused" the greater the chances of a faster and higher priced sale. For more information read my column " Buyers Want Move-In Ready Homes. "

Buyer's Comfort Zone May Be a Danger Zone

2012-07-10T12:09:00.003-07:00

The greatest obstacles to success with any goal can be our advantages. These comfort zones can be dangerous distractions when advancing toward a goal to buy a home or cottage, or to achieve any significant change in life. Your advantages can represent limitations since they offer only familiar possibilities and obvious opportunities. These aren’t necessarily the best options, most creative solutions, or ideal choices for the future.

Advantages of friendship, experience, financing, or family proximity can lure buyers to markets, locations, or price ranges which can detract from long-term goals, restrict lifestyle options, or limit return on real estate investment:

Friendship can undermine analysis and decision makingLook no further than friends for market research and real estate knowledge, and success is limited before you start. At the same time, a buyer who considers the real estate or mortgage salesperson a friend may leave more of the analysis for fit and practicality of the real estate or mortgage to the professional than is to the buyer’s advantage. Clearly-defined goals, not insecurity, short-sightedness, or plain laziness, should form the foundation for investing in real estate. Buyers who don’t take the initiative to think and act in their own best interest are vulnerable to the agendas—hidden and otherwise—of salespeople, and to sellers’ marketing campaigns and staging. If you don’t take charge of your future, others will.

In times of change, experience can be a buyer’s worst enemy>/b>Let the fear of acquiring new skills, perspectives, or knowledge paralyse you, and you’ll be trapped in your comfort zone. For first-time buyers of a house, condominium, or cottage that can be problematic as they have no ownership experience to fall back on—just hearsay based on the questionable experience of non-professionals (that’s friends and family). Buyers who have owned at least one property, may not realize how dated their experience is. A lot has happened in the last year or so, thanks to the internet and the economy. If a buyer’s real estate experience and knowledge are a decade or two old, it may put decision-making at risk or at least cause a buyer to miss out on the best the current market has to offer. Cellphones and the net don’t automatically answer your wishes like Aladdin’s Lamp. Look beyond what is easily available and beyond Google™ and Wikipedia™, to learn from the broad range of experience and wisdom of real people and creative professionals.

What can be afforded may not be all that can be bought.Even at the max pre-approved financing limit, buyers may not be able to purchase the location or type of housing they prefer. Add a rent-paying boarder or two, or a income-generating second unit to the real estate mix, and borrowing power is extended. Lenders will usually include at least half the rental income in mortgage calculations which can mean a mortgage large enough to buy that “dream home” or preferred neighbourhood. After a few years, the rental may no longer be necessary, or it could have evolved into a financial powerhouse in paying off the mortgage. Include a home-based business, and tax advantages will lower income tax while increasing cashflow. Using a mortgage broker to shop for the best mortgage package available can increase returns and expand affordability even further.

Families can mean the best of times and the worst of timesWhat the family thinks a buyer should do, may be dramatically different from what the buyer would like to achieve, or it may be more than the buyer is ready to commit to. Add to this, the pressure to move near family, and you have buyers who are paying the mortgage on a house or condominium that may not really be their first choice. Purchase a property for family convenience or under pressure from others, and the independence that comes with real estate ownership is compromised from the beginning. If you don’t reach beyond what family thinks you can do because they know you so well, how will you discover that brilliant future that can lie ahead?

The major limiting factor in buying real estate is not what the market is doing, but how creatively buyers can achieve the goals that matter to them. Play follow the leader and do what your friends are doing, and you’ll end up with what they’ve all settled for. Expand your thinking by learning more about where personal value lies and how to be a savvy buyer, and you’ll end up with more home, a more affordable mortgage, and less wasted money.

Advantages become strengths when they are consciously used as bridges to overcome disadvantages. If you don’t move out of comfort zones, you’re in danger of never discovering what you’re missed.

Pending home sales index rises in May, up 13.3% from 2011

2012-07-10T12:08:00.001-07:00

WASHINGTON – Americans signed more contracts to buy previously occupied homes in May, matching the fastest pace in two years.

Matt Rourke, AP

A sign for a home under contract. File photo.

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Matt Rourke, AP

A sign for a home under contract. File photo.

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The increase suggests home sales will rise this summer and the modest housing recovery will continue.

The National Association of Realtors said Wednesday that its index of sales agreements increased to 101.1 last month from 95.5 in April. That matches March's reading, the highest since April 2010, when a home-buying tax credit boosted sales.

A reading of 100 is considered healthy. The index is 13.3% higher than it was a year ago. It bottomed at 75.88 in June 2010, after the tax credit expired.

Contract signings typically indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.

Recent data suggest the housing market has started to recover more than five years after the bubble burst.

Data by YCharts

Home prices rose in 19 of 20 major U.S. cities in April from March, according to the Standard & Poor's/Case-Shiller index, released Tuesday. A measure of national prices rose 1.3% in April, the first increase in seven months.

Sales of new and previously occupied homes are up over the past year, in part because mortgage rates have plunged to the lowest levels on record. Builders are more confident and are starting to build more homes.

New home sales jumped in May to the fastest pace in more than two years. Sales of previously occupied homes fell last month, after nearly touching a two-year high in April. Still, re-sales have risen 9.6% in the past 12 months.

The supply of homes for sale remains extremely low. That has helped stabilized prices and could push them higher.

The inventory of existing homes for sale is back down to levels last seen in 2006. And there were 145,000 new homes for sale in May, just 1,000 higher than April, which was the lowest supply on records dating back to 1963.

Despite modest gains in housing, the broader economy has weakened in recent months. Employers have added an average of only 73,000 jobs a month in April and May. That's much lower than the average of 226,000 added in the first three months of this year. Some economists worry that the sluggish job market could weigh on home sales just as the housing market is flashing signs of recovery.

Thirty-year mortgage rate stays at record low 3.66%

2012-07-10T12:07:00.003-07:00

WASHINGTON – The average U.S. rate on the 30-year fixed mortgage stayed this week at the lowest level on record. Cheap mortgages have helped drive a modest housing recovery and could give the broader economy a jolt at a time when the job market is weak.

Justin Sullivan, Getty Images

A ''sale pending'' sign is posted in front of a home on June 7, 2012, in San Francisco, Calif.

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Justin Sullivan, Getty Images

A ''sale pending'' sign is posted in front of a home on June 7, 2012, in San Francisco, Calif.

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Mortgage buyer Freddie Mac says the average on the 30-year loan was 3.66%. That's unchanged from last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, slipped to 2.94%. That's down from 2.95% last week and matches the record-low 2.94% reached three weeks ago.

The rate on the 30-year loan has been below 4% since December.

Cheap mortgages have provided a lift to the long-suffering housing market. Sales of new and previously occupied homes are up from the same time last year. Home prices are rising in most markets. And homebuilders are starting more projects.

The number of people who signed contracts to buy previously occupied homes rose in May, matching the fastest pace in two years, the National Association of Realtors reported Wednesday. That suggests Americans are growing more confident in the market.

National Mortgage Rates

National overnight averages	Today	+/-
30 yr fixed mtg	3.63%
15 yr fixed mtg	3.01%
5/1 ARM	2.69%
$30K home equity loan	5.71%
$30K HELOC	4.58%
About these rates

To compare rates in your area:
Enter zip code

Low rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Data by YCharts

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks.

And the sluggish job market could deter some would-be buyers from making a purchase this year. The U.S. economy created only 69,000 jobs in May, the fewest in a year. The unemployment rate rose to 8.2% last month, up from 8.1% in April.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasuries increase, the yield falls.

And the yield will likely fall even lower now that the Federal Reserve has said it will continue selling short-term Treasuries and using the proceeds to buy longer-term Treasuries. That goal of the program is to drive long-term interest rates lower to encourage more borrowing and spending.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans also was 0.7 point, up from 0.6.

The average rate on one-year adjustable rate mortgages was unchanged from last week at 2.74%. The fee for one-year adjustable rate loans slipped to 0.4 point from 0.5 point.

Remodelers turn to paint, porches to update home exteriors

2012-07-10T12:07:00.001-07:00

When Darci and Matt Haney saw the "for sale" 1938 cottage a few blocks from where they were living in Carlton, Ore., they fell in love with its architecture.

Susan Seubert, for 'This Old House'

The Haneys of Carlton, Ore., boosted their curb appeal with new plants, a gravel path, landscape lights and heftier porch posts.

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Susan Seubert, for 'This Old House'

The Haneys of Carlton, Ore., boosted their curb appeal with new plants, a gravel path, landscape lights and heftier porch posts.

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"It was pretty overgrown," recalls Darci Haney, who runs a small design company. They bought it anyway and began clearing the space to restore the two-bedroom's exterior charm.

"We did the work ourselves," she says, including new plantings, a gravel path, landscape lighting and heftier porch posts. They repaired and painted the cedar siding but spent the bulk of the project's cost, $25,000 to $30,000, on a new roof and energy-efficient windows.

"We absolutely love it. There's nothing we would change," Haney says of the renovation, completed last summer.

As more Americans remodel existing homes, rather than move to new ones, they're maximizing not only their renovation budgets but also their entire property.

"People are going back to the front of the house," to entertain and relax, says Amy Hughes, features editor ofThis Old House magazine. "It's kind of a throwback." As part of that trend, she says, more people are restoring or adding front porches.

She welcomes the effort, saying, "the entry is the handshake of your home," whether it's a beautiful porch, walkway or front door. She says homeowners can create an inviting entry simply by adding light sconces on each side of the front door and using window boxes, pathway lighting or hanging planters.

MORE: Other 'Renewal: It Starts at Home' reports, including video

"We encourage people to sweat the small stuff," she says, adding it can be inexpensive and have "a huge payoff" in both curb appeal and homeowner satisfaction.

"If you don't like the look of your house, it can markedly color your life within its walls," says architect Sarah Susanka in her book, Not So Big Remodeling, published by Taunton. "Even if you don't really need to change the exterior, give yourself permission to consider giving it a prettier face."

Try lipstick. If people have little to spend, she suggests they paint the window sashes, or the storm windows, a strong color. "I call this the 'lipstick' approach, because it has the same effect as makeup on a face," she says, noting that it draws attention to one small element and makes the whole look more appealing as a result.

Kimberly Lacy, a designer on HGTV's Curb Appeal: The Block, agrees. She encourages homeowners to use color and says the front door is often a good place to make a statement. She recommends they pick a hue that complements either the house's exterior, its landscaping or its neighborhood.

"That's the perfect place to be brave, because it's just a quart of paint" and can be easily changed, says Jackie Jordan, director of color marketing at Sherwin-Williams. She says red, blue, green, brown and black are popular. More daring favorites: deep plum, purple, burnt orange.

Hughes says she's even seeing tangerine, teal and yellow. "You can take risks and do a lime-green door if the rest of the house is subdued," she says. "But don't think of the door alone."

She says exterior colors should call out interesting details but match the intensity of neighboring homes, adding, "You don't want to be the sore thumb."

In exterior makeovers, Hughes says Americans are using more manmade, weather-resistant materials such as PVC trim, fiber-cement siding, fiberglass doors and Trex decking. She says they've become less expensive and better looking.

Housing recovery hindered by negative equity

2012-07-10T12:06:00.000-07:00

Scott Andresen would love to sell his Seattle house. He just can't afford to.

Andy King, for USA TODAY

Mike Resop, left, finishes sodding his home June 25 in New Market, Minn.

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Andy King, for USA TODAY

Mike Resop, left, finishes sodding his home June 25 in New Market, Minn.

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The 41-year-old policeman and his wife, Rebecca, an environmental consultant, bought the house six years ago. Because of falling prices, they now owe at least $25,000 more on it than it's worth.

The couple would like to move to a better neighborhood with better schools for their children, ages 7 and 4. But they'd have to write a check to cover the difference.

"We can't get out, because it would be too expensive," Andresen says. "It's very frustrating."

Homeowners like the Andresens inhabit just about every housing market nationwide, and their reluctance to sell is having an unexpected impact on the U.S. housing market, which is showing signs of stabilizing after years of declining prices.

Rather than a housing market defined by weak demand and falling prices, the market is now being hampered by a restricted supply of homes for sale as demand improves. That's leading to multiple offers in dozens of markets, rising prices in some and a more volatile housing recovery than many expected.

"When you get (houses priced) under $125,000, it's like a frenzy," said Linda Schlitt-Gonzalez, owner-broker of aColdwell Banker franchise in Vero Beach, Fla. "It's not unusual to have five offers."

Negative equity, also known as being underwater, is a big part of the issue. Nationwide, almost three of 10 homeowners with mortgages have no equity in their homes or less than 5% equity, says market researcher CoreLogic. Those homeowners would have to write a check in a traditional sale, so many are not selling. Other homeowners, seeing prices rise or stabilize after falling for six years, are holding out for more price increases, Realtors and real estate experts say.

"We thought, if demand was there, there would always be sellers. But instead the supply is sitting on the sidelines," says Stan Humphries, economist for real estate website Zillow. "The inventory phenomenon … will make for a more volatile housing recovery than what we initially expected," he says.

Prices in certain markets may rise faster than expected, given shortages of homes for sale, then level off when homeowners and home builders add to supplies and banks unload more financially distressed properties, Humphries says. He had expected home prices to stop declining, then level off for years before trending up.

The nation had a 6.6-month supply of homes for sale in May, the National Association of Realtors reported. That's considered a balanced market. But NAR also reported "broad-based shortages" of lower-priced homes for sale in much of the country outside of the Northeast, "extremely tight" supplies in most price ranges in the West and "widespread" inventory shortages in much of Florida.

Of the 18 major markets tracked by real estate brokerage Redfin, 10 had less than a three-month supply of homes for sale in May. Those included Seattle, Phoenix, Denver, Sacramento, the San Francisco Bay Area, Washington, D.C., and parts of Southern California.

Tara and Steve Andersen are seeing the low inventory up close.

They're not selling their Southern California home, because they can't find anything to buy. Their town, Placentia, now has just a one-month supply of homes for sale, says data tracker ReportsOnHousing.com.

The Andersens started looking a year ago to move from their 2,100-square-footer into a bigger house with a pool. "We were looking for the house we wanted to live in forever," says Tara Andersen, 43, a professional fundraiser and mother of four.

With low interest rates, "We figured it was a good time to do that," she says. They estimate they have almost $200,000 in equity in their $550,000 home, which they've owned for 12 years.

The couple bid on a handful of homes, but each received about a dozen offers, Andersen says. Meanwhile, "prices have inched up," she says, and some homes have moved out of their price range.

Rather than move, the couple are considering adding a pool to their home. "We're feeling kind of stuck," Andersen says.

Phoenix hit hard

The impact of limited home supplies may be most evident in Phoenix, a major market that was pummeled by foreclosures.

In April, Phoenix-area home prices were up 9% year-over-year, according to Standard & Poor's Case-Shiller home price data. Nationally, prices were down 1.9%.

The Phoenix region had 50% fewer homes for sale in May than it did a year earlier, says Michael Orr, real estate expert at Arizona State University. Nationally, the May year-over-year drop was 20%, NAR says.

For homes under $250,000, buyer competition is intense. Multiple offers are common. One home recently got 95 offers, Orr says, and sold for 17% above its listing price.

Orr says Phoenix prices may level off during the hot summer months, when buying activity typically slows.

Phoenix-area foreclosures are also going up as banks work through more distressed loans in the wake of a national settlement earlier this year between state and federal officials and major mortgage servicers, Orr says. That will increase supplies, too.

Nationwide, the flow of bank-owned homes coming to market slowed 18 months ago, adding to the inventory crunch, but it may pick up again, as it has in Phoenix.

Fears that banks will flood the market with foreclosed homes, however, have been "scaled back," given that they haven't so far and that they are modifying more distressed loans, says Herb Blecher, senior vice president of mortgage tracker LPS Applied Analytics.

"Its good for prices to go up, but you see crazy things happening," Orr says. "In order for us to see a more stable housing recovery, the basic rule of economics requires prices to change enough to bring a new wave of sellers on the market."

Many of those prospective sellers are sitting tight — and may be for a while.

Less than 20% equity

Nationwide, 45% of home-loan borrowers have less than 20% equity in their homes, CoreLogic says. Sellers would generally need at least 20% equity to generate enough cash to turn around and buy a similar or larger home using a conventional loan.

If people owe 25% or more on homes than they're worth, they may not be right-side-up again for a decade, says Sam Khater, CoreLogic economist.

Supplies are shortest in markets where more homeowners are underwater, CoreLogic says.

It recently analyzed underwater borrowers and housing supplies in the nation's 50 largest metropolitan areas.

In those where more than half of the home-loan borrowers were underwater, the supply averaged 4.7 months in March. In markets with less than 10% of underwater borrowers, supplies averaged 8.3 months, CoreLogic says.

"Over time, (home) prices will increase and lift people out of debt," Khater says. "But the scale of this is too large for anything but time to cure."

Is the time right?

Rob Oyler, 42, a fiber optics executive in a suburb of Kansas City, Mo., is pondering whether time is on his side.

He and his wife, Leigh Ann, have owned their home for 10 years. They're considering selling so they can buy a bigger home for the family of five.

Interest rates, which last week averaged 3.66% for a 30-year fixed-rate loan, have enticed them to think about leaving a beloved home and neighborhood.

But they haven't taken the plunge. They suspect they'd get $20,000 less for their home than they put into it.

"We'd hate to take a loss on this house unless I know I'm getting a deal on a bigger one," Oyler says. "At the same time, interest rates have nowhere to go but up, and I worry that, if we don't sell, I'll be kicking myself in five years."

While the Oylers and Andersens have equity in their homes, Eric Berto does not.

He and his wife, Kelci, bought their home in Kent, Wash., almost four years ago. They thought they'd bought at the bottom of the market.

"We were seriously wrong," says Berto, 31, who works in public relations. The couple estimate they could get $250,000 for the home they bought for $100,000 more.

Berto is pursuing a lower interest rate loan so they can turn the house into a cash-flow-positive rental and still buy another home.

"Right now, we're operating under the assumption that the house will never again be worth $350,000," Berto says.

The dwindling inventories aren't confined to once-red-hot markets that took the biggest price declines.

In Minneapolis, inventories of available homes are down to a 4.5-month supply, says Barb Jandric, president of Edina Realty, the largest brokerage firm in the Twin Cities.

Mike and Annie Resop tested the market in January, putting their 2,500-square-foot suburban Minneapolis home on the market.

They listed it at the "high end," $269,000, Mike Resop, 31, says. They purchased it in 2008 for $250,000. No offers came. They considered lowering the price.

Annie, an administrative assistant, and Mike, a truck driver, made a list of the pros and cons of selling. They'd leave a great neighborhood and good friends. But they'd buy a place with more land and a nicer backyard.

They decided not to sell. The couple have since made closer friends in the neighborhood. Instead of being excited about someplace new, they're excited to improve their home.

"We're happy to stay put," Resop says.

5 Strategies for Adding Value to Your Property

2012-05-16T07:03:00.004-07:00

Whether you are looking to sell your home as soon as possible or want to ensure you get the most bang for your buck once you do decide to sell, increasing the value of your home doesn’t have to be expensive. There are many things you can do without breaking the bank.

Here are some strategies that can help you add value to your Myrtle Beach property without breaking the bank:

1. Maximize Curb Appeal

A property that delivers a great first impression can positively change the way a potential buyer will approach the rest of the home. Great curb appeal also has the potential to add as much as 5 to 10% to the value. Aged siding, stained driveways and walkways, and unattractive or unkept front yards all detract from the overall experience and ultimate value of a home. Be sure to focus on the following areas:

Landscape. Trim and manicure the lawn and spruce up your landscape with plants and other greenery.
Siding and wall exterior. Old siding and cracked bricks can cause a home to appear tired and distressed, which will lower the property value.
Repair and repaint. Consider repainting your front door and repair any small cracks, rusted railings or other areas that may have been neglected over time. A new paint job can turn an older home into a fresh newer-looking one and greatly increase the curb appeal.
Don’t forget the Mailbox. If your mailbox is rusty and dusty, use some extra house trim paint to give it a lift.

2. Paint and Touch Up

Painting is one of the least expensive ways to add value to your home. Marks and scratches can easily be covered up and removed from the walls completely with just a little touching up. In most cases, a fresh coat of paint will reenergize your home and go a long way towards impressing potential buyers.

If you are painting an entire room or multiple rooms, consider researching the do’s and dont’s of choosing a paint color. The right color will complement an entire room, but just remember to stay away from colors that are too bright if you selling any time soon.

3. Update Your Kitchen

To most families, the kitchen is the heart of the home. An outdated kitchen with old appliances, aged countertops, and a general tired feel will hurt your home’s value. There are some things you can do to give an updated look and feel to this important space, without having to spend large amounts of money. Here are some things you can do to spruce up the kitchen:

Add color with a fresh coat of paint.
Install molding for some architectural interest.
Update old or out-of-style lighting. A bright and modern fixture gives an instant facelift.
Replace the faucet and sink.
Replace the cupboard and drawer pulls.

Ideally you might consider new countertops, but they can get pricey, depending on the materials used. Granite is always popular with buyers, but you may consider granite tile instead, for an updated and modern look but at a more affordable price.

4. Update the Bathroom

Bathrooms are equally important to prospective buyers if you are planning to sell. New fixtures and lighting also add a great deal of value in this space. Adding a fresh coat of paint and a new shower curtain are other ideas to making this room look fresh and clean.

5. Install New Windows

While they can be a bit more expensive than repainting your walls or updating your kitchen, installing new windows not only contributes to reducing energy costs but also demonstrates to new buyers that the current homeowner has kept up with the necessary updates and repairs of the home. Updating your windows can have significant, positive effects on your energy bills, but they also provide your home with a stylish update that is attractive to potential buyers. If possible, you may also want to consider adding shades or blinds, which can add value as well as increase the overall appeal to buyers.

Whether you are selling or staying for awhile, even inexpensive updates can make a big impact to the value of your home.

Inside This Week’s Market News for the Week of May 15th

2012-05-16T07:03:00.002-07:00

Out of a reported 146 metro cities surveyed, the National Association of Realtors announced that home prices have risen in nearly 75 of them in Q1 of 2012. This is an improvement from the 29 cities that saw home price increases in Q4 of last year. Additionally, the National Association of Realtors has also reported that inventories for existing homes are down 41% since the peak in mid-2007.

The National Federation recently reported that the Small Business Optimism Index was up 2 points for the month of April – this is the highest level since February of 2011. The index is currently at 94.5 and while companies have added employees at a slower rate in April than in March, the economy is still showing improvements. Our economy is improving but remains fragile, pointing towards the improvement in Bonds.

Bonds and home loan rates continue to improve as Europe is experiencing continued uncertainty in politics and the financial sector.

Forecast

Next week will see many economic reports that will touch on many aspects of the economy including consumer spending and inflation.

The Retail Sales will be released this Tuesday and will focus on the current state of consumer spending. The Consumer Price Index, also being released this Tuesday, will report the inflation at the consumer level.

Housing Starts as well as Building Permits data will be coming this Wednesday. The Weekly Initial Jobless Claims will be released this Thursday – last week’s numbers were the lowest in a month.

The important point to take away from the recent market news reports is that now continues to be an excellent time to purchase or refinance a home as home loan rates continue to remain near historic lows. If we can help answer any questions for you please contact us as we would be glad to help you.

Housing Starts as well as Building Permits data will be coming this Wednesday. The Weekly Initial Jobless Claims will be released this Thursday – last week’s numbers were the lowest in a month.

Deciding on a Down Payment Amount

2012-05-10T09:21:00.000-07:00

Unless you are paying cash for your home outright, the amount of your down payment can figure heavily into the success of your home-buying process and your financial future. There are several strategies and approaches to making a down payment, each of which can be discussed with your realtor before you begin the home-buying process.

Less vs More

Making a Small Down Payment

The down payment you make on a home can range from as little as 3.5% (FHA loan) to as high as 20% of the sales price or greater. Naturally, putting down as little as possible will give you some breathing room for cash emergencies as well as additional funds to repair and improve your home. However, if you can afford putting 20% down on a house you escape the cost of private mortgage insurance (PMI) and avoid higher monthly mortgage payments.

The Benefits to a 20% or Greater Down Payment

Putting down 20% of the sales price is huge accomplishment for most home-buyers and is quite difficult, especially for those seeking to purchase their first home. A higher down payment will allow you to pay less interest over the life of the loan and avoid having to pay for private mortgage insurance, which can run anywhere from $45 to as high as $60 per $100,000 in purchase price.

Here are some of the advantages to making a down payment of at least 20% of the sales price of a home:

Less likely to default on the mortgage.

Reduces the size of your monthly mortgage payments.

May qualify for lower interest rate.

No need to acquire and pay for Private Mortgage Insurance. A lender will require PMI if your loan-to-value ratio is greater than 80% of the home value or purchase price, whichever is less. Your monthly PMIamount is affected by several factors, depending on the type of residence you are purchasing, your credit score, and several other determinants you can discuss with your realtor.

Your agent will be able to walk you through each step of the home-buying process and discuss the down payment amount you are comfortable making.

Five Musts Before You List Your Home

2012-05-10T09:00:00.004-07:00

Deciding to list your home for sale is a momentous time. It means you will be moving on to a new stage of life, no matter if you’re moving up or sizing down. Take a moment to look over these tips for what every seller should do before they put their home on the market.

Organize Your Paperwork:Every homeowner should have a detailed list of all past repairs, updates, and upgrades they’ve made. This will help your agent know what should be mentioned on the MLS. Did you put on a new roof in 2010 or a install a new water heater in 2009? These are great selling features because they means less work in the future for the prospective buyer.Also included in this list should be any home warranty information. These warranties will most likely transfer with title of the home.

Get Ready to Declutter: Even before you’ve officially listed your home for sale you should start getting rid of things you don’t need. Starting now will mean a more thorough and less rushed job of clearing things out.Start with one closet and work your way through the entire home. Sort items to toss, keep, sell, and donate.

Having a yard sale is a wonderful way of making a little extra pocket change while reducing the amount of things you’ll have in your home during showings and that you’ll need to pack up and move. It’s a win-win!

Chances are buyers will ask for this anyways come closing time. You’ll beat them to the punch and have a shiny, sparkling home to show for it.

Clean, Clean, and Clean Some More: Dirty homes are a real buyer turnoff. Now is a great time wash down walls, spruce up paint, and give your entire home a thorough cleaning. Do your carpets need refreshing? Consider renting a carpet shampoo machine or hiring a professional carpet cleaning company to come in and revamp your carpets.

Get an Inspection: Did you think inspections were only for buyers? Having a pre-sale inspection can mean identifying problem areas. Perhaps you’re unaware that your foundation needs repaired. This will severely affect your listing price. It’s best to be prepared and realistic in today’s market.

Make Repairs or Get Estimates: Your inspection will likely leave you with a list of repairs, large and small, that need made. Keep in mind that prospective buyers will also get an inspection of your home and will find these same issues. Head them off at the pass and do some fixing up. You may wish to go ahead with large repairs. If not, be sure to at least get estimates so you are fully prepared for negotiations (you’ll know what the real cost should be) or should you can provide the estimates for buyers.

Start Staging: Staging is like prepping your home for its first date. You want to have it clean and well-dressed. This means amping up curb appeal with neat landscaping, fresh paint, and flowers. It means rearranging furniture and removing clutter.Congratulations on deciding to list your home for sale. Be proactive about making a good first step by following these tried and true tips.

Understanding Appraisals

2012-05-10T08:58:00.002-07:00

It's a term homeowners and sellers hear all the time. What does "appraisal" really mean and how will it affect your ability to make a deal?

As the market dips and continues to struggle across the nation, many sellers are finding themselves in an unhappy predicament. They have a buyer lined up and an offer on the table, but wait...... the buyer's financing has now fallen through. The asking price of the home has come in over the appraised value.

This has led to a unnaturally high number of contract cancellations. According to the National Association of Realtors (NAR), "Twenty-one percent of NAR members in January reported delays in contracts, and 33 percent said contracts fell through.. The number of contract cancellations remains mostly unchanged from December. An increase in the past year of contract cancellations or delays has been blamed on more lenders declining mortgage applications from stricter underwriting standards and low appraisals coming in under the agreed upon contract price."

Here are some things you need to know about appraisals:
First, it's true that lenders usually won't write a mortgage for more than a home is "worth". This sets them up for a large financial burden should the prospective borrower default on their loan. They will, instead, write a mortgage for whichever price is less, be it the sale price or the appraised value. From a business standpoint it is logical. For a stalled and unpredictable housing market, it is downright frustrating.

An appraisal is figured by your local tax office (appraiser's office). They calculate what the market value of your home is based on, the square footage and specifics of your home. Do you have a fireplace, hardwood floors, and four bedrooms? You'll pay more in taxes and have a higher appraised home than the same home with no fireplace and laminate floors.

You generally receive a statement from the tax office each year showing you the appraised value of your home. If you feel this is in error be sure to contest it!

It is much more likely in this market that homes are appraised for less than sellers are wanting to sell their home for. This is due partly to an ailing labor market that continues to drag home prices down.
Appraisals are a tricky business. They are objective and are easily influenced by local market factors.

Your local area's market conditions directly affect the appraised value of your home. If there are 10 houses on your street and 4 of them are in foreclosure, you're in for a shock when it comes to the current value of your home. These foreclosed homes could sell at a 15 to 20 percent discount over your home.
According to the NAR, "Distressed sales, which tend to sell at steep discounts, continue to hamper home prices nationwide. Foreclosures and short sales accounted for 35 percent of all January home sales, which is up slightly from 32 percent in December."

Buying a Home Won't Get Much Cheaper

2012-05-10T08:57:00.001-07:00

Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable -- but it won't stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

"This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer," he said.

Prospective homebuyers who've been sitting on the fence shouldn't worry if they aren't quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Fannie Mae: Confidence in Economy and Home Values Increasing

2012-05-10T08:55:00.004-07:00

Both the expectation for home prices and the percentage of those who think the U.S. economy is on the right path reached record highs in Fannie Mae’s April 2012 National Housing Survey.

Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded.

At 71 percent, a high percentage of Americans still say it is a good time to buy while the percentage who said it is a good time to sell was 15 percent, a 1 point increase from March.

“Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations,” said Doug Duncan, Fannie Mae chief economist.

Duncan also mentioned the recent figures on employment in April, which showed a decline in job growth.

“Friday’s report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year,” said Duncan.

The expectation for average rental prices decreased slightly to 3.6 percent; in March, respondents expected rent to go up by 4.1 percent over the next 12 months.

If respondents were to move, 32 percent said say they would rent while 64 percent said they would buy. The percentage of those who said they would rent increased 2 points and reached the highest level since November 2011.

The percentage of Americans who believe the economy is on the right track rose to 37 percent, a 2 point increase from the previous month and the highest level in the survey’s two-year history. Still, an even greater 56 percent believe the economy is moving in the wrong direction.

Also, 23 percent of Americans reported their household income is significantly higher than it was a year ago, while 36 percent said their household expenses are significantly higher since the same time period. Both categories rose 2 percentage points compared to March.

The percentage of those who think their financial situation will decline was unchanged from the previous two months at 12 percent, the lowest value recorded in over a year.

The Fannie Mae survey polled a nationally representative sample of 1,000 respondents aged 18 and older between April 4, 2011 and April 27, 2012.

3 Tips to Finding Your Myrtle Beach Dream Home

2012-05-04T12:27:00.003-07:00

Myrtle Beach offers beautiful beaches, endless things to do for entertainment, and a vibrant and diverse selection of homes that can fit your every need and want. Identifying and choosing a dream home can be difficult though, with so many different choices competing for your attention. It is important to identify what you want and need in a home before beginning your home buying process.

Following are 3 tips to finding your Myrtle Beach Dream Home:

1. Don’t jump on the first house or condo that becomes available.

It’s easy to become overwhelmed when viewing a potential home, but it’s important to be as objective as possible and not let emotion rule your choice completely. That first rush of adrenaline the moment you step inside your potential new home can cause you to forget about the things you are looking for and want in a new home.

When you fall in love with a property too early you are limiting yourself on finding a home that has the things that are important to you. Seeing additional properties will help you better judge what you like and dislike about each property, and help you narrow your focus to what is most important.

2. Ask questions and satisfy your curiosity.

Inspect everything – don’t be afraid to look in closets, under rugs, behind cabinets, and anywhere else you might normally pass by. Ask about the neighborhood and map out the route to work and school.

If you leave a showing with questions left unanswered you are doing yourself a disservice. Don’t leave any nook or cranny left unexplored.

3. Keep notes and take pictures and video.

Taking video can be a great way to remember the visual aspects of a home in ways notes or a picture cannot accomplish. Digital photos and video also allow friends and family the chance to see the home and give you their advice and thoughts.

Keep a written log of each property you view and write down as many details as possible. Any notes, video, or pictures you take can aid you in making objective observations about a property after the initial adrenaline rush and excitement has worn off.

While home buying can be a stressful process, imagine the great reward when you finally find your dream home.

Investment and Vacation Home Sales Surging

2012-05-04T12:26:00.001-07:00

According to The National Association of Realtors®, sales of investment and vacation homes jumped in 2011, with the combined market share rising to the highest level since 2005.

Existing and new home sale transactions in 2011 show investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year, from 749,000 in 2010. Vacation homes also rose 7 percent to 502,000 in 2011 from 469,000 in 2010. In Myrtle Beach, this trend does not appear to be short-lived as somewhat brisk sales continue during the first quarter of 2012.

Vacation home sales accounted for 11 percent of all transactions last year, which was up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

The National Association of Realtors Chief Economist, Lawrence Yun said real estate investors with cash are taking advantage of incredible market conditions the last few years. These conditions going into 2012 are still present with even the most recent economic news pointing towards mortgage interest rates remaining at or near record lows and ample inventory being available at bargain home prices. Yun even said, “Rising rental income easily beat cash sitting in banks as an added inducement. In addition 41 percent of investment buyers purchased more than one property.”

Nearly half of investment buyers said they were likely to purchase another property within two years.

Yun indicated the shift in investment buyer patterns in 2011 indicate the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank owned real estate) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All cash purchases have become more common in the investment and vacation home market the last several years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who are not hesitant to use cash,” Yun said. For buyers who financed their purchase with a mortgage, typical down payments in the Myrtle Beach area were anywhere from a low of 10 percent and up to 35 percent for condotel type properties. The median down payment for both investment and vacation home buyers nationwide in 2011 was 27 percent.

The median investment home price in the nation was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, while the median vacation home price was $121,300, down 19.1 perent from $150,000 in 2010.

Investment home buyers in 2011 had a median age of 50, earned $86,100 and purchased a property that was relatively close to their primary residence.

82% of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat.

The typical vacation home buyer was 50 years old, had a median household income of $88,600 and purchased property that was a median distance of 305 miles from the primary residence. 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers said they planned to own their recreational property for at least 10 years on average.

Lifestyle factors have been the primary motivation for vacation home purchasers, while the desire for rental income drives investment purchases. Vacation homes purchased last year were more likely to be in suburban locations.

Eight-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investment portfolio or realized a good investment opportunity.

Sixteen percent of vacation buyers and 14 percent of investment buyers purchased the property for a family member, friend or relative to use. In many instances the home is intended for a son or daughter to use while attending school.

Fort-two percent of vacation homes purchased last year were in the South, 30 percent in the West, 15 percent in the Northeast and 12 percent in the Midwest; one percent were located outside of the United States.

Eight out of 10 second home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation home buyers.

If you would like to take advantage of great mortgage rates, great prices, and ample inventory in the Myrtle Beach area, click the button below and we will connect with you to help you realize your opportunities for investment and vacation properties in Myrtle Beach.

4 Tips to Making Your Home-Buying Process Easier

2012-05-04T12:24:00.002-07:00

Buying a home may be intimidating but finding yourdream home is well worth the effort. Here are 4 tips that can make your home-buying process a little easier:

1. Know Your Expectations

It’s important to have reasonable expectations about what you want in a home before you begin the home-buying process. Consider making a list and ranking essential and non-essential aspects of what you are looking for in a house or condo. Spending the time to decide what you must have and what you can live without in a new property will save you a lot of time down the line when you are looking at new properties.

2. Become Familiar With The Area

Your potential new neighborhood and the immediate area surrounding your home will contribute significantly towards how happy you can be living there. Take time to discover the neighborhood and area your prospective house is located in before you make an offer. Consider doing the following:

Chat with prospective neighbors and ask them how the like the area
Visit local businesses, parks, and other areas nearby
Search online and/or ask about the local schools

Despite the abundant information available online, discovering the area for yourself can aid you in deciding if the area is right for you and your family.

3. Get Pre-Approved

Getting pre-approved before you begin searching for a new home allows you to know the true costs involved and search safely in your price bracket. Knowing your financial limits will allow you to focus your search and discover the ideal home for your family and one that is within your financial reach.

4. Don’t Go It Alone

Due to the complexity of a real estate transaction, it is vital to have a professional to assist you. Buying a house with the right agent can help you discover your dream home as well as avoid looking at properties that you weren’t going to consider anyway. The home-buying process can be overwhelming – an agent can help you navigate all the paperwork and help you narrow your search to homes that fit your wish list and budget, and save time and stress by focusing only on the homes that work for your family. Having some guidance through the home-buying process can help you avoid mistakes and find the right home for you.

Home Mortgage Rates Remain Low

2012-05-04T12:23:00.002-07:00

After last week’s Federal Open Market Committee meeting, Fed Chairman Ben Bernanke noted the improving conditions in our economy, but acknowledged that the housing market continues to remain depressed as new home sales remain low for the month of March. New home sales fell 7.1% in March to 328k units on an annual rate, down from February’s 353k units on an annual rate.

We also saw Bernanke report last week that inflation is higher in the short run due to higher energy costs, but prices are expected to remain moderate in the long run. While rising inflation could prevent home rates from remaining near record best levels, the upcoming Core Personal Consumption Expenditure (Core PCE) report (the Fed’s favorite measure of inflation) will shed light on current inflation levels.

Forecast
On this coming Monday we will see the Personal Income and Spending Data be released in addition to the much anticipated Core PCE report which will reveal the current inflation levels after Ben Bernanke’s comments last week suggested inflation levels will remain in check in the long-term.

The Initial Weekly Jobless Claim report will be coming this Thursday and will be closely watched by investors due to the last few weeks of elevated Jobless Claims. An ongoing trend of weak economic news will cause money to flow out of Stocks and into Bonds, helping bonds and mortgage home loan rates to improve, while strong economic news normally has the reverse result.

How do I make an offer?

2012-05-04T12:22:00.001-07:00

Making an offer on a home is one of the important steps to owning your dream home. While placing an offer isn’t complicated, rushing through the process could be the difference between acquiring your dream home or having to continue the search for a new one. It’s important to discuss your potential offer with your real estate agent and ensure that you understand each step.

An offer consists of three basic parts:

The property address and legal description.
Consideration, which is the price you are willing to pay.
The closing date.

It’s easy to become overwhelmed when viewing and considering the purchase of a potential home, but it’s critical to be as objective as possible throughout the entire home-buying process to ensure you buy the home that is right for you.

Getting the Most Out of Your Offer

Generally, the offer will be proposed in a “Contract to Purchase” form or “Offer for Purchase” form. Whatever the case, there are a few issues you must address before completing the offer.

1. Earnest Money

Also known as a good faith deposit, earnest money represents a buyer’s seriousness and intent to purchase a property. Typically buyers offer as little as $1,000 in a slow market to as much as 10% of the sales price in a hot market.

2. Contingencies

While problems can sometimes arise during a buying process, contingencies allow you to back out of a contract for a specific reason. Here are a few examples of possible contingencies that you may want to consider including in your offer:

Sale of your current residence
Inspections satisfactory
Financing secured
Appraisal
Insurance

3. Miscellaneous Requests

You should consider listing any fixtures or additional items that you want to be sure are included with the purchase. These items can include window coverings, hot tubs or even appliances and furniture if you are interested in including it in the purchase price. It is best to be clear what will be staying with the property and what will be leaving with the seller, in order to avoid misunderstandings or surprises on either side.

It’s important not to rush through the process of making an offer. If you have questions about the contract or property – don’t sign until your questions are answered. You want to be sure that you are presenting the best offer possible before going forward, and have the best chance of having your offer accepted. Your agent will be a valuable resource to answer your questions and to help make the home-buying process as smooth as possible.

Real Estate Outlook: Affordability High

2012-04-25T08:14:00.000-07:00

Housing affordability is still at a record high, according to the National Association of Realtors (NAR). It is at the highest level since record keeping began in 1970. This is based on the relationship between median home price, median family income and average mortgage interest rate.

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said this latest data underscores buyer opportunities in today’s market. "This is the first time the housing affordability index has broken the two hundred mark, meaning the typical family has roughly double the income needed to purchase a median-priced home," he said. "For buyers who can qualify for a mortgage, now is a very good time to become a homeowner."

Projections for the remainder of 2012 indicate that this affordability high will continue and rates will remain low. "Housing inventory levels have declined to a point where conditions are becoming much more balanced in much of the country," Veissi said. "If access to credit improves, we could see a much more meaningful increase in home sales and broader stabilization in home prices with modest gains in areas with stronger job growth."

Despite these incredible buyer opportunities, builder confidence is down. The National Association of Home Builders (NAHB) reports that builder confidence for newly built, single-family homes declined for the first time in seven months.

"What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September," said NAHB Chief Economist David Crowe. "This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery - particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals."

This has been an ongoing concern for many market activists. While housing affordability is at an all-time high, gaining access to credit is a tough road for many would-be buyers. Additionally, some would-be buyers are still wary of the market and are waiting on the sidelines for the economy to improve or market conditions to stabilize.

Regionally, results varied. The Northeast was the only region to see a gain in builder confidence, posting a 4 point gain on the HMI scale. The West remained unchanged, but both the West and South posted declines. Single-family home production held steady for the month. The multi-family sector saw a double digit decline, according to the U.S. Commerce Department.

Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, FL, reported, "While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing.

Lenders that Sell Short Sales Faster and for Less, According to RealtyTrac

2012-04-25T08:13:00.000-07:00

Pursuing a short sale is often thought of as a painstaking process, and it’s not uncommon to hear of complaints about slow responses from servicers and last minute rejections on offers. Fortunately, not all lenders/servicers are the same when it comes to dealing with short sales, and RealtyTrac compiled a list of data revealing which institutions tend to move through the process quicker and for less.

Fannie Mae, Freddie Mac, and FHA had the shortest timelines at 193 days in January 2012, a decrease compared to a year ago in January 2011, when short sales averaged 248 days. Ally Financial came in second at 321 days, reducing its timeline as well from 393 days a year ago.

PNC Financial Group was third, taking 353 days, though the bank takes longer than it did a year ago when the it took 206 days. Wells Fargo came in fourth (385 days). Bank of New York Mellon took the fifth longest (402 days), followed by Bank of America (403 days) and Sun Trust (404 days). The short sale timeline includes the time a property starts the foreclosure process to the time it’s sold as a pre-foreclosure property.

Recently, Fannie Mae and Freddie Mac announced new guidelines to take effect in June requiring servicers to respond within 30 days after receiving a short sale offer or a borrower application. Bank of America recently announced that its providing a decision on a short sale offer in 20 days.

In terms of pricing, Fannie Mae, Freddie Mac, and FHA sold homes for the least amount in January 2012, averaging $128,642, a drop from year ago prices in January 2011 when they averaged $160,982. Deutsche Bank’s average price was $132,996, followed by Sun Trust Banks ($144,024), and CitiGroup ($148,411), and PNC Financial Group Inc ($149,332). Bank of America Wells Fargo were the bottom two on the top 10 list, averaging $158,632 and $167,371, respectively, for January 2012.

As for the number of short sales, Bank of America completed the most in January 2012, with 5,276, followed by Chase (2,967), Wells Fargo (2,788), MERS (1,429), and Bank of New York Mellon (1,401).

Fannie and Freddie Set Timeline Requirements for Short Sales

2012-04-25T08:11:00.000-07:00

Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.

Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).

Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.

The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received. According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale.

All decisions must be made within 60 days. In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.

The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative. Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.

“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales.

“There is no question that this will help short sales and the market as a whole.” Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.

What A Property In Myrtle Beach Really Costs

2012-02-21T07:46:00.002-08:00

If you are planning to purchase a property in the near future in the Myrtle Beach area, you will likely be elated by the residential and condo prices that you will find on the market. The purpose of this article is to help you prepare for the day in which you close on the sale of that property so that you can begin now to budget accordingly and know the costs involved in the transaction.

The day the property is legally exchanged from seller to buyer is typically referred to as the closing or settlement. A great way to plan for your closing is to review a blank HUD-1 Settlement Statement. The HUD-1 is the standard, federally mandated form that your lender or mortgage broker will provide you by law a few days prior to the closing of the sale. A document that precedes the HUD-1 is the Good Faith Estimate (GFE). The Good Faith Estimate (download sample here) is a snapshot of what you should expect at closing and is provided to you by the lender or mortgage broker when they quote you an interest rate or you apply for a mortgage loan. It is simply an estimate of your settlement charges and loan terms if you are approved for the loan for which you apply.

HUD-1 Settlement Statement

The total purchase of your home will be summarized on page one. A breakdown with an itemized description of the charges can be found in Section L (Settlement Charges). Below is a sample HUD-1 Settlement Statement for you to review:

To Read more about each individual line item, please go to:

http://thehoffmangroupinc.com/what-a-myrtle-beach-property-really-cost

Mortgage rates cling to record lows this week

2012-02-17T07:10:00.002-08:00

WASHINGTON — The average rate on the 30-year fixed mortgage stayed at a record low this week, providing some added incentive for those looking to buy a home or refinance.

Mortgage buyer Freddie Mac says the rate on the 30-year loan was unchanged at 3.87 percent.

The average on the 15-year fixed mortgage rose to 3.16 percent, up from last week's record low of 3.14 percent. Records for mortgagerates date back to the 1950s.

Still, low rates have done little to boost the struggling housing market. Rates have been below 5 percent for all but two weeks in the past year. Yet few people can qualify to buy a home or refinance. Many of those who can have already done so.

What Happens When You Walk Away From Your Home?

2012-02-17T07:09:00.002-08:00

It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust.

Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

They were carrying a loan of $260,000 on their original home alone, meaning they were well 'underwater,' owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an "anchor around our necks," she says, threatening to gobble up all their retirement savings and leave them with nothing.

The couple made a difficult call: They would do a 'strategic default,' and simply stop paying the old mortgage. "We really had to wrestle with it," said Perkins, 60. "We had worked all of our lives to build good strong credit, and we're proud people. But it came down to, 'Can we keep doing this?' We had to say 'No.'"

As the housing bust drags on, many homeowners are thinking like Perkins. Almost 11 million homes are now underwater, says financial information provider CoreLogic. Around 3.5 million homeowners are behind in their payments and another 1.5 million homes are already in the foreclosure process, according to online marketplace RealtyTrac.

As banks start to work through their backlog of distressed properties, the New York Federal Reserve estimates that 3.6 million foreclosures will take place during the next couple of years.

So, the question is: Does it make sense to keep paying a massive mortgage, knowing that it might be decades before a home regains its prior value? Or is that akin to - as columnist James Surowiecki recently wrote in the New Yorker - "setting a pile of money on fire every month"?

"I constantly get the saddest e-mails from people saying, 'I've exhausted all my life savings, my retirement is gone, and now I have to default,'" said Jon Maddux, CEO of YouWalkAway.com,

a foreclosure agency that helps clients with strategic default (and charges a fee for it). "But if they had seen the writing on the wall a couple of years earlier, stopped paying the mortgage and stayed in the home throughout the whole process, they would be in a much better financial position."

Moral Quandary

There's a moral component to that decision, of course. People naturally feel embarrassed about breaking a contract and not paying their bills; no one wants to be branded a deadbeat. But remember that companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process. Even the Mortgage Bankers Association itself, in a flourish of irony, arranged for a short sale of its Washington headquarters.

It's not personal; it's business. So think of strategic default as a business decision, and do a cold-eyed cost-benefit analysis of whether it makes sense for you, advises Carl Archer, an attorney with Maselli Warren in Princeton, New Jersey.

[Also see: Small Money Missteps That Can Cost You Big]

"People think it reflects on their integrity, and say 'I wasn't raised this way,'" said Archer. "But the more businesslike attitude is to say that there's a contract, there are penalties for violating that contract, and sometimes it just makes financial sense to break it."

The penalties largely revolve around your credit record, which admittedly gets blown up in the near-term. For a few years you can likely forget about qualifying for a mortgage or a car loan. When lenders are ready to take a chance on you again, you'll have to pay for the privilege, with stiff interest rates due to your default history.

What Happens to Scores

Charlotte Perkins watched her credit score go from a pristine 800 to 685, dropping every time she missed a payment. Credit-scoring firm FICO estimates that someone with a 680 score would see that number sink between 85-100 points after a strategic default, and someone with 780 could crater 140-160 points.

Not desirable, of course, but not the end of the world either. For Perkins, for instance, she already had a loan on her Ford Escape, and the mortgage on her new house, before she even started the default process. She hasn't seen any changes on her credit cards since, in terms of limits or interest rates.

Now that the previous home was auctioned off in December, she can start slowly rebuilding her credit, a process that should take about seven years.

Strategic default isn't a decision to be taken lightly, of course. If everyone did it, the housing market -- and the banks -- would be in much worse shape than they already are.

The following are some of the issues to keep in mind:

1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.

2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called 'non-recourse' states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they're only able to sell the property for $200,000). In other states they can pursue the difference, in theory - which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.

3. Use the interim to save like a demon. If you're in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. "Save money as if you were still paying the mortgage," says Archer. "If you don't, then you'll run out of both time and money, and then you'll be in a real tough spot."

4. Know the tax implications. Historically, if you have a debt that's forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though - so if it's not extended, you could potentially face a tax bill for the difference.

5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.

"Strategic default is not an easy decision, and there's a cost either way," said Gerri Detweiler, director of consumer education for Credit.com. "Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you're finally at the point where enough is enough."

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