Central Ohio Real Estate Cafe'

By Paige Tepping

RISMEDIA, August 26, 2010--You wouldn't buy a house without shopping around first, right? Then why would you commit to the loan you use to buy that house without making sure you're getting the best deal possible? From the experts at LendingTree, here are six reasons why it's essential to take a few minutes to browse before you borrow:

1. To get the best interest rate possible
Over the life of a $200,000, 30-year fixed rate loan, a one-tenth of a point difference in interest rate could save or cost you thousands of dollars.

2. To pay lower loan fees
Once your loan application is accepted, the lender will get back to you with a good-faith estimate (GFE), including an itemized list of all the costs associated with the loan. If there are any parts of the GFE that you don't understand, don't be afraid to ask the lender to explain each fee that is listed.

3. To avoid a prepayment penalty
In these transient times, it seems no one stays in their home long enough to pay down their mortgage the old fashioned way: in monthly increments over a period of decades. So you'll want to be clear on whether the terms of your loan include a penalty if you pay off your mortgage early-either because you move or refinance.

4. To find a lender you feel comfortable with
You don't want any surprises popping up at closing time. Get a lender who is responsive to your questions and is willing to give you the details in writing.

5. To find a lender that specializes in your situation
Recent volatility in the mortgage markets means that people with bad credit or little money for a down payment might have to look a little harder to find a lender.

6. To get the rate lock period you want
Once you've found the lender offering the best mortgage rate and terms, you'll want to get a written commitment, known as a "lock" that puts in writing that the lender will make the loan to you at that the specified interest rate. The length of the lock can vary from 30-90 days, but many lenders will charge a fee for a rate commitment of longer than a month. Negotiate the lock period that is right for you, depending on when you plan to close on your new home and if interest rates are expected to creep higher during that time.

Reprinted with permission from RISMedia, the leader in real estate information and real estate news. Copyright 2010. All Rights Reserved.

Commentary: Why your best investment is a foreclosed home

By Michael Murphy

BOULDER, Colo. (MarketWatch) -- The recession is "officially" over according to GDP figures. Stocks are up 50% from the March 2009 bottom. Gold and silver are up dramatically, too. So what's the only remaining asset class that's still cheap?

Real estate.

Sure, in most parts of the country the market is still in the toilet. July marked the 17th straight month foreclosures exceeded 300,000, and the number of homeowners who lost their homes rose again on the month. But real estate is always a local market and different cities, neighborhoods and individual houses will bottom at different times. And now is that time for many areas.

Most of you will think I am way early on this recommendation, but here are three great advantages to buying today:

1. Desperate sellers. Not the homeowners, of course. They already know they'ree toast. It's the banks that financed the mortgages that are desperate. Everyone in the workout department has stacks of folders on their desks, their credenza, the floor -- everywhere -- all needing attention yesterday. That gives the few buyers out there big leverage.

2. Little competition. Most people don't have the patience and energy to push through a pre-foreclosure, short sale offer or a post-foreclosure real estate owned (REO) offer. Most real estate agents don't want to work that hard to get a deal done. But as with many things, those investors willing to be patient and do the work will reap big rewards down the road.

3. Low financing rates. If you believe major inflation is coming -- and I most certainly do -- getting 4-to-1 to 32-to-1 leverage at a low fixed rate of interest is like having someone give you money. As of this writing, rates for 30-year fixed mortgages are an incredible 4.5%. That's the lowest in 39 years, and a new bottom seems to be set each week.These trends point to a bottom. And if they're not enticing enough, remember that you can make $500,000 tax-free in as little as two years by buying and living in a short sale or REO home -- while either renting out your current home or simply changing your primary residence on the tax rolls. Then you sell the foreclosure and move back into your current place with a hefty payday.

With the summer winding down and Labor Day around the corner, now is the time to seriously consider making a low-ball bid on a distressed situation. Real estate is seasonal, and after September the buyers will be even scarcer as cold weather and the start of the school year slows down house hunters.

There are risks, of course, and not all houses make good investments. So how do you make the best buy?

A short sale is usually the most attractive way to buy distressed property, but also requires the most patience dealing with the hapless pre-foreclosure department at the lender. Before the actual foreclosure, you make an offer to buy the property for less than the mortgage loan. Most homeowners are eager for this because it is less of a hit to their credit report, and typically when things get so near to foreclosure there is no way for them to stay put anymore anyway.

If they need some enticing, you can offer to pay their moving expenses or even buy some of their personal property such as appliances or the lawn mower on the condition they don't trash the place before you move in. Start by researching the original sale price to the owners. Troubled loan departments at Bank of America Corp. (NYSE:BAC) , which took over Countrywide, or J.P. Morgan Chase Co. (NYSE:JPM) , which sucked up Washington Mutual, will usually take an offer equal to 80% of the loan without any argument.

Obviously, if you are looking at a property where the borrowers paid top dollar at the peak of the market and got a 100% loan, you might have to offer as low as 20% to 30% of the original mortgage to get a good deal. You should always start with a lowball offer and make them come back to you with a counteroffer, but the bigger loss the bank is faced with, the less eager they will be to avoid a foreclosure auction.

Second, get permission from the current borrowers to contact the bank's short sale department directly. The major banks' short sale people obviously were hired off the street for $10 an hour just to deal with the flood of paper, and most of them sound like they are 22 years old and still live with their parents. They have little or no knowledge about real estate, so be patient and realize that this inexperience will ultimately allow you to get a great deal.

Third, make sure you know the exact foreclosure date. The short sale people do not talk to the foreclosure people, who are something like an army of locusts mindlessly marching through a wheat field. Most likely, about three days before the foreclosure sale, the short sale people will panic and accept your low bid. If not, the foreclosed property will be handed over to the Real Estate Owned department and listed with a realtor, where you can make your offer again.

Of course, there are many other considerations that are typical to buying any home -- getting an inspection from a contractor, checking legal and insurance information, and not falling in love with a property just because of the price tag.

Investing in a short sale or REO home right now is certainly not easy, but the incentive of $500,000 tax free makes the move worth it for many. That figure comes from the husband and wife exclusion for the tax on the capital gain of a primary residence in which they have lived at least two of the prior five years

To make the full $500,000, you'll have to buy something nicer than a $150,000 house on a suburban lot, and get a heck of a deal. But it's not impossible. I have noticed that some good-sized houses on golf courses have gone into foreclosure, with the last transaction price maybe $800,000 and a $640,000 mortgage. If you buy that for 35% off, you pay $416,000. When inflation takes off, you sell it for $975,000, take your half a million tax-free and go home after two years.

Not a bad deal.

Michael Murphy is the editor of the New World Investor stock newsletter.  7:55 AM EDT August 20, 2010

5 Tips for Buying a Foreclosure

Article From BuyAndSell.HouseLogic.com

By: G. M. Filisko
Published: March 29, 2010

Get prequalified for a loan and set aside funds, and you'll be ready to purchase a foreclosed home.

When lenders take over a home through foreclosure, they want to sell it as quickly as possible. Since lenders aren't in the real estate business, they turn to real estate brokers for help marketing their properties. Buying a foreclosed home through the multiple listing service can be a bargain, but it can also be a problem-filled process. Here are five tips to help you buy smart.

1. Choose a foreclosure sale expert. Lenders rarely sell their own foreclosures directly to consumers. They list them with real estate brokers. You can work with a real estate agent who sells foreclosed homes for lenders, or have a buyer's agent find foreclosure properties for you. To locate a foreclosure sales specialist, call local brokers and ask if they are the listing agent for any banks.

Either way, ask the real estate professional which lenders' homes they've sold, how many buyers they've represented in a foreclosed property purchase, how many of those sales they closed last year, and who they legally represent.

If the agent represents the lender, don't reveal anything to her that you don't want the lender to know, like whether you're willing to spend more than you offer for a house.

2. Be ready for complications. In some states, the former owner of a foreclosed home can challenge the foreclosure in court, even after you've closed the sale. Ask your agent to recommend a real estate attorney who has negotiated with lenders selling foreclosed homes and has defended legal challenges to foreclosures.

Have your attorney explain your state's foreclosure process and your risks in purchasing a foreclosed home. Set aside as much as $5,000 to cover potential legal fees.

3. Work with your agent to set a price. Ask your real estate agent to show you closed sales of comparable homes, which you can use to set your price. Start with an amount well under market value because the lender may be in a hurry to get rid of the home.

4. Get your financing in order. Many mortgage market players, such as Fannie Mae, require buyers to submit financing preapproval letters with a purchase offer. They'll also reject all contingencies. Since most foreclosed homes are vacant, closings can be quick. Make sure you have the cash you'll need to close your purchase.

5. Expect an as-is sale. Most homeowners stopped maintaining their home long before they could no longer make mortgage payments. Be sure to have enough money left after the sale to make at least minor, and sometimes substantive, repairs.

Although lenders may do minor cosmetic repairs to make foreclosed homes more marketable, they won't give you credits for repair costs (or make additional repairs) because they've already factored the property's condition into their asking price.

Lenders will also require that you purchase the home "as is," which means in its current condition. Protect yourself by ordering a home inspection to uncover the true condition of the property, getting a pest inspection, and purchasing a home warranty.

Be sure you also do all the environmental testing that's common to your region to find hazards such as radon, mold, lead-based paint, or underground storage tanks.

Reprinted from HouseLogic with the permission of the NAR

 

RISMEDIA, August 9, 2010--In an effort to help responsible homeowners who owe more on their mortgage than the value of their property, the U.S. Department of Housing and Urban Development  provided details on the adjustment to its refinance program which was announced earlier this year that will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth. Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater' non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.

The FHA Short Refinance option is targeted to help people who owe more on their mortgage than their home is worth - or ‘underwater' - because their local markets saw large declines in home values. Originally announced in March, these changes and other programs that have been put in place will help the Administration meet its goal of stabilizing housing markets by offering a second chance to up to 3 to 4 million struggling homeowners through the end of 2012.

"We're throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined," said FHA Commissioner David H. Stevens. "This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product."

FHA published a mortgagee letter to provide guidance to lenders on how to implement this new enhancement. Participation in FHA's refinance program is voluntary and requires the consent of all lien holders. To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500. The property must be the homeowner's primary residence. And the borrower's existing first lien holder must agree to write off at least 10% of their unpaid principal balance, bringing that borrower's combined loan-to-value ratio to no greater than 115%.

In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees the write down a portion of the unpaid principal.

To facilitate the refinancing of new FHA-insured loans under this program, the U.S. Department of Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens. To be eligible, servicers must execute a Servicer Participation Agreement (SPA) with Fannie Mae, in its capacity as financial agent for the United States, on or before October 3, 2010.

Reprinted with permission from RISMedia, the leader in real estate information and real estate news. Copyright 2010. All Rights Reserved.

By Stephanie Andre

Looking to spruce up your home, but don't know where to start?

From molding to choice of color, there's a lot to consider before dipping your brush in the paint. Does a room really look smaller with a darker color on the walls? Should your ceilings be white? Do you want to add an accent wall?

Here are some tips on getting started:

Getting Started

· Size up your room. How you use color depends on where you use color. Each room has its own unique elements and function. First think about the structure of the room. Consider its shape and size. A lighter color can make a small room feel more spacious, while a darker color can help an immense room seem cozier.

· Take into account any architectural details, such as molding, trim, columns, and brackets. What's attractive and what's not? Varied intensities and hues can complement architecture, furnishings, and art. Remember, paint can accentuate a room's features or hide them.

· Your choice of color also depends largely on function. Will the main purpose of the room be eating, sleeping, working, entertaining, or something else entirely? A warm hue in the living room gives a more comfortable and inviting atmosphere for guests than a cooler color.

Selecting Interior Paint

· Before choosing your paint, think about where your room fits into the scheme of things. Where is it situated in relation to other rooms? Is it a high- or low-traffic area? Flat paint, for instance, is best suited for ceilings, walls, surface imperfections, and anywhere else that a muted low-reflecting surface is desired. Because it takes more effort to remove stains from this type of paint, a flat finish is best suited for the low-traffic areas of your home.

· Use low-luster, satin, and eggshell paint on areas where a sheen is desired. These paints are easier to clean than flat paint and hold up better under repeated washings. They withstand the wear and tear of high-traffic areas-hallways, woodwork, kitchens, baths, children's rooms, and playrooms-more easily than other finishes.

· Semigloss and high-gloss paint and enamel are best suited for banisters, railings, shelves, kitchen cabinets, furniture, doorjambs, windowsills, and any other surface you wish to accentuate. But be careful-the higher the gloss, the more it emphasizes any surface imperfections.

Choosing a Palette

· Having trouble deciding on your paint palette? Choose a design direction. If you've already chosen an interior décor or if you're working with a room that's already furnished, focus on a favorite fabric color, piece of art or furniture, or other object. If you still can't settle on a color you like, we offer free computerized paint matching and custom color mixing.

· Have color confidence-don't be afraid to paint bold and bright. If your room is unfurnished, a vibrant color can fill it until you can.

· Consider yourself above all. Paint color should reflect your mood and personality. What are your favorite colors? If you're having trouble selecting a color, try looking in your closet. The colors you enjoy wearing are the ones that make you feel good. You are the one who has to live with the color so live with the shades you love.

Making Your Purchase

· Water versus oil. When selecting an interior finish, try choosing a water-based enamel instead of an oil-based gloss paint. Water-based gloss enamels have less odor than conventional oil-based paints. They are much easier to clean up after, and they wear better over time.

· Don't purchase low-quality paint. High-quality paint performs better for a longer period of time. It's less prone to yellow as it ages, goes on smoother, and won't leave brush marks. It is also easier to wash and dirt resistant.

• Purchase test quarts to review your color and finish selections at home. Paint a piece of scrap material such as cardboard, or even a portion of your wall, to study the effects of various light conditions.

Reprinted with permission from RISMedia, the leader in real estate information and real estate news. Copyright 2010. All Rights Reserved.  

May closings maintain frenzied pace

Home sales this year now exceed 2009 by 24 percent

Central Ohio home closings in May significantly outpaced the previous month as well as the previous year. The number of home

sales last month (2,401) were up 27 percent over April of this year and were 32.7 percent higher than homes closed in May of 2009.

"Although many believed that home sales activity would slow after the April 30 deadline for the home buyer tax credits," said Sue

Lusk-Gleich, President of the Columbus Board of REALTORS®. "However, home sales didn't just keep pace but far exceeded the

previous few months. That speaks volumes for the level of interest and confidence home buyers have in our central Ohio housing

market."

The average sale price of $166,156 in May dipped slightly from the previous year but was up almost five percent over the previous

month. The average sale price for the first five months of the year stands at $156,452, fully five percent over the $148,956 average

sale price for the first five months of 2009.

March home sales up 54 percent

Numbers of home sales and new listings both on the increase

There were 1,704 central Ohio homes sold during March of 2010. This is 54.1 percent higher than the previous month and 25.3

percent higher than March of 2009. First quarter saw 3,873 homes sell in central Ohio which is 12.5 percent more than home sales

during January through March of 2009, according to the Columbus Board of REALTORS®.

There were 4,949 residential homes put on the market last month - a 44.3 percent increase over new listings the previous month and

32.8 percent higher than homes listed in March of 2009.

"The central Ohio housing market is on fire right now," exclaims Sue Lusk-Gleich, President of the Columbus Board of REALTORS®.

"There's no question the home buyer tax credits have a lot to do with our market activity. But the significant increase in listings as

well as rising sale prices are clear evidence that our local market is regaining its strength."

It seems that most agents are quite busy trying to help as many folks as possible find and sell homes prior to the April 30th deadline.  Here in the Columbus area it has been a wild and crazy ride with multiple offers, price increases and vanishing inventory.  It has been quite awhile since many of us have worked with such motivated buyers and sellers.  All of this leads us to the quiet worry of "What Happens Next?

Will our buyers and sellers continue to operate with such  a great sense of urgency?  Will real estate settle back to a slow crawl. I'm not really sure that anyone has all the answers.  However, what I do know is that real estate will continue to be one of the greatest ways to build personal wealth.  I know that people will continue to need to buy and sell their homes.  So "What is Next?.... We as Realtors®  will continue to  work hard on behalf of our clients and to help our buyers  and sellers with all of their real estate needs...

Thinking of buying or selling Central Ohio Real Estate today or in the future call me at 614-273-6406 or email me at vanessa.simmons@realliving.com

So your Realtor® has taken you to meet a builder and after a long seemingly endless search you have finally found your "Dream House." 

Later as you ponder your good fortune you receive an unexpected call from the builder with more ‘good news.'   He tells you that you can save yourself 3% if you ditch your agent and work directly though him.   Wow, no brainer you think.  You even mange to convince yourself that if your agent really cared about your well being they will be happy to see you save money. Heck even if they are not happy, these are tough economic times and savings are savings. 

Needless to say your agent will not be thrilled with this news for several reasons: 

•1.        It violates the trust the agent displayed by bring a potential customer to this builder

•2.       This situation leaves the client without representation

•3.       It reduces the value add service agents provide to only 3%  of which most skilled agents would have gotten for their clients anyway oftentimes even more than 3%

As a buyer if you find yourself in this situation there are a couple of key things you should keep in mind:

•1.        The building process spans months.  During the process there are always issues that arise.  An experienced agent can not only successfully guide you through the difficult times quite often they are in there fighting to make sure things are going smoothly and you are satisfied.

•2.       If the builder is so unethical that he would to something like this to an agent that brings potential business to him what makes you think that he wouldn't hesitate to be unethical in his dealings with you?

In a recent new build transaction I was able to get my clients 5 ½% off the list price and a 42" flat screen TV.   

 If you are ready to buy or sell Central Ohio Real Estate give me a call at 614-273-6406 or email me at Vanessa.simmons@realliving.com

Although 2009 was another challenging year for Ohio Real Estate it shaped up to be slightly better than 2008. The first time home buyers tax credit helped many central Ohioans realize their dreams of home ownership. Below is a quick snapshot that tells us a little about the typical 2009 central Ohio home buyer.

• 47% Were First Time Home Buyers
• Median household income for first time buyers was $62,800
• Median household income for repeat buyers was $89,700
• 20% of the buyers were single females
• 10% were single males
• Median age of First time buyer was 28 years
• Median age of repeat buyers was 45 years
• Typical Home buyer searched for 10 weeks and looked at 14 homes
• 83% Purchase Single Family Detached Homes
• Typical Square Footage of Home was 1800 sq. ft.
• 59% Said that First time Tax Credit was a Factor in Purchase
• 81% of Buyers used a Real Estate Agent to purchase their home
• The median purchase price for a central Ohio home was $165,000 compared to $185,000 nationwide.

With the extension and expansion of the first time home buyers tax credit there continues to be optimism that 2010 will be a better real estate year. If you are ready to explore your real estate options please give me a call at 614-273-6406 or email me at Vanessa.simmons@realliving.com.