Provided By Realty Times
With the beginning of 2012, there are several issues that will remain at the center of discussion for real estate professionals. Starting with distressed homes, sellers must confront a series of challenges (and opportunities), which demand the attention of experts who can address these matters effectively. Remember: as the economy struggles to recover, and as more properties go into foreclosure or become financial liabilities for banks and lenders, sellers of distressed homes will make this year a time of urgent action. In fact, the only way for sellers of these properties to start anew is with the help of investors who understand the intricacies of the marketplace.
From my perspective, as someone who interacts with sellers on a daily basis and sees the Dallas-Fort Worth area as a symbol for a number of broader national trends, listings for distressed homes are on the rise. Think of 2012 as the year of distressed properties, a time when sellers will become more active in their search for seasoned investors who can enter this environment. And, unlike a traditional real estate agent who will err on the side of passivity and hope for a surprise buyer, investors have a different approach.
Rather than wait for a sudden economic turnaround, which will almost certainly not happen in the next six months, sellers need to abandon the standard tactic of having an agent look (in vain) for a buyer who will respond to a posting or advertisement. None of which is to suggest that these agents are not good people; they just handle an entirely different set of responsibilities, which have little to do with the sale of distressed homes.
As a very serious buyer, we make decisions on the spot and can bring closure to a story that could otherwise continue on for months or years. Also, this new year will see more people - particularly in the Dallas-Fort Worth area - searching for a way to enjoy a fresh start.
These individuals want to reclaim their lives, move to new cities and seize existing job opportunities. Most importantly, they want to be rid of the baggage that comes with a troubled property. But before they can do these things, and well before 2012 can be their year of renewal, they must first sell their distressed homes. Again, from my experience I know that the right home can be attractive for investors who want to make a profit and help the surrounding neighborhood.
By transforming these properties into quality retail homes and clean rentals, property values within the same community can rise. For example: as these homes become more attractive, both physically and economically, there is a net gain for everyone. Existing owners see a positive turnaround, while newly arrived buyers or renters can move into a quality residence.
With this information at our disposal, we should make 2012 a year for success. That achievement starts by extending our wisdom on behalf of sellers of distressed homes. That assistance can make these next twelve months a period of positive activity throughout the real estate industry. Let us move forward with strength and optimism.
In the Dallas-Fort Worth area, we can - and do - make a positive difference in people’s lives. With that rule in mind, let us move forward on behalf of those we serve.
Are you a distressed homeowner? Give us a call at 972-772-7000 or email us at frontdesk552@kw.com to learn how you solve your foreclosure situation.
Monday, January 16, 2012
Friday, January 13, 2012
10 Selling incentives to motivate buyers in a down economy
Provided By Trulia
Everyone likes a bargain, a sale, or a giveaway. What's not to like? In real estate sales incentives can be a great way to motivate a reluctant buyer to take the plunge and consider making an offer on your home despite the current economic downturn. So as a seller what are some ways you can use sales incentives to drive up interest in your property?
Let's take a look at 10 selling incentives to motivate buyers in a down economy:
Pay the points
What are points? Points are fees charged by lenders to provide financing. In general one point equals one percent of the mortgage balance. For instance a buyer paying 1 ½ points on a $200,000 loan will pay $3000 in loan fees. As an incentive to write an offer, some sellers offer to pay points on behalf of the buyer.
Buy down the interest rate
Many buyers are unaware that they can secure a lower interest rate by paying additional points at closing. Just like the points discussed above, a point, when buying down the interest rate, is one percentage point of the sales price. For example, a buyer who is securing a $300,000 mortgage, paying one point in loan fees, and then another two points to buy down her interest rate will pay a total of $9,000 dollars in loan costs at closing! If she can save any portion of this amount by choosing one home over another it might very well sway her decision.
Pay for closing costs
Closing costs are fees charged by escrow companies and lenders to process the paperwork necessary to close the sale. Sellers generally pay for insuring clear title by purchasing title insurance on behalf of the buyer, but many homeowners also decide to offer to pay for the buyer's closing costs as well. However, in doing so it is wise to put a cap on the amount of closing costs you are willing to pay by stating that you will pay "up to" a certain predetermined amount.
Pay for inspections or compliance work
Inspections are typically required by lenders before funding a buyer's loan. While in many areas of the country these are typically paid by the buyer, they are almost always negotiable. The same is true of any needed repairs that might be revealed by the inspections. To secure a sale many sellers will offer to pay for inspections and or compliance work "up to" a reasonable amount.
Carry the contract
Owner financing means that the seller acts as the bank by agreeing to accept payments from the buyer. The advantage to offering owner financing is that buyers will be able to save thousands of dollars in loan fees and can often close the sale very quickly. The downside is that you take on additional risk should the buyer default at some future point. Before offering or accepting a sale with owner financing always seek the advice of legal counsel.
Upgrades
Many builders now allocate as much as 5% of their sales price to sales incentives that they offer back to buyers in the form of upgrades. Following suit many homeowners have caught on that this technique can be a great way to set their home apart from the competition by offering kitchen and bathroom upgrades, landscaping upgrades, or even carpet upgrades, to motivate buyers to take action.
Allowance
If your home needs a facelift but you don't have the money to do the work yourself you might consider providing the new buyer with an allowance. An allowance is a credit given to the purchaser to compensate for accepting a home's defects - things like worn out carpets, failing plumbing, or poor drainage.
Free appliances
Many sellers are now offering to provide buyers with their choice of brand new appliance packages. From front load washers and dryers to new convection ovens, and even plasma televisions, these incentives can be a real plus for buyers who have never owned a home before. They can also be a plus for any buyer who wants new appliances, like just about everyone.
Pre-paid utilities
Like getting stung by bee once a month, adjusting to a new mortgage payment can be painful. One way sellers swab on the calamine lotion and make it easier for a buyer is to pre-pay utilities over a certain period of time. This could range from pre-paying for gas, electricity, cable TV, or even internet services.
Pre-paid services
Owning a home isn't easy. You have to clean the darn thing, mow the grass, maintain the heating and air condition systems, clean the pool, clean the gutters, and even change the light bulbs once in a while. Because of this some sellers throw in a pre-paid service like a lawn mowing service, pool cleaning service, or even a housekeeping service, to encourage buyers to step up and write an offer.
Consider your options carefully. Selling incentives can often be just the catalyst your home needs to make the jump from being just an active listing competing with hundreds of other homes for a buyer's attention to a home that sports a pending sale sticker. The key is to choose an incentive that fits your budget and your market. For guidance, explore what other sellers are offering to motivate buyers to take action and consult with a local agent.
Are you interested in selling your home? Give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
Everyone likes a bargain, a sale, or a giveaway. What's not to like? In real estate sales incentives can be a great way to motivate a reluctant buyer to take the plunge and consider making an offer on your home despite the current economic downturn. So as a seller what are some ways you can use sales incentives to drive up interest in your property?
Let's take a look at 10 selling incentives to motivate buyers in a down economy:
Pay the points
What are points? Points are fees charged by lenders to provide financing. In general one point equals one percent of the mortgage balance. For instance a buyer paying 1 ½ points on a $200,000 loan will pay $3000 in loan fees. As an incentive to write an offer, some sellers offer to pay points on behalf of the buyer.
Buy down the interest rate
Many buyers are unaware that they can secure a lower interest rate by paying additional points at closing. Just like the points discussed above, a point, when buying down the interest rate, is one percentage point of the sales price. For example, a buyer who is securing a $300,000 mortgage, paying one point in loan fees, and then another two points to buy down her interest rate will pay a total of $9,000 dollars in loan costs at closing! If she can save any portion of this amount by choosing one home over another it might very well sway her decision.
Pay for closing costs
Closing costs are fees charged by escrow companies and lenders to process the paperwork necessary to close the sale. Sellers generally pay for insuring clear title by purchasing title insurance on behalf of the buyer, but many homeowners also decide to offer to pay for the buyer's closing costs as well. However, in doing so it is wise to put a cap on the amount of closing costs you are willing to pay by stating that you will pay "up to" a certain predetermined amount.
Pay for inspections or compliance work
Inspections are typically required by lenders before funding a buyer's loan. While in many areas of the country these are typically paid by the buyer, they are almost always negotiable. The same is true of any needed repairs that might be revealed by the inspections. To secure a sale many sellers will offer to pay for inspections and or compliance work "up to" a reasonable amount.
Carry the contract
Owner financing means that the seller acts as the bank by agreeing to accept payments from the buyer. The advantage to offering owner financing is that buyers will be able to save thousands of dollars in loan fees and can often close the sale very quickly. The downside is that you take on additional risk should the buyer default at some future point. Before offering or accepting a sale with owner financing always seek the advice of legal counsel.
Upgrades
Many builders now allocate as much as 5% of their sales price to sales incentives that they offer back to buyers in the form of upgrades. Following suit many homeowners have caught on that this technique can be a great way to set their home apart from the competition by offering kitchen and bathroom upgrades, landscaping upgrades, or even carpet upgrades, to motivate buyers to take action.
Allowance
If your home needs a facelift but you don't have the money to do the work yourself you might consider providing the new buyer with an allowance. An allowance is a credit given to the purchaser to compensate for accepting a home's defects - things like worn out carpets, failing plumbing, or poor drainage.
Free appliances
Many sellers are now offering to provide buyers with their choice of brand new appliance packages. From front load washers and dryers to new convection ovens, and even plasma televisions, these incentives can be a real plus for buyers who have never owned a home before. They can also be a plus for any buyer who wants new appliances, like just about everyone.
Pre-paid utilities
Like getting stung by bee once a month, adjusting to a new mortgage payment can be painful. One way sellers swab on the calamine lotion and make it easier for a buyer is to pre-pay utilities over a certain period of time. This could range from pre-paying for gas, electricity, cable TV, or even internet services.
Pre-paid services
Owning a home isn't easy. You have to clean the darn thing, mow the grass, maintain the heating and air condition systems, clean the pool, clean the gutters, and even change the light bulbs once in a while. Because of this some sellers throw in a pre-paid service like a lawn mowing service, pool cleaning service, or even a housekeeping service, to encourage buyers to step up and write an offer.
Consider your options carefully. Selling incentives can often be just the catalyst your home needs to make the jump from being just an active listing competing with hundreds of other homes for a buyer's attention to a home that sports a pending sale sticker. The key is to choose an incentive that fits your budget and your market. For guidance, explore what other sellers are offering to motivate buyers to take action and consult with a local agent.
Are you interested in selling your home? Give us a call at 972-772-7000 or email us at frontdesk552@kw.com.
Wednesday, January 11, 2012
Pending Sales Rise
Provided By Realty Times
According to the latest report from the National Association of Realtors Pending Homes Sales Index, pending home sales are at the highest level in 19 months.
What has precipitated this rise? Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. "Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage," he said.
There was a 7.3 percent jump in contract signings in November, up 5.9 percent from the year prior. The last time to market had this many signings was in April 2010 when the deadline for the first time home buyer tax credit was "November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead," Yun added.
Regionally, the largest rise was seen in the West, which has previously struggled. It rose 14.9 percent for the Month, giving it a boost of 2.9 percent of November 2010.
The Northeast was close to double-digit gains with a solid 8.1 percent rise. It is still 0.3 percent below last year’s figures. The Midwest is doing well. It is 9.5 percent above November 2010 for pending sales and rose 3.3 percent for the month.
Finally, the South rose 4.3 percent, rising 8.7 percent above last year’s numbers.
Other factors that could have contributed to this rise are recent declines in the unemployment rate. The rate has lingered about 9.0 percent for months, but fell below this mark in recent weeks. Holiday hirings were up, but so were hirings in other sectors.
Consumer confidence peaked 10 points in November to the highest rate seen since the end of the recession and retailers boasted the best holiday sales figures in years. This could signal a return of buyers to the housing market.
Are you interested in the pending sales in your area? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
According to the latest report from the National Association of Realtors Pending Homes Sales Index, pending home sales are at the highest level in 19 months.
What has precipitated this rise? Lawrence Yun, NAR chief economist, said the gains may result partially from delayed transactions. "Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high. Some of the increase in pending home sales appears to be from buyers recommitting after an initial contract ran into problems, often with the mortgage," he said.
There was a 7.3 percent jump in contract signings in November, up 5.9 percent from the year prior. The last time to market had this many signings was in April 2010 when the deadline for the first time home buyer tax credit was "November is doing reasonably well in comparison with the past year. The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead," Yun added.
Regionally, the largest rise was seen in the West, which has previously struggled. It rose 14.9 percent for the Month, giving it a boost of 2.9 percent of November 2010.
The Northeast was close to double-digit gains with a solid 8.1 percent rise. It is still 0.3 percent below last year’s figures. The Midwest is doing well. It is 9.5 percent above November 2010 for pending sales and rose 3.3 percent for the month.
Finally, the South rose 4.3 percent, rising 8.7 percent above last year’s numbers.
Other factors that could have contributed to this rise are recent declines in the unemployment rate. The rate has lingered about 9.0 percent for months, but fell below this mark in recent weeks. Holiday hirings were up, but so were hirings in other sectors.
Consumer confidence peaked 10 points in November to the highest rate seen since the end of the recession and retailers boasted the best holiday sales figures in years. This could signal a return of buyers to the housing market.
Are you interested in the pending sales in your area? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.
Monday, January 9, 2012
Mortgage Rates Finish 2011 Near Historic Lows
Provided by Realty Times
In Freddie Freddie Mac's results of its Primary Mortgage Market Survey®, the average fixed mortgage rates finishing the year near their all-time historic lows helping to keep homebuyer affordability high.
Averaging 3.95 percent, the 30-year fixed has been at or below 4.00 percent for the past nine consecutive weeks and only twice in 2011 did it average above 5.00 percent.
The 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending December 29, 2011, up from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.86 percent.
The 15-year FRM this week averaged 3.24 percent with an average 0.8 point, up from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.88 percent this week, with an average 0.6 point, up from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 3.77 percent.
1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.77 percent. At this time last year, the 1-year ARM averaged 3.26 percent.
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
"Mortgage rates ended the year hovering near historic lows in an already affordable housing market. For instance, the seasonally-adjusted S&P/Case-Shiller® 20-City Composite home price index in October was the lowest seen since March 2003. The largest hit areas were Las Vegas with the lowest reading since January 1997 and Atlanta which was since June 1998. It's not surprising then that over 5 percent of households in December plan to purchase a home over the next six months, the highest share since May, according to The Conference Board."
In Freddie Freddie Mac's results of its Primary Mortgage Market Survey®, the average fixed mortgage rates finishing the year near their all-time historic lows helping to keep homebuyer affordability high.
Averaging 3.95 percent, the 30-year fixed has been at or below 4.00 percent for the past nine consecutive weeks and only twice in 2011 did it average above 5.00 percent.
The 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending December 29, 2011, up from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.86 percent.
The 15-year FRM this week averaged 3.24 percent with an average 0.8 point, up from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.88 percent this week, with an average 0.6 point, up from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 3.77 percent.
1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.77 percent. At this time last year, the 1-year ARM averaged 3.26 percent.
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.
"Mortgage rates ended the year hovering near historic lows in an already affordable housing market. For instance, the seasonally-adjusted S&P/Case-Shiller® 20-City Composite home price index in October was the lowest seen since March 2003. The largest hit areas were Las Vegas with the lowest reading since January 1997 and Atlanta which was since June 1998. It's not surprising then that over 5 percent of households in December plan to purchase a home over the next six months, the highest share since May, according to The Conference Board."
Friday, January 6, 2012
Which Home Improvement Projects Offer the Best Returns?
Provided By Realty Times
When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.
"This year's Remodeling Cost vs. Value Report shows the value of putting your home's best façade forward, so to speak," said National Association of REALTORS® President Moe Veissi. "Inexpensive exterior replacement projects are not only crucial to a home's regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal."
HouseLogic.com, NAR's consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.
Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.
The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project - upscale vinyl - rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.
The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.
When it comes to remodeling, exterior replacement projects have routinely rewarded home owners with more bang for their buck. This year is no different: REALTORS® recently rated many exterior improvements as among the most valuable home investment projects as part of the 2011-12 Remodeling Cost vs. Value Report.
"This year's Remodeling Cost vs. Value Report shows the value of putting your home's best façade forward, so to speak," said National Association of REALTORS® President Moe Veissi. "Inexpensive exterior replacement projects are not only crucial to a home's regular upkeep, but are also expected to recoup close to 70 percent of costs. Specific exterior projects such as siding, window and door replacements are part of regular home maintenance, so many homeowners are already undertaking them. These projects also do not require expensive materials and they have the added bonus of instantly adding curb appeal."
HouseLogic.com, NAR's consumer Web site, includes dozens of remodeling projects, from kitchens and baths to siding replacements, which indicate the recouped value of the project based on a national average. According to the Cost vs. Value, seven of the top 10 most cost-effective projects nationally in terms of value recouped are exterior replacement projects. REALTORS® judged an upscale fiber-cement siding replacement as the project expected to return the most money, with an estimated 78 percent of costs recouped upon resale.
Two additional siding replacement projects were in the top 10, including foam-backed vinyl siding, expected to return 69.6 percent of costs, and upscale vinyl siding, expected to recoup 69.5 percent of costs. Three door replacements were also among the top exterior replacement projects. The steel entry door replacement is the least expensive project in the report, costing little more than $1,200 on average and expected to recoup 73 percent of costs.
The upscale garage door replacement jumped seven spots to number six this year, primarily due to the average cost of the project declining more than 15 percent nationally. The upscale and midrange garage door replacement projects are expected to return more than 71 percent of costs. One window replacement project - upscale vinyl - rounded out the last exterior replacement project in the top 10, expected to recoup 69.1 percent of costs.
The 2011-12 Remodeling Cost vs. Value Report compares construction costs with resale values for 35 midrange and upscale remodeling projects comprising additions, remodels, and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the 14th consecutive year that the report, which is produced by Remodeling magazine publisher Hanley Wood LLC, was completed in cooperation with NAR.
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