The Market is Competitive for Home Buyers

More home buyers are finding they’re losing their power position in the real estate market and that when they submit an offer for a home, they are not alone in the bidding. In fact, buyers who submit low offers may not even get a courtesy of a callback nowadays. Money Magazine recently offered potential buyers the following tips if they want to get the winning bid on a home: Get pre-approved, not prequalified: Pre-approval for a loan based on a buyer's credit, income, and assets is viewed as better than getting pre-qualified, which is just an estimate of how much that buyer may be able to borrow. Find an experienced REALTOR®: Money Magazine advised home buyers to find a real estate professional who knows how to handle multiple-offer situations and can advise how much to offer and help buyers determine if they’re getting a home at a fair price. Watch the contingencies: “The best offer isn't always the one with the best price," says George Miller, a Sarasota, Fla., real estate agent. Buyers who put in too many contingencies with their offer may lose out. Source: “Winning in a Seller's Housing Market,” Money Magazine (Sept. 12, 2012)

Are Home Warranties A Good Deal?

When something malfunctions in your home, wouldn't it be great if you could pick up the phone, request a service call, pay a nominal service charge and have the problem fixed? In theory, this is how a home protection plan works.

A home protection plan--also know as a home warranty-is an insurance policy that insures homeowners against defects in the major systems of their home. Precisely what is covered will vary from one company to the next. Most policies cover the heating, plumbing and electrical systems as well as built-in appliances like the stove, dishwasher and garbage disposal. Some companies will cover movable appliances like the refrigerator, washer and dryer for an extra charge. And some policies even include roof coverage-if you pay an additional fee.

Policy terms are usually for one year and they are renewable. The annual cost of a policy varies but you might expect to pay about $250 for a moderate-size home. Protection plans are available for both single-family residences and condominiums.

Home protection plans are popular in the home sale industry because they provide a relatively inexpensive way to take care of home defects that develop soon after the home sale closes. For example, let's say the water heater quits working the day after closing. Depending on the terms of the purchase agreement, the seller may be responsible for replacing the water heater. A new hot water heater can cost several hundred dollars. However, if there is a home protection plan in place at closing, the hot water heater will probably be replaced for the nominal cost of a service charge. Home warranty service charges vary but they are often in the range of $45-$55 per call.

Some sellers offer to pay for a home protection plan to cover the home for the buyer for one year. If problems arise during that year, the buyers simply call the warranty company and pay the service charge. The warranty company pays for the repair or replacement.

FIRST-TIME TIP: Be sure to read the policy carefully because there are exclusions from coverage. For example, pre-existing conditions are not usually covered. So if the furnace hasn't worked properly for years, it probably won't be covered by the buyer's home protection plan. Also, there are limitations on coverage. For instance, some policies offer roof and septic system coverage, but only up to $1,000 of work.

Seller coverage is also available to cover the home during the listing and sale period. Seller coverage works the same as buyer coverage except that there are usually more limitations on the coverage. For example, the furnace is usually covered under both buyer and seller coverage. But, the amount of coverage offered under seller coverage is often less than the amount that's available to the buyer if the furnace breaks down after closing.

One seller who had signed up for seller coverage was able to have some of the defects that were discovered during the buyer's inspections fixed by the home protection plan company for the cost of a service charge. This was a great deal for the seller because it saved him money and he didn't have to pay the policy premium until closing. Seller coverage is usually charged by the day. The cost varies, but it can run about 75 to 95 cents a day.

THE CLOSING: If the seller of a home you're buying does not offer to pay for a home protection plan, you can pay for one. Be sure to order it before the closing date.
There are a few companies that will allow you to purchase a home warranty at any time.

Increase Your Home's Value

It is no secret. 2010 was a hard year for home values. While you cannot
protect yourself against market corrections, you can take small steps to help
increase your home's value and make it more marketable. The following tips
are meant to inspire and motivate you to treat your home like the investment it
was meant to be.
1. Make Repairs: Homes require regular maintenance and repairs are a
necessary component of home ownership. Procrastination gets you nowhere
when it comes to home value. Stay on top of repairs as they are needed. And
be sure to address large projects before placing your home on the market. For
example, roofs are expensive to replace or repair. Many buyers will pass up
your otherwise wonderful home when faced with roof issues.
2. Curb Appeal: Curb appeal is about first impressions. It is also about
neighborhood values. Drive down a street lined with manicured lawns and well maintained
homes and the values are sure to reflect the care their owners take.
On the other hand, streets with overgrown trees, junky yards, and chipped and
faded paint are fighting an uphill battle in the values game.
3. Community Involvement: The classic quote from Chinese philosopher
Lao-tzu says, "A journey of 1,000 miles begins with a single step." This is
especially true for improving the health and wealth of a community. Change
starts with yourself. By becoming an active member of your community, you
can inspire the change you desire. Family, friends, and neighbors will follow
your lead of civic duty. How can you get involved? Run for city council, join the
PTA, volunteer, and help organize fund raisers and events that inspire
community togetherness.
4. Updated Kitchen: Kitchens are a real selling point. Outdated cabinets,
counters, and appliances will stick out like a sore thumb to buyers. Be sure,
however, that you research your comparables before beginning a remodel. You
do not want to price yourself out of the running. This means if you love granite
and travertine, but other homes in your area are selling with laminate, you will
probably not be able to ask for a drastically higher price that covers the price of
the granite.
5. Updated Bath: Bathrooms also hold much of a home's value. New lowflush
toilets cost as little as $100. And tubs and showers can be easily replaced
or resurfaced. Be sure, above all else, that your bathrooms are clean for
showings.
6. Energy Savers: Buyers are looking for homes that are energy efficient.
Low-flush toilets, solar panels, water filtration systems, and insulated windows
are all inexpensive fixes for energy zappers.
Consider these simple tips and decide for yourself what may help your home retain its value.

BELIEVE

If there’s one thing I’ve seen over and over again, it’s the cycle where housing soars, corrects, and then soars again.


In its low periods, like today, many, many people think real estate values will never come back. And certainly they’ll never go up again like they did in the past.


I don’t know about other parts of the country, but this is California where the American Dream thrives. I am eternally optimistic about California housing values, and most optimistic about values in the Bay Area.


So, I’ve collected some quotes from the past where people say real estate is dead. Reading them might allay some peoples’ concerns and put things into perspective. Enjoy:


“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” (Time, Dec. 1, 1947)

“Houses cost too much for the mass market. Today’s average price is around $8,000—out of reach for two-thirds of all buyers.” (Science Digest, April, 1948)

“If you bought your house since the War…you have made your deal at the top of the market… The days when you couldn’t lose on a home purchase are no longer with us.” (House Beautiful, Nov. 2, 1948)

“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs $28,000.” (Business Week, Sept. 4, 1969)

“Be suspicious of the ‘common wisdom’ that tells you to ‘Buy now…because continuing inflation will force home prices and rents higher and higher.’” (NEA Journal, Dec. 1970)

“The median price of a home today is approaching $50,000….Housing experts predict that in the future price rises won’t be that great.” (Nations Business, June, 1977)

“The era of easy profits in real estate may be drawing to a close.” (Money, Jan. 1981)

“In California… for example, it is not unusual to find families of average means buying $100,000 houses…. I’m confident prices have passed their peak.” (John Wesley English, The Coming Real Estate Crash, 1980)

“The golden-age of risk-free run-ups in home prices is gone.” (Money, March 1985)

“If you’re looking to buy, be careful. Rising home values are not a sure thing anymore.” (Miami Herald, Oct. 25, 1985)

“Most economists agree… [a home] will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980s.” (Money, 1986)

“We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot.” (Los Angeles Times, Jan. 31, 1993)

“A home is where the bad investment is.” (San Francisco Examiner, November 17, 1996)

Things look grim right now, but go back and look at the dates on all these quotes? Anyone who followed the advice of these people would have missed out on one of the great real estate booms of all time.

What if you paid attention to the advice in quote #7? You’d have missed out on all that growth in the 1980’s.

What about quote #12? If you followed that advice, you’d have missed out on all the great years up until last year.

I could go on and on. If you’re a patient person, it’s been almost impossible not to get rich on California housing.

It happened before and it will happen again.

Don’t bet against California housing.

In the long run, it’s always been a great investment.

BY: Rick Soukoulis

Chairman and CEO

The Loan Source

408.578.8700

rsoukoulis@Interomortgage.com

The (Not Just) First-Time Homebuyer Tax Credit

The (Not Just) First-Time Homebuyer Tax Credit, Expanded & Explained


By Gino Blefari
President and CEO, Intero Real Estate Services

After much speculation by the general populace (and the real estate industry) and much consternation by Congress, the much-anticipated extension of the First-Time Homebuyer Tax Credit has been passed.

Passed, not to mention greatly expanded.

Whether you’re in favor of or opposed to the credit, it’s now been made available to a host of Americans not included in the initial offering, so how can you take advantage of it? Let’s break it down, shall we?



The original tax credit, which was a part of the economic stimulus package put into effect in February 2009, was made available to first-time homebuyers (people who hadn’t owned a home for three or more years) and applied to home purchases that closed on or before November 30, 2009. With the passage of the expansion bill into law, that credit has been extended to purchases made by May 1, 2010 and that are closed prior to July 1, 2010 (that means escrow is closed, all papers signed and keys are in-hand on or before June 30th).

For first-time homebuyers, the credit amount, as it was in the original plan, remains at 10% of the purchase price, up to a maximum credit of $8,000. Originally, to be eligible for the credit, single (not married) purchasers could have an adjusted gross income (AGI) of no more than $75,000/year; married couples with an AGI of $150,000 or less were eligible. Under the new plan, singles with an AGI of up to $125,000 and married couples with an AGI of up to $225,000 are eligible.

For those of you who had previously been ineligible to claim the credit at all because you already owned a home, there may be good news for you. Under the new plan, homeowners who have lived in their homes for 5 consecutive years of the past 8 years are eligible to receive a credit toward a new home purchase. Meant to give a boost to “move-up” buyers, this credit amount can be 10% of the purchase price, up to $6,500. The income caps referenced above are the same.

If you’re a member of the Armed Services and were/will be deployed outside the United States for at least 90 days between December 31, 2008 - May 1, 2010, you may claim the credit until May 1, 2011 (with settlement all wrapped up before July 1, 2011).

One peculiarity of which it’s important to take note: even if you purchase a new home in 2010, you can claim the credit on your 2009 tax return. If you file for an extension of time to file your income taxes, or if you amend your already-filed 2009 tax return, you may include the tax credit (this would put the cash in your pocket much sooner than if you were to claim the credit on your 2010 tax return). Be sure, however, to take heed of the income limitations, as they apply to the year in which you claim the credit.

Finally, it’s important that you understand that if the purchase price of the home exceeds $800,000, no tax credit may be claimed, regardless of your income levels. The credit only applies to primary residences. Investment properties or vacation homes don’t qualify.

Whether the expansion and extension of this credit is the shot in the arm that the US Economy needs remains to be seen, but it’s here, it’s ready and, if you’re planning on purchasing a new home, you should most certainly take advantage of it. Talk to your Intero agent or consult your financial advisor to discuss how this affects YOU.

CONGRESS PASSES HOMEBUYER TAX CREDIT

Here's the latest intelligence from Real Estate Economy Watch.

Special Report

CONGRESS PASSES HOMEBUYER TAX CREDIT


--------------------------------------------------------------------------------


The House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.
The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close. First-time buyers who are in process of making a purchase will no longer need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline. The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit. A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.


Read the full story at http://www.realestateeconomywatch.com/

Home Maintenance Tips

It's Fall: Time to Prepare Your Home for Winter

Fall maintenance is important because it helps make homes more energy efficient during the winter months, and will safeguard homes against potential seasonal 'disasters' such as leaking roofs or home fires caused by neglected chimneys. Here are ten tips to a safer, warmer winter.

TIP #1 -- Check the heating system. Check the filter, pilot light and burners in a system fueled by gas or oil. Fireplaces, boilers, water heaters, space heaters and wood burning stoves should also be serviced every year. Have the specialist inspecting your unit show you how to change the filter and then you should change it at least once every 2 months. Clean ducts in the heating system. Clean and vacuum dust from vents, baseboard heaters and cold air returns. Dust build-up in ducts is a major cause of indoor pollutants. Ducts should be professionally cleaned about every three years.

TIP #2 -- Have the chimney inspected by a qualified chimney professional. Chimneys should be checked and cleaned, if necessary, on an annual basis. If you are using a wood stove this season, be sure that the stovepipe was installed correctly according to the manufacturer's recommendations and local codes. If there is any doubt, a building inspector or fire official can determine whether the system is properly installed. If you have a chimney that will not be used, consider having it sealed shut.

TIP #3 -- Test fire alarms, smoke detectors and carbon monoxide detectors, and vacuum out the dust. Batteries should be checked every six months to ensure that they're working.

TIP #4 -- Remove excess leaves and damaged branches from trees surrounding the house. Dead branches have the potential to break and fall, ruining roofs, decks, or vehicles and the possibly causing injuries to people.

TIP #5 -- Maintain gutters. Remove all debris that can slow or impede the ability of water to drain effectively from the roof. Trapped water can be destructive not only to the gutters themselves but to the adjoining roof as well. Make sure gutter water drains away from your home.

TIP #6 -- Inspect the roof. Look for damaged or loose shingles, gaps in the flashing at joints with siding, vents and flues, as well as damaged mortar around the chimney.

TIP #7 -- Inspect exterior walls, doors and windows. Check walls and window sills for damage such as cracks, gaps, loose or crumbling mortar, along with splitting and decaying wood. Caulk exterior joints around windows and doors, which helps keep the home weather tight and lower heating bills. Check windows and doors to make sure locks work properly and that they are in good condition. Clean tracks and lubricate hinges. Repair or replace any cracked windows.

TIP #8 -- Maintain steps and handrails. Repair broken steps and secure loose banisters and handrails. Broken steps can cause a dangerous fall. Similarly, a person slipping will grab a handrail for support.

TIP #9 -- Inspect the attic and basement or crawlspace. Insulate voids in the attic - the entire attic floor above a living space should be insulated with at least six inches of insulation, except around electrical fixtures such as recessed lights that aren't rated for contact with insulation. Damp basements and crawl spaces can become mold and mildew problems. Watch for leaks from your water heater, plumbing system and seeping rain water from the roof. Locate and maintain a clear access to your main water shut off valve. If you have a sump pump, test, clean and lubricate it.

TIP #10 -- Shut down sprinkler systems and outside faucets. Homeowners can shut down outside faucets, however weatherizing the underground sprinkler system is best performed by industry professionals who will flush the system before the cold sets in, preventing cracked pipes.

Excerpted from http://rentonwa.gov/

Would you want your child to go into real estate?

By:Rick Soukoulis
Chairman and CEO
Intero Mortgage


Kind of an interesting question, isn’t it?

It reminds me of that Willie Nelson song, “Mothers, don’t let your babies grow up to be cowboys…”

So what is it? Do you or don’t you want your kids to follow your foot paths into real estate?

First, let’s look at the choices. Your child could be a Realtor, a mortgage broker, a bank lending officer , an appraiser, or a title or escrow officer.

The first thing is that yes, it can be a very lucrative field. This is especially true for Realtors and mortgage brokers.

It’s not unusual, at least in a good year, for a Realtor or mortgage loan officer to make $100,000-200,000 in a year.

The obvious downside is volatility. I know one person who was an account executive for the sub-prime mortgage arm of Lehman Brothers. She was making about $300,000 a year during the good times, but she’s now working as a bookkeeper at a plumbing supply company.

If your kids do go into real estate, teach them early to set aside money during the good times to help them ride out the bad times.

Along with the lack of predictability of income, there is one huge positive: It’s the ability to help people. This is especially true for Realtors who work so hard to help people find their piece of the American Dream.

Being a Realtor was once considered almost a hobby. The cliché was that bored housewives did it to have something to do. I don’t know if that was really the case, but today’s Realtor is highly trained and extremely professional.

A final benefit to being a Realtor or being in the mortgage business is that these careers present all sorts of interesting investment opportunities. If your son or daughter goes into these or related fields, they will learn about good buildings for sale way before an ad shows up in the Sunday paper.

So along with the potential for good compensation, there is the chance to make good money through smart investing.

All in all, would I want my kids to go into real estate?

The answer is, quite simply, yes. And I’d be proud of them for doing so.

Housing Statistics Show Strong Demand in Santa Clara County Market

Housing Statistics Show Strong Demand in Santa Clara County Market
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Mortgage news

Bonds have not been able to hold on to their gain this morning. There are two big events coming up this afternoon. At 1 o'clock Eastern Time, the results of the $23 Billion auction of 10-year Notes will be released. Then at 2:15, the Fed will issue its Policy Statement after its two-day Fed Meeting.

The news from the Fed will be both multi-faceted and potentially market moving. Any hints of inflation and hikes could cause the market to swing in one direction. However, news of Bond purchases could cause an opposite reaction.

Online home search: Make sure you get the complete picture

Online home search: Make sure you get the complete picture


By Gino Blefari
President and CEO
Intero Real Estate Services


There are lots of places to search for properties online. National sites, local sites, broker sites, agent sites.


After a while they all start to look the same.


But they are not the same.


In fact, there are important differences you probably didn’t know about.


Let me explain.


The electronic life of a property listing begins the moment an agent enters it into the Multiple Listing Service (MLS). There are thousands of MLS’s nationwide, and they serve as central regional databases that all REALTORS use to share information on properties. They are as close to a complete picture of what’s on the market as you can get.


In the past, REALTORS shared this information only amongst themselves. But in 2000, the National Association of REALTORS formalized something called IDX (Internet data exchange). IDX allows brokers and agents to show each other’s listings on their own websites.


So, for example, if you visit broker A’s website, you will see broker A’s listings, but also the listings from brokers B through Z. This is good for brokers – who get to market their listings more widely – but also good for consumers, who get a full picture of homes for sale in their market.


Everybody wins.


Now consider some of the most popular home search sites on the Internet – those run by media companies or start-ups, not real estate brokerage companies like Intero. These sites look good, but what you may not know is that many of them show you just a slice of the listings. Because they are not members of the MLS, they cannot participate in IDX.


And you, the consumer, see an incomplete picture.


Think about it: If you were shopping for digital cameras online, it might be OK to miss a few models. But homes? Not seeing all your options is a big deal.

So next time you go online to look for homes, make sure you’re on a site that gives you a complete picture.