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Housing and Mortgage Trends to Look Forward to This Spring

The upcoming Spring months look as though they will bring good news to those looking to buy or sell and current homeowners. To assist you in knowing what to keep an eye out for, we’ve assembled a list of the top real estate trends for the months ahead.

1. Mortgage rates rising, but not skyrocketing. It looks like mortgage rates have already gone as low as they are going to go. Many borrowers missed that small window earlier this year. That doesn’t mean that mortgage rates are now going to skyrocket. The Mortgage Bankers Association found that the 30-year fixed rate will average around 4.3% in the second quarter. That’s up from the first quarter, but still low.

2. Buyers are competing with investors. Thanks to reasonable mortgage rates, low home prices and rising rent, the housing market is a great opportunity for investors. This is especially true at the lower end of the market with first time homebuyers. One major advantage investors have is many of them can pay cash. Sellers almost always prefer someone who can pay cash so they can close the deal quickly.

3. Homebuyers are ready to commit. They are seeing that the market’s not going any lower so they are ready to make their purchase. The price gap between what sellers are asking and what buyers are paying is getting smaller; therefore home sales are improving. Consumer confidence is on the rise; also more renters are making the move towards buying.

4. Refinances are getting easier. Homeowners with FHA-insured mortgages, who are also current on their payments, will be able to refinance with lower fees through the FHA streamline refinance program. This program only applies to loans that were closed before June 2009. HARP is another government program put in place to make refinancing easier for homeowners.

Make Your House Hunting Easier This Spring

Long gone are the days of having to go visit a real estate brokerage and flip through a huge book of listings to find what homes are on the market. Now all a buyer has to do is go online! Advances in Smartphones and real estate apps have made house hunting an on-the-go activity. Here’s a list of must-haves to check out for this year’s open house season.

1. Trulia – this app lets you read through user generated reviews of neighborhoods that you might be interested in. You can use their custom search to narrow down your selections, and then save the notes you make on the different locations. Also sign up for email alerts that let you know when new property is available.

2. Mobile apps with GPS capabilities – finding these apps will help you have a more organized plan of action when you’re looking for open houses near you. Easily add the listings to your calendar and then use the GPS to get you there. Move around the interactive map to discover new neighborhoods, and mark off what properties you have been to.

3. Gadgets – use your Smartphone like a pen and paper. Write down notes right in your phone so they’re always conveniently near you. You can also take photos and videos.

4. Social Networks – put Facebook to work! Post photos of the open houses you go to to get friends’ feedback. Also the Trulia app will connect you with Yelp so you can check out what shops and restaurants are in the neighborhood.

5. Message Boards and Blogs – on the Trulia Voices site they offer a community of agents and locals that can answer your questions.

These new technologies are making home buying a much more enjoyable experience. It’s fun to keep track of all the places you look at, get feedback from friends, and compare pictures. It’s a great time to be shopping for a home!

 

Expectations Rising for Spring Housing Market

Spring is the annual occurrence of new beginnings, and if there is one place where people are hoping for a rebirth, it is in the housing market. As we gradually turn the corner towards an economic recovery, this spring could be the strongest in years for the real estate industry. Many economists say that the demand for housing this spring will be a litmus test for the economy as a whole.

Existing home sales in February were up 9% over last year, and while the spring season generally runs from March until June, some say it may have gotten a head start this year thanks to warmer winter weather. A late February NAR survey of over 4,000 agents pointed to Realtors’ confidence in the single-family home market. The survey gave this segment the highest marks in four years.

Spring sales will help give visibility to the housing market recovery, but economists caution that not all markets will move in sync with one another. Whereas Phoenix, Denver and Detroit are expected to do quite well, spring sales may be slow in other areas where buyers took advantage of the mild winter and did their purchasing earlier in the year. Eric Fox, a Veros Real Estate Solutions economist, believes that 40% of 321 metropolitan areas will see prices rise, a large uptick that many hope will reinvigorate consumers’ confidence in the economy as a whole.

Help for Repaying Homebuyer Tax Credit

Back in 2008, a first-time homebuyer tax credit was established to help with the damage the housing crisis had created. The credit acted as a no-interest loan, and those who used it were able to pay it back over time in annual installments through their tax return.

Sadly, the payback requirement was eliminated in 2009, and many borrowers found themselves in a predicament. The tax credit was of course gone, but more concerning was how they might pay back the government the money they borrowed. Additionally, taxpayers were responsible for keeping track of all their own records, making a stressful situation worse.

The IRS recently created a tool to help organize information and streamline the process. Now, borrowers can see their balance, the amount paid back to date, total tax credit received, annual installment amount, and the exact payback amount online. Taxpayers simply enter their social security number, birthday and some other identifying information. To access the tool, please visitthe IRS website.

This tool isn’t exclusive to 2008 homebuyers. Those who used the tax credit in 2009 or 2010 and sold their homes within three years of purchase are also required to pay back their benefit.

Tips for Sellers

The real estate market can be a challenging one these days, especially for sellers hoping to standout in a sea of available properties. Keep these tips in mind when listing your home and the process will be much more seamless!

1. Find a Pro: Selling your home is the time to enlist professional help. Selling a home is a complicated transaction, and a real estate professional can help you navigate any problems, accurately price your home, deal with contracts, and most of all, bring potential buyers to your doorstep.

2. Price Realistically: If you’re serious about selling your home, you’ll need to price it correctly from the start. So be realistic and take cues from your listing agent regarding price. Sure a big price tag seems appealing, but overpriced homes sit on the market and don’t sell.

3. Be Honest: Why are you selling your home? Full disclosure to your listing agent and potential buyers up front is the way to play.

4. Detach Emotions: When listing your home for sale, remove family photos and anything else that’s sentimental. Sellers won’t have the same emotional connection, and attaching yourself to your home will only make it harder to hand over the keys.

5. Set the Stage: It’s pretty critical to stage your home so buyers can see the full potential of each room. You’ll make concessions about your own style, but you need to create a neutral scheme that appeals to a wide range of buyers.

6. Stay Involved: While it would be easy to wash your hands of the sale and let your listing agent handle everything, you’ll be much more relaxed if you stay involved.

7. Scatter: When your listing agent arranges an open house, make yourself scarce. Your presence can make buyers uncomfortable, and that’s the last thing you want.

8. Plan to Move: Assume the best–your home will sell quickly and new buyers will be moved in shortly. That means you need to plan on moving, and you’ll want to have this sorted out well in advance of the sale closing.

9. Remain Flexible: Stay flexible on both your price and terms of the sale, and you’ll reap the rewards. Be firm with your bottom line, but know that you will need to leave room to negotiate.

10. Be Positive: Staying positive and upbeat will take you far in this process. Take the feedback you get seriously from both buyers and your agent, and stay focused on the task at hand…selling your home!

Choosing the Right Property Profile Photo

When you’re listing a property online, getting the aesthetics right is a must. Many brokers will put up a blurry photo of a property, or worse, won’t include one at all. Imagine you were searching for a home to purchase. Would you click on a listing or want more information about a property you couldn’t see?

In all likelihood, the answer is no. Humans are looking for instant gratification, especially when they are about to spend a large amount of money on something. So, choosing the right property profile photo becomes paramount to a successful online listing. People shopping online for a home will want to know what their future residence looks like. That’s why it’s critical to pick a photo that will give the best first impression possible to your potential buyers. A clear, crisp photo of the exterior is the best way to give them that.

Choose a photo that showcases the front of the house. A visually appealing image will capture your viewer’s attention, and they will click through your listing to see more photos, gathering more information about your listing simultaneously. Thumbing through professional-looking photos online gives people the sensation that you are professional and worthy of their business, not to mention helps them imagine themselves living in the home that you are trying to sell.

Handy Home Improvement Apps

A variety of home improvement apps exist for Apple devices like the iPad, iPhone and iPod. Here are six that assist with home maintenance and improvement:

1. ColorSnap by Sherwin-Williams—Snap of photo of anything in your home, like your kitchen curtains, and this free app will offer a color-matched Sherwin-Williams paint. Another feature brings up coordinating colors.
2. CALCS—For only $2.99, this app has more than 115 calculations you’ll need for home improvement projects, like determining quantities of asphalt or mulch.
3. Ruler 2—Spend 99 cents and you’ll always have a ruler or tape measure at-hand. Drag a pointer along the length of an object and Ruler 2 provides you with the length.
4. iHandy Carpenter—Looking for a digital toolkit that turns your device into a level, steel protractor, ruler or plumb bob? IHandy Carpenter is the app you need and costs only $1.99.
5. Dream Home—Dream Home puts design ideas for remodeling projects in your hand. It’s loaded with hundreds of magazine concepts, but costs a fraction of the price at $1.99.
6. I.D. Wood—At $4.99, I.D. Wood is the most expensive app on our list, but helps you understand 160 species of wood, including pictures and tips for working with various types.

6 Tax Breaks Every Homeowner Should Know

Buying a home makes a lot of sense because of the built-in tax breaks that accompany homeownership. To take full advantage, it’s usually necessary to itemize your taxes, and while this may seem like an unnecessary hassle, the benefits are well worth it. Here are six tax breaks every homeowner should know about.

1. Mortgage Interest Deduction—Since the bulk of your monthly mortgage payments are applied towards interest at the beginning, a Mortgage Interest Deduction (MID) allows you to deduct what you pay from your taxes. Your lender will issue Form 1098, and it’s important that you keep it with your tax records. This form shows what you’re entitled to deduct and is your proof should you be audited by the IRS.
2. Mortgage Insurance Premiums—If you have a mortgage with a loan-to-value ratio that is higher than 80%, you are required to carry private mortgage insurance (PMI) to protect your lender against default. But did you know that if your AGI is less than $100,000 for married couples, you might be able to deduct what you paid?
3. Energy Star—It pays to install energy-efficient fixtures in your home, as they can offer you another tax deduction. To qualify, you must install items like energy-efficient windows, doors and skylights by the end of the year. Tax credits equal 10% of the product costs, assuming you meet the criteria. Installation costs are not tax-deductible.
4. Points—If you paid fees to obtain a mortgage, you can deduct these charges in the year you paid them if the loan was for a primary residence. For refinances, you can deduct the points over the life of the loan.
5. Property Taxes—Homeowners with property taxes that are based on the assessed value of their real property can deduct state and local property taxes. If you pay out of pocket, you will need to keep track of your bills. However, if you pay through an escrow account, the information will also appear on Form 1098.
6. Construction Loan Interest—If you’re remodeling your home and take out a construction loan, you may be able to deduct the interest. This deduction is only available for the first two years of the loan, despite the length of time it takes to complete your construction.

Differentiating Between Personal and Real Property

‘Lectric Law Library defines Real Property as “Land and all the things that are attached to it.  Anything that is not Real Property is Personal Property:  anything that isn’t nailed down, dug into or built onto the land.”  That should prevent any misinterpretations, right?

Not necessarily. While furniture and appliances are typically considered “personal” property, individual jurisdictions may have their own interpretations of “real” vs. “personal” property, leaving parties with substantial “grey” areas.  Take that chandelier in the entryway…  It may not have been meant to be moved once it was installed, but its value – whether in dollars or in sentiment – could change when it comes time to selling the property.  That changing priority can, on occasion, lead to confusion and/or dispute between buyers and sellers.

The best thing to do?  Identify items that are staying and going at the outset.  If you’re selling a home and know the appliances are staying or the drapes are going, mention it to potential buyers.  When drawing up the purchase agreement, be sure any items like this are clearly identified.  Built-in bookshelves, window air conditioners, and radiators are examples of other items that could cause dispute.  The list of property items should be included in escrow docs so it’s clear to all parties what items stay and what items go.

Mortgage Delinquency Expected to Decline in 2012

The number of borrowers who are 60 days or more behind on their mortgage payments is expected to decline this year. Current estimates point to 2012 decreases staying in line with 2011 reductions; the number of delinquencies in 2011 was 7% lower than at the end of 2010.

As the employment market improves and credit markets loosen, borrowers are expected to have better opportunities to avoid delinquency. The development is expected to help overall consumer confidence and the GDP of the U.S. Real estate has become one of the most stubborn legacies of this recession, with some states seeing mortgage delinquencies of more than 20%. Repossession of properties has left banks with a glut of vacant properties on their books; tight credit markets have locked out many buyers who, just four years ago, wouldn’t have had any problem qualifying for a mortgage.

While the nation’s overall delinquency rate is expected to fall in 2012, high unemployment in states like California, Florida, and Nevada will likely lead to a further uptick in the number of borrowers falling behind in 2012. In those markets, economists estimate the delinquency rate could increase in 2012 by nearly 12% over 2011 rates.