Listing a House

Selling a home can be daunting. These are the benefits of listing your home with me:

• Listing with me is free
• I will make the process easy for you
• I know the local market
• I will show your home
• I will offer you suggestions on price
• I will offer you suggestions on staging
• I will do a thorough walk through with you
• I will keep you informed as we go along

My honesty and integrity will take your home from "For sale" to "Sold."

A Smaller House

Tips for buying a smaller house that is more affordable:

Truth #1: Rising interest rates hurt more with a bigger, more expensive house. With gobs of people wondering how they’ll manage their whopper mortgages because of the spectre of rising interest rates, smaller is starting to look sweeter. We’re at the tail end of a generation-long cycle of declining interest rates, so people are thinking about how their increasing costs will squeeze their cash flows when they have to renew their mortgages at higher interest rates.

Truth #2: No down-payment mortgages are gone. They were stupid to begin with. They let people who had done no planning for home ownership into an arena many weren’t prepared for. They got eaten by the lions. If you can’t afford to save a downpayment, you likely can’t afford to be a homeowner.

Truth #3: Longer amortizations cost way more money. Choosing a 35-year amortization on a mortgage was the only way some people could afford the huge homes they were buying. The fact that they would end up paying almost three times the cost of the home after all was said and done seemed of little concern. With the shift to getting out of debt, which, please God, I hope is firmly taking hold, a 35 year mortgage is far less attractive to smart home buyers.

Truth #4: A home is a place to live, not a retirement savings account. The era of double-digit annual gains in home prices is gone. Tying up all your money in mortgage payments when you should be investing for retirement is far less attractive now. Buying smaller means more money for RRSPs, TFSA and unregistered investment portfolios.

Truth #5:  Smaller homes have lower carrying costs. It’s not just the mortgage. It’s the property taxes and insurance. It’s the utility bills and maintenance. And it’s all the stuff it takes to furnish a bigger home.  Spending less to keep your home all gussied up means more money for a life now, and a future.

Source: Gail Vaz-Oxlade

Tips on Buying

Tips for house shoppers from Bank Rate:

1. If you find the right house at the right price, buy it.
2. Put technology and a buyer's agent to good use.
3. Negotiate effectively.
4. Avoid gimmicks.

Prices on the Rise

South Florida’s housing market will continue to improve in 2012 as home prices rise 6 percent through the rest of the year, a California research firm says.

That forecast from Clear Capital would put Palm Beach, Broward and Miami-Dade counties among the 10 highest-performing large metro markets in the country.

Demand from foreign investors is slowly helping the South Florida market recover, said Alex Villacorta, director of analytics and research at Clear Capital of Truckee, Calif.

Less than a third of all home sales are from a lender. During the housing collapse, about 50 percent of sales involved a bank-owned home, Villacorta said.

Phoenix is projected to have the biggest increase in prices at 12.1 percent. Tampa is next at 11.4 percent and Orlando is third at 9 percent. South Florida is ranked sixth.

Despite the expected gains, prices in many of these hardest-hit markets remain more than 50 percent below peak levels, Clear Capital says. Prices in South Florida are off nearly 60 percent.

“All of these markets still have a long way to go,” Villacorta said.

The firm says its analysis is based on repeat sales of homes and condominiums.

Analysts agree that the South Florida housing market is slowly recovering, but some still expect prices to fall in 2012.

Moody’s Analytics of West Chester, Pa., says it could be 2013 before Palm Beach County hits bottom and 2014 for Broward County.

Many homes are stuck in the foreclosure process now but eventually will come on the market, said Chris Lafakis, an economist covering Florida for Moody’s.

“Banks have this inventory and once that inventory is liquidated, prices will fall,” Lafakis said.

Source: Sun-Sentinel

Best Place to Live: SouthFlorida

You should live in South Florida because the area is ranked:
#2 in the best places to spend Thanksgiving
#3 in best places to spend the holidays
#7 most fiscally fit cities
#7 most single cities
#14 in America's manliest sports cities
#24 cities on the edge of greatness
#25 in energetic cities

Real Estate Vocabulary - N

Test your knowledge of real estate vocabulary or just understand the process better with simple and concise definitions.

negative amortization

Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

no cash-out refinance

A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is caculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a "rate and term refinance."

no-cost loan

Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

note

A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

note rate

The interest rate stated on a mortgage note.

no-points loan

Almost all lenders offer loans at "no points." You will find the interest rate on a "no points" loan is approximately a quarter percent higher than on a loan where you pay one point.

notice of default

A formal written notice to a borrower that a default has occurred and that legal action may be taken.

Source: Real Estate ABCs

Prices across markets

You know that buying a home in rural America is cheaper than buying a loft in New York City, but what does the same money really buy you?

In Wisconsin, a plot of land featuring a barn that has been converted into a three-story home and another barn that could serve as a garage.

In New York or Boston, a one-bedroom condo.

In Aventura, Florida, over a dozen residences came up in the search. The average condo had 2 bedrooms, 2 bathrooms, and all the swanky amenities you expect.

Source: Daily Caller and Zillow

2012 Housing Market Predictions

Patrick Newport, an economist with IHS Global Insight, expects prices nationwide to slide another 5 or 10 percent in 2012, as the foreclosure pipeline gets moving again, dumping distressed properties on the market. Foreclosed properties tend to sell at a discount of 20 to 30 percent, according to several studies.

Lower prices have left many homeowners (especially those who paid high prices at the market peak) owing more on their homes than the properties are worth.

Of course, the lower prices have also made it easier for buyers to afford homes. And once the foreclosure bottleneck is cleared, many low-priced properties will come onto the market, said Patrick O’Keefe, an economist with J.H. Cohn in Roseland, N.J.

“There will be a lot of opportunities for purchasers to get steeply discounted properties,” he said. He predicted prices will stabilize by the end of 2012.

Many buyers have held back because they think that home prices will keep dropping.

“Most people don’t want to buy in a market where prices are falling, because you lose your equity right off the bat,” Newport said.

Interest rates

Mortgage rates, which have been near record lows for several years, will remain below 5 percent, according to most forecasts. Along with lower home prices, the rock-bottom rates have made buying a home much more affordable.

Source: Nashua Telegraph

What is a Strategic Default?

What is a strategic default?

Let’s first define strategic default in simple terms. Wikipedia says:

A strategic default is the decision by a borrower to stop making payments (i.e. default) on a debt despite having the financial ability to make the payments.

This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house’s price such that the debt owed is (considerably) greater than the value of the property – the property negative equity or “underwater” – and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble. Such borrowers are called “walkaways.”

How do Americans feel about strategic default?

• The number of underwater homeowners who believe it is okay to default on your mortgage if you are under financial distress has almost doubled in the last twelve months (14% to 27%).
• 47% of people that are underwater and behind on their mortgage have considered strategic default.
• Those who know a strategic defaulter are more likely to have considered defaulting.
• 1 in 5 Americans knows a strategic defaulter.

Basically, as more people enter into negative equity, more will be tempted to ‘walk away’ from their mortgage obligations which will increase the homes going into foreclosure.

For more information on this and other real estate news, visit my website!

Source: KCM