Real Estate Information

If you want to refinance to a lower interest rate, but your home's value is too low, there may be some help.  A government program called HARP... Home Affordable Refinance Program can be utilized even if you owe more than the value of your home.  Your current mortgage has to be a Fannie Mae or Freddie Mac prior to May 31, 2009. If you had mortgage insurance, you still have to retain mortgage insurance. If you did not have mortgage insurance you will not be required to get mortgage insurance. Loans can be as high as 110% - 125% of the appraised value.  There are restrictions and the rules constantly change, so you have to consult a mortgage professional.  You are welcome to call me and I'll refer you to mortgage companies who do these loans.   

2012 will continue to see a lot of homes foreclosed or sold via short sale.  Lenders have gotten up to speed and hired staff to handle the huge short sale caseload.  Lenders are more willing to renegotiate or approve a short sale than ever before.  We advise using an attorney and a Realtor who are very experienced with short sales.  That means a track record of successfully closing short sales.  A short sale is an alternative to foreclosure.  The lender is "short" of getting the loan paid in full.  It does ding your credit, but nothing compared to a foreclosure.  It costs nothing upfront to try and renegotiate your loan or find out if you  qualify for a short sale.

On the other hand, if you want to buy a short sale, the advice is about the same. Use a very experienced Realtor.  Only 1 out of 3 short sale listings end up with a successful closing.  A knowledgeable agent can help navigate the long painful process of buying a short sale, but the experience is never fun.  If you have a timeframe you need to be in your new home, don't even consider a short sale.  Short sales are for only those who want a great deal and are willing to try 2 or 3 houses before getting one to closing.      

There was an article in the Dispatch last weekend that may have shocked you if you are planning on buying a house  this year.

The article was written from the perspective of a nationwide status of real estate.  He projected values to fall another 2% or 3% this year. That may be the case if values are averaged.  However, as they say "All markets are local."  Central Ohio is better off than most areas of the country.  Some areas of central Ohio have experienced double digit increases for the last couple of years!  If you are going to buy this year, just get an agent that knows the market and can produce the stats to prove them.       

We are ending the year on a high note.  Lending has loosened a bit and inventory is down 20% - 25%.  While average prices of homes still declined 4% in 2011, non distressed homes declined just 1/2%.  Shadow inventory... homes with financially distressed owners are estimated at 4 million units.  That will effectively keep prices from rebounding for another 2 years.  2014 is projected to see 2 1/2% increase in home prices.  Wish I could say the same about interest rates!  Rental property will continue to be the strong segment of the market as there will remain a high demand for rental homes.  Locally, we have seen an influx of people taking their money from nonperforming investments and buying rentals.  It may be hard to get a 2% return on your savings, but the same money invested in a rental could easily return 15% - 20%. 

Good news for central Ohio.  The number of listings are still falling, 13,859 as of Dec 5, 2011.  That's down from almost 20,000 in 2008.  That's 31% fewer listings with which to compete.   Here's a truism you can take to the bank... or to a safe place.   The fewer the number of units for sale, the better the price they will bring.  We are not down to the "normal" level of 10,500 but we're a sight better than we have been and a whole lot better than most places around the state.  Winter is always the best time to sell because the inventory is at its lowest point of the year.  Don't wait until March or April if you need those extra dollars!  Buyers, do not be concerned about not being able to steal a house right now.  The low interest rates offered now will far outweigh the benefit of a lower price in spring.  I'm not guaranteeing interest will go up in the spring, but everybody knows it will go up... it's just when?  Making good decisions is not hard when you have good information.  Connect with an agent who knows the market!

Seems there is a lot of incorrect information circulating regarding "short sales".  They are complicated and frustrating if you don't know what to expect. Let me make it simple. A lender may decide to accept less money than they are owed and allow a house to transfer to a new owner.  Why?  Because foreclosure is too long a process and too expensive to gain possession of their collateral.  If life circumstances ... such as a job loss, divorce, death in family, medical issues prevent one from making their payments, a lender may "approve" them for a short sale.  Getting knowledgeable people is paramount in having success in selling short.  Every lender has different procedures.  If the short sale is done correctly, the homeowner in distress will be able to sell the house and usually have the deficit forgiven with no tax consequences.  If it's done correctly that is!  I suggest hiring not only a professional Realtor that has short sale/foreclosure training, but also consulting with an attorney, a negotiator to deal with the lender and a CPA that has experience handling short sales.  A Realtor experienced in short sales will have such a team put together.  It costs much less than you think because the lender pays the Realtor and the costs of selling.  Studies have shown about 50% of those who lost their home in foreclosure never even consulted a Realtor or attorney.  What a shame. A short sale dings credit for just 3 to 4 years, while a foreclosure damages credit for 8-10 years. 

The more things change, the more they are the same.  The real estate market has changed more in the last 5 years than it had in the last 40.  But, one thing has not changed:  SELLERS STILL WANT THE MOST FOR THEIR PROPERTY THAT THEY CAN GET.  There are only three ways to do that.  1.) Sell it yourself without hiring a professional.  2.) Hire an internet brokerage.  3.) Hire a professional agent to market your property.

Selling "By Owner" is tougher than ever.  Most owners are not even wasting time trying in this market.  You save by not paying an agent, but the lack of marketing may result in a lower sale price.

 Internet brokerages do little more than help you sell by owner.  They give you some internet exposure but many find they don't get enough buyers this way.

Interview several professional agents and see what they do and how successful they are at getting properties sold.  Professional agents can show you that professional marketing brings more buyers and consequently a higher sale price.       

A minor kitchen remodel may carry a high price tag, but it's a relatively inexpensive face-lift to what many buyers consider the most important room in the home.  Consider these cost-cutting ideas:  Keep your existing electrical wiring and plumbing in place; If you need new cabinets, use less expensive ones to replace out-dated styles; Instead of a laminate floor that resembles wood, opt for ceramic tile.  Laminate flooring may get a  negative reaction and ceramic flooring is about the same amount of money; Consider a laminate counter top vs. marble, granite or other natural stones.  The selections today are very impressive with many mimicking the look of more expensive counter tops; Do as much of the work yourself as you possibly can.  For example, remove the old counter tops and cabinets yourself.

I've been getting a lot of calls lately regarding the new county assessments. Some think the assessed value is too high and others that it is too low.  Here in Ohio the auditor of each county is required to keep the assessed values current so they reassess every 6 years.  The value the auditor places on your property is for tax purposes only. It has nothing to do with the real value... which may be higher or lower.  Real estate agents do not consider the auditor's assessed value and buyer don't either.  

Your property is worth whatever a buyer is willing to pay for it.  Everyone else's opinion is just that... an opinion.  Unless of course, the buyer's lender's appraiser thinks the buyer overpaid. Then the appraiser's valuation limits the value. 

So, as far as I am concerned... the lower the assessed value the better!  If you think the assessed value is too high you can challenge the valuation. Go to your county's auditor's website and fill out the appropriate forms.  You will need to provide comparable sales or an appraisal to support your case.    

Big-bang projects can make or break a home sale from the moment potential buyers exit their car.  Not only can a new front door make a lasting impression, but so does a garage door.  If you're thinking of replacing your garage door in preparation for selling your home, consider several factors:   Consider how potential buyers might want to use the garage.  A selling point for garage tinkerers might be windows or upgraded insulation.  Windows let in natural light and make an enormous difference in the usability of your garage.  BUT...place the windows in the top panel only - not the 3rd panel to prevent would-be thieves from checking out the contents.    Insulation will knock the edge off of the cold in the winter and keep the garage cool in the summer and will prevent bumps on the inside from showing as dents on the outside.