Realty Times - Sell Your Home Faster, Give Your Cabinets a New Look

by Phoebe Chongchua

As the fall season sets in and the weather gets colder, it's just another reason to spend more time in the kitchen cooking up warming soups and maybe some hot cider. But no matter which season, kitchens and great rooms tend to be very popular for homeowners and, of course, buyers.

For this reason, it's important to make sure your cabinets are looking good--not laden with holes from chipped or worn off paint or stain. Kitchen cabinets often take a beating from all the opening and closing of the doors and drawers; however getting them looking good again can seem like an overwhelming project.

According to the National Kitchen & Bath Association, "The variables that affect the cost of kitchen cabinets relate to quality, appearance, and functional effectiveness."

So, if you're really sprucing them up and using high-end handles, adding more shelving inside them, the costs will rise. But what if the insides of your cabinets aren't really in poor condition? Maybe the hinges and the hardware are still in good shape, it's just the outside that could use a makeover.

That's when giving your cabinets a new face might be your best option. Stripping the cabinets and painting or refacing them can add a lot of value to the overall appeal of the home without incurring the bigger expense of replacing your cabinets.

The NKBA says that, "This will cost about half of what you would spend for comparable new kitchen cabinets, but such a strategy will only work if the basic room configuration and cabinet placement in your existing kitchen are to remain the same." However, if your cabinets are sagging or you need a new configuration for more space, for instance, this option won't work. But, again, if your cabinets simply need a new face, this can be a good solution especially when you're listing your home for sale. The investment isn't nearly as high as replacing them.

There are a few steps involved in refacing: remove/prep the veneer, strip the surface, fill in missing chips, clean cabinets, apply new veneer and trim, prep veneer, and finally stain and finish. Some homeowners decide to do their own handyman work.

There are many articles on the step-by-step process, so this column won't focus on that but instead will let you know a few things that you should be aware of to ward off bigger problems. Actually, the first is an issue I had when refacing my kitchen cabinets. (After one painter messed up the cabinets, I ended up having to hire a qualified professional to successfully finish the job.) What you should know before you start. Especially in tract homes, certain types of cabinets may have a protective layer (veneer) on top of the wood or pressed particle board. If you remove this layer you can end up with a big mess. While it often chips off over the years, and appears easy to remove, in fact you can peel it off with your finger tips, removing it completely will require the under material to be sanded and prepped so that the surface will allow paint to stick to it. But, removing it may also cause harm to the cabinets.

"Most kitchen cabinets are made with pre-veneered laminated wood (particle board in some cases) and the hardwood veneer is rolled onto the laminated wood with terrifically high pressure and in most case you would damage the wood underneath trying to remove the veneer," according to RefinishFurniture.com. The site indicates that the old veneer can be left on as a base. The old must be lightly sanded to remove the finish and then a new veneer can be added. RefinishFurniture.com also recommends marking all the cabinet doors before you remove them to strip them or prep them for paint or stain. It'll save you so much time and frustration when you go to put them back on.

Another word of advice. While many homeowners like the do-it-yourself projects, when you're selling your home, this kind of project can become tedious and too time consuming. Refacing your cabinets will help your home show better but the question is: Do you do-it-yourself or hire a company to do what they do best? Either way, newly painted or stained cabinets go along way when it comes time to sell your home.

Enough with the doom and gloom about homeownership

Enough with the doom and gloom about homeownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

The Sept. 6 cover of Time magazine: This is what capitulation looks like.

After all, at the peak of the bubble five years ago, Time had a different take. "Home Sweet Home," declared its cover then, as it celebrated the boom and asked: "Will your house make you rich?"

But it's not enough just to be contrarian. So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.

More on the Developments Blog

· Buying a Home, Good Idea?

· With Little to Do, Home Builders Focus on Quality

· In Monaco, the 'Most Expensive' Home

· House of the Day: Private Maine Island

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

Write to Brett Arends at brett.arends@wsj.com

Where is Jimmy HAFA?

IS JIMMY “HAFA” ALIVE AND WELL?

We are attorneys in Washington State. We practice throughout Washington emphasizing, during our Recession, distressed homeowner client assistance. We negotiate short sales and work closely with Real Estate Professionals throughout the state.

WHERE IS JIMMY “HAFA”?

HAFA is a government program that was designed to change the way that short sales are conducted. It will, but I am discovering every day more and more impediments to this program that provides seller assistance to short sales. I am publically announcing AGAIN, as I did last November when word of the program came out:

IT WILL BE EFFECTIVE, BUT FAR LESS EFFECTIVE THAN ANYONE ANTICIPATED WHEN THE PROGRAM WAS FIRST ROLLED OUT!!!!

MANY ARE CALLED BUT FEW ARE CHOSEN:

In order to qualify for HAFA, one has to qualify for HAMP and fail or reject that opportunity. [HAMP is the government sponsored loan modification program]. Well let’s look at some hard statistics for HAMP right from the government:

1. 80% of those that apply will fail to get an actual final loan modification. [Only 20% will succeed.]

2. 64% of those that do get a loan modification will fail after nine (9) months.

So HAMP has been a complete failure. There are lots of fingers being pointed and this memo does not try to ascertain why that program failed. IT HAS FAILED!

So if one applies for HAFA one can expect many of the same problems to the point that we expect that a year after implementation, HAFA statistics will parallel those of HAMP above.

LOTS OF “TRIP-WIRES” FOR HAPA DIS-APPROVAL:

Many reading my writing here will not believe what I say, as they believe what the government is telling them and that this is the best program since the beginning of time. IT COULD BE, BUT IT ISN’T. IT WON’T BE. WHY?

INITIAL FIVE PART TEST FOR HAFA:

There is a 5 part test to get into HAFA (and it’s the same 5 part test to get into HAMP). However, they are NOT the only criteria that need to be met. What is that 5 part test?

1. Must be owner occupied [that knocks out a whole group of customers doesn’t it?];

2. Must be a loan not greater than $727,250.00 [Normally not an obstacle for the masses].

3. Must have been taken out before January 1, 2009 [This has only come up 5 times for me in my practice].

4. Must be in default or imminently in default.

5. Payment amount must be greater than 31% of gross income [First loan only plus reserves].

Meet that test? Are you in??? Wait. Watch out as you are only at the beginning and there are many “trip-wires” that can throw you out of the program and not have HAFA available. [By the way at Bank of America says if your HAFA application is rejected for any reason you get to start out at the beginning for a traditional short sale application. I see that occurring with other servicing companies as well].

MORE “TRIP-WIRES”…………………

PMI:

So you have one loan and let’s say that there is PMI [Private Mortgage Insurance]. If the PMI Company does not agree to release liability, you are OUT of HAFA!!! Many of the PMI companies are not agreeing to go along with HAFA. Remember that they do NOT have to. It is voluntary.

SECOND MORTGAGES:

If the holder of a second mortgage doesn’t agree to release the borrower of the debt, you are OUT of HAFA!!! [Many of the lenders we deal with are telling us that they will only involve themselves with HAFA on a case by case basis. Many others say that by policy that they will not be involved in HAFA]. This doesn’t KILL a short sale. It takes us back to negotiating it as a traditional short sale.

MINIMUM NET PROCEEDS:

You have to read the Regulations concurrently with the forms as well as talking to the various banks daily and we find that there’s a SECRET in the program. It’s not a real secret. It’s a fully exposed secret that is contained right smack dab in the program announcement paperwork.

What’s the secret? They can tell you what price to sell the property, but the servicing company is precluded from telling you their minimum net proceeds amount. It’s a secret. [Keep in mind that in the short sale negotiation business in our practice, this is all we talk about with lenders day in and day out].

Say you go out and get the new Listing Price and you, as an agent, are all ready to sell the property at the price offered and life is good. Heck you come in with a price for the property at or around the Listing Price, but [within 10 days] you find your offer is REJECTED. It didn’t meet the MINIMUM ACCEPTABLE NET PROCEEDS (MANP). This is in the program, I did not invent this. You included seller costs that were not approved!!! The structure of your deal made it fail. As a result, you will be severely limited in how you structure a HAFA short sale.

WAHINGTON IS A PECULIAR STATE:

You see, we have this huge 1.78% transfer tax. In most cases when we start talking about a deal with a national lender we are always trying to see if we can get it done with 10% closing costs as that is what the lenders like at “first triage”. However, we are a 12% state because of that pesky transfer tax. It causes national lenders havoc on a regular basis. It will create a real problem for HAFA as well.

The HAFA program is a national program attempting to apply to all states with many different ways of doing business in each individual state especially Washington. It is tough to get all the typical seller costs contained into those that are approved by HAFA and still meet the Minimum Net Amount without having a transaction that probably won’t fly because it won’t be able to meet the economic needs of many purchasers. Some deals will fly, but many will not fit into the constraints of this program. It will take a pretty “vanilla” deal to make it through HAFA guidelines. I don’t know about you, but our office never gets any of these “vanilla” deals during this recession.

You see there are ONLY CERTAIN ALLOWABLE expenses of sale. Read the list and you will find that many of the types of concessions and other matters that constitute the vast majority of our short sale deals will actually KILL the deal!!! [Keep in mind that we always have traditional short sales still available to us].

1. Seller has large amount of unpaid taxes? [Probably a deal killer at least for HAFA].

2. Seller concessions for buyer closing costs? [Probably a deal killer at least for HAFA].

3. $3000 relocation assistance is part of the costs of closing at least according to HAFA and makes it affect that magic net amount to the lender. [That is the secret amount].

4. Home Owners Fees due? [Anything of any substantial amount will probably be a killer].

5. Utility charges? [Again anything above normal will probably be death to a HAFA deal].

SO WHY AM I UP ON MY SOAP BOX?

I am happy to have any program that can facilitate short sales. However, I am duty bound to tell our Real Estate Professional partner when I see more and more signs that there are major defects in this program that can cause you problems.

We are heavily involved in HAFA applications right now as we want a complete record of each and every lender’s approach to the program so we can properly and timely advise our clients and Real Estate Professionals.

DON’T PROMISE MORE THAN YOU CAN DELIVER:

We are very cautious with sellers, but we are taking advantage of this program for anybody that we can make qualify.

We are NEVER guaranteeing the $3000 relocation assistance as we see so many occasions where that can be eliminated and it’s amazing that the sellers seem to have such vivid recollection of that aspect of the program more than anything else.

FANNIE HAFA is different from FREDDIE HAFA and both are different from non-Fannie and non-Freddie HAFA. We investigate for each client we consult with which specific program MAY apply to them.

All these changes and all these new programs out there can create new challenges for you as Real Estate Professionals. We work with this stuff 18 hours a day and it’s sometimes difficult for us to make certain that we have all these programs under our belts. However, as this is what we do, we must have the knowledge and it must be complete.

WHERE IS JIMMY “HAFA”?

He’s everywhere it seems right now. Our office and our attorneys know all the rules and regulations and we can assist you and your clients through HAFA or traditional or anything that has to do with loan modifications, short sales, foreclosure and bankruptcies.

We’re good at what we do and we’re not afraid to stick our opinions out in the market when “it needs to be said”.

CONSULTATIONS ALWAYS AVAILABLE:

We meet with sellers (and you folks too) for a fixed fee of $150.00 to go over all aspects of distressed property transactions. Give our people a call and set up a consultation in-person, by phone or by video conferencing. Just call 253-284-3838 and press “1” to speak with one of our paralegals.

Regards,

Ed McFerran

McFerran, Burns & Stovall, P.S.

Attorneys at Law

3906 South 74^th Street

Tacoma, WA 98409

253-284-3838 (Short Sale Hotline)

1-800-236-4948

Remodeling your home? Get online

(Money Magazine) -- Home improvement is one of the fastest-growing segments of e-commerce. But the consequences of a bad decision when it comes to finding a contractor or remodeling products online are far worse than buying the wrong paperback.

What if those rave reviews you read about a contractor are ringers posted by his daughter -- or if your supposedly in-stock sink order doesn't ship for two weeks, throwing off your entire work schedule?

Follow these tips to avoid glitches and get the most for your money.

To find a contractor: Sites that are driven by consumer ratings are your best bet. That's because you get to see what as many as hundreds of prior customers say about all the pros in your area.

Renovation wizard: Will your project pay off?

Just watch for sites with anonymous postings and ads that appear in search results that look like positive ratings. In the New York, Chicago, and Los Angeles metro areas, or a few counties in New York, Connecticut, and Florida, check out Franklin-Report.com, which compiles user comments into Zagat-like ratings.

Beyond those regions, a good alternative is Angieslist.com, which charges $5 a month, and uses the credit card info to prevent anyone from creating more than one login in order to post multiple revews.

To vet a contractor: The next step is to talk to former clients and visit current and completed job sites. Sadly, there are no e-ternatives to doing this in person.

But there is one key step you can do online: a background check. Get a report about a contractor's licensing, bonding, insurance, bankruptcy, civil judgments, criminal background, liens, and credit rating for $13 at contractorcheck.com, run by the credit bureau Experian.

To order supplies

Sites run by home-improvement chains (such as HomeDepot.com and Lowes.com), boutique manufacturers (BeadBoard.com, Horizon-Shutters.com), and specialty e-tailers (eFaucets.com, TileShop.com) offer bigger selections than local retailers do. But the main attraction is price: Discounts of 10% to 50% aren't uncommon.

Just keep in mind that if something goes wrong, those savings could turn into cost overruns. As with any online purchase, you run the risk of shipping damage or late deliveries, which can derail a project with multiple tradesmen working around one another's schedules.

So order online only if your contractor okays it and provides technical specs; you're far enough ahead of the installation date to make other arrangements if there's a problem; the site is an authorized dealer for the brands you're buying; and if possible, you've seen the product firsthand.

Otherwise, buy locally. It'll be easier to get matching items quickly if needed, and you'll avoid having to deal with a faraway call center if a problem arises.

Mortgage Rates Rise Again This Week

Stronger than expected economic data pushed mortgage rates a little higher again this week. Following a string of weekly drops since the middle of June, mortgage rates have now risen for two straight weeks.

Over the summer, mortgage rates have fallen substantially. Weaker than expected economic reports and the debt crisis in smaller European countries caused investors to reduce their forecasts for economic growth and produced a flight to the relative safety of government guaranteed bonds, resulting in the lowest mortgage rates in decades. Now, however, some investors are asking whether they can fall further. Weaker than average economic growth, low inflation, and an "unusually uncertain" economic outlook still make the current environment supportive of low mortgage rates, but some investors feel that these factors have been fully "priced in." These investors feel that economic growth must falter significantly for mortgage rates to drop much from here.

Also contributing to the fall in rates was the possibility that the government would take action which would push mortgage rates lower. The political climate has turned less favorable for this, though. Growing opposition to fiscal spending of any type has reduced the chances for additional government support for the housing market and mortgage rates.

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales, an important indicator of economic growth, will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, is scheduled for Wednesday. Empire State, Import Prices, Consumer Sentiment and Philly Fed will round out the week.

Courtesy of:

Sandra Pearce

Home Loan Consultant

MLO-282403

Republic Mortgage

(360)280-7607 Mobile

888-843-6939 Fax

republicmortgage.com/spearce

INFO THAT HITS US WHERE WE LIVE

Last Thursday, July Pending Home Sales came in UP 5.2%. This measure of signed contracts on existing homes indicates we should see an increase in Existing Home Sales for August and September. Some analysts feel it shows the start of positive market movement after the end of the tax credit, which pushed signed contracts forward into April. We now have a new batch of buyers looking to take advantage of today's affordable prices and historically low mortgage rates.

Speaking of prices, Standard & Poor's/Case-Shiller National Home Price Index reported home prices UP 1.0% from May to June in 20 major U.S. cities. This was the index's third straight gain, which many experts feel came from the increased demand due to the tax credits. So sellers still need to be flexible, since not as many eager buyers are now in the market. But prices do seem to be stabilizing, so buyers would do well to act on a property they like, rather than hold out for any significant price declines going forward.

National average mortgage rates have recently been at historic lows. But in their latest forecast, Mortgage Bankers Association economists see rates going up slightly in the last three months of the year, rising a bit above that for 2011, then perhaps up another percentage point by the end of 2012. More reason for buyers and refinancers to not drag their feet!

>> Review of Last Week

POSITIVE WITH NEGATIVES... The U.S. economy keeps delivering mixed signals, but this week investors on Wall Street let a positive vibe drive the proceedings. Stocks went up four days in a row, ending with a big rally Friday driven by an August Employment report that was by no means great, but better than the downbeat readings that were expected. All three major stock indexes ended up for the week with the Dow now up for the year.

There were notable negatives that continue to show the pace of recovery has slowed. The ISM Services Index came in below estimates indicating modest growth in the non-manufacturing sector. Consumer inflation was UP 0.2% in July and UP 1.5% over a year ago. This is still within the Fed's acceptable range, although some economists think inflation should start rising noticeably next year. Personal income was up 0.2% for July, but this was below what the consensus expected. Finally, final Q2 Productivity dropped to a 1.8% annual rate, a bigger dip than previously estimated.

Positive signs included the ISM Manufacturing index, reported up for July instead of down as expected. August Consumer Confidence also beat expectations. But the big news came with Friday's Employment Report. The U.S. economy lost 54,000 nonfarm jobs in August, far less than the 100,000+ job losses expected. The private sector added 67,000 jobs, while upward revisions to the two prior months took the net gain to 133,000 jobs. Average hourly earnings were UP 0.3% for the month and UP 1.9% this year. But unemployment ticked up to 9.6%, due to an increase in the work force. So even though the report played well on Wall Street, it didn't on Main Street.

For the week, the Dow ended UP 2.9%, to 10447.93; the S&P 500 was UP 3.7%, to 1104.51; and the Nasdaq was UP 3.7%, to 2233.75.

Bond prices held up for most of the week, but Friday's jobs report surprise kept things in check. The FNMA 30-year 4.0% bond we watch ended UP 7 basis points for the week, closing at $102.27. Again, Freddie Mac's weekly survey showed national average fixed rates for conforming mortgages at historic low levels.

>> This Week’s Forecast

TAKING A BREAK...This week truly is a break from the hectic pace of economic reports we've seen lately. The Fed's Beige Book on Wednesday will give us another take on the central bank's view of the economic recovery, as reported from Federal Reserve Districts across the country. Observers look to this survey for signs of where Fed policy decisions may be heading in the future. We will continue to watch Thursday's Initial and Continuing Jobless Claims, as experts are predicting a slow improvement there. Thursday's July Trade Balance is expected to be down slightly from the prior month, perhaps signaling more demand for our goods overseas.

Courtesty of:

Teri Sanders/Sterling Savings Bank
Loan Officer
4200 6th Ave SE, Suite 301
Lacey, WA 98503
Phone: (360) 339-5395
Mobile: (360) 259-2266
Fax: (866) 271-3636