5 Reasons You Should Sell Your House TODAY!

Selling your house in today’s market can be extremely difficult. It is for that reason that every seller should take advantage of each and every opportunity that appears. Each fall, such an opportunity presents itself. This fall, that opportunity may be just too good to pass up.

Below are five reasons you should consider when pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.

1. Entering this time of year, the buyers are more serious.

We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the ‘lookers’ are at the stores doing their holiday shopping. The home buyers left in the market are serious and are more apt to make a purchasing decision. Less showings – but to more motivated purchasers.

2. If you are moving up, you can save thousands.

The Chicago Tribune stated in an article last week that sellers who want to ‘trade up’ should act now:

It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.

A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath. But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.

Keep in mind the spread may be even greater. There’s a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.

3. Interest rates just fell again – to 4.19%.

Professor Karl E. Case, the founder of the Case Shiller Pricing Index in an article in the New York Times last month actually did the math for us:

Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833 … housing has perhaps never been a better bargain.

4. You beat the rush of inventory that is coming next year.

Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. As an example, here is the number of listings available for sale in each of those months in 2010.

• January – 3,277,000
• February – 3,531,000
• March – 3,626,000
• April – 4,029,000

You won’t have to worry about this increasing competition if you sell now.

5. You have less ‘discounted’ inventory with which to compete.

This year, sellers of non-distressed properties have been given an early holiday present. With banks declaring a suspension on the sale of many distressed properties (foreclosures), there has been a large supply of discounted properties removed from competition. No one knows how long this self imposed moratorium will last. However, while it does, every homeowner has a better chance of selling their property.

Bottom Line

If you are looking to sell in the near future, there may not be a more opportune time than this fall. Serious buyers, great move-up deals and less competition from foreclosures creates the perfect selling situation. Don’t miss it!

Foreclosure Freeze

Just wanted to pass along information that might be helpful in educating you on our real estate market. The foreclosure freeze is going to have a big impact...we are not sure what exactly it will do. There are many different predictions and opinions, but it is best to educate yourself if you are thinking about buying. ...Here's one of many articles out there. I would love to hear what your thoughts are and if you have any questions!My goal is to keep you informed as much as possible with the latest real estate news.

http://blogs.wsj.com/developments/2010/10/13/navigating-the-foreclosure-freeze-a-buyers-guide/

Before You Buy a Home - Look at Eight Reasons to Buy a Home

If you're like most first-time home buyers, you've probably listened to friends', family's and coworkers' advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are eight good reasons why you should buy a home.

Pride of Ownership

Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

Appreciation

Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight tracks the movements of single family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.

Mortgage Interest Deductions

Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

Property Tax Deductions

IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less.

Capital Gain Exclusion

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the "over-55" rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit--subject to limitation--free from taxation.

Preferential Tax Treatment

If you receive more profit than the allowable exclusion upon sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

Morgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

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.