Real Estate/Mortgage


Selling a home in the cold, dreary winter months may not be ideal but there’s still plenty you can do to get a home to standout.

“Buyers out looking at homes in December or January are, as a group, quite serious about buying,” Laura Ortoleva, a spokesperson for the RE/MAX Northern Illinois, told RISMedia. “Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property.”

RE/MAX agents offer some of the following tips when selling a home in winter in a recent article at RISMedia.

Turn on the lights: Counter winter’s cloudy and short days by turning on all of the lights in a home for each showing. “Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled,” says Marlene Granacki of RE/MAX Exclusive Properties in Chicago. “People are always driving past the house, and keeping it lighted makes it look happy and welcoming.”

Have a place for shoes: Prospective buyers may arrive at the front door with shoes coated in snow or salt. “Make it easy for buyers to deal with their shoes when they arrive,” says Barbara Hibnick of RE/MAX Showcase, Long Grove, Ill. “Put a festive area rug at the front door for a great first impression and so visitors can wipe their feet. Have slippers or disposable booties available, along with a bench or chair, if there is room for one, where a visitor can sit and easily remove or put on their boots.”

Watch for odors: Homes can get stuffy in the winter. “Pet odors can be especially worrisome in winter,” says Mike Mondello of RE/MAX Synergy in Orland Park, Ill. “Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often.”

Don’t make it too toasty: “Don’t blast buyers with hot air,” the RISMedia article notes. Keep the temperature at a comfortable 65 degrees during your showings (although keep in mind that a comfortable temperature for your thermostat can vary form house to house.) Potential buyers will most likely be wearing their winter coats when they tour the house so no reason to make them sweat.

Read more winter-selling tips.

Source: “10 Ways to Get the Best of Winter When Selling Your Home,” RISMedia (Dec. 1, 2011)

Read More:
Add Some Holiday Charm to Your Listings

7 Tips for Showing Property in the Dead of Winter

Improved Job Report Sends Mortgage Rates Higher

Daily Real Estate News | Friday, October 14, 2011

 

After posting record lows the last few weeks, mortgage rates inched higher this week, Freddie Mac reports in its weekly mortgage market survey. Yet, rates still remain near 60-year lows.

“An employment report that was better than market expectations helped to lift long-term Treasury bond yields and mortgage rates as well,” Frank Nothaft, Freddie Mac’s chief economist, notes. In September, the economy added 103,000 workers; however, the unemployment rate still remained high at 9.1 percent.

Here’s a closer look at rates for the week ending Oct. 13.

  • 30-year fixed-rate mortgages: averaged 4.12 percent, with an average 0.8 point, moving up from last week’s record-hitting 3.94 percent average. A year ago at this time, 30-year rates averaged 4.19 percent.
  • 15-year fixed-rate mortgages: averaged 3.37 percent with an average 0.8 point–that’s up slightly from last week’s low of 3.26 percent average. Last year at this time, 15-year rates averaged 3.62 percent.
  • 5-year adjustable-rate mortgages: averaged 3.06 percent, with an average 0.6 point, and inching up from last week’s 2.96 percent. Last year at this time, the 5-year ARM averaged 3.47 percent.
  • 1-year ARMs: averaged 2.90 percent with an average 0.6 point, a drop from last week’s 2.95 average. A year ago, 1-year ARMs averaged 3.43 percent.

Source: Freddie Mac

Read More:
Housing Can Be ‘Key Engine of Job Growth’

8 Common Seller Problems (and How to Resolve Them)

If you’re working in real estate, you’re bound to run into one of these problems. But if you address them early and honestly, they shouldn’t present major obstacles for your transaction.
July 2011 | By Rich Levin

Do you ever clash with sellers on price, staging, or marketing? Has someone ever asked you to lower your commission? Has a seller’s personality ever rubbed you the wrong way?

If you work in real estate—and you aren’t exclusively a buyer’s agent—then the answer to those questions is almost certainly yes. But unless you’re working with someone who’s incredibly dense and obstinate, these problems don’t have to slow down the selling process.

The Problems

Note that the problems below don’t apply just to real estate professionals. In fact, they’re even bigger issues for sellers. These cost them time, money, and aggravation, and disrupt their lives far more than their agents’.

1. Sellers can be uncooperative on price.

2. Sellers frequently believe that the way they live in the house is the way they can sell the house.

3. Sellers are often unprepared for low appraisals.

4. Most sellers aren’t negotiation experts. They may bring expectations and anxiety that make everyone’s experience more difficult.

5. Sellers can be uncooperative on commission and might even request a reduction.

6. Sellers regularly have unrealistic demands concerning showings, advertising, marketing, and communication.

7. Agents and sellers may have personality conflicts.

8. Sellers might not be aware of all the closing costs.

Solving these problems gets sellers’ homes sold faster, for more money, and with less stress.

The Universal Solution in Two Parts

Before we get into the solution, it’s important to point out that owners don’t fully understand the entire process of selling a home. These problems would occur far less or not at all if agents could give them a crash course on selling, in which the practitioners covered these issues in a frank way. If that happened, I believe that sellers would be more cooperative.

The universal solution in two parts is first to ask the seller specific questions over the phone and at the beginning of the listing presentation as the agent is establishing rapport. These include:

▪ “Have you done much research to determine the asking price or how to sell a house?”

▪ (If yes) “We’ll talk more when we get together, but what are some of the more important things you discovered?”

▪ “Why are you thinking of selling?”

▪ “Where are you going?”

▪ “Is there an ideal time frame to have the move complete?”

▪ “The tax records indicate that you bought it x years ago, is that correct?”

▪ “Have you refinanced?”

Similar to how a doctor asks patients about their health history, this process gives the sellers confidence in the thoughtfulness, thoroughness, and ability of practitioners.

The second part of the universal solution is for real estate pros to build a listing presentation that addresses each of these problems before they arise. Details on how to do that are below:

1. If they’re uncooperative on price, prepare a very thorough comparative market analysis. Show sellers all the research that you used to select the properties you chose for the final CMA. Offer your pricing recommendation, but let sellers choose — and “own” — the list price.

2. Sellers believe the way they live in their house is the way they can sell it. Ask sellers if they are planning to do any work to prepare it for the sale. If they are, use your judgment to determine whether they will follow through or not. Share examples and anecdotes of how house cleaning, reorganizing, renovations, and so forth have helped homes sell faster and for more money.

3. Describe the entire pending process, from offer acceptance to closing. As you go through this, cover other stumbling blocks and how you work to prevent or address them.

4. Go over the entire negotiating process, from interested buyers to accepted offer. Also, explain pitfalls and emotional turbulence and describe how you will be their advocate.

5. If they’re uncooperative on commission, sometimes you will simply have to walk away. When possible, build so much value into your marketing plan that sellers are reluctant to even ask you to adjust your commission.

6. Show proof that what you do works. Continuously check for agreement. If and when they challenge you, make a note and return to it after they are impressed with your entire effort.

7. When it comes to personality conflicts, make sure you’re self-aware. Determine your personality style, and your strengths and weaknesses. Learn to recognize others’ personality types, and figure out which will naturally conflict with yours. Learn strategies for adapting.

8. Get sellers’ mortgage balances. Find out what else they plan to pay off with the proceeds. Then complete a detailed net sheet. Use a conservative sale price. Inflate the numbers a bit, so you can assure them it will likely be more in their pocket.

All of these bases can be covered either in conversations with owners over the phone before making an appointment or during the listing presentation. Top practitioners have spent years interacting, building, rehearsing, presenting, adjusting, and improving. Solving these problems consistently comes out of that effort.

Home sales volume and price peaks

By Bradley Markano • Jul 17th, 2011 • Category: Charts

This article looks at home sales volume, and discusses California trends in homebuying and selling.

Chart Last Updated 7/17/11

  June 2011 May 2011 June 2010
Southern CA
20,532
18,394
23,871
Northern CA
18,443
17,142
20,093

CA Total

 

38,975
35,536
43,964

 

 

 

Chart Last Updated 6/23/11

  2012* 2011* 2010 2009 2008 2005
NorCal 217,138 189,330 192,979 219,460 191,809 398,174
SoCal 238,862 216,851 228,655 245,331 201,894 355,698
Total 456,000 406,181 421,634 465,654 404,820 753,876

Data courtesy of MDA Dataquick

All forecasts are made by first tuesday based on current data, influential factors and market trends.

The above charts track sales of single family residences (SFRs) on a month-to-month and annual basis. This includes all resales and new homes in CA, including new homes sold directly by the builder.

Recent sales numbers suggest the upcoming year will be characterized by a bumpy plateau in home sales volume. Volume and prices slipped slightly during the first half of 2011, and are expected to continue falling through the third quarter, with an eventual (but short-lived) rise at the end of 2011 due to low prices and interest rates. [For more on the influence of interest rates on home sales, see the first tuesday Market Chart, Buyer Purchasing Power.]

Little overall change from 2010’s numbers will occur before early to mid-2012, and no sustainable improvement is expected before 2013. The state of stasis will continue until California employment and homebuyer confidence improve dramatically. Trends currently do not suggest this improvement is imminent: at the time of this writing, 30% of all homeowners cannot sell and relocate because their homes are worth less than the debt encumbering them and lenders are reluctant to undertake short sales.

first tuesday currently expects the housing market to begin making real, although slow, steps toward recovery in late 2012 or early 2013, with a total of 50,000 more homes likely to be sold in California in 2012 than in 2011. It is still expected to take until 2017-18 before home sales volume returns to the highs last seen in 2007. Relocating Boomers going into retirement will be the primary propelling force, with their Gen Y children adding to the volume as they become first-time homeowners.

Read More first tuesday Analysis
(last updated May 2011)

Causes for the rise and fall  

The trend in California home sales during the initial years of the 2010s remains grim for sellers, since sales have been excessively lender-driven, speculator riddled and easily predictable for single family residential (SFR) agents and their brokers. The center of all this action is the multiple listing service (MLS), the economic marketplace for all those affiliated with SFR sales and the financial base for the lifestyle of those agents and their brokers who are SFR-reliant.

For a forward look, some review of the recent past is needed to set the stage. Mid-2005 saw sales volume peak for all types of real estate in California. Early 2006 produced both the peak in sales prices and the initial precipitous decline in sales volume, with nearly 30% fewer recorded sales than in 2005. 2007 saw a drop in sales volume of 30% from 2006.

2009 sales were higher than anticipated due to subsidized purchases, but remained 39% below the 2005 peak year. 2010 saw a decline from the year earlier in both sales volume and prices. The continued widespread overpricing by sellers and listing agents kept buyers away from the more expensive housing market, the effect of the sticky price phenomenon.

2008 and 2009 introduced massive quantities of real estate owned (REO) re-sales. Resales continue to arrive in a slowly declining trend, and will continue for years until REOs return to their historic norms. These lender-owned properties were dumped at price reductions and on terms for payment and escrowing which attracted too high a percentage of investors and speculators to support sales volume for the long-term (and definitely caused actual homebuyers to be crowded out).

In turn, the speculators and own-to-let users artificially drove 2008 and 2009 sales volume above 2007 sales, with a sales volume peak in July 2009. This 2008-2009 fast-track rise and sudden peak represents the classic initial “dead cat bounce” in a real estate recession. Sales volume (and prices) in 2011 is headed back for lower, long-term levels and will not likely hit a bottom, on which the recovery of real estate can then begin, until well into 2012 or early 2013.

Now fast-forward into 2011 and 2012. In 2010, unemotional, objective real estate factors combined to push down sales volume in spite of tax credit stimulus to bridge homesales and get the market moving again (the last homebuyer’s tax credit, in 1975, was in retrospect unnecessary to boost real estate sales, but then we had major consumer inflation, and in this recession we have none).

As a result, sales volume will likely stabilize between the end of 2011 and mid 2012 and will most likely remain level as a vacillating trough in sales volume for 12-18 months. In 2013 or early 2014, monthly sales volume is predicted to pick up from the current plateau.

Anticipate modest price increases to follow, in 2014, with pricing and volume probably peaking during the 2016-2018 period. Short term interest rates will rise at a point in the interim to keep a lid on the recovery (as they did in both 1984 and 1994), then decline into 2016.

The real estate market is now settling into a long recessionary winter of waiting, with little warmth provided by homebuyers; they simply are not available in sufficient numbers (and, in fact, were presold for the following couple of years, reducing what would otherwise be 2011 sales, thanks to the 2009 first time homebuyer tax credits).

At some point in the mid-to-late 2010s, another wave of investors and an upsurge of household formations by the net-geners will kick-start the sales volume, and in turn, drive pricing momentum upward once again. Keep your eyes on the demands of buyers (not sellers, median prices, or the MLS inventory). Homebuyer demand is driven by age demographics, interest rates, tax credits, and new jobs; you fail to consider these factors at your peril.

Many favorable market factors are currently at work:

  • lower income taxes beginning in 2011 (for 95% of homebuyers);
  • increasing number of new jobs, as job losses bottomed out in 2010;
  • expiration of government-subsidized down payments (tax credits of $6,500 and $8,000 homebuyer grants, both ended April 30, 2010);
  • government largess in the form of direct lender subsidies for loan modifications on modestly upside-down mortgages;
  • much lower high-tier home prices (as well as more price declines in the low-tier and mid-range homes);
  • no competitive new construction starts;
  • high levels of MLS inventories for better selection at lower prices (fueled by a rise in REOs and a drop in speculator participation as buyers);
  • increased short sales (lenders will discount, since they are beginning to get more realistic about taking on REO risks and as the Attorney General’s office litigates to push foreclosure resolutions);
  • growing consumer confidence and spending;
  • the recapitalization of PMI to eventually replace government guarantees of home mortgages; and
  • increased congressional awareness of the need to grant cramdown authority to bankruptcy judges on SFRs (although killed in congress for the third time in December 2009).

However, sales volume will be inhibited by the public’s generally anti-business, anti-big, and pessimistic attitude about American economics which has methodically intensified since 1980. In addition to the fact the public has a generally negative bias about businesses, many unfavorable market conditions are still at work restraining sales volume from rising;

  • deflationary pressure on consumer and real estate prices (labor and materials for replacement of improvements and the price of land have become less expensive, commodity price jumps delivering no long term inflation rates as they will not continue to rise indefinitely, and will eventually return to normal);
  • increased personal savings (will hurt sales volume now but increase sales volume in 2013 and beyond);
  • impending stockholder wealth – while significant at the moment – will decline as the boomer generation dis-saves by continuing to leave the stock market (though not the real estate market: as those who sell their homes will nearly always buy a replacement home);
  • weakest homebuyer demographics in 15 years (boomers retiring and selling in the 2018-20 time period, the same period that will see the smaller, but still significant, group of their Net-generation children peak in their pace of household formations and first time homeownership);
  • excessive rental vacancies and reduced rents (landlords competing to rent excess shelter at a better value than a home purchase);
  • the temporary exodus of SFR speculators and income property investors, and the dumping of properties acquired by speculators in 2008 – 2010, followed by speculator dumping of larger income properties;
  • lease-option and land sales contract schemes exposed (due-on violations, reassessment avoidance and judicial foreclosures – including actions on wiped out home equity loans);
  • scandals in mortgage loan modification services and the status quo or pick up in the pace of foreclosures;
  • the slower than usual recovery of the 1,500,000 jobs lost statewide after November 2007; and
  • tightened lender standards as lenders are further forced to apply the forgotten fundamentals of sound mortgage lending practices (20% down payment on all non-FHA loans, and FHA down payments as low as 5%,, lower income ratios, the need for risk-free credit scores and full verification/documentation of income and funds for qualifying).

Future sales volume analysis by SFR brokers and their agents will indicate they need to consider adding SFR-related services to supplement their income. Those that do add related services will restructure their practice as all-service brokers by integrating transaction-related services to remain solvent and grow. SFR brokers should consider performing services for their clients such as:

  • escrowing their transactions in-house under the broker’s license;
  • entering into or expanding property management (a recession-proof service);
  • inspecting vacant homes and issuing BPOs for REO lenders;
  • negotiating equity purchases for investors from sellers-in-foreclosure who have a positive equity or the chance of a short sale discount;
  • demanding that prospective buyers commit to exclusive representations through a broker and his agent to locate a home (or other property) by signing an exclusive right-to-buy listing agreement just as sellers are asked to do when they employ brokers and their listing agents;
  • specializing (in particular property types, loan forms, locations, and sales approaches);
  • providing mortgage loan broker services for business loan origination by private lenders (no endorsement or registration required);
  • arranging carryback financing with loan assumptions (and buying and selling those carrybacks);
  • negotiating options to buy;
  • exchanging properties with equities to help owners relocate their wealth held in real estate; or
  • using barter credits in lieu of greenbacks, etc.

Note: Southern California numbers correspond to MDA Dataquick’s selection of the most populous SoCal counties, and include Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. NorCal numbers include all counties not listed.

 

 

– ftCopyright © 2011 by the first tuesday Journal Online – firsttuesdayjournal.com;
P.O. Box 20069, Riverside, CA 92516

Readers are encouraged to reproduce and/or distribute this article.

One long, grueling summer for California’s recovery

By Tara Tran • Jun 20th, 2011 • Category: Feature Articles, Journal Articles, June 2011 Journal

This article reviews indicators in the market which signal the long-awaited national housing recovery and evaluates the California real estate market’s progress towards recovery.

The worst is (almost) over

Meditating on the landscape of American housing doesn’t bring much peace of mind, yet economists claim a nugget of hope is wedged somewhere beneath the muck of this real estate bust, even for the more deeply entrenched California.

2011 has thus far failed to yield an economic recovery of leaps and bounds and thrust us beyond the Great Recession. Low interest rates (courtesy of the Fed and generous government housing subsidies) triggered an artificial leveling of home prices nationwide going into 2010, but were insufficient in duration and intensity (or reception) to bridge the recession gap.

Many economists predict an additional 25% decline is not out of reach for reasons now known to all involved.

Prices nationally in the first quarter of this year hit a new low – 5% lower than one year ago, according to the S&P Case-Shiller Index. Thus, the nation’s home prices have returned to mid-2002 levels. Many economists predict an additional 25% decline is not out of reach for reasons now known to all involved. [For more information on tracking the market with the most recent data from the S&P, see the first tuesday Market Chart, S&P 500: Stock Pricing vs. % Earnings (P/E Ratio.]

A look at other circumstances in the national real estate market lead some to believe this is the worst of the storm and a sustained recovery is now on its way, in spite of current price adjustments.

Hints of a national recovery

Positive signs – nationally – thus far include:

  • advantageous home purchasing conditions due to low decade-old prices and very low mortgage rates, both slipping downwards at the same time;
  • gross rent multipliers (GRMs) such as home prices and home price-to-rent ratios of between 9-11 times the annual rental value which mirror the stable long-term trend of pre-bubble years [For more information about the GRM, see the June 2010 first tuesday article, Renting vs. buying: the GRM.];
  • lower apartment vacancies and higher rents, which typically help bolster home prices;
  • an 18% decrease in new foreclosures from the previous quarter and improved household delinquency rates for a fifth consecutive quarter as more borrowers catch up with their mortgage payments versus those who fall behind; and
  • 200,000 new jobs added to the economy in each of the past three months and 1.2 million jobs in the past year (more jobs mean a lot of positive things, but it is a particularly good sign for the construction industry which, if given a leg up, may consequently boost home prices). [For more information on positive indicators in the nation’s housing market, see the Economist article, The darkest hour: Signs of hope among the gloom.]

A gauge for California’s recovery

That’s national, and this is California, the seventh largest economy in the world. But is recovery in California feasible, or just a far-fetched fantasy?

Here we evaluate the Golden State for the same (positive) signs and provide a forecast most Californians will likely have to live with:

  • Are home purchasing conditions advantageous? Yes, you can bet on that. Rarely do we get low prices, low interest rates and low down payment financing at the same moment in time. All that is needed is the will to buy, which in part requires brokers and agents to get the word out that mortgages are available at 4.5% if you apply.

Prices fell 2% in Los Angeles, 4% in San Diego and 5% San Francisco for the year ending with the first quarter of 2011, and further drops are forecasted for the rest of the year. Buyers have this information and what it is telling them is to wait until prices bottom to make offers. Agents have their work cut out to convince buyers that a further drop is likely but the present pricing will look most proper in three or four years, and will make no financial difference in ten years.

Interest rates have also been and are on a continuous decline. The average rate for a 30-year fixed-rate mortgage (FRM) in the U.S. Western region dropped to 4.45% the second week of June. The 15-year FRM also dropped in the same week to 3.63%. However, even with these deals and steals on the market, people are just not buying. The agent’s advice is that rates cannot move much lower, if at all, and they can and will rise in the future as the recovery gains steam – as will prices.

Home sales volume in California has dropped since the first quarter of 2010. 35,202 total homes sold in April 2011, trending consistently down from 37,908 in April 2010. [For more information on home sales volume in the current market, see the first tuesday Market Chart, Home sales volume and price peaks.]

  • Are prices stabilizing? Yes. The lingering drop in home prices across California in all tiers of housing is not a momentary dip from which they will fast rise akin to the fabled V-shaped recovery. Today’s home prices represent a resetting of the artificially high prices of the bubble years (which commenced in 1997) to their more stable levels consistent with historic trends. The end of 2011 may just likely see that reaction to low interest rates and a better informed and more confident public. However, that annual rise is more likely to reflect the consumer price index (CPI) rate of inflation rather than the 5 to 10% annual rate buyers are now thinking they will experience.

Except for those negative equity homeowners imprisoned and burdened by insolvency due to the steep price plunge, price stabilization is good news for California’s housing market in the long run. [For more information on historic home prices in California, see the first tuesday Market Chart, California tiered home pricing.]

  • Are rents higher? Yes. While home prices fall steadily, rents in California continue to rise, 4% for the year ending April 2011, according to the Spring 2011 Housing Report by HotPads.com. (Although landlords in the bedroom cities of the state’s inland and central valley will beg to disagree.)

Rent prices are indicators of which way home prices will go since they are the primary fundamental used to set property values. However, any rise in home prices beyond the rate of consumer inflation will take several years. [For more information on rentals in California, see the first tuesday Market Chart, Rentals: The Future of Real Estate in CA?]

  • Are household delinquency rates better? Sort of. Compared to the 18% nationwide drop in foreclosures, California foreclosure numbers are loitering near stagnancy. 8% more homes were foreclosed upon in California’s high-tier areas in the first quarter of 2011 from a year earlier. An even higher 23% more homes in low-tier areas were foreclosed upon in the same period.

Foreclosures in both housing tiers dropped only 2% over the year ending April 2011. Mortgage delinquency in the state is improving at an equally slow pace. 9% of mortgage payments were seriously delinquent in the first quarter of 2011, a slight but steady decline from 11% a year earlier. Thus we have an inventory problem called excess supply (the REOs), and until the buyers enter and start to cut into that supply, the prices will remain low, market momentum will be negative and competitive buyers for a property will be rare.

California foreclosures and delinquency rates, like other sand states, are higher than the rest of the nation but are improving at a faster rate. So when the market shifts to positive volume and pricing, some buyers will be surprised. [For more information on first quarter 2011 California defaults and foreclosures, see the April 2011 first tuesday article, 1Q 2011 defaults and foreclosure data.]

  • Do we have more jobs? Yes, but not enough and not fast enough. As of April 2011, California has yet to replace 1,298,700 of the jobs lost since the peak of California employment in December 2007. 363,100 jobs have been added since the beginning of the recovery in January 2010 and employment numbers have gradually made small ticks upward since then.

Employment needed to rent or buy a home was up by 148,100 jobs annually in April 2011. But what we need is around 400,000 jobs annually to get back to the pace experienced in the late 1990s. Jobs are slowly returning but will not reach pre-recession employment levels until 2016. [For more information on the effect of statewide employment on real estate, see the first tuesday Market Chart, Jobs Move Real Estate.]

Slow and steady to the end

Now back to the first question: Will California get to the finish line of its recovery? Yes. But if we’re to have a robust and sustained economy, keep in mind, the recovery will – and must – be gradual.

We just need two more ingredients to add to the mix: more jobs and more consumer confidence.

Although California is definitely a step behind the nation heading for recovery (just as it was a step ahead of the nation in growth during the Millennium Boom a few years ago), the conditions for a housing recovery are not completely absent in the state. We just need two more ingredients to add to the mix: more jobs and more consumer confidence.

Brokers and agents can do nothing about jobs. What they can do is give prospective buyers great detail about a property and extensive justification for its value, and then escort them through the loan pre-approval process with a couple of lenders. These simple gestures of due diligence will get the confidence of buyers up immediately. They merely need someone they feel they can depend on for advice.

Without an adequately employed population both poised (read: ready and free of their negative equity homes) and willing to buy, California will continue to march across the rocky plateau of its flat-line recovery. [For more information on building public confidence in a depressed real estate market, see the June 2011 first tuesday Market Chart, A bounty of loan deals, a dearth of willing buyers.]

– ftCopyright © 2011 by the first tuesday Journal Online – firsttuesdayjournal.com;
P.O. Box 20069, Riverside, CA 92516

Readers are encouraged to reproduce and/or distribute this article.

Copyright © 2011 by first tuesday Realty Publications, Inc. Readers are encouraged to reprint or distribute this information with credit given to the first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516.

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Avoid Home Flaws Being Uncovered Too Late

Home inspections don’t always turn up everything
wrong with a home, but unknowing buyers can quickly turn unsatisfied when they
move into their new home if they find a bunch of problems.

“The purpose of a home inspection is to look for material
defects of a property: things that are unsafe, not working, or that create a
hazard,” Kurt Salomon, president of the American Society of Home Inspectors,
told the Chicago Tribune. However, most buyers “think we can see through walls
and predict the future.”

Home inspections,
for example, don’t specifically test for environmental safety hazards like lead,
asbestos, or radon–which can be costly to remove. Inspectors also may overlook
mold or vermin when its hidden behind floorboards.

As such, buyers also should be on the lookout for common hazards
because pinpointing these before closing at least allows them the opportunity to
ask sellers to help pay for removal costs.

Experts warn that buyers should take note of homes built prior to
1978, which usually contain lead and possibly asbestos in 9-by-9 floor tiles in
basements.

To help avoid post-move-in
surprises, buyers also might consider bringing in additional safety inspectors
to evaluate the home, such as chimney inspectors, electricians, or experts for
leading or radon testing.

Source:
“Above and Beyond the Home Inspection:
Buyers Face Big Expenses When They Don’t Discover These Common
Problems,”
The Chicago Tribune (May 6,
2011)

Analysts Say Housing Is on the Way Up

Analysts at both Standard & Poor’s and Barclays Capital
agree that the uptick in home resales last month is a favorable sign of things
to come. Because pending home sales — an indicator of future activity — were up
in February, S&P believes transaction volume will rise for April.

Barclays, meanwhile, says March’s 3.7
percent gain in existing-home sales merely reinforces its position that the
housing market actually hit bottom in late 2010.

Source: “Monday Morning Cup of Coffee,” Housing Wire, Jon Prior (04/25/11)

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