Credit Scores Now More Important than ever

Buyers anxious to take advantage of record low interest rates may be disappointed if their credit score does not qualify them for a loan. Buyers who qualify for a mortgage may find that they're ineligible for the best rates because lenders have tightened their credit standards. “Credit scores have never mattered quite as much as they do now,” says Bob Walters, chief economist for Quicken Loans. As an example, current Fannie Mae standards announced this week requires a credit score of 620 for a mortgage with 20% down...in the past a 580 credit score was acceptable.

If you’ve already found a home you’d like to buy, there’s not much you can do to raise your score before you apply for a loan. But if you’re just starting to tour open houses, there are steps you can take to improve your credit profile, including:

• Review your credit reports for errors. You’re entitled to a free credit report once a year from all three of the bureaus, but only if you go through this website... www.annualcreditreport.com.

• Pay off credit cards and other debts. One of the factors used to calculate your credit score is your “credit utilization ratio,” which measures the amount of credit you have outstanding vs. your total available credit. This ratio accounts for 30 percent of your score. Paying off balances will increase the amount of unused credit you have available, which will help your score.

Even if you’ve decided never to use credit cards again, don’t close your accounts. Closing a credit card account won’t help your credit score and could hurt it.

• Avoid opening any new accounts.

The Making Home Affordable Program

Many Homeowners are having trouble with their mortgage payments, for a number of reasons ---loss of income, adjustments in the mortgage interest rates, as well as other issues. Here's a plan which may help --- a permanent loan modification program. For more information, visit www.makinghomeaffordable.gov

$8000 Home Buyers Credit Extended

Good news for homebuyers! The $8000 tax credit for first time homebuyers was extended by the Senate panel today until April 30, 2010. Homebuyers only have to have an accepted contract by that date, with closing by June 30.

In addition, the credit was expanded to include other purchasers of a home as well. A credit of $6,500 will be offered to purchasers of a primary residence as well (this is not a first time home buyer).

Income limits were also raised, to $125,000 for single taxpayers, $225,000 for joint taxpayers.

Fall is in the air -- With the Fall Festival Oct 30

Fall is very much in the air, and a much needed respite from the summer heat!!! Alachua, FL is planned for Friday, October 30 from 6-8pm. An annual event for the city, join us in your festive garb as we 'Trick or Treat' on Main Street. A highlight of this event is the activities held at the First Baptist Church....games and activities ranging from a water dunk, to cookie decorating...a great time for the entire family! I look forward to seeing you next week!!!

So what do all those Letters Mean?

Realtors oftentimes have a series of letters after their names....so what do they mean anyway?

Simply put, these letters are special designations for realtors. To receive such designations, realtors attend additional training in specialized areas, and oftentimes have to complete a number of transactions to demonstrate they have experience in addition to the formal training received.

I am an SRES....a Seniors Real Estate Specialist, meaning I have additional training and expertise in dealing with customers 50 and over. As you know, seniors have unique needs, and have services available to them which others do not -- such as a HECM or reverse mortgage. As we go through life, we have unique needs at different stages, our older population is no different.

Understanding the situation and needs of folks as they get older is important if we are to be able to meet their needs.....after all, real estate is more than a transactional business, it's a people business, building relationships as we go.

An Easy Way to Shave Months - or YEARS off your Mortgage

Owning your own home is a wonderful feeling! Committing yourself to a mortgage of 30 years, however, is a 'not so good feeling'. This is especially true when you consider how much interest is paid over the life of the loan. For a $100,000 mortgage over 30 years, interest payments alone will be $115,838 --- WOW. There are several alternatives to paying this amount of interest, and have the loan paid off sooner.

One alternative is to finance with a 15 year loan...the advantage is obvious, interest over 15 years for the same mortgage would be $51894.....a savings of $63,944. The downside to this is that the monthly payments are increased by about $250....from $600 to $843. I know, if I could aford that, I would have bought a different house!!

Another option to shorten the mortgage is to pay the first month's payment on the first day following close on the property. As mortgage interest is calculated in arrears, you generally skip the first month's payment following closing on the property. This one action will reduce the term of the mortgage by about 7 months! The $600 paid early will result in a savings of about $4200 in interest over the life of the loan.

The final option is to pay additional principle on the mortgage each month. A lot is heard about bi-monthly mortgage payments, where lenders will allow you to pay every other week instead of once a month. By doing this, you make 13 monthly payments annually rather than 12. Most lenders charge a fee for this service. You can accomplish the same thing (and avoid the fees!) by taking your monthly payment and dividing by 12 (in this example $50), then adding that to the monthly payment and indicating that it is 'additional principle'. This option if done regularly will reduce your mortgage by nearly 6 years, and save a significant amount of interest over the term of the mortgage!!

You may be able to refinance your existing Mortgage if you are 'under water'

Borrowers hoping to refinance who do not have at least 20 percent equity in their homes may qualify for the Obama administration’s “Making Home Affordable” program. Through June 2010, borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac may be able to refinance for up to 105 percent of a home’s value.

Homeowners must be current on their mortgage payments and may qualify with credit scores as low as 620. Borrowers who do not meet the criteria for the refinance program may be eligible for another Obama administration plan that focuses on loan modifications. See www.makinghomeaffordable.gov.

White House may extend first time homebuyer tax credit

As you are probably aware, the $8000 tax credit for first time home buyers will be expiring on November 30,2009. Economists are currently evaluating the impact the credit has had on the economy, and will be making a recommendation to the President shortly.

Realtors, builders, not to mention first time home buyers feel this credit has had a positive impact on the economy. If you agree, please contact your congressman to weigh in on this important issue.....and perhaps be the benefactor of the $8000 credit!!!

To be sure, if you are considering purchasing a new home, the time to act is fast running out....with lenders now taking about 45 days for loan approval and closing, the 'sand is fast running out of the hour glass'!!

Home Inspector Kills the Deal

Oftentimes overlooked, a home inspection is a big benefit to the buyer when purchasing a home. A Home Inspection should be performed by a reputable, qualified individual...one who is honest, and has an affiliation with an association of professionals. ASHI is perhaps the leading affiliation of home inspectors.

Until recently, Florida required no licensing of home inspectors....basically anyone could become one. Realtors, through their own lack of knowledge turned to licensed contractors oftentimes to perform home inspections.

So what is the job of the inspector? In simple terms, it is to determine the condition of the property at the time of the inspection. A house does not 'pass' or 'fail' an inspection.....the condition of the home is determined as of the date of the inspection.

So many times the inspector can 'kill' a deal merely by his presentation of the facts to the buyer. As an example, using the technical term of 'reverse polarity' in a report could create unnecessary concern on the part of the buyer relating to the electrical system. Realizing that to correct such a condition requires only reversal of two wires at a minimal cost puts such a condition more into the correct perspective.

You can see where communication of the facts in a fair balanced manner is important.....having a trained, competent inspector is a critical factor in communicating to buyers the proper significance of issues detected in the purchase of real estate.

Buying a home is perhaps the single largest purchase most people make. The processionalism of an inspector and their communicative skills is critical in discussing with the buyer exactly the condition of the home.

Look for an inspector who is qualified, and not 'a rookie'. Again, being affiliated with ASHI - the American Society of Home Inspectors, is a good place to start in finding a good home inspector.

Photos Make a Difference

So what's the big deal with photos and listing of your home for sale. When trying to sell real estate, it's important to have a lot of pictures, and ones with quality. Small bathrooms are particularly difficult to visualize. To capture all of the room, you really need a camera with a wide angle lens, as in the photo at the left.

Without a wide angle lens, you get photos such as the one on the left. Quite a difference! With a 'point and shoot' camera, generally it's just not possible to capture the entire room. In essence you're standing in the doorway and taking a picture of about a 5' wide area.

A lot of pictures, with as much detail of a room possible is important in getting potential buyers to visualize a home, regardless of how and where it is listed!

Staging a Home...and Not

I was again reminded this week of the importance of properly preparing a home for sale. I recently listed a property, and the homeowners were beginning their search for a new home. As we toured the homes under consideration, we saw several things, including a lack of painting, dishes in the sink, beds not made, many, many photos on the walls, etc. I begin to ask myself in some of these homes if the seller was really wanting to sell the property!

First impressions are important. As such, when selling a home, you want to make a good one. It is said a buyer will form a first impression in the first 11 seconds of getting to a home. Curb appeal is critical....the exterior of a home is where it all begins. You must recognize you are competing with other homes on the market.....if the exterior of your home is dirty, cluttered, and the grass not mowed, well, you know.

Pressure wash the exterior if needed, plant colorful flowers in the front, keep the grass neat and trimmed....look at your home from a buyers perspective, you will begin to think differently. Ask yourself the question, what does a first time visitor see on the exterior of my home.

Do the same thing with the inside, take a look at painting, excessive personal items (toys, clothes, and photos). Oftentimes it is well worth the small expense of renting a storage unit to get unused personal items out of the home. This does two things, it makes the home feel more spacious (particularly in the closets), and 'de-personalizes' the home.

We all love our families, but we don't want potential buyers preoccupied with personal photos and wondering where you took your last vacation.....rather we want them to visualize where they will be putting their furniture in the home!

Another important consideration when trying to sell your home is to keep it neat and clean. Beds made, dishes washed, all common sense, but you would be surprised just how many homeowners fail in this area.....

Small sacrifices now will make a huge difference in the marketability of your home, even in this market. I had rather delay listing a home for a few weeks to address these issues up front in order to make a good first impression when the home does go on the market.

Rent Vs. Buy

Low Mortgage payments, first time homebuyer credits, depressed housing values....perhaps the time to buy. Uncertain job future, unfamiliar with the area, lower rental payment, maybe not.

So what is best for me --- Rent or buy.....let's take a look!!!

http://www.youtube.com/watch?v=bSBui4_uPGM

Don't Get the Cart Before the Horse!

Manytimes potential homeowner's get caught up in the excitement of finding their dream home only to find they can't afford it. You can imagine their disappointment finding they can't qualify for the mortgage on the home they have spent weeks and months looking for.

A similar situation arises when potential buyers find a home and then ask the question -- "Is financial assistance available?" If a buyer is looking for financial assistance, the time to do it is PRIOR to finding the home.

Typically qualifying for financial assistance involves several steps.....approval of the person, approval of the property, and awarding of the grant. The person needs to apply for the assistance, have their eligibility verified, attend training of some sort, and finally approval. The process may take a couple of months. Then the property has to qualify --- the price must be within certain guidelines, it must pass inspection(s), and finally the assistance is provided.

In short, it is best to determine the level and type of financing you qualify for before the home purchase. If you qualify for $175,000, you won't be wasting your time looking for homes which are more than that amount. You can also see what your monthly payments will be and have time to see if you are comfortable with that level of monthly expense toward housing.

How much is my House Worth?

ORLANDO, Fla. – July 9, 2009 – One of the biggest mysteries in the region’s tumultuous housing market these days is: How much is that house worth?

Appraisers, real-estate agents, buyers and sellers across Central Florida are in a quandary about whether to include bargain-basement sales in the price mix when determining the value of a nearby, comparable home.

“It’s really causing havoc in the market right now,” said Les Simmonds, president of the Orlando Regional Realtor Association. “Hopefully it will turn around as we go through inventory of foreclosures and other distress sales. But I want to emphasize that could take some time.”

The confusion over local home values in a changing market is compounded when it takes weeks – or even months – for actual sale prices to reach government and commercial Web sites. One nationwide Internet sales site is taking on that problem by rolling out next-day closing prices, with the hope that it will draw potential customers by helping take some of the guesswork out of determining the worth of nearby properties.

Realtor.com has started posting sale prices the day after the transactions close in 22 U.S. markets – including the Daytona Beach area, parts of Brevard, the Miami area and Northeast Florida.

“If you’re trying to track trends in your neighborhood, you can find out what homes sold for in 24 hours. You don’t have to wait 60 to 90 days,” said Julie Reynolds, a spokeswoman for the Web site, which serves as a national, consumer version of local Realtors’ well-known Multiple Listing Service. “With the rapidly changing market trends, especially in Florida, it’s an art to establish the right list price or the right bid.”

Current sales information also can affect homeowners who are considering whether to sell or refinance their property, she said. The sales information is available in the “Find Home Values” feature on Realtor.com’s home page.

Leah Selig, executive director of the Space Coast Association of Realtors, said her group voted to disclose its members’ sales-price information to the public on a next-day basis to give the Realtors’ Web site an advantage over competitors such as Zillow.com, which provides property listings and estimated home values for houses throughout the country.

“Some of these public sites are publishing data that is not always current or accurate,” Selig said. “And you’ve got consumers out there relying on that information when it’s really months old.”

Zillow posts sale prices within about three weeks of closings in most markets.

So far, the Orlando Realtor association, with members throughout the region, hasn’t embraced next-day reporting of sale prices. The group voted against the idea about a year ago, noting that the information typically becomes available on government Web sites within a few weeks of a closing, Simmonds said.

But he added that the Orlando group is likely to review its earlier position, perhaps as soon as next week.

Though quicker reporting of sale prices can give the public more-accurate snapshots of the home market as a moving target, it won’t untangle confusion over whether foreclosures and short sales should affect the value of other homes.

Orlando real-estate analysts have tried to keep such “distress sales” from sullying the rest of the housing pool by separating the two in monthly price reports. On the other hand, Orange County Property Appraiser Bill Donegan often includes foreclosures when his staff computes home values in particular neighborhoods.

The state Department of Revenue has advised county property appraisers that they are allowed to, but don’t have to, use foreclosure sales when determining the value of nearby properties. Donegan said his staff is factoring foreclosures into property values in areas that contain numerous bank-sold houses.

“It’s got to be more than one, or even five, foreclosures spread out among 3,000 houses,” Donegan said. He said his appraisers are “being awfully cautious, based on what they did before [the housing bubble deflated]. They’d rather be low than high.”

The Orlando Regional Realtor Association has taken to distinguishing between the prices paid for foreclosure properties and those paid for homes sold through conventional methods. In May, for instance, the median price paid for all distress sales was $140,000, compared with the $165,000 median for “normal” sales, the association said.

Simmonds said he thinks it’s important to categorize the two types of sales because people need to understand why prices overall have continued to drop, even as monthly sales volume has been improving compared with a year ago.

Copyright © 2009 The Orlando Sentinel, Fla., Mary Shanklin. Distributed by McClatchy-Tribune Information Services.

More Information on $8000 Tax Credit for First Time Home Buyers

Here is some additional information from the Florida Association of Realtors regarding the $8000 tax credit for First Time Home Buyers. A little lengthy, but very informative if you are a candidate for the credit!

Short Sale Closes!!!

Whew...my son closed on his home in Plant City today. He got a great deal on a short sale property, and is very thankful the process is over. We've all heard of horror stories and delays in closing a short sale. In retrospect, this one went pretty fast, but the delays and mis-communications were as advertised!!!! I believe it is only through perserverance and an insistance on communicating the details of agreed upon terms continually that this deal went through. It's unfortunate that the purchaser has to be the one driving the process, but in reality they are the ones with the most at stake.

Chinese Wallboard becoming a Big Issue in Florida

In the recent housing boom, construction was going crazy. Following Katrina, building materials were in short suppply....builders turned to materials which were available, and affordable. One of these materials was wallboard which was made in China. As time has past, it appears this material poses a major health hazard for homeowners. Being in a warm, humid climate, impacts of this material are magnified in Florida. This certainly something homeowners need to be aware of.....here is an article which explores this issue in some detail..

http://news.yahoo.com/s/ap/20090411/ap_on_bi_ge/chinese_drywall

With Mortgages at Historic Lows, Now is a great time to Refinance

With mortgage rates at historic lows, homeowners eager to lower their payments are rushing to refinance in numbers reminiscent of this decade's real-estate boom.

The Mortgage Bankers Association said Wednesday that mortgage-refinance applications rose to almost triple their level a year ago. The average contract interest rate for 30-year, fixed-rate mortgages stood at 4.73%, down from more than 6% a year earlier. About 80% of all mortgage applications are for refinancing.

Prior to refinancing your current mortgage, be sure to consider additional factors as well, such as how long you intend to be in your current home. If you are thinking of a move within five years, you may not save enough in payments to pay for the closing costs. If, on the other hand you are going to be in your existing home for a longer term, refinancing may be just the right thing to do!!!

30 year Mortgages at a record low!!!

The average rate on 30-year fixed-rate home mortgages hit a record low this week, after the Federal Reserve announced it would purchase Treasury securities over the next six months, Freddie Mac's chief economist said on Thursday.

The 30-year mortgage averaged 4.85% in the week ended March 26, the lowest point since Freddie Mac's weekly survey began in 1971. Last week, the mortgage averaged 4.98%; the mortgage averaged 5.85% a year ago.

Fifteen-year fixed-rate mortgages and five-year adjustable-rate mortgages also hit record lows. The 15-year fixed-rate mortgage averaged 4.58% and hasn't been lower since 1991, when the survey began tracking the mortgage. The 15-year mortgage averaged 4.61% last week and 5.34% a year ago.

With home values at current lows, the low interest rates make it an excellent time to be in a buying position!

Home Sales up Nationally...What About Gainesville?

Nationally, home sales were up 4.7 % as reported in the attached video.

http://online.wsj.com/video/higher-prices-may-follow-home-sales/EA999434-627A-4097-8452-2BBBD357BF72.html



But what about Gainesville? MLS statistics indicate we're not quite following the national trends. In fact home sales in Gainesville were down 13% in January and February from the same time period last year.



We see the same active interest from first time homebuyers, looking to take advantage of the $8000 tax credit. The credit, coupled with lower home prices and very favorable interest rates, make it an excellent time for a first time home buyer!!!

Florida Homestead Exemptions

Don't forget that effective in 2009, Florida homeowners receive a $50,000 exemption on their tax base with the passage of ammendment one. For more information, visit my website... www.mrmikesrealestate.com

$8000 Tax Credit for First Time Home Buyers Included in Economic Stimulus

As a part of the stimulus package recently signed into law, there is a tax credit of up to $8000 for first time home buyers. Here are some of the preliminary details;

• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.

• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.

• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.

• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.

• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.

• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 31, 2009.• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.

• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.

• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.

• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly. The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund. By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment.

Source: © 2009 FLORIDA ASSOCIATION OF REALTORS®

Have Sales Bottomed out....Now is a great time to be purchasing a home!!

ORLANDO, Fla. – Jan. 26, 2009 – Florida’s existing home sales rose in December, making it the fourth consecutive month that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). December’s statewide sales also increased over November’s figures in both the existing home and existing condo markets.Existing home sales rose 27 percent last month with a total of 11,053 homes sold statewide compared to 8,712 homes sold in December 2007, according to FAR. December’s statewide existing home sales were 28.9 percent higher than November’s statewide sales.Florida Realtors also reported a 12 percent gain in statewide sales of existing condominiums in December, marking the third recent month (following September and October) for higher statewide existing home and existing condo sales compared to year-ago levels. Statewide existing condo sales last month increased 37.7 percent over the total units sold in November.Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in December; 11 MSAs also showed gains in condo sales, marking the sixth month in a row that a number of markets have reported increased sales activity.Florida’s median sales price for existing homes last month was $155,500; a year ago, it was $213,600 for a 27 percent decrease. According to industry analysts with the National Association of Realtors® (NAR), there remains a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in November 2008 was $180,800, down 12.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $285,680 in November; in Massachusetts, it was $283,000; in Maryland, it was $262,109; and in New York, it was $210,000.While overall sales have softened nationally in recent months, NAR’s latest housing outlook noted a trend of increasing activity in Florida, California, Arizona and Nevada markets. “Sales are rising in areas with large numbers of distressed properties as bargain hunters take advantage of discounted home prices,” said NAR Chief Economist Lawrence Yun. “It is imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit.”In Florida’s year-to-year comparison for condos, 3,138 units sold statewide compared to 2,814 sold in December 2007 for a 12 percent increase. The statewide existing condo median sales price last month was $130,600; in December 2007 it was $192,600 for a 32 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $185,400 in November 2008.Last month, interest rates for a 30-year fixed-rate mortgage averaged 5.29 percent, significantly lower than the average rate of 6.10 percent in December 2007, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. Among the state’s large to medium-size markets, the West Palm Beach-Boca Raton MSA reported a total of 638 homes sold in December compared to 467 homes a year ago for a 37 percent increase. The existing home median sales price was $246,000; a year ago, it was $337,900 for a 27 percent decrease. In the year-to-year comparison for the existing condo market, a total of 527 units sold in the MSA last month, up 26 percent compared to 419 condos sold the previous December. The market’s existing condo median price was $112,900; a year ago, it was $161,400 for a 30 percent decrease.

Spring is on the Way!

It's fast becoming my favotire time of year. It won't be long til the trees start budding out, and flowers begin to bloom. The sign of new life is exciting to me! We've all had a rough winter (even in Florida!). Time for Global Warming to kick in!

I hope you take time to kick back and just enjoy the newness of life soon to come!

This is a shot of some of the flowers in Brenda's Garden.