Posted by Annalisa Burgos | April 2, 2009
As they say, April showers bring May flowers. And in real estate, it seems like all the elements are in place for a perfect storm heading into the prime Spring season.
News headlines are proclaiming “falling home prices” and “interest rates at record lows.” Throw in record levels of foreclosures on the market, and you’ve got a trifecta for a Spring homebuying spree.
We already started to see the trend in February, when the National Association of Realtors’ reported a 5.1 percent jump in existing home sales, citing a surge in distressed home sales. And with the latest S&P Case-Shiller Home Price Index showing home prices in 20 major cities down 19 percent from a year earlier, this trend is likely to continue.
Speaking of home prices, what are today’s sellers supposed to do when trying to price their homes? Yes, they’re supposed to be using comps to determine fair market value. But if you’re competing with foreclosures, short sales and just desperate (er, motivated) sellers, it screws up the whole paradigm. Not sure if you can really call all this “fair.” Unfortunately, that’s the reality of selling in this market. So if you have no choice but to sell now, buck up, get realistic, research what’s happening in your market and try these tips on how to price your home to sell, courtesy of FrontDoor Insider and San Diego Realtor Kris Berg. And real estate guru Barbara Corcoran shares her top 4 must-do tips, including one on pricing your home.
Home values aren’t what they used to be. But the ways to determine home value won’t change. Sellers, get back to the basics and check out FrontDoor’s Home Seller’s Guide, specifically steps 7 and 8.
And buyers, we’ve got tips for you too. FrontDoor’s Top 10 for April features our Top 10 Bargain Markets for Homebuyers. And check out steps 9-10 of FrontDoor’s First Time Homebuyer’s Guide. Just because prices and interest rates are falling doesn’t mean everything is an automatic bargain. You’ve still got to do your due diligence.
Happy house hunting and selling!
Posted by Annalisa Burgos | March 24, 2009
It looks like it’ll be a promising Spring for real estate. Buyers are back in the market, drawn to falling home prices, low interest rates, potential bargains in the form of foreclosed homes and short sales, and incentives like the $8,000 first time buyer tax credit. In fact, first-time buyers bought half of the homes sold in February, says the National Association of Realtors.
Of the existing homes sold in February, distressed sales — which involve a foreclosure property or a homeowner doing a short sale — accounted for 40 percent to 45 percent, pushing overall activity up 5.1 percent but dragging median home price down more than 15 percent, according to NAR. Sales are still down 5 percent year-over-year.
Distressed homes typically sell for 20 percent below normal market price, so it’s not surprising to see first-timers drawn to these properties, especially if they are move-in ready or require minimal repairs.
If you’re one of the many bargain hunters out there, check out FrontDoor’s Foreclosure Guide for tips and advice on buying a distressed property. Did you know foreclosure homes sold at auction are typically sold “as-is” and require a 10 percent to 20 percent cash deposit upfront?
The bad news is that sellers are competing with these heavily discounted properties. So even if you have a well-maintained property, you may have a hard time selling it, even if it’s priced reasonably.
Market value is just that — value dictated by the market, i.e. what a buyer is willing to pay for your home. It’s not what you paid for your home. It’s not what you paid for your home and all the wonderful home improvements you made.
The reality is that if your home is competiting against foreclosures and short sales, finding a buyer may end up coming down to price.
Posted by Annalisa Burgos | March 12, 2009
With foreclosures instantly at the top of the news again, we’ve pulled together tips and tools for homeowners struggling with their mortgages. For one, contact your lender immediately and ask about your options, whether it’s a refinance or loan modification.
Also, investors looking for opportunities should check out our 10 steps to buying a foreclosure. Did you know properties can be in one of three stages of foreclosure? Find out which one is right for you. Plus, search for available foreclosures on FrontDoor.com.
According to RealtyTrac, the foreclosure picture remains bleak, with February foreclosure filings in the U.S. up 30 percent year-over-year. Among the top 10 hardest hit metro areas, in order: Las Vegas, Cape Coral-Fort Myers, Stockton, Modesto, Merced, Riverside-San Bernardino, Bakersfield, Reno-Sparks, Phoenix and Vallejo-Fairfield. The news comes amid President Obama’s $75 billion dollar efforts to keep struggling homeowners from losing their homes.
FrontDoor Insider Rick Sharga of RealtyTrac predicts even more challenging times this year. Several analysts and economists have said that Obama’s refinancing and loan modification programs aren’t enough to buoy an economy plagued with an 8.1 percent unemployment rate and lagging consumer confidence.
And with foreclosures sure to make headlines again, FrontDoor is working on a new foreclosure resource center, with more helpful guides and tools. Stay tuned!
Posted by Annalisa Burgos | March 4, 2009
Starting today, homeowners can apply for a loan modification with lenders under Obama’s $75 billion refinance and mortgage modification program. The Treasury Department says the “Making Home Affordable” program will help up to 9 million homeowners avoid foreclosure.
Lenders will receive financial incentives to modify mortgages of at-risk borrowers who have not yet missed payments and to remove second liens on loans. You can modify through Dec. 31, 2012.
Eligibility:
* Loans originated on or before Jan. 1, 2009
* First-lien loans on owner-occupied properties with unpaid balance up to $729,750. No investor-owned, vacant or condemned properties.
* Borrowers must show a recent tax return and two pay stubs and sign an affidavit of financial hardship.
The plan sets industry-wide standards for modifying a home loan, including using a “net present value” (NPV) test to determine the benefit of a loan modification. This test includes ways to determine property value, assume home price appreciation and estimate foreclosure costs.
Under the plan, a borrower’s monthly payment must be reduced to no more than 31 percent of gross monthly income.
To do this, the lender must go through a series of steps:
1) reduce the interest rate, at a floor of 2 percent
2) extend the life of the loan for a maximum of 40 years
3) forbear principal (i.e. offer interest-free forbearance on part of the principal)
Check with your lender to see if you qualify.
And don’t forget that borrowers with mortgages held by Fannie Mae and Freddie Mac are also eligible to refinance through June 2010.
Stay tuned for more exclusive real estate news, only on FrontDoor Unlocked!
Posted by Annalisa Burgos | March 3, 2009
HGTV’s real estate site FrontDoor.com is back with a brand new blog!
Tune in for expert tips, tools and advice to help you get an edge in today’s market, whether you’re buying or selling a home.
Get exclusive updates on what’s going on in the real estate industry, from Obama’s foreclosure prevention plan to new requirements for loan modifications.
Take a peek inside some very cool houses for sale, with unique features or by celebrity sellers.
Moving to a new city? Dreaming of living somewhere new? Explore popular neighborhoods and local hotspots with FrontDoor’s city guides.
And much more!
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It’s good to be back. And in multiple ways…
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Happy house hunting!
Annalisa Burgos
Senior Editor, FrontDoor.com
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