Information, Insight, Advice.

What's Going On In The Market?

• Investors know a party when they see one. They snatched up 64.5 percent more homes in 2011 than in 2010 and now account for nearly one in every four homes sold according to http://www.realtor.org/.

• The second-home market is back with a vengeance. Both investors and playhouse buyers are jumping on this bandwagon. They pushed vacation/second home sales up 7.0 percent in 2011.

• Meanwhile, owner-occupied purchases fell 15.5 percent last year.

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, which means you may have already missed rock-bottom in this sector.

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Most People Unaware of Government Modification Programs

More than 70 percent of home owners are unaware of government mortgage modification programs to help underwater borrowers, according to a new survey by FreeScore.com, an online credit servicer.

Underwater home owners--those who owe more on their home than it’s currently worth--are at risk of falling behind on their mortgage payments or falling into foreclosure. The government offers several programs aimed at helping underwater home owners refinance their loans or obtain a loan modification to make their monthly payments more affordable.

Seventy-two percent of the 300 survey respondents said they had never heard of such programs as the Home Affordable Modification Program (HAMP) or the Home Affordable Refinance Program (HARP). In fact, only 13 percent of the respondents said they had heard of both HAMP and HARP.

The two government programs provide struggling borrowers a way to refinance into today’s ultra-low mortgage rates.

“Prior to these plans, underwater home owners, whose mortgages were worth more than their homes, had little recourse but to either pay the higher mortgage rate on the devalued property or ultimately foreclose,” according to FreeScore.com. “The programs help underwater home owners avoid foreclosure by allowing borrowers to renegotiate the terms of their mortgage, refinance at lower rates, and adjust monthly mortgage payments downward, in line with current market valuations.”

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3 Things That Turn Home Buyers Off

Here are 3 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:

1. Stalk-ish Sellers. You are just trying to be helpful walking the buyer through the home explaining the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home

What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.

2. New, ugly home improvements. Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.

What’s a Seller to do? Check in with us before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.

3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it.

What’s a Seller to do? Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers. I will perform a market analysis on your home that will have your house listed competitively.

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