Rates are low – think about refis…

5 Things Preventing You From Getting a Mortgage Refinance

Chris Birk | AOL News | April 8, 2013 | link

Mortgage rates are beginning to creep up, but they’re still well within the kind of range that makes longtime homeowners shake their heads in disbelief. The average interest rate on a 30-year fixed-rate mortgage hit 3.63 percent for the week of March 10, marking the highest point since last summer. So while a seller’s market may be taking shape, it’s still a great time to shop for a mortgage, especially a refinance. That’s why it’s so frustrating for homeowners who can’t get on the bus. So what’s keeping you from getting a refinance loan right now? Here’s a look at five of the most common culprits:

So-So Credit

Same as it ever was when it comes to mortgage lending — you’re going to need to meet a lender’s qualifying credit score for a refinance, which in many cases will be higher than what you’d need for a purchase loan. For conventional refinancing, you’re likely looking for at least a 740 score to really capitalize on current rates. The bar won’t be quite so high if you’re going after a government-backed option like an FHA or VA loan. Make no mistake: A loan program may not have a credit score requirement, but the lenders who actually issue loans certainly will. Right now, for example, VA lenders are generally looking for at least a 620 score. But you’ll more than likely need at least a 640 to start the refinance conversation.

Your Home Is Underwater

Values are starting to rebound in some parts of the country, but a lower-than-anticipated appraisal remains a common refi-killer. Consumers who owe more than their home is worth know this all too well. Pursuing a traditional refinance is all but impossible for underwater homeowners — and that explains why the government’s special refinance program for distressed borrowers is absolutely booming. Refinances through the Home Affordable Refinance Program (HARP) topped 1 million in 2012, more than double the year prior. The HARP program helps underwater homeowners with Fannie Mae- and Freddie Mac-backed loans. It’s possible for some lenders to process refinance applications without an appraisal (the VA’s Streamline program is one example). But today that’s a rare exception.

Not Enough Income

All indications are the economy is on the upswing. While that’s good news for the nation, continued recovery doesn’t suddenly put more money in your pocket. Many homeowners lost jobs or took pay cuts in the wake of the economic crisis. One missed mortgage payment can stymie a refinance application. Lenders will typically want to see 12 consecutive months of on-time payments. Diminished income can also make it tough to actually pay for the refinance, which like any mortgage loan comes with costs and fees. Self-employed homeowners will need at least 2 years of tax returns.

You Bought Big

Jumbo loans can present a unique set of refinance difficulties. These non-conforming loans typically require sterling credit and significant skin in the game to acquire. It can be especially tough when your $625,000 home has lost a third of its value. Jumbo homeowners may have to come to the closing table with cash in order to secure that lower rate.

Mortgage Insurance

Paying mortgage insurance can complicate your ability to secure a refinance. That’s especially true for lender-paid mortgage insurance. Either form presents problems for the federal HARP program as well, although some lenders have loosened restrictions a bit in the last two years. If this is currently an obstacle, keep searching for a lender that will work with you.

Need a referral? Let me know!

Beware of Overpaying For Home Features

Brendan DeSimone | Zillow Blog | April 5, 2013 | link

Spectacular view
When a real estate agent sits down with sellers to discuss the value of their home, the conversation inevitably turns to the home’s features — a spectacular view, a cool garage workspace or perhaps a one-of-a-kind garden.

While those features might be selling points, the truth is potential buyers may not value them nearly as much as the seller. That spectacular view may not be something buyers want to pay extra for. Some buyers will see the garage workspace as a liability. And while beautiful to the seller, that unique garden could look like a lot of maintenance to a buyer.

A home may go on the market with what real estate agents call “seller pricing,” which is based more on the seller’s perceived property value than on actual market conditions. Inevitably, after some time on the market, the price eventually gets reduced.

Here are three strategies — one for sellers, two for buyers — to avoid losing money on home upgrades.

Sellers: Test the waters — but not for long

You fell in love with your home’s view, garage or garden when you were a buyer. You’re convinced another buyer will love it too and won’t mind paying extra for it. But, your agent thinks otherwise.

Consider this: By pricing your home higher because of what you see as a special feature, you’re shrinking its potential market. Don’t want to risk it? Try listing at the higher price for a short period. If that view-fanatic buyer is out there, chances are he or she will appear early on and make an offer.

If you don’t get a good offer immediately, do a sharp price reduction and give the listing another life. Here’s why: If that buyer doesn’t materialize and six to eight weeks go by, you’re facing an unpleasant reality. Even if a view-loving buyer enters the market, he or she is unlikely to offer the price you want. Your property, having been for sale for a while, will be seen as “stale.”

Buyers: Don’t get emotionally attached

As the market continues picking up, stories of multiple offers are everywhere, in places such as Indianapolis, Raleigh, Sacramento and South Florida. With such little inventory, buyers are forced to compete for the limited goods. This competition, which we’ve seen before, creates a frenzy, causing some buyers to make an emotional purchase based on their attachment to a potential home, its features or location. This results in a quick increase in home values — what some might call a “bubble.”

Make no mistake: This is a great time to buy, especially if you have a down payment, a stable job and good credit, and you’re committed to the community for the next five years. In most areas, it’s cheaper to buy than rent. Just make sure to always think like a seller, not just a buyer, as you move ahead on a particular property. Weigh the potential market value of its amenities five years down the road, when you may turn around and sell. To achieve the maximum equity, try not to overpay for those features, either for competitive or emotional reasons.

Buyers: Think like a seller

In 2005, a buyer in San Francisco bought a home without a garage. A deeded garage can increase a home’s value in that city by $50,000 or more, but the buyer didn’t see the value in having his own garage. The house was on multiple transit lines, he used his bicycle for transportation, and he knew he’d have access to a leased garage space if he needed it. He was competing with a few buyers and ended up paying a little more than his competitors.

Fast forward three years and the market slowed. The buyer didn’t believe his home should be priced less than a comparable home with a deeded garage because his house was so centrally located. Plus, he had the leased garage space nearby. What he didn’t want to believe was that 25 percent of buyers commute to work and don’t want to risk having a leased garage space taken away later. They wouldn’t even look at his home’s photos online — let alone go to the open house — due to its lack of a garage.

This was a clear case in which the buyer failed to think like a seller. He didn’t anticipate issues he might face selling the property later. Don’t let yourself fall into that trap.

It’s not too late to save!

There’s still time to lower your 2012 tax bill

Stephen Fishman | Inman News | Friday, April 5, 2013 | link

<a href="http://www.shutterstock.com/pic.mhtml?id=102789911">Money and calculator</a> image via Shutterstock.Money and calculator image via Shutterstock.

There are only a few days left until the April 15 income tax filing deadline. If you’ve yet to file, are there any things you can do to lower your tax bill at this late date? You bet there are.

Make an IRA contribution

If you already have a traditional IRA (Individual Retirement Account), you can contribute to it up to April 15 and deduct the amount from your 2012 income. If you’re under age 50 you can contribute up to $5,000. If you’re 50 or over, you can contribute up to $6,000. If you’re married, you can double the contribution limits. This is true even if one spouse isn’t working.

To take advantage of doubling, you must file a joint tax return and the working spouse must earn at least as much as the combined IRA contribution. There are income limits on the deductibility of your IRA contributions if you or your spouse are covered by another retirement plan.

If you haven’t already established an IRA, you have until 11:59 p.m. Eastern time on Monday, April 15 to open an account and make your contribution. You can open an account and fund it online at many financial institutions.

Make an SEP-IRA contribution

An SEP-IRA is a simplified employee pension. It’s very similar to an IRA, except that you can contribute more money under this plan. Instead of being limited to a $5,000 to $6,000 annual contribution, you can invest up to 20 percent of your net profit from self-employment every year, up to a maximum of $50,000 for year 2012.

If you don’t already have an SEP-IRA, you have until as late as October 15 to establish one and still make deductible contributions for 2012. However, the October 15 deadline applies only if you file an extension to file your 2012 income taxes. Otherwise, the deadline is April 15.

So, even if you don’t have the money right now, you can still take the deduction for your 2012 taxes so long as you make your contribution by the deadline.

Make a 401(k) or Keogh plan contribution

If you already have a 401(k) plan or Keogh plan, you still have plenty of time to make a deductible contribution for the 2012 tax year. You have until October 15 to make your 2012 contribution if you file an extension to file your 2012 return. However, you must have established your plan by December 31, 2012 to deduct a contribution for 2012. Depending on your income, you can contribute up to $50,000 per year to these plans.

Make an HSA contribution

If you set up a Health Savings Account by the end of 2012 and paired it with a high deductible health insurance plan, you have until April 15 to fund it and deduct the payments from your 2012 taxes. Up to $6,250 can be deducted by families; $3,100 for individuals. You cannot establish an HSA in 2013 and make deductible payments for 2012.

That’s why buyers need us!

The home bidding wars are back!

Les Christie | CNNMoney | April 5, 2013 | link

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California have been drawing competing bids.

The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.

In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.

 The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.

“The brokers stopped taking names after the number of bidders reached 250,” she said. The winning bidder offered $2 million for both units.

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin’s CEO.

Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry big hits on credit scores, 85 to 160 points, according to FICO.

“Many people have been holding on for a profit and they’re just now getting their heads above water,” said Kelman.

Those who want to sell and buy a new home are encountering a market where it’s difficult to find a new place of their own, said Vogt.

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure.

The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller’s agent. They were later told the house sold for nearly $550,000.

Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and again, they were beaten out. The house was only on the market for two days.

The third attempt to make an offer on a bank-owned property was also met with silence.

“It was very frustrating,” said Jackie Kaufman. “We felt we were always on the outside of the loop and that people who won the homes had the inside track.”

By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price.

They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail’s pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker’s Southern California operations.

Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.

“With buyers out in force and sellers cautious, the market is in an awkward ‘tweener’ phase,” he said. To top of page

Be smart…

Don’t Be Fooled By These 3 Real Estate Myths

Brendan DeSimone | Zillow Blog | March 31, 2013 | link

Guy in disguiseAs the real estate market significantly rebounds, some buyers and sellers are dipping their toes in the waters for the first time. Inevitably, they come into the market with assumptions about how it works.

Their assumptions may come from TV reality shows or watching their parents’ house-hunting experiences. Maybe they’ve learned about real estate from a co-worker’s recent home buying or selling experience. The trouble is, the new buyer or seller’s assumptions are sometimes based on outdated or generalized “real estate myths.” Here are three such myths that many less-seasoned home buyers and sellers assume are true.

Myth No. 1: Spring is the best time to sell a home

Historically, real estate seasons were tied to summer and the end of the school year. Families were the typical buyers or sellers, and they wanted to move during the summer so their kids could start anew in September. That’s how spring became the prime selling season. It’s true there are still more homes for sale in the spring, which means there’s a lot of activity and buzz. But spring isn’t necessarily the best time to sell a home anymore.

The reality: The best time to sell is during the holidays and right after

Today, more than half of buyers aren’t married, and their decisions aren’t based upon school schedules. So spring isn’t as relevant as it used to be. Instead, the best time to sell a home is in November, December and January.

It’s a supply-and-demand issue. Most sellers assume buyers aren’t seriously looking during this prolonged holiday season. And yet, many buyers are looking at properties in person and online right up until Christmas Eve. If the right home goes on the market in mid-December, a serious buyer — and there will be a lot of them — will take note.

After New Year’s Eve, most buyers jump back into their routine with a resolve to get into the real estate market, even though many sellers wouldn’t even consider listing in January. The net effect: Savvy sellers will face less competition for a still-strong pool of buyers during this period. And that makes November-January a great time to sell.

Myth No. 2: Always start with your lowest offer

There’s no generalized strategy for making an offer on a home anywhere, ever. A seller could have overpriced or underpriced the home on purpose. Some markets may be more competitive than others. But, somehow, in the back of the buyer’s head is good old Uncle Bob saying “never offer the full asking price.” That strategy might work if you’re trying to buy a used computer on eBay. And it worked in some real estate markets years ago. But times have changed.

The reality: A low offer may get you nowhere fast

A buyer in a strong, tight inventory market today would be wasting their time making low offers right from the start. It’s likely a home that’s priced right and shows well can receive multiple offers, sometimes even over the asking price. In this environment, constantly throwing in low offers because that’s what your Uncle Bob advised you to do will likely lead to disappointment. Instead, work with a good local real estate agent to understand the market. You’ll quickly learn after a few weeks on the open house circuit (and maybe a disappointment or two) that starting low may not get you anywhere.

Myth No. 3: A cash offer trumps all

There’s an assumption that a seller, considering two different offers, will always go with the cash offer because there’s less risk. As a result, many buyers who hear they’re competing with a cash offer assume they won’t get the home. They may not even make a formal offer. At the same time, many cash buyers assume that because they’re paying cash, they can make an offer below the asking price, and it will likely be accepted.

The reality: A savvy seller may be more tempted by a solid financed offer

Consider a seller with a home priced at $399,000. The seller receives two offers: One is a cash offer of $375,000. The other is an offer for the full asking price, with 25 percent down, a bank pre-approval letter and swift contingency periods.

A good buyer’s agent, upon learning their client is competing with a cash offer, will arm the seller with lots of data supporting their client’s finances, such as a credit report and verification of income or assets. The agent might even arrange a call between the seller and the buyer’s lender.

Learn your market

When you become a buyer or seller, especially for the first time, the most important thing you can do is learn your market. Talk to a savvy local agent, and don’t make assumptions based on what you think you know. Real estate is local. Every market is different, with its own customs. If you believe there are general rules for real estate strategy that apply everywhere, anytime, you’ll likely be fooled — not only in April, but every other month of the year.

Livermore chic!

Livermore: Hottest Neighborhood Of 2013 In Northern California

Robin Wilkey | Huffington Post | January 22, 2013 | link

Livermore

Ladies and gentlemen, the results are in. Real estate brokerage firm Redfin has analyzed its facts and figures. It’s made a list, checked it twice and finally revealed the hottest neighborhoods of 2013.

And leading the local pack, the most desirable neighborhood in Northern California is…Livermore?

Livermore. Not the Dogpatch or Mission Creek; not West Oakland or even the Western Addition, but Livermore. As in windmills and suburbs and cows and “the other” wine country.

Surely us snobby San Franciscans have missed the memo on the blossoming cultural hub that is Livermore, California. Is it the restaurant scene? The arts? We went to a wedding there once, and we hear their lab is famous. At least they have a Patxi’s?

San Francisco did get a nod for the Mission District: home of Dolores Park, several Michelin stars, a cultural mecca and some of the best bars in the state. But the neighborhood didn’t hit the list until the number nine spot. (Was it something we said?)

Redfin CEO Glenn Kelman shed some light on the subject:

The housing market may be recovering nationwide, but the reality on the ground is sometimes more complicated than that. For 16 markets across the country, Redfin’s local real estate agents collaborated with our analytics team to identify the neighborhoods where we expect prices to rise the most this year, based on activity from about 10,000 active homebuyers, and data from more than more than 130,000 listings. The results surprised us: the hottest neighborhoods aren’t the well-known bastions of privilege. They’re once-gritty urban areas and far-flung suburbs with school districts on the rise. This is the surest sign that the recovery is broadening, and that home-buyers are venturing out to once-marginal areas hit hard when the bubble burst.

Los Angeles’ Highland Park led the country in hotness, with a huge 2012 jump in both home sales and price. And sure enough, Livermore wasn’t far behind, clocking in at number five.

Looks like it’s time for a Bay Area road trip?

Check out which other neighborhoods made the list across the country:

All the single ladies…

A Growing Segment of Buyers: Female Baby Boomers

Daily Real Estate News | Monday, April 15, 2013 | link

Single women make up the second largest segment of home purchases, with one out of every five homes purchases by a single woman, according to the National Association of REALTORS®. With more than 25 million single women over the age of 45 — whether never married, divorced, or widowed — it is making up a growing demographic, according to a recent report by FOX News.

“Single women see homes as more than just a place to live, it’s a symbol of success, and provides roots and security,” says author Jan Cullinance, author of the AARP book The Single Woman’s Guide to Retirement.

These single buyers tend to look for a home that is low-maintenance, with a sizable kitchen, walk-in closets, laundry near the master bedroom, and universal design principles to allow aging in place, Cullinance says.

Some builders are reportedly adding two master bedrooms to help accommodate the 40 percent of single women who choose to have non-romantic roommates, according to AARP.

Some single boomer women are also choosing cohousing communities, which are known as CCRCs or continuing care retirement communities. These communities allow you to progress from independent living to assisted living to skilled nursing care on the same campus, Cullinance says.