Luvingmom's blog: "Real Estate"

With the messy housing market out there one of the common questions asked by homeowners and people searching for their new home is whom can I trust? It's difficult to read through all the negative stories that the media reports and the various positive spins that professionals put forth. We feel a quick summary and recap of our market here in the Treasure Valley will help shed some light on the current market. Also reviewing a few items regarding the issue of trust will help you make informed decisions Treasure Valley Market Summary Inventory: As of today there are 4398 homes for sale between $150,000 and $300,000 in Boise, Meridian, Nampa, Caldwell, Kuna, Star and Eagle. This relates to nearly 8 months of existing inventory. For homes priced above $300,000 there is approximately 13 months of inventory. What this means is that our market remains very strong for buyers looking for homes in practically all price ranges. A noticeable issue that we've brought up many times is that a large percentage of homeowners are not acknowledging the change in the market and adjusting their asking prices either too slowly or too late leading in many cases into their need for a short sale. Short Sales: Shorts sales are on the rise. A short sale occurs whenever the lender agrees to accept less than what is owed on the property. Many times a home facing a short sale isn't listed this way in the public comments. Often we have advised clients to be careful for the home was subject to a short sale. While this could be a bargain often the frustration in waiting for weeks or even months for the bank to return a final decision negates the potential savings for the buyer. Short sales aren't always the deal they seem. Why you ask? Often the homeowner owes more on the property than what other homes in the neighborhood are selling for which means the savings are eliminated. Thinking that a short sale is a guaranteed way to pick up a real bargain is not always the case. Before making any offers find out if the home is subject to a short sale, check into other listings, run comparables and by all means call an agent you trust. Foreclosures: Foreclosures are also on the rise. A foreclosed property occurs when a consumer defaults on the loan that they've taken and the bank repossess their house. Foreclosed homes often end up for auction at the county courthouse steps or one of our local title companies. Many people think they can show up and purchase the home for pennies on the dollar. The truth is that many times the bank has entered a blind bid buying the house back themselves. Remember cash or a cashier's check is needed to purchase these properties and finding amazing deals aren't plentiful during this process. When the bank purchases the property it becomes a REO (Real Estate Owned). HUD, VA & REO Properties: There's a rise in these type of homes. HUD and VA are government owned homes. The government guaranteed the home and stepped into payoff the home from the mortgagor that defaulted making them the current owner. On a HUD home generally speaking you will get a decent deal. The house may not be in great condition but the price is what is needed to recoup costs. You can find HUD and VA homes at http://www.hud.gov To make a bid on one of these homes contact your local agent. REO homes are usually contracted with agents in our area who list the homes on the MLS (Multiple Listing Service). Overpriced Homes: In cases where current homeowners owe to much on their home it maybe headed for the short sale, foreclosure or government owned process described above. Refinancing could be an option or simply discussing a new plan with the current lender may help. In many cases though the owner would like to get X for their home but X is based on 2005's higher prices and not the current value. For example in one neighborhood we follow closely the highest priced home sold in the past year was $450,000 yet there are many homes priced $490,000 and higher with similar square footage. Months have passed and whenever a new home goes on the market under $450,000 it usually sells rather quickly. The other homeowners will need to adjust or remove their home from the market. Ask your agent to see the comparables before making any offer. Building Trust Trust must be earned. There are a few things to look for when talking with people from mortgage lenders to agents and any real estate vendors you encounter. Ask questions and ask them in multiple ways. Many agents feel they are in charge but guess what they are not. We are human beings just like you, licensed to perform a service of meeting your needs and your best interests. The agent's best interests should come last! Do not feel in re-wording your questions that you are tricking the agent. What you are doing is finding out what the agent's true motivation is and once that is established then you will know if you can trust that person. This same principle applies to anyone you are looking to worth with in the future. Actions speak louder than words. Look to see if the person you contact follows through with their statements. A little slack needs to be granted for such items that may cause a delay in response such as family or previous appointments. Often agents or vendors may take a day or two instead of an hour in getting back to you but they still followed through. Managing expectations on both sides is key in establishing a working relationship. Many people look for agents with the most knowledge. However, it's not just about knowledge. It's about having the wisdom to know how to impart that knowledge to benefit the clients. Have you ever met someone with a high IQ who although they where smart they had no common sense and handled themselves and situations really poorly? We all have and that's why when looking for an agent it's not just about book smarts but it's about the heart and drive to get things done right for you. If you want to know more about us as agents feel free to email or call us with any questions. Looking for help at all just let s know. We truly are here to help our clients with all their real estate needs.

Homeowners and soon to be homeowners need to learn how to dance with each other. Whether you are thinking about buying or selling in this uncertain market please take the time to learn to dance. A key factor in any successful real estate transaction is the art of negotiations. It doesn't have to be a difficult process. It's the matter of taking the time to know when to take a step forward or take a step back and learning the steps of a graceful dance to bring the real estate transaction to a beneficial end for all parties involved. Living in a me-me society as we've come to be, people forget that their wants are not all that are involved. But there are needs on the part of buyer and seller alike that must be taken into account. You can do a 2 step and kill the transaction with ink and pen or you can do a beautiful waltz that give you a first place trophy on Dancing With The Stars. Make sure the agent you select is the star that will take the lead in guiding you through the difficult phases of negotiating a contract. Phase 1: Writing a contract and coming to acceptable terms for both parties When a contract is written you have 3 answers that you can receive a yes, a no way or a counter-offer, which means what dance shall we perform. The 2 step is when you write an offer based on fair comparables that you're agent has provided you. Despite this fair offer the seller counters for closer to the asking price expecting you to accept it without further negotiations. A 2 step will usually kill a contract. Learn to tango and hope that both agents realize that it may take 3, 4 or 5 steps to come to a melding of the minds where all parties are dancing together without stepping on each other's toes. Phase 2: You've come to an agreement, inspection has been completed and items now need to be repaired in order to continue with the dance. An inspection release has been written and presented to the seller. At this point either party can do The Bus Stop and bring the transaction to a halt; or you can do The Electric Slide and joyfully complete this phase of the purchase. Listing every single item in need of repair will usually kill a transaction. Unless you are buying a brand new home it's not necessary to ask for all the small items in need of repairs to be completed. For example new outlet covers cost $.50 to $1.00 at your local hardware store and cracks in the sidewalks can easily be filled after closing. Major items that will impact your health and/or safety should be addressed. For example foundation, roofing, plumbing, electrical and HVAC related repairs should not only be addressed, but grouped together in non-intimidating ways on the inspection release so that all parties feel comfortable and informed, helping you slide right pass these hurdles. Phase 3: The signing at title Coordinating all parties and keeping everyone patient until the documents have been delivered to title, reviewed and adjusted if needed by the escrow officer and making sure the final walk through is complete make up this graceful dip of a finale. Sometimes due to work schedules there can be some little hitches where the seller or the buyer have to adjust whom signs first. As long as all parties stay in communication this can work out smoothly ending the dance on a wonderful upbeat. We decided to write on this topic based on a few recent real life examples. We share these examples and this blog entry in hopes that it will help people in the future. Case 1: Recently on behalf of our client we made an offer and unfortunately it was killed based on the 2 step dance example. The listing agent encouraged a dance but abruptly halted it despite having actual comparables indicating a lower price that we believe the listing agent chose to psychologically dismiss. Comparables showed the home to be worth 15,000 less than the asking price. The appraisal would not have come in at the asking price and we must wonder if the agent even told her sellers this information. Case 2: One buyer's agent we worked with nearly killed a transaction by insisting on several small items being repaired in order to make her appear as a superstar, despite the items requiring little money or time. In this case the agent's ego was on the line instead of any of the client's best interests. Luckily our ability to find excellent and affordable vendors willing to step up and help the seller's family get through this process with little financial burden saved this transaction. We were able to smoothly complete what appeared to be a nightmare for the sellers. In the end it turned out to be a blessing. Case 3: As the dance was nearing end the title company found a hidden Liz Pendence (legal action pending against a property). Our clients and the listing agent started to freak out. Tami's negotiation ability kept our clients and the other agent calm. Thankfully having a great escrow officer and negotiator at the title company also contributed to the success.

Top first-time home buyer tips In a down market, they are valuable purchasers — but do research By Matt Woolsey Forbes Updated: 3:45 p.m. MT July 24, 2007 There is more to buying a home than collecting curtain swatches and making sure you've got enough moving boxes. Other, just-as-important details include calculating the cost of renting vs. owning, the quality of the local school district, legal fees, local preservation laws and signs of value in the neighborhood in which you are looking. Consider house hunters in San Diego. There, the single-family home market is experiencing a significant price correction. In 2006, the market dropped 4.5 percent. Renters pay 38 percent of the cost of an owner's mortgage payment, according to data from Torto Wheaton Research, a research firm owned by CB Richard Ellis. That's compared with 79 percent nationwide. The situation illustrates a key point. Owning a home fulfills a central element of the American Dream, but if you don't do the math, it can quickly turn into a nightmare. Take mortgage payments. During a market slide, they have high opportunity costs since home investments for the most part aren’t appreciating well. Prices across the country continued to drop last month. During May, year-over-year prices fell for the 10th consecutive month and existing home sales dipped 0.3 percent. If you've locked into a mortgage, you're paying a rate that may no longer represent your home's value. Still, there is a silver lining. In markets with excess inventory, first-time home buyers are a prized commodity, says Mark Zandi, chief economist at Moody's Economy.com. They help stabilize a market in flux. How so? National vacancy rates are at a 15-year high of 2.8 percent. For a seller, a first-time home buyer is ideal as the sale won't be contingent on the buyer selling his or her present home, an arduous task. Having the upper hand is great, but how to play it best? Do your homework. Broad pricing data won't tell you how the micro-market is performing on the corner of Elm and Main Streets. Instead, when touring prospective neighborhoods, look for signs of whether each will hold its value. Walk a five-block radius and count the "for sale" signs to get a sense of whether there is a glut of available housing. Have your agent look up how much time other neighborhood houses have been on the market and how different the current asking price is from what it was at first listed. Check the test scores of the local schools; regardless of whether you have children, future buyers will want to be in a good school district. Many strong school districts have parcel taxes, but there are almost always more potential buyers than there are homes available. Good news for when the kids go to college and you want to move away. Hire an environmental research group to do an appraisal of the neighborhood. Each state has different laws governing what sort of potential health hazards have to be disclosed and how far away those hazards have to be from the house to be considered serious. Outside health and environmental factors should be considered as important to price negotiations as interior tests for lead or structural damage. "Environmental research in commercial real estate is common practice, but for some reason people don't always do it with their homes," says Robert Barber, CEO of Environmental Data Resources. "Most of the time there's no problem, but it's worth it for the peace of mind." An environmental data firm, like Barber's, can tell you every potential concern within a six-acre circle of your lot, whether that involves a leaking gas tank, the location of a former drug lab, any possible water pollutants or logged Center for Disease Control concerns. A standard report costs between $100 and $150. If the neighborhood has a historical preservation board, figure out how much leeway they'll give you for additions and remodeling. In some areas, homeowners need to get sign-off before making any changes. This can mean limits on the color of paint or style of architecture, as well as restrictions on how big a house can become based on the size of the lot. Of course, all that means nothing if you can't afford to buy. If you're not one of the 22 percent of homeowners who receive their down payment from a family member, according to the National Association of Realtors, you can get creative. One such way to raise cash is to tap your 401(k). Many plans allow for a one-time loan up to 50 percent of the account, or up to $50,000. It won't get you a tax write-off, but you'll be repaying yourself as a lender. The risk is if you lose your job or switch jobs, in which case you have to pay the balance within 60 days or pay tax and penalties. The bottom line: Given the state of the market, first-time buyers are in prime position to snag a good deal. © 2007 Forbes.com

Realty Times Real Estate Sky Won't Fall: Here's Why Jun 07, 2007, 12:01 pm PDT Real estate hasn't made much of a case for itself lately and it's not getting much help from any of the sub industries, such as builders and mortgage makers. Just in the past few weeks, so called experts from the mortgage industry, the building industry, and the resale real estate industry have all been quoted as saying that the sky is falling. Nice job guys! And while real estate's reputation as the number one investment is on the ropes, the general media and other investment categories have stepped up their attacks on real estate value. What do you need to know? The Sky isn't falling. The real estate market always fluctuates. Real estate sales prices are largely determined by the principal of substitution and reflect the uniqueness of the property, at a specific point in time, competing against only those other similar properties that happen to be available for sale, at that point in time. If there are many similar homes available at that time, there will be downward pressure on sales prices. As an expanding population absorbs the excess, competition for a dwindling resource will cause selling prices to escalate. Real estate is unique. There's a reason that homes and real estate aren't traded like commodities on the Chicago Mercantile. They are too dissimilar. Even each tract home has a somewhat different location, orientation, lot dimension, proximity, and view. There is no bubble. The value of real estate isn't driven by speculation; it's driven by its utility. If the economy moves away, such as in the rust-belt, that utility may decline. If high paying jobs are headed into a region, the value of the scarcest of all commodities, real estate will rise. Increasing development costs absolutely guarantee that new construction will cost more than existing properties are selling for. This factor alone has caused many developers to mothball projects in the pipeline until shortages again push prices up. Value is a complicated cocktail. Assessed value, appraised value, market value, replacement value, and selling price all mean something different. When the media says that real estate values are falling, they really mean that the prices people paid for a small number of homes, last month, was less than what a different group of people paid for a different assortment the month before. There is always a baseline of demand. An increasing population must be housed. There is a natural ebb and flow, not a boom bust. At various times, demand outstrips supply; supply is increased until the surge recedes to baseline or below. There is always a baseline of mortgage defaults. There will always be unforeseen circumstances that will bring some homeowners into default. Even in good economic times. And even with good mortgage loans. In an appreciating market, they are able to sell in a short period of time. So, in most markets, foreclosure activity has been below the historic baseline. Now, it could increase, spiking a little to reflect those who can no longer survive on increasing equity and then may level out at baseline again. When the next rapid appreciation cycle begins, and it almost assuredly will, rates may fall back below the newly adjusted baseline. There is no risk. Save the term risk for high stakes poker in Vegas. Buying real estate isn't inherently risky. But it isn't a get-rich-quick scheme, either. It's a formula for building long term wealth. Real estate is a great way to build wealth. You have to live somewhere. If you rent, you are making some or all of someone else's mortgage payment. But even if you have to work two jobs and barely scrape by to make your own mortgage payment, you are building equity that over time will be quite substantial. So, perhaps, don't believe every "the sky if falling" report or article. Educate yourself on the market and happy wealth homeowning!

Agents are suppose to adhere to an established defined set of behaviors in order to meet the Real Estate needs of the general population in the state in which we are licensed, and set forth by the National Association of Realtor. I felt that I needed to share a very basic behavior that agents should adhere to: A) If your home is currently listed with an agent no other agent is suppose to solicit you to cancel your listing. B) If you are currently working with an agent to purchase a home and have signed a buyers representation agreement NO other agent should be showing you homes. An agent that attempts to ruin the client agent relation between you and your agent does not have your best intrest at heart they are only thinking of the almighty dollar. If you seriously have an issue you can't resolve with your agent ask them to cancel your contract and then interview new agents. Do not allow unscrupulous agents to try to discredit your agent. If you do not live in Idaho and are not working with a realtor I have an extensive network of wonderful ethical agents who would be more than happy to help you Internationally as well as within the USA. If you do live in Idaho and need a Realtor or have real estate related question I am more than happy to help you in any way I can. Best of wishes to you all Tami L. Merriam