Realty Reality

Friday, November 14, 2008

Strengthening Your Personal Finances: Some Guidelines

1) Review Your Credit History

Many of us never bother to check our credit score or review our credit history unless we're preparing to apply for a loan, but it doesn’t hurt to examine your credit history at any time to check for potential errors. Check for any incorrect or outdated information, and dispute anything that is inaccurate. Resolving incorrect or incomplete information may take time, so it pays to address the issue directly rather than risk affecting any potential credit needs in the future.

2) Are You "In the Red"?

Are you spending more money than you're earning on a monthly basis? The variety and ease of credit has helped many of us lose site of the bottom line. Evaluating your cash flow is the first step towards realizing stronger financial footing.

3) Create an Itemized Budget

Once you've established your overall expense to income ratio, create a detailed, itemized budget of your monthly expenses if you don’t already do so. When calculating expenses that can fluctuate from month to month (such as the cost of gas, groceries or energy bills) be conservative and round up. Always be honest about the expenses you see from month to month – after all, you'll only be cheating yourself on anything you "fudge". Seeing your actual expenses on paper makes it far easier to decide what is necessary and what can be cut.

4) Trim Excess Spending

With your monthly budget in hand, you're now equipped to start reducing spending. Some experts will tout the need to avoid "large expenses" such as big screen TVs, new cars or big vacations. While minimizing spending splurges is obviously prudent in tougher times, it's unrealistic to think that most consumers will be able to save thousands of dollars from their monthly budget by crossing off one or two purchases (those of us who don’t buy an iPod-a-month, anyway).

Generally speaking, cutting spending is a more practical matter of determining what you don't really need or need as often. For example, if you typically go out to eat two times a week, consider cutting that in half. Keep an eye on your buying habits at the grocery store, which can be an easy trap for expensive, unnecessary "impulse" buys. Augment your entertainment budget by renting music and movies from your local library. The little steps you take here and there will add up to noticeable monthly savings.

5) Minimize High Interest Debt

Unlike home or student loans which have lower interest rates, the high interest rates of credit cards make carrying a large balance a financial burden. Avoid carrying any sort of significant balance on a credit card whenever possible – you want to (at most) carry a balance that remains less than 25 percent of the maximum avilable credit limit.

Have a Payment Plan – Making only the minimum required payment is not a realistic strategy for resolving credit card debt. Instead, set a goal date for when you want your card paid off and budget out payments accordingly. If you have multiple cards, pay off the credit card with the highest interest rate first. Once the first card is paid off, roll the amount you were paying on that card into the payment plan for the next card with a balance, and so on.
Pay Attention to Changes in Interest Rates – Credit card companies are required to provide you notice of any changes in the terms of your contracts, but often consumers toss these notices tossed aside as "just more junk". Changes in the interest rate or minimum monthly payment can significantly affect both your payment plan and the urgency for paying off the balance. Make sure to always carefully review any correspondence from your credit card company.
Avoid Using Credit – Ideally, your credit card should only be used in the event of an emergency such as an expensive repair or unexpected medical expense. Avoid using your credit card for routine purchases such as groceries, gas or bills. If you're planning a vacation, save the necessary amount of money and use a debit card or traveler's checks when on the road.

6) Have an Emergency Reserve

While it’s not necessary to start stuffing hundred dollar bills under your mattress (the Federal Deposit Insurance Corporation now insures savings and checking accounts at banks and savings & loans for up to $250,000, making banks a perfectly safe place to store your money), having easy access to a store of liquid assets is important. Ideally a "rainy day fund" should amount to several months worth of monthly budget and should be in an accessible account (rather than tied up in a bond, line of credit, etc).

7) Invest in Your Company Retirement Account

Many individuals make the basic mistake of not contributing to their employer-provided retirement account. Almost all companies who provide a retirement plan will match their employees' contributions up until a given threshold (a percent of your annual income). By not putting at least enough money into your retirement account to receive matching funds from your employer, you are essentially agreeing to leave available funds (between 3 to 5 percent of your annual pay) on the table.

8) Conserve Energy

The volatility of energy markets can easily result in fluctuating utility bills that leave homeowners in the lurch. To minimize the unpredictable impact energy has on your budget, make a point of conservation:

Turn the thermostat down 2-3 degrees – A little mild discomfort will be offset by far greater energy savings.
Wear warmer clothing at home during the winter – You may prefer to roam around in your favorite t-shirt and shorts combo, but dressing the season will make it easier to scrimp on use of the heating system. Besides, the "bundled" look is in for the fall and winter months anyway.
Program your thermostat – avoid running your heating while away at work or asleep. If you don't already have a programmable thermostat, make a point of manually turning off/down the heat while away.
Save gas by combining errands – You can spend a lot of fuel money by running errands one day at a time. Instead, combine those drive-around chores whenever possible to economize gas.
Update your home's weather-stripping – Replacing cracked or worn weather-stripping around doors and windows is relatively inexpensive, and can greatly impact your home's heating efficiency.

The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Thursday, November 13, 2008

Mortgages Today: What to Know

With so much changing in the real estate and financial markets in recent weeks, many potential buyers are looking for answers. If you're currently shopping around for a mortgage, here is some information to consider.

Rates Remain Low

The federal government's recent backing of mortgage giants Fannie Mae and Freddie Mac has helped re-assure financial markets about the stability of the mortgage industry, and as a result already-favorable rates have dropped even further.

Interest rates on traditional 30 year fixed rate mortgages dropped by between .3 and .5 percent in the days following the news of the government bailout. Some analysts believe that rates will continue to drop, particularly if the government reduces or eliminates some of the fees that Fannie Mae and Freddie Mac currently charge lenders.

Today's Loans Require Extensive Documentation

Interest rates remain very favorable for buyers, but obtaining a home loan is not as easy as it has been in recent years – even for buyers with good credit. Some lenders had previously been amenable to approving buyers for a loan based on either basic income documentation, or in rare cases, no documentation at all. Today, lenders are carefully scrutinizing the income and credit situations of all loan applicants.

For the best chance at getting the loan you want, make sure to provide complete financial documentation, including:

-Completed federal tax returns for the previous three years.
-One to two month's worth of pay stubs
-All W-2 forms for each person who will be named on the loan
-Contact information of your supervisor or human resources manager, to confirm employment
-Two to three statements for every bank account, 401(k), IRA, or other retirement account that you have.
-Addresses and account numbers for any open forms of credit in your name.
-Down Payments Grow

On the flipside of lower loan rates, some banks are raising the minimum down payment required in order to secure a loan. The existence of the once-popular "no money down" mortgages has already all but disappeared this year. Today, even homeowners able to put down 10 percent of the home's purchase price may find difficulty securing a loan product.

The reason: banks concerned over soften markets are attempting to limit their exposure. As a result, many are already adopting guidelines that Fannie Mae has indicated it would apply in 2009. Chief among those guidelines is the requirement that homeowners put down 15 percent of the home's purchase price.

Wednesday, November 12, 2008

Home Safety Council® Research Reveals Few Families Take Action to Prevent Falls – the Leading Cause of Home Injury

NATIONAL NONPROFIT URGES CAREGIVERS TO PROTECT OLDER ADULTS AND CHILDREN - THE AGE GROUPS AT MOST RISK

Falls are the leading cause of home injury and injury-related death in the U.S. However, new research from the Home Safety Council (HSC) indicates only 25 percent of adults have taken any action at all to prevent injuries from falls in and around their homes. In particular, by failing to take critical falls-prevention measures, caregivers are leaving their loved ones at serious risk for the nearly 5.1 million injuries and close to 6,000 deaths that occur from falls in the home on average each year.

To help raise awareness of this important public health problem, HSC is encouraging families to follow a few simple safety steps to protect against falls in each area of the home. HSC also reminds caregivers to pay particular attention to protecting those most vulnerable to fall injuries – young children and older adults. HSC research shows that children younger than age 5 and adults age 65 and older consistently experience the highest rates of fall-related injuries at home.

“It’s a grave concern that the majority of caregivers fail to recognize falls as a serious and potentially life-changing home danger,” said Meri-K Appy, president of the Home Safety Council. “We want people, especially those caring for children and older adults, to understand that making a few simple behavioral changes and inexpensive home modifications can protect their loved ones against falls. This is critical from early childhood to later in life – and all the years in between.”

The Home Safety Council’s new interactive safety destination - MySafeHome.org - is an online resource available to help adults identify common injury dangers throughout the home, including falls. The site offers the opportunity to explore a virtual home to learn about the safety actions and technology that can protect against the leading causes of injury in every area of the home, indoors and out. To help caregivers keep family members safe during each phase of life, MySafeHome.org will soon include special sections targeted to new parents and caregivers of older adults. MySafeHome.org also offers one-click access to simple, straightforward tips and checklists to help families take a room-by-room approach to safeguarding against home injury. Prevent Falls among Older Adults Older adults experience an average of more than 4,700 fall-related deaths and 1.5 million nonfatal fall injuries each year. Despite these statistics, HSC research polling adults in top U.S. cities shows families are not taking the proper steps to prevent falls among older adults. In fact, although the vast majority of respondents have friends and/or family members who are 65 years of age or older (78 percent), only slightly more than half (51 percent) have talked with them about the importance of falls prevention.

”We urge caregivers of adults to first take action to prevent falls in their own homes,” says Appy. “That way, the adults in their care won’t view safety improvements as a consequence of aging. The same safety precautions that can help keep older adults safe can protect the entire family.” HSC recommends the following falls prevention steps for the areas of the home where falling injuries are most common.

Stairways/Walkways:

- All stairs and steps should be protected with a secure banister or hand-rail on each side that extends the full length of the stairs.
- Make sure all porches, hallways and stairwells are well lit with a bright light at the top and bottom of stairs. Use the maximum safe wattage in light fixtures.
- Use nightlights to help light hallways, stairwells and bathrooms during night-time hours.
- Keep stairs, steps, landings and all floors clear. Reduce clutter and safely tuck away telephone and electrical cords out of walkways.

Bathroom:

-Use a non-slip mat or install adhesive safety strips or decals in bathtubs and showers. If you use a bath mat on the floor, choose one that has a non-skid bottom.
-Install grab bars in bath and shower stalls. Do not use towel racks or wall-mounted soap dishes as grab bars; they can easily come loose, causing a fall.
-Keep the floor clean and dry. Promptly clean up grease, water and other spills.
-If you use throw rugs in the bathroom or anywhere your home, place them over a rug-liner or choose rugs with non-skid backs to reduce your chance of slipping.

Ladder Use:

-Always use sturdy step stools with hand rails when climbing is necessary.
When climbing on a ladder is necessary, always stand at or below the highest safe standing level. -For a stepladder, the safe standing level is the second rung from the top, and for an extension ladder, it's the fourth rung from the top.

Protect Children from Falling Dangers

Every parent wants their home to be a warm and safe environment where children learn and grow. An active child naturally climbs, crawls and rolls– and parents and other caregivers need to take precautions to make sure curious children avoid injuries. From the nursery to the stairway and even outdoors on the playground, children are at alarming risk for fall injuries. In fact, falls are the leading cause of nonfatal home injury for children from birth through age 14.

Consider the following safety tips to protect your child from falls:

Nursery:

-Be aware that conventional window screens are not designed to prevent a child’s fall from a window.
-Install specially designed window guards on upper windows with a quick-release mechanism so that they can be easily opened by an adult in a fire emergency.
-Never leave young children unattended near open windows and move furniture away from windows in children’s rooms to prevent them from reaching windows.
-Always use safety straps on high chairs, changing tables and strollers.
-Wipe up spills when they happen.

Stairway/Walkway:

-Use safety gates at the tops and bottoms of stairs. For the top of stairs, gates that screw to the wall are more secure than “pressure gates.”
-In homes with children, make sure toys and games are not left on steps or landings.
-Do not allow children to play on stairs, balconies or landings.

Playground:

-Cover areas under and around play equipment with soft materials such as hardwood chips, mulch, pea gravel and sand. Materials should be nine to 12 inches deep and extend six feet from all sides of play equipment.
-Check equipment for signs of deterioration or corrosion including rust, chipped paint, splitting or cracked plastic components or loose splinters.
-Avoid putting play equipment close together. For example, stationary climbing equipment should have an uncluttered fall zone of at least six feet in all directions of equipment.
-Slides and platforms for climbing equipment should not exceed heights of six feet for school-age children or four feet for pre-school children.
-Avoid elevated platforms, walkways or ramps that lack adequate guardrails or other barriers.
-Watch for possible tripping hazards such as rocks and roots. Clear this debris from your child's play area.
-Always supervise children when they are using playground equipment.

Source: HSC

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

HUD Issues New Mortgage Rules To Help Consumers Shop For Lower Cost Home Loans

New 'Good Faith Estimate' will help borrowers save nearly $700

WASHINGTON - For the first time in more than 30 years, the U.S. Department of Housing and Urban Development(HUD) today issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.

In announcing HUD's final changes to the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA), HUD Secretary Steve Preston said that changes in the housing market and increases in home foreclosures demands action. (Read Preston's remarks)

"It has been a long road but today we can finally announce a better way to buy homes in America," said Preston. "Consumers need and deserve to know what they're getting themselves into before they sign on the dotted line. After carefully considering the concerns of consumers and the different businesses in the housing sector, we have developed an approach that empowers the average family to shop for the most appropriate loan to meet their needs."

Last March, HUD proposed reforms to the longstanding regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) by improving disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. Last May, HUD extended the rule's comment period to June 12th to allow for more opportunity for comment on the Department's proposed GFE form.

Brian Montgomery, HUD's Assistant Secretary of Housing, Federal Housing Commissioner, said, "We have carefully considered the concerns expressed from every corner of the mortgage market in developing this rule. I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don't understand all the fine print of their mortgages and this, in many respects, is at the heart of today's mortgage crisis."

Since 1974, little has changed about the process Americans endure when they buy and refinance their homes. Now, HUD's final reform will improve disclosure of the key loan terms and closing costs consumers pay when they buy or refinance their home.

HUD received approximately 12,000 comment letters following the proposal of its new RESPA rule. In considering those comments, the Department made considerable modifications to its proposal. For example, HUD originally proposed that settlement agents read a closing script at the closing table and that a copy be provided to borrowers. HUD ultimately discarded the script in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final loan terms and closing costs with those listed on their Good Faith Estimate.

Most industry commenters said HUD's proposed four-page GFE was too long. HUD shortened the GFE form to three pages including an instructional page to help borrowers understand their loan offer. HUD continues to believe that consumers need to be aware of the key aspects of their loan as well as associated settlement costs.

HUD agreed with many commenters who suggested the new GFE allow consumers to compare their estimated closing costs with the actual costs included on their HUD-1 Settlement Statement. To facilitate comparison between the HUD-1 and the GFE, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in very much the same manner as many of the commenters suggested.

HUD will require the new standardized GFE and HUD-1 beginning January 1, 2010. To view these documents, click on the following links:

HUD's standard Good Faith Estimate (GFE)
HUD-1 Settlement Statement

###

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. For more information about FHA products, please visit www.fha.gov.

Fact Sheet on HUD's final RESPA Rule

For the first time ever, HUD will require mortgage lenders and brokers to provide borrowers with an easy-to-read standard Good Faith Estimate (GFE) that will clearly answer the key questions they have when applying for a mortgage including:

- What's the term of the loan?
- Is the interest rate fixed or can it change?
- Is there a pre-payment penalty should the borrower choose to refinance at a later date?
- Is there a balloon payment?
- What are total closing costs?

HUD estimates that by improving upfront disclosures on the GFE, and limiting the amount estimated charges can change, consumers will save nearly $700 in total closing costs.

Based on substantial public comment, HUD withdrew a proposed requirement that closing agents read and provide a ‘closing script.' Instead, to borrowers in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final closing costs and loan terms with those listed on the GFE.

HUD's new Good Faith Estimate has been reduced from four to three pages, including an instructional page to help borrowers better understand their loan offer. In addition, the GFE will consolidate closing costs into major categories to prevent junk fees and display total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. HUD will specify the closing costs that can and cannot change at settlement. If a fee changes, HUD will limit the amount it can change.

To help borrowers compare their Good Faith Estimate with their HUD-1 Settlement Statement, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in the same manner many commenters suggested.

HUD will require lender payments to mortgage brokers (often called Yield Spread Premiums) to be disclosed in a more meaningful way. These payments are directly dependent on the interest rates that consumers agree to. To ensure that HUD's new requirement will not create a consumer bias against brokers, the Department did rigorous consumer testing and found the new Good Faith Estimate helped consumers to select the lowest cost loan nine-out-of-10 times, regardless of whether the loan was originated by a lender or a broker.

Loan originators will be required to provide borrowers their Good Faith Estimate three days after the loan originator's receipt of all necessary information. To facilitate shopping, loan originators could not require verification of GFE information (tax returns etc.) until after the applicant makes the decision to proceed.

HUD will allow lenders and settlement service providers to correct potential violations of RESPA's new disclosure and tolerance requirements. Lenders and settlement service providers will now have 30 days from the date of closing to correct errors or violations and repay consumers any overcharges.

The new, standardized GFE and revised HUD-1 will not be required until January 1, 2010.

Tuesday, November 11, 2008

Community Supported Agriculture: Powerful Produce

For most consumers, the only brush with truly fresh produce is when making a trip to the local farmer's market. Unless you're lucky enough to have both a patch of land suitable for a garden and the requisite green thumb, you're likely more used to the unpredictable world of supermarket produce. This predicament has spawned an innovative system that connects normal consumers with small family farms in your area. This increasingly popular strategy is known as "Community Supported Agriculture".

What is Community Supported Agriculture?

A relatively new approach to agriculture, Community Supported Agriculture dates back 30 years ago to Japan. A group of women, worried about increasing food imports and dwindling local farms started a direct growing and purchasing agreement between themselves and farms in their area. The relationship was called "teikei" in Japanese, which translates to "putting the farmers' face on food." The idea made its way first to Europe and eventually to the United States. The term "Community Supported Agriculture" was coined in 1985 at Indian Line Farm in Massachusetts. Today there are over 2000 CSA farms throughout the United States and Canada.

From the Fields to Your Front Door: How it Works

Community Supported Agriculture consists of a community of individuals who pledge to financially support a farm operation in exchange for a share of the crop in return. The growers and consumers thus provide mutual support and share the risks and benefits of food production. Typically, a grower draws up a budget reflecting production costs for the upcoming growing season. This budget is then divided by the number of people for whom the farm will provide, which in turn determines the cost of the individual share (each share is usually designed to meet the needs of a family of four, although some CSA's differ). Members then sign up and purchase their shares (either in one lump sum or in installments throughout the growing season).

In return, they receive shares in the farm's bounty throughout the growing season, as well as satisfaction gained from reconnecting to the land and participating directly in food production. Members also share in the risks of farming, including poor harvests due to unfavorable weather or pests.

In most cases, each CSA member receives a weekly drop-off of one box of selected produce. Typically a wide variety of herbs and vegetables are included (particularly with farms that utilize integrated cropping and companion planting), and some farms may provide flowers, fruits, eggs, milk or meats. Share prices vary based on location, quantity and selection of food products, and length of the growing season. Many CSA farms practice organic farming techniques.

Why Go Local?

In addition to the increased connection between farmers and consumers, CSA's
provide tangible benefits for farmer's and "shareholders" alike:

Shareholders receive the freshest of produce each week
CSA members often receive farm news and recipes with each box
Most CSA farms offer tours of the farm and hands-on learning opportunitues
Direct relationships with consumers give farmers the fairest return on their products
Buying locally helps reduce the environmental impact associated with shipping and storage
Buying from local farms helps sustain and maintain regional food production
By having a guaranteed market, farmers can focus more time and energy on their crops (as opposed to sales and marketing)

For more information, visit http://www.localharvest.org/csa

Monday, November 10, 2008

HUD Announces New, Permanent FHA Mortgage Loan Limits

WASHINGTON - U.S. Department of Housing and Urban Development(HUD) Secretary Steve Preston today announced the new Federal Housing Administration (FHA) mortgage loan limits for single-family homes as prescribed by the Housing and Economic Recovery Act of 2008.

Beginning January 1, 2009, FHA will insure single-family home mortgages up to $271,050 in low cost areas and up to a maximum of $625,500 in high cost areas. The February 2008 Stimulus Package temporarily raised the FHA maximum to $729,750 through December 31, 2008. The new $625,500 maximum, however, represents a significant increase over the $362,790 limit that was in effect prior to the Stimulus Package.

"In today's environment where access to credit is being restricted, we need to make mortgage loans readily available to households throughout the country, and especially in high-cost areas," said Preston. "These new loan limits will ensure FHA can to continue help struggling homeowners refinance into safe, affordable government-insured loans, and allow many first-time buyers take advantage of today's buyers market"

For several years, FHA's loan levels were below the cost of the average home in communities across the nation. As a result, families who needed FHA mortgage insurance to qualify to buy a home were effectively locked out of the process. In some cases, borrowers turned to exotic subprime loans.

FHA mortgage insurance makes home financing more available to low-income and first time homebuyers. This is because the mortgage is backed by the full faith and credit of the government, freeing lenders from assuming the risk of default.

Higher FHA loan limits do not cost the government any money because the FHA Insurance Fund is fully supported by premiums paid by borrowers who receive FHA-insured mortgage loans.

The Housing and Economic Recovery Act pegs the national conforming mortgage loan limit to a house price index chosen by the new Federal Housing Finance Agency (FHFA). For 2009, the national conforming limit will remain at the current level of $417,000.

The Act says that the new FHA loan limits will be set at 115 percent of the median house price in a given area, as determined by HUD, but can not be lower than 65 percent of the conforming loan limit (the national floor). Also, the FHA mortgage limit cannot exceed 150 percent of the national conforming loan limit (the national ceiling).

Home Equity Conversion Mortgages

The Act also pegs the national mortgage limit for FHA-insured reverse mortgages to the national conforming loan limit. The FHA product known as the Home Equity Conversion Mortgage (HECM) will therefore have a national mortgage limit of $417,000. Unlike the new forward mortgage loan limits, the new HECM loans limits are effective on loans insured or after November 6, 2008. This is the first time that a single limit applies to these mortgages nationwide. As in previous years, the special exception areas of Alaska, Hawaii, Guam, and the Virgin Islands may have higher loan limits. Starting in January 2009 counties in those areas may have loan limits of 115 percent of area median prices, where that amount is above $417,000, up to a ceiling of $625,500.

Reverse mortgages allow homeowners age 62 and older to borrow against the value of their homes without selling them. Homeowners can select a lump-sum payment, monthly payments or tap into a line of credit. No repayment is required as long as a homeowner lives in a home with a reverse mortgage. The reverse mortgage is repaid, with interest, when a homeowner sells the home or dies.

HUD will inform mortgage lenders and brokers of the new limits through a mortgagee letter posted on www.hud.gov and www.fha.gov.

HUD is making available comprehensive listings of the new loan limits in all counties throughout country. Downloadable files are available for FHA Forward Loans, FHA HECM loans, and Fannie Mae and Freddie Mac purchases on the HUD website. The limits are determined by the county in which the property is located, except that for properties located in metropolitan statistical areas the limit is determined by the county with the highest median home price within the metropolitan area.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

Saturday, November 08, 2008

NAR Home Buyer and Seller Survey Shows Rise in First-Time Buyers, Long-Term Plans

The latest consumer survey of home buyers and sellers shows first-time buyers have risen in market share and plan to own their homes longer than buyers in the past. The study was released here today at the 2008 REALTORS® Conference & Expo (NAR).

The 2008 National Association of Realtors® Profile of Home Buyers and Sellers is the latest in a series of large national NAR surveys evaluating demographics, marketing, preferences and experiences of home buyers and sellers.

Lawrence Yun, NAR chief economist, said a higher share of first-time buyers makes perfect sense, and it’s a trend he expects to grow. “First-time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home,” he said. “Given low home prices, plentiful supply and affordable interest rates, it’s been an optimal time for entry-level buyers with a long-term view.

“Considering the temporary first-time buyer tax credit and improvements to the FHA loan program, we expect stronger entry-level activity as the flow of credit improves – that, in turn, should free more existing owners to make a trade in 2009.”

The number of first-time buyers rose to 41 percent from 39 percent of transactions in last year’s survey and 36 percent in 2006. “Although modest, this is a meaningful gain for the 12-month period ending at the close of June, and more recent independent data show a stronger uptrend in first-time buyers who are helping to reduce excess inventory,” Yun said.*

According to the NAR study, the median age of first-time buyers was 30, down from 31 in 2007, and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007.

The median downpayment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. “The study covers transactions through the middle of 2008, so we can assume the downpayment numbers have shifted recently because credit tightened and no-downpayment loans all but disappeared around the close of the survey,” Yun explained.

Of first-time buyers who made a downpayment, 69 percent used savings and 26 percent received a gift from a friend or relative, typically from their parents. Another 7 percent received a loan from a relative or friend, while 16 percent tapped into a 401(k) fund, stocks or bonds. Ninety-two percent chose a fixed-rate mortgage.

NAR 2008 President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said consumers rely heavily on the expertise of real estate agents to navigate the market. “This is the biggest transaction most people are ever involved in, so the qualities they’re looking for in a real estate agent include reputation, honesty, integrity and knowledge of the market,” he said. “Both buyers and sellers want agents to provide context, advice and know-how. The vast majority would use their agent again or recommend their agent to others.”

Only 1 percent of sellers chose an agent based on his or her commission. Forty-six percent report the real estate agent initiated a discussion of compensation, while 24 percent of sellers brought up the topic and the agent was willing to negotiate the commission or fee. Thirteen percent of sellers did not know commissions and fees are negotiable.

Nearly nine out of 10 home buyers and sellers would definitely or probably use the same agent again or recommend him or her to others, consistent with the 2007 findings. The survey shows that 81 percent of home buyers and 84 percent sellers used a real estate professional, comparable to 2007.

Thirty-eight percent of sellers found their agent as a result of a referral, while 26 percent used the agent in a previous home purchase. Similarly, 43 percent of buyers relied on referrals to find an agent, while 18 percent of repeat buyers used an agent from a previous transaction.

The percentage of buyers who purchased a home in foreclosure jumped to 6 percent of transactions in the 2008 survey from 1 percent in 2007. Another 38 percent of buyers considered purchasing of a home in foreclosure but did not, primarily because they could not find the right home.

Commuting costs factored greatly in neighborhood selection, with 41 percent of buyers saying they were very important and another 39 percent saying transportation costs were somewhat important. “Since fuel costs began rising in the latter part of the survey period, it’s reasonable to assume they’ve become even more important to home buyers since,” Yun said. “We’ve heard from our members that commuting costs are playing a bigger role in buyers’ decisions.”

Environmentally friendly features also were important, cited by 90 percent of buyers. Heating and cooling costs were of primary importance, followed by energy efficient appliances and energy efficient lighting.

Buyers searched a median of 10 weeks and viewed 10 homes. Of buyers who used an agent, 61 percent chose a buyer’s representative. Nearly nine out of 10 consider their home a good investment, and almost half see it as a better investment than stocks. Fifteen percent of buyers own two or more homes.

The typical repeat buyer was 47 years old, earned $88,200, purchased a home costing $236,000 and plans to stay in that home for 10 years. Repeat buyers made a median downpayment of 15 percent, but 10 percent paid cash for their property.

The median age of home sellers was 47; income was $91,000. Three-quarters were married couples, had been in their home for six years and moved a median distance of 19 miles. Their home was on the market for eight weeks; 5 percent of sellers who also purchased a home reported selling their home in a short sale.

Forty-two percent of sellers offered incentives to attract buyers, such as assistance with closing costs or home warranty policies. The typical home sold for 96 percent of the listing price, and 86 percent of sellers were satisfied with the selling process. Fifty-two percent of sellers were trading up to a larger home, while 22 percent were downsizing.

The study found that 81 percent of sellers used full-service brokerage, in which real estate agents provide a range of services that include managing most of the process of selling a home from listing to closing. Nine percent chose limited services, which may include discount brokerage, and 9 percent used minimal service, such as simply listing a property on a multiple listing service. All of these types of services are provided by Realtors® as well as non-member agents and brokers. The results are identical to findings in 2007 and comparable to findings in 2006.

Primarily, sellers want agents to price their home competitively, market the property, find a buyer and sell within a specific timeframe.

Home buyers are consistent in their expectations of real estate agents. Buyers thought the most important agent services are helping find the right house, and negotiating sales terms and price. Because agents often are chosen based on a referral, or were used in a previous transaction, two-thirds of buyers contacted only one real estate agent in the search process.

Buyers used a variety of resources in searching for a home: 87 percent used the Internet, 85 percent used a real estate agent, 62 percent yard signs, 48 percent attended open houses and 47 percent looked at print or newspaper ads. Fewer buyers rely on a home book or magazine, home builders, television, billboards and relocation companies. Buyers most commonly start their search process online and then contact a real estate agent.

When asked where they first learned about the home purchased, 34 percent of buyers said a real estate agent; 32 percent the Internet; 15 percent from yard signs; 7 percent from a friend, neighbor or relative; 7 percent home builders; 3 percent a print or newspaper ad; 2 percent directly from the seller; and 1 percent a home book or magazine.

Eighty-seven percent of home buyers who used the Internet to search for a home purchased through a real estate agent, in contrast with 72 percent of non-Internet users who were more likely to purchase directly from a builder or from an owner they already knew in a private transaction.

Local metropolitan multiple listing service Web sites were the most popular Internet resource, used by 60 percent of buyers, followed by Realtor.com, 48 percent; real estate company sites, 46 percent; real estate agent Web sites, 43 percent; for-sale-by-owner sites, 19 percent; and local newspaper sites, 11 percent; other categories were smaller.

Sixty-one percent of buyers are married couples, 20 percent are single women, 10 percent single men, 7 percent unmarried couples and 2 percent other. Twenty-six percent are non-white, 9 percent were born outside of the United States, and 4 percent primarily speak a language other than English.

Seventy-eight percent of all respondents purchased a detached single-family home, 9 percent a condo, 8 percent a townhouse or rowhouse, and 5 percent some other kind of housing.

Fifty-five percent of all homes purchased were in a suburb or subdivision, 17 percent were in an urban area, 16 percent in a small town, 10 percent in a rural area and 2 percent in a resort or recreation area. The median distance from the previous residence was 12 miles.

The level of for-sale-by-owner transactions was 13 percent, up slightly from a record-low market share of 12 percent in both 2007 and 2006. The level of homes sold without professional representation has trended lower since reaching a cyclical peak of 18 percent in 1997.

A large number of these properties were not placed on the open market – 45 percent were “closely held” between parties who knew each other in advance, such as family or acquaintances.

Factoring out properties that were not placed on the open market, the actual number of homes sold without professional assistance is 7 percent – the rest are unrepresented sellers in private transactions. This matches the results in the 2007 study and marks a downtrend from 10 percent sold on the open market in 2004.

The median home price for sellers who used an agent was $211,000 vs. $153,000 for a home sold directly by an owner, but there were important differences between the two. Unassisted sellers were more likely to be in a rural area or small town where sellers are more likely to know potential buyers. In addition, the home was more likely to be a mobile or manufactured home, and the owner’s income was lower than that of sellers using agents.

The most difficult tasks reported by unrepresented sellers are selling within the planned length of time, getting the right price, preparing the home for sale, and understanding and performing paperwork.

NAR mailed an eight-page questionnaire in August 2008 to a national sample of 133,000 home buyers and sellers who purchased their homes between July 2007 and June 2008, according to county records. It generated 10,053 usable responses; the adjusted response rate was 7.9 percent. All information is characteristic of the 12-month period ending in June 2008 with the exception of income data, which are for 2007. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent.

The 2008 National Association of Realtors® Profile of Home Buyers and Sellers can be ordered by calling 800-874-6500, or online at www.realtor.org/newresearch. The cost is $50 for NAR members and $125 for non-members.

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*A separate report by HouseHunt, Inc., based on a survey of 2,000 real estate agents, shows 50 percent of homes purchased in the third quarter of 2008 were by first-time buyers.

Thursday, November 06, 2008

More Governments Coming to Evicted Renters' Rescue

Governments are stepping in to protect renters who find themselves evicted when the property they rent is foreclosed. (Alan Gomez, October 27, 2008, USA Today.com)

More Information . . .

Saturday, November 01, 2008

Real Estate Cyber Tips - November 2008

CYBER MAGIC TRICKS

TRICK#1

3D For Everyone!
Thinking of building that deck? How about an attractive tool house – or pool house? Whatever chore you envision, you can now envision it better in 3D. This neat program from Google is designed to help you easily look at whatever you can imagine done up in an impressive 3D package -- and have fun while you're doing it. All of this comes to you compliments of the good folks at Google.
Click Here for This Cyber Trick

TRICK#2

Here You Were In 1955!
How would you like to see how you'd fit in a few decades ago? Here's a fun place to "picture yourself" in any year you choose – between 1950 and 2000 You (a picture of you) will be stepping out with the current hairstyle and fashions for that year while listening to the music of that era. You get all this along with a running fashion commentary. Remember when --fun and nostalgic!
Click Here for This Cyber Trick

GREAT PLACES!

GREAT PLACE #1

Where'd That Phrase Come From?
"Let the cat out of the bag - Bats in the belfry - As happy as a clam - Think outside the box." Ever wonder how phrases like this originated? These are just a few of the thousands of phrases that this great place tracks back to their origin. Because this site is a product of British genius you may see a few that are unique to our friends across the pond but with this storehouse of information you'll certainly be able to "Mind your Ps and Qs"!
Click Here for This Great Place

GREAT PLACE #2

Free Up Your Memory!
Sometimes it’d be nice to clear our heads of overburdened memories – and that's a tough chore. But with your computer it can be as easy as pie! (See Great Place #1 :-) Here’s a mini program that will free up lots of memory whenever you feel your computer getting sluggish. It’s easy to use yet highly customizable by computer novices and experts alike. These folks certainly learned how to "keep it simple" (See Great Place #1 :-) And best of all it’s on the house. Guess there is a free lunch! (Aaarggh!)
Click Here for This Great Place

The information contained in Real Estate CyberTips is believed to be true and correct but no warranties or guarantees are provided and readers should rely solely on their own information and advisors in connection with any sites, services or products reviewed. All content Copyright 2008, RECS. All rights reserved.

Visit my web site for additional services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).

Friday, October 31, 2008

HUD Modernizes Online Guide For Avoiding Foreclosure

WASHINGTON - Do you need help finding a housing counselor or contacting your lender? Or do you want more information about mortgage refinance options offered by HUD's Federal Housing Administration (FHA)? Americans are able to do all this and more thanks to an updated website developed by the U.S. Department of Housing and Urban Development. The Guide to Avoiding Foreclosure is a one-stop-shop designed to educate Americans about the most current housing information and resources HUD has to offer. The updated site has a number of helpful resources particularly important for Americans at risk for losing their homes.

"The Guide to Avoiding Foreclosure is an easy-to-use site allowing users to quickly search information specific to their needs," said Preston. "The streamlined website educates individuals on the many ways HUD can assist them through these trying times and help them hold on to their homes."

In an easy-to-find location on the front page of HUD's website, the Guide to Avoiding Foreclosure links homeowners to:

Housing counselors
Lenders
Local resources in their states
Foreclosure process and alternatives
Refinancing options such as:
- FHASecure
- HOPE for Homeowners

Located at www.hud.gov/foreclosure, the Guide to Avoiding Foreclosure is also featured on the U.S. Department of Commerce website, www.economicrecovery.org, as an in-depth resource to help Americans keep their homes, find jobs and protect their savings.

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HUD is the nation's housing agency committed to sustainable homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov, www.hud.gov/foreclosure and espanol.hud.gov.

Source: HUD No. 08-171

Thursday, October 30, 2008

Relief Nears for 3 Million Strapped Homeowners

The U.S. Government's latest plan to aid struggling homeowners is close to being finalized. This plan could move as many as three million people into more-affordable mortgages. (Michael R. Crittenden and Jessica Holzer, October 30, 2008, WSJ.com)

More Information . . .

Visit my web site for real estate services and support: LawrenceYerkes.com [NJ/PA]

and visit Besthomes-NJ.com to find the latest New Jersey Real Estate property listings (Residential, Commercial, Multi-Family, Farm, Land).