If your home will be for sale this winter, it is important to master certain seasonal issues that are less significant or even non-existent at other times of the year. Here are 10 bits of sage advice that can help put a “Sold” sticker on that yard sign.

Let Those Lights Shine: The best way to combat winter’s short and frequently cloudy days is to turn on your house lights. For a showing, every single light in the house must be on, even in the closets and utility/mechanical rooms.

“Make sure all the bulbs are working, and stock up on all the right bulbs for lamps and fixtures so burned out bulbs can be replaced immediately.”  “Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled. People are always driving past the house, and keeping it lighted makes it look happy and welcoming.”

We also advise opening the drapes and blinds during the day to let in light and let visitors enjoy the view.

Provide Convenient Parking: It’s vital that buyers have a convenient place to park. They won’t want to walk very far in cold weather or be forced to climb over a snow bank to exit their vehicle. Because parking is often more restricted around condominiums, sellers should make sure their agent can pass along parking details to buyers.

Make It Easy to Enter: Winter showings can get off to an awkward start if prospective buyers arrive with snow or salt on their shoes.

Make it easy for buyers to deal with their shoes when they arrive.  “Put a festive area rug at the front door for a great first impression and so visitors can wipe their feet. Have slippers or disposable booties available, along with a bench or chair, if there is room for one, where a visitor can sit and easily remove or put on their boots.”

Keep Odors Under Control: Any home tends to be stuffy in winter when windows are opened rarely. That can allow odors to build up, which can be a turn-off to buyers.

“Pet odors can be especially worrisome in winter,” says many of our buyer clients. “Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often.” For example, change the cat litter daily, rather than every third or fourth day, or even consider using an air purifier.

If pets are in the house, consider setting the thermostat control so that the furnace fan runs constantly during the day to keep air moving through the house and dissipate odors. Also try to avoid strong cooking odors, especially if a showing is scheduled that day.

Cultivate a Festive Look: Appropriate decorations for Christmas and even St. Valentine’s Day help give a home a cheerful look during the winter months.

“I really believe that holiday decorations can help homes sell, but don’t go to excess,” suggests Linda Head, staging coordinator for George's Team. “Keeping small, decorative white lights on trees and bushes pretty much through the winter season is fine, but other decorations should be taken down quickly once the holiday passes.”

Don’t Ignore the Outdoors: Make a good first impression on buyers with a neatly maintained yard. Walks and steps should be kept clear, especially of snow and ice.

Look after Condo Common Areas: If the home you are selling is a condominium, your job as a seller may be relatively easy in winter, with no snow to shovel or yard work to worry about. However, that is only the case if your condominium association does its job well.

If the association isn’t doing it, the homeowner may have to take responsibility for keeping the entrance area and hallways clean. If the association isn’t getting snow shoveled promptly, consider buying some de-icing salt and sprinkling it judiciously around the building entry.

Don’t Roast Buyers: We all tend to prefer a specific temperature for our homes during the winter, but don’t blast buyers with hot air. Keep the temperature at a comfortable 65 degrees for all showings. Remember, buyers are likely to be wearing their coats even as they walk through the house.

Keep Seasonal Clothing under Control: “One major challenge of selling a home during the winter months is the overabundance of cold weather gear that must be stored,” says George. “A buyer doesn’t want to find the mudroom filled with boots or the hall closet overflowing with heavy coats. Shift some winter coats to another closet and put anything not needed in the closet into storage.”

To keep gloves and scarves from piling up in the front hall or mudroom, put a special container for them, such as a decorative chest, where the family typically enters the home.

Encourage Day Time Showings: A home shows to its best advantage during daylight hours, which are relatively scarce in winter.

“Encourage your agent to show your home before 3 p.m. and have it ready to show by 9 a.m. if you want the best results,” George recommends.

Despite the special challenges of marketing a home during winter, there also are benefits, notes Brian Graves, President of Bentley Properties.

“Buyers out looking at homes in December or January are, as a group, quite serious about buying. Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property,” he says.

  The national delinquency rate for residential home loans fell to 7.99 percent in the third quarter—the lowest reading since the fourth quarter of 2008. This represents a decline of 45 basis points from the second quarter of this year, and a drop of 114 basis points from the third quarter of last year.

The Mortgage Bankers Association reported recently that the 30-day delinquency rate reached its lowest level since the second quarter of 2007 at 3.19 percent.

Cumulative default rates among U.S. residential mortgage loans continued to level off in third-quarter 2011, furthering improvements that began at the start of the year. Loans that were originated during the height of the housing boom in 2006 and 2007 still have the highest default rates, but performance within these two vintages has improved in recent months.

“We believe moderating first default and redefault rates are propelling this reduction, and this reduction is likely the primary factor causing cumulative defaults to flatten. Performance among loans originated in 2007 has improved more than that of loans from 2006 recently, both in terms of cumulative and active defaults,” said Diane Westerback, managing director for structured finance at Standard & Poor’s. However, it’s still too soon to accurately assess whether these trends will continue, she said.

According to Michael Fratantoni, MBA’s VP of research and economics, though delinquencies are down, foreclosure starts are now rising quarter over quarter.

“While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet and that the issues continue to vary by geography. A closer look shows that there are different trends driving these results. The increase in the foreclosure starts rate this quarter was driven by large increases from just a few servicers, concentrated in certain ‘hardest hit’ states. For most servicers, the foreclosure starts rate was little changed over the quarter. In these ‘hardest hit’ states, the few large changes reflects the progression of delinquent loans through the foreclosure process. Outside of these states, improvement has continued, although at a slow pace due to the still-weak job market,” said Fratantoni.

The nation’s foreclosure inventory rate, which includes all loans in foreclosure, was 4.43 percent at the end of the third quarter.

That’s the same reading reported for the second quarter, and represents a 4 basis point increase from a year earlier.

“While the delinquency picture changed for the better in the third quarter, the foreclosure data indicated that we are not out of the woods yet,” said Fratantoni.

Next week Fannie Mae and Freddie Mac are to announce sweeping changes to the HARP program.  Expected changes include -- Higher LTV's (above 125%), shorter amortization periods (pay down mortgages sooner), and reduced appraisal requirements, to name but a few.   Various other eligibility factors appear to remain unchanged, such as that the loan has to be owned  by Fannie or Freddie prior to and  continually since May 31, 2009. 

We will continue to monitor and advise when all parameters have been issued and rules issued by our various lenders.

Please do not hesitate to contact us should you wish us to contact you directly when these changes are published. 

Happy Veterans Day to all the men and women who have served. 

Existing-home sales were down in September on the heels of a strong gain in August, but remain well above a year ago, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 3.0 percent to a seasonally adjusted annual rate of 4.91 million in September from an upwardly revised 5.06 million in August, but are 11.3 percent above the 4.41 million unit pace in September 2010.

Lawrence Yun, NAR chief economist, says the market has been stable although at low levels, and there is plenty of room for improvement.

“Existing-home sales have bounced around this year, staying relatively close to the current level in most months,” he says. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable—this speaks to an unfulfilled demand.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.11 percent in September, down from 4.27 percent in August; the rate was 4.35 percent in September 2010.

Contract failures were reported by 18 percent of NAR members in September, unchanged from August; they were 9 percent in September 2010. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.

NAR President Ron Phipps says access to credit is unbalanced. “All year we’ve been discussing the fact that many creditworthy home buyers are being denied mortgages,” he says. “On top of that, loan limits have been lowered, which means buyers of higher priced homes, including many in more expensive housing markets, now have to pay a higher interest rate for a jumbo mortgage than buyers who can qualify for a conventional loan. We need to remove the roadblocks to a housing recovery—not place more obstacles in the way of financially qualified buyers.”

All-cash sales accounted for 30 percent of purchase activity in September, up from 29 percent in August and 29 percent also in September 2010; investors make up the bulk of cash purchases.

Investors purchased 19 percent of homes in September, down from 22 percent in August; they were 18 percent in September 2010. First-time buyers accounted for 32 percent of transactions in September, unchanged from August; they were also 32 percent in September 2010.

The national median existing-home price for all housing types was $165,400 in September, down 3.5 percent from September 2010. Distressed homes—foreclosures and short sales typically sold at deep discounts—accounted for 30 percent of sales in September (18 percent were foreclosures and 12 percent were short sales), down from 31 percent in August and 35 percent in September 2010.

Total housing inventory at the end of September declined 2.0 percent to 3.48 million existing homes available for sale, which represents an 8.5-month supply at the current sales pace, compared with an 8.4-month supply in August.

Single-family home sales fell 3.6 percent to a seasonally adjusted annual rate of 4.33 million in September from 4.49 million in August, but are 12.2 percent above the 3.86 million-unit level in September 2010. The median existing single-family home price was $165,600 in September, down 3.9 percent from a year ago.

Existing condominium and co-op sales rose 1.8 percent a seasonally adjusted annual rate of 580,000 in September from 570,000 in August, and are 5.6 percent above the 549,000-unit pace one year ago. The median existing condo price was $163,800 in September, which is 1.0 percent below September 2010.

Regionally, existing-home sales in the Northeast rose 2.6 percent to an annual level of 790,000 in September and are 6.8 percent above a year ago.

The median price in the Northeast was $229,400, down 3.3 percent from September 2010.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.09 million but are 17.2 percent higher than September 2010. The median price in the Midwest was $137,400, which is 1.4 percent below a year ago.

In the South, existing-home sales declined 2.6 percent to an annual level of 1.89 million in September but are 10.5 percent above a year ago. The median price in the South was $144,400, down 3.0 percent from September 2010.

Existing-home sales in the West fell 8.8 percent to an annual pace of 1.14 million in September but are 10.7 percent higher than September 2010. The median price in the West was $207,400, which is 4.5 percent below a year ago.

“The falloff in Western sales from a surge in August was expected because many lenders had lowered mortgage loan limits over concerns that sales wouldn’t close before the higher loan limits expired at the end of the September,” Yun says. “Given the concentration of higher cost housing in the West, particularly in California, many buyers were motivated to close in the months leading up to the changeover while they could still get low interest rates on conventional mortgages. Unless Congress reinstates the higher limits, the overall housing market recovery will be slower than it otherwise could be, and will hold back the broader economic recovery.”

Information and comment by RISMedia

Fannie and Freddie to Increase Fees…
But What Does It Mean?
Starting in 2012, Fannie Mae and Freddie Mac are expected to increase their fees, which could impact homebuyers depending on the risk of their loan or the location of their home.
Here’s what you need to know – including what’s really happening and what it means to homebuyers.
What fee is being increased?
First, it’s important to remember that Fannie Mae and Freddie Mac do not actually make home loans. Instead, they provide financing to lenders by purchasing mortgages from those lenders. Then, Fannie and Freddie either keep those mortgages on their books or they package them (in the form of securities) for sale to investors.
That means, Fannie and Freddie don’t actually charge direct fees to homebuyers. But they do charge fees to lenders when they purchase home loans from those lenders. The lenders, in turn, build those fees into the home loans they offer. So the bottom line is that any increase in the fee that Fannie and Freddie charge lenders will essentially be passed on to consumers.
However, the fees likely won’t be increased the same amount across the board. For example, Fannie and Freddie may charge higher fees when purchasing riskier loans or they may vary the fees based on which part of the country the home is located in (taking into account things like the foreclosure rate of the location).
Why is this happening?
Fannie and Freddie were seized by the government three years ago to help protect them from failing. That’s important because Fannie and Freddie (along with other government agencies) actually guarantee about 9 out of every 10 new home loans—and with the challenges that the housing market has seen recently, those guarantees have been extremely important. However, Fannie and Freddie have also cost the taxpayers more than $140 Billion.
So Fannie and Freddie will gradually increase their guarantee fees next year and reduce the size of the home loans they purchase in an effort to:
1. Save taxpayers money and
2. Reduce the amount of government involvement (by attracting more private funding to the mortgage market)
What does this mean to homebuyers?
As stated above, the fees likely won’t be increased exactly the same across the board—so the impact will vary depending on the location of the home, risk of the loan, etc.
But we can look at one example to get an idea of the potential impact. For example, as the Wall Street Journal reported, if we calculate an increase of 0.1 percentage point (which is a number the White House proposed), we can see that a home loan for $220,000 would be increased by about $15 per month.
So the increase may not be very noticeable for many homebuyers. And, if people purchase a home while affordability is still high and home loan rates are still historically low, they’ll still benefit significantly compared to other times throughout history.
What should people do?
The fees are expected to begin increasing in 2012 and gradually rising thereafter. If someone you know is thinking about purchasing or refinancing, there’s still time to examine the options and make a move before the fee increase becomes much of an issue.

With Fall comes short days, wet weather, and cooler temperatures, so when we are looking at homes please keep in mind how much daylight we will have so you can make the best  when previewing homes.

With foreclosures flooding the real estate market, many property buyers and investors are hitting the auction circuit looking to capitalize on the next great deal. For those that are new to the auction block, there are a few ‘rules of thumb’ you’ll want to keep in mind before placing your bid. PropertyAuction.com provides some essential tips when looking to get in on the auction action, including:

1) Exercise your due diligence. Arm yourself with as much information on the property of interest before you bid. Many auctioneers provide a Property Information Package that contains vital information about the property (demographics, environmental information, tax data, etc.) as well as the contract of sale. Some simple online research prior to the auction can also assist in finding out some need-to-know facts before you invest your time and money.

2) Fully understand what ‘As Is, Where Is’ condition entails. Pretty self-explanatory, you are agreeing to purchase a property with whatever flaws it has at the time of sale, in the location stated on the contract. Unless there is something specifically outlined within the contract, the “As Is, Where Is” item means that the seller is not responsible for any damages or repairs the property may need. This could be as minimal as a broken window with a location on a busy street, or as mammoth as environmental issues on a property located right next to a set of working train tracks. Know what you’re getting into before you get into it.

3) Be aware that most auctions do not come with financing. “Since the majority of real estate auction contracts have no financing contingencies, it is imperative for a prospective auction buyer to be sure of their ability to purchase the property in question,” advises Ori Klein, president of PropertyAuction.com. “Usually, there are no refunds on bid deposits due to lack of financing if you are the winning bidder. Decide on the highest price you are willing to pay for the property in question and tack on some extra for additional fees. Have your funds lined up and ready to go by the time you’re going to bid.”

4) If you can’t close, don’t bid. If for some reason you can’t close on time, you can lose your deposit and could be held liable for additional damages and daily penalties. Be aware that most real estate auction closings are within 30 days. In short, be prepared to buy or walk away.

5) Don’t bid with your emotions. Most people have a ”dream house” in mind, or are seeking to start a business in a swanky new office building. Whatever your expectations, come prepared with a price you can afford and don’t go over it. Remember, real estate auction sales are final.

6) Inspect the property. Just as in traditional sales, prospective buyers can usually have a chance to inspect real estate properties offered at auction. These inspections are usually arranged by appointment or at specific scheduled times designated by the auction company. This is an excellent opportunity to find out all the ‘As Is, Where Is’ details you need to know before bidding.

Bottom line: You can get deals at real estate auctions. As a buyer, you simply need to do your homework beforehand, be sure of what you can afford at the time of auction, and keep a cool head come bidding time. Many a first-time home buyer and business investor have walked away from an auction with a newfound goldmine.

RISMEDIA, June 29, 2011—A drop in some mortgage loan limits for the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and the Federal Housing Administration scheduled to occur on Oct. 1 will reduce housing demand and place downward pressure on home prices in major housing markets, according to a new study from the Economics and Housing Policy Group at the National Association of Home Builders (NAHB).

When they come up for sale, the homes that will become ineligible to be purchased and securitized by the GSEs or to be purchased with FHA-insured financing as a result of the lower limits “would likely require financing with higher mortgage interest rates and other less favorable loan terms, such as higher required downpayments and more stringent credit history thresholds,” according to the report.

The downward pressure on prices could extend beyond the homes directly affected by the lower limits, the study warns, because first-time and trade-up home sales are interrelated.

The size of “conforming” mortgages for the GSEs is currently limited to $417,000 in general, but that ceiling can rise to as high as $729,750 using a statutory formula based on local median home prices.

Unless Congress acts to extend these levels, they will revert to the lower permanent criteria for high-cost areas under the Housing and Economic Recovery Act of 2008.

The base limit will remain at $417,000, but the formula for establishing limits for high-cost areas will change from 125 percent to 115 percent of the area median home price, and the national ceiling will drop from $729,750 to $625,500.

Purchasing homes that go above the GSE ceiling will require non-conforming loans that currently have been about 60 basis points (0.6 percentage points) higher than conforming loans, the study finds, and based on a report by the Federal Housing Finance Agency (FHFA) the non-conforming mortgages are expected to be 50 to 75 basis points higher.

Looking at limits published by the FHFA, 204 counties—or 6.5 percent of the 3,143 counties in the U.S.—will see a decrease in their high-cost conforming loan limit. These counties represent relatively dense concentrations of population and housing and contain 20.7 million owner-occupied units out of the 75.3 million nationwide, or 27 percent.

In the counties facing a decline, the average decline in the loan limit will be $67,018, down 11 percent from current levels.

Under present law, 3.63 million owner-occupied homes are priced above the conforming loan limits. Under the changes set to take place on Oct. 1, an additional 1.38 million owner-occupied homes will be above the limit, leaving a total of 5 million homes that will not be eligible for GSE funding.

Lowering the limits will take an even bigger toll on homes eligible for FHA-insured financing, the study finds.

As with the GSEs, the national ceiling for FHA loans will drop to $625,500 on Oct. 1, and for counties whose housing is priced somewhere between that amount and the lowest ceiling of $271,050, the FHA mortgage loan limit will also decline from 125 percent to 115 percent of the area median.

According to the limits published by the FHA, 620 counties—or 20 percent of the total—will see a decrease in their FHA loan level. The affected counties contain 44.3 million owner-occupied housing units, or 59 percent of the owner-occupied housing stock in the U.S.

For counties facing a decline, the average drop in the FHA loan limit is $58,060, down 14 percent from current levels.

Under present law, 8.32 million owner-occupied homes are priced above the existing FHA loan limits. Under the changes set to take place on Oct. 1, an additional 3.87 million owner-occupied homes will surpass the limit, bringing the total number of homes ineligible for FHA-insured mortgages to 12.2 million.

RISMEDIA, June 24, 2011—The so-called “shadow inventory” of foreclosures—properties in the foreclosure pipeline but not yet listed on multiple listings services—slowly sank over the past year but still amount to five months’ worth of home sales.

The inventory fell from 1.9 million homes a year ago to 1.7 million in April, according to the latest report from CoreLogic, who attributed the decline to fewer new delinquencies over 90 days and a high level of distressed sales, which helped reduce the number of outstanding distressed loans.

The shadow inventory nationally peaked in January 2010 at 2 million units, 8.5 months’ supply, and stands 18 percent lower today than it was in April 2011. The total shadow and visible inventory was 5.7 million units in April 2011, down from 6.2 million units a year ago. The decline occurred in both the visible and shadow inventories.

Of the 1.7 million current shadow inventory supply, 790,000 units are seriously delinquent (2.6 months’ supply), 440,000 are in some stage of foreclosure (1.4 months’ supply) and 440,000 are already in REO (1.4 months’ supply).

In addition to the current shadow inventory, there are 2 million current negative equity mortgages that are “upside down” by more than 50 percent or $150,000. These current but underwater loans have increased the risk of entering the shadow inventory if the owners’ ability to pay is impaired while significantly underwater.

Mark Fleming, chief economist for CoreLogic, commented, “The shadow inventory has declined by nearly one-fifth since it peaked in early 2010, in large part due to a reduced flow of newly delinquent loans in recent months. However, it will probably take several years for the shadow inventory to be absorbed given the long timelines in processing and completing foreclosures.”

Currently the shadow inventory accounts for 29 percent of the combined shadow and visible inventories.

RISMEDIA, 2011—The economy is improving overall and, as a result, some bright spots are showing up in the real-estate market. However, the foreclosure spike, which began around the same time the recession did, isn’t a distant memory just yet. In many areas, foreclosures are still happening; in some areas, those numbers have increased. Surprisingly, foreclosures have even encroached into some key cities that were formerly thought to be unshakable real-estate markets — like San Francisco, where foreclosures actually rose in 2010 (including in luxury neighborhoods like Pacific Heights, where a condo that sold in 2007 for $2.3 million recently sold for $1.44 million as a foreclosure).

This “second wave” of foreclosures – combined with the fact that many people’s 401(k)s have bounced back with the stock market, and most economists agree that the bottom of the recession has hit – means that competition for these foreclosed homes is, in many cases, fierce. There’s a renewed, final dash to get in on what some perceive as the best real-estate deals they’ll get in awhile. But how do you know which foreclosure is a good buy, and which to walk by? Here are some tips to help guide your clients:

Get it checked out by a pro. Perhaps the most essential point: Never go by looks alone as an indicator of whether a foreclosure is a good buy. A $2 million mansion may look gorgeous on the surface but might have toxic mold hiding beneath, which will require extremely pricey, lengthy repairs. On the other hand, a Mission fixer may look dilapidated but may have excellent bones and can be repaired at reasonable cost. Stipulate to your client that a certified professional home inspector must be contracted to check out a property before making a deal on it, to determine what repairs need to be done — so they can truly assess whether it’s worth it for them. Don’t rely solely on previous inspections, even if relatively recent – a vacant home can deteriorate quite a bit in a short time, especially in an area with climate extremes.

Don’t abandon common real-estate logic. Too many people, when shopping for a foreclosure, abandon their real-estate sense and focus on price alone. Remember, things like a sub-par location, poor light, terrible view, below-average school district, high local crime rate and other negatives might be part of the reason why a home went into foreclosure in the first place. Don’t assume that financial problems of the previous owner are the main reason for every foreclosure. The last owner may have bought the home ignoring some of the aforementioned problems, and seen value sink because of them. Don’t ignore those problems, especially if your client is considering selling in the next 5 to 10 years. Let your client know how long the home has been empty; the longer it has, the more of a chance this isn’t a good deal. Also, if there are plenty of other foreclosures nearby, that’s also a bad sign.

Skip – or, at least, very strongly rethink – the flip. “House-flipping,” i.e., buying at bargain-basement pricing, updating, then selling for much higher – is very 2006… and hasn’t exactly been hot since. Even if a house looks like an incredible flipping opportunity, beware of this temptation unless your client is a pro, with incredible contractor connections. Tell them to automatically triple the amount they think they’ll be spending to fix up the home. Clients should avoid the temptation to make fast money unless they think it through and talk to their real-estate professional, a home inspector, contractors – and possibly even a therapist!

Go over the budget. A fixer-upper means nothing if you can’t afford to fix it up – and that’s especially true for foreclosures, where those fixes can cost a pretty penny. Before buying, make sure your client has an ample budget to do all the repairs needed, after truly taking stock (with the help of a home inspector) of what those needs are. Make sure they have at least half of that money in cash, and preferably all of it. They don’t want to take more loans than needed, especially private loans, which shouldn’t be taking at all – the interest on them will, little by little, chip away at the initial foreclosure bargain.

Do your homework on lenders. Fewer people are getting financing for home-buying than they did before the recession, but good financing is luckily still available to many qualified buyers. Just make sure, as with regular home buying, that you enlist a reputable lender. A good lender will take the time to do a review of your client’s financial life and long- and short-term goals, to truly pick the best solution for them, rather than just spitting out options. Also ask about hidden costs, rate locks, prepayment penalties, origination fees and whether underwriting is done in-house. Make sure everything is explained to them clearly, and recommend that they review all of the answers with a real-estate attorney, who will also be able to check out the lender’s overall reputation. These are things that many people do during the standard home-buying process, but might gloss over when lured by a low foreclosure price tag.

See it in person. Finally, advise buyers never to buy a house without going in person to see it. Ever. Foreclosure or otherwise.