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Don't forget about first-time homebuyers Premium Content

By David Fletcher, Tuesday, April 26, 2011.

As federal regulators have proposed a 20 percent down payment requirement for many borrowers to secure a home loan, let me be positive. This is a great idea -- in fact it might be low -- for speculators and investors purchasing residential real estate. Those in this market segment are sophisticated, willing and able to take risks. They can weather the unexpected.

Even at 20 percent down, speculators may consider walking if they purchase preconstruction homes or condominiums and cannot close before interest rates climb so high they cannot cover their monthly cash flow. The difference between them and everybody else is that they can handle the losses. They are the first in to purchase presales in a good market, and the first out when the market goes south.

But the first-time homebuyer is the bread and butter, the base, the market segment that needs the help. Nothing down is not the answer. Neither is 20 percent. And for too long they have been set to fail if things did not go as planned. Mortgage to the max, then refinance to the max, so the lender keeps making money on those fees and points.

Regulatory proposals aside, what is truly needed is an understanding of the market -- especially the first-time homebuyer. First-time homebuyers, as they start moving back into the market, need a program that makes sense. They will not be able to depend on refinancing every few years. They need a sound program now.  more...

A real estate trade secret: work really hard Premium Content

By Kris Berg, Tuesday, April 26, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/littlesister/2152082489/">IndyDina with Mr. Wonderful</a>.

I am a trained professional, a trusted real estate adviser. I'm just like that well-coifed woman on the snappy National Association of Realtors ads -- the one standing just inside the white picket fence wearing a tailored suit, a proud lapel pin and a big-ol' smile.

Yep -- I'm just like her. Except I spent the better part of yesterday scouring the copper bottoms of an entire set of cookware that might have been unearthed from the Mayan ruins on a recent archeological dig. They might have, that is, had the Mayans possessed the Cuisinart Chef's Classic series. (Emeril hadn't yet been invented.)

So it was that I spent my Saturday morning hanging out in my client's kitchen, helping him help himself. Sure, I could have told him to scrub his own pots, but he has a Y chromosome, which means it wouldn't have gotten done. It's part of a process we call staging and, try as I might to uphold that business-suit image, I somehow get sucked into the process every time.

You see, the pot rack was a thing of beauty but the black, crusty cooking thingies dangling from it were not exactly a selling point. Nor was the misplaced 700-pound mirror that had to be rehung, the computer desk looking disturbingly out of place in the dining room, or the 4-foot-tall brass giraffe hanging out in the hallway of this Mediterranean-style wondering which way the Serengeti might be.  more...

10 cities with top schools: a range of real estate prices Premium Content

By Inman News, Tuesday, April 26, 2011.
Pella, Iowa. Flickr image courtesy of <a href="http://www.flickr.com/photos/carlwwycoff/3514832834/">cwwycoff1</a>.

A list of the nation's top 10 cities with top-performing public schools challenges the idea that the best schools can only be found in the most expensive housing markets, announced a report from school ratings site GreatSchools and business magazine Forbes.com.

"The two biggest life stage decisions a family makes are finding a great place to live and excellent schools for their kids," said Bill Jackson, CEO and president of GreatSchools, in a statement.

"Great schools exist within every housing budget. This is good news to Realtors who want to help their clients when relocating to a new area," the report added. 

The Northeast, the West and the South each accounted for three cities in the top 10 list. The Midwest accounted for one. That city, Pella, Iowa, had the lowest median home value among the ten: $148,200. Manhattan Beach, Calif. had the highest: $1,278,980.  more...

FICO to walkaways: You're on our screen Premium Content

By Ken Harney, Tuesday, April 26, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/redvers/954492941">Redvers</a>.

Fair Isaac, developer of the ubiquitous FICO score, has a new warning for homeowners plotting a strategic default or walkaway: We can now spot you in advance. We've developed a black-box risk-identification tool that enables lenders and mortgage servicers to tag you months in advance -- and then pursue their own strategic measures to intervene.

The tool is so effective, according to FICO, that it can "capture nearly 67 percent of strategic defaulters" who are otherwise unremarkable and undetectable, paying their mortgages on time.

Sound a little spooky? Not for the major lenders who are working with FICO to install the new statistical risk-scoring model, aimed at some of the costliest and most perplexing defaulters in the marketplace: people who just stop paying on their loan abruptly, without ever previously being late, even though they have the income to pay.

Strategic walkaways are a multibillion-dollar headache to banks and investors. A study by researchers at the University of Chicago's Booth School of Business found that during last September alone, 35 percent of mortgage defaults in the U.S. were strategic -- up sharply from 26 percent in March 2009.  more...

3 reasons sellers should hire own inspector

By Barry Stone, Tuesday, April 26, 2011.

DEAR BARRY: In one of your columns, you recommended that sellers hire a home inspector, even though the buyers would probably hire an inspector of their own. As a seller, this concerns me. If my home inspector finds a major defect (something that has given me no trouble for the past 30 years), then I'll have to spend thousands of dollars to repair it, or I'll have to disclose it to the buyers. Frankly, I fail to see the advantage in this. Can you please explain again the advantages when sellers hire a home inspector? --Ken

DEAR KEN: There are three main reasons for sellers to hire their own home inspector:

1) Avoiding liability: If an undisclosed defect (one that you were unaware of for the past 30 years) is discovered after the close of escrow, you could be sued for nondisclosure. The fact that you were unaware of the problem would be for you to prove in court.

2) Avoiding repair costs: Disclosing defects at the outset of a purchase transaction enables you to do an as-is sale. When defects are discovered by the buyers' home inspector, the buyers are more likely to insist on repairs.

3) Building trust: Providing a home inspection report to buyers is a good way to build trust in a transaction by demonstrating that you, the seller, have nothing to hide.

As a seller, it's better to provide disclosure than waiting for disclosure to happen to you.  more...

Prices fall in 19 of 20 Case-Shiller metros Premium Content

By Inman News, Tuesday, April 26, 2011.

Half of the 20 major metro markets tracked by a Standard & Poor's/Case-Shiller Home Price index hit new lows for the downturn in February, and the 20-city composite index is "within a hair's breadth of a double dip," Standard & Poor's said in releasing the latest numbers today.

The 20-city composite index was down 1.1 percent from January (not seasonally adjusted), and 3.3 percent from a year ago, for a total decline of 32.6 percent since the summer of 2006.

Atlanta; Charlotte; Chicago; Las Vegas; Miami; New York; Phoenix; Portland, Ore.; Seattle and Tampa all posted new lows for the third month in a row (not seasonally adjusted).

Looking back a year, the index scores were down in 19 of 20 markets tracked -- the lone exception being Washington, D.C., which posted a 2.7 percent growth rate.  more...

Rental rates climb as sale prices dip Premium Content

By Inman News, Tuesday, April 26, 2011.

Rental listing prices nationwide jumped 7.4 percent in the last year while for sale listing prices dropped 8.8 percent, according to a report from property search site HotPads.

The report is based on listings active on HotPads in April 2010 and April 2011. First-quarter data shows a reversal of the broader trend -- rental prices fell 1.8 percent and sale price rose 3.5 percent -- but the report emphasized that the first-quarter trend is likely attributed to seasonal patterns in the housing market.

"We predict investors looking to ride the rental upswing will continue renting properties and will wait for home values to appreciate," the report said.

"Increasing demand for rental properties is an indicator of a growing preference for low-risk housing options, which is closely linked to the broader economic uncertainty."   more...

3 social photo apps Premium Content

By Gahlord Dewald, Tuesday, April 26, 2011.
Flickr image courtesy of <a href="http://www.flickr.com/photos/arthur-caranta/2789985987/">Arthur40A</a>.

One of the big things that iPhone brought with it was an easy way to manage photos taken with a cell phone. With the old "feature" phones you could take pictures, but getting them off the camera and into something usable and sharable was a significant hassle.

In this week's column we'll look at three photo apps that take advantage of the social capabilities of technology. Using photos to connect with other people has been around as long as portable personal cameras.

Now that cameras are in the pockets of anyone with a mobile phone, and people's social networks are embedded into websites and mobile services, expect social photography (and eventually videography) to become more pervasive in our online experience.

Some of these services are new and not yet fully baked. So my usual beta warning: give it a try and start playing with these to see if they make your life better. If they don't, then stop using them.  more...

Realtor.com rolls out iPad app Premium Content

By Andrea V. Brambila, Tuesday, April 26, 2011.

Property search site Realtor.com has launched a mobile application for the Apple iPad, site operator Move Inc. announced today.

Also today, the company announced the newest update to its iPhone app, which makes the iPad and iPhone apps more similar in appearance.  

Realtor.com stepped into the mobile space in January 2010 with the launch of its iPhone app. Ten months later, the site released apps for the Android and Windows 7 operating systems. Combined, the apps have been downloaded 3.6 million times, the company said. Active users jumped 79 percent from December through March.

The rise of mobile is changing the home shopping experience for consumers and agents, said Move CEO Steve Berkowitz.  more...

Snag real estate bargains in post-bubble market

By Tara-Nicholle Nelson, Tuesday, April 26, 2011.
Image courtesy of <a href="http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470943661.html" target=blank>Wiley</a>.

I'm a (recovering) attorney myself, so I feel at liberty to point out that most people think their encounters with lawyers will cost them money, and lots of it. New York real estate lawyer Adam Leitman Bailey aims to disabuse homebuyers of this belief by revealing his insider secrets for saving money on their homes.

With his new book, "Finding the Uncommon Deal: A Top New York Lawyer Explains How to Buy a Home for the Lowest Possible Price," Bailey offers a stripped-down, fluff-free set of anecdotes and action steps culled from his own daily work as a real estate attorney, homeowner and real estate investor.

In New York, where Bailey practices, attorneys are much more involved in the nitty-gritty details of effective real estate transactions than in states where the brokers and escrow providers do this work and attorneys are rarely retained for basic real estate transactions.

As a result, Bailey's advice does not focus only on legally complex deals, but rather on helping everyday homebuyers get the best price for the best home they can in "regular" old everyday real estate deals.  more...

Beware when canceling real estate contract

By Benny Kass, Tuesday, April 26, 2011.

DEAR BENNY: My husband and I signed a contract in November and put $1,000 down. The real estate agent put financing as "n/a" (not applicable) because we were preapproved by our bank. He sent us to a bank and the loan was approved, with a great interest rate and no points. Then problems started.

The underwriter said a road maintenance agreement was needed, which was not disclosed in contract. We told the other side we want out, and to give us our money back. The agent said an attorney was working on the road maintenance issue with 28 families.

We still have not gotten our deposit back, and the agent said if we pay the seller's fee of $500 for the attorney doing the road maintenance agreement, they might release us from contract.

I filed a complaint with the Department of Real Estate because of the nondisclosure of road maintenance, and they said there is no violation. Now the home inspector is calling us wanting his money, and we have told him the agent still has it. We did sign a release of contract designating where the $1,000 should go, and when we called the agent he said the owners are still thinking about it. Do we have any options left, other than paying even more money for an attorney? This has been a nightmare. --Tom  more...