Housing Market Brings Added Rules for Pricing a House (correctly)

How do you price a home in this current Buyer’s Market? Actually, the right question is: How do you price a home correctly in this current Buyers’ market? The use of standard tools such as comparables is irrelevant these days.

Simply: You must price the home for less than the active competition to gain any traction. There are very few exceptions to this new paradigm. Price is the current king.

A common mistake is the notion that someone who is less eager to sell a home quickly can set the price a little higher. In this market, the lower price is more “realistic” to the limited number of buyers in the marketplace.

A good suggestion for any seller (and the agents who are helping sell the home) is to look hard at the three or four most competitive active listings that the home seller will be facing. Be brutally honest; today, the homes are a commodity first and an emotional luxury second. If there are no real differences between those houses and the seller’s home, undercut the competition on price. It is not only your strongest tool, it is your only tool at this time.

If the house you’re trying to sell has something that the competition doesn’t — say an enclosed lanai or bonus room — then go with the same price. But, you must demonstrate the value to be at the same price.

This new paradigm (today’s reality) is common sense when you have the luxury of looking from the outside-in and without the emotional haze many home sellers face. If you do not have the correct perspective, perhaps you should call someone you can give you an honest perspective of your options.

For more information on this and many other helpful real estate-related issues, review the White Gate Realty Newsletter, or go to my website where the information is accurate, FREE and no obligation to you: www.WhiteGateRealtyTeam.com.

The Hunny-Don’t List

Being a homeowner is a never ending list of tasks. Most are placed on the Hunny-Do List. In a recent interview on the radio, I discussed how some home renovation jobs are a lot harder than they look at first. I have personally done many home improvement projects to my homes. I have also known when to let the pros have their day, and get the job done without the frustrations of learning on the project.

Here is an example of five standard Do-It-Yourself (DIY) projects that inexperienced renovators (DIYers) routinely mess up, and some tips from professionals for the homeowners and DIYers. I refer to this as the Hunny-Don’t List.

Outdoor Projects
The Project of: BUILDING A DECK OR RAISED PATIO
The Pitfalls for DIYers: Not putting a layer of metal flashing in between the deck & your roof or house frame can lead to leaks and water damage. Also, DIY decks often wind up with frames and railings that aren't up to code, or are saggy and crooked. This is a result of too shallow or improper foundations.
The Professionals Advice: Inexperienced renovators, DIYers and Fixer Uppers; Do Not Try This at Home. Leave it to experienced contractors. If not done right, it will not be truly enjoyed and will not provide your home with the maximum value.

The Project of: LAYING BRICK PATHS & WALKWAYS
The Pitfalls for DIYers: If the foundation under your pavers isn't packed hard and level, your path may look like an old, crooked, cobble-stone street within six months and/or after enough rain.
The Professionals Advice: Pack the earth under the intended path & stick with spaced out, individual stones, unless you're trying for the crooked, cobble-stone street look of New England or old Europe. The individual stones are less formal, which allows you to get away with not having the foundation as straight and solid as the pros get it.

Indoor Projects
The Project of: REMOVING WALLPAPER
The Pitfalls for DIYers: Removing part of the drywall along with the wallpaper and having pitted walls that need to be repaired or even replaced make for a longer project than necessary. It means taking extra time and effort before the next step of painting or wallpapering the room.
The Professionals Advice: Drywall holes may be unavoidable when you try to remove it If the wallpaper was put on incorrectly in the first place. You can try to loosen the glue behind the paper with a steamer or a wallpaper removal product such as “Diff”. If the paper doesn't soften easily, you're probably asking for trouble if you proceed. Leaving the wallpaper on and preparing to paint over it instead may be a better choice.

The Project of: PATCHING DRYWALL
The Pitfalls for DIYers: Inexperienced DIYers & fixer-uppers routinely fill holes in sheet rock with heavy volumes of joint compound. Using too much joint compound and/or using the wrong-width knives result in lumpy walls that look rough or textured.
The Professionals Advice: Using a six-inch knife to smooth the first coat of joint compound and then using an eight-inch followed by a ten-inch knife in successive coats allows for an even and smoother surface. The key is to try using less joint compound for each application and apply four or five extra-thin coats instead of just three coats. Smooth and even is the result.

The Project of: REMOVING "POPCORN" CEILINGS
The Pitfalls for DIYers: Getting rid of the ceiling texture made popular in the 1970s and 1980s know as “Popcorn”, can be very messy, dirty, and back-breaking which results in ceiling gouges or sometimes, the stuff just doesn’t come off the ceiling.
The Professionals Advice: Work Wet. Never scrape a dry ceiling. Wetting the ceiling first with a garden sprayer and then scraping it with a putty knife will allow the “popcorn” to come off in neat little clumps. This way, you get more cooperation with the material and there's less risk of ceiling holes.

For more information on this and many other helpful real estate-related issues, review the White Gate Realty Newsletter, or go to my website where the information is accurate, FREE and no obligation to you: www.WhiteGateRealtyTeam.com.

--Jon White, Broker-REALTOR®
White Gate Realty, Orlando, FL
www.WhiteGateRealtyTeam.com

5 Things You Should Know Before Applying for a Mortgage Loan

As both a licensed real estate and mortgage broker in Florida, I keep abreast of the latest trends in the marketplace which affect my dual professions and more importantly, the future real estate-related decisions of my clients.

If you are ready to buy a home, or need to refinance an Adjustable Rate Mortgage (ARM) that will soon increase your monthly payments, you’ll want to understand some of the nuances of trends in the mortgage loan industry that will greatly increase the chances of having your mortgage loan approved and getting – or financially remaining in - the home of your dreams.

1) Increased Ability To Finance Your Closing Costs
Compared to the old limit of 57%, you can now finance up to 100% of your closing costs thanks to recent changes in Federal Housing Administration (FHA) guidelines. This is very good news for the first time home buyer who typically has less cash available at the time of closing.

2) Increased FHA Limits
The FHA loan amount maximums have increased, which is particularly helpful for people living in high-cost housing markets. FHA's mortgage limit is now tied to local housing costs. The limit is now 95% of the median home price, or 75% of the Fannie Mae maximum loan amount, whichever is lower.

3) Increased Accessibility to Down Payment Assistance Programs
With the rapid increase in home prices over recent years, more people are having the dream of home ownership ripped from their hands. Typically, one had to go through a rigorous process to qualify for a down payment assistance program. Today, there are now programs which have very little hassle. Ask your mortgage broker if they have access to such options.

4) Rapid Loan Approval
One of the latest innovations in the mortgage industry is the advent of computerized loan approval. These programs provide both rapid loan approval and more uniform loan approval practices. This type of approval is done by scoring a borrower's credit worthiness, which quantifies the risk of whether they’ll default on the loan. Does your mortgage broker use such a program?

5) Affordable Mortgages That Don't Verify Income
These loans are perfect for people who are self employed, real estate investors, retired persons and anyone who doesn’t want to have to prove their income. It is essential to have a good credit score in order to qualify for a non income- verified loan.

Still have some questions? Want FREE information on buying, selling or owning your own home, including How to Buy A Home with No Money Down? Or what to do NOW to get ready Before Disaster Strikes.

www.WhiteGateRealtyTeam.com.

--Jon White, Broker-REALTOR®
White Gate Realty, Orlando, FL
www.WhiteGateRealtyTeam.com

Understanding short sales as a way to avoid foreclosure

The foreclosure problems we continue to hear and read about are affecting us all – whether you’re a seller personally involved in a foreclosure situation, or a borrower dealing with more stringent lending guidelines.

Lenders are under increasing pressure to avoid foreclosure and contain losses, but there are limits to what they will do. Short sales have been around for a while, but recently have become more prevalent as a tool to deal with the foreclosure crisis. However, the short sale process is complicated and can be time-consuming, given the volume of requests coming from the marketplace.

In recent months, I’ve had several buyers offer full price on short sale listings only to find out weeks later that the lender never considered short selling the property. Finding a REALTOR® who understands the short sale process, and its value as a sales tool, is critical.

What is a short sale?
The working definition of a Short Sale is: A mortgage default workout procedure in which the lender accepts less than the full balance on the loan and the borrower works with the lender to sell the property quickly.

Not a sure thing
To determine if a seller qualifies to take a short sale on their property, most lenders require certain information. This usually includes:

• The seller proving they do not have the means to repay the mortgage. This may include: pay stubs, bank statements, tax returns, (non) employment verification, evidence of divorce proceedings, doctor or hospital receipts, proof the seller must move to another location, etc.
• The seller proving their change in ability to pay is the result of new circumstances and not something the seller concealed from the lender when they originally applied for the loan (concealment of these application facts could be considered mortgage fraud).
• An appraisal or Brokers Price Opinion (BPO) to verify the value of the property has either decreased, the offer price is the maximum price obtainable and/or the property listing has exceeded average days on market.
• Verification that the seller has met with a HUD-approved Counselor (see below) and other options (i.e., refinancing, loan modifications, etc.) are not viable.
• Proof of repairs needed with qualified estimates for repair costs.
• A preliminary HUD-1 with all estimated costs, including required restrictions on REALTOR® commission and title agency fees paid from the sale.

Procedurally, short sales have no set guidelines or guarantees. It takes the combined effort of the seller and the agent to find out as much as possible about: (1) the lender's requirements, (2) who to submit the offer to, (3) an estimated wait time, (4) compensation to agents, (5) any closing costs or other considerations. Once these issues are addressed, the likelihood that a short sale can be completed grows exponentially.

If the seller’s request is accepted, the lender will give a conditional approval to allow a short sale. This approval doesn't usually agree to a price, it simply confirms the lender will consider lower-than-mortgage-balance offers.

Here are some other helpful information to keep in mind:

• There may be special requirements for submitting offers to the lender, and a few lenders require specific clauses and/or disclosures to be included with the Purchase and Sale Contract. Don't rely on a lender representative's verbal statements regarding the terms of the short sale - - get their terms and responses IN WRITING. This can help cut down on vague stall tactics such as "just start sending offers, then we’ll respond."
• The Private Mortgage Insurer (PMI) is an ally to the seller in these circumstances because the PMI doesn’t have to pay unless the property is foreclosed upon. On the flip side, the lender typically won't settle for a short sale that is substantially below what the lender would net from an auction and PMI payout.
  
• If there is more than one mortgage, ALL lien holders MUST agree to the sale.
  
• The lender won't say how low they will go to sell the property, but you may be able to search online (or investigate with your preferred loan processors) to get an idea of the range and average maximum discount a specific lender has traditionally accepted.
  

The seller may still owe the IRS
At present, the seller will likely owe the IRS some taxes on the amount of any forgiven debt, or the lender may require the seller to sign for a new loan to pay back the shortfall. Even if the lender approves the short sale without a loan payback, that lender may impose “requirements” that attempt to pressure the seller into a loan for repayment, pressure the buyers to pay more cash, and/or pressure the REALTORS® to forego or reduce their commissions. However, changes have been proposed at the federal level that may diminish or even eliminate the shortfall debt – without further cost to the buyer, seller or agents – depending on the circumstances.

Help is available
The Department of Housing and Urban Development (HUD) has Housing Counselors who offer FREE advice to homeowners and help them understand the law, review refinance or sale options, and organize the qualification process. Best of all, these Counselors will also assist in negotiations with the lender. The short sale process will likely go more smoothly and quickly with their help.

You can find contact information for HUD approved Counselors located near you at: www.hud.gov or call 800-569-4287.

Courtesy of Jon White, GRI, RECS, Broker-Owner
White Gate Realty www.WhiteGateRealtyTeam.com

Simple Tips for Sellers to More Easily Keep Their Home Show-Ready

When selling a home, there are several things that sellers know will be necessary – but not necessarily pleasant – to do. One of the least enjoyable is the need to keep the house show-ready, which can become particularly onerous for a family with children, or more than four household members.

One way to maintain a positive attitude is to establish a reasonable expectation of what show-ready” really means. It means having the home to the standard of clean you’d achieve if you were having your boss and his/her spouse coming over for dinner. It doesn’t mean that the house has to look un-lived-in, but it should allow a potential buyer to mentally “move in” and picture themselves comfortably living in your home.

As important as it is to maintain a show-ready home, it truly can be accomplished with minimal effort. With enough initial preparation, your home can easily go from lived-in to show-ready with perhaps 15-20 minutes’ notice. Here’s how…

Spend time prior to the first showing to de-clutter and clean your house. Go room to room, preferably with a friend or advisor who can objectively look at your home and help you emphasize each room’s positives (e.g., high ceilings, beautiful flooring, wainscoting, crown molding, etc.). Pack up your highly personal items such as photographs, excess books or bric-a-brac, and store the boxes in an out of the way place. Reposition essential furniture to optimize space and store – or garage sale – furniture that is not immediately needed, or that you don’t intend to take with you once you move. This will help make the space look larger, brighter and more inviting. And you have the added benefit of starting your packing, saving time later when the offer is accepted.

Additional cleaning tips, prior to your first showing (which likely won’t need to be cleaned again while marketing your home):
· Keep lampshades looking better and dust free longer. Clean the lamp shades with a dry sponge. Then rub the lampshade with a fabric-softener sheet. This will reduce the amount of dust it collects.
· Use warm soapy water to clean built-up grime on small items used as accents around the house. Simply gather these items in a colander and submerge them into warm soapy water for a few minutes. Pull them out, rinse them off and allow them to air dry.
· Let the sun shine in. Get those windows sparkling now. Not only will it give the whole house a bright, clean feeling for potential buyers, but you’ll enjoy the nice appearance in the meantime.
· Remove pet hair on furniture. You can more easily vacuum pet hair from furniture if you spray the surface with a light coat of static remover. Wait a few minutes and vacuum it up. Most of the hair and dander will be captured in the machine. Once cleaned, throw sheets or towels over the areas where the pets rest, so that you can pull them up and showcase your clean furniture when it’s time for a showing.

Don’t clean everything all the time, but certain things more frequently. Little-used rooms rarely need more than spot cleaning, and unless you have a particularly messy family, carpets don’t need to be vacuumed for every showing. Floors should be swept or mopped if there is noticeable dirt, pet hair or splatters, but don’t always have to be clean enough to eat from.

The three types rooms that will have the most impact on buyers (and therefore need the most attention) are: kitchen, bathrooms, bedrooms. By keeping up a simple routine on a daily basis, even these most-lived-in areas can be ready in a flash when potential buyers want to stop by.

IN THE KITCHEN…
· Keep the microwave looking clean, inside and out. After than the refrigerator, the microwave is typically the most used appliance in today’s kitchens. Wipe down the microwave after every use. If it’s particularly messy and hard to clean, heat 2 cups of water in the microwave for 5 minutes to create steam that will loosen tougher, dried-on splatters and make it easier to wipe clean.
· Keep your dishwasher empty. If you have a dishwasher, remember to load (and unload) on a regular basis. An empty dishwasher is a great for last-minute calls – you can put those dirty dishes on the counter in it, even if you don’t run it right away. And, if you remember to check it before you turn it on later, it’s a great spot to temporarily hide other items from your countertop to make your kitchen look less cluttered.
· Attend to spills/splatters/stains right away. Don’t let spills become bigger problems by leaving them for another time. They’ll also be easier to remove if cleaned up immediately.

IN THE BATHROOM…
· Wipe it down and pick it up. Every few days, when the bathroom is steamiest right after a shower, take a small hand towel, wipe the shower to get some moisture, then use the damp towel to wipe down vanities, toilet seats, floor, etc. Just a few extra moments’ work will save you time when the phone rings. Also, remember to pick up discarded clothes, towels, etc. from the bathroom floor and put it into a hamper – if you don’t have one, get one, even it it’s an inexpensive plastic basket. Oh, and flush the toilets.

IN THE BEDROOM…
· Make the beds every morning, or have an extra-large duvet/comforter on standby. Believe it or not, there are many people who don’t think it’s necessary to make a bed every day. If you’re one of these people, that’s fine, but just remember, there will likely be many others who consider an unmade bed nearly as distasteful as a dirty kitchen or bathroom, and may simply walk away rather than try to picture themselves in the room (with a made bed). If making a bed daily is truly a challenge for you or perhaps for that teenager living in your home, purchase an oversized duvet or comforter for the bed that can be folded at the foot until needed, then thrown over the bed at a moment’s notice when the showing call comes, hiding whatever rumpled sheets and blankets are underneath. Also a great place to temporarily hide the dirty clothes on the floor and furniture that didn’t make it into the hamper.

Courtesy: Jon White, White Gate Realty
www.WhiteGateRealtyTeam.com

Free Report Helps You Avoid Mortgage Mistakes Before You Buy

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can save or cost you literally thousands of dollars and years of expense.

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved before you buy.
In answer to this issue, you can receive a free report entitled "6 Things You Must Know Before You Buy". Having the right information beforehand can undoubtedly make a major difference in this critical negotiation.

To hear a brief pre-recorded message about how to order your FREE copy of this report, call 1-866-352-7135 and enter ID# 3004. You can call any time, 24 hours a day, 7 days a week.