REMAX 440/Central Blog

Homeownership Aspiration Remains Strong among Americans

December 10, 2010 10:29 am

RISMEDIA, December 10, 2010--A new study released by Fannie Mae finds that most Americans--both those who currently own their homes and those who rent--strongly aspire to own a home and to maintain homeownership, despite challenges in the housing market. However, demographic trends such as fewer married couples and less families with children resulting in shrinking households--combined with financial caution among consumers--are contributing to an increased willingness to rent.

The Fannie Mae 2010 Own-Rent Analysis is based on extensive primary research with homeowners and renters, U.S. Census Bureau data, and micro- and macro- economic parameters, and explores the factors influencing consumers' decisions to buy or rent a home. The release highlights two of the four major themes of this analysis in reports titled, Persistence of the Homeownership Aspiration and Housing Choices Throughout the Lifecycle and the Impact of Changing Demographics. The reports are available on www.fanniemae.com. The remaining two themes from this analysis will be announced next week.

According to the study findings, 51% of current owners and renters say that the housing crisis has not affected their overall willingness to buy a home. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying. Overall, according to Fannie Mae's National Housing Survey third quarter results, one-third of Americans (33%) would be more likely to rent their next home than buy, up from 30 % in January 2010. Among renters, 59% said they would continue to rent in their next move, compared to 54% in January 2010.

The Fannie Mae National Housing Survey is an ongoing research initiative that surveys Americans' attitudes about housing on a monthly basis. The most recent installment of this survey, released in November, showed that aspirations toward homeownership remain strong well in excess of current homeownership rates but decisions to buy are tempered by current consumers' cautious attitudes toward home buying in the current financial environment and a more conservative housing finance environment.

"Despite Americans' strong desire to own their homes, our study reveals that life events are greatly influencing families' decision to rent. This trend, coupled with the housing crisis, has caused consumers to approach homeownership with greater caution and thoughtfulness," said Doug Duncan, Fannie Mae vice president and chief economist.

Fannie Mae's research analysis indicates that shifting U.S. demographic and lifestyle trends correlate to consumers' housing decisions, which may have long-term implications for the housing market. For example, married couples historically have been more likely to own than other households, but traditional married couples are a shrinking portion of the population. Additionally, having children has increased the propensity to own a home, historically, although many families with children (particularly single mothers) currently are renting because of financial constraints, and the percentage of households with children is declining overall.

"The data in the analysis aligns with what we're seeing in the market. More Americans are viewing rental housing as an attractive and sustainable housing option. As a result, we remain focused on helping America's working families--many of whom have incomes at or below the median in their communities--live in quality, sustainable, affordable rental housing," said Ken Bacon, executive vice president of Fannie Mae's Multifamily Mortgage Business.

Overview of Key Findings

Desire for Homeownership Remains Strong

  • Fifty-one percent of those surveyed reported the housing crisis had little or no impact on their intentions to buy or rent, versus 27% who said they are more likely to buy and 19% who said they are more likely to rent.
  • The substantial majority of homeowners (89%), as well as nearly half of renters (44 %) believe they would be better off owning their homes, given their current financial situations.

Americans' Housing Choices Impacted by Lifestyle and Stages of Life

  • Single (unmarried) respondents are least likely to own and report the lowest level of satisfaction with their housing choices. After controlling for age, income, wealth and a number of other factors, regression analysis indicates that married/partnered couples are 2.5 times more likely to own than other respondents
  • Respondents with children generally have higher homeownership rates than those without children after controlling for age and income, and having children is cited as a major reason to buy a home by approximately three quarters (76%) of the general population.
  • Americans 50 and older are more likely to believe they are better off owning than renting than any other age group, and are increasingly able to realize homeownership aspirations as they age. A person age 65-74 is 3.5 times more likely to own than a person under 25.
  • The housing crisis has had the greatest impact on younger Americans. Since the housing crisis, homeownership for those 25 to 29 years has declined 11% since peak rates, compared with a decline of 5% among those 35 to 44 and less for those 45 and older.

Changing Demographic and Lifestyle Trends May Create Shifts in Housing Market Over Time

  • Married couples, statistically most likely to own a home, represent a shrinking portion of the population--50% of households in 2009, compared with 56% in 1990.
  • Although having children increases consumers' propensity to own a home, renters are more likely than owners to have children under 18 living at home.
  • In particular, 58% of single mothers rent, versus 32% overall for households with children under the age of 18.
  • The percentage of families with children is declining overall, and reached an all-time low of 45% in 2009.
  • Homeownership rates increase with age, and the U.S. population is experiencing an aging trend fueled by the baby boomers. Thirty-eight percent of households were headed by someone 55 or older in 2009, versus 35% in 1990.
  • Possibly reflecting changing demographics and economic caution, recently, the size of new homes has begun to decrease, reversing a long-standing trend of more space per person. There has been a 6% decline in median square footage of new homes from the peak of the housing bubble in 2006 to the second quarter of 2010.

Top Tips to Help Your Home Stand Out from the Crowd

December 9, 2010 10:29 am

RISMEDIA, December 9, 2010--How can homeowners desperate to sell their home increase their chance of a quick and profitable sale in the current real estate market? Most importantly, the home must stand out from the crowd in a sea of homes for sale. Without a doubt, having a home professionally staged is the single best way to outshine the competition.

According to home staging expert Debra Gould, People shop with logic and buy on emotion. If prospective buyers dont fall in love within minutes of walking into a house and have that same emotional connection all the way through, theyll be off to the next appointment. This is especially true in a buyers market when they feel no pressure to make an immediate offer.

New home builders offer model homes for viewing, because they know how important it is to help potential buyers imagine themselves living in the house, adds Gould. Staging allows individual homeowners to employ that same proven concept.

There are several points a seller should keep in mind when hiring a home stager, including the home stagers knowledge of real estate and the local market in particular. It is always important to ask questions of anyone they are considering hiring.

Real estate agents or neighbors are excellent sources for referrals or individuals can locate a Home Stager in their area.

In the current real estate climate with so much inventory and competition, achieving the best possible sales result has become even more difficult, and many sellers are simply hoping that their home sells at any price or that they can avoid the significant price cuts recommended by their agents.

But in order to sell, a home must be marketed wisely. Statistics show that staging homes results in a faster sale and a higher price than homes that are put on the market as is. A small investment in staging can make a significant difference in the outcome of a sale.


Holiday Decorations Provide a Cutting Edge...if Done Right

December 9, 2010 10:29 am

RISMEDIA, December 9, 2010--Holiday decorating, when tastefully done, can be the eye candy you need to sell your home. With a little holiday flair, you can transform your home into a winter wonderland that will grab the attention of any type of buyer.

Since you don't want to turn off any potentials, leave the inflatable Santas and reindeer in the attic. Not only do they take up much-needed space in your front lawn, but they also make symbolic statements that you are best avoiding. Forgo religious symbols as well--you don't want to segregate any buyer who may not share the same beliefs as you.

The St. Petersburg Times recommends choosing one theme or look and sticking with it throughout. Pay attention to proportion and balance; make sure your decorations suit the home appropriately and add to rather than hinder the home's dcor.

Don't overdo exterior holiday lighting; rather, use them for a determined purpose. Christmas lights can be used to light up a walkway for night viewings and can add a nice sparkle to that pine tree sitting in your front yard. If your house ends up looking like something out of National Lampoon's Christmas Vacation, you have gone too far. Scale back and be more conservative than you usually would be with your decorating.

Keep your decorations elegant and simple, says energizedseller.com. When decorating, think "Winter" and not "Christmas." White lights help give your home a seasonal look without symbolizing any specific holiday, while pine wreaths serve the same purpose for the exterior or interior of the home.

If your family cannot do without a tree, stick to tall and thin trees. You want your home to feel open and spacious even with sporadic decorations about. Stick to two or three colors when decorating your tree; less is more when trying to sell your home. Lastly, be sure to take your tree down before the new year.

If your home is on the market, you can still give it a festive and seasonal look without going overboard. By brightening your home up for the season, you can incite buyer interest in your home.


13 Bases to Cover to Ensure Property Profitability

December 9, 2010 10:29 am

RISMEDIA, December 9, 2010--Even when the going gets tough for real estate buyers immersed in challenging market conditions, return on investment potential still exists. Residential real estate profit seekers should ensure their bases are covered throughout the process to minimize risk and maximize reward.

Consider these insights on how to best assure property profitability from Robert Jenson, CEO of a luxury Las Vegas real estate purveyor.

  1. Interview and hire a buyers agent: Purchasing a home could be the most important and complex financial transaction you engage in, and going it alone is risky. Indeed, a buyers agent can save you time, hassle and thousands of dollars. Take time and care when selecting a real estate buyers agent - find someone you can trust, and that you have a good rapport with.
  2. Outline what you do and dont want: The first step in the home buying process is to create a realistic idea of the property you'd like to buy. What are the primary four features that are most important to you? Make two lists: one with your wants, the other with your dont-wants--each listed in order of priority. Refine both lists as the house hunt progresses. It is also helpful to search online to see what is currently available on the market.
  3. Shop for the most favorable mortgage rates and terms: Also early on, shop around for the most favorable mortgage rate and terms. A difference of even half a percentage point can mean a considerable savings over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that's $12,600.
  4. Get a good faith estimate: Commonly called a GFE, if you plan on financing your investment properties, you need to know exactly what your payments are going to be. Only then can you determine if the property is going to be cash negative or positive. The lender you are working with should be happy to provide you with a GFE for free. If the lender is hesitant to give it to you, then move on to a different one.
  5. Get pre-approved for a loan: Many buyers want to find the perfect home before having their credit pulled, which can backfire when an offer is on the table and time is of the essence. Its wise to get pre-approved for a loan even before you view your first home. Your credit report may contain inaccurate information that you were not aware of, which can be a time-consuming process to rectify. Or, you might not like what loan program you qualify for, or you might qualify for a higher loan value than you thought. Ultimately, you will need a pre-approval letter with your offer, so save yourself some time and do this in advance.
  6. Find properties below market value: Foreclosures and short sales are everywhere. Now is the time to take advantage of what is decidedly a buyers market. Do note that negotiating bank-owned foreclosure property is fairly quick, while short sales can take from one to four months for bank approval. Look to your agent on advice on what kind of property will meet your needs.
  7. Visit properties: Now youre ready to visit houses. Your real estate agent will arrange showings, and should also help you keep track of the properties youve seen. Your REALTOR should also accompany you on visits to newly built homes, as the onsite sales agent represents the builders best interests, not yours. Your agent is an expert who will negotiate the best price and incentives on a new home, and will oversee the sales process on your behalf.
  8. Know the features that help or hurt resale: There are many things to consider when buying a home, including its resale potential. For example, in neighborhoods with attached three-car garages, a two-car or detached garage may adversely affect the home sale and future value. Number of bedrooms, floor plans, location, and proximity to noisy streets are among other factors that can prove problematic for a future sale.
  9. Rate the houses you tour: After touring each home, write down what you liked and didnt like. Develop a rating system that will help narrow the field. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as the standard. Try to avoid trying to track more than four top choices at any given time since this can quickly become overwhelming.
  10. Determine the propertys rental value, before you buy it: Todays good buys are still long term holds. Look to secure financing with a fixed rate, and be sure the markets current rental value will cover or exceed the mortgage payment, taxes, insurance, HOA dues and other expenses. Be cash positive in your investments. If the properties are costing you money out of pocket every month, this is not a good strategy to long term wealth building.
  11. Make an offer: Once youve pinpointed the home you want to purchase, its time to get serious about the financial and contractual side of the purchase and make an offer. Be strategic, though realistic, with your offer price based on the homes size, condition, features/upgrades, community comparables, current market conditions and other key indicators to stack the odds in your favor for a successful outcome--and generally expedite the process overall.
  12. Arrange for a home inspection: After your offer is accepted, set up a home inspection. It's not uncommon to find problems, including leaky roofs, electrical problems, insect infestations and foundation concerns and code violations. Hire a reputable inspector, and negotiate to get you the most for your money once the inspector's report is final. If you negotiate repairs as part of the purchase, ask for a "walk through" before finalizing the paperwork to assure all issues are resolved to your satisfaction. Also ensure the seller pays for a home protection plan as part of the transaction, which may save you money in the short and long-term future.
  13. Prepare for a successful closing: Before your closing date, ensure everything is in order, such as confirming youve made all necessary deposits and completed all required paperwork including mortgage, title, homeowners insurance and any other needed for local or state governments. Due diligence here will help you avoid any last-minute snags, so you can actually enjoy every moment of the home-buying process.

Selling a Home with Pets

December 8, 2010 10:29 am

RISMEDIA, December 8, 2010--According to the American Pet Products Manufacturers Association, six out of ten households in the U.S. own a pet and pet owners spend more than $40 billion a year on their animals. As much as pet owners love their pets, it's smart to think about how your cat or dog may be hurting your home's marketability. Courtesy of The Washington Times, consider the following when trying to sell your home:

Check for odors. You won't be able to tell if your home has an odor, so have your agent or a neighbor come by with their noses ready. Even in homes with perfectly mannered pets, homes can still have an odor that may turn off some buyers. Don't go overboard with freshener, rather, use odor neutralizers instead. Try to put yourself in the mind of a non-pet owner and make sure your home appeals to any type of buyer.

Be sure to vacuum daily. While you are showing your home, be sure to vacuum daily. Pet hair is another turn-off that some potential buyers may pick up on right away. While you're at it, open the windows and let some fresh air in. The more you can do to keep the home ventilated, the better.

If possible, keep your pets away from showing appointments. It's impossible to know what type of buyer is going to come through the door, therefore, you won't know what effect your pet may have on them. Some may be scared of your pet or overly distracted by it. You want your touring visitors to really take in all your home has to offer. If possible, relocate your pet temporarily or keep it in the yard. Also, hide any dishes, toys or other signs of pets residing in the home. You want your home to have the most cleanly appearance possible. Buyers have many options in today's market. Don't give them a reason to cross your home off their long list.

Although your pet is probably viewed as a member of the family, it's important to keep your home extremely tidy when showing it to buyers. By being aware of the "pet factor," you can neutralize your home to please any buyer's perception.


Major Lending Institutions to Allocate More Resources to Distressed Homeowners

December 8, 2010 10:29 am

RISMEDIA, December 8, 2010--Struggling homeowners in danger of foreclosure can expect better customer service from their lenders in the near future. As Congress has been calling for major lending institutions to improve their service, Bank of America and other major mortgage servicers have begun to respond.

According to the Los Angeles Times, Bank of America will be reassigning 2,500 personnel over to its loan modification department in response to borrower feedback and results from a Senate Banking Committee hearing held last month.

According to Barbara Desoer, Bank of America's mortgage chief, a new "case officer" system will be implemented, preventing customers from having to explain their satiation to a different employee each time they call. "We know this goes to the heart of many customer complains that you've heard," she said.

Wells Fargo and J.P. Morgan Chase have also announced that they will be following suit and allocating case managers to extend assistance to customers trying to save their homes, reports Mortgage Lending News.

Bank of America's confirmed re-assignment will involve employees at ten of its branches around the country.The 2,500 reassignments will increase their loan-modification staff by 10%.


Tips for Choosing the Best REALTOR for the Job

December 8, 2010 10:29 am

RISMEDIA, December 8, 2010--When choosing a REALTOR for your real estate needs, it's important to find one who will always have your best interests in mind. A dependable and knowledgeable agent can save you time, money and headaches. Your road to success depends on your ability to find the person for the job. Here are a few key tips to finding the right REALTOR for you:

A good rapport is key. Since your REALTOR will be helping you make one of the biggest decisions and transactions of your life, having good chemistry with them is important. You need to generally like the person you are conducting business with because there is no doubt that you'll be spending lots of time communicating with him or her. Communication should be easy and reliable, meeting the standards of both parties. If you find you are uncomfortable with an agent for any reason, it may be time to find a new one.

Keep your eye on conflicts of interest warns MortgageLoan.com. A large red flag: an agent who only steers you to their own office's listings. Beware of dual agents as well. One who works for the buyer and the seller is legally obligated to report back to the other party. With these types, you must be careful what you say, as anything could weaken your negotiating position. Try to eliminate any trace of conflict in your transaction.

A proven track record and proper credentials are things you should look into before agreeing to go through an agent, says Reuters. The agent should be licensed by your state, meeting minimum levels of education, training and testing. Also, look into what extra designations the REALTOR has, such as CRS (Certified Residential Specialist) or GRI (Graduate REALTORS Institute). How many homes did the agent sell or find for buyers in the previous year? All of this information could be a make or break for your decision to use them as your REALTOR.

Don't hesitate to interview different agents. In addition to questions regarding credentials, the National Association of REALTORS recommends asking the following questions: How long have you been working in residential real estate sales? Is it your full-time job? How many days does it take you to sell the average home? How close to the initial asking prices of the homes you sold were the final sale prices? By interviewing potential agents, you can get a better feel of their work practices and successes and better judge whether or not you want to work with them.

Neglecting to carefully select your real estate professional is a rookie mistake any buyer and seller can easily avoid. With the right agent, you can set yourself up for success when buying or selling a home.


Real Estate Deal Breakers

December 7, 2010 10:29 am

RISMEDIA, December 7, 2010--Home sellers in today's market should know that plenty of buyers with good credit are simply being cautious. Though this tends to keep sales down, in most areas its a buyers market and people can afford to be picky.

"Most buyers in this market will try to re-negotiate based on the findings of their home inspection. If the seller is unwilling to make repairs or lower the price, they walk away," says Kathleen Kuhn, president and CEO of HouseMaster. More and more home sellers are getting a pre-listing home inspection that helps identify potential deal-breaking issues before the house is listed on the market," Kuhn continues. "This way, sellers can fix problems and worry less about a buyer walking away later in the deal process."

According to Kuhn, the following are "The Fearsome Four" when it comes to real estate deals:

Roofing Concerns: A new homeowner does not want the expense of roof replacement shortly after closing. Many sellers believe that if their roof is not leaking it is in acceptable condition. However, underlying issues can exist.

Electrical Problems: Some panel models were discontinued and might even pose a fire hazard. Although they are straightforward to replace, the potential fire risk can be scary for prospective buyers.

Structural Issues: Fortunately, major structural issues are the least common defect found in homes, but when they do occur, they can be costly to repair. Note that a professional home inspector wont assess the extent of repairs needed when these conditions are found. Structural engineers and other professionals should be consulted to get specifics on the scope of repairs needed.

Synthetic Stucco or Exterior Insulation Finish Systems (EIFS): Overall EIFS can be effective, economical alternatives to traditional stucco. Unfortunately, installation issues often lead to trapped moisture behind the siding, causing mold and extensive deterioration. In many cases the siding has to be replaced, often with a different type of siding that can cost tens of thousands of dollars.

Sellers lose some advantage when they are caught off guard by issues, including minor ones. In a market where every edge counts, sellers can use tools like pre-listing home inspections and repair records to show that they are conscientious and have taken appropriate steps to sell responsibly and competitively.


Major Mortgage Providers Freeze Foreclosures for Holidays

December 7, 2010 10:29 am

RISMEDIA, December 7, 2010--Several major mortgage players have announced that they will not evict borrowers in default during the two weeks surrounding Christmas, reports CNN Money. The two government-sponsored enterprises, Freddie Mac and Fannie Mae, will suspend all foreclosure evictions on mortgage loans they own or back from December 20 through January 3.

Evictions indicate the end of the unfortunate foreclosure process. Upon sale at a foreclosure auction or after banks repossess the home, owners must vacate the property or face eviction notices.

"If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays," says Anthony Renzi, executive vice president of single family portfolio management at Freddie Mac.

Many of the large banks already observe a moratorium through the New Year. Unless the foreclosure involves an investor choosing not to observe the holiday policy, banks such as Bank of America, J.P. Morgan Chase and Wells Fargo will also freeze foreclosures temporarily.


American Home Shield Launches Website Specifically for Mobile Phone Users

December 7, 2010 10:29 am

RISMEDIA, December 7, 2010--American Home Shield (AHS), one of the nation's leading providers of home warranties, has launched a new website specifically for users with smartphones.

The mobile site's content, look and feel cater to users of smartphones such as the Android, Blackberry, iPhone, or any other mobile device with a web browser such as the iPad. It is designed specifically for the mobile experience, making it is easy to navigate using any mobile Internet-enabled device.

According to Tony Roy, director of digital strategy for AHS, "Today's homeowners and consumers are busier than ever, and this release provides a convenient way for them to connect with AHS or learn more about home warranties."

Smartphone users who type ahs.com in their browser will be directed to the mobile site where they can be connected directly with AHS customer service, request a free quote, view frequently asked questions about home warranties, and more.

"The focus of today's mobile site is to make it easier for our customers and prospective customers to reach us no matter where they are," said Steve Burnett, senior vice president of sales and chief marketing officer for American Home Shield. "In the future, not only do we want to allow transactions on the site, but we'd like to add content for new products as well as for real estate professionals, contractors and others."


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