It is a great time to buy for many would-be homeowners

The market offers historically low interest rates, as well as affordable home prices. Here are 10 steps that buyers can take to make home dreams a reality!

1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a down payment and closing costs.

2. Down payment options. Do you qualify for down payment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a down payment gift? Many financial experts recommend a down payment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Preapproved. It's time to talk to a lender! Pre-approval will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $1,000,000?

5. Get Prequalified. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are prequalified.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.

9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company. Try www.wix.com/dr_broker_shull/site and search for free.

“10 Reasons To Buy A Home, Now.”

1. You can get a good deal. This is a buyers’ market. Prices on average have come down about 30% from their peak according to the Case-Shiller Index.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. As recently as two years ago, they were about 6.3%. That drops your monthly payment by 25% or more. When inflation picks up, and it will, you won’t see these mortgage rates again in your lifetime.

3. You’ll save on taxes. You can deduct the mortgage interest rate from your income taxes and you’ll get a tax break on capital gains when you sell.

4. The home will be yours. You can have the kitchen and bathrooms as you want. You can move the walls, build an extension or paint everything bright orange. These types of changes are impossible for renters.

5. You’ll get a better home. In many parts of the country it is really hard to find a good rental. Many of the best places have been sold as condos. Generally speaking, if you want the best home, in the best neighborhood, you’re better off buying.

6. It offers some inflation protection. Studies by the Case-Shiller Index suggest that, over the long term, housing has beaten inflation by a couple of percentage points a year.

7. It is risk capital. No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. Sooner or later the economy is going to grow and real estate prices will head up again, too.

8. It is a forced savings. Part of a mortgage payment goes towards the principle repayment. You are just paying yourself by building equity. As a forced monthly savings, it is a good discipline.

9. There is a lot to choose from. Builders are sitting with inventory. They have also introduced new model homes that are more energy efficient, and in many cases more affordable to own. That means great choices, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. As hard as it may be to believe, demand will exceed supply, the price of labor and materials will increase leading to higher prices.

Now is the perfect time to buy if you qualify for a mortgage, especially if you don’t have a home to sell.

John L. Scott Real Estate Company

Most Homebuyers Have No Regrets

The Great Recession may have drained the equity from millions of homes, but when it comes to making what's often the greatest purchase of all, the vast majority of homeowners are resting easy.

An overwhelming 90 percent of homeowners say they don't regret buying their current home, according to a new study by Bankrate, Inc.

That's even in the face of stagnant - or sliding - home prices they've suffered and rock-bottom mortgage rates they may have missed out on.

Only 9 percent of respondents expressed second thoughts about taking the plunge. Why? Most often because they couldn't sell their home and move on, or because they were unable to afford the monthly mortgage payment.

"It's surprising and reassuring to hear 90 percent of homeowners say they don't regret the purchase of their current homes," says Greg McBride, CFA, senior financial analyst for Bankrate.com.

"And all the nasty headlines in the past two years have really moved the needle in terms of mortgage awareness, with a significant drop in the percentage of borrowers who don't know what type of mortgage they have," McBride said.

Only 8 percent of Americans don't know what type of mortgage loan they have. That's a lot lower than the 26 percent of respondents in a Bankrate study done two years ago who said they were in the dark about their mortgage type.

Being bullish on homeownership isn't necessarily new. A recent Fannie Mae report revealed 70 percent of consumers see a home as one of the safest investments to make and 64 percent think now is a good time to buy.

"The key to any real estate survey conducted in today’s market would be to factor in the state where the survey's respondents reside. In many parts of the country, particularly in the Central states, they did not experience a real estate boom like the West and East coasts and therefore are not faced with the fall out of a dramatic real estate bust today," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

She added, "Feelings about homeownership should have changed very little in those states where home prices and equity have remained relatively stable."

Other results in the Bankrate poll of 1,001 randomly selected adults, conducted last month by Princeton Survey Research Associates International, include:

• Fixed-rate mortgages are gaining in popularity. Seventy-nine percent of respondents said they had this type of mortgage on their home.

• Wealthier Americans -- those making more than $75,000 -- overwhelmingly preferred fixed-rate mortgages. Almost 90 percent of those who were asked, said they used a fixed-rate mortgage.

Mortgages and Interest Rates Revised

NORMAL APPRECIATION

NORMAL APPRECIATION
What we can learn from the past to set realistic expectations



As we look back at the real estate boom, it’s clear that many of us got used to the idea of quick home price appreciation. Real estate speculation became a game not just for investors, but for anyone with some equity and the desire to move. As we become accustomed to the post-boom market, our expectations for home price appreciation need to evolve as well.
From 1980 through 2010 (including six months forecasted for this year), home values appreciated on average 25% every five years. This average appreciation rate incorporates the post recession boom of the late 80s, the housing downturn of the early 90s, and the more recent boom and financial crisis of the past decade. The years since 2000 have been anything but normal. As a nation, we experienced extremely high real estate appreciation rates between 2002 and 2007, which were followed by historic price declines over the past three years. Though these appreciation and depreciation rates vary depending on area and price range, what seems to be true for all price points and regions is that homes are once again places of shelter—not get-rich-quick investments.
From this point forward, most homeowners will want to stay in their homes for three to five years to build up enough equity to make selling and moving a sound financial decision. This is because most major real estate economists anticipate that we will not see moderate appreciation in home value appreciation until 2011 and very gradual year-over-year improvement into the next decade.
The multi-year recoup period is historically normal: annual appreciation rates averaged 4.6 percent (compounded) per year since 1980, despite the many ups and downs over the past 30 years.
Since they will most likely want to stay in their next home for at least three to five years, today’s buyers need to consider their near- and long-term plans as they shop. Growing families, retirement, children going off to college, or any other factor that could affect their budget or the amount of space they’ll need over the next several years should be taken into account.
Many homeowners and would-be buyers are wondering if it is a good time to sell or buy. We have seen valuations stabilizing in many areas and price points, and since current historically low interest rates equal greater purchasing power, sellers and buyers need to consider their individual situations carefully.
As normal appreciation rates return and become more familiar, we must realize that while real estate is still a good long-term investment, a home is about far more than money—it’s there to provide shelter, comfort, and a safe place for families to gather.

Homebuyer Tax Credit Closing Deadline Finally Extended

Late Wednesday night the Senate followed the lead of the House of Representatives and voted to extend the closing deadline for the popular homebuyer tax credit that was scheduled to expire yesterday at midnight. Once President Obama signs the Homebuyer Assistance and Improvement Act of 2010, which he is expected to do next week, homebuyers will have until September 30 to close on their home purchase and still qualify for the tax credit (as long as they signed their sales contract by April 30, 2010).
The federal tax credit was part of the American Recovery and Reinvestment Act signed into law in February 2009. The $8,000 credit was available to first time buyers who purchased a house after January 1, 2009 and was originally scheduled to expire on November 30, 2009. The credit was seen to have stimulated home sales, especially in the lower price ranges, and in November Congress extended it through April 30 and added a $6,500 tax credit for non-first-time buyers.

Puyallup

The City of Puyallup is situated at the foot of scenic Mount Rainier in the beautiful Puget Sound region, 10 miles east of Tacoma and approximately 35 miles south of Seattle. Puyallup is known for its antiques stores, many of which are located next to each other on the main north-south street of Meridian. Puyallup is one of many cities and towns in Washington that contains an "old-fashioned" downtown shopping area. There are also lots of shopping opportunities on Puyallup's South Hill. The city boasts cinemas, restaurants, a two-year community college, parks and recreation, good K-12 schools, nice residential districts, and a lot more.

In its early years, Puyallup was an agricultural community. Farmers grew hops, berries, and flowers and the city continues to pay homage to its agricultural roots. Citizens are able to grow lush vegetable gardens in soil which has been nourished by eons of volcanic and glacial geologic activity.

The valley in which Puyallup was originally settled is the heart of the town. Its fertile soil is optimal for the acres of daffodils that are grown for distribution world-wide and are featured in the town's annual spring parade.

Beyond The Tax Credit – What Now?

With the Federal Home Buyer Tax Credit behind us, now it’s time to focus on the next phase of the housing market. I’ve had numerous people ask me, “what now”? So, here are my thoughts in a nutshell. The tax credit was a compelling call for action for those who took advantage of it. It also played a critical role in stimulating economic recovery. But the tax credit didn’t define the entire housing market. Even without the tax credit, the home buyer purchase power advantage remains high thanks to historically low interest rates and lower adjusted home prices.

Now it’s time to turn our attention to interest rates. Rates are currently hovering around 5% for a 30-year fixed-rate mortgage. But many economists are predicting that they will steadily rise to 6.5% by the end of 2011. As a buyer, it’s important to understand the impact that this can have on housing affordability.

To simplify the math, I will defer to the National Association of REALTORS®, who state that for every 1 percentage point rise in interest rates, 300,000 to 400,000 less home sales take place. The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer’s purchasing power by about 10 percent. Here’s an example the Associated Press put together that demonstrates this concept:

“Taking out a 30-year mortgage for $300,000 at a rate of 5 percent will cost you about $1,600 a month, not including taxes and insurance. But the same monthly payment at a rate of 6 percent will only get you a loan of $270,000.”

Using this same example, you can also deduce that with a 1 point rise in interest rates, a buyer’s purchasing power reduces by $30,000 on a $300,000 loan.

What we’re seeing now is a bifurcated market in which the more affordable housing markets are experiencing relatively low inventory levels and strong sales in areas close to the job centers and large-scale businesses. In the upper end markets there are higher levels of inventory due to fewer sales. In the coming year, the more affordable markets will continue gaining strength, the mid price ranges should remain fairly stable, and the upper end will likely experience some minor downward price adjustments.

Evidence that economic growth is heading in the right direction came out in a recent report by the Commerce Department which stated that the GDP increased by 3.2% in the first quarter, fueled mostly by growth in consumer spending. Furthermore, in early April, the Labor Department reported that nonfarm payrolls increased by 162,000, which is the largest gain in three years.

The home buyer tax credit brought many buyers forward that would’ve normally bought in the months ahead, so we can expect to see a temporary dip in sales along with increased inventory levels in all price ranges for the next few months. But barring any unforeseeable events, the health of the housing market can be expected to steadily improve as consumers continue to regain confidence in the U.S. economy and the American Dream.

*More affordable refers to homes priced at – or below – the median home price in a given market. - Lennox Scott

What To Repair Before Putting Your Home Up For Sale

If you are preparing to put a home on the market, it is expected that a few minor repairs and improvements will need to be done first. But what repairs will translate into the biggest return? Every home is different, but the answer largely depends on a variety of factors, including location, the time of year, how hot (or not) the market is and the competitive inventory.
The goal of most buyers is to move in with minimum costs and headaches. Thus, a home with completed repairs is a big draw. But here is where local market conditions impact the decision to do minor improvements. What needs to get done to be competitive? In a hot sellers market your client might not need to lift a finger, while in a buyers market that list of repairs may grow quite long.
Practical projects that require little of your clients time, effort or money - like applying a fresh coat of paint - can instantly make the home more appealing, helping it sell faster and for more money. So, without question, suggest they complete smaller repair projects like patching cement cracks in sidewalks, caulking windows and doors, replacing old doorknobs and locks, mending or painting fences and resurfacing asphalt driveways.
But what about the larger issues? Before your clients decide whether to fix or merely disclose to buyers, discuss the fact that doing repairs will invariably result in a higher sales price. You can undoubtedly relate firsthand stories of buyers who ratchet up their enthusiasm upon hearing the terms "new" or "just replaced" as you show a home.
Key changes:
• Along with removing old wallpaper, there is no more cost-effective improvement than the application of fresh paint: inexpensive, and relatively quick, painting should be your first suggestion when discussing repairs.

• Buyers typically desire hardwood floors, so it would pay to have your clients old carpeting removed and have the floors refinished. Replace chipped or cracked tiles, and clean or replace the grout, but don't suggest installing expensive ceramic unless it is in a small space, like an entranceway.
• In the kitchen, appliances and cabinets are the big-ticket items to replace. If your clients do not have to upgrade, they will save a lot of money. However, if their cabinets are worn and weathered-looking, the house might not sell as quickly (or at all). Paint might help here too.

• Kitchen remodeling is typically a wise return on investment, but high-end kitchen makeovers do not tend to return as much as mid-range or minor kitchen remodeling. Most buyers will be drawn to "new" but tend to shy away from the top-of-the-line refrigerator, high-end stove or travertine tile floors. Similarly, new counters show well with a simple laminate rather than expensive granite counters.

• Bathroom repairs and renovations are always a solid recouped cost. It is easier for prospective buyers to imagine themselves stepping out of the shower onto pristine new floors, surrounded by new fixtures and lights.
Typically, buyers will want to move into a house that has new appliances, updated plumbing, electrical and HVAC - a home that is ready to be lived in.

MOVE- UP/LUXURY MARKET Showing Signs of Life

Over the past several years, first-time buyers made up about 42 percent of the market. As a result of home buyer tax credits, those first timers represent close to 50 percent of buyers. However, increasing activity in the upper price ranges shows that buyers in the move-up/luxury market are sparking the housing recovery as well.
In Pierce County, pending sales* of entry/first-time/move-up homes (those priced $299,999 or less) were up 72 percent over last March. In the move-up/luxury market ($300,000+), pending sales were up 97 percent over last year. This is clear evidence that the move-up/luxury market is doing comparably well to the broader first-time segment, especially when you consider that this market has not directly benefited from home buyer tax credits like the lower price ranges have.

Why is the move-up/luxury market improving?
• Buyers who are hoping to “time” the bottom of the market
• Low interest rates
• The increased affordability of jumbo loans

At this time last year, interest rates on a jumbo loan were in excess of 8 percent due to a large number of lenders exiting the jumbo market. Today, many of those lenders are returning, which has helped bring interest rates on jumbo loans more in line with conforming loan rates: near 5.5 percent. In addition, Pierce County FHA loan limits are up to $567,500, which means that a buyer can purchase a home with as little as 3.5 percent down payment as long as the loan does not exceed $567,500.
With increasing optimism in employment numbers and consumer confidence, as well as the increasing availability of financing products, the housing market recovery should continue at a steady pace. And as we are already seeing, the recovery appears to be taking place throughout the price points, not just in the markets that have been bolstered by tax credits.

HUD Official going over “How to Properly Complete the new GFE ”

Is The Rumor Fact or Fiction?

Rumor Number One

The new "Cap and Trade" Climate change bill in Congress requires a homeowner to license their home prior to selling it.
FICTION!

There is no requirement in the law to license a home before your clients are allowed to sell their home. In addition, there is not a requirement to make a home more energy efficient before it can be sold.


Rumor Number Two

The recently-passed health care legislation imposes a 3.8% tax on homes sales.
FICTION!

An article has been circulating that mischaracterizes and overstates what is actually in the legislation. Here are the facts.
There is a new 3.8% Medicare tax for "High Income Filers" that goes into effect January 1, 2013 The tax is on unearned income and will apply ONLY to single filers with more than $200,000 of Adjusted Gross Income (AGI) and joint filers with more than AGI of $250,000. Unearned income includes interest, dividends, capital gains and net rents.
Keeping in mind the income limitations above, real estate income that will be affected for high-income filers include:
• Sale of a primary residence: If the gain from the sale of the property is below $250,000 (individual)/ $500,000 (couple) NO tax will have to be paid on the gain. The new Medicare tax would only apply to any gain realized over the $250K/$500K existing primary home exclusion that will bring the filers AGI over the $200K/$250K limits.
• Second Home/Investment property: The additional 3.8% tax will apply to the portion of the gain realized on the sale of a second home or investment property that will bring the filers AGI over the $200K/$250K limit.
• Rental Income: The portion of net rental income that exceeds the $200K/$250K AGI limits will be subject to the new 3.8% tax.

What is HAFA? And What is going on with Short Sales Today?