Entering 2010, many home sellers feel they’re mired in the winter of their discontent, but there are signs the real estate market is on the mend. Sales activity is up, homebuilders are finally moving inventory and values are rising slightly in many American cities. At year-end 2009, mortgage rates stood at historic lows, spurring a wave of new applications.

But don’t be too jubilant. A recent report by Deutsche Bank estimates that by 2011, about 48 percent of all U.S. mortgages will be underwater. Short sales and foreclosures will continue to put pressure on home prices in 2010 as they work their way through the pipeline slowly. It was apparent in 2009 that lenders were holding back much of their foreclosure inventories and REO, or real estate-owned property, in an effort to keep values up.

Meanwhile, housing’s biggest economic driver — the job market — continues to stagnate as average unemployment remains high, at around 10 percent. So it’s no surprise the new year will ring in another buyer’s market, though with far more upside than in 2009. With that as a backdrop, here are 10 real estate tips for homebuyers and owners in 2010.

1. Take up Uncle Sam on his offer.

Might as well get a piece of that big stimulus pie while it lasts. At some point, the federal government will have to let the toddler walk on its own legs.

The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers who sign a binding contract to buy a home by April 30, 2010, and close on it by June 30, 2010, qualify. The program’s maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.

For those who have owned their homes for at least five years and want to trade up to a different primary residence, a separate $6,500 tax credit has been added. Further, many homeowners who are underwater in their real estate loans are eligible for a loan-modification program with their current mortgage company or loan servicer through the Making Home Affordable Program.

2. Find down payment assistance.

There are several down payment assistance programs for first-time homebuyers at the federal and local levels. Other down-payment assistance programs that can piggyback ongoing federal programs are often available at the city, county and state level. Just conduct an Internet search for “down-payment assistance programs” with your locality’s name added.

3. Make home improvements now.

For households with access to credit, now may be the best time in years to fix up the homestead, either for a potential sale or simply for the sake of better living. Low financing costs, reduced construction materials costs and lower contractor costs make rehabs more affordable. Repairs that typically yield the highest returns are kitchen and bathroom makeovers with an emphasis on counters and cabinets. Get three different estimates. Then, factor in an additional 10 percent for those on-the-fly “change orders” that inevitably crop up. See home improvement strategies and checklists at Homegain.com.

4. Hire real estate agents and home inspectors wisely.

Now is not the time to hire a friend or relative as your real estate agent, especially with one of the most important transactions of your life on the line in this still-shaky market. You want someone who is well-connected with other agents, lenders and other fellow industry pros. Check credentials, references and recent performance histories.

If you’re hiring an appraiser, make sure he or she is a veteran with at least five years of experience who’s appropriately state-licensed or state-certified. Because of potential conflicts of interest, don’t pick one based solely on a reference from a real estate agent. The same diligence should apply to hiring a home inspector. Conduct reasonably brief phone interviews with at least two or three before you choose.

5. Price accordingly, sellers.

This should be on every real estate seller’s priority list. In most of the U.S., there are few reasons that a house can’t go under contract in 60 days or less. The listings that generate activity while others gather dust are typically those whose owners have adjusted expectations based on comparably priced homes, or “comps.” That doesn’t mean you should drop your price precipitously on your well-maintained home to undercut the litany of poor-condition foreclosure homes. It just means “price to the present,” not to a fantasy market.

6. Don’t wait out the recovery.

Yes sellers, housing has been repriced. And by the looks of things, it will take years — even a decade or more — for values to return to their highs of two years ago. That potential loss you’re fretting over may only be on paper, especially if you’ve been in the house awhile. Example: Take a move-in-ready house that appraises for $250,000. Because there’s competing inventory, your agent advises you to take 10 percent off the price. Now you’ll be selling for $225,000. “Ouch,” you might say. But consider that you only paid $175,000 for the place in 2000. So how is a $50,000 profit, a loss? What’s more, if you’re planning to move up in the same or a similar market, you will likely realize that same 10 percent discount on your move-up purchase.

7. Think long term.

Buyers, don’t settle for “good enough.” Just because you’re getting a bargain doesn’t mean you’re getting a home that suits your long-term needs. Think functionality, neighborhood, location, access to services, highway access, work routes, schools, relatives and mass transit, and not price only. Do your homework, keep a cool head and carefully examine all the options. If you can spare the time, give yourself an extra month or two to make a decision. A house is a habitat first, an investment second.

8. Energy largesse.

Through Dec. 31, 2010, homeowners who buy and install specific energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can get a 30 percent tax credit for up to $1,500 of their costs on each product.

If you want to take it a step further, you can buy greener (and more expensive) energy-saving products, including solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems, and get 30 percent tax credit with no spending limit on each system, through 2016. Go to EnergyStar.gov’s Federal Tax Credits for Energy Efficiency for a complete summary.

9. Consider rent-to-own deals.

The current market has driven many former homeowners into rentals, where they have nothing to show for their payments. Rent-to-own or lease-to-own deals allow buyers to “tire-kick” a home for a designated period while paying a higher-than-market rent to buy down an eventual down-payment. This gets renters vested in a home while they repair their credit and also helps frustrated sellers generate an above-market revenue stream. Make sure to draft a very specific contract that spells out all the options.

10. Don’t take or make it personal.

Our homes have such a personal connection to us that we’re often challenged to turn them back into just plain houses when it’s time for us to sell. It is always best to remove personal effects such as pictures, knickknacks, mementos, trophies, greeting cards and the like before showing a house. (A good agent or home-stager should emphasize this.) There is a rule of thumb that you should count every item in every room of a for-sale home and eliminate or store 50 percent of them.

The buyers want to imagine themselves in the house for years to come and your excess decor and whatnots only distract from this vision. And don’t get defensive about colors or design patterns or flooring that you love. It’s OK to grit your teeth as you grin. Let your agent be the buffer. Remember, the customers (your buyers) are always right, unless, of course, they’re low-balling you.

SOURCE: BANKRATE.COM

 http://www.bankrate.com/finance/real-estate/10-tips-to-buy-or-sell-real-estate-in-2010-1.aspx

MIAMI (AP) — Home resales in the South skyrocketed last month as first-time buyers hurried to grab an expiring federal tax credit while exploiting low prices and mortgage rates.

The South recorded 176,000 home sales in November, the National Association of Realtors said Tuesday, up 48 percent from a year earlier when the nation was dizzied by the financial market meltdown. The median sales price fell slightly more than 1 percent, to $151,400.

Nationally, existing home sales soared nearly 47 percent compared with last November, without adjusting for seasonal factors. The median sales price dropped 4 percent to $172,600.

Half of the national sales went to first-time homebuyers using a tax credit of up to $8,000 that was set to expire last month. Congress extended the credit until next spring and also added a tax credit of up to $6,500 for repeat homebuyers.

The first-time homebuyer tax credit, along with mortgage rates below 5 percent, lured more buyers than during previous holiday seasons, real estate agents said.

”Remember that a year ago the months of October, November and December were pretty much the worst quarter in the history of real estate — and not just for San Antonio,” said Bob Leonard, a broker with Re/Max San Antonio.

”At least in the case of housing, the consumer confidence level is coming back,” Leonard said.

All 19 Southern cities covered by the Associated Press-Re/Max Monthly Housing Report showed sales increases compared with last November. Median sales prices were flat or increased in 11 Southern cities.

The AP-Re/Max report, also released Tuesday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Here are some highlights:

– Orlando, Fla.: This tourist mecca experienced two extreme swings in November. Sales doubled from last November, the biggest gain among Southern cities in the AP-Re/Max report. (Jackson, Miss., had the smallest sales gain at 15 percent.)

Meanwhile, the Orlando median sales price dropped by a quarter to $123,250, the steepest price decline among Southern metro areas in the AP-Re/Max report.

Homes priced $200,000 and below sold quickest in November, fueled by first-time buyers and investors, said Les Simmonds, president of L.G. Simmonds Real Estate Corp. in Orlando.

”If you have something in the low price range, your telephone will ring,” Simmonds said.

Still, prices could keep sinking because of consistently heavy foreclosure inventories, which have driven down property values in Orlando as well as in Miami and Tampa.

”That’s the kicker: It’s almost like you feel you are getting somewhere, then there’s always something to hold you back,” Simmonds said.

– Miami: This sunny metropolis saw the median sales price decline 23 percent to $152,000, but affordable prices for houses and condos helped spur a 59 percent sales increase from last November, the AP-Re/Max report showed.

Foreign investors and buyers looking for bargain foreclosures boosted sales for Ralph De Martino, owner of Ocean International Realty in Miami Beach. De Martino has presided over six deals since the start of November.

”Business has been pretty good — very good, actually,” De Martino said.

– Houston: With its steady oil- and health-care-based economy and solid employment base, Houston proved to be a strong market in November.

Sales of existing homes jumped 34 percent, while prices rose nearly 9 percent to $150,000 — the largest price increase among Southern cities in the AP-Re/Max report.

One hot area is central Houston, known as ”inside the loop” because it’s encircled by expressways. There, nicer homes rarely sell for under $300,000, and the few properties listed below that price last just a few days on the market, said Tim Surratt, an agent with Greenwood King Properties in Houston.

”We’re extraordinarily busy days before Christmas,” Surratt said. ”The window to purchase, where the prices are right and the interest rate is right, is closing.”

Michael Bradford has already jumped through that window. Bradford looked at about 20 houses after relocating from San Francisco to work for a Houston-based energy company.

He bought a three-bedroom, 2,300-square foot home for $405,000. He paid $6,000 above the list price after competing with other buyers for the home located inside the loop.

Bradford was surprised to see sellers refusing to budge on prices during his search.

”When I was dealing with sellers who had an irrational emotional attachment to the home, it really compromised the integrity of the process because they were not willing to understand what the market would bear,” said Bradford.

– Washington: Inventory in and around the nation’s capital dropped 40 percent compared with last November — the steepest rate among Southern cities in the AP-Re/Max report.

Industry experts say a decline in inventory is key to a sustainable housing recovery.

Existing home sales in Washington rose 36 percent from last November, while the median sales price inched up 1 percent to $286,000, the AP-Re/Max report showed.

In the ”close-in” areas of Washington — which includes areas just outside the city such as Montgomery County, Md., and Fairfax County, Va. — the dollar volume of home sales surged 64 percent over last November, said Donna Evers, president of Evers & Co. Real Estate in Washington.

U.S. sales of existing homes soar 7.4% Buyers looking to take advantage of a federal tax credit for first-time owners helped boost sales in November, a traditionally slow month, compared with October.

Sales of previously owned homes soared 7.4% in the traditionally slow month of November as buyers looked to take advantage of a tax credit for first-time purchases, an industry group said this morning. Sales of single-family houses, town homes, condominiums and co-ops rose to a seasonally adjusted annual rate of 6.54 million units in November, the National Assn. of Realtors in Washington said. That is 44.1% above the 4.54 million sales pace of November 2008. The 7.4% rise reported today was compared with sales in October 2009. The median price for all types of existing homes was $172,600 in November, a 4.3% drop from November 2008. Distressed properties accounted for 33% of sales in November, the Realtors group said. The Realtors group lobbied heavily for the extension and expansion of the $8,000 federal tax credit for first-time buyers initially scheduled to expire Nov. 30. Congress last month extended the subsidy through April and expanded it to include a $6,500 incentive for some buyers who already own a home. Lawrence Yun, chief economist for the Realtors group, said the bump came as first-time buyers — unsure whether Congress would extend the tax credit program in early November — rushed to take advantage of the credit. A survey of buyers in November by the Realtors group showed first-time purchasers made up 51% of all transactions. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit,” Yun said. The only markets with lower sales were in San Diego, Riverside and Sacramento, where inventory shortages for lower-priced homes are limiting sales, the Realtors group said. In the West, sales of previously owned homes increased 10.6% to a seasonally adjusted annual rate of 1.46 million units. That’s an increase of 28.1% from November 2008. The median price for a home in the West was $231,100, which is 4.1% below a year ago. Patrick Newport, U.S. economist for IHS Global Insight, said in a note to clients this morning that the effect of the first tax credit was to borrow sales from 2010 in 2009. The effect of the second credit will likely be to shift sales from the second half of 2010 into the first. “We project that sales will drop in the first quarter of 2010, payback from the first tax credit,” he wrote. “Sales will take a second hit in the third quarter of 2010, payback from the second tax credit. Overall, sales in 2010 will be about the same as in 2009.” Total housing inventory at the end of November declined 1.3% to 3.52 million previously owned homes available for sale, representing a six-and-a-half month supply at the current pace and down from a seven-month supply in October. The last time there was a lower supply of homes on the market was April 2006 when it was at a 6.1-month supply, the Realtors group said. But one major issue of concern among experts has been a potential wave of foreclosures hitting the market next year and flooding it, putting pressure on prices. A supply of 1.7 million of such homes headed for sale because of foreclosure or delinquency existed at the end of the third quarter, the research firm First American CoreLogic reported last week. Some economists believe that this glut of properties could slow the recovery, while others argue that lenders will put the homes up for sale at a careful pace.

SOURCE: 2009, The Los Angeles Times

The Federal Reserve said Wednesday that it would keep short-term key interest-rate target between 0 and 0.25 percent for an “extended period” – interpreted by many analysts to mean months.

Officials said in a statement after the close of its December meeting that the economy has “picked up,” unemployment is “abating,” and financial conditions have “become more supportive of economic growth.”

The Fed also said Wednesday that it will complete its purchase of up to $1.25 trillion in mortgage-backed securities by March, a decision that could negatively affect the availability of mortgages.

Source: The Wall Street Journal, Jon Hilsenrath (12/17/2009)

Home building rose 8.9 percent in November to an annualized rate of 574,000, the U.S. Commerce Department announced Wednesday.

The rate was still 12.4 percent below what it was in November 2008, but the increases were nationwide, with the Northeast leading the trend with housing starts rising 16.4 percent. Housing starts rose 12.3 percent in the South, 3 percent in the Midwest and 1.9 percent in the West.

Analysts attributed the increase to the extension and expansion of the home buyer’s tax credit. David Crowe, chief economist at the National )Association of Home Builders, is cautiously optimistic. “The new credit will have an impact as we move into 2010 and consumers plan for that credit availability, and builders begin to answer expected demand in the spring,” he says.

Source: CNNMoney.com, Hibah Yousuf (12/16/2009)

You don’t have to be a millionaire to buy a house

IRS Sets New Rules for Tax Credit The IRS has spelled out guidelines for eligibility for the home buyer credit when co-borrowers purchase a property. When a home-owning parent of an adult child co-signs for a mortgage and both names appear on the note, the IRS says that under some circumstances, the first-time home buyer can qualify for the whole amount. The IRS says the parent doesn’t qualify for any portion of the credit, but if the child hasn’t owned a home during the three years preceding the current purchase and can qualify based on income, he or she can be allocated the entire $8,000 credit. When unmarried individuals co-purchase a home and only one of them is eligible for the credit, then the full $8,000 can be allocated to the eligible buyer.

Source: Washington Post Writers Group, Kenneth R. Harney (12/04/2009)

Life After Bankruptcy

By Stephanie Anson, Licensed Real Estate Agent Benchmark Real Estate Group, Inc. Orlando, FL –

Bankruptcy is an uncomfortable subject for a variety of reasons. The most obvious is the potential havoc it can wreak on your finances. Running a close second is the negative stigma which is often attached to the process. This negativity is important to mention because strong emotions can sometimes lead to unsound financial decisions with devastating results.

Bankruptcy becomes a viable option for someone who is “upside down” in terms of cash flow. In other words, when a person has more money going out each month than coming in, bankruptcy should be considered if no reversal of this negative cash flow is within sight. The longer someone waits to explore the various options available, the more serious his or her situation may become.

One of the worst things people can do in this situation is to borrow more money to try and pay off their debts. On paper, this is clearly an unwise financial decision. In the real world, however, it is very common for individuals to pursue this strategy in an attempt to buy time and hold off on filing for bankruptcy. On the surface, this is certainly a noble notion; however it can often compound the problem and serves only to delay the inevitable.

For many homeowners in the midst of this upside down cash flow, speaking to a qualified mortgage professional is a much better option. An experienced loan officer can objectively look at your finances and help you determine if restructuring your mortgage would not only help, but possibly even alleviate any need for bankruptcy.

If bankruptcy is the only option, seek out a reputable bankruptcy attorney and credit counselor. A qualified mortgage specialist can provide references for you as well, as he or she works with these professionals on a regular basis. Reliable references are essential in this case because experienced professionals greatly increase the odds of a successful bankruptcy experience. It’s that simple.

When filing for bankruptcy, be completely honest and accurate regarding every aspect of your financial situation. This includes any changes to your income which may occur throughout the process. Bankruptcy is a federal procedure, adjudicated by real judges, and scrutinized by representatives who coordinate with the Department of Justice, the FBI, and the IRS. Here are some additional steps you can take to make the bankruptcy process as painless as possible:

• Save all paperwork regarding your bankruptcy, and keep it organized. This will prove beneficial after your bankruptcy as you now have all of the pertinent information in one place. Also, be sure to write down your discharge date. It’s surprising how many people forget to do this.

• Establish a household budget. This can be accomplished in many ways, but there are several inexpensive computer programs available which do an excellent job.

• Throughout the bankruptcy, do your best to not only live below your means, but to save as much cash as possible. You never know what you may need it for once the process is completed.

• Be prepared for a barrage of junk mail. There will be sharks on the loose who are hoping to capitalize on your need for credit.

Tips for Rebuilding Credit:

• If you must buy a car, focus on transportation as opposed to style. Buy an inexpensive, used car, and try to get a loan for it. It’s a good idea to figure out what your budget allows in terms of a dollar amount first. This means obtaining financing prior to looking for a car.

• Get a secured credit card. Secured credit cards allow for the cardholder to deposit a said amount of money into an account, thus establishing the spending limit of the card. Missed payments result in deductions from the account. Some of these cards will reward responsible borrowers by upping the limit without an additional deposit. Some will even convert the account into a traditional credit card. (Be wary of offers of “easy credit” or any card which asks you to call a 900 number. You will be charged for the call.)

• Meet with a credit repair specialist. Not only can they help you clean up the damage to your credit report, they can advise you on specific ways to rebuild the credit you lost as well. While it does take time, there is definitely life (and credit) after bankruptcy. Some mortgage lenders will even lend to you within a year or so after a bankruptcy. If you’re in serious financial trouble, the trick is to get the help and advice you need from professionals you trust.

Stephanie Anson is affiliated with Benchmark Real Estate Group Inc., a Licensed Broker, Florida Department of Real Estate.

Stephanie Anson

407-252-8240

sanson@benchmarkrealtygroup.net

Economic forecasters predict that 2010 will be the first year since 2005 for housing to contribute to the growth of the U.S. economy, according to a survey released by the National Association for Business Economics.

Home prices are expected to rise 2 percent next year, but forecasters don’t believe the increase in prices will discourage homebuyers.

More than 80 percent of economists surveyed by the NABE think the recession is over and recovery has begun, but they expect the expansion to be slow because unemployment persists.

Source: Associated Press, Mae Anderson (10/12/2009)

New Home Builders are providing great incentives on new construction. Almost all home building companies provide a 10 year structural warranty. There is also a one to two year warranty on mechanicals.

If you are a first time home buyer you may want to consider your options when looking to purchase a home. There is room to negotiate on new construction as well as on existing home sales.

Contact our office for assistance in your home purchase. Many of our agents have worked for builders and or have a strong contruction background. We have the skills to assist you in negotiations.