“With signs of a housing turnaround getting stronger, housing experts say buyers are finding several recent changes when they go to put in an offer on a home. A recent article at U.S. News & World Report highlights some of these changing “rules” for your home buyer clients:

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.”

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

This recent surge of bidding wars is a result of supply shortages, unlike the wars of the past “go-go years.”

According to the Wall Street Journal’s recent article, the competitive bidding hasn’t been producing huge price increases or leaving sells with large profits. The wars, causes by small inventory, provide the evidence that housing demand is looking up after years of decline.

“An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

‘We very much believe we’ve hit bottom,’ said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.” Read Full Article. 

• Appreciation – Buying a home now (at the current rates) can almost ensure your home’s appreciation in the future.  Mortgage rates are near historic lows and home prices in many parts of the country are down.  This is the perfect recipe for home appreciation.  Additionally, many foreclosed homes are available for a fraction of the original cost.  This can translate to a higher profit if you decide to sell once the market rebounds.

• Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible.  The IRS (Publication 530) provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.

• Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset.  Capital assets are given preferential tax treatment.

• Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals.  Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This trend is called equity building.  Equity builders usually select a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster.  This rapid payment process allows borrowers to:

• Pay off the principal balance faster
• Lock in near-record-low interest rates
• Shorten the length of their home loan
• Own their home faster
• Pay substantially less mortgage interest

Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners.  Also, home equity is the largest single source of household wealth for most Americans.

• Pride – Homeownership offers many benefits to many different types of people.  For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk.  For me, homeownership will permit me to build an NBA regulation size basketball court on my own property.  For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams.  No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.

Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.

It’s officially 2012 so let me start by wishing you a happy new year.  In early January, many of us are planning and setting goals for everything we want to do and achieve in the year to come.  While many people think of spring as the primetime home buying season, the winter months often offer an even greater selection, and the opportunity to settle into the new home before warmer months arrive.  If buying a house is on your “to do” list this year, now is also the time to begin preparing.

I remember when I bought my home.  There were so many things to get in order– it was confusing to decide where to begin! So, even if you plan to buy in the spring, January is a good time to get ready. Here are some tips to help you get on track to reach your 2012 home buying resolution:

• Select a qualified and trusted real estate agent: At Coldwell Banker, we have a network of knowledgeable, trustworthy agents.  Agents understand the local market and can help you find all the information and resources you need to get started. Researching on your own is important, and using free online tools is a great way to start, but meeting with an agent will ensure you don’t miss any important steps along the way.  In fact, the next three tips were sourced from the great advice of our agents.

• Create your “must-haves” and “nice-to-haves” list: Easier said than done, right?  But it’s next to impossible to find a first home with everything.  You’ll need to think about your lifestyle needs and prioritize the non-negotiable home accommodations, such as a bedroom for each family member, over items you may want, but not need, such as a large master suite. Everyone’s list is different, but knowing your “must-haves” in advance will help you stay focused.

• Determine your budget: Be realistic about what is affordable. An agent can help you find comparable home prices and hone in on approximately how much the payments will be.  You should also plan to get pre-approved for a mortgage. Doing this prior to house hunting will let you know how much money you qualify for, and how much you can afford. You’ll also be able to figure out which mortgage type is best for you.

• Identify the perfect “location, location, location”: Everyone has heard this phrase before, and while the surrounding neighborhood and home itself may improve over time, the physical location will remain the same. Determine in advance how close you would like to live to work, schools or extended family. A short commute to work, proximity to family or having easy access to highways and mass transit will often be items for your “must-haves” list.

Hope your 2012 is off to a good start. If you’re starting your home search in 2012, we’d love to hear what you’re doing to get the home search process started.

Homeownership can be a real joy, and now is a great time to get off the fence. Here are five great reasons to embrace the joys of home ownership…

1. Equity: When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Overall, today’s home buyers tend to be fairly knowledgeable about the real estate market, but there are still a few points of confusion in the process.

So, Zillow conducted a survey of 1,000 potential home buyers. The results revealed five main areas of confusion among today’s home buyers:

• Appreciation: About 42 percent of home buyers believe home values will appreciate by 7 percent a year. Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year.

• Mortgage insurance: 41 percent of buyers think they will have to purchase private mortgage insurance, regardless of the amount of their down-payment. Reality: Buyers only need to purchase PMI if their down-payment is less than 20 percent of the home’s purchase price.

• Appraisals: 56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition. Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value.

• Home owner’s insurance: 37 percent of home buyers said that buying home owner’s insurance is optional. Reality: Lenders require home buyers to purchase homeowner’s insurance.

• Ownership: 47 percent of home buyers said a prospective buyer owns a home after the purchase contract is signed. Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership.

www.youtube.com/watch?v=3hYgRg__Eq0

Now is the time!  Rare opportunity to own in one of Corolla’s newest neighborhoods!

Developer close-out pricing is now available on a limited number of ocean-side lots. Ocean Lake, the newest neighborhood in Ocean Sands, is centrally located in the resort area of Corolla. The community was carefully developed with the vacationer in mind, with home sites just steps from the renowned Outer Banks oceanfront.  Owners and their guests enjoy a seven acre community lake, an Olympic sized swimming pool with a separate children’s pool, four community tennis courts, and a community bath house with changing rooms.

Coldwell Banker Seaside Realty and our Partner, SAGA Construction are pleased to offer turnkey new home packages starting at just $359,000!

We are on-site, stop by today! Our Ocean Lake Sales Office is located at 694 Ocean Trail in Corolla.

The KCM (Keeping Current Matters) Crew reported on the Fannie Mae National Housing Survey, a survey asking the American public a multitude of questions concerning today’s housing market. “Each quarter, we like to pull out some of the findings we deem most interesting. Here they are for the most recent report:”

Most Important Reasons to Buy a Home

When we talk about homeownership today, it seems that the financial aspects always jump to the front of the discussion. However, the study shows that the four major reasons a person buys a home have nothing to do with money. The top four reasons, in order, are:

• It means having a good place to raise children and provide them with a good education
• You have a physical structure where you and your family feel safe
• It allows you to have more space for your family
• It gives you control of what you do with your living space (renovations and updates)

The Home as an Investment

Though most people purchase a home for non-financial reasons, everyone realizes there is a money component to homeownership. Here is what they said on this issue:

• 65% of the general population (and 67% of homeowners) believe that homeownership is a ‘safe’ investment.
• 56% believe that homeownership has more potential as an investment than any other traditional asset class.
• 69% think that now is a good time to buy a home (this number has increased in each of the last two quarters)

Rent vs. Buy

We are always interested in the difference people see in renting vs. owning.

• 63% of renters have aspirations to someday own their own home
• 72% of renters think that owning is superior to renting
• 95% of homeowners see homeownership as a positive experience (4% see it as a negative experience) while 82% of renters see renting as a positive experience (17% see it as a negative experience)
• 96% of homeowners live in a single family residence while 46% of renters live in a multi-unit building

The National Association of Realtors reports that last year unmarried women made up 20 percent of all home buyers, where single guys accounted for 12 percent. Single women have become a major force in the real estate market.

According to the Joint Center for Housing Studies, there are three main reasons why single women are buying homes in record numbers.

1. To relocate closer to a job or family
2. Because they need more space
3. And the number 1 reason: because they have a strong desire to nest

TODAY.com has some helpful tips for being a savvy solo home shopper. “For starters, it’s no longer ‘location, location, location.’ It’s now ‘location, condition and price.’”

Location- Obviously, location is still important. Try to buy in the best neighborhood you can afford. But also take your passions and hobbies into consideration before investing. If you love the nightlife that a big city has to offer, consider living right in town, with restaurants and bars within walking distance. But if you’re an outdoorsy type, a more suburban — or even rural — setting would put you closer to the weekend activities you love. Since many home-buying single women also are mothers, it’s also important to consider a school district’s reputation and the safety of the area.

Condition- For many solo buyers, a property’s condition is of equal importance to its location. I purchased a brand-new condo almost 20 years ago, and reveled in the fact that I didn’t need to call a repairman for almost 10 years. Old cottages in the woods may sound charming but can be money pits. Gray says, “I know it’s boring, civil-engineering stuff, but before you buy, find out about drainage. Will your basement flood in winter rains?” And don’t be afraid to poke around at the foundation, especially when you’re buying an older home. Spending a few dollars on a professional inspector can save heartache down the line.

Price- Where the rule of thumb used to be buy the most expensive house you can so that you can realize more of a return, nowadays you should carefully consider your monthly mortgage payment. Experts say it should not exceed 28 percent of your pre-tax monthly income. And stop thinking of a house as an investment and just think of it as a home (and perhaps also a tax write-off).

For more tips, read the entire article here.

Chief economist for Freddie Mac, Frank Nothaft, is optimistic that the housing market and the economy will improve in the second half of the year.

Nothaft predicts that mortgage rates will remain at historical lows of between 4.5 and 5 percent for the remainder of 2011. That being said, he also expects more buyers to stop waiting on the sidelines as recent price drops in home prices have improved affordability.

Some potential buyers are apprehensive to purchase until they have clear signs of an improved market and economy. Nothaft says that these buyers should be getting their signs in the second half of the year, with protected job gains, and a growing, improved economy.

“Even though near-term concerns over income and sales growth are restraining consumer spending, business hiring, and new building, a number of positive signs in the economy indicate that growth will continue and is likely to accelerate in the second half of this year,” Nothaft said. “Look for a gradual improvement in housing activity in the coming year.”

Read full article here.