Wednesday, March 31, 2010

Weekly Map 3/31/2010

Hoboken Real Estate Monitor's Open House Map Open houses are picking up again as the weather warms and the real estate season opens. The Map is a great tool for starting the real estate purchase process. Walk around Hoboken on a Saturday or Sunday afternoon, looking at real estate. Get an idea of what your dollar can buy, in what part of town, with what amenity level. The map is refreshed through Thursday afternoon so be sure to stop by again before your weekend search. Sort by price, number of bedrooms or day of week! By subscribing, you will be able to not only get the basics - price, number of bedrooms, and street location but will get the unit number, and the full Multiple Listing Service listing with photos, square footage and more. . . .

Smart Questions to Ask Before Purchasing a Condo in Hoboken

Many homeowners find the condo lifestyle to be highly rewarding, and a smart investment. But there's some investigation to be done before a wise purchase is made. Here's a thorough list of questions to ask, at least consider before you go ahead and purchase a condo.

What is the age of the building?

Is the building air-conditioned?

What sort of security system is in place? Is it 24 hrs?

Is there a parking space included in the purchase price? (ask to see it!)

Is there guest parking, and if so what are the conditions of use?

Is the use of recreational facilities included in the purchase price, or monthly fees? Find out the terms of use for these facilities - are they strictly for the use of owners and their guests, or are they open to the public in any way?

What Costs Should You Add Onto Your Mortgage - and What Costs You Should Not By Todd Levinson

It's a known fact that the first couple years of owning a house are the most expensive years. This is especially true of pre-owned houses, where you're almost guaranteed to need to make some immediate repairs and adjustments, or will find you have to make some down the line. Many people believe it makes good sense to add in some of these costs into their mortgages. While it can make sense to add in some of these costs, it does not make sense to add them all in. Let us take a look at this debate.

As a rule of thumb the costs you add into your mortgage should only be those costs that will ultimately improve the value of your home. What this mainly includes are renovations for upgrades to "fixed" areas of your home. Examples include, permanent electrical work, a replaced roof, built in cabinetry, flooring like hardwood or tile and plumbing.

It doesn't make sense to borrow funds to purchase items that are not permanent fixtures in your house. Area rugs, decorative pieces, artwork, accent furniture and window coverings, at the end of the day, may look snazzy but won't make you any better off with regards to your investment. So don't attempt to include them into your mortgage amount. Hold off, and you can gradually accumulate these items over the years.

Purchasing such items with the "long-term borrowing" costs of a mortgage means you'll be paying interest charges on those borrowed funds for the next 25 years- this is VERY expensive. And, the foolish thing is that these investments are not evolving and growing to improve your home equity. They are separate from your investment and won't do much more than make your home pretty and comfortable - which is of course desirable, but it makes more financial sense to such touch ups with non-mortgage monies.

Of course there are other more logical ways to cover the costs of furniture and furnishings. Credit cards, short term loans and lines of credit all make much more sense than tacking on these costs into your mortgage.

Buy with Resale in Mind By Carol Werst

What are you thinking about when buying a new home? Are you thinking about the way that you can start your new life there? How about the money that you are going to spend? While there are some things which keep your mind busy when you are shopping for a real estate and there is one thing which you should not forget. Do you know what that may be? Whether you buy real estate with the idea of reselling. Sure, you may live in your home for a long years but you should not forget the resale opportunities.

When buying a home you need to remember that you are not going to live your rest of your life in the same house. This means you want to own the real estate and resell it to somebody else. For most people this is not a difficult, but if you do take this into consideration when buying in the first place you may find yourself in deep conflict. Take this situation for example.
You may find a great home that suits your every need, including your budget. The only issue is that the home is in a part of town that has been on the deterioration in recent years. If you really want the home you may end up buying it, and hoping that everything works out; and it may work for you. But what happens if the neighborhood continues to rapidly decline?

What Is Escrow? By Brian

Escrow is a transaction where one person delivers something of value to a third person, to be held until the happening of a specified event or condition, upon which it is then delivered by the third person to another. Both parties to a real estate transaction entrust legal documents and various funds to the escrow holder, which transfers the papers and funds upon the closing of escrow. As a neutral third party, both buyer and seller are assured that all mutually agreed to terms are met before the transaction is completed.

• Deposits the deed to the buyer with the escrow holder.
• Provides evidence to meet the buyer’s condition of sale,such as proof of repair work and inspections.
•Submits other documents, such as tax receipts, mortgage information, insurance policies, and warranties.
•Using the escrow holder as a common depository, the buyer and seller can proceed simultaneously in providing funds, deeds, inspection reports, insurance information, and other required documents. Both parties give written instructions,
the requirements of which must be met before the transaction is complete, to an experienced escrow officer. Lenders also specify their conditions for completing the loan process. Provided that the instructions are clear and mutually consistent, the
escrow officer, as a limited agent for all parties, saves time in the closing process.

Ten Pieces of Information Every Hoboken Buyer Should Know

10) First Time Home Buyer Credit: In order to make the April 30th deadline, you must be out of attorney review by the deadline. Realistically it means your offer must be in by April 15th. Attorneys will be swamped the last two weeks. If you want to get it done, build in the buffer. Need to understand the tax credit ? See The Homebuyer Tax Credit Chart

9) The Mortgage Market: What are the interest rates, given your credit score? Are there lenders that are more likely to lend to you? What are the potential pitfalls you should anticipate? A real multi-part answer. This is an encompassing piece that gets to the heart of the matter. Local lenders know their markets better. Connect with a local Hoboken Lender.

8) List vs. Sale Ratio
What's the average discount rate? 2%, 3%, 4% ,10%? It's a moving target based on segment and market conditions. Buyers must know what is reasonable negotiation position.

7) The Last Three Months Of Sold Hoboken Condo Comparables.
Sold comps will run 45 to 60 days behind the market. While they will not give you a real time understanding of today's market they are the only real data points that a buyer has. It's like trying to predict a stock price based on yesterday's information. However, coupled with market direction, sold comps give a buyer a way to understand what the true price range should be.

Mortgage Rates Rise Ahead of Fed MBS Exit, 30-yr to 4.875 (+0.125) research shows 30-yr fixed mortgages are available today at 4.875 percent to well-qualified consumers paying a standard .07 to 1 point origination. Today's rate is slightly higher (+0.125) than what's been obtainable for most of March.

It's not just the 30-yr fixed rate that's up, as a result of a decline in mortgage-backed securities prices late last week, conventional mortgage rates are up on almost every program.15-yr fixed mortgages, previously available at 4.125 with standard origination, are available today at 4.25. 5/1 adjustable rate mortgages, previously available at 3.625, are now at 3.75.

A larger increase in mortgage rates is expected soon after the Fed officially ends their 1.25 trillion dollar mortgage-backed securities buying program on the 31st. FHA mortgage rates have been steady. FHA 30-yr fixed mortgages remain available at 4.75%, now slightly better than the conventional rate.

Tuesday, March 30, 2010

Key Rates

Key Rates

How much home can I afford?

This article is to help you understand the factors influencing how much money the bank will loan you. This won't necessarily help you compute your borrowing power any better (that's what the calculator is for), rather it's just to help you understand the concepts behind those numbers better. This discussion isn't absolutely essential for most homebuyers, but it's provided for those who want to know as much as possible -- especially those having trouble affording a home who want to look for way to improve their house-buying chances.

Of course, if you haven't already gone through the basics of how much home you can afford and haven't used the calculator then you should go back there now before reading any further -- the page you're on now is the advanced stuff.

Okay, on with the advanced stuff....

You'll remember the simple formula from the previous page -- since you pay for your house with a combination of a down payment and a bank loan, the total of both is the cost of the home:

Down Payment + Biggest Loan You Can Get = How Much Home You Can Afford

You know how much you can afford for a down payment, so that part's easy. (At least you should know -- if you don't you should probably figure that out before going any further.) So that leaves us with finding the biggest loan we can get. So really, the rest of this page is really How much loan can I get? and not How much home can I afford? To find how much home you can afford just add the amount you can afford for a down payment to the amount you can get for a loan.

We've left one thing out of our simple equation above -- closing costs. You'll need to either pay the closing costs from your savings (lowering the amount you have available for a down payment), or qualify for a loan that's a little larger than the house you want to buy, and have the closing costs added to the loan.

Returning our focus to getting the biggest loan possible, here are the things that can get us a bigger loan:

Higher monthly income
Lower existing monthly debt payments
Bigger down payment
30-year mortgage (vs. 15)
A better credit score
A lower property tax & insurance rate
Let's look at each of these in detail.

Higher Monthly Income. Obviously the more you can afford to pay for a home, the bigger the loan you can get. The bank limits your monthly mortgage payment (including taxes and insurance) to no more than 28 to 36% of your monthly income. What determines where you fall on that scale is the size of your down payment and your credit score. In any event, the higher monthly payment the bank allows, the bigger the loan they'll give you.

This 28 to 36% figure is called the Housing Ratio. For example, if you make $3000/mo. and the bank uses a housing ratio of 33% then the bank figures you can afford $990/mo. in mortgage payments ($3000 x 28%). Note that the amount you can borrow is also limited by how much debt you have. Just because the Housing Ratio says your payments can be up to $990/mo., any debt you have couldbring that figure down. We'll cover that later on.

Concession Thoughts

Now is the time, in a recessionary economic cycle, when owners of investment properties begin to get calls from tenants about rent reductions, forbearance, assistance, desire to cancel their lease and a number of other requests for what amounts to financial assistance from their landlords. In these times it is hard for a landlord to know which way to turn given their own financial situation, the size of their mortgage and other variables.

In approaching a request from a tenant for some kind of relief it is vitally important that the landlord see the whole picture. That means that the landlord should expect adequate information to help make a decision that can lead to the success of the tenant and a going forward way of thinking about the business. With most tenants that means good financial information, from sales reports to operating statements, to a new business plan, to new financial statements and credit reports. With many tenants, however, realistically, such information just isn't available. Many small tenants aren't keeping records of their businesses in a manner that they understand them, let alone so a landlord can understand them.

How to Save to Buy a Home

It can be one of the hardest things to do -- save money for your first home. But now, more than ever, there's incentive to buy. Government housing tax credits have been extended and that's sparking buyers' interest.

Reports show that U.S. homes sales increased 10 percent in October to the highest level since February 2007. The tax credit, less expensive homes, and lower mortgage rates are being credited. However, while the government is helping to support the purchasing of a home, many Americans still can't afford to buy one.

"Most Americans are spoiled. Most Americans spend a lot of money on discretionary items," says Eric Tyson, co-author of Home Buying for Dummies, 4th Edition. "What it really comes down to is you have to be motivated to look at where are you currently spending money and what discretionary spending can you cut off," says Tyson.

Green-building Growing, More Jobs, More Buyer Interest

According to a new study from the U.S. Green Building Council (USGBC) and Booz Allen Hamilton, construction in the green-building industry will support 7.9 million jobs over the next four years while pumping into the American economy $554 billion. Currently, 2 million American jobs are supported by the same industry and more than $100 billion in gross domestic product and wages is generated.

The USGBC writes on its Web site that "buildings in the United States are responsible for 39 percent of CO2 emissions, 40 percent of energy consumption, 13 percent water consumption and 15 percent of Gross Domestic Product per year, making green building a source of significant economic and environmental opportunity." The study found that from 2000 to 2008, $178 billion in gross domestic product was contributed to the economy and 2.4 million direct/indirect and induced jobs were created or saved which generated $123 billion in wages.

"Our goal is for the phrase 'green building' to become obsolete, by making all building and retrofits green -- and transforming every job in our industry into a green job," said Rick Fedrizzi, president, CEO and founding chairman of US Green Building Council.

Fedrizzi says, "This study validates the work that the 25,000 people gathered here at Greenbuild, and every member of our movement, do every day." According to the press release, "The study also assessed the U.S. Green Building Council's 19,000-plus member organizations and found that they generate $2.6 trillion in annual revenue, employ approximately 14 million people, come from 29 industry sectors and include 46 Fortune 100 companies." It further included results from workers including architects, construction laborers, truck drivers—all aspects of the green building industry.

Weekend Do-it-Yourself Projects

Spring is here at last, and like many other homeowners you may be looking for simple do-it-yourself projects to spruce up your home or to increase its value.

Keep reading to get ideas on a few weekend updates and upgrades that are sure to be worth your while.

We've all heard the term "curb appeal." And that's where our projects start today. Curb appeal is another way of saying your home's "first impression." It can affect your home's value and saleability.

One easily overlooked element can be your driveway, sidewalks, and steps. Dirt, oil, and grime can darken and stain your concrete, giving it the appearance of being unkempt. This is not a first impression that sits well with buyers. But have no fear, there is a simple solution.

Power washing your concrete can be a great way to renew its look. You can rent a machine at your local Home Depot or local home improvement store. You could also buy one for use over and over again. Pressure "power" washers start for as low as $100.

Another concrete solution can be using stain. This is as simple as choosing the color, buying a gallon, and then rolling it onto your surface.

To prep your concrete, sweep the surface and then power wash or scrub it with soap and water.

Monday, March 29, 2010

Buying an Historic Home Requires Special Considerations

It ‘s often said, "What’s Past is Prologue." In real estate, the past can indeed determine the future, when buyers choose to restore or preserve a historic property.

"Opportunities abound for those wanting to purchase a historic home, but so do questions about the soundness of the investment," says Robert Alvarez, MBA, ABR®, a broker with MRA Realtors.

Before making an investment in history, Alvarez recommends that potential home buyers consider these questions:

•What regulations govern local historic buildings and districts?
•Does the house need extensive restoration?
•Are original or substitute materials available for repairs?
•Are craftsmen who are knowledgeable about historical materials and building systems available?
•How will the house be appraised?
Knowing what to look for is an important first step. "Potential buyers should understand that there are significant differences between a historic house and a new one," Alvarez says. "Before purchasing a historic home, consumers will want to research just how much restoration is needed and how much the restoration will cost. That includes, of course, uncovering any possible environmental problems not typically found in new construction such as the presence of asbestos or lead paint."

Knowledge of any structural problem and the time and money needed to fix it should not only influence the decision of whether to buy, but also how much to offer. In some cases, the seller may be required to undertake some of the work as part of the purchase agreement.

Home sales fell in North Jersey in 2009

North Jersey home prices dropped 8 percent last year, falling to their lowest level since 2004 and draining billions of dollars from the housing market.

Despite federal efforts to prop up the market with low mortgage rates and an $8,000 tax credit, the median price for single-family homes dropped 8 percent in Bergen County and 9 percent in Passaic County, according to an analysis of sales data by The Record. For the year, homes sold at a median price of $415,000 in Bergen and $320,000 in Passaic. Prices dropped the most at the low and high ends of the market.

“We entered 2009 staring into the economic abyss,” said Rutgers economist James Hughes. And that was reflected in the housing market, which continued to pay for the excesses of the housing boom.

It’s too early to tell how 2010 prices will shape up, although many analysts believe housing demand will slacken after the tax credit expires next month.

In fact, prices in 2009 were down about 15 percent from their peaks in the middle of the decade — much less than the roughly 30 percent average decline seen nationwide. Even more striking, the number of sales in the two counties has plummeted by 62 percent since the market peak, The Record’s analysis found. Only about 7,400 residential real estate sales were recorded in Bergen and Passaic, down from 19,300 in 2005.

Mortgage Rates Inch up Following Bond Yields

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 4.99 percent with an average 0.6 point for the week ending March 25, 2010, up slightly from last week when it averaged 4.96 percent. Last year at this time, the 30-year FRM averaged 4.85 percent.

The 15-year FRM this week averaged 4.34 percent with an average 0.6 point, up slightly from last week when it averaged 4.33 percent. A year ago at this time, the 15-year FRM averaged 4.58 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.14 percent this week, with an average 0.6 point, up from last week when it averaged 4.09 percent. A year ago, the 5-year ARM averaged 4.96 percent.

The 1-year Treasury-indexed ARM averaged 4.20 percent this week with an average 0.6 point, up from last week when it averaged 4.12 percent. At this time last year, the 1-year ARM averaged 4.85 percent.

"Mortgage rates inched up slightly this week as bond yields rose even further," said Frank Nothaft, Freddie Mac vice president and chief economist. "Interest rates on 30-year fixed mortgages, however, were still below 5 percent for the fourth consecutive week."

"Household debt burdens on aggregate continue to improve through the end of 2009. The Federal Reserve reported that the financial obligations for homeowners declined to under 16.1 percent of their disposable income in the fourth quarter, which represents the lowest share since the third quarter of 2003. Similarly, the obligations share for renters fell below 24.4 percent, the lowest since the end of 1993."

Homeowners Advice: Housewarming Party Etiquette

Buying a home can be the single largest purchase of a lifetime. And in our society, celebrating that purchase is a common and happy occurrence.

But questions arise as to what are the proper procedures and etiquette regarding a housewarming party. Can you throw the party yourself? Are gifts mandatory? When should the party happen? And can renters throw a housewarming party? These are a few of the questions that we'll cover in this article.

The first tip from the experts is to wait to have your party until you are actually settled into the house. Sometimes new homeowners are so excited to share their new life that they jump the gun. You don't want to be searching for a serving spoon or a mixing bowl when your guests are arriving. And you also don't want them walking a maze around boxes and disorganized furniture.

The next consideration is who plays host and organizes the party? You should feel completely comfortable in hosting your own housewarming party, if done with the right intentions. Housewarming parties shouldn't be done with the intention of getting gifts, just as a wedding shouldn't take place in order to get presents. If there are items you'd like to have, you could consider registering for gifts. Gifts, however, should probably not be requested or suggested as mandatory,. And registry information should not be included on the invitation. There will be guests who will bring offerings, regardless if you register, request, or not.

Real Estate Outlook: Steady Growth Expected

Harsh weather conditions held back home sales in February -- leading to some renewed gloominess by Wall Street analysts.

But several new economic reports, including on employment, suggest that during the coming several months we're likely to see steady but unspectacular national economic growth, and some pretty good housing rebound numbers to boot.

Even the February home sales numbers were nowhere near as negative as you might expect under the circumstances. Existing home sales were down slightly for the month – by six tenths of a percent – but were still clicking along at more than 5 million on an annualized basis.

Sales in the Northeast region, which took the brunt of the storms, were actually up by nearly 3 percent! Median prices in the northeast gained seven and a half percent!

New home sales were harder hit – down by 2.2 percent for the month. But median prices on new homes sold for the month jumped by six percent over January and were up five percent year over year, according to the Commerce Department.

Friday, March 26, 2010

Panel: Redevelopment in N.J. calls for ramping up state, local efforts

Attracting employers to New Jersey’s municipalities is often a major driver of redevelopment in those towns, but bringing in new companies will require improving the business climate on both the state and local level, a panel of redevelopment experts said Friday.

Jersey City put a new system in place to prove it was serious about preventing corruption following a series of high-profile arrests last summer. (NJBIZ file photo)“Towns cannot make commercial redevelopment work and attract investment to redevelopment areas unless state government is a constructive partner,” said Gil Medina, executive managing director of commercial real estate brokerage Cushman & Wakefield’s New Jersey operations, speaking at the New Jersey Future Redevelopment Forum 2010, in New Brunswick.

“New Jersey doesn’t have a business plan” that identifies new industry clusters in the state and that comes up with strategies to rectify policies and practices that make the state uncompetitive, said Medina, who served as the state’s commerce secretary under Gov. Christie Whitman.

Among his suggestions for improving the business climate in New Jersey were establishing a cabinet-level task force that would receive input from the private, labor and academic sectors; creating an advisory board of corporate executives; and forming an account management system, where account managers would proactively interact with employers in the state.

Another panelist, William O’Dea, deputy executive director of the Elizabeth Development Co., presented 15 rules for local development agencies to attract employers. Among them: having knowledgeable staffers up-to-date on development issues and available government programs and benefits.

“As much as they may fall in love with a site, (developers) understand the cost if they pursue development in a city and a town where your staff is either not qualified, not committed, not willing to work with you,” he said.

Stability in government also is key, since a lack of stability would present political and financial risks that may scare off businesses, O’Dea said. “Your political stability — you can’t change it, but you’ve got put the best face on it,” he said. Local officials with tenure, he said, are examples that “you’re going to be able to promote and sell to a potential business or developer coming in here.”

Jersey City has had its share of political ups and downs, when more than a dozen city officials or residents were arrested last summer as part of a massive corruption ring, but the state’s second-largest city “still managed to go forward,” said Robert Antonicello, executive director of the Jersey City Redevelopment Agency.

As a result of the July 23 arrests, “we now have a completely different process,” with the creation of a four-member development steering committee, he said. Prior to the arrests, “we had a dozen portals that you can enter the development process in Jersey City,” such as through the city council, freeholders or the mayor’s office, but “all of that is now one.”

Antonicello has also relied on focus groups to get feedback from the private sector and understand their issues and concerns. Towns need to “go the extra nine yards,” he said. “It’s no great secret on why some towns are successful and why some are not.”

Housing Bailout Plan #46 47 (Hard to keep up with these)

The Obama administration plans to announce programs to help homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.

The plan, to be unveiled today, would expand Treasury Department and Federal Housing Administration programs and use funds from the $700 billion Troubled Asset Relief Program, according to two administration officials. The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosure.

“It’s almost like a triage policy,” said Eric Barden, chief investment officer of Barden Capital Management in Austin, Texas. “It limits the losses of the most overvalued properties and it also limits the losses to the borrowers that are in the most distress.”

The new plan would increase payments to lenders that modify second mortgages, an official said. Banks’ unwillingness to write down second liens has helped block efforts to prevent foreclosures, said Josh Rosner, managing director at Graham, Fisher & Co. The Washington Post reported earlier on the administration’s plan.

The administration will propose allowing more mortgages to be refinanced into FHA guarantee programs if the borrower is current on the loan, one of the officials said. The lender would have to cut the amount owed by at least 10 percent to less than the value of the home. The first and second mortgages combined would have to be no more than 115 percent of the home’s value.

“Banks continue to carry second liens on their books at vastly inflated value,” Rosner said. “If the government reduced their ability to overinflate these assets, the banks would be more willing to engage in principal reductions.”

The Treasury would help unemployed homeowners reduce mortgage payments for at least three months while they look for work, the officials said. If homeowners don’t find a job in that time, or if they find a new job at a lower salary, they will be evaluated for further assistance.

Moving In, Not Out: Multi-Generational Housing Growing

In some cultures it's very popular to have mothers-in-laws, grandparents, and even children and their children all living under the same roof. But in America an attitude of independence has prevailed and living in multi-generational households has just not been as popular.

Today, times are changing and multi-generational households are a burgeoning trend which is changing what buyers are looking for in a house.

According to a January poll by Coldwell Banker, 37 percent of its 2,360 agents polled noted increases in buyers who want to purchase homes that can accommodate multi-generational families. The poll also found that financial concerns were the primary reason for the 39 percent of buyers or sellers who were moving into multi-generational homes. That was followed by 29 percent who said the reason was health care issues, and 6 percent expressed tight family bonds as the motivator to combine households.

"There are times when there are young families moving back into a home because they can't afford their own home and the owners of the home will adapt [their home]," says Goggin.

He says that owners used to build an apartment on top of the home for the younger couple. But he says, these days, homeowners are going beyond the common conversion such as finishing a basement or converting the garage. "It seems to be more elaborate, but always keeping in mind what will be sellable in the future—not just to throw an apartment on the house which usually is a negative point when you try to sell a house (because of local regulations about two family homes), explains Goggin.

He recommends that if you're considering a home for multi-generational living purposes be sure to look for these four things.

1. Space. Obviously, the more people in the home, the more space is needed. Goggin says, if the home isn't the square-footage that you need, buyers should just make sure that there is a way to expand on the property so that the home still retains its value upon resale.

2. No Stairs. Sometimes finding a home that's a single story can be very difficult, especially in densely populated areas. However, fewer stairs is a big plus for multi-generational families. Even homes that have sunken living rooms are often remodeled for not just the aging-in-place generation but also the very young (crawling babies and barely-walking toddlers).

3. Full bedroom and bath on first floor. If you can't find a single-story home that you like, at least having a full bedroom and bath on the first floor is essential. These types of homes are also highly sought after because of the fact that they have multi-purpose rooms—used for everything from an elderly family member, a nanny, or an office. With many people out of work and starting their own business, home office space is a high priority in housing.

4. Communication. People living together can be in a very blissful harmony but, often, issues occur if they are not stated and agreed upon beforehand. Looking for a home together can be challenging depending on mobility issues or, if small children are involved, it can lengthen the housing-hunt process. That doesn't mean their needs shouldn't be addressed.

It's a good idea to have several conversations to discuss the needs, chores, obligations, and expectations of all those who will be living in the multi-generational living home. Having this clarity ahead of time will allow you to shop for the most appropriate home as well as have a peaceful living arrangement beyond the purchase of the house.

Counseling Clients on Home Improvements

Before you start to counsel owners about home improvements, remember these two rules:

First and foremost, never counsel before you are hired. Counseling happens after a client-relationship is established. Attorneys don't offer legal advice before their services have been officially retained. Doctors don't diagnose without assurance of compensation. Realtors should follow suit. Wait until the listing agreement is signed. Then begin to give counsel regarding how the owner can realize a quicker sale or higher price by making recommended home improvements and implementing staging advice.

Too frequently, agents give away their expert counsel during listing presentations in hopes of proving their ability and expertise to sellers. More often than not, though, the sellers simply take the counsel with them when they link up with an agent who is less skillful but who promises a cheaper fee.

Second, tell the truth. If the sellers need to clean the home, tell them. If they are smokers and the house reeks from cigarettes, tell them.

I once had to convince some clients to hire professional cleaners to rid their home of the smoke smell that permeated the carpets, walls, and furniture throughout the entire home. Then I made them promise not to light up again for so long as they owned the house. They agreed under protest, but we sold the home, so they were happy. The wrong odor in a home can really lower the odds of a sale.

Likewise, appearances can kill buyer interest. If the home is crowded with too much stuff, say so. If the pink exterior color will cause people to drive right on by, speak up. Holding your tongue will only delay the day of reckoning. What's more, it's easier to be totally frank when you first notice the problem, though only after the listing contract is signed. If you counsel before you gain commitment, your advice could offend the sellers and cost you the listing. This is another reason to follow Rule #1 and get a signature before giving counsel.

Improvements that contribute to the sales price When it comes to preparing a home for sale, worthwhile and necessary improvements fall into three categories:

•Improvements that bring a home back to standard.

•Improvements that correct defects

•Improvements that enhance curb appeal or first impressions.
The following sections provide guidelines in each area.

Bringing a home back to standard Before you present a home with horribly dated d├ęcor, counsel the sellers to modernize the interior look in order to align it with the expectations of current-market buyers. Sellers don't have to go overboard; they just need to install a reasonable color scheme and implement enough of an update so that new owners will feel they can move in without having to undertake an immediate facelift. Share the following advice with sellers:

Keep improvements simple. A total redecoration isn't necessary or even advisable. The objective is to arrive at a widely acceptable and reasonably current color scheme in paint, counters, and floor coverings.

Don't aim to create a design showpiece. Realize that following the purchase buyers will often change a home significantly to make it their own. The sellers' objective is to allow them to feel that their changes can happen in time over the next years; that they're not glaringly and immediately necessary

Focus on the big stuff. If the interior of a home looks current and the landscaping, yard, decks, and patios are well kept and serviceable, the onus on buyers to make significant, immediate changes lightens. As a result, they'll be more likely to buy the home. They'll also be more apt to make a more competitive initial offer than would be the case if the home presented obvious exterior or interior color or repair issues. Any changes a buyer has to make to a home comes out of money they must have, not money they can borrow. Many buyers will use that fact as one of the factors of which home they buy now.

A little paint makes a huge difference. Repainting is one of the most cost effective ways to freshen the look of a home, and even to disguise design shortcomings.

Steer clear of the latest trends. Counsel clients away from the current rage in deep wall colors. Advise them to create a warm, blank canvas that any prospective buyer can work with.

Correcting defects If a home has defects, the seller has two choices: Fix them or provide commensurate monetary compensation to the buyers.

For example, if a roof needs repair or replacement the improvement will be expected by both the bank and the buyer. The seller can offer one of the following two remedies:

1.Handle and pay for the repair or replacement.

2.Provide the buyers with sufficient compensation to cover the cost and hassle of correcting the defect themselves. Hassle compensation is money above what it costs to professionally correct the problem. The amount extended for hassle compensation differs by task and buyer. In most cases, though, if buyers have to collect and decide between contractor bids, arrange for repairs, and check the work of the contractor, they'll want some compensation for their time and effort.
Enhancing first impressions Any cost-effective improvement that adds curb appeal or enhances first impressions can augment the sales price. Follow these tips:

Create dimension on the exterior of the home by adding shutters or fish scale over a garage gable, selecting a better color pallet and, certainly, spending a few hundred dollars to plant annuals to color up the exterior walkways. The effect will increase the probability of a sale and positively influence the sale price.

Inside the house, after improving the home's paint color scheme, advise sellers to assess the quality of the home's hard surfaces, including carpet, tile, vinyl, and counter tops. Replacing surfaces is often far less costly than buyers anticipate. Many choices look rich but aren't. A seller doesn't need to put slab granite on the kitchen counters; simply updating old, cracked, chipped Formica will deliver a great improvement and pay off when it comes to price negotiation. Choose a light, bright surface and the change can contribute the feel of a larger, lighter room.

When working with a limited budget (as most sellers do) counsel the sellers to improve surfaces in core areas first. Focus on the areas most used by buyers, which include the kitchen, family room, dining area, and master bedroom. Improvements to skip As a general rule, I advise sellers to skip any improvement that isn't simple or doesn't affect curb appeal.

Improving curb appeal ­– the home's ability to show well in a drive-by test – is essential because you want to get the prospect in the door. After that, limit improvements to necessary repairs, fresh paint, new hard surfaces, and a good cleaning.

When sellers ask about replacing cabinets, remodeling rooms, building bookshelves, replacing siding, adding decks, and even finishing basements, share the following facts:

•According to Remodeling magazine and the National Association of Realtors, the average major investment update on a home recoups 81% at resale, or only four out of five dollars spent.

•The highest average rate of return results from a minor kitchen remodel, which yields 93% of the costs incurred.

•The lowest average rate of return results comes from finishing a basement, which yields a 76% return.

•The more money spent, the higher the risk for the seller and the lower the chance of making a return or even breaking even.

Part II: Mr. President: America Needs A Trust-Based Mortgage System

This article is Part II from a series from columnist David Fletcher

Q: The property may be in foreclosure, but not foreclosed. It is still the owner's responsibility to pay the fees.

Making bad loans should only affect the company making them. Some banks have stopped paying the assessments that are due to the home owner associations when they are pursuing foreclosure. This places an obvious stress on the entire community that is dependent upon those funds to keep the street lights on and the grass cut.

Q: You seem to have strong feelings about this.

Yes, I do because I think that it is simply wrong to allow the actions of pursuing troubled loans to cause the price of every home in the neighborhood to fall thereby damaging every resident, local business and even the value of the other mortgages in every lender's portfolio.

Q: Are we discussing homeowner rights, here? Homeowner's and communities need to have rights and recourse against mortgage lenders that do not pay the fees required of every other home owner. This right needs to be in place to maintain the value of all of the homes in the community.

Housing is a national concern. The rights of homeowners and tenants must become more important to prevent even more damage.

Q: Lenders have the right to expect to get their money back, do they not?

Of course they do. Lenders need to have the legal right to get their money back. The point here is that they need to behave responsibly. A doctor should have the right to transplant a heart, but he should not have the right to kill the guy on the street to get it for the patient.

Q: So, the lender has a moral obligation, if not a legal one to protect all owners?

Other home owners in the neighborhood have made the long term commitment to live in that community and they also have an important stake in the long-term value of the community just like the lender has an interest in recovering its money.

Q: You said the lender is destroying his own security. Explain.

When a lender takes action that destroys the value of the surrounding properties, this action affects everyone, even the other homes that they have financed. Something has to be fundamentally flawed when a lender actually takes steps to destroy its own security that it has in the other properties that it has financed.

Q: What principles would you apply going forward?

A good first step would be to have the entity that issues a mortgage effectively guarantee it. If a mortgage is going to become a commodity and be traded, it should not be able to be sold without fully disclosing the underwriting criteria to the entity that buys it.

Q: How can this be prevented in the future?

It might be a good time to consider using the same type of checks and balances in the mortgage business that are in place to regulate a company that is going to trade shares on the stock market if these mortgages are going to be sold.

Q: Who should guarantee the loan?

If mortgages are going to be sold, then the originating company should remain in effect a "guarantor" to the loan. This would remove the incentive to simply write paper and then pass the high-risk paper on, and keep the low-risk servicing part of the business.

Q: That's a lot of pressure on the underwriter.

Underwriters need to focus on making sure that the borrower has the financial capability to repay a loan and that the underlying asset has the value required to secure the loan, not to operate a business that is focused on flipping the paper.

Q: Should mortgage lenders be licensed? Anyone representing a lender or involved in approving the documentation should be licensed, insured and held responsible for the information on the document that is being relied upon to make a decision to fund or transfer a loan.

If there proves to be a problem with the underwriting, the person that wrote the loan should be called upon to prove that they actually obtained the documentation and information that would be reasonably required and that they actually verified it.

Q: Some will resist your ideas.

I don't understand the resistance to taking the right steps to ensure that the American housing industry is stabilized and continues to be rock solid in the future. The consumer's interest and rights to quiet enjoyment of their home needs to take priority over the interests of poor or predatory lending practices."

Q: So what should be done? If mortgages are now going to be a commodity that is going to be packaged and traded, the way that these transactions are going to be processed needs to be controlled and tightly regulated. There is an immediate need to establish the policies, including requirements for disclosure and representation warranting the product and of course the rules and regulations governing the trading transaction must in place.

Regulation with teeth is probably going to be the answer. The tightly regulated American stock exchanges and commodity trading floors are the model for the rest of the world and it works.

Thursday, March 25, 2010

Real Estate Investing: How Will it End?

Real estate investing needs a long term vision. As individual investors we save money, purchase real estate and try to increase our portfolio over time, hoping that by the time we retire, if not before, the cash flow from the investments might pay for college for our children and then pay for a comfortable retirement.

Curveballs: Around 40 we decide it is time for us to improve our money management strategies so that we have money available for our retirement. Typically this happens because we can see our parents aging. We choose good investments, great locations, super cash flow, we refinance and use the equity generated to buy other investments.

Our plans look good until:

Multiple marriages/partners: Maybe we have been married two or three times, but what about the adult children that came with your new spouse? What if your spouse passes away and the step children want their inheritance now? The investment income you may have been counting on, or the house you thought you would live in for the rest of your years, may be in jeopardy.

Health: You were in good health but all of a sudden cancer caught up with you and you need to be in a rehabilitation facility. It was a good thing you purchased long term care insurance, but the drugs are affecting your memory; you are having a hard time making decisions.

Investment partners: You invested with a partner for many years, but his wife is ill and he needs to liquidate to have enough money to take care of her. Maybe our partner has four children and wants his assets to be passed to them. How do these partnerships continue…or end, do we have an exit strategy that will work favorably for all of the partners?

Mr. President: America Needs A Trust-Based Mortgage System

Dear Mr. President: Who in our lifetime would have thought that owning a home, the largest financial investment most families ever make, would spew so much financial misery when the housing bubble exploded? But it is not just about the money. It is the about the trust that was violated by the very ones homebuyers must trust the most, their mortgage broker or lender.

Lenders were advising marginally qualified buyers to purchase homes with creative mortgage products such as negative amortization, one and five year arms and all the rest, because "in five years increased home prices would more than cover the expense of refinancing."

Even worse, those who were purchasing mortgage-backed securities, such as pension funds, did not understand that although the loan pool, from which they purchased, included 'first mortgage' homebuyers, many of the mortgage products attracted buyers who could not or who would not make mortgage payments on time, and therefore would go into default.

The more we learn, the more it seems that lenders got out of the home lending business and into the mortgage selling business, and developed mortgage products to help anybody and everybody buy a home regardless of their income.

To help shed some objective light on what happened and what needs to be done to prevent such a meltdown, Mr. Harold Green principal of The Scollard Group, a national and international housing research and marketing firm to share his thoughts about what happened to the housing industry and what needs to happen now. He is not an economist. He is as he refers to himself, 'an observer."

First-Timer's Guide To Mortgage Shopping

It's not everyday you go looking for a mortgage.

It's not a trip to the mall.

It's a methodical, step-by-step process requiring planning, time, effort and attention to details.

Here are some guidelines for beginners, especially first-time home buyers -- assuming you've already laid the groundwork by inspecting your credit report.

• Inspecting your credit report and getting it in the best shape possible is your first step to the best mortgage. In today's tight money world it behooves you to take the time necessary to carefully scrutinize your credit report and credit score to be prepared to explain to creditors any dings you can't fix.

• Shop around for a mortgage from a variety of sources to determine what's available. Shop mortgage brokers, mortgage lenders, banks and credit unions. Don't forget to examine your local and state mortgage programs as well as community service and housing agency mortgages and mortgage assistance programs.

• Obtain all loan cost information, not just the monthly mortgage payment and annual percentage rate (APR). Check the cost of points (in dollar amounts, not just number of points), broker fees, origination fees, underwriting fees, administrative costs, mortgage insurance, yield spread premiums, commissions, escrow and closing costs -- each and every cost associated with your mortgage. You need these numbers to make a fair comparison.

Weekly Stats for Hoboken Real Estate Monitor Week Ending 03/17/2010

Use the weekly statistics to track the market. Bid on your new home with confidence!

See the price per square foot by neighborhood, by the number of bedrooms. What have units sold for? What are they listed for today?

Weekly Stats Public 2009

Wednesday, March 24, 2010

Agent Designations Explained

ABR. CRS. GRI. There are a myriad of Realtor and agent designations, enough to confuse anyone entering the real estate marketplace.

As a simple guide, here are 10 of the most popular designations and certifications you'll come across, and just what they mean for you.

Accredited Buyer Representation (ABR): This Realtor has met specific educational and practical experience criteria, including completion of a 2-day Real Estate Buyer's Agents Council (REBAC) core course, the REBAC web course, satellite television education programming, and one elective course. They've also passed a written exam on the legal and practical aspects of agency representation, have proven through 5 documented sources that they have met the practical experience requirements, and are a member in good standing with both REBAC and the NAR.

Accredited Land Consultant (ALC): According to the ALC, these professionals "aren't just land sales professionals, they are the most accomplished, the most experienced, and the highest performing land sales agents." Candidates have completed a total of six Land University courses, in a live classroom, online, and/or through their independent study program. Applicants must also have a least 3 years of experience in land sales or brokerage, and broker managers must have at least 5 years of experience.

Weekly Map 03/24/2010

Hoboken Real Estate Monitor's Open House Map Open houses are picking up again as the weather warms and the real estate season opens. The Map is a great tool for starting the real estate purchase process. Walk around Hoboken on a Saturday or Sunday afternoon, looking at real estate. Get an idea of what your dollar can buy, in what part of town, with what amenity level. The map is refreshed through Thursday afternoon so be sure to stop by again before your weekend search. Sort by price, number of bedrooms or day of week! By subscribing, you will be able to not only get the basics - price, number of bedrooms, and street location but will get the unit number, and the full Multiple Listing Service listing with photos, square footage and more. . . .

Existing Home Sales - March Report

Home Sales Pace

For the second month in a row, sales of existing U.S. homes fell in January, according to the National Association of Realtors. With the deadline of the first-time home buyer tax credit in December extended through June, buyers felt less pressure to buy immediately. Total sales fell 7.2 percent to a seasonally adjusted annual rate of 5.05 million units, down from December's downwardly revised 5.44 million sales. The silver lining is that January's sales figures were up 11.5 percent over January 2009 data.

"Most of the completed deals in January were based on contracts in November and December," said NAR chief economist Lawrence Yun. "People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales. Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery."

The national median home price fell in January to $164,700 from a downwardly revised $170,500 December price, but the latest median is unchanged from a year ago.

The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc. to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Can Government Make More Loan Modifications Ahead of the Next Foreclosure Wave?

The $75 billion Home Affordable Modification Program (HAMP), a creation of the Obama administration, has aimed to lower the monthly payments of struggling homeowners in order to save the country from more massive foreclosure rates. Unfortunately, the consensus so far is that it has not been terribly effective; only 110,000 homeowners have seen their trial modifications made permanent, meaning the majority of the program participants are still in danger of reverting back into default.

Now millions more foreclosures are being forecasted for 2010 as certain types of exotic loan rates are poised to reset this year. HAMP was originally designed to save several million homeowners from losing their homes, but so far there are only 902,620 borrowers enrolled in the trial program.

Rx for HOA Insurance Gapposis

One of the all too frequent occurrences in homeowner associations (HOA) occurs when a gap exists between insurance carried by the HOA and insurance carried by each homeowner. This is not a small problem. According to Murphy's Law: If there is a loophole, insurance adjusters will find it and refuse to pay a claim on it. So, when different insurance carriers define coverages differently, a gap in coverage results. This gap too often plays out in common wall homeowner associations.

One way to eliminate the possibility of insurance gaps is to have both the HOA and all owners insured by the same carrier. It makes sense to go one step further and all use the same agent. When the same carrier is used, where one policy stops, the other begins. No gaps.

Another way of solving the gap problem is for the board to adopt a Maintenance and Insurance Areas of Responsibility Policy which includes a list of grounds and building components and which party, HOA or owner, is responsible to maintain and insure them. The list should be definitive and consistent with maintenance responsibilities found in the governing documents. For example, if the governing documents state that the HOA is responsible for decks, the board cannot make it an owner responsibility.

Tuesday, March 23, 2010

For the First Time in a Year, Fewer Sellers Slash Asking Prices

How times change. is reporting this month that nationally fewer sellers cut their listing price on their homes and in some markets that's even resulting in bidding wars on lower-end properties, according to Trulia's March 2010 Price Reduction Report. stated that we are now at the lowest percentage of price reductions in the last year for homes that have been reduced. Just under 20 percent of homes that were for sale as of March 1st had been reduced at least once. However in the fall months of October and November, up to 26 percent of sellers slashed their asking price. The current figure is the lowest since the company started tracking these price reductions in April 2009.

"The total dollar amount slashed from home prices dropped to $21.6 billion and the average discount for price-reduced homes continues to hold at 11 percent off of the original listing price," states on its website.

The biggest declines in U.S. price reductions during the past few months (Feb. 1 – Mar. 1, 2010) have been in Charlotte, NC; Colorado Springs, CO; Houston, TX; Raleigh, NC; Jacksonville, FL. The highest percentage of decline for these areas was in Charlotte (28 percent drop).

In a press statement, co-founder and CEO, Pete Flint, said, "Consumer engagement on Trulia remains at an all time high, but home sales have dropped nationally during the past few months because there has been a lower sense of urgency to 'buy now'. As we get closer to the government incentives running out, we expect price reductions to increase as sellers begin to feel the pressure to lure buyers in, in advance of the tax credit expiration."

Mortgage Rates Hold Close to All Time Lows – 30-yr at 4.75 Still

Conventional 30-year fixed mortgages are available at 4.75% today for well-qualified consumers paying a standard .07 to 1 point, says rate research website

Today's 15-yr fixed rate is 4.125%, and the 5/1 ARM rate 3.625.

FHA mortgage rates continue to mirror those of conventional loans. While FHA loans do offer similar rates, the closing cost associated with those rates is significantly higher. That cost is set increase when MI, a premium charged at closing to borrowers obtaining FHA financing, is boosted from 1.75 to 2.25% of the amount borrowed on April, 05.

30-year fixed jumbo loans are available at 5.625% with slightly better rates (5.5) for borrowers with an extremely low LTV. Mortgage-backed securities prices, which drive mortgage rates in the opposite direction, have been flat in the month of March. As a result, mortgage rates have been stable, unchanged since dipping slightly at the end of February.

Just one week now until the much anticipated end of government MBS purchasing. The Fed says ideally the end of buying, set for March 31st, will cause only a slight rise in mortgage rates.

Current Mortgage Rates

•30-yr fixed rate – 4.750%

•15-yr fixed rate – 4.125%

•5/1 ARM rate – 3.625%

•FHA 30-yr fixed rate – 4.750%

•FHA 15-yr fixed rate – 4.500%

•FHA 5/1 ARM rate – 3.625%

•VA 30-yr fixed rate – 4.875%

•Jumbo 30-yr fixed rate – 5.625%

•Jumbo Conforming 30-yr fixed rate – 4.875%

Benefits of Homeownership

Homeownership can bring with it many blessings. Yet, the idea of caring for and maintaining a home, as well as affording a mortgage can seem daunting, but let's review some of the many reasons that homeownership can be beneficial.

The most obvious benefit is building wealth. The U.S. Department of Housing and Urban Development (HUD) notes that "home equity is the largest single source of household wealth for most Americans."

What is home equity? Home equity is the difference between the home's fair market value and the outstanding balance of all liens on the property. Let's say you have a balance of $100,000 left on your home's mortgage, but the property appraises for $150,000. You now have $50,000 worth of home equity.

And let's not forget about appreciation. While there is no set year-to-year rate that is considered normal, reports indicate that you can expect around a 6.5 percent average value increase in your home each year.

The National Homeownership Strategy cites that “through homeownership, a family ... invests in an asset that can grow in value and ... generate financial security." This is what sets homeowners apart from renters.

Real Estate Outlook: Freddie Mac Predicts Positive Recovery

Real Estate Outlook: Freddie Mac Predicts Positive Recovery
by Kenneth R. Harney
Could we be heading for a "double dip" in the economy, taking us back into recession, as some Wall Street analysts predict?

Could the Federal Reserve's planned departure from the mortgage securities market send home loan rates spiking upward, and knock the wind out of the housing recovery?

Those are scary questions. But last week one of the country's most accurate economic and housing forecasters came out with projections for the balance of the year that basically said: None of that scary stuff is going to happen.

Frank Nothaft, chief economist for mortgage investor Freddie Mac, sees what he calls "a very steady, quarter to quarter growth" pattern ahead, with no "double-dip" mini-recession hurting real estate, and only minor increases in interest rates.

Notehalf's econometric models point to expansion of the U.S. economy in the 3.3 to 3.5 percent range, as measured by the Gross Domestic Product (or GDP) through 2011. In economic terms, that's sort of a "not too hot, not too cold" scenario that helps keep interest rates low and inflation under control.

Nothaft forecasts average 30-year mortgage rates around 5.6 percent by the end of the year - up from today's rates but still in historically low territory and not high enough to seriously constrain housing demand or sales.

In fact, Nothaft expects total housing sales - that's existing resales plus sales of newly constructed homes -- to be at a nearly 6 million annual rate by the end of 2010, and even higher in 2011.

One sobering area in his projections, however, is prices. On a national average basic, his models point to a pattern of relatively flat prices for the coming year as the result of continuing high foreclosures, short sales and other distress situations in parts of central California, Nevada, Arizona and Florida.

But Nothaft emphasized in an interview with Realty Times last week that "the national numbers tend to obscure what's happening in regional and local markets" that are not heavily burdened with distress sales, and where underlying economic demand already is producing higher prices and multiple bids on homes for sales.

In a separate forecast last week, economists at the Mortgage Bankers Association predicted employment gains of 75,000 to 80,000 a month on average nationwide for the balance of the year - a sharp contrast to the 400,000 and higher monthly losses typical last year.

Bottom line here: Look for steady, moderate improvements ahead, nothing spectacular, but good enough to keep real estate headed in the right direction.

The Condo Solution: To Rent or Buy?

If you are renting because you believe it's cheaper than buying a home, it's time to take a close look at your math. Current interest rates make mortgage payments equivalent to or lower than rents in many areas.

At the end of a tenancy, you have paid out thousands of dollars and have nothing to show for this expense. Yes, renting may get you into a house or condominium that you could not afford to own at this point, but it still leaves you with nothing but the illusion of security.

Answering the question, "Should I rent or buy?" starts your real estate adventure. Don't rely on your own reaction to this question. A knowledgeable local real estate professional can take you through the process of evaluating possible answers to this question.

Decide to buy smart and you can gain enough financially on your first purchase to make a significant step up with your second buy. The equity, or accumulated value, increases in parallel with the marketplace and as the mortgage is paid down. Equity represents the potential down payment for your next property.

Credit Consequences of Home Loss

Financially distressed homeowners not only face painful personal circumstances, but also they must consider choices that have both tax and credit implications. While a variety of professionals may be able to explain taxation issues in these circumstances, not as much seems to be known about credit consequences -- other than that they are bad.

Recently, the legal department of the California Association of Realtors® (CAR) issued a memorandum titled "Credit After Foreclosure, Bankruptcy, or Short Sale." It is an extremely useful document for those who have questions about how credit is affected by the various ways in which one might lose his or her home.

In large part the memo is based on the 2008 update of Fannie Mae guidelines (Fannie Mae Announcement 08-16), so it should be clear that the explanations are not completely general or unqualified. When, for example, it is said that a person is not eligible to obtain a home loan for a certain number of years, that means that Fannie Mae won’t buy a home loan made to that person during that time. Granted, most lenders want to be able to sell their loans to Fannie Mae or Freddie Mac (whose rules tend to be similar), but there might be portfolio lenders or other institutions that would make such a loan.

Thursday, March 18, 2010

Weekly Stats for Hoboken Real Estate Monitor Week Ending 03/17/2010

Use the weekly statistics to track the market. Bid on your new home with confidence!

See the price per square foot by neighborhood, by the number of bedrooms. What have units sold for? What are they listed for today?

Weekly Stats Public 2009

First Time Home Buyer Credit Expires April 30th

First Time Homebuyer Credit was extended as of November 2009 both in terms of the deadline for use and the purchase price of a home. Unless Congress extends it again, it is set to expire April 30th 2010. You must have a contract of sale by April 30th, 2010 to take advantage of the tax credit program.

See the grid to the below and the IRS instructions and forms below. You can download them here.

*Income Limits Rise

The new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.

For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify.

New Requirements

Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law:

* Dependents are not eligible to claim the credit.
* No credit is available if the purchase price of a home
is more than $800,000.
* A purchaser must be at least 18 years of age on the
date of purchase.

*The information in this paragraph came directly from the website. Please always consult your tax advisor.

Homebuyer Tax Credit Word

Form 5405 - 1st Time Homebuyer Cr.

Wednesday, March 17, 2010

30 Year Fixed Mortgage Rates Unchanged

30 year fixed mortgages were available at 4.75 percent all of last week to well-qualified consumers paying a standard .07 to 1 point origination, says, a rate research website. 15 year fixed mortgages could be obtained at 4.25, and the 5/1 ARM at 3.625.

FHA loans continued to be available at the same rates as conforming mortgages. While MI and other FHA fees make FHA loans more expensive, a home-buyer tax credit of up to $8,000 is available through the end of April and applicable toward closing cost. New FHA loan guidelines, effective April 05, include an increase in MI to 2.25 percent of the amount financed.

Jumbo mortgage rates held steady last week as well. The jumbo 30 year fixed rate, for true jumbo loans exceeding conforming jumbo mortgage loan limits, remained at 5.625 percent all week. 5.5% was available to consumers with extremely low loan to value ratios of 60% or less. The benchmark 10 year treasury yield, a leading indicator for 30 year mortgage rates, finished the week flat at 3.7 percent. When mortgage rates dipped to all time record lows late last year, the yield dipped below 3.2 percent.

Welcome to the HOA Board!

The annual homeowner meeting convenes. The president announces that the floor is open for nominations. A fellow homeowners say to you, "You know, you would make a good board member." Before you have a chance to reply, some body movement indicates that you are willing, ready and able to serve. "The nominations are closed," a vote is taken, and suddenly you're on the board! What does being on the board mean? Who is going to teach you? How much does it pay?

What does it mean to be on the board of a homeowner association? You have made a commitment that you will serve the HOA's interests to the best of your ability, be fair on matters that come before the board, do your best to preserve and enhance the value of the members' property and spend money in a prudent manner. Being a director also means that you have the duty to make informed decisions. That means that if you do not understand something, you get good information, counsel and advice before making a decision.

More Time to File Form 1040

For most people, this year's deadline for filing Form 1040 is Thursday, April 15. Miss the deadline and you could get slapped with a substantial, nondeductible penalty. Generally, the penalty is 5 percent of the balance due (the amount that remains unpaid after subtractions for taxes previously paid through withholdings from wages during 2009 and payments of estimated payments) for each month, or portion of a month, that a 1040 is late.

The maximum penalty is 25 percent of the balance due -- a truly steep charge. On a balance due of, say, $10,000, that works out to $500 a month. The penalty can reach as much as $2,500 when more than four months elapse before your return reaches the Internal Revenue Service.

Weekly Map 03/17/2010

Hoboken Real Estate Monitor's Open House Map Open houses are picking up again as the weather warms and the real estate season opens. The Map is a great tool for starting the real estate purchase process. Walk around Hoboken on a Saturday or Sunday afternoon, looking at real estate. Get an idea of what your dollar can buy, in what part of town, with what amenity level. The map is refreshed through Thursday afternoon so be sure to stop by again before your weekend search. Sort by price, number of bedrooms or day of week! By subscribing, you will be able to not only get the basics - price, number of bedrooms, and street location but will get the unit number, and the full Multiple Listing Service listing with photos, square footage and more. . . .

Mortgage Rates from Hoboken Real Estate Monitor

Tuesday, March 16, 2010

10 Things to Know About Real Estate in 2010

Is 2010 the year to buy a house? It certainly looks that way: After a steep run-up in prices during the first half of the decade, home values have plummeted back to 2003 levels. Fixed mortgage rates are sitting near record lows. And the foreclosure epidemic—while painful for many home owners—has created some wonderful opportunities for bargain hunters. If that's not enough, Uncle Sam is handing out thousands of dollars in tax credits to nearly all first-time buyers and the bulk of existing home owners who close a purchase by June.

But while the 2010 outlook appears inviting, there's one key catch. "You need to have a stable job," says Mark Zandi, the chief economist of Moody's The economy is showing signs of life, but the unemployment rate is already at 10 percent and expected to go higher. And while those mortgage rates are attractive, buying a house makes sense only if you can bank on your income stream. So before you consider purchasing a home, take a hard look at your job, your company, and your industry.

More New Yorkers eyeing N.J. for a move

Drawn to lower real estate costs, modern facilities and incentives programs, an increasing number of New York-based warehouse users are making the move to New Jersey, either as part of a relocation or expansion into the state.

“There has been, since the beginning of the year, a lot more activity than last year at this time” among firms considering such a move, said David Berger, a partner at Totowa-based Carl Berger Associates, which helps businesses obtain commercial financing. “Companies are more comfortable or more confident in their business plan, and see the need to expand into New Jersey.”