Start with the Feds and end with the consumers, but there's a lot of blame in between when it comes to who is responsible for the subprime mortgage morass.
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Daily Real Estate News l September 4, 2007
Buying a basically sound house and updating the cosmetics is a profitable thing to do in almost any market. But be careful what you buy or it may end up costing you later on.
Here are 10 tips to consider when selecting a fixer-upper:
1. Purchase homes that are at least 30 percent below the market value of comparable nearby homes.
2. Choose a location with low crime rate, good schools, and quiet streets. There isn't anything you can do to cure a poor location.
3. Choose a house with 3 or 4 bedrooms. Smaller homes are unlikely to have enough buyer appeal.
4. Avoid homes that need major unprofitable repairs, include wiring, major plumbing, foundation repairs, major kitchen and bathroom renovation, room additions, and/or a new room. Spending money on these basics doesn't add value.. Buyers expect them.
5. Find a home that needs profitable cosmetic improvements like fresh paint inside and out, new light fixtures, new carpets and flooring, and fresh landscaping.
6. Look for affordable, low down-payment financing, such as taking over an existing mortgage, lease with option to buy, seller carry-back financing, or a combination.
7. Avoid obtaining new bank financing until the fix-up work is completed and the home's market value has increased.
8. Don't buy a fixer upper that is more than 60 minutes from your current residence because it is important to visit everyday while the renovation work is being done.
9. Make sure that the seller or tenants will vacate immediately upon transfer of title.
10. Look for sellers who are motivated to sell and who want to make the sale happen.
Source: Inman News, Robert J. Bruss (09/01/07)
When mold issues are uncovered in a building, whether residential or commercial, there is a perception that the structure has become unfit or unusable. In addition, there are costs of litigation with tenants, purchasers of property or persons who claim to have been injured.
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Your credit report is a sort of fiscal fitness report. There are seven steps to take toward improving your credit worthiness.
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Daily Real Estate News l July 16, 2007
Confusing prequalification with preapproval can mean disappointment for both a home seller and a buyer. Real estate experts say that it's smart to urge buyers to become preapproved by their lender - not just prequalified.
For a buyer to obtain a bona fide preapproval, he must submit a loan application with the necessary documentation and fee. After the lender verifies and analyzes the application, it will notify the applicant of how money he can afford to borrow. Armed with that information, the buyer can confidently go home shopping.
Prequalifications are simply an estimate of what a buyer can afford. A buyer who assumes that this estimate is accurate and chooses a home based on the information may, in fact, be denied a loan when he actually applies, a situation that wastes his time and can put a seller in a bad position if they've already turned away a qualified buyer. And of course it wastes the real estate practitioner's time as well.
Source: Kiplinger's Personal Finance Magazine (08/01/2007)
Writing dispute letters about your account may not help to increase your credit score. Everytime a letter is sent disputing your account it will be recorded as "pending investigation".
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Daily Real Estate News l June 25, 2007
First-time home buyers have a lot to think about, and sometimes they don't consider all of the factors that will impact their enjoyment of their new home.
A handful of recent home buyers in St. Louis say what they wish they would have asked buying a property. The issues they raise are valid concerns for anybody buying a home practically anywhere:
* For pet owners: How welcome and comfortable will my pet in this home? Are there any restrictions and is there a safe convenient place to walk a dog.
* For condo buyers: How often and by how much have the condo fees gone up in the past? Is there a maintenance fund, and how large is it? While past performance is no guarantee, stable fees and good planning in the past is promising.
* For homes with basements: Does water sometime seep into the basement or other parts of the home? Has this property ever been flooded?
* For everyone: Who are the neighbors? Do any of them have noisy animals or hobbies?
* For homes near vacant land: What is the future of the adjacent open land? Just because a piece of property doesn't have anything built on it how doesn't guaranty that it won't.
Source: St. Louis Post-Dispatch, Sarah Casey Newman (06/23/2007)
What you think your homeowners insurance policy covers and what it really covers could cost you hefty, out-of-pocket expenses -- when you can least afford them.
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Mortgage brokers are coming under increased scrutiny as home mortgage defaults rise.
Some legislators are seeking to impose a fiduciary duty on brokers to put their customers' interests first, as lawyers, real estate professionals, and financial planners generally are required to do with their clients. But many mortgage brokers are opposed to this idea.
"The mortgage broker does not represent the borrower," says Chris Holbert, president of the Colorado Mortgage Lenders Association. "We sell access to money."
Brokers are involved in originating about 60 percent of all home loans, according to Wholesale Access, a research firm in Columbia, Md.
When choosing a broker, borrower should ask tough questions. Among them: In searching for loans, do you feel obliged to put my interests ahead of yours? Exactly how much will you earn on this loan? And how many lenders do you check regularly for rates and terms?
Source: The Wall Street Journal, James R. Hagerty (05/24/07)
No doubt a foreclosure purchase can be a good way to save money or buying a house , but if you don't know what you're doing the ordeal can smother you under a shroud of financial losses.
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Daily Real Estate News May 11, 2007
A recent survey by the District of Columbia government identified the metro areas that take the smallest tax bite. The survey looked at the tax burden for families in the largest city in each of the 50 states and Washington, D.C.
The D.C. government in its survey accounted for local income, sales, real estate, and car/personal property taxes for couples at various income levels. The survey' s rankings provided below from Kiplinger's Personal Finance Magazine are based on a dual-income couple, with one school-age child and a combined gross income of $75,000 in 2005.
Here are the top 10 metro areas that are under those circumstances claim the lowest percentage of taxes:
1. Achorage, Alaska: 4.1 percent
2. Cheyenne, Wyo.: 4.3 percent
3. Jacksonvilee, Fla.: 6.6 percent
4. Las Vegas, Nev.: 5.4 percent
5. Honolulu, Hawaii: 5.6 percent
6. Memphis Tenn.: 6.1 percent
7. Sioux Falls, S.d.: 6.3 percent
8. Fargo, N.d.: 6.3 percent
9. Houston, Texas; 6.3 percent
10. Billings, Mont. 6.7 percent
Not surprisingly, seven of the top 10 cities above are in states with no income tax.
Source: Kiplinger Personal Finance (05/07)
The number of U.S. millionaire households has risen to a record high of 9.3 million as of mid-2006, up 5 percent from 2005, according to TNS Global annual Affluent Market Research Program.
The millionaires' mean net worth, not including their primary residence, is $2,167,167 with investible assets of $1,442,841. Their median age is 58 and 45 percent are retired.
Forty six percent of millionaire households own investment real estate such as a second home, third home, rental properties and undeveloped land. Thirty-four percent have a first mortgage on these residences and 25 percent have second mortgages on these additional residences.
The TNS study identified 10 counties with the highest number of millionaire residents.
Los Angels County with 268,136
Cook County, Ill., 171,118
Orange County, Calif., 116,157
Maricopa County, Ariz., 113,414
San Diego County, Calif., 102,138
Harris County, Texas, 99,504
Nassau County, N.Y., 79,704
Santa Clara County, Calif., 74,824
Palm Beach County, Fla., 71,221
King County, Ore., 68,390
-- Associated Press (05/01/2007)
Almost always, a peaceful solution is available that does not have to be destructive. As long as your neighbor is cooperating, solving this problem is easy and inexpensive.
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Foreclosure continues to be a serious concern for many U.S. home owners. Indeed, according to a recent survey from Yahoo Real Estate and Harris Interactive, 22 percent of home owners are at least somewhat concerned about the possibility of foreclosure due to their inability to meet monthly mortgage payments.
But Americans remain bullish on real estate. In fact, 37 percent of all U.S. adults would be at least somewhat interested in buying a house in foreclosure.
Here is a list of the 10 metro area markets where mortgage delinquency rates increased the most between the fourth quarter of 2005 and the first quarter of 2007, according to Equifax and Moody's Economy.com. The following list also includes the percentage increase in foreclosures for each area during that period.
1. Modesto, Calif.: 3.9 percent
2. Stockton, Calif.: 3 percent
3. Merced, Calif.: 2.8 percent
4. Port St. Lucie-Fort Pierce, Fla.: 2.7 percent
5. Miami-Miami Beach-Kendall, Fla. Metropolitan Division: 2.5 percent
6. Riverside-San Bernardino-Ontario, Calif.: 2.5 percent
7. Vallejo-Fairfield, Calif.: 2.4 percent
8. Las Vegas-Paradise, Nev.: 2.3 percent
9. Atlantic City, N.J.: 2.2 percent
10. Cape Coral-Fort Myers, Fla.: 2.2 percent
Source: Dow Jones Business News, Ruth Mantell (04/23/07)
The average price of a single family home in Lake Tahoe, Nevada reached $1.4 million in March, up 20% from the first quarter of 2006, according to a report prepared for Chase International.
"Lake Tahoe is unlike any other market," says Susan Lowe, corporate vice president for Chase. "When it comes to single family homes in Lake Tahoe, the bubble isn't bursting. Instead, these properties continue to show steady appreciation."
The biggest increase in the price of single family homes was recorded on the lake's east shore - the Nevada side of the lake. Prices there rose 67 percent from $1.5 million to $2.4 million in March, according to the report.