Truitt, a Realtor with Century 21 Elite in Tampa, discovered Showhomes, a home staging company, with what it calls a unique spin on traditional home staging: the nationally franchised company finds people to live in and help stage vacant homes so that they show better and sell faster. Given the declining real estate market, mansions and just about every other type of home are difficult to sell, the company reports.

Showhomes says it staged Truitt’s home and it sold in eight days. “I had an almost full price offer within a week of Showhomes’ staging, and a 25% higher offer than the two offers that had come in previously to the home being staged,” Truitt says.

Showhomes Tampa owner Linda Saavedra says Truitt’s experience isn’t a fluke.

She says the company’s staged homes are selling in a fraction of the time most homes are taking to sell. So are homes all over the country staged with Showhomes’ system, she adds. According to the company, a typical $850,000 home in Florida is taking well over a year to sell in today’s market and the average time it has taken Showhomes to sell these homes is 132 days.

“Recently we’ve had six major success stories with homes that have lingered on the market for over a year,” she says. “Three homes sold within 35 days and two others were contracted within seven days of staging. The home that sold in 8 days has been on the market for over two years and the sale price was 20% more than the offers they received when the home was vacant.”

“Our approach is working,” says Thomas Scott, VP of operations at the Nashville-based corporate headquarters of Showhomes. “We are experiencing similar home sales results in southern California, the Midwest and Northeast. Despite the glut of inventory, there are buyers in the market and they are choosing to purchase homes we have staged.”

For more information, visit www.showhomes.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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In some markets, buyers continued negotiate large discounts. The Vero Beach, Florida market topped the list again in September, with buyers paying a median 8.1% off the final price of homes. Based on a median listing price of $235,000, that translates to a discount of nearly $19,000. The other top negotiating spots were also in Florida, with buyers in the Naples, Sarasota and Panama City markets negotiating more than 7% off the final listing price of their new homes.

On the other end of the spectrum, buyers paid more than asking price in seven metro areas. Most of these were the California markets that have been hardest-hit by foreclosures. In Stockton, buyers paid a median 2.4%, or about $4,500 more than asking price. In Las Vegas, buyers also paid more than asking price (a median 0.5% or $836).

Here is a list of 10 markets where sellers are getting more than asking price.

One note about homes still on the market: 22.7% of them had a price cut as of the end of September, and sellers cut a median 6.5% off.

For more information, visit www.Zillow.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

For more headlines on RISMedia.com, be sure to see:
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HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes. 

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are: 

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI) 

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment. 

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.” 

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom/s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase). 

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999. 

For more information, visit www.homegain.com. 

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com. 

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If recent court decisions are any indication, we could be headed for an explosion of litigation in this area.

And now, Massachusetts Courts have revealed the possibility that unlawful foreclosures, dating back to 1989, might be invalidated and that buyers of foreclosed properties and short sales may have clouded titles.

The implications are enormous for title companies, bankruptcy attorneys, real estate agents, those facing foreclosure, and those who have lost their homes.

The problem stems from the collision of two worlds. It illustrates what can happen when the new world fails to acknowledge or understand the old. It is change that takes place without the cooperation of all affected parties.

Real property law has an ancient tradition. But, its laws and their purpose are not always apparent to those who want to change those traditions to benefit themselves.

In the case of maintaining a public chain of title to real property, it was thought to be essential and generally required by the law.

For hundreds of years, no one ever thought of any reason to change it. It was thought to be part of the public good.

That is, until Wall Street saw the money making potential in credit derivatives.

Credit derivatives are packages of debts such as car loans, student loans, credit card debts, and mortgage loans to name a few. These are collected, rated according to their risk, and sold to investors around the world.

One small problem; if you are going to bundle mortgages from every county in the country, you would have to physically send someone to every county recorder’s office on multiple occasions and pay multiple recording fees. It was costly and cumbersome to those responsible for affecting the recordings.

Their solution? Stop recording the assignments in public and track them instead in an electronic data base that the major lenders would operate through a cooperative entity. That entity is known as Mortgage Electronic Registration Systems (MERS). In my opinion, not only did it save them a fortune in county fees and manpower, it turned out to be a cash cow.

Well, good for them, right? They figured out how to bring technology to the process and were handsomely rewarded. Never mind that the cost of maintaining a county recording system is paid, in part, by the recording revenue. They still have to maintain the apparatus, but now they aren’t receiving the revenue intended to maintain the system. Of course, this comes at a time when many counties are struggling to provide necessary services to their residents.

But, as with many new ideas, there are unintended consequences that are now coming to light as state after state are enforcing basic property rights. Consider these cases:

Massachusetts

On October 14, 2009, Judge Keith Long of the Massachusetts Land Court said in his ruling, “The issues in this case are not merely problems with paperwork or a matter of dotting i’s and crossing t’s. Instead they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts legislature.”

He was referring to the industry practice of trading notes endorsed in blank, in direct violation of securities law. Here is what he said on that point; “The blank mortgage assignments they possessed transferred nothing…in Massachusetts, a mortgage is a conveyance of land. Nothing is conveyed unless and until it is validly conveyed. The various agreements between the securitization entities stating that each had a right to an assignment of the mortgage are not themselves an assignment and they are certainly not in recordable form.”

Two years earlier, Judge Rosenthal in re Schwartz, found that there was no evidence that the note itself was assigned and no evidence as to who the current holder might be.

Kansas

On August 28, 2009, Judge Eric S. Rosen of the Kansas Supreme Court likened MERS to a “straw man” and not a party of interest with the right to foreclose.

“Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of a default. The person holding only the deed of trust will never experience a default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not hold the deed of trust.”

California

On October 21, 2008, Judge Samuel L. Bufford noted in his ruling that California codified the principal in 1872 in Carpenter v. Longan: “Given that ‘the debt is the principal thing and the mortgage an accessory,’ the Supreme Court reasoned that as a corollary, ‘the mortgage can have no separate existence. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”

Nevada

On August 19th, 2008, Judge Linda B. Riegle concluded, “There is no evidence that the named nominee is entitled to enforce the note or that MERS is the agent of the note’s holder. Indeed, the evidence is to the contrary, the note has been sold, and the named nominee no longer has any interest in the note.”

Arkansas

On March 19, 2009 the Supreme Court of Arkansas found that MERS was not the beneficiary under the deed of trust, although so designated in the deed of trust, because it did not receive the payments on the underlying debt.

Ohio

On October 31, 2007, U.S. District Judge Christopher Boyko dismissed 14 foreclosure actions and delivered a strong admonishment in a footnote:

“Plaintiff’s ‘Judge, you just don’t understand how things work,’ argument reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process…There is no doubt that every decision made by a financial institution in the foreclosure is driven by money.”

When you consider the origin of this problem, it is hard to disagree. If the foreclosing entity didn’t loan the money, the original note was sold, the location of the note is unknown, and it isn’t even clear what would happen to the proceeds of the eventual sale of the property to a new owner.

Until recently, MERS had succeeded in most foreclosure actions. In non judicial foreclosure states like California, there is no judicial review of the elements of a foreclosure. Unless the borrower files for bankruptcy or brings a law suit against MERS alleging RESPA or TILA violations, there is no opportunity for the borrower to challenge the foreclosure.

In judicial foreclosure states, there is a law suit brought by the party entitled to payment on the defaulted loan. Not the trust, but the actual possessor in due course of the original note. It’s part judicial procedure, part uniform commercial code and part ancient property law.

But, the securitization business is so complicated, intentionally so, that defendants, most of their legal representation, and the judges rarely considered the consequences to the real parties in interest. This will continue until enough people understand the importance of the actual note and its relationship to the property.

I believe many homes have been unlawfully foreclosed by entities not entitled to anything. The former owners of these homes have rights that will need to be addressed.

People who applied for mortgage modifications and received them may have gotten approval from an unwitting bank employee with no authority to change the underlying terms of the securities in the pools.

Many people bought these homes and have potential future claims. If there is a cloud on title, the new owner is at risk of being unable to sell or encumber the property. If the foreclosure were unlawful, the borrower is entitled to their property. And, there is a very real possibility that the true holder of the actual note, once and if ever this mess is sorted out, could come forward with the actual note.

It isn’t important to only those in foreclosure. Those seeking loan modifications, potential buyers of short sales and foreclosures and those acting in a fiduciary capacity on their behalf, may soon be demanding, “Show me the note.”

About the author: George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.

Mantor can be reached at GWMantor@aol.com.

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The third quarter survey shows that 69% of Realtors think home prices will either stay the same (46%) or increase (23%) in the next six months. Compared with HomeGain’s second quarter survey, 71% of Realtors thought home prices would stay the same (49%) or increase (22%) versus 45% of Realtors who thought home prices would stay the same (36%) or increase (11%) in the first quarter survey.

According to the third quarter survey, 38% of homeowners believe that their homes should be listed 10 to 20% higher than what their Realtors’ recommend, up from 36% of homeowners who believed so, but down from 45% in the first quarter.

Sixty-four percent of home buyers think that homes are overpriced, unchanged from the second quarter and up from 59% of home buyers who thought homes were overpriced in the first quarter.

Seventy-three percent of home sellers believe that their homes are worth more than their Realtors’ recommended listing price, up from 69% in the second quarter survey and 71% in the first quarter survey. The survey showed that while home sellers still believe their homes to worth more than their Realtors say they are, they have tempered their price expectations. In the current survey, only seven percent of home sellers believed their homes were worth 21-30% more than their Realtors’ recommended price versus 14% who so believed in the first quarter survey.

“The third quarter HomeGain Home Prices Survey of Realtors reveals a continuation of the stabilization trends that became evident in the second quarter survey,” stated Louis Cammarosano, General Manager at HomeGain. “The vast majority of Realtors expect prices to remain the same or increase in the next six months. Buyers continue to believe that homes are overpriced and expect bargains, while a greater percentage of sellers, perhaps emboldened by stabilizing conditions, think their homes should be priced higher than their Realtors are recommending.”

Forty-two percent of Realtors surveyed indicated approval of Barack Obama’s performance as President, down from 57% in the second quarter. Forty percent of surveyed respondents ’strongly disapprove’ of the President’s performance and 18% ’somewhat disapprove’, earning the President a 58% disapproval rating. The President fared slightly better in the nationwide Rasmussen Daily Presidential Approval Index taken during the same period as the HomeGain survey, with his approval rating hovering in the 47-49% range.

For more information, visit www.homegain.com.

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Moderator:
Virginia Cook, Special Liaison for Large Firm Relations, NAR

Participants:
Charlie Young, CEO, ERA Franchise Systems, LLC, Parsippany, New Jersey
Margaret Kelly, CEO, RE/MAX, Denver, Colorado
Helen Hanna Casey, President, Howard Hanna Real Estate, Pittsburgh, Pennsylvania

Virginia Cook: Much has been written about the effects of the American Recovery and Reinvestment Act of 2009, also known as the Stimulus Package-specifically, the tax credit for first-time home buyers-and its impact not only on the real estate industry, but on the nation’s economy in general. As we speak, NAR and REALTORS® nationwide are working with the government to craft new programs and innovative strategies for luring new buyers into the market in the hope that their timely jump into real estate will stimulate our financial system. But is the tax credit doing the job as the President and the Legislature intended? Here we discuss the issue-and what may need to happen next-with three savvy industry veterans. Charlie, is the stimulus package living up to its hype? Is it having a significant impact?

Charlie Young: Well, it’s certainly having an impact on the intended segment of the market. First-time buyers in many regions account for more than 50% of current home sales, which means added activity and opportunity for sellers as well-particularly at the lower price points.

Margaret Kelly: That’s true, and we are all doing everything we can to keep momentum going in that segment. But increased activity doesn’t necessarily mean recovery. In many cases, we are getting distressed properties off the market-and that’s a good first step. But we can’t skim along the bottom forever. We won’t make real progress in the market until we find a way to provide some stimulus in the step-up market.

Helen Hanna Casey: An $8,000 tax credit doesn’t mean much to buyers unless they believe that their jobs are secure. One thing that helps is a job protection program, like the ones some car makers are promoting. Our program provides $1,500 a month for up to six months in the event they lose their job. In order to really move forward, people need to feel confident that the economy is stabilizing and their paycheck will still be there once they are homeowners.

CY: Good point. And if we’re making a wish list, we’d like to see mortgage rates stay under 5%. To really be effective and to impact the higher-end market, we’d like to see the tax credit increase from $8,000 to $15,000. We’d like to see it extended to all buyers, not just first-timers, and extended through 2010 instead of just through Dec. 1 of this year.

HHC: The only danger with extending the cut-off date is you lose that feeling of urgency-that feeling that, “I’d better get going before that tax credit goes away.”

MK: I agree with Charlie that a tax credit for all buyers would help. So would reasonable rates for jumbo loans. That would go a long way toward helping sellers move up. And we need to promote short sales and speed up the process so that sellers whose homes have lost value can manage to stay out of foreclosure and buy another home.

VC: NAR is actively evaluating a variety of federal legislative options that would provide an extension of the First-Time Homebuyer Tax Credit. In addition, through its Right Tools, Right Now initiative, NAR offers a variety of resources free of charge or at cost, including the “Save Now With the Homebuyers Tax Credit” brochure and a “Field Guide to Short Sales.” Visit www.REALTOR.org/RightTools for more information.

The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Virginia Cook, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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Sales of existing condominiums statewide in the second quarter rose 29 percent compared to the same time the previous year. This marks the third consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

Statewide sales activity in 2Q 2009 also increased over 1Q 2009’s sales figure in both the existing home and existing condo markets, FAR records show. For 2Q 2009, statewide sales of existing homes rose 37.2 percent over the 1Q 2009 figure; existing condo sales statewide in 2Q 2009 increased 45.3 percent over the 1Q 2009 level.

“In spite of the challenges with the economy, most people – 83 percent – still believe that buying a home is a good financial decision, according to a recent survey from the National Association of Realtors® (NAR),” says 2009 FAR President Cynthia Shelton, CCIM, CRE. “Many homebuyers are realizing that this is the time to buy – with a good selection of housing inventory, affordable pricing and low mortgage rates.

“In fact, three-fourths of those responding to the 2009 National Housing Pulse Survey said they think now is a good time to purchase a home, a number that has increased steadily the past two years,” she says. “However, providing solid financing options for homebuyers is key to returning stability to the housing market, and buyers also need programs that help with downpayment and closing costs. That’s why the federal $8,000 first-time homebuyer tax credit and other programs enabling eligible buyers to access that tax credit for downpayment or closing costs are so important – programs like the Florida Homebuyer Opportunity Program.”

Sixteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the second quarter compared to the same three-month-period a year earlier, while 12 MSAs showed gains in condo sales.

The statewide existing-home median sales price was $143,600 in the second quarter; a year earlier, it was $203,200 for a decrease of 29 percent. The 2Q 2009 statewide existing-home median sales price was 1.8 percent higher than 1Q’s statewide existing-home median sales price of $141,000. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 14,742 units sold statewide for the quarter compared to 11,459 in 2Q 2008 for a 29 percent increase. The statewide existing-condo median sales price was $111,100 for the three-month period; in 2Q 2008, it was $179,800 for a decrease of 38 percent. The 2Q 2009 statewide existing-condo median sales price was almost 1 percent higher 1Q’s statewide existing-condo median sales price of $110,100.

Continuing low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 5.03 percent in 2Q 2009; one year earlier, it averaged 6.09 percent.

The Florida Association of Realtors®, the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 115,000 members in 67 boards/associations.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Banks couldn’t shuffle money and trains would not run; sure calamity and ruin awaited us all.

It didn’t happen, of course, but it was good at generating sales as people stocked up and waited for the power to go out. As a matter of fact, it generated a lot of generator sales, most of which now sit in people’s garages and have never been used.

Lately, the fear has been a persistent, yet unproven, urban legend that the worst is yet to come and that a tsunami of foreclosures are working their way through the process and will come to market soon. A raging torrent of vacant houses swamping the market and sinking prices another 14%.

“Just wait until those rate resets occur.” some have said.

Speculation has included a surge in homeowners withholding payments in an effort to force a mortgage modification and laid off workers who will soon run out of benefits, wanting to have some cash for food and utilities. We know this group exists, but it has been difficult to determine the extent of it. The rest is easy to track.

Just as the so-called experts have been wrong about just about everything else, many are also wrong about the numerous facets of our current foreclosure panic.

While there were many things that brought us to this point, the biggest factor has been the ignorance, incompetence, and arrogance of our business and political leaders. They are either grossly incompetent or dishonest to their core and now they persist in continuing this drum beat of fear and apprehension, but in this case they are busted.

Primarily, as a way of deflecting blame from themselves, and in part because they really don’t know anything about how the real world functions, they started feeding the lap-dog media a rash of nonsense about toxic loans and greedy American consumers.

Remember, our terror has been good to them, and what could be more terrifying than losing your home, whether to “extremists” or a complex, world-wide fleecing? Color my chart red.

Now, with the passage of time, we have both perspective and hard data on which to derive some conclusions about the causes and the nature of the housing picture. And, the image is far different than what we are being told.

When you consider the following, we see a housing market and an economy improving in tandem. And, while every region is at a different stage, we are finding pockets of improvement. Here are seven surprising and hopeful signs:

1. Subprime loans and liars loans are not to blame.

According to a study by Stan Liebowitz, professor of economics and director of the Center for the Analysis of Property Rights and Innovation in the management school at the University of Texas, Dallas, “51% of all foreclosed homes had prime loans, not subprime, and that the foreclosure rate for prime loans grew by 488% compared to a growth rate of 200% for subprime foreclosures.”

2. Mortgage rate resets are not to blame.

Liebowitz, writing for The Wall Street Journal, said he found “That interest rate resets did not measurably increase foreclosures until the reset was greater than four percentage points. Only 8% of foreclosures had an interest rate increase of that much.”

And, with rates remaining low, it doesn’t appear that resets will contribute much going forward.

3. Lenders are not deliberately holding back on filings.

I speculated back in June that lending institutions may have been delaying foreclosures because they did not want to alarm shareholders and regulators who might disallow their bonuses for poor performance. No, that can’t be it.

Upon further reflection, the banks themselves aren’t even involved in the process. Most mortgage payments are paid to servicing companies who collect a small fee for processing the monthly payments of millions of loans.

However, just as every circumstance creates winners and losers, in this case the greatest single beneficiary of the foreclosure crisis has been mortgage servicing companies who make their real money squeezing fees, late charges, and penalties out of distraught homeowners.

And, from everything I can see in San Diego County, notices are being filed in a timely fashion, usually dependent on the resources of the institution, in order to protect the legal position of the beneficiary as well as begin a more aggressive phase of the collection process.

For a variety of reasons not market related, including a brief moratorium affecting a small percentage of San Diego loans, it can be several months before the foreclosed property comes to market. But, public records quickly reflect the filing of notices of default and foreclosure so we know what is coming.

4. The loan servicers don’t want to stop foreclosing.

They are the Repo Men of homes. They get paid really well to do what they do. The servicing companies, who control the process, are far better compensated for foreclosing on homes than they are for achieving a workout with the homeowner.

The bailout bonus program, Hope for Homeowners, offers only a fraction of the available compensation for a workout that a skilled telephone collector can wring out of vulnerable homeowners. And, there is no downside for the servicers, because the homes that secure the loans aren’t their assets.

Most defaulted loans are eventually brought current. But, in the interim, the servicer can extract tens of thousands of dollars in late fees and penalties. On those that do foreclose, there are a host of additional services the servicer can charge back to the institution that actually holds the loan. The servicers are actually in a hurry to file default notices because they gain additional leverage with the homeowner and can begin collecting fees immediately.

5. There is no evidence of a great backlog of foreclosures in San Diego County.

Market conditions are affected by many local influences so circumstances will vary from market to market, but we are seeing some positive national trends starting to get legs, and the positive trends in San Diego appear to be playing out on a national level. Analyze the data below for your community and do your own comparison, you might be surprised.

Here, I walk the streets, fiddle with the lock boxes, see a lot of houses, and talk to other agents. They all believe that it’s coming, but they all agree that we are woefully short of inventory. There is a large oversupply of homes over $700,000.

Homes that once sold for $1 to 1.5 million can now be had for $850,000. Only a small percentage of borrowers can qualify and, even then, financing can be difficult. Good properties priced below $560,000 result in dozens of offers.

The most striking thing is what I don’t see: “For Sale” signs. To hear some people tell it, you would think that looking down a street in a moderately priced neighborhood would be like walking into a super market for sign sellers and real estate franchises, but not here. The signs are gone.

If there were a lot of short sales and REOs, why would they not be for sale in a market that is so low on inventory? Because, they already have a buyer.

A report compiled by Robert Brown, Ph.D., California State University, San Marcos, based on 34 zip codes in North San Diego County shows both defaulted loans and bank owned properties as of the end of June. With the exception of a couple of zip codes with homes constructed in the boom years, bank owned properties represent only a month or two of inventory, if that.

The combined 34 zip codes have averaged over 1,100 sales per month in the past six months which is right on par with historical averages, and there are 3,939 active listings. The vast majority of these active listings are short sales and foreclosures. Many are so “unique” that they are either tear downs or projects beyond the ability of most homebuyers.

There are also 2,796 pending transactions and 1,474 more contingent sales, likely awaiting short sale approval. The majority of these properties are in the default stage, so it appears that many of the defaulted and bank owned properties in Brown’s report are reflected here and already absorbed.

There is very little inventory. We know that about half of our sales have been short sales and REOs, although that percentage appears to be increasing as non defaulted inventory is rare. The current pending and contingent sales, sales that already have buyers, are a whopping 4,270, a number that exceeds the total of active listings.

Conclusion: the vast majority of defaulted and bank owned properties are already represented in either pending listings, contingent listings, or active listings and there is no great flood headed our way.

Defaulted properties, not yet bank owned, amount to 4,688 and represent the wild card. It is difficult to determine exactly how many of these will be foreclosed and how many will be cured. Some also represent long term litigation as homeowners sue their mortgage companies.

In a normal economy, the vast majority of all defaults are cured. Often, these defaults are the byproduct of the ups and downs of businesses and professions, or a brief job loss or illness. Others, whose prospects are not so immediately resolved, would have the option of selling. It is safe to conclude that not all of these defaulted properties will wind up as REOs.

Many of these defaulted homes make up a very large percentage of a very small number of listings, or are represented in the 4,270 already pending or contingent.

North San Diego County Foreclosure Comparison

Active Listings IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 3,939
Avg. Sales Per Month IIIIIIIIIIIIIIIII 1,100
Total Bank Owned IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 2,984
Total Pending Sales IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 2,796
Total Contingent Sales IIIIIIIIIIIIIIIIIIIIIIIII 1,474
Total notices of Default IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 4,688
Comb. Pend. & Cont. IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII 4,270

6. Foreclosures related to fraud caused the first domino to fall, but are now gone.

One explanation for the higher default rate in prime loans mentioned above is that because prime loans require a high degree of documentation they are thought to require less scrutiny. Organized crime and even some disorganized criminals would rather make counterfeit documents than work for a living. Well documented prime loans fly right on through underwriting.

Take the case of San Diego’s infamous Lincoln Park street gang. They were able to pull off a $100 million mortgage fraud. If they could do it, imagine how many other street gangs got wind of this?

The first wave of foreclosures was fraud for profit. No payments were ever made on these properties and they were destined for foreclosure before the ink on the loan docs was dry. Most involved inflated appraisals and 100% financing.

These properties, not always the nicest, came to market just as builders were dumping their increasing inventory into the MLS. This glut of inventory drove prices below their replacement cost.

With declining equity, there comes a tipping point when it crosses the borrower’s mind that his home is worth half what he owes, and he gets angry.

But, here is the good news; the fraud activity peaked in 2006 as prices stopped rising and inventory began to build. These were the first wave of foreclosures. Most of these were loans on which not a single payment was ever made or intended to be made. Even at the slow pace of the foreclosure process, most of the fraud foreclosures have already worked their way through the system and have new owners.

7. Loss of equity and job losses are driving current and recent foreclosures.

It is no wonder that according to a study by Mc Dash Analytics of 30 million mortgages dating from the third quarter of 2006, in which 4.3 million homes went into foreclosure, only 12% of homes had negative equity, but they comprised 47% of all foreclosures. Further, it should come as no surprise that the next greatest factor in foreclosures was unemployment. If you don’t have a job, you cannot pay your mortgage.

San Diego County’s Leading Economic Indicators have posted positive gains the past three months except in the area of employment. This appears to be a jobless recovery, to this point. This may be a time when the demand for housing will contribute to a recovery in which the jobs will follow.

The construction industry is vital to the economy, but in San Diego County the opportunities for development are limited. Fortunately, military housing construction is on the upswing locally and there is some stimulus money ear marked for construction, so some, but not all, of those workers are already back to work. Some jobs are just never coming back.

The “Sustainability Economy” is already creating jobs in the area of energy retrofitting, including insulating, weather proofing, solar and wind systems that sell energy back to the grid, new materials and new techniques. These are promising jobs for the future, but the question is, when will they arrive?

Two circumstances are driving current foreclosures, unemployment and negative equity. Despite the push to refinance, it is obvious that that is no solution to the foreclosure crisis if the real problem is that people are upside down.

And, with servicing companies refusing to modify lucrative delinquent loans and it isn’t even clear if they can, they become a major force in inhibiting the recovery in some communities. The annoying part is that these companies have already received bail-out funds to compensate for the workout.

There will be more foreclosures. Except in times of extraordinary appreciation, there is always a baseline of foreclosures because of choices people make and things that happen in life. People will still get sick or injured, get fired, gamble, and with half of all marriages ending in divorce, foreclosures are inevitable.

Not to minimize the crushing impact on those who have lost and will lose their homes. Maybe more wouldn’t have to if our leaders had any compassion, or understood how things work. But, it now appears that after all the talk about a huge wave of foreclosures, they simply cannot be found. And, if they did exist, rather than flood the market, they would provide much needed inventory to satisfy a frustrated pent-up demand.

George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm. Mantor can be reached at GWMantor@aol.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

So I found some hip fabric (a gray cotton with a modern graphic print), took an upholstery stapler et voila! A whole new look for the dining room in less than two hours for about $40.

“Shouldn’t you take the chairs to a professional upholsterer?” a dubious friend asked before I started my DIY project. For a sofa or even a whole chair, yes. But for a few seat cushions, no. It’s so easy and more affordable to do it yourself. (Check below for step-by-step instructions from Betsy Blodgett, owner of Bon Bon Atelier in Kansas City, Mo.)

Fabrics are a way to set the mood of the room. Want sophistication in the bathroom? Create a tall fabric shower curtain that hangs from a rod close to the ceiling. It makes the room feel larger, too.

“A tall shower curtain is an expensive designer look, and it’s so easy to make,” says Eddie Ross of New York, who was a contestant on Bravo’s “Top Design” reality show. A book and his own television show are in the works. “You don’t even have to sew.”

Ross suggests taking an existing fabric shower curtain and finding a coordinating fabric for the bottom, fusing the fabrics together using Stitch Witchery, which works as an adhesive when it’s ironed. Sure, the fabrics can be sewn together instead.

This year Blodgett, a fashion designer, made her own shower curtain from a pink Asian-style fabric with metallic gold threads she found on sale at Jo-Ann Fabric and Craft Stores.

“It transformed the room, really setting the tone,” says Blodgett, whose bathroom now has a boudoir look. “The vinyl shower curtain before was hideous, definitely not very inspiring.”

Designers say fabric reflects personal style more than paint does. That’s why Karen Roark, owner of Urban Arts and Crafts, likes the idea of fabric as wall decor. For a modern look, fabric can be wrapped around square wooden frames and stapled in back. The fabric frames can be hung in a horizontal series of three or four or a grid pattern of nine. Placed inside garage-sale frames, fabric takes on a more vintage, feminine style.

Fabrics also can give a nod to trends without breaking the bank. Besides modern graphics, current looks include ethnic-inspired ikat (pronounced e-cat) and suzani motifs, says Jan Jessup, spokeswoman for Calico Corners, which sells hundreds of decorative fabrics. Wood grain-pattern prints also are becoming popular.

Don’t forget to shop your linen and clothes’ closets for fabrics, Ross reminds us. A towel can make a plush terrycloth ottoman cover in a bathroom. A flat sheet can be turned into a duvet cover. A quilted matelasse bedspread can become a chair slipcover. Men’s suit jackets, such as gray flannel or navy wool pinstripe, can be converted into handsome accent pillows.

Even classic summertime seersucker can look fresh. Check out the fun window display of seersucker-upholstered chairs at Brooks Brothers.

Room by Room: Other fresh fabric projects

Dining Room: Use outdoor fabrics to make tablecloths and banquette cushions. They are easy to bleach and clean.

Family Room: Create a junior ottoman by stacking three 26-inch boxed pillows that can also be floor pillows for television viewing.

Bedroom: Make a modern canopy by hanging bed drapery panels on swing-arm rods at each side of the bed.

Bathroom: Cover a wastebasket with a decorative fabric using spray adhesive. Add gimp or braid trim with a glue gun to hide the edges.

Closet: Upholster the walls and ceiling of a tiny closet using Mod Podge as an adhesive.

Step by step: Reupholster dining seat cushions

Supplies and Equipment Needed:

- 3 yards of fabric for four chairs
- Tape measure
- Upholstery stapler with heavy-duty staples (about $15 at fabric stores)
- Scissors
- Screwdriver

Betsy Blodgett, owner of Bon Bon Atelier and a fashion designer, knows the ins and outs of working with fabric. She showed us how easy it is to reupholster seat cushions. We kept the old upholstery on to preserve a decades-old history of the chair and gain a bonus: extra padding. From start to finish, it took less than two hours to cover all four seats.

Step 1. Turn over the chairs and unscrew the cushions.
Step 2. Measure 3 to 4 inches extra per side of seat and cut the fabric.
Step 3. Wrap the fabric on the seat and padding as you would a gift. Pin the fabric in place to anchor it.
Step 4. Pulling the fabric as tight as you can, staple along the edges.
Step 5. Screw cushions back in place.

©2009, The Kansas City Star.
Distributed by McClatchy-Tribune Information Services.

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A national study of U.S. broadband consumers by RVA LLC Market Research and Consulting, released this week, shows that 82% of those buyers who have had broadband service over fiber all the way to the home rank it as the leading real estate development amenity. Four other key prospective features ranked lower among buyers shopping for a new home.

Even among broadband customers who cannot get fiber, nearly 70% want “very high-speed Internet from a direct fiber-optic line” at the next home they buy, the study showed. The percentages in each case were of customers giving advanced broadband either a 5 or 4 on a five-point scale for rating the importance of amenities.

A national random survey of more than 600 fiber-to-the-home (FTTH) consumer users was conducted in April, and a national random survey of more than 600 other broadband consumer users was conducted in May. Respondents were asked a series of perceptual questions and also were asked to test and report their current Internet speeds. Both surveys were done for the Fiber-to-the-Home Council.

“The message to the real estate market is to put a sign on the lawn and a line in your ad saying, ‘This place has fiber,’” said Joe Savage, president of the Fiber-to-the-Home Council. “When end-to-end fiber broadband service tops green space, a security patrol, a community pool, a park or a fitness center among sought-after amenities-and this survey shows that it does-then it’s a real factor.”

Mike Render, CEO of RVA LLC, said: “Broadband has become so much a part of home life that the best, fastest and most reliable service is what’s in demand. From our research, it appears that this desire relates to current needs for fast Internet, the anticipation of even more online services in the future, and an appreciation that this amenity will add value to the home for future resale.”

Studies show that home broadband bandwidth requirements have grown at a rate of about 10 times every six years as access to more complex files and interactive services has increased. Multiple devices in the home doing more downloading and uploading will mean even greater demand for bandwidth, which fiber-based facilities are well-positioned to meet.

In another RVA study, very high-speed Internet-such as over fiber-ranked second only to landscaping and setting on a list of 23 amenities, ahead of features such as pools, home automation, shops, a fitness center, a dog park, a golf course, Wi-Fi at the pool area, day care or concierge services.

“The indication is that the personal space and connectivity really matter to the home buyer now, compared with public facilities; it’s where home owners actually spend their time, and broadband is an increasing part of that time, so they want the best,” Render said.

Realtors are discovering the same thing.

“Having ready and reliable broadband service is very important to potential home buyers because it contributes to making a move as seamless and hassle-free as possible,” said John Tunny, a sales associate at Weichert, Realtors in Chatham, N.J. “Having a home with high-quality broadband capability is extremely desirable to potential home buyers because they want to be able to have secure Internet service without having to compromise on speed.”

According to Bill Heilig, Verizon vice president of corporate marketing, social trends also affect the quest for fiber-based service. “Teleworking is on the rise again, and nothing beats a 25 or 50 megabit-per-second downstream link for just-like-at-work service,” he said.

From a home-sales perspective, census data indicate families generally stay put for at least 5.2 years, on average. With the pace of change in both technology and in broadband services, moving into a home that is already wired for the future is a distinct advantage.

Verizon’s FiOS Internet and FiOS TV services are provided over an all-fiber network straight to the home. The capacity of glass fibers is enormous, so the FiOS network is perfectly positioned to meet the demands of the Internet age.

Increasingly, consumers are downloading movies and videos rather than viewing hard media at home, and experts say the era of the home publisher, pushing multimedia out to the world, is just beginning.

Verizon’s Stu Elby, vice president-technology, said that as a society, we’ve “turned a corner and are headed toward being a information publishing society more than an information consuming society, so faster upload service speeds will be an advantage.”

According to the company, Verizon last week increased the upstream speeds of its most popular bundled FiOS Internet services. The former offer of 10 megabits per second (Mbps) downstream and 2 Mbps upstream now includes upstream service at 5 Mbps, and the previous 20/5 Mbps service now comes with 15 Mbps upstream.

“Home shoppers used to scan the prospect for a Jacuzzi or an intercom,” Heilig said. “Now, not so much. They look for the Verizon Optical Network Terminal and the Verizon broadband home router so they know they’ll have the best Internet and TV service over the best home network available today.

“Those who are lucky enough to have the fiber to the home can leverage it to get 21st century service ahead of everyone else,” he said.

Verizon also offers a range of fast, affordable DSL-enabled High Speed Internet service with speeds of up to 1 megabits per second (Mbps)/384 kilobits per second (Kbps), 3 Mbps/768 Kbps and 7.1 Mbps/ 768Kbps* available, as well as wireline voice and all-digital-quality DIRECTV service. For more information on High Speed Internet and Verizon bundled services, visit http://www22.verizon.com/residential/highspeedInternet/.

* Internet speeds refer to the connection speed between the user’s location and Verizon’s central office. Actual surfing speeds will vary based on many factors and be lower than connection speed.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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Still, selling a home isn’t easy in most markets today. To get the typical first-time buyer to bite and submit an offer, a house has to stand apart from the competition – and there’s a lot of it, including foreclosure homes that are selling at hefty discounts.

One big thing working in favor of the traditional seller: A lived-in, maintained home is easier for buyers to imagine themselves living in than a vacant foreclosure. That has great appeal for someone buying a home for the first time, for practical and financial reasons.

“First-time buyers are skeptical of buying homes that need improvement. Sellers certainly don’t need to remodel the kitchen, but they want to make sure that their home showcases very well,” said Eric Mangan, a spokesman for ForSaleByOwner.com.

In fact, while nearly half of brokers polled for a Coldwell Banker survey last year found that affordability was the No. 1 concern for first-time buyers, 81% said move-in conditions were very important to these buyers. Only 7% said first-time buyers were looking to purchase fixer-upper homes that they could buy on the cheap and renovate.

Those feelings are likely just as strong today as lenders generally require larger down payments, unless the mortgage is backed by the Federal Housing Administration. Higher down payments means buyers have less cash left over for improvements, said Leslee MacKenzie, of Coldwell Banker Hickok & Boardman Realty in Burlington, Vt.

“They’re doing what they can to save for the down payment,” she said, and that will deplete some of the funds a home buyer would have for repairs. “They’re concerned about out-of-pocket expenses upon taking ownership.”

While foreclosures that are in severe disrepair can be a huge turnoff for a first-time buyer, some banks will make improvements to their foreclosure stock, fixing them up so that they meet FHA standards and a buyer’s needs, said Chuck Whitehead, of Coldwell Banker Associated Brokers in Southern California. These homes can be stiff competition for the rest of the for-sale inventory.

Never fear, there are still ways to outshine other homes on the market. Assuming the home is priced correctly, here are five ways to lure a first-time buyer:

1. Maintain and Stage. A home that has been taken care of throughout the years will offer a stark contrast to a vacant, empty foreclosure.

“If someone is living there, the landscaping is not dead,” Whitehead said. “There is warmth in the home,” and that can go a long way in selling a property. “It’s all about the emotion, of having the ability to see what they can have.”

As with any home, a fresh coat of paint, decluttering and the removal of unpleasant odors can go a long way to making a good first impression. But be careful not to over-improve the home, because the investment might not be worth the cost.

2. Mention Up Front That You’ll Help Pay Closing Costs. Whether it’s in the marketing material or in the listing, this could be an extra motivator to reel a buyer in. Generally, there’s a good chance they’ll ask for closing cost help anyway, but it might pay off to be proactive and offer it at the beginning, said Heather Joubran, a real-estate agent with RE/MAX Central Realty in Lake Mary, Fla.

If rising mortgage rates have your buyer spooked, consider paying mortgage points to bring the rate down, Mangan said. But consider a buyer’s timeline for staying in the home before deciding if this is the most effective way to help; paying points generally makes sense for those staying in a home for more than a few years.

3. Offer a Home Warranty. First-time buyers are often coming from a rental, and they are used to calling a landlord when there’s a problem. To help them more easily transition into homeownership, provide them a warranty that covers major systems when problems arise, Joubran said.

4. Offer Mortgage Protection. In some cases, it might make sense to address buyers’ fears by purchasing insurance so they can keep up with their mortgage even if after losing a job. Coldwell Banker has such a program through its parent company, Realogy.
Basically, the plan will make several months of mortgage payments in the event that the buyer becomes unemployed. “There are people with secure jobs who are still nervous. This can give them just a little more comfort,” MacKenzie said.

5. Don’t Snub Low Offers. Buyers know prices have fallen, so they’re being aggressive in their offers-sometimes extremely aggressive. But even if they come in with a shocking lowball offer, don’t scoff at it. Understand where they’re coming from, and try to compromise.

“My rule of thumb is every offer deserves a counteroffer,” Joubran said. “At least counter them back. It gets the conversation going.”

If they liked the home enough to make an offer, it’s possible you can arrive at a mutually acceptable price, she said.

©2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.

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The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. This announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize’ up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5% of appraised value or their closing costs, which can help achieve a lower interest rate.

“We believe this is a real win for everyone,” said Donovan. “The Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.”

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5% downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5% minimum down payment, but, under the terms of this announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. This action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

According to estimates by the National Association of Home Builders, the Administration’s homebuyer tax credit will stimulate 160,000 home sales across the nation- 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA’s current market share, it’s estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.

For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.

For more information, visit www.hud.gov.

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The survey shows that 36% of homeowners think their homes should be listed 10 to 20% higher than what their Realtors’ recommend, down from 45% in the first quarter.

Conversely, 64% of homebuyers think that homes are overpriced versus 59% who believed the same in the first quarter.

“Realtors are in a unique position as they get to hear both sides of the home price story – the buyers’ and the sellers’. They then apply their own home valuation analysis based on their understanding of the market which often meets resistance from buyers and sellers,” said Louis Cammarosano, General Manager of HomeGain. “The results of our second quarter Realtor home prices survey indicates that home sellers seem to be getting the message that perhaps their homes are not worth as much as they thought they were, while buyers are expecting to find a bargain on every corner.”

The Realtors surveyed expressed more optimism in the second quarter survey on the direction of home prices than in the first quarter, with 22% of them believing that home values will increase in the next six months versus 11% who believed the same in the first quarter. Twenty-nine percent of survey respondents believe that home prices will fall in the next six months versus 53% who believed the same in the first quarter survey.

“There is major improvement in the number of homes selling,” stated Heather Lawson, Broker Century 21 Watson Real Estate in Genoa, IL. Gillian Goldrich of Coldwell Banker Residential Brokerage in Woodbridge, CT, agreed with Lawson, stating, “Markets are definitely picking up. It seems that buyers are getting off the fence and taking advantage of tremendous buys.”

Fifty-seven percent of Realtors surveyed indicated their approval of Obama’s performance as President. These results mirrored the nationwide results of the Rasmussen Daily Presidential Approval Index. Fifty-five percent of survey respondents believe that the Obama stimulus plan will have or has had no impact on home values versus 45% who believed the same in the first quarter survey.

For more information, visit www.homegain.com.

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I love having a small mirror right there with a little key hook next to it, holding the house keys. Just above or below the mirror, I do a stencil that says very simply “Welcome Home.”

What if you don’t have a wall that is facing the front door, hence, no place to hang your mirror? The next best area in which to hang a mirror is in a location where the person entering the home will first walk. One of the most important things to remember is that while staging your home, you are creating the flow at which you want visitors to move through the home.

If you are doing an open house event, you can even hang a mirror in the center of a wreath with a small “welcome home” sign suspended from the wreath. You can also put a small mirror just above the doorbell with a stencil that says: “Just use your key” and tie a small key on a ribbon and fix it to the mirror. These are great ways to get people to fall in love with your home before they ever even come through the front door.

My next favorite place to put a mirror is in the bathroom. Of course, you will have one above the vanity or lining the wall above the sinks, but have you thought about putting a small mirror in the bathtub or shower?

A mirror can always be used to expand the size of a room or make a narrow room look wider. Don’t be afraid to have mirrored closet doors in the right environment, or do a mirrored wall. What you don’t want are mirrored tiles.

A great look is large wardrobe mirrors, fixed to a wall centered, top to bottom. Space them about 2-4 mirror widths apart and paint a “frame” around each one. Now you have added a great decorative and interesting element to the room, while still giving it the benefit of “expansion.”

Lastly, I love a wall of mirrors. Not the panel mirrors that we have been talking about, but rather, all different shapes and sizes, framed, etched, big, small, round, square…you get the idea.

The key to success to creating a wall of mirrors is balance. You have to make sure that you end up with a sense of flow and even distribution. You can couple wood frames with frameless, round with square and etched glass with metal accents. If you have something heavy, then put something light next to it, and try to keep the same shapes from being next to one another and feel free to keep the entire wall neutral or add one or two really bold splashes of color with frames. All neutral works well for an elegant look, but to modernize the scene, throw in one or two bright colors like orange, red or yellow.

However you decide to use mirrors while staging your home, make sure that you use them effectively so that you get the greatest impact.

Karen Schaefer is the Founder of Simple Appeal, Inc. and APSD^TM, The Association of Property Scene Designers. She is widely recognized as the Premier Staging Designer for Investment Properties in the Country. For more information, visit www.SimpleAppeal.com.

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1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”

2. Consider Paying Points for Your Mortgage Transaction. Mortgage “points” are upfront fees that you pay in order to lower your mortgage interest rate. One point is equal to 1% of the loan amount. “In the past, it almost never made sense to pay points in most situations where you were refinancing your mortgage,” Nicholas said. “However, enormous changes have taken place in the mortgage securitization process. Wall Street investors are demanding higher upfront fees for borrowers with credit scores below 740, and mortgage lenders don’t have as much flexibility when pricing loans. This means that the interest rate savings can be very significant when you pay upfront points.”

“If you are buying a home, negotiate into your purchase contract for the seller to pay points on your behalf,” Nicholas said. “In addition to the significant interest and payment savings you will enjoy, you will also receive a tax deduction this year for points paid by the seller on your behalf. If you are selling a home, offer to pay points for potential buyers as part of your marketing efforts. This will make your home more affordable for potential buyers and help your listing stand out from the glut of available inventory in today’s market.”

3. Carefully Structure Your Real Estate Short Sale Transaction. A real estate short sale is when a home owner sells their property for less than what they owe on the mortgage, and the lender gives their permission to do this by forgiving the difference and/or releasing the mortgage lien on the property. “Short sales are very common in many markets because of negative home owner equity due to the steep decline in house values,” Nicholas said.

“If you are selling your home as part of a short sale transaction, make sure to negotiate for a release and full satisfaction of the mortgage from your lender. Depending on the laws of your state and your individual circumstances, lenders may be able to wait a year or two for you to improve your financial situation, and then file a deficiency judgment against you to try and recover the money that you still owe them. The only way for you to avoid this risk is to have the lender not only release the mortgage lien, but also agree in writing to a full satisfaction of the mortgage.”

If you are a buying a home as part of a short sale, Nicholas advises you to take steps to make sure the deal is closeable. “It is estimated that approximately 30% of short sale listings are not closeable deals because the lender simply won’t approve it. In most of these cases that aren’t closeable, the first or second mortgage lender is expecting home sellers that have money to contribute something to the deal. One way to avoid getting caught up in the middle of this is to have your Realtor verify the status of the seller’s hardship package with their lender.”

4. Utilize the Special Options Available for Seniors Age 62 or Older. “If you are 62 or older, you could use a reverse mortgage to buy a new home without making any monthly mortgage payments,” Nicholas said. “This is a fantastic opportunity if you are contemplating a move but are worried about trying to sell your current home into a down market. Additionally, reverse mortgages can be used to supplement your retirement income that may be declining due to unfavorable economic or financial market conditions.”

5. Carefully Interview Your Mortgage Professional. With all the noise, confusion, fear and misinformation in today’s market, it is more important than ever for you to work with a Certified Mortgage Planning Specialist who has the training and experience to guide you through the home buying or refinancing process. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way.

For more information, visit www.CMPSInstitute.org.

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To a certain extent, the notion may be driven by tough economic times. With equity evaporating in many markets, it might be a necessity for some sellers to go the DIY route. It is a question brought about by the perception of high cost for very little real work and a nagging sense that, hey, maybe I could do that.

Maybe you can. Maybe you shouldn’t.

The market, motivation, familiarity with the process, knowledge of real estate law, disposition, time, and resources should all be considered before you begin the process of selling your own home.

The Market

They don’t call them buyers and sellers markets for nothing, and, to a large extent, market conditions are often mostly local. A gripping nationwide recession, industry-wide job losses, and lenders’ unwillingness to lend, tend to have nationwide implications. But, even at the darkest of times, there are pockets of prosperity where demand for housing is high. In most cases, even if you over or under estimate the price, the market will eventually catch up to you.

Not so in a declining market. If you don’t get the price right, you will be chasing the market down. Before listing your own home, you need access to good current data about sales prices, market times, and activity. Assuming a modest sixty day market time, you still need to analyze past sales to determine what the value will be in 60 days or more, before a buyer commits.

If you are unrealistic about price, you have no chance. The notion that a prospective home buyer is going to stroll down your street and fall in love with your house is a fantasy. The objective is to price the home for a quick sale but not leave money on the table. It’s a fine line that only an experienced professional, armed with facts, can determine.

Motivation

If at all possible, you should avoid selling into a buyer’s market. If you do not have to sell, don’t, unless you are doing so to buy something else. You also have to be willing to take the hit on your opinion of value and make it up on the bargain you are buying. If you must sell, be realistic about your situation and take your markdown sooner rather than later.

Familiarity with the process

There are two types of FSBOs; the ones who know it all and the ones who don’t know anything, and it isn’t uncommon for FSBOs to be engaged in the industry because they aren’t intimidated by the process.

The process appears daunting because it is, but it isn’t unmanageable. The basic issues are either contractual or regulatory, and there seems to be a tendency among novices to assume that selling real estate to someone is just like selling a used dishwasher.

As the seller, you will need to fulfill numerous legal and regulatory conditions applicable to the state in which the property is located. The consequences for failing to be in compliance are rather harsh. Before listing your home on your own, be familiar with the process and know the requirements for your state.

Knowledge of real estate law

Some sellers believe that because they are not licensed, laws and regulations do not apply to them. Ignorance of the law is a major hurdle. Unless they specialize, most attorneys don’t know much about real estate law. On the other hand, responsible real estate brokerages make a practice of avoiding litigation by knowing and complying with the law. Today’s real estate transaction files are an inch and a half thick and weigh three pounds, and it is all driven by caution. Know the law, or hire someone who does.

Disposition

Most people, even practitioners, haven’t the proper disposition for selling real estate, let alone their own property. The job of real estate requires a lot of patience while you deal with prospective homebuyers, until one transforms into a paying client. People who are buying or selling real estate are under a lot of stress. There is the stress of uncertainty and the underlying events driving their decisions.

There is also a lot of raw emotion throughout the home buying and selling process. Well trained professionals do not surrender control of their emotions to events or the actions of others.

Time

Time is of the essence. It isn’t just a legal phrase, you will need to invest time to market the property and be available to show your home and respond to any inquiries. Your time does have value which can be earned through the investment of the time in something profitable or the value of time for leisure and enjoyment. If the home doesn’t sell quickly, you aren’t likely to recoup the value of your time in savings.

Being on the market longer won’t get you a higher offer either; it will just eat away at your equity.

Resources

How will potential buyers know about your property? A homemade sign in the front yard is effective only if the potential buyer happens to drive down your street.

The best kept secret in real estate is that if the property is priced to reflect true market value and it is placed in the multiple listing service, nothing will stop it from selling. Sooner or later, every buyer turns to the MLS, if for no other reason than to prove to themselves that there is no better home out there. The challenge for a FSBO is to find a method as cost effective as the MLS.

Looking at the bigger picture, it is hard to imagine that someone would want to take the risks and the responsibility of selling for sale by owner unless they were certain they would net significantly more money upon closing. But, that rarely happens. Most, ultimately wind up engaging the services of a professional after wasting time and money. In a declining market, every month you don’t sell means a lower market value. And, if you are making mortgage payments, each payment is lowering your net equity. A fast sale is the most profitable sale.

One thing you are likely to discover is that real estate practitioners produce more potential buyers then you will. In fact, those FSBOs who do succeed often wind up paying at least half of the brokerage fee to the broker who produces a buyer. So, at best, you won’t be able to influence a higher than market value, you will likely pay a partial fee and, if that isn’t bad enough, the buyer of a FSBO also intends to pocket the brokerage fee. Like so many things, it really is harder than it looks.

Before selling your own home, interview a few brokers and get their opinions of value and overview of the market. If one is particularly helpful, you might want to consider listing with them if the home doesn’t sell quickly. And, remember what lawyers say, “Any attorney who would represent himself has a fool for a client.”

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Why are short sales an important option for seller’s in today’s market?

In the simplest terms, short sales are a last hope for people looking to avoid foreclosure. The market that we are experiencing today is full of homeowners who are truly hurting and they don’t know where to start or who to turn to. Short sales, although not an ordinary transaction, are a good alternative for sellers who are either in a foreclosure already, or are headed toward one. It is crucial that real estate professionals take the time to understand that these are real families on the verge of losing their home. It is our job to embrace these individuals and at the same time give back to the communities in which they live, and we work.

What are some advantages to offering short sales?

The biggest advantage to offering a short sale is that it helps the distressed homeowner avoid a foreclosure, which is crucial since foreclosures are one credit item that are almost impossible to repair. Foreclosures stay on your history forever and affect your credit score as well as your present employment and the hiring process for a new job.

What are some of the misconceptions people have about the short sale process?

Many people think short sales can be used as an alternative for homeowners who find themselves in trouble with their mortgage payments, but they are only an option for sellers who are either in a foreclosure already, or are headed toward one. It is important to understand the difference between dissatisfied homeowners- those who are simply upside down with their mortgage and are facing hardships- and homeowners who are in trouble.

What pitfalls do agents need to watch out for when working with short sales?

Before dedicating their time to help sellers through the short sale process, agents need to make sure the seller is 100% committed to the time frame of the process as well as being willing to work with them through the process.

A seller’s assessment sheet is an important tool to help save time and effort in pursuing a short sale. The assessment sheet is based on four criteria and each is graded on a 1-10 scale, with one being the lowest and 10 being the highest.

1. Expectation- The client has to have real expectations of the market and what is possible- both within value and market time.
2. Motivation- What is the client’s motivation to get out of the situation? If they aren’t motivated, they may become disinterested in the sale, and that will be a waste of the agent’s time, money and marketing.
3. Cooperation- Will the client work with you through the short sale process? Will they keep the property neat and accessible to show and be available when you need them?
4. Communication- The client has to be willing to communicate with their agent openly, honestly and on a regular basis. If the client isn’t being upfront, that is a huge warning sign.

What percentage of your time do you devote to short sales?

At this point in time, about 50% of my closings are short sales and repos. My business up until now was centered around corporate relocation, so I had to take a step back and look at my business in a new way. Working with short sales has enabled me to reset my goals and provide homeowners who are in trouble with the guidance they need.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

“Despite the tough economic times, people who want to sell their homes don’t have to wave a white flag in surrender. Relocation.com wants to help educate consumers about the selling process so that they can make smart decisions about moving to a new home,” said Sharon (Ron) Asher, chairman and founder, Relocation.com. “With these sales strategies, consumers can get their homes sold and on to moving into their new residences.”

Tips for Selling a Home in Today’s Market

1. Do not overprice the home. Buyers today are looking for a bargain, and the seller in the end will likely have to bring the price down to meet market demands. The longer the home sits on the market, the stronger the negotiating position of the buyer.

2. Select Internet-friendly pricing. More than 80% of home buyers begin their real estate searches online. Most real estate sites filter the prices in $25,000 to $50,000 increments. So while a creative price of $555,777 may grab attention, buyers who set their search maximum filter at $550,000 will exclude it. Additionally, prices ending in 000 (such as $500,000) tend to sell at a larger discount than homes ending in 500 (such as $524,500).

3. List the home on a Friday. Most buyers are checking out new listings on Fridays so they can see what is new for the weekend.

4. Occupy or stage the home. Buyers appreciate a home that is well attended. A vacant home typically feels cold and empty, while one that is still occupied has a warm, cozy feel, attracting more buyers. However, keep the personalization minimal; having neutral decor and paint colors will make it easier for a buyer to visualize their own style in the home. If a seller moves to a new residence before selling the old residence, it is a good idea to have the home professionally staged as if someone still lives in it.

5. Monitor local foreclosures. Foreclosures are costing sellers money and have become very aggressive opponents in today’s market. If the seller’s neighborhood has a lot of foreclosures, wait until they are sold before listing the home, if at all possible. Most banks are extremely eager to sell, thus creating an underpriced competitor. If the seller cannot wait to list the home, it will need to be priced competitively with the foreclosures, which can dig significantly into the home’s equity.

6. Keep the home neat and clean. With so many foreclosures on the market today, buyers are seeing homes at their worst. If the home is presented in the best possible way, it will attract more positive attention.

7. Keep records. Foreclosures do not come with any disclosures. Sellers who keep updated records, photos and permits handy for the buyer to review will make them feel much more confident about buying the home, giving the seller a competitive advantage over foreclosed properties in the neighborhood.

For more information, visit www.Relocation.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Related homeowner tips and topics on RISMedia.com:

• 8 Predictable Closing Day Obstacles – How to Avoid Them
• Teaming up with Your Lender for a Loan Modification

Your buying clients need to understand that what happened in real estate was a bubble, not something permanent. It was created by removing all barriers to owning real estate. Getting a mortgage became too easy. Interest rates were at historical lows. Appreciation skyrocketed in many markets. The rush to riches through real estate came to an end because bubbles eventually burst. Now we are left with a buyer’s market, instead of a seller’s.

What can you do to show potential buyers that this is the time to buy real estate? Many buyers just don’t understand the market because there are a few more unknowns than they are used to considering.

They may be afraid we haven’t hit the true bottom yet, or even that real estate may no longer be a great investment. They may think they can’t get a mortgage. But whatever the reason, buyers need to know that, like the stock market, no one can predict the exact bottom, and buying now is advantageous due to very low pricing and interest rates, plus many sellers’ incentives.

They need your expertise to help them recognize the indicators that show the time is right to buy in your local market. Maybe it’s a reduction in foreclosures or inventory, or an influx of foreign investors, but regardless, your assessment of the market is paramount to their decision. You can prove to them real estate is a great investment by the historical data below:

National data:

1970-1979 = 142% appreciation
1980-1989 = 52% appreciation
1990-1999 = 45% appreciation
2000-2008 = 42% appreciation

Source: The National Association of Realtors

Like every investment, there are ups and downs. Even if they buy now and it isn’t the exact bottom, the resulting appreciation in years to come will clearly compensate. Now is the time to gain by buying during the low period. Patience and planning are true virtues in real estate. Where else can clients earn these percentages on money that is primarily not theirs and get a tax deduction? What are their alternatives-to miss a great opportunity or buy high?

Chris Kaucnik is marketing director for Home Warranty of America, Inc.

For more information, please visit www.hwahomewarranty.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Don’t miss other home selling strategies by Chris Kaucnik on RISMedia.com, see:

Show and Sell – Tips You Can Use From Retail Sales
Part II: Show & Sell-Smells that Sell
Buy a New or Gently Used Home? It’s a Question of Budget and Lifestyle

Skills, as opposed to services, are what set the most effective agents apart from the rest.

Recognizing that home sellers will benefit from understanding what these skills are, the Top 5 in Real Estate Network® is making available to its members an important new guide: “What Every Home Seller Should Demand of Their Real Estate Agent.” Written with the home seller in mind, the guide will help consumers ask an agent pertinent, specific questions designed to reveal if he/she has the professional skills required to enable the seller to realize the best possible price in a reasonable amount of time.

Highlights of “What Every Home Seller Should Demand of Their Real Estate Agent” include:

• Demand a marketing agent not just a real estate agent-someone who is dedicated not just to selling your home, but for selling it for more.

• Expect your agent to be an expert negotiator. Negotiations take preparation, strategic thinking and persistence, requiring the agent to devote time throughout the selling process.

• Find an agent who is a property promoter, not a personal promoter. It’s great for an agent to claim a top ranking but meaningless unless that agent is promoting your property and not his own prestige.

• Ask for proof. Your agent will have record of her sales and should be asked to point to those that exceed market average.

• Insist on an agent with capable information technology skills, including online and database understanding. Real estate sales move at the speed of light and you should expect your agent to handle complex Internet searches and manipulate secure databases.

• Favor agents who are leaders in their communities and who have a record of giving back. Agents who invest in where they live will use their skills in your favor as they will remain in that community long after you’ve moved away.

“Consumers deserve a great measure of transparency when it comes to identifying the most proficient real estate agent,” states Allan Dalton, President, Top 5 in Real Estate Network®. “Far too often, consumers believe all agents are the same and the inevitable result is that they settle for less.”

By taking the simple step of expecting more, the empowered home seller can now demand more. Top 5 believes that if agents know they’ll be measured on the skills they provide, they will, in turn, become better at providing what their clients deserve.

The next Top 5 event will be taking place will be in the Greater Atlanta area on February 17, 18 and 19, 2009. Allan Dalton, President, Top 5 in Real Estate Network® and former CEO of REALTOR.com, will be presenting a comprehensive overview of the program. To learn more about this free event or to register to attend, visit http://events.rismedia.com.

About Top 5 In Real Estate :
Top 5 in Real Estate Network® is a membership network of leading real estate professionals dedicated to providing real estate skills, service and information to consumers. To qualify for membership in the Top 5 in Real Estate Network®, agents must meet area-specific criteria in five key categories: experience, results, professional and continuing education, information technology and commitment to community. Detailed information may be found at www.top5inrealestate.com. To read about a new Top 5 Member and how she uses the new Network, see the news article here: www.acorn-online.com/joomla15/index.php?option=com_content&view=article&id=19884:raising-the-bar-for-realtors&catid=166:local-news&Itemid=462.

Top 5 in Real Estate is a division of RISMedia, the leader in real estate information systems, which has been providing the industry with news, trends and business development strategies for nearly 30 years through its flagship publication, Real Estate magazine, its leading website, RISMedia.com, and its renowned networking and educational events.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.