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1. Why should I buy if house prices are still depreciating?

The experts believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage.

Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.

In an article last week CNN Money reported:

You can kiss those record lows goodbye,” said Greg McBride, chief economist for Bankrate.com.

Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.

I don’t think we’re going back to a 50-year low anytime soon without an economic collapse, he said. Rates will probably never revisit those levels.

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010. They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.

Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.

That leads to the third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Survey shows that the four major reasons people buy a home have nothing to do with money:

• A good place to raise children and for them to get a good education
• A place where you and your family feel safe
• More space for you and your family
• Control of the space
• What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.

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RISMEDIA, January 7, 2011 (MCT) The drumbeat from the housing community was loud and clear in 2010: There was never a better time to buy a home. For most of the past 12 months, home prices tumbled, mortgage rates ticked downward, and the inventory of available traditional and distressed homes was plentiful.

But would-be buyers, even if they were able to overcome job worries, found that the hurdles to obtain a loan were formidable. They remained on the sidelines, and housing analysts opined that if the broader economy improved and unemployment fell, pent-up demand would be unleashed, credit guidelines would ease and home sales would improve.

As the New Year begins, that guarded optimism has turned into uncertainty, thanks to a combination of rising mortgage rates, tighter underwriting guidelines and sweeping government regulation. As a result, it’s unlikely to get any easier and may, in fact, get much more difficult to buy a home in 2011.

From a credit standpoint, I tend to think we’re toward the bottom of that cycle, said Bob Walters, chief economist for Quicken Loans Inc. The bad news is, I don’t think it’s going to get a lot better in 2011. You’ll hear a lot more noise pressuring the industry to ease guidelines, and you’ll hear from the industry that we don’t want a redo of what’s happened.

Looming large over the mortgage market are provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that have yet to be finalized. Among them is a requirement that mortgage lenders maintain some skin in the game on the mortgages they originate by holding at least 5% of the credit risk rather than bundling the loans and selling them off entirely.

The goal is to discourage a repeat of risky past practices, but the legislation makes an exception to the risk-retention standard for what is labeled a qualified residential mortgage. It is the still-unspecified definition of what’s become the industry’s latest acronym to digest, QRM, that has lenders in an uproar.

If a very strict definition is applied by regulators, and a final rule isn’t expected until the spring, it could become more difficult, and more costly, for home buyers to secure mortgage financing.

People have some very different ideas of how to define this, said Michael Fratantoni, vice president of research and economics at the Mortgage Bankers Association. Some would say if it doesn’t have a 30 percent down payment, it’s not a QRM. For a first-time home buyer, that would really be eye-opening. It definitely has the potential to turn the market upside down. his could dramatically tighten underwriting much more than what the lenders have already done. It’s going to make it even tougher to work through the housing overhang.

Wells Fargo has told regulators it supports exempting mortgages with a 30% down payment. Community banks worry such a strict definition would curtail home mortgage lending. If you have to have 30 percent down, the American dream would become the American fantasy, said Nick Parisi, a senior vice president at Standard Bank and Trust Co. in Hickory Hills, Ill.

Additional regulation on mortgage bankers will mean a thinning of their ranks, weeding out the unscrupulous players. But it also will lessen consumers ability to comparison-shop widely for the best home mortgage product. That means less competition, and generally, less competition is not good for the consumer, said Bob Walters, chief economist for Quicken Loans Inc. It might mean that your interest rate over time is a little higher. A less competitive industry has to work less hard.

Tighter lending requirements already have steered 40% of buyers to secure Federal Housing Administration-backed loans, which carry their own set of fees. FHA-backed loans are exempt from the Dodd-Frank provision.

Another new wrinkle to the mortgage market is that beginning in March, Freddie Mac will raise fees for mortgages sold to Freddie that carry higher loan-to-value ratios. The additional fees will vary depending on the borrower’s credit score and the loan-to-value ratio, but in some cases the upfront fees will increase by as much as 0.75% of a loan’s balance. If a lender passes along a 0.25% fee to the borrower, it could add about $10 to the monthly payment on a $200,000 mortgage, according to Freddie Mac.

In late December, Fannie Mae announced its own series of considerable loan-level price adjustments, effective April 1, for mortgages with greater than a 60% loan-to-value that will apply even to consumers with credit scores above 700.

Loan fees aren’t the only item going up: So is the cost of money itself. The average rate on 30-year, fixed-rate mortgages has been below 5% since early May, but economists predict those days are nearing an end.

General guidance on mortgage rates for a 30-year, fixed-rate mortgage call for them to stay under 6% for the year and likely falling somewhere between 4.75% and 5.5%. Still, that could be a jolt to buyers on the sidelines who watched rates drop to as low as 4.2% in the fall.

(c) 2011, Chicago Tribune.

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Florida and Arizona have long been the favorite 2 states for retirement migration.

In a recent Del Webb survey among baby boomers on retirement preferences the top reasons for choosing where to live in retirement were cost of living, health care, climate, and opportunities for culture and recreation. Family and friends were further down the list. Boston College’s Center for Retirement Research found the same general reasons for retirement moves, but in a different order: family, financial, better location, leisure/climate, and health. Looking at these and related reasons, is there a logical explanation why boomers now prefer North Carolina over Florida for retirement?

Taxes:
Both NC and FL are fairly low tax states. Florida has one important edge – it has no state income tax (although North Carolina does not tax social security income, and military retirement pay is exempt with some conditions).

Neither state has inheritance or estate taxes. In both states, full-time residents can take advantage of homestead laws which protect them from unreasonable property tax increases (there are certain restrictions in North Carolina). Both states have sales taxes (6% in FL vs. 6.75% in NC). Both states have fairly low property taxes, at least compared to the northeast.

The Tax Foundation ranks North Carolina as the 20th highest state for tax burden, while Florida is 47th (higher ranking is more tax friendly).

Climate:
Florida certainly has the edge for people who prefer warmer winters. Even in northern Florida the winters are mild – vegetable gardens grow in January and it rarely snows or goes below freezing. In southern Florida shorts and short sleeves are usually comfortable on January and February days, although there can be occasional cool spells.

North Carolina has a much more diverse climate than Florida’s. The coast is a bit cooler in summer and a bit warmer in winter than elsewhere in the state. It rarely goes below 40 along the coast, but can go into the teens in the Great Smoky and Blue Ridge mountains in the western part of the state, where there are ski resorts. People who want 4 seasons will find them in North Carolina, and folks who want to go swimming or play golf in January will usually be able to do so in Florida.

Both states have climates that permit a wide range of activities year round. Florida has had a number of hurricanes in the last 10 years, and those storms have led to very high insurance rates.

Economy and Cost of Living:
Both states have been on “watch” lists for fiscal problems due to the recession. Both have high unemployment and have borrowed money to pay unemployment claims.
Florida, at least, has begun to implement severe austerity measures which are unpopular, but which have helped to reassure the state’s credit raters. North Carolina probably has a more diverse economy than Florida’s top-heavy concentration on tourism and construction.

Cost of living in both states is below average. In North Carolina the Zillow Home Value Index statewide was $137,300 in early 2010, almost identical to Florida’s at $136,500 (data from Zillow.com – the U.S. Value Index was $182,400).

Geography:
Like Florida, North Carolina has an ample, but not quite as long coastline, where people can enjoy the beach and access to bays and the ocean.

NC has pastoral places to live like the sandhills around Pinehurst in the central part of the state, as does Florida in the panhandle and center of the state. North Carolina, however, has towns in its western mountains where people who crave mountains can find their ideal retirement. At a towering 345′ above sea level Britton Hill is the tallest peak in Florida, whereas Mt. Mitchell in NC stands at 6,684′. Overall: NC wins for geographic diversity.

Where to Live:
Both states have interesting towns to live in. Both have college towns – like Chapel Hill in NC and Gainesville in FL. Each state has large cities to live in like Charlotte, Tallahassee and Miami. Each also has interesting towns like Mount Airy or Key West. There are plenty of cultural activities to be had in either state, if one chooses a town carefully. Because of cheap land and plenty of willing retirees, both states have hundreds of new and existing active adult communities to choose from.

North Carolina has an edge with Asheville, the most popular retirement destination in the country. Florida, however, has dozens of towns that are dominated by and desirable for retirees.

Our conclusion: North Carolina offers more diversity in terms of the available living environments and scenery but Florida has many more communities that are dominated by retirees.

Health Care:
Both states have a wonderful collection of medical facilities and professionals, particularly in the larger cities. Doctors and hospitals tend to go where the patients are, and since both states have a growing population and (at least until recently) booming economies, they are both well-supplied medically.

So Why is North Carolina coming out on top for retirement preference?
After analyzing all of these factors we had hoped that we would find a compelling reason why North Carolina is beating the pants off Florida in attracting retirees. Unfortunately, that is not the case. On most factors the states are about even – each one comes out ahead on a few points and behind on some others. Conclusion: there must be some intangibles at work here.

The Cool Factor:
These are strictly our opinions, but here are some reasons why North Carolina’s Secret Sauce is giving Florida a licking in the retirement department:
– Florida just isn’t cool anymore. In our opinion most of us baby boomers are obsessed with fads – being cool by being in on the latest trend. Too many movies have parodied retirement life in Florida – from “Cocoon” to “In Her Shoes”. A lot of people don’t want to be associated with the blue haired, shuffleboard playing set that is displayed in popular culture about Florida.
– Florida is tacky and crowded. By no means is the whole state that way, but there are many, many towns where everything is new and every store is a big box or a chain. Some people are rejecting that barrenness, along with the intense traffic and development that comes with unchecked growth.
– On the positive side, North Carolina has a cool factor. Towns like Asheville, New Bern, and Chapel Hill have good reputations as interesting places to live. North Carolina represents something new and undiscovered, with the advantage of being not too far away or too different from the northeast many retirees are moving away from.

Most popular retirement towns in North Carolina:
Here are the most popular retirement towns in North Carolina as determined by page visits to their reviews at Topretirements.com:

Asheville – In the western mountains – the #1 retirement spot in the country
Beaufort – An old seaport (and Blackbeard the Pirate’s retirement town) with considerable charm
Chapel Hill – A lively college town and home to the University of North Carolina
Hendersonville – Small town in the Blue Ridge National Heritage area
Mount Airy – The fictional home of Mayberry in the mountains
New Bern – Smaller and more charming, near the coast
Pinehurst – Charm and understated elegance in a legendary golf community
Southport – An active fishing village in southern North Carolina – where “Dawson’s Creek” was filmed
Winston-Salem – A larger city that is attracting retirees

Filed under: Blog by Kim Bregman
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When you use an agent to sell your home, you may agree on a commission as high as 5 per cent with the proceeds split two ways. One half goes to the agent who works for you and the other half is paid to the agent who finds the buyer and helps negotiate the deal.

Now that the federal government has brought more competition to buying and selling a home, there are more ways for you to sell a home by yourself. That means the role of the real estate agent acting for the buyer will become even more important to you and the buyer.

Most people understand that when you sign a listing agreement to sell your home if you sell during the term of the agreement, you owe commission to that agent.

It’s a little different for when you’re buying a home. Here, you agree to work exclusively with one agent to find the property you want. The agent protects your interests and negotiates the best price for you. This becomes important if you are involved in a bidding war because you’ll need an objective third party to guide you, to make sure that you do not get too emotional and end up overpaying for the property.

In exchange, you agree to pay this agent a fee, typically a percentage of the sale price. For example, if the homer costs $200,000 and you agree to pay your buyer agent a 2 per cent commission, the cost is $4,000. Usually, the agent will get the commission from the seller. If the seller refuses to pay, then the offer will be readjusted to $196,000, and the buyer will pay the fee directly.

When interviewing buyer agents, be sure to ask for references and then follow up and call them. If you are nervous about signing the agency agreement, you might want to consider signing for a short term, let’s say 14 days, to get a feel for the kind of service your buyer agent will provide. You must understand though, that if your agent shows you a home during that 14 day period that you later buy, you will owe commission.

Sellers should make the effort to co-operate with buyer agents as well, even if they are trying to sell their home by themselves. One of the main reasons is that when a potential buyer approaches a seller directly, the seller has no idea whether this buyer is really looking for a home or even has the financial ability to afford the home. They may in the extreme case be a thief who is only looking to see whether they can come back to this property at a later time. When you work with a buyer agent, you know that they have already qualified any potential buyer so that you have the comfort of knowing that this buyer is in fact ready to buy and more importantly, can afford your home.

In addition, because the buyer agent will protect their buyer by conducting the appropriate due diligence on the property itself, there is less chance that the buyer will discover problems after closing. This means that the seller will not likely be sued by the buyer after closing. This means peace of mind for the seller after closing, as well.

There are advantages to both buyers and sellers in working with buyer agents. Understanding this will make your next home purchase or sale decision much easier.

Real estate lawyer Mark Weisleder is the author of Put the Pen Down! What homebuyers and sellers need to know before signing on the dotted line.

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A decline in home prices of 50 percent or more, historically low interest rates, unprecedented foreclosures, a weak U.S. Dollar and changes to immigration laws for investors has created a favorable climate for international buyers, according to Kevin Dickenson, a Palm Beach Real Estate Agent.

Florida is the number one destination for international buyers according to a study conducted by the National Association of Realtors (NAR). Dickenson said the NAR study analyzed sales between March 2009 and March 2010 and found that buyers with permanent residences outside the United States spent an estimated $41 billion on residential property nationally.

A second NAR study revealed that international buyers purchased 90,000 Florida condos and homes in 2010 representing 22 percent of Florida’s real estate market.

According to a study by Harris Research Group for NAR, over 1 million potential overseas buyers surveyed would consider retiring in the U.S. The study also confirmed that international buyers select Florida due to the warm climate, but 81% of the buyers surveyed said the primary reason is the cost to live in Florida is significantly less than their current country of residence.

“There are several other key factors fueling international buyers to purchase real estate in South Florida,” according to Dickenson. “The Canadian Dollar is now on par with the U.S. Dollar and this may be the best time in 10 years for Canadians to buy. The Europeans have an even larger advantage with a Euro that is over 25 percent stronger than the U.S. Dollar. A $500,000 condo can now be purchased for 375,000 Euro’s.”

“There are also various U.S. visa programs, including the E-2, EB-5 and L-1 visas for investors looking for a fast path to U.S. residency,” said Dickenson. One long-term visa program helps investors attain a conditional lawful permanent residence status by investing $500,000 in a limited partnership at various government-maintained regional centers. Another program involves an investment of $l million to create 10 new full-time positions for U.S. workers.”

“Private equity groups, REIT’s and hedge funds from around the world are snapping up bulk condos from banks and distressed developers,” continued Dickenson. “Buyers always ask me if it’s the right time to buy and I tell them to look at what the bulk buyers are paying because this is the group that is establishing market bottom for the Florida condo market.”

There are also visas for people who manage various types of enterprises and businesses in the U.S., including rental properties, condominiums and franchises; people in the export and import business; and foreign executives who manage U.S. subsidiaries of foreign companies. All can facilitate international investment in U.S. real estate.

“Take all of these factors and add unprecedented foreclosure rates and a decline in real estate values of 50 percent or more and it’s no surprise that international buyers are moving in for the kill,” said Dickenson.

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The National Association of Realtors reports that under Fannie Mae’s new lending guidelines, which will take effect Dec. 13, securing a mortgage will become easier for some borrowers and more difficult for others.

These new rules will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment. Freddie Mac is also considering similar new guidelines, according to spokesman Brad German. Borrowers previously were required to contribute a minimum 5 percent down payment from their own funds, with additional down payment money permitted from a gift.

These new rules are “definitely going to help upgrade buyers and young couples who for whatever reason don’t have enough money and are getting some from their families,” said Edward Ades, the owner of broker Universal Mortgage. The gift rules apply only to single-family principal residences and cover mortgage amounts in excess of 80 percent of the property’s value. The loan balance also has a limit of $729,000 in high-cost areas like New York City and $417,000 in other areas.

At the same time, Fannie Mae is cracking down on debt-to-income ratios, with the maximum ratio for those seeking a conventional mortgage set to drop from 55 percent to 45 percent under the new guidelines. Fannie Mae is also increasing its scrutiny of payment histories on revolving debt, and buyers who have missed a payment will have 5 percent of the total balance added to their ratios.

Under the new rules, borrowers who have gone through foreclosure will be excluded from obtaining a Fannie-backed loan for seven years, an increase from the previous limit of four years.

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In the fall is when you want to get ready for the winter cold. The worst thing in the world is trying to put your storm windows in when its 20 degrees outside. Or worse, not having your sprinkler system purged before the freezing weather comes.

The following is an easy checklist of things to do for the various systems of your home. Make sure you do before winter so you can enjoy the snow and not worry about your home.

Heating & Cooling System:

The time to check your heating system is in the Fall, no later than the end of October. Give your system a test run through and make sure all systems are “GO“.

Test Run:
Turn the thermostat to heat mode and set it to 80 degrees just for testing. You should hear the furnace turn on and warm air should blow within a few minutes. If it’s running OK, turn the thermostat back to its normal setting. Depending on what’s wrong, you can fix it yourself or you may need a qualified service technician.

Replace the Air Filter:
Put in a new clean air filter.

Fuel:
If you have a propane or oil furnace, make sure to have your fuel storage tank topped off and ready to go.

Heating Vents:
Clear obstacles to heating vents so air can freely flow.

Check for Carbon Monoxide Leaks:
This silent killer can easily be detected with either an inexpensive test badge or battery operated alarm. Whichever way you decide, just please decide to protect your family with one of these units.

Often neglected is one of the most important components of a cooling system. That is the condensing unit outside churning away in the heat of summer.

Clean Condensing Unit of Debris:
Take a hose with the spray head set to “jet” or the highest pressure you have and clean the fan blades and condensing coils of clear of debris and dirt.

Cover Condensing Unit:
Left unprotected the condensing unit can be damaged by wet leaves and debris that contribute to rusting and freezing of internal components. Although these units are designed for outdoor use, covering them with a breathable waterproof cover made for that purpose goes a long way to extending the life and efficient performance of the unit.

And for window air conditioners, remove them and store for winter. If they can’t be removed, then close the vents and make sure to get a air conditioning cover similar to condensing unit cover described above.

Wood Burning Fireplace/Chimney and Flue:

Although not thought about much in warm weather, the wood burning fireplace and chimney can be a major source of cold air leaks and other issues in winter.

Check that the chimney is clear of any nests from birds, squirrels or other animals.

Check flue damper operation. Make sure it opens and closes fully, and that it is able to be locked in the open or closed position.

Check chimney draft. Make sure the chimney will draw up the fire and smoke properly. Test this by taking several sheets of newspaper and rolling them up. Then with the fireplace damper in the open position, light the newspaper in the fireplace. The smoke should rise up the chimney. If it doesn’t, you have an obstruction and need to call a professional in to clean the chimney of creosote and ash and possible debris.

If it has been several years (or never!) since you had your fireplace chimney cleaned, you should have it done by a professional chimney sweep. Definitely not a fun DIY project.

Inspect the fire brick in the fireplace. If you see any open mortar joints have them repaired immediately! A fire can spread into the stud wall behind the masonry fire brick through open mortar joints

Plumbing:

Plumbing is especially susceptible to cold weather and freezing. Burst pipes from freezing can cause some of the most expensive repairs in the home. So let’s go over some of the basics to make you have them covered.

Insulate Exposed Piping
If you have any exposed water or drain piping at all in uninsulated spaces such as in a crawlspace, attic, outside walls, etc., make sure to insulate them with foam insulation at a minimum. Ideally you should wrap them with electrical heating tape first, then insulate them.

Exterior Faucets
Known as hose bibs, the exterior faucet needs to have its water supply turned off inside the house, and you also need to drain water from it by opening up the exterior faucet. You may also want to consider an insulated cover for the hose bib. And remember to disconnect your garden hoses from outside faucets and drain them if you store them outside.

Seasonal Shut Down
If you are shutting down a property for several months you should always shut off the water supply and drain the plumbing system. If a leak were to occur without occupancy, the damage could be catastrophic.

Insulation:

Insulate your hot water tank with an insulating blanket you can buy at the hardware store.

Insulate exterior outlets and switch plates with inexpensive foam sealing gasket.

If you don’t use your fireplace often and it leaks air, you can cut a piece of fiberglass insulation and stuff it into the fireplace behind your glass doors to block the cold air coming down the chimney. Of course you remove this when you make a fire…

Infiltration of cold air from air leaks around doors and windows is as significant a contributor to your heating bill as is poor insulation in the walls and ceiling. An easy way to reduce you heating bill is to reduce these drafts with simple weather-stripping.

Windows:

On a day when it’s windy outside, close your windows and feel for air leaks. You can use an incense stick for this too if you don’t mind the smell. Watch the smoke trail and if it becomes anything other than vertical, you have an air leak. Typically air leaks will be at the edges where the window is hinged, slides, or meets another unit, such as between the two panels of a double hung window. Rope Caulk is an ideal and inexpensive product for making temporary or permanent repairs around leaky windows, vents, and roofs. If the weather is really cold you can soften it up a little in the microwave to make for easier application.   Press the rope caulk into all the joints where air is leaking.

Doors:

The easiest fix here is to check for weather-stripping on the side and bottoms of the doors. Install weather-stripping on any leaking doors.

Roof:

Moving to the outside of the home, you should do a quick check of the roof. Either hire someone to inspect the roof if you are not comfortable safely doing this yourself, or inspect it yourself wearing solidly fastened shoes having non-skid soles.

Check roof for missing or damaged shingles and have them replaced.

Check flashing around chimneys and other roof projections which are often the source of leaks.

Make sure gutters and downspouts are clean, having no leaves or debris. Wet leaves remaining in the gutters over winter add significant weight and volume to the gutter when frozen and increase the risk of damage.

Sprinkler System:

The sprinkler system should no be overlooked in preparing your home for winter.

Have your sprinkler system winterized no later than the end of October.

Winterizing should include turning off the water supply and blowing compressed air through the sprinkler lines to purge them of water and prevent them from freezing and bursting.

Outdoor Landscaping and Amenities:

Lastly, you’ll want to prepare your yard for winter too. Let’s take a look at what can be done for the grass, deck and outdoor amenities around the home. There are a number of serious fall chores for the landscaper to complete before winter in order to ready the landscape for the next growing season. Let’s take a look at some of the required chores, breaking them down by landscaping category.

Fall Lawn Care:

Apply herbicides to broad leaf weeds.

Thatch removal: detach your lawn, by raking; for bad cases of soil compaction, you may have to employ the technique known as core aeration.

Rake leaves, lest the leaves smother your grass over the winter.

Lawn mower care: make sure to drain old gas after last mowing or just run it until it is our of gas..

Cover patio furniture.

If your deck needs it, consider giving it a fresh coat of sealer before winter.

Drain any water fountains, unplug the pumps and prepare for winter

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Home buyers are an increasingly rare breed these days. Many who were eager to buy a house raced to take advantage of federal home buyer tax credits. When those government perks expired in April, home sales essentially went into deep freeze, plummeting to levels not seen in more than a decade, according to the latest numbers from the National Association of Realtors.

Still, the Realtors project that nearly 4 million existing homes will sell in 2010. First-time buyers, without the burden of a home to sell, could benefit from the distressed market and the record low mortgage rates.

Here are common missteps that home buyers make:

Going it Alone

With so many web sites offering a mass of data on listings, who needs a real estate agent? Most people, actually. Finding a house and figuring out comps (the price of comparable homes on the market) is the easy part. Managing the nuances of contracts, addendum’s, offers, counter-offers, inspections, financing, estoppel letters, and all the other pivotal steps to buying a home is where many buyers tend to make costly mistakes.

When you hire an agent make sure you are working with an Exclusive Buyer’s Agent; they are obligated to put your interests first, even if their commission is paid by the seller and based on the sale price.

Buyer’s Agents are skilled real estate professionals who choose to work for buyers. A top Buyer’s Agent is your full-time advocate, researcher, advisor, negotiator and local community expert. The job of a Buyer Agent is to acquaint you with the community, answer your questions, help you decide on your home selection criteria, and locate the home that best suits your needs at a fair market value.

Unlike most real estate professionals, Buyer’s Agents have no loyalty or fiduciary responsibility to any home seller; they do not accept listings. Buyer’s agents exclusively represent the homebuyer and their best interests. Hiring an Exclusive Buyer’s Agent eliminates any conflicts between the seller’s and buyer’s representation.

But don’t let the agent find you; do your research. Ask friends and neighbors about good experiences they have had. Relocating to a new area? Do use the Internet to search for your initial list of agents to speak with. Make sure you ensure that the agent you select is an EXCLUSIVE buyers agent and does not also take listings. They have a conflict of interest when representing both Sellers and Buyers.

Know How Much You Can Afford

Many buyers mistakenly take a do-it-yourself approach to financing. They use online calculators to estimate how much house they can afford, dive into the house hunt, and then get a dose of cold water when lenders refuse to qualify them for that amount.

Ask you real estate agent for some recommendations for mortgage brokers and get pre-qualified. A good mortgage broker will explain the process to you, give you a list of documentation you will need to prepare for mortgage qualification, and will assist you through the loan process. Remember, too, that the costs of buying and owning a home go well beyond the sticker price. While online calculators do take into account property tax and insurance, it’s up to you to account for maintenance costs, moving fees and association dues.

Falling in Love with the Home

No one will fault you for falling hard for a home; but understanding the neighborhood, age of home, commute times, schools, neighbors, covenants and restrictions, and local amenities is all part of the homeowner experience. In hindsight, many buyers say they wish they’d taken their due diligence a few steps further to really get to know all the perks, quirks and hassles of living in a particular place. You can

always fix up the house, but there’s no easy remedy for annoying neighbors, oppressive homeowner association rules, and aggravating commutes.

If you are purchasing an older home you must factor in renovation and repair costs as well. Of course, new homes aren’t without their drawbacks. Recently, many newly built homes experienced serious problems with Chinese-made drywall and radon, for example. Proceed with care whatever the home’s age.

Spend as much time as you can in your future neighborhood, ideally on different days and times.

Making Arbitrary Offers

With housing inventory running high and sales at record lows, in most markets, there’s no shortage of houses for sale and sellers desperate to get out from under them all the more reason to hold out for the right house and the right price. But when you find that perfect house, don’t assume you can lob a low ball offer or make unreasonable demands. Even in hard-hit markets, nice houses in desirable neighborhoods are fetching multiple bids.

If the house has been on the market for months and has not reduced their listing price recently, you probably don’t need to worry about other buyers lining up behind you. Make an offer based on recent sales for comparable homes, foreclosure activity, and market trends, and don’t be afraid to start the bidding low. If you are serious about purchasing the home however, making an unreasonably low offer may have the unintended result of putting a bad taste in the Seller’s mouth and not getting a counteroffer. I have had more than a few deals go south because of the impression the Seller gets of the Buyer bottom-feeding and not being reasonable and well-intended buyers.

If the house is fresh on the market, has taken a recent price reduction, or recently foreclosed, and other buyers are circling the block, put your best foot forward with the guidance of your real estate professional, but don’t get suckered into a bidding war.

Filed under: Blog by Kim Bregman
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WEST PALM BEACH, Fla. Aug. 17, 2010 The number of homes and condominiums for sale across South Florida has steadily declined over the past two years, an encouraging sign for the region’s battered housing market.

Still, industry observers worry about a sizable shadow inventory of foreclosed homes that could complicate any real estate recovery.

Broward County had 19,869 properties on the market in July, down 35 percent from July 2008, according to a multiple listing service report compiled by the Keyes Co.

Palm Beach County’s inventory of homes and condos slid 31 percent to 23,947 during the same period.

The supply of new homes being built in the two counties also has decreased sharply in the past two years, said Brad Hunter of the Metro study research firm in Palm Beach Gardens.

In 2005, sellers rushed to list their homes, hoping to fetch record prices during the housing boom. But the frenzy led to a collapse and prices plummeted.

Thousands of foreclosures and short sales have clogged the market ever since, giving buyers plenty of choices and little reason to pay top dollar.

You won’t get price appreciation until you get the inventory in balance, said Mike Pappas, president of Keyes. We’re making great strides.

Declines in homes for sale already have helped stabilize prices recently.

The median price in Broward rose 7 percent during April, May and June to $209,800 from a year ago, the Florida Realtors said Wednesday. Palm Beach County’s median increased at the beginning of the year but dipped 2 percent in the second quarter to $235,500.

Pappas said his firm is handling fewer transactions involving foreclosed homes, and he thinks that’s an indication the foreclosure market has peaked.

But some analysts disagree, pointing to a recent surge in homes repossessed by lenders that is pushing inventory levels higher in recent months.

Banks are on pace to take back nearly 50,000 properties in Palm Beach, Broward and Miami-Dade counties this year, according to CondoVultures.com, a real estate consulting firm. Many lenders are careful to hold off listing those properties for sale all at once to prevent widespread price declines.

Sean Snaith, an economist at the University of Central Florida, expects more foreclosures to result from homeowners losing their jobs. And he said the sagging labor market likely will discourage potential homebuyers.

You have to have a healthy labor market as a foundation for a healthy housing market, Snaith said.

Another concern is the expiration of the federal homebuyer tax credits.

Buyers who signed contracts by April 30 and close by the end of September are eligible for the $8,000 and $6,500 tax rebates. But people who put homes under contract after April 30 don’t qualify.

While pending sales still are robust, demand for homes is expected to wane in the second half of the year. Fewer sales would keep the supply of homes elevated and ultimately hurt pricing, said Chris Lafakis, an economist covering Florida for Moody’s Economy.com in West Chester, Pa.

“Our forecast is that … demand won’t be strong enough to work off the excess inventory fast enough to stave off future price declines, Lafakis said. But by this time next year, the worst of the declines will be over.

Filed under: Blog by Kim Bregman
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North Carolina boasts the second-lowest mortgage closing costs in the country, says a survey released Monday by Bankrate.com

The study found that on a $200,000 loan, N.C. home buyers pay an average of $3,255 in closing costs $1,476 in origination fees charged by the lender and $1,779 in average title and third-party fees.

Only Arkansas, with average closing costs of $3,007, fared better than North Carolina in the study.

North Carolina, Arkansas and Iowa are the only three states with average closing costs at least 25 percent below the national average of $3,741.

Closing costs in New York easily are the country’s highest, at $5,623. Texas is second, at $4,708, followed by Utah.

The Bankrate.com findings come just days after a Freddie Mac report showing long-term mortgage rates hit record lows last week.

Freddie Mac (NYSE:FRE) said 30-year fixed-rate mortgages averaged 4.44 percent in the week ending Aug. 12, down from 4.49 percent the previous week. And 15-year fixed-rate mortgages fell to 3.92 percent on average, also the lowest on Freddie Mac’s record book.

Filed under: Blog by Kim Bregman
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