Still, for the committed seller willing to do some prep work and come to terms with the current value of his or her home, locking in a buyer isn’t impossible.

By listing in early January, you might be able to catch some of those early birds who start browsing in the winter so that they can find a new home before school starts in the fall, said Louis Cammarosano, general manager of HomeGain.com, a real-estate website. In fact, many buyers tend to start their searches online right after Christmas, and continue throughout January and February, he said.

“If you hit the ground running and you’re a fresh listing that has done everything right, you’ve got the best shot,” said Cammarosano.

Consider the following tips to give your home the best chance to get noticed — and sold — in 2011.

Price It Right from the Start

Many sellers suffer from attachment bias, said Tara-Nicholle Nelson, consumer educator for real-estate website Trulia.com. They believe that their home is worth more than they’d pay for it in another context. While it’s always a bad idea to overprice a home, it’s especially dangerous in times like this because there is so much competing inventory in many local markets.

Nelson’s advice: Give yourself a reality check by looking inside comparable homes during open houses. That can help you get a clearer idea of your home’s value.

You might even consider interviewing a few real-estate agents to get more than one take on how the home should be priced, Cammarosano said.

The longer something sits on the market, the more price reductions you might have to make and the more potential buyers will assume that there’s something wrong with the home, he said. So more often than not, it’s best not to try testing the waters with a higher price, he adds.

Don’t be afraid to advertise in the listing and marketing materials that it’s not a foreclosure or short sale, Nelson said. In markets where distressed sales are plentiful, there are buyers who simply don’t want to deal with the extra hassle and uncertainty of a short sale or bank-owned property, she said.

Get the House Ready

Most sellers know they need to declutter, paint in neutral colors and generally stage the home as best as they can to help buyers envision themselves in the home. Often, this is done on the advice of a real-estate agent or professional stager.

The closer you can get your home looking like a photo from a Pottery Barn catalog, the better off you will be, said Beth Jaworski, a real-estate agent in the Milwaukee area.

And make sure that your cabinets and refrigerators are cleaned out and decluttered, too. “You want to have a minimum of ‘stuff’ in the house. The less stuff you have, the larger the closets, basement and garage will look,” she said.

Jaworski also recommends having a home inspection done a month before putting the home on the market to identify any major defects that need to be corrected.

Provide as Much Information as Possible

Have energy bills and a list of updates available for buyers to see, Jaworski said.

“Buyers are always curious what the utility bills are, how old the roof is, how many layers it has, how old the major mechanicals are and when that addition was added,” she said. “The more information you can provide on the house, the better.”

Consider providing a floor plan with listings as well, Cammarosano said. That way the prospective buyers don’t have to keep making return visits to determine how their furniture will fit in the space — they’ll have the dimensions in hand.

Make It Easy to Show

The more available you can make your home for showings, the better, said David Welch, a broker/associate in Orlando, Fla.

Make it easy for your real-estate agent to access the property and keep the place clean.

“You want your home to be easy to show because you don’t know if you will get a second chance,” Welch said. “Trust me, the buyer wants to like your house. Keep it in show-ready condition,” he said, so they aren’t turned off by a first impression.

Be Flexible

Buyers are in the driver’s seat these days, and they know they can make all sorts of unusual requests without risking the deal. Be ready.

“Buyer wants to see the house at 7 a.m. on Tuesday, OK,” Jaworski said. “Buyer wants to bring 10 family members and an inspector to check out the house for three hours this weekend, OK. Buyer wants you to include the kitchen table and chairs, the painting over the fireplace and your snow blower, OK.”

“The more flexible you are,” she said, “the better off you will be.”

Source: MarketWatch

Westside LA Real Estate Advice: 30-year benchmark falls to 4.17 percent, lowest on records dating back to 1971.

Rates on fixed mortgages dropped to their lowest levels in decades this week after the Federal Reserve unveiled a massive bond-buying program to help spur economic growth.

Mortgage buyer Freddie Mac said Tuesday the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That’s the lowest on records dating back to 1971.

The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That’s the lowest since the survey began in 1991.

The Fed detailed plans last week to buy $600 billion in Treasury bonds. On Wednesday, the central bank gave more details, saying it plans to purchase $105 billion in Treasurys over the next month. The extra demand means Treasurys will produce lower yields for investors. Mortgage rates tend to track those yields.

Mortgage rates have been at or near historic lows since April as investors, concerned about the health of the global economy, shift their money into Treasurys, pushing down rates on the bonds and consumer and business loans.

While more borrowers have refinanced their home loans, low rates have done little to boost the beleaguered housing market. Would-be buyers remain on the sidelines, too worried about their jobs or unable to qualify for a loan because of tighter credit standards. Others can’t sell their own homes before buying another.

Home sales were the worst in decades this summer, and home prices fell in half of U.S. cities in the third quarter, the National Association of Realtors said Thursday.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

Rates on five-year adjustable-rate mortgages fell to their lowest level in at least five years. They averaged 3.25 percent, down from 3.39 percent a week earlier. It is the lowest rate on records dating back to January 2005.

Rates on one-year adjustable-rate home loans were unchanged at 3.26.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount.

The average fee for 30-year and 15-year fixed loans in Freddie Mac’s survey was 0.8 point. It was 0.7 point for 1-year and five-year mortgages.

Source: Associated Press

Home prices are rising in virtually every corner of the state. They’ve climbed for nine consecutive months, and in July posted a 10.4% gain year-over-year. That puts the state’s median price at $315,000 — nearly twice the national median of $183,000.

And the news is even better in coastal cities.

San Francisco posted the biggest gain of any U.S. metro over the past year, rising 14.3%. The median price there is now more than $607,000. Meanwhile, San Diego has climbed 11.2% (median price: $389,000) and Los Angeles jumped 9.2% (median price: $345,000).

Meanwhile, Florida, Arizona and Nevada — California’s erstwhile bubble-state partners — continue to struggle. So where is the Golden State’s strength coming from?

“I think it comes from the fact that prices went down so far and so quick,” said Lesley Appleton-Young, California Association of Realtors’ chief economist. “That left a lot of people here saying, ‘Wow, affordable California housing.’”

However, a quick home price rebound was delayed by the crush of foreclosures that accompanied the subprime mortgage meltdown. California real estate had become so expensive that a basic single-family home required many buyers to overextend themselves with exotic loans.

That is no longer the case. Most of the subprime-related distressed properties have been flushed from the system. And when a foreclosure does hit the market, it’s snapped up. The median days it took to sell a home in July was just 44 — lightening fast.

“It’s the dearth of supply for distressed properties that has put pressure on home prices,” said Appleton-Young. “More than half the homes on the market last year drew multiple offers.”

Plus, the California economy is picking up. Even in a recession, it has remained one of the world’s 10 largest economies, mainly because it is driven by every major industry — aerospace, tech, software, finance, agriculture, tourism. So as more of those industries recover and employment picks up, demand for housing will jump.

“California is a much larger, stronger and more diversified economy than the other [bubble] states,” according to Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA.

Another factor that has helped lift prices is a trend toward more short sales. Fewer of the distressed properties are going all the way through the foreclosure process. “The shift to short sales in itself would increase home prices,” said Mark Goldman, who teaches real estate at San Diego State University.

That’s because short sellers usually occupy and take care of the homes until they’re sold, leaving the properties in better condition and worth more than similar foreclosed homes.

Goldman added that California markets are, generally, more constrained than any of the other bubble states. Florida and Nevada, for example, still have room to develop and grow in most areas. But the lack of developable land is especially acute in California, pushing home prices up.

Finally, the California state government has not sat idle. “California provided markets with more significant price support,” he said, “That played a role in elevating prices.”

The state support came in the form of tax credits of up to $10,000 for first-time homebuyers and buyers of new homes. Some purchasers were able to combine the state credit with one from the federal government to reduce their costs by $18,000.

For home sellers in other states, what’s happening in California is encouraging. Trends often begin on the coast, so they’re hoping the recovery will roll eastward.

Source: CNNMoney.com

When you are interviewing REALTORS® to market your home, you’ll be introduced right away to a priceless document—the comparative market analysis(CMA.) This is one of the areas in which the real estate industry really earns its keep—by showing you in black and white what your competition is. But like a sword, it is a tool that can cut both ways. You and your agent will use the CMA, among other tools, to determine where your home will stand in comparison to others which are on the market, and those which have recently sold to determine the highest possible asking price. Your buyer will use it to find ways to reduce his or her offer.

CMA’s are about facts which can be qualified and quantified. The CMA is typically designed to give quick capsules of information such as number of bedrooms and baths, approximate square footage, size of major rooms, amenities such as fireplaces and pools, age of the home, property taxes, listing agent contact information and more.

CMA’s can include homes that are currently for sale and those which have recently sold. They can go back in time as long ago as a year or a month or week ago. CMA’s can cover areas as narrow as one or two streets surrounding your home, or as broad as an entire subdivision.

What is not included in the CMA are those factors that affect perception, and that is the key difference between why one home with identical features will ultimately command a higher price than its twin. Perception alters reality, and this is a crucial consideration in understanding the buying and selling process and the value of the CMA. Much of a home’s value will ultimately be determined by the emotional impact it has on buyers. These emotions are based on subjective elements such as drive-up appeal, interior dec or, colors, views from the windows, light, darkness, room flow, and hundreds of other factors.

At the end of each home’s information on the CMA report there will be a brief statement provided by the listing agent. This statement is usually a combination of fact and subjective opinion, and will generally cover selling restrictions or selling points. It could be anything from “seller’s agent must be present at all showings” to “kitchen and master bath completely remodeled in 1997″ to “Charming! Must see!” (Keep in mind that Realtors are salespeople, self-employed and have individual styles of marketing and that some will be better at writing CMA reports than others.)

For privacy reasons the CMA that is offered for public consumption does not list every piece of information that has been obtained by the seller’s agent. It will give the what, when, where, but it won’t give the who (the seller’s identity) and the why (why the home is being put up for sale.) The reasons are two-fold, to protect the seller’s privacy and to keep from inadvertently giving the buyer an advantage in a distress situation.

The CMA is clearly a selling tool, but like any tool, it doesn’t work very well by itself. It takes a skilled person to be able to use it. For this reason, the CMA will always need to be interpreted by a professional or with complete objectivity by the seller or buyer.

Remember that the CMA is also a buying tool; it is taken just as seriously by the buyer and his or her agent. As you and your agent are going to use the CMA to ask the highest possible price for your home, the buyer is going to use it to find reasons to either choose or eliminate your home, and to arrive at the lowest price possible.

Source: Realty Times

In general, sellers have gotten more realistic in pricing their homes than they were right after the housing bubble burst, but agents say that many still don’t grasp how much they must concede to close a deal. And buyers are still spraying lowball offers around in hopes that sellers will be desperate enough to bite.

Take such unreasonable expectations, multiply by two, and what do you get? “A standoff,” says Glenn Kelman, CEO of real estate brokerage Redfin.

With the busy summer home-sale season drawing to a close, there’s little time to waste. Whether you’re trying to unload your place or land a new one, follow these dos and don’ts to negotiate the best deal — fast.

If you’re buying

Don’t say: “I’ll pay 85% of your asking price and not a penny more.”

Instead: Look for homes that are fairly priced and make a reasonable offer. “Coming in about 10% below list is a good starting place for negotiations now,” says Denver real estate broker Jeff Fogler. Yes, you have the upper hand in most markets, but the average homebuyer is paying only 2.7% below list price (see the chart). Set your expectations accordingly. You can always ask if the seller is willing to bridge a price gap in other ways — for example, by picking up your closing costs (which can run $7,500 on a $300,000 house).

Don’t say: “I haven’t put my own place on the market yet.”

Instead: List your current home before you start shopping seriously for the next one. Because it takes almost three months to move a house these days, sellers are loath to write home-sales contingencies into purchase contracts. You’ll have far more leverage if you’ve gotten rid of your house before you start negotiating: Sellers know there’s less chance of the deal falling apart. (Prequalifying for a mortgage helps too.) What’s more, you’ll know exactly how much money you can put into your new digs.

Don’t say: “This is my dream house.”

Instead: Stop imagining the great parties you’ll throw there and gird yourself to walk away if the seller won’t make reasonable concessions. Your ability to abandon negotiations is your most powerful bargaining chip. Given that plenty of other homes are on the market now, finding another place to love shouldn’t be too hard. You might let the seller know that. Nicely.

If you’re selling

Don’t say: “You’re offering how much? Forget you!”

Instead: When bidders lob low-balls at you, thank them for their interest — and ask that they come back with earnest offers. “If you become offended, enraged, or unreasonable, you’ve blown any chance at negotiation,” says Warwick, R.I., real estate agent Ron Phipps. These days many buyers are just testing you to see how big a discount they can get. Point the bidder to comparable recent sales that support your list price. (Received several super-low offers? Check the comps to make sure your price isn’t too high.)

Don’t say: “I didn’t know the deck was rotting.”

Instead: Pay a few hundred dollars to get your house inspected before you put it on the market. Then arrange to make any necessary repairs yourself. (In most states the law requires you to disclose to potential buyers any defects of which you’re aware.) “Taking care of any inspection issues upfront helps sellers limit the points that buyers can negotiate on,” says Pat Lashinsky, CEO of the national brokerage ZipRealty.

Don’t say: “It might take us a while to move out.”

Instead: Make sure to tell buyers — especially those who might have children starting school this month — that you’re willing to scram pronto, if possible. That will help you stand out from any short sales in your area, which may have lower list prices but can take months to close. “If the buyers have a strict time limit, they’re going to pay more money to get into a house quickly,” says Ellen Klein, a realtor in Rockaway, N.J. More money plus more speed: That’s what it’s all about.

Source: CNNMoney.com

For millions of home sellers, it’s been a hot summer but a chilly housing market.

Sales of previously occupied U.S. homes plunged last month to the lowest level in 15 years , despite the lowest mortgage rates in decades and bargain prices in many areas.

July’s sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

The weak economy and high unemployment rate, a standoff between buyers and sellers over price and the expiration of government tax credits are all playing a role in keeping the housing market weak.

For home buyers, the glut of houses means they can be as picky as they please about everything from the home’s price to the neighborhood it’s in to whether they like the kitchen faucet.

For home sellers, it’s more important than ever to stick out among the pack. Msnbc.com asked real estate agents in several markets for five tips for actually selling your home in a sluggish market.

1. Price, price, price
In a market thick with foreclosed homes and short sales, even people who are selling their homes the traditional way need to make sure they are priced competitively, said Robyn Yates, a broker/owner with Windermere Real Estate who has been selling homes in the Las Vegas area for 15 years.

“If a regular seller can price their property the same as the bank-owned property or the short sale (property), then they’re going to be in very good shape,” Yates said.

A buyer in this market may be turned off by a home that is priced too high, because they don’t want to deal with the headache of negotiating to a lower selling price when the next house over is already at that lower price.

2. We’re not in foreclosure!
That said, Yates noted that there are advantages to being a traditional seller, and sellers who are not looking for a short-sale or a foreclosure can use that as a differentiator.

Besides the potential financial headaches of buying a distressed home, a traditional seller is more likely to have kept the lawn alive, the house clean and the appliances intact.

Greg Herb of Herb Real Estate in Gilbertsville, Pa., said he is still seeing that sellers are able to command a higher price over homes that are not in foreclosure, especially in markets where foreclosures aren’t as rampant. He said that’s because they can show that their home is in better shape than a foreclosed home, and will not require as much work before the buyer moves in.

Traditional home sellers also can differentiate themselves by offering little perks, such as a credit toward closing costs, money to repaint the house or a one-year home warranty.

3. Looking your best
The tried-and-true tips for selling a home still apply.

“You’ve got to make sure that one the house definitely has wonderful curb appeal,” said Ennis Antoine, associate broker with Better Homes and Gardens Real Estate Metro Brokers in the Atlanta area, who has been a real estate agent since 1986.

Clean the house well, add fresh flowers and sprinkle around some brightly colored towels to give your house an appealing look. Sometimes just moving around the furniture can make a huge difference, Herb said.

“You want to lead with your best foot and showcase your property as best you can,” he said.

If you can afford it, hire someone to professionally stage the house. If you aren’t living in the house, Antoine recommends finding someone who can stay in the house, keeping it clean and furnished.

Antoine also recommends showcasing the house in a non-traditional way, such as holding a wine-and-cheese for potential sellers.

4. Ditch the point and shoot
These days, most buyers are looking at homes online first, so some real estate agents strongly recommend hiring a professional photographer who can showcase the home in the best light possible.

Post as many photographs online as you can, and think seriously about a virtual tour or even a video, Antoine said.

Yates also recommends going beyond just the rooms and yard. A few photos of the neighborhood also can make a huge difference, especially if your home is near a park or if you can show that there aren’t that many homes for sale – or in distress – on your street.

“It’s not just about the house, it’s also about the neighborhood,” Yates said.

Don’t forget the details, either, Yates said. You may also catch a potential buyer’s eye with a photograph of a lovely fixture or beautiful plant.

5. Consider leasing
If you absolutely can’t find a buyer at the price you want, consider leasing the property to a family that is having trouble buying. Antoine said he’s seeing a lot more leasing activity in the Atlanta area, and that it’s especially appealing to people who want to live in a particular area but can’t buy for one reason or another.

In the Las Vegas area, Yates said she’s seeing a lot of people switching up.

“The renters in our market are now becoming home buyers and the people that used to own homes are now becoming renters,” she said.

Source: msnbc.com

“Before a house is listed for sale, the real estate agent will work with the homeowners to make sure that the property is competitive with similar properties in the area,” Molony explains. “A little dampness in the basement or a small drywall crack are flaws that a potential buyer may be willing to overlook,” says Molony, “but a cracked or bowed foundation wall will be a major red flag. Since most home sales are contingent on a satisfactory home inspection, foundation problems are very likely to stop a home sale dead in its tracks.”

Home improvements vs. home repairs
In today’s tight economy, it’s understandable for homeowners to put off home improvements until they feel more financially secure. But it’s important to make a distinction between basic “feel-good” improvements (like painting a room or installing shelving) and repairs that correct safety issues or prevent a problem from getting worse. Fixing a damaged foundation definitely falls into this latter “must-do” category.

“It’s risky to put off fixing a damaged foundation,” says Dave Thrasher, of Nebraska-based Foundation Supportworks. “If a crack starts to enlarge or a wall starts to buckle, you’re seeing a failure that is probably going to get worse,” Thrasher continues. “The longer you wait, the more extensive the problem becomes and the more expensive the repair is going to be.”

Foundation problems follow the building boom
Some foundation problems are obvious—cracks, tilting chimneys and bowing basement walls, for example. But there are other symptoms that may signal a settling or shifting foundation. For example, windows or doors can be racked by a shifting foundation and become difficult to open and close. Drywall cracks that extend from the corners of windows and doors are another telltale sign.

As surprising as it seems, a newer home may be just as likely to have foundation problems as an older one. A Wall Street Journal article (8/13/2009) reported on an entire housing development in California with numerous foundation problems.

According to journalist M.P. McQueen, the decade-long building boom that began in the late 1990s “caused shortages of both skilled construction workers and quality materials. Many municipalities also fell behind inspecting and certifying new homes.” This perfect storm of poor quality control definitely took its toll. Research conducted by Criterium Engineers, a national building-inspection company, confirmed an uptick in the percentage of new homes with major construction defects.

Specialty foundation repair contractors have the right solutions
The good news about foundation problems is that most of them can be corrected, as long as the contractor has the training, tools and materials to do so. “We certainly get our share of calls from panicked homeowners,” says Thrasher. “By the time people call us, they’ve probably realized that local remodeling contractors can only temporarily fix cosmetic problems, but are unable to permanently solve the problem.

Source: RISMedia

The demand for U.S. mortgage applications to purchase homes rose last week for a third straight week as interest rates tumbled, the Mortgage Bankers Association said on Wednesday.

The low rates also buoyed demand for home refinancing loans, with activity rising in five out of the past eight weeks, the industry group said.

The trends provide a glimmer of hope for a housing market that has been struggling since the April 30 expiration of popular home buyer tax credits.

The MBA said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.3 percent in the week ended July 30. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 0.3 percent.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.60 percent, down 0.09 percentage point from the previous week, the MBA said. The rate was up just 0.01 percentage point from a record low set two weeks earlier. The survey has been conducted weekly since 1990.

Interest rates were also below their year-ago level of 5.17 percent.

The seasonally adjusted purchase index, a tentative early indicator of home sales, increased 1.5 percent. Demand, however, is down about 40 percent since the tax credit expiration.

To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended another three months.

Kurt Gleeson, national vice president of sales at RealEstate.com, a division of LendingTree, which is headquartered in Charlotte, North Carolina, said he expects poor home sales over the next two to three months.

“The housing market is sputtering,” he said. “There is a smaller pool of buyers who can afford to purchase a home. The economy, and more specifically, the sluggish employment market, has excluded many potential buyers from the housing market.

“Jobs growth ranks No. 1 in importance for the housing market and without it there will be no rebound,” Gleeson said.

Key insight into the state of the jobs market will emerge on Friday when the U.S. Labor Department releases July data.

The MBA’s seasonally adjusted index of refinancing applications increased 1.3 percent.

The MBA said fixed 15-year mortgage rates averaged 4.03 percent, down from 4.12 percent the previous week, a record low. Rates on one-year adjustable-rate mortgage, or ARMs, decreased to 7.10 percent from 7.15 percent.

Source: Reuters

A total of 23,871 new and resale homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 7.2 percent from 22,270 in May, and up 2.6 percent from 23,262 for June 2009, according to MDA DataQuick of San Diego.

The sales count was the highest since July last year when 24,104 homes were sold. It was the strongest month of June since 2006 when 31,602 homes sold. The average June since 1988 has had 28,086 sales.

“The market was wildly out of kilter a year ago, now it’s just somewhat out of kilter. We’re still seeing lots of bargain hunting, and we’re not seeing much discretionary buying. The single-biggest issue is still mortgage financing. Rates may be at record lows, but that doesn’t mean much if the lender won’t qualify you,” said John Walsh, MDA DataQuick president.

“Still, more money was spent last month buying homes in Southern California than in the past two years, and more money was loaned. The tax credits had something to do with that, though it’s not clear exactly how much. With the impact of the credits fading fast, the next few months will tell us a lot.”

The median price paid for a Southland home was $300,000 last month. That was down 1.6 percent from $305,000 in May, and up 13.2 percent from $265,000 for June 2009. The low point of the current cycle was $247,000 in April 2009, the high point was $505,000 in mid 2007. The median’s peak-to-trough drop was due to a decline in home values as well as a shift in sales toward low-cost homes, especially foreclosures.

Foreclosure resales accounted for 33.0 percent of the resale market last month, down from 33.9 percent in May, and down from 45.3 percent a year ago. The all-time high was February 2009 at 56.7 percent, DataQuick reported.

Government-insured FHA loans, a popular choice among first-time buyers, accounted for 39.0 percent of all mortgages used to purchase homes in June.

Last month 20.8 percent of all sales were for $500,000 or more, compared with 22.2 percent in May and 19.3 percent a year ago. Zip codes in the top one-third of the Southland housing market, based on historical prices, accounted for 29.6 percent of existing single-family house sales last month, down from 31.0 percent in May but up from 27.8 percent a year ago. Over the last decade those high-end areas have contributed a monthly average of 33.3 percent of regional sales. Their contribution to overall sales hit a low of 21.0 percent in January 2009.

High-end sales would be stronger, and the overall market recovery more robust, if adjustable-rate mortgages (ARMs) and “jumbo” loans were more available. Both have become much more difficult to obtain since the August 2007 credit crisis.

While 43.9 percent of all Southland purchase mortgages since 2000 have been ARMs, it was 6.6 percent last month, up from 6.5 percent in May and up from 2.7 percent in June last year.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 17.3 percent of last month’s purchase lending, up from 17.2 percent in May and from 14.9 percent in June 2009. Before the credit crisis, jumbos accounted for 40 percent of the market.

Absentee buyers – mostly investors and some second-home purchasers – bought 19.7 percent of the homes sold in June, paying a median of $220,000. Buyers who appeared to have paid all cash – meaning there was no indication that a corresponding purchase loan was recorded – accounted for 23.5 percent of June sales, paying a median $213,000. In February this year cash sales peaked at 30.1 percent. The 22-year monthly average for Southland homes purchased with cash is 14.1 percent.

The “flipping” of homes has also trended higher over the past year. Last month the percentage of Southland homes flipped – bought and re-sold – within a six-month period was 3.4 percent, while a year ago it was 1.9 percent. Last month it varied from as little as 3.0 percent in Orange and San Diego counties to as much as 3.8 percent in Los Angeles County.

MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,251 last month, down from $1,293 for May, and up from $1,193 for June a year ago. Adjusted for inflation, current payments are 44.3 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 54.4 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but is lower than peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above- average, MDA DataQuick reported.

Source: DQNews.com

Tanya is a self-employed writer with solid credit and enough savings to put 30 percent down on her chosen Connecticut house. But for the past year, no lender would approve her. Then one got personal.

While dissecting the account she shares with her boyfriend, “they demanded to know what my relationship was with him. I finally gave up, decided I would just rent,” said Tanya, who asked that her last name be withheld should she opt to “go back to that bank.”

Businessman Ben Wilkinson-Raemer and his wife tried for six months to purchase a (very small) apartment in Manhattan’s West Village neighborhood, on the market for $400,000. He dutifully provided underwriters mounds of requested financial records. He winced when they also scoured the bank account of his 85-year-old grandmother because she gave him $10,000 toward the purchase. Despite his excellent 700 credit score, the loan was rejected.

“We opened a bottle of Champagne,” Wilkinson-Raemer said. “We were just so happy to have the whole weight off our shoulders.”

Even for successful buyers with sterling credit, seeking a mortgage these days can feel like a simultaneous root canal and colonoscopy. Tighter loan restrictions were expected after the mortgage fiasco. A quarterly Federal Reserve survey of loan officers at large banks confirms they have tightened standards significantly over the past three years, although now some lenders are beginning to loosen up.

But as the housing market continues to struggle, with home sales plummeting last month, some mortgage brokers say the pendulum of scrutiny has swung too far, causing transactions to take far longer than necessary, putting buyers through too much hassle and blocking qualified applicants from purchasing.

The real estate business seems to have switched its motto from “location, location, location” to “documentation, documentation, documentation.” Potential buyers must chronicle every dollar of income and all assets via pay stubs, W-2s, tax returns, bank statements, credit reports and sometimes even letters from employers or family members. Mortgage brokers blame new federal lending rules for injecting unneeded delays in the loan process, and they accuse some underwriters of focusing on their own job security rather than fairly analyzing a consumer’s default risk.

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“The big difference today is the fact that underwriters look at the guidelines with a strict black-and-white viewpoint and are unwilling to interpret the guidelines for fear of job loss,” said Kirk Jaffe, chief operating officer of Los Angeles-based Peak Financial Partners Inc., which offers real estate services. “It is always easier to say no than to say yes.”

“The changing rules during the last couple of years are making it much more difficult to obtain mortgages, slowing our economy, causing our housing market to decline,” said Warren Greenlee, who runs RE/MAX at the Lake in Mooresville, N.C.

Many brokers and agents agree that home-loan snags are stalling the housing recovery and damaging the economy, hurting businesses that sell the types of goods and services and new homeowners typically buy.

“The changes are far-reaching,” Greenlee said. “Some are comical.”

Like the lender who — due to an inspector’s typo — temporarily refused to fund a mortgage for a Greenlee client. When naming the property in his report, the inspector mistakenly inserted a space between the words “Four” and “Square.” The bank, JPMorgan Chase, insisted the inspector redo his report. “In years past,” Greenlee said, “the lender would have never noticed or cared.”

The simplest loans — those involving one person with one checking and savings account —require 33 pages of disclosure documents, said Todd Huettner, president of Denver-based Huettner Capital, a real estate mortgage brokerage.

Home-loan frustrations, Huettner said, are touching “every borrower.” But the most qualified applicants — high-income, high-credit folks who three years ago zoomed through the process with 10-minute pre-qualification calls and no-doc loans — now are most apt to choke on red tape because they have “the most complex finances,” he said. In such cases, an underwriter often demands extra documentation from the borrower “five, six, or seven” times.

“And considering that each iteration takes about a week, that’s why people are spending two and three months trying to get a loan done,” he said.

According to a survey conducted earlier this year by The Work Number — an employment verification database used by more than half of the Fortune 500 companies — 72 percent of respondents said they are confused by the flood of disclosure forms.

“We were joking while signing all the paperwork that, on paper, I don’t think anybody knows us better right now,” said Aaron Lupo. Last week, he and his wife closed on a $150,000 home in Olathe, Kan. The underwriters “know everything there is to know about us.”

But consumers like Wilkinson-Raemer in Manhattan, stuck in rental purgatory, are paying the steepest price.

In a “normal market,” about six of every 10 loan applicants are approved, estimated Paul McFadden, a loan officer at the Legacy Group in Bellevue, Wash. Before 2008, at the height of the subprime lending craze, roughly nine of every 10 loans were approved, he said.

“Now, it is probably three out of 10,” McFadden said. “As a lender, we’ve all had to adjust to a new reality.”

“In many cases, borrowers who have proven their ability to buy homes and pay for mortgages are being penalized and declined mortgages,” Jaffe said.

Huettner also blamed federal reforms for mucking up the mortgage machine.

RESPA — the Real Estate Settlement Procedures Act — requires lenders to supply good-faith estimates to would-be buyers, revealing loan terms and closing costs. As a result of the law, which went into effect Jan. 1, brokers cannot order property appraisals until their clients have had the good-faith estimates for three days — an “artificial delay,” according to Huettner.

Then there’s the federal Home Valuation Code of Conduct, which prohibits lenders, brokers and agents from selecting or having “substantive” communication with a residential appraiser. The idea was to ensure appraiser independence.

Before the mortgage crisis, fraudulent appraisals inflated many home values. Yet as a result of the new code of conduct, appraisers now might come from 20 to 50 miles away and are unfamiliar with the neighborhood’s nuances. As a result they often write “egregiously low” appraisals, Huettner and other brokers contend.

“The regulatory stuff coming from Washington … it’s bad,” Huettner said. But he said the pendulum might not have swung as far as some believe.

Some of “the whining you’re hearing,” Huettner believes, lies with “inexperienced” mortgage brokers who “don’t have underwriting expertise.”

Huettner doesn’t see loan guidelines as being substantively different from years past. The real change: the paper trail of income evidence that’s now required.

He said the new scrutiny of borrowers is a change from recent years but not unprecedented.

“Go talk to someone who bought a home 40 years ago,” he said. “They had to produce all kinds of documentation.”

“The end result here is that lenders and investors want to be certain that they have minimized any opportunity for default prior to originating a mortgage,” said Jim Sahnger, a mortgage brokers in Jupiter, Fla.

“As procedures were implemented to verify all aspects of the application, confidence has returned. And part of the result is the lowest mortgage rates we have ever seen,” Sahnger said. But “today, just because you have a FICO score in the 740-plus range does not mean you don’t have to prove it.”

Source: MSNBC.com