Westside LA Real Estate Advice: But signed contracts are still well below last year’s levels.

The number of buyers who signed contracts to purchase previously occupied U.S. homes increased in July but remained well below last year’s levels, a sign that demand for housing remains weak.

The National Association of Realtors said Thursday its seasonally adjusted index rose 5.2 percent from a month earlier to a reading of 79.4. Economists surveyed by Thomson Reuters had expected the index would fall to 74.9.

The index was still down 19 percent from the same month last year. June’s reading was the lowest on records dating to 2001. It was revised slightly downward to 75.5.

The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.

High unemployment, weak job growth and tight credit have hurt the housing market. Sales picked up in the spring when the government was offering tax credits of up to $8,000. However, once the tax credits expired on April 30, sales plunged.

“The recovery looks to be a long process, ” Lawrence Yun, the Realtors’ chief economist, said in a statement. “For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

The sales report was driven by a nearly 12 percent jump in the West and a more than 6 percent increase in the Northeast. Sales were up 4 percent in the Midwest and about 1 percent in the South.

Though mortgage rates have been at or near the lowest level in decades , the economy remains weak. Plus, many buyers have been scared away by the prospect that home prices could start to turn downward again — something that most analysts expect.

The index tracks signed sales contracts for previously occupied homes. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.

Source: Associated Press

Westside LA Real Estate Advice: Despite a recent spate of bad news coming out of the housing industry, home prices show signs of stabilizing.

National home prices jumped a substantial 3.6% in the past year, according to the S&P/Case-Shiller Home Price Index released on Tuesday. Prices also climbed 4.4% in the second quarter compared with a 2.8% plunge in the first quarter.

“While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. “Even with concerns about near term developments, we recognize that the housing market is in better shape than this time last year.”

Of course, the positive report was buoyed by the government’s tax credit program, which refunded as much as $8,000 for homebuyers. With that program now over, markets could cool.

“We all know what happened to housing after the homebuyers tax credit ended,” said Mike Larson, real estate analyst for Weiss Research. “It’s been an Acapulco-sized cliff-dive.”

And because this report is a lagging indicator, Larson adds that “it would be foolhardy to think that this report tells us that prices will continue to rise.” Instead, he expects prices to slowly deteriorate over the next several months.

In fact, home prices across the country could be substantially lower a year from now, according to Pat Newport, an analyst with IHS Global Insight. “It’s now apparent that the demand for housing is a lot weaker than anyone thought,” he said.

That has resulted in a glut of inventory, which a slew of bank repossessions of foreclosed properties is only making worse. Plus job gains are still proving elusive.

“These three factors are enough to bring home prices down,” Newport said.

Winners and Losers

A market basket of 20 metro areas tracked by the S&P/Case-Shiller home price indexes showed that prices gained in all markets but one. The index is up 4.2% year-over-year, well above a 3.1% forecast from industry experts as compiled by Briefing.com. The month-over-month gain was 1%.

“Las Vegas was the only city to record a fall in prices during June (-0.6%), compared with a month earlier. All 19 other markets were either up or flat, with Chicago, Detroit and Minneapolis the biggest winners. Each gained 2.5%.

Fifteen of the 20 cities recorded 12-month price rises, with San Francisco leading the way. Its 14.3% increase was one of three cities posting double-digit gains, with San Diego prices jumping 11.2% and Minneapolis 10.7%.

Source: CNNMoney.com

Westside LA Real Estate Advice: A growing number of homeowners are choosing to pay down their mortgages at a faster rate–even if it means a substantial jump in their monthly payments.

Between January and June, 26% of homeowners who refinanced chose a 15-year fixed-rate mortgage, according to data from CoreLogic, a provider of financial, property and consumer information. During all of 2009, 18.5% of borrowers who refinanced opted for a 15-year term.

What’s prompting the shift to shorter loans? Historically low interest rates for fixed-rate mortgages.

Homeowners are doing the math and realizing that rates have fallen enough so the increase in payment between a new 15-year mortgage and their current loan is no longer unbearable for their budgets, says Bob Walters, chief economist at online lender Quicken Loans.

The average rate on a 15-year fixed-rate mortgage was 3.86% for the week ending Aug. 26, according to Freddie Mac’s weekly survey of conforming mortgage rates.

A Change in Thinking

The financial situation of those capable of refinancing today is a factor in the shift, Mr. Walters says. These people typically are homeowners with the best credit and the most equity — and, therefore, most suited for a shorter-term loan.

But there might be some other psychology at work. “We’re seeing a different view on debt than maybe we’ve seen in the past,” he says. Today, homeowners are saying, “I really want to pay this off. I’m going to bite the bullet and take the payment and work toward paying this down.”

A 15-year mortgage also acts as somewhat of a forced savings account for homeowners, says Leif Thomsen, chief executive of Mortgage Master, a privately owned lender, given that the higher payments help a borrower pay down the principal at a quicker clip.

This is a huge shift in borrower thinking. “There was a drive a couple of years ago to take out the biggest mortgage that you could and use all of the money you would have otherwise had in the house and put it into stocks and bonds–to think of your house and mortgage as part of your entire investment portfolio,” says Amy Crews Cutts, deputy chief economist for Freddie Mac.

“That worked for people who do investment finance for a living and are good at managing accounts,” she says. “But for the average person, debt is a drag on their psyche as well as their overall budget.” Many Americans have reverted to the goal of paying off their house and getting rid of their mortgage, Ms. Cutts adds.

Doing the Math

Refinancing into a shorter-term mortgage isn’t a strategy for everyone, however.

Choosing a shorter term usually means you’ll get a better rate–and you’ll pay much less interest over the life of the loan–but a shorter time frame ramps up monthly mortgage payments.

For example, with a 4.5% interest rate on a 30-year fixed-rate mortgage of $200,000, you would have a monthly payment of $1,015, including principal and interest, Ms. Cutts says. The monthly payment jumps to about $1,480 with a 4% interest rate on a 15-year fixed-rate loan.

Of course, if the refinancing borrower’s current 30-year loan has a higher rate, the difference between the monthly payments could be lower. Still, you should count on some increase in monthly payments.

In general, Mr. Walters says, those who choose 15-year fixed-rate mortgages are older and have more equity and less debt than other folks. They also earn higher incomes and don’t have some of the added expenses that younger homeowners typically do.

“People who are taking these loans are financially stable and can afford the payments, but at the same time are planning on staying in their home for an extended period of time,” Mr. Thomsen says.

Mr. Walters says you shouldn’t take on a 15-year fixed-rate mortgage unless you have substantial savings, including at least a year’s worth of living expenses in liquid accounts.

Also, he recommends having a debt-to-income ratio below 35%. So if you have a gross salary of $5,700 per month, for instance, your monthly debt–including any mortgage payments, taxes, insurance, homeowners-association dues as well as auto and student loans and credit-card debt–would have to be a max of $1,995 to get a 35% ratio.

Borrowers who don’t meet those standards, or are worried about future loss of income, might be better served taking a longer-term mortgage but making extra payments on the principal to pay off the loan faster, says Mr. Walters.

For instance, if you refinance a $200,000 mortgage into a 30-year loan with a 4.5% rate, and then apply $100 of the savings to the principal payment each month, you’d save $31,700 in interest over the life of the loan, Ms. Cutts says. And you would pay off the mortgage in 25 years, instead of 30, she adds.

What’s more, you would have the flexibility of not paying that $100 in months when money gets tight. “Maybe today you’re feeling flush with money. Maybe you’re worried in the future that income might change,” Ms. Cutts says. With a 30-year mortgage, you have more flexibility. “Shortening to 15 years is a pretty big bump in payment.”

Source: Wall Street Journal

Westside LA Real Estate Advice: First-time deal for buyers had spurred sales, which have since crashed.

The Obama administration has not decided whether it should resurrect a popular tax credit for first-time homebuyers, Housing and Urban Development Secretary Shaun Donovan said on Sunday.

“It’s too early to say whether the tax credit will be revived,” Donovan said in an interview on CNN’s “State of the Union” program. He said the administration would “do everything we can” to stabilize the shaky U.S. housing market.

A federal $8,000 homebuyer tax credit, which expired several months ago, had boosted home sales, helping to revive a flagging housing market that had been a key factor in driving the United States into recession.

It followed a $6,500 credit for those purchasing a new primary residence, which also has expired.

But an unexpectedly large drop in U.S. home sales in July — sales of existing homes in the period fell to their slowest pace in 15 years — has spurred fears that the nation could be on the cusp of another sharp drop in housing.

Donovan acknowledged the data was worse than the Obama administration expected but said the government was taking measures, including rolling out a refinancing program for some borrowers and an emergency loan program for the unemployed.

Those opposed to bringing back the homebuyer tax credit say it would blow a bigger hole in the federal deficit, while supporters see it as key to stabilizing a pillar of the economy that faces headwinds despite low mortgage interest rates.

“I think it would help enormously,” Florida Governor Charlie Crist, who is running as an independent for the U.S. Senate in the November elections, told CNN. “I would absolutely encourage the president to support that.”

One of Crist’s challengers, U.S. Representative Kendrick Meek, a Florida Democrat, said he also supported reviving the tax credit.

Last month, Obama signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get the tax credit.

Homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.

Source: Reuters

Westside LA Real Estate Advice: If you’re shopping for a new home, chances are, whether you cook or not, the kitchen is an area of great interest. The bathroom is also likely high on the list to inspect. That’s because we spend a lot of time in both of these rooms, socializing and taking care of the, ahem, important stuff.

These two areas of homes are so vital that there’s even an association to educate, certify industry professionals, and promote ideas for these rooms. The National Kitchen and Bath Association (NKBA), founded in 1963 as The American Institute of Kitchen Dealers, has nearly 40,000 members. Earlier this year it released its top trends for kitchens and bathrooms for 2010.

Finding what you like in a home is most important but if you’re considering a resale in the future, understanding what appeals to the masses can help. Here, then, is a look at some of the top trends from NKBA.

Concealed Kitchens. This doesn’t mean that you walk into a home and can’t find the kitchen. Instead, the kitchen area blends with other areas of the home. Formal dining spaces often aren’t used much. But when a home has a kitchen that opens to a great room, it allows far more flexibility for people’s lives. What may be concealed are items such as commonly used appliances. Ultimately, the harmonious blending of color, design, and functionality make kitchens aesthetically pleasing and useful. NKBA writes in a press release that, “Clean structural lines coupled with sleek color palettes enable the space to establish a distinctive identity, without overpowering the surrounding rooms.”

Thirst-Quenching Stations. NKBA writes that beverage stations, complete with under-counter refrigerators that hold beverages and wine, are a new element in many kitchens. Exemplifying our attachment to our morning ritual, many of these beverage stations include a coffee station (”simple single-pot coffeemakers to larger units capable of espresso, latte, and cappuccino”), states NKBA. The design typically includes space for stemware, beverage mugs and glasses, and condiments. This setup allows people to gather to quench their thirst while being out of the way of the chefs.

Rounding Out the Edges. Think soft geometry. Countertops, islands, archways, and even light fixtures, are being designed with soft, round edges. According to NKBA, “The introduction of rounded islands and countertops carves a smooth-flowing traffic pattern throughout the room, while an appropriately placed arch will bring an overall softening to the more angular fixed features that are typical in kitchens and baths.”

Varied Heights. No more monotony. Kitchen countertops, islands, and even walls are being designed for specific purposes and that means their heights are varied. The various heights create “a beautiful counterbalance.”

Asian influence. There has long been a fascination with Asian countries and now it seems that the impact of Japanese design is showing up in subtle ways such as “clean lines, open spaces, and neutral color palettes with bold splashes of color in select areas,” according to NKBA. The association says oftentimes there will be “one strong anchor piece of Japanese origin” that designs are built around.

Whether you’re shopping for a new home or thinking of remodeling your current home, remember that trends do change. However, those that tend to stick are the ones that combine pleasing looks with highly functional features.

Source: Realty Times

Westside LA Real Estate Advice: Fewer borrowers were behind or in foreclosure in the second quarter, but the number of newly distressed loans grew.

The number of U.S. households that missed consecutive mortgage payments or were in foreclosure fell more in the second quarter than anytime since the mortgage crisis began four years ago, a survey found.

But the data, released Thursday by the Mortgage Bankers Association, showed the crisis is far from ending. One worrisome sign: The number of newly distressed borrowers increased, raising the prospect that foreclosures and delinquencies could resume their rise.

Overall, some 14.4% of borrowers had missed at least one payment or were in foreclosure at the end of June. That was down from 14.7% at the end of March, but up from 13.5% a year ago. The improvement came because fewer borrowers fell 60 days or more delinquent on their mortgages. The number of households that had missed just one payment increased.

“We’re past some of the worst problems,” said Jay Brinkmann, chief economist of the Mortgage Bankers Association. But with more than seven million homeowners behind on payments or in foreclosure, he said, “The bar for good news is being set very low.”

The improvement was seen in almost every state, with the biggest declines coming in those that have been hardest hit by foreclosures: Arizona, Nevada and Florida.

The news that the share of borrowers that have missed one payment rose—after falling for two straight quarters—reflected the difficulty some borrowers are having making payments on modified mortgages. It also came during a period when unemployment-insurance claims increased.

The rise in newly delinquent mortgages was the sharpest among borrowers with loans backed by the Federal Housing Administration.

While the mortgage crisis was driven at first by adjustable-rate mortgages that reset to higher payments, the majority of deteriorating loans are now being driven by unemployment. Ultimately, the economy will need to create more jobs to pull the housing sector out of its yearslong slump.

“It takes a paycheck to make a mortgage payment, and that is key at this point,” said Mr. Brinkmann.

Over the past year, policy makers have taken aggressive steps to stabilize housing markets by offering tax credits to spur sales and by backstopping loans with low down payments through the FHA. At the same time, mortgage rates have fallen to historic lows. The average rate on a 30-year, fixed-rate loan fell to 4.36% for the week ending Thursday, according to a survey from Freddie Mac.

But the housing market is facing a new round of pain. Sales plunged in July after tax credits expired and as new concerns mounted about the strength of the economy.

That could lead to lower prices, which would exacerbate one of the biggest problems facing the market: the elevated level of homeowners who are “underwater,” or owe more than their homes are worth.

A separate report Thursday showed that nearly 11 million homeowners were underwater in the second quarter, down slightly from 11.2 million in the prior quarter, according to CoreLogic, a mortgage-analytics firm. The decline came largely as more underwater homeowners went through foreclosure.

Even if the economy improves and the pool of delinquent loans begins to shrink for good, housing markets will have to absorb some share of the 4.5 million loans that are seriously delinquent or in foreclosure.

“The problem is going to move to a resolution phase where you’ve got to work through the foreclosures, and eventually it impacts the real-estate market,” said Herb Blecher, senior vice president of LPS Applied Analytics, a research firm.

Already, there are signs foreclosures could soon be on the rise. Newly initiated foreclosures increased 25% in July to a six-month high, according to a coming report from LPS. The uptick comes as more homeowners who have been in a “trial” loan modification have failed to receive permanent modifications under the government’s Home Affordable Modification Program, or HAMP.

Foreclosure time lines have grown longer as banks pursue modifications and other workouts on a glut of loans. At the end of July, the average borrower in foreclosure hadn’t made any payments for more than 15 months, according to the LPS report.

Meanwhile, the Obama administration, faced with disappointing results from HAMP, is focusing its latest efforts on unemployed homeowners who are at risk of foreclosure.

The administration this month announced a new round of $3 billion in funding for state initiatives and a federal program that will offer bridge loans to help jobless homeowners make their mortgage payments.

Source: Wall Street Journal

Westside LA Real Estate Fewer mortgage borrowers are delinquent on their loan payments, according to the latest data from the Mortgage Bankers Association.

The nation’s overall delinquency rate dropped to 9.85% in the second quarter, down from 10.06% of all loans outstanding three months earlier.

Even better, the percentage of seriously delinquent loans — ones 90+ days late or already repossessed by lenders — dropped to 9.11% from 9.54% in the first quarter.

The drop in loans 90 days or more late was the biggest the MBA has ever recorded, according to the MBA’s chief economist, Jay Brinkmann. “That shows we’re making headway,” he said.

He cited three reasons for the improvement:

• Fewer loans are coming into the default process;
• The homebuyers tax credit, which increased demand for homes, generated many pre-foreclosure sales, removing the attached delinquent loans from the statistics;
• The government- and lender-led mortgage modifications “cured” some payment problems.

However, even with those bright spots, there was one troubling finding: First-time delinquencies increased after four quarters of decline. It inched up to 3.51% in the second quarter from 3.45% in the first quarter. According to Brinkmann, the reversal reflects the weakness in both the housing market and the overall economy.

“It’s a question of jobs,” he said. “It takes a paycheck to make a mortgage payment.”

Underscoring the trend is the foreclosure trend among borrowers with conventional loans, like 30-year, fixed rate mortgages. They accounted for nearly 36% of foreclosure starts during the quarter. And these safe loans rarely get into trouble unless they lose employment or income.

The four worst hit states — California, Florida, Arizona and Nevada — still account for nearly 60% of national delinquencies, but California’s numbers dropped dramatically this year. At the end of 2009, California foreclosure starts made up nearly 20% of the nation’s total. That dropped to 14.7% during the second quarter.

Another positive trend is the gradual downturn in the number of borrowers who are underwater on their mortgages, owing more than their homes are worth.

CoreLogic reported today that the rate of borrowers underwater dropped to 23% in the second quarter from 24% in the first.

When borrowers fall underwater, it increases the chance that they’ll lose the homes. Brinkmann calls it one of the two “triggers” that lead to foreclosure.

If homeowners have positive equity, they can use it as a source of cash to pay bills, including mortgages. But if their cash reserves are gone and they can’t afford to make payments because their income has dropped, foreclosure is almost inevitable.

CoreLogic found that negative equity is worst in five states: Nevada (68%), Arizona (50%), Florida (46%), Michigan (38%) and California (33%).

Have you just become delinquent on your mortgage payment? Is it because you lost your job? If so, send an email to realstories@cnnmoney.com and you could be profiled in an upcoming story. Please include a contact phone number. For the CNNMoney.com Comment Policy, click here

Source: CNNMoney.com

Westside LA Real Estate Advice: Plenty of forces, from overly cautious lenders to inaccurate appraisals, are wrecking real estate deals right now. But one of the biggest roadblocks to getting a house sold these days is the disconnect between buyers and sellers.

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

Westside LA Real Estate Advice: Price, perks and appearance matter, real estate agents say.

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

Westside LA Real Estate Advice: The Obama administration may propose that any federal backing of mortgages be paid for through fees on the lending industry, according to people familiar with the internal discussions.

While the administration hasn’t settled on a plan to revamp failed mortgage giants Fannie Mae and Freddie Mac, which are now under federal supervision, a consensus appears to be emerging that some type of government guarantee will be needed to keep the ailing mortgage market functioning.

Some conservatives don’t believe the government should offer any type of guarantee, while others advocate limited, but explicit, backing. About nine in 10 new loans are currently backed by Fannie, Freddie or government agencies.

Policy makers face challenges determining what types of loans or mortgage-backed securities should be guaranteed and how the industry should be charged for government backing. Government officials want the cost of any explicit guarantee fully offset by the mortgage industry to avoid adding to the federal budget deficit.

But Washington must walk a fine line between pricing a guarantee high enough so it accurately reflects risk, while not charging so much that borrowing costs soar.

At a housing-finance conference last week, Treasury Secretary Timothy Geithner cited a “strong case” for a continued federal guarantee but said “the challenge is to make sure that any government guarantee is priced to cover the risk of losses, and structured to minimize taxpayer exposure.”

Officials want to avoid a repeat of what happened to Fannie and Freddie, which had to be bailed out and taken over by the government in 2008 after losses destabilized the firms. Mr. Geithner and others have said the firms wrongly guaranteed increasingly risky mortgages without charging enough to cover the risk.

Others warn the government has a poor track record when deciding how to price guarantees. While guarantees provided by the Federal Housing Administration, which insures mortgages, have traditionally turned a profit for the U.S., in recent months that agency has depleted its reserves and risks running out of money.

“It’s very hard to know what the right fee is,” said Alex Pollock, resident fellow at the conservative American Enterprise Institute think-tank, who supports moving to a fully private mortgage market. “The argument will always be from homebuilders, realtors, affordable housing groups, consumer groups and members of Congress that you’re charging too much and making it too expensive for borrowers.”

The National Association of Realtors, for example, is asking the Treasury to reduce interest payments Fannie and Freddie must currently make to the government, arguing that easing the firms’ expenses could produce more flexible lending standards. In a letter to Mr. Geithner this month, the organization said the Treasury should retroactively lower the 10% dividend the firms must pay on the $148 billion in taxpayer aid they have used.

The industry appears prepared to pay some type of premium to get the government’s backing. Under proposals floated by two trade groups, the Financial Services Roundtable and the Mortgage Bankers Association, new private-sector entities created to securitize and insure mortgages would pay a fee into a government-insurance fund.

Researchers at the New York Federal Reserve Bank, writing on their own behalf, have proposed creating lender-owned cooperatives that would replace Fannie and Freddie. Private lenders would pay into a “mutualized loss pool” to provide guarantees for mortgage-backed securities, and members would also pay a reinsurance fee to the government for a separate fund to backstop additional losses.

Some investors and academics say a government backstop is needed if the U.S. wants to facilitate securitization markets, where investors buy bonds backed by pools of mortgages. While mortgages were once funded primarily through the banking system, securitization fueled the growth of the nation’s $10 trillion mortgage market over the past 30 years, dwarfing the capacity of the nation’s banking system to fund loans.

“To suggest the private market can come back in and take the place [of the government] is simply impractical. It won’t work,” said Pacific Investment Management’s Bill Gross at last week’s summit.

Source: Wall Street Journal