Video: How To Sell A Home (Err...Maybe Not!)...

If Timothy Geithner—the current United States Secretary of the Treasury—can't price his home to sell...what does that say about the ability of your clients to price a home correctly in today's market?
Watch this hilarious outtake of how NOT to sell a home. And this is from the man with a large role in directing the Federal Government's economic response to the financial crisis—unbelievable!!...

http://www.thedailyshow.com/watch/wed-july-29-2009/home-crisis-investigation

IRS Is Scrutinizing Mortgage Deductions

According to published reports, the Internal Revenue Service is more closely examining how taxpayers are reporting mortgage interest deductions.

The IRS is reportedly examining some returns with high deductions for mortgage interest and enforcing obscure rules that most home owners and many accountants could be unfamiliar with.

The calculations are very complex and rely on precise records that some home owners may have trouble producing.

Experts advise home buyers who have borrowed more than $1 million in mortgages and home equity loans since 1987, the year deductibility limits were enacted, to consult a tax expert because the newest loan may not be tax deductible.

Source: Investment News Daily, Art Auerbach (08/25/2009)

Bill Encourages Energy Improvements

A bill that helps home buyers afford energy improvements and encourages banks to offer a discount on loans to pay for reducing energy usage passed the U.S. House in June and could pass the Senate in the fall.
The American Clean Energy and Security Act of 2009 requires Fannie Mae and Freddie Mac to offer discounts on mortgages that include extra cash for making a home more energy efficient.
These discounts, which are already in effect at some lenders like J.P. Morgan Chase & Co. and Bank of America, include savings on closing costs for homes that have Energy Star appliances.
The Federal Housing Administration is offering a plan through its approved lenders that allows borrowers to add the cost of making efficiency improvements into the mortgage, but the extra money doesn’t count toward determining how much loan a borrower can qualify for. For instance, a borrower who adds $5,000 to a $100,000 loan to afford new Energy Star appliances would only have to qualify for $100,000 – not $105,000.
Source: The Wall Street Journal (08/24/2009)

What Has the Housing Crash Cost Americans?

How much real wealth have Americans lost so far in the real estate crash?

The Federal Reserve estimates that the total market value of U.S. homes fell 18 percent from $21.9 trillion to $17.9 trillion or about $13,000 per person from the end of 2006 through March 31, 2009.

The Fed also estimates that homeowner’s equity has declined 40 percent from the peak and now accounts for just 41.4 percent of real estate values. By comparison, after the last slump in the 1990s, home equity levels remained in the high 50s.

This collapse in equity makes it difficult for potential buyers to sell their homes and trade up, which many experts say will weigh heavily on the housing recovery.

Source: The Wall Street Journal, Brett Arends (08/20/2009)

Message to Buyers: You Can Probably Afford It

Housing is remarkably affordable these days.

A family earning the nation’s median income of $64,000 a year could afford to buy 72.3 percent of all homes sold in the United States during the second quarter of 2009, according to the National Association of Home Builders and Wells Fargo.

Sellers are the ones who are paying the price. More than 30 percent of all homes sold during the second quarter sold for less than the sellers paid originally, according to Zillow.com.

A significant percentage of owners who bought within the past five years and sold during the quarter lost money on the deal, according to Stan Humphries, Zillow's vice president in charge of data and analytics.

[Editor's note: Although discussion of trends on a national level can be useful, conditions in a local market can be vastly different from what's happening statistically on a national level. For that reason, conditions for owners who've bought in the last five years might or might not resemble what analysts are seeing statistically on a national basis.]

Source: CNNMoney.com (08/19/2009)

Greenspan Unsure About Recovery

Former Federal Reserve Chair Alan Greenspan said the economy seems to be improving in some areas, but he was dubious that improvement is sustainable.

“I think we’re going to be OK for the next six months,” he says. "We are getting a recovery in (housing) starts and motor vehicles, but the process doesn't have legs to it.

"Greenspan adds that while the decline in construction is reducing inventory, it is unlikely that the percentage of home owners will ever be as high as it was at the peak, and that will result in a reduction of the overall size of the market.

Source: Reuters News, Emily Kaiser (08/17/2009)

FHA Program Offers Purchase, Renovation Aid

The Federal Housing Administration is encouraging use of its little-known 203(k) loan program.

The 203(k) lets an owner-occupant borrow money for both the purchase and renovation in one loan, and put down only 3.5 percent.

The program requires the use of credentialed contractors and can include cosmetic improvements as well as major renovations like replacing plumbing or electrical. Completing the application process requires patience, says Nancy Hammock, an associate with RE/MAX Properties in Western Springs, Ill.

But in this lending environment, more homebuyers are finding 203(k)s worth the hassle. In fiscal 2008, the government insured about 6,700 of the 203(k) loans. This year, more than 11,000 loans have already been insured, according to the Office of the Comptroller of the Currency.

Source: Chicago Tribune, Mary Ellen Podmolik (08/14/2009)