Beware of Predatory Lending!

Predatory lending is a term often associated with short-term consumer financing options such as payday loans, but it's prevalent in the home loan realm as well. In fact, mortgage fraud is rampant these days. At best, these practices are annoying to potential victims, but for the actual victims, the end result could be far worse: the loss of a home, financial catastrophe, the destruction of hard-earned credit scores.With that in mind, it's vitally important to choose the right lender and remain fiscally secure.

We've taken a look at some common predatory lending practices to alert prospective borrowers to the warning signs before they're victimized. It's vital that you know how to protect yourself, and know where to go if it's already too late for that.Current homeowners seeking refinance options are at greater risk of fraud than regular home loan seekers, but no one is immune by any means. At particular risk of mortgage scams are any buyers who, due to credit issues or self-employment status, must rely on subprime lending.Also at risk are those seeking to buy in neighborhoods that have been red-lined (read: greatly discriminated against) by conventional lenders.

Almost by default, a buyer in this kind of area, which is likely low-income and in need of some serious housing overhaul, is placed at the mercy of subprime lending providers.But it goes beyond that.There are many people involved in fraudulent, predatory practices, ranging from large and well-known banks, loan servicing companies, small-time con men who once hocked aluminum siding and water filtration systems door-to-door, corrupt loan originators working for otherwise legitimate firms, jaded real estate attorneys, builders, agents, and more.THE

BOTTOM LINE: Predatory lending is profitable, and more opportunists are always coming out of the woodwork. Here's a short list of predatory practices.

The Classic Bait & Switch. This commonly-used term comes from numerous retailing industries, where a great sale on a plasma TV or new car gets buyers to come down to a store, only to find out that the item is sold out or the sale no longer applies. However, the retailer has something “almost as good” that he'll give you a good deal on to make up it. The practice is common in the mortgage field as well. A borrower commits under a set of terms -- a certain interest rate, a fixed - or adjustable-rate mortgage with a specified time frame and adjustment index, loan duration, etc. Then, at closing, the borrower realizes the documents specify a higher rate, a different adjustment, a five-year note with a balloon, or other terms to which he had not agreed. The loan originator does not answer his phone. The sellers are beginning to look real unhappy. Under pressure and distraught, the borrower signs the documents and swears he will get the mess straightened out. But with the papers signed, it is now a legal issue that takes time, money and perhaps courts to resolve. If you think this could never happen to you, a California study of 125 people who used subprime lenders reported that 70 percent of borrowers said that at least one key of their loans changed negatively at closing.

Lending More Than a Borrower Can Afford. It happens more often than you might think -- a lot more often. You’ve seen the ads in your email box or on late night TV for sure.

· Borrow 125 percent of your home’s value!
· Use your house to buy a new [insert car, yacht, home entertainment system, dream vacation or other indulgent purchase here].

While these can be classified under aggressive solicitation, they are also part of a more devastating practice. Purposely granting and/or structuring a loan with monthly payments in excess of what a client can reasonably be expected to pay is probably as bad as it gets. An over-the-top loan-to-value ratio is all but guaranteed to get you in trouble, but there are other things to watch out for on top of that.

Disregarding Income and Debt, for one. Bad lenders ignore the conventional guidelines regarding the borrower’s ratio of debt to income, or the level of income itself. If a borrower is lined up to pay 55 percent of his income to PITI, for instance, default is all but guaranteed. Negative amortization is now illegal in many states, and should be in all of them, but lenders can usually get away with closing these deals with an uninformed borrower, and with little risk of prosecution. With a "neg am," the borrower is required to pay less than the amount due each month, with the balance being tacked on to the principal. At some point, that swollen principal will come due. Which means disaster in most cases.

Interest-Only Loans. Zero amortization is less dangerous than negative amortization, but both Florida home loans are a recipe for disaster. In both cases, the borrower makes a minimum payment for a period, covering interest but paying nothing toward principal. After 5-10 years, payments are accelerated to cover both interest and principal.A lender usually does this to virtually insure that the borrower will fall into default, and when that inevitably happens, the lender is the first to know and can approach a customer to offer refinancing to bail them out of the jam. How convenient. Under any of the above scenarios, a borrower might refinance 2-3 times before ultimately losing the house to foreclosure or being forced to sell, losing most or all his equity in the process and walking away virtually empty handed.

Prelisting Inspections: Head Off Trouble

Sandy Schoon, ABR®, GRI, a sales associate with Arizona Best Realty in Scottsdale, knows firsthand just how quickly a deal can be put in jeopardy — or slip away altogether. Schoon had a listing on an older house, built in the early ’70s. Two weeks before the sale was to close, the air conditioning system broke down. After some scrambling by the sellers and a $2,000 repair, the deal went through, but Schoon says the added stress could’ve easily been avoided.“If you do an inspection and make the necessary repairs before listing a home, the house basically has a clean bill of health,” says Schoon, who has regularly recommended prelisting inspections to her clients during the four years she’s worked as a real estate salesperson. “It’s an opportunity to take care of things that could go wrong so that they won’t come back and bite you.

”Prelisting inspections — examinations paid for by the seller before a house is put on the market —are becoming an increasingly popular way for practitioners to not only reduce the possibility of last-minute surprises but also give their cli­ents’ homes a Marketing Edge. Although some practitioners suggest prelisting inspections for older homes or those in obvious need of repair, Susan Spellman, ABR®, a salesperson with Long & Foster, REALTORS®, in Williamsburg, Va., recommends them to all her clients. Her average sales price is about $700,000, and her clients tend to live in gated communities. “Just because a home has granite countertops doesn’t mean it’s well built,” she says.

She feels so strongly about prelisting inspections that if her clients don’t agree to do one, she gives them two options: sign a letter acknowledging they’re not following her advice or work with another practitioner. “I tell my clients not to be penny-wise and dollar-dumb,” Spellman says. In the end, “my clients feel it’s been money well spent,” she says.Schoon and Spellman both mention the inspections in all of a home’s marketing materials, and make the inspection reports, as well as any repair receipts or cost estimates, available during showings.

“Sellers are realizing it’s not just their market anymore. Thanks to the Internet, potential buyers are walking into homes more knowledgeable than ever before, and sellers know they must do everything they can to sell their house,” Paterkiewicz says. “A prelisting inspection helps get buyers comfortable with the idea of making an unconditional offer. There’s also a greater sense of security because the seller and practitioner are being very forthright, demonstrating that there’s nothing to hide.”The need to make certain repairs—such as to mechanical systems (heating and air conditioning, plumbing, and electrical) and to address safety issues (broken locks, loose handrails)—almost goes without saying. But the prelisting inspection can help the owner and practitioner decide which, if any, of the remaining projects to address before putting the house on the market. Even if sellers decide not to make any of the suggested fixes, a prelisting inspection can still prove beneficial, Steward says. For example, it allows sellers to obtain cost estimates for needed work, so they can offer potential buyers an appropriate, not excessive, discount off the listing price.

Prelisting inspections can reduce parties’ stress level and eliminate many of the bumps that can throw a deal off track, says Long & Foster’s Spellman. “You want a smooth, successful transaction,” she says. “If the house doesn’t sell, it’s a lose-lose for everyone.”

How to Handle Water/Mold Damage

Water damage, if left unattended for any period of time, may lead to mold growth. People may experience health effects associated with exposure to mold in damp buildings, according to a two-year study by the Institute of Medicine. These health effects may include a runny nose, sneezing, coughing, congestion, aggravation of asthma, sore throat, or inflammation of the sinus. Concerns are more likely to arise when "at risk" individuals are exposed to mold growth. "At risk" people can include immune suppressed or compromised individuals, young children, and individuals with chronic inflammatory lung diseases such as asthma and severe allergies.
Dealing with Mold

Professionals handle water damages every day. Prompt action is required to prevent new mold growth. If your property has sustained a recent water damage, it is vital to have the water removed and the structure dried promptly.

When excessive mold contaminates a building, remediators follow five principles in dealing with the mold:

Principle 1: Provide for health and safety. Since moldy buildings are associated with health problems, remediators protect the health of workers and occupants. Some work practices prevent workers from exposure as they disturb the mold during cleanup. Other work practices prevent mold from spreading to occupied areas of the building.

Principle 2: Document conditions and processes.Remediators record conditions in the building such as the extent of the contamination and the amount of moisture saturation. Once remediation is completed, an independent indoor environmental professional may record that mold in the building is returned to normal conditions.

Principle 3: Control the mold contaminant at its source. Work practices aim at keeping mold contamination from becoming airborne and then spreading from the source to clean areas. This reduces the amount of airborne mold that workers are exposed to. It also makes the process of removing mold more efficient.

Principle 4: Remove contamination. Once mold has grown beyond normal levels, the most effective solution is to remove the excess mold contamination. This may be accomplished by physically removing materials damaged by growing mold, by vacuuming excessive mold spores into HEPA filters, and by damp wiping soiled surfaces with detergent cleaning products.

Priniciple 5: Correct the moisture problem. This is the key to dealing with mold. Stop the source of moisture that initially contributed to mold growth. Even the best cleanup efforts will not keep mold from returning if a building continues to have moisture problems.

How to Take Care of Your Home

No directions on maintenance, no guidance on repairs, no description of how all of the parts work. Home improvement expert Lynda Lyday, host of the DIY Network’s viewer call-in show “Talk2DIY,” sought to change that with her latest book. She explains how every component in the home works, from the hot water heater to the chimney cap, and provides practical maintenance tips.

Each of the generously illustrated chapters covers a different part or system of the home, such as flooring, ventilation, and plumbing. The focus isn’t on do-it-yourself repairs but on providing an overview of the terms, materials, and care needed for each part of the home. The book can help you and your clients better understand the inner workings of a home and would be especially helpful for buyer clients who just bought their first home.

Tips From the Book:
Make sure the lawn is properly graded. If it’s not graded correctly, rainwater will create puddles on the lawn and suffocate plants. In most cases, once the water has done damage to the yard, it will find ways to enter the home through cracks in the foundation. When enough water builds up against the foundation wall, it creates pressure that can crack the foundation and cause water to seep into the home.

Buy the right kind of dimmer switch. There’s nothing like being able to create an instant mood with the touch of a button, making light dimmers an excellent choice. But not all dimmers are created equal. An inexpensive switch can cause the light bulb’s filament to buzz. Spend a few more dollars on a more expensive switch, which has components to store the electrical charge that makes the filament buzz. If you’re buying a dimmer for a ceiling fan, you can’t use a regular dimmer. You must buy a switch especially for that purpose.

Burn dry hardwoods in the fireplace. Have the chimney cleaned and inspected every year to remove the risk of fire and ensure the fireplace works efficiently. Chimney sweeps clean out the soot and the creosote, which is produced by an incomplete combustion of wood. Creosote is caused by burning woods that are not seasoned or are wet, and softwoods produce more of it than hardwoods do. Season firewood under a cover for six months before burning it, or consider fire logs made of sawdust and petroleum wax, which burn much cleaner and minimize creosote buildup.

10 Things to Take the Trauma Out of Homebuying

1. Find a real estate agent that’s simpatico. Homebuying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.

4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.

7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.

10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

Say Hello To The “Live-In Room,”

Take the room formerly known as a kitchen. The new concept room features a professional cooking area, a less formal dining and entertaining space, and a comfortable lounge area with sofas, a television, and a beverage center.

Electrolux, an international appliance company, debuted "Live-In Room" concepts at the 2006 Kitchen & Bath Industry Show. “We reviewed how the kitchen is used and developed a space that makes it a comfortable setting that encourages togetherness,” says John Swenson, director of brand marketing for the company.

Instead of walls, the room has "zones" that allow for residents to move around into different areas seamlessly and perform different tasks, from paying bills to watching movies on a comfy couch.

Then there’s the room formerly know as the laundry room. Cabinetry manufacturer Merillat Industries LLC showed off its ideas for multiuse layouts incorporating various types of cabinetry to bring together laundry, craft, office, and other spaces.

Design Services Director Paul Radoy says his team discovered that small kitchen spice drawers make great storage for sewing materials, fly-tying supplies, or model-building parts. Pull-out desk surfaces double as sewing stations, and an island on casters is ideal for a laundry-folding table or gift-wrapping surface.
Both Electrolux Electrolux and Merillat have tools and checklists on their Web sites that encourage multiuse-space thinking. “It's exciting to see what people will do with this mixed-use approach because the result will be different for everyone,” Radoy says.
Source: Remodeling Magazine

Alabama Real Estate: Feng Shui Lighting

A centuries-old Chinese practice, feng shui has in recent years captured the Western imagination as a tool for good design and spiritual well-being. The Chinese words for "wind" and "water," feng shui teaches how to live in harmony with home, garden and office surroundings in order to create the most positive energy flow and mental state of mind.
Free flowing chiThough there are many different schools of feng shui, the basic beliefs are the same. Practitioners use a number of different approaches and design principles to connect with the energy (chi) or "feel" of a place, and to fine-tune it for those living or working there. These principles can be implemented at little cost in both new and existing buildings, and users believe that allowing for a free flowing "chi" of energy can produce a happier, more positive mental outlook and an abundance of harmony, vitality, joy, love, and peace. Whatever the outcome, the principles of feng shui contain many sound design ideas that are easy to try and fun to put into practice!
Create a harmonious home mood So how can the principles of feng shui be applied to home lighting? Well, feng shui correctly recognizes that the position of lighting has a profound effect upon the occupants of a home or office. If shadows are cast where we read or prepare food, or if light glares on a computer or TV screen, we will be constantly irritable and out of sorts. Harsh, unfiltered light can also affect our moods. Modern lighting design can help you follow feng shui principles and create harmonious, pleasing rooms to live and work in.
Here are some specific design steps you can take to follow basic feng shui principles:
Incandescent bulbs will generate a warmer, orange-hue level of lighting than other sources and is well suited to creating inviting living spaces. Halogen lights send out a bright light that can be used for reading or directed to a specific area for overall room lighting.
Choose color bulbs or shades for the mood you want to create. Pink shades denote calm and pleasure, purple is more passionate and yellow more settled and relaxed.
Use a variety of direct and indirect lighting so you can create a softer mood or a more functional lighting arrangement depending on your needs. For example, use track lighting or spotlights to focus light on work areas while using softer, more diffused sources (such as torchieres or wall sconces) for more diffused light.
Instead of using one bright light in a room, use two or more softer lights to create a warm general glow and positive room energy.
Lamp shades made from fabric or paper soften the light and create a more yin (quiet) atmosphere. Metallic or reflective shades will create a harder more yang (active) atmosphere. Use soft shades in bed or bath areas, harder shades in areas where you work or need to be more active.
Red lamp shades in a living room bring.fame!
Pink shades in a bedroom for romance.
Purple shades in an office bring wealth. Eliminate sharp edges in a room with corner uplights, torchieres or accent lighting. Softening sharp edges improves energy flow and produces a more restful environment. Uplighting also encourages an upward flow of energy, which is helpful if you have low or sloped ceilings. Light on the ceiling makes a room appear larger and more open. Uplights are also useful to transform dark corners or to illuminate heavy beams, which can lessen their negative chi effect. Add a mirror to a wall space to change the direction of a room's energy or to make it appear larger and less restrictive. Mirrors and associated lighting will speed up the flow of chi energy, creating a more dynamic, stimulating atmosphere perfect for offices or study areas. Mirrors are particularly good for dark spaces where you want to reflect a light source.
Centuries ago the Chinese would place red lanterns in hallways to give them energy and light. The modern equivalent is red art glass wall sconces along the length of the hall or a crystal chandelier with red shades placed at the beginning or end of the space.
Irregular-shaped rooms should have a lamp placed in the missing sector or area to maintain proper chi energy levels.
To channel beneficial energy from the earth in a garden or driveway setting, use a pole light with a top light fixture. This encourages good chi to rise and brings good fortune. For more creative energies, try a metal fixture with a white shade in the west corner of a room.Use dimmers to create the perfect mood and positive energy.
Try these tips and keep making subtle changes and adjustments in your lighting plan. You might just be surprised at the level of happiness and harmony that proper room lighting can achieve!
Happy Lighting!

Author: Mark Raissen Director of Lighting Design for LAMPS PLUS,

Help Your REALTOR to Sell Your Home!

10 Important Steps to Take Before You Sell Your House

From Janet Wickell,Your Guide to Home Buying / Selling.

The home selling process differs from state to state, but there are some important steps that most home sellers should take before listing a house with an agent or selling it for sale by owner. Every bit of prep work you do helps you get the most return from your investment.

1. Get Pre-Approved for a Home Loan
I've known sellers who signed a contract to sell their house before they knew if they were qualified to buy another. They could no longer qualify for a loan, or they weren't able to sell at a price that allowed them to buy the type of replacement house they wanted. They ended up renting or buying something that was far from ideal.

2. Check Your Mortgage Payoff
Call your lender to check the payoff for your current home mortgage. You'll need the figure to complete Step 6. Once you sign a contract you are confirming that you have the ability to sell the home.

3. Determine How Much Your House Is WorthDetermine your home's fair market value. Real estate agents will usually help you determine value as a courtesy, but you might take it a step further and order an appraisal.

4. Estimate Your Costs to Sell
Real estate commission if you use an agency to sell.
Advertising costs, signs, other fees if you plan to sell by owner.
Attorney, closing agent and other professional fees.
Excise tax for the sale.
Prorated costs for your share of annual expenses, such as property taxes, home owner association fees, and fuel tank rentals.
Any other fees typically paid by the seller in your area (surveys, inspections, etc.).
Real estate agents deal with transactions every day and can give you a very close estimate of seller closing costs.

5. Estimate Costs to Buy a New Home
Calculate moving expenses, loan costs, downpayment, home inspections, title work and title policy, paying for a new hazard insurance policy--all expenses related to buying a home. Your lender should give you a disclosure of estimated costs when you apply for loan pre-approval.

6. Calculate Your Estimated Proceeds
Deduct your mortgage payoff from your home's fair market value.
Deduct your costs to sell from the remainder to get an estimate of the proceeds you will be paid at closing.
Will your closing proceeds cover your costs to buy a new home? If not, do you have cash or other funding to make up the difference?

7. Make Necessary RepairsMake all needed repairs unless you want the house to be regarded as a fixer-upper. I'm not referring to cosmetic updates--just items in need of repair. Anything that's obviously broken gives potential buyers a reason to offer you a lower price, especially if it's one of several repair hot spots that worry buyers the most. In tight markets perfection matters!

8. Get the House Ready to Show
Most houses need at least a little spiffing up before they are shown to potential buyers. Great curb appeal, fresh paint indoors (and sometimes out), organized closets and cabinets, sparkling clean windows and appliances and a clutter-free look are essential if you want the house to appeal to buyers. Be sure to avoid the things buyers hate most about houses.

9. Get Psyched Up to Let People In
If you're listing with a real estate agent, she'll ask you to leave when the house is shown. Why? Because lurking sellers make buyers nervous--they don't feel comfortable inspecting the house when they feel they are intruding in your personal space.

Make the house accessible. That means it should always be ready to show. Many agents won't bother showing a house that takes 24 hours to get into.

Landscaping To Sell!

Your front yard is the perfect place to plan an attractive landscaping project to impress buyers, neighbors and visitors. A lush, green lawn speaks volumes about the care and maintanence that you have done on the inside. The best part is that you don't need a lot of money to transform your front yard into something spectacular.

The front yard of your home is a prime place to test out a variety of landscaping ideas. If you are looking to spruce up your home before a sale or you'd like to win the next homeowners-association award, combining a little creativity and a couple Saturdays worth of work will help you do both. Here are some ideas for planning a front yard landscaping project.

Front Yard Landscaping: Planning

Yard Size. The size of your front yard will dictate whether you can have larger landscaping projects, such as islands or trees. You should find out the square yardage of your front yard first.

Terrain. The terrain of your front yard includes the type of grass you have; the natural elevations; and existing trees, shrubbery and bushes that might have an effect on your plans.

Your Budget. Make sure you choose a front-yard landscaping design you can complete with the resources you have. An unfinished project is never attractive. Now that you have an idea of the initial thoughts to put into your front yard planning, let's take a look at some of the more popular projects homeowners choose to complete. These are fairly simple ideas that are inexpensive and attractive. For specific details on each project, contact a home improvement center or landscaping professional.

Front-Yard Landscaping: Ideas

Pine-Straw Island. A pine-straw island is a great way to reduce the cutting area of your lawn and give a home to plants, shrubs and flowers.
Boundary Island. A boundary island along the side of your house is a perfect place to plant English boxwoods or another type of greenery.
Pond. Pond kits bring the element of water to your front-yard landscaping. With the right front yard landscaping project, you could be the envy of your neighborhood. Remember...if you need help, hire a professional. Many sales are lost BEFORE the buyer reaches the front door.

Author: Kelly Richardson
allaboutlawns.com

Top Ten Tax Deductions for Owning Your Home

Your home shelters you from the elements, but it is also a valuable tax shelter.

Your home provides many tax benefits -- from the time you buy it right on through when you decide to sell. Here's a summary of the tax benefits of home ownership; you can get details by visiting the IRS website at www.irs.gov.

1. Mortgage Interest
Joint tax filers can deduct all the interest on a maximum of $1 million in mortgage debt secured by a first and second home. The maximums are halved for married taxpayers filing separately.
2. Points
Your mortgage lender will charge you a variety of fees, notably what are called "points." You can fully deduct points associated with a home purchase mortgage. You cannot deduct a mortgage broker's commission.
3. Equity Loan Interest
You may be able to deduct some of the interest you pay on a home equity loan or line of credit. However, the IRS places a limit on the amount of debt you can treat as home equity debt for this deduction.
4. Home Improvement Loan Interest
If you take out a loan to make substantial home improvements, you can deduct the interest on this loan. There is no dollar limit on this deduction. However, the work must be a "capital improvement" rather than ordinary repairs.
5. Property Taxes
Often referred to as "real estate taxes," property taxes are fully deductible from your income.
6. Home Office Deduction
If you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, and depreciation.
7. Selling Costs and Capital Improvements
If you decide to sell your home, you'll be able to reduce your taxable capital gain by the amount of your selling costs.
Real estate broker's commissions, title insurance, legal fees, advertising costs, administrative costs, and inspection fees are all considered selling costs.
8. Capital Gains Exclusion
This is a true tax shelter for those who are treating home buying as an investment. Thanks to the Taxpayer Relief Act of 1997, many home sellers no longer suffer a taxable gain. Married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. Single folks and married taxpayers who file separately get to keep up to $250,000 apiece tax free -- including single people who own a home jointly.
9. Moving Costs
If you move because you got a new job, you may be able to deduct some of your moving costs. To qualify for these deductions you must meet all requirements, which get more and more complicated as you read on:
10. Mortgage Tax Credit
A home-buying program called mortgage credit certificate (MCC) allows low-income first time homebuyers to benefit from a mortgage interest tax credit of up to 20% of the mortgage interest payments made on a home (the amount of the credit varies by jurisdiction).

Source: NOLO.com

NAR Welcomes Tougher Mortgage Guidelines

The NATIONAL ASSOCIATION OF REALTORS® welcomed proposed guidelines Tuesday from five federal financial regulatory agencies on specialty mortgage products that allow consumers to defer repayment of the home mortgage principal and interest.

“The guidelines appear to be consistent with NAR's view that specialty mortgages are not appropriate for everyone. Home buyers should consult a REALTOR® to learn more about different financing options, their implications over time and what types of mortgages might work best for them,” says NAR President Thomas M. Stevens, senior vice president of NRT Inc., from Vienna, Va. “While specialty mortgage products have helped many borrowers finance the American dream of home ownership, NAR wants to help borrowers understand the risks before they take out an interest-only or payment-option adjustable-rate mortgage.”

While the agencies recognize that innovative mortgage products can benefit some consumers, they are concerned that non-traditional mortgages are being offered to sub-prime and other borrowers who may not fully understand the risks that come with these products. The five federal agencies also expressed concerns that these mortgage products present important risks that must be managed.

Do Your Homework First brochure is part of an NAR’s consumer education campaign addressing specialty loans and abusive lending practices.

—NAR

Rich Families Foresee Higher Home Values

A new survey from PNC Financial Services Group Inc. reveals that 65 percent of the wealthy home owners expect the value of their primary homes to grow by at least 10 percent over the next five years, 31 percent anticipate an increase of more than 20 percent, and only 7 percent believe a decline will occur.

Wealthy homeowners in Florida were the most optimistic, with half expecting an increase in home value of more than 20 percent; while those in New England were most cautious, with 18 percent forecasting a decline.

Buyers who were looking at real estate as a way to get rich quick are likely to be disappointed as the housing market slows.

"But, in general, established wealthy Americans haven't been speculative buyers, and they remain solidly confident in the long-term value of their real estate holdings," says Nicholas Buss, research director of PNC's real estate division.

Source: (WSJ) Hagerty, James R.

Delinquencies & Foreclosures Rise in 3Q

More home owners were late on their mortgage payments during the third quarter of this year than in the previous three months, according to a report by the Mortgage Bankers Association.

The rate of home loan delinquencies rose to 4.44 percent during the third quarter from 4.34 percent in the previous three months, but was down from 4.54 percent a year ago. Also, the rate of homes entering the foreclosure process rose to 0.41 percent, up from 0.40 percent in the third quarter of last year.

MBA warns that the effects of hurricanes Katrina, Rita, and Wilma will be reflected over at least the next few quarters. Although the group expects delinquencies and foreclosures to rise, the improving economy is likely to offset the increase.

"At the end of the day, the most important criteria are job growth and real income growth," says MBA Chief Economist Doug Duncan.

Source: Los Angeles Times (12/15/05)

Noise Control Becoming Big on Home Front

Noise Control Becoming Big on Home Front

Almost 80 percent of homeowners say their daily life is disrupted by superfluous noise, yet only 20 percent have some form of noise control in place within their homes. That's creating a niche for some companies.

Companies have developed products to stifle sounds between rooms. The products can cut by well more than half the amount of noise that transmits through walls. That's especially important as more homeowners set up home offices and need quiet to concentrate.

Ideally, noise control is made part of the initial planning of the home, because it can be difficult to retrofit existing spaces for noise control. Key steps--such as adding more insulation--should be taken in the early phases of construction.

Source: Belleville News-Democrat (IL) (12/17/05)

Do Open Houses Sell Homes?

Open Houses Encourage Looky-Loos

Real estate practitioners don't hold open houses just to generate buyers; they want to satisfy the curiosity of neighbors and other visitors, because practitioners know they'll spread the word to others.

Practitioners also say neighbors use open houses to get decorating and remodeling tips and ideas about how to price their own property for sale.

Just as importantly, practitioners use the events to meet possible new clients. In the end, open houses rarely lead to sales, but they open the door for practitioners to be be successful by building future business.

Source: Los Angeles Times (12/18/05); Brenoff, Ann

Staging Your Home To Sell!

Home staging can easily increase the selling price of your home by $10,000 to $50,000 with minimal investment.
Referred to as "the dream weavers of the real estate world" (Forbes, 2002), "House Fluffers" can take a home and turn it into another house entirely— often in a matter of days!

Decorating your house to sell, also called Home Staging or House Fluffing, will help you sell in record time and get top dollar for your home.

Higher inventory of homes means that houses for sale tend to sit for longer periods— house hunters can afford to take their time and be more demanding about what they buy.

When buyers have time and selection on their side, they can be very picky. Obviously, the homes that show the best will sell faster and for more money.

Take the case of a house in Toronto in 2003 that was listed appropriately at $599,900. In 5 days they had 10 bids and the final price was driven up to $725,500, proving that while people may shop with logic, they buy on emotion. This would not have happened in a house that hadn't been home staged, or decorated to sell.

What's especially intriguing is the possibilities that can open up in your life when you have a sudden cash windfall from selling your home for way more than you imagined. You could put the money into the next bigger house, but some clients use it instead to take time off work and try something new.

"I couldn't have imagined that just moving our furniture and art around would get us three offers after we sat on the market for 6 weeks! Our agent wanted us to drop our price significantly, but thanks to your house fluffing we got 98% of our original price!" John W.

Bottom line... the home staging process can make a huge difference in the outcome when you put your home on the market.

Article Source: Debra Gould
www.debragould.com

Decorating for the Ultimate Design

You can find loads of information about home furnishings and decorating for your home. Once you have chosen a house or apartment to live in, one of the first things that you will want to do is to begin to furnish and personalize it. One of the easiest ways of personalizing your home is through furniture upholstery and other soft furnishings.

When it comes to home decorating, in these financially challenging times, you can find ways to save money without sacrificing style. The best ideas don't have to cost a lot of time or money and can often be done with existing furniture and items found around the house.

If you're still unsure of what might look best in your home, you may want to use an interior designer. Designers work in one of two ways. For an hourly fee, he or she can provide a plan and obtain competitive bids from retailers. Or the designer can buy your furnishings at wholesale and charge you the retail price. You may pay no more, yet save time and get a look that is uniquely yours.

To begin the process of home furnishings and decorating most online furniture stores feature the best possible prices on quality brand name furniture! At most online furniture stores you will be delighted by their attention to detail and white glove customer service. Leather furniture works well with any design style. Several construction types are available including all leather, partial leather and simulated leather.

Comfortable seating furniture does more to make a room appear inviting than any other furnishing. An ottoman in the living room is conducive to comfort as it can be used with an upholstered chair for lounging. All the furniture in a home should be shod with smooth metal disks so that it can be moved easily.

The beauty of a piece of furniture depends upon good design, good color, and interesting texture. With all the poorly designed furniture in the shops it is indeed an achievement to avoid it. Home furnishings and decorating should have the charm of variety. The ideal finish for furniture is a lustrous, eggshell, semi-gloss rubbed to a soft glow.

About The Author:

Roger King is a successful author and publisher of http://www.1st-home-decor.com. Home furnishing and decorating to showcase your homes.

Article Source: Roger King

Make Your Profits When You Buy!

Every investor wants to pay as little as possible for single family rental homes. Have you ever stopped to think why you should negotiate for the lowest possible purchase price? Yes, I know every real estate guru talks about no money down or little money down as the correct approach to investing. Yes, but why?

Let's say a home you are interested in buying has a true market value of $100,000. If the owner was financially distressed you might be able to buy that home for $80,000. The moment the deal closed you would seem to have a free and clear equity in the home of $20,000.

If course, you could not put that $20,000 in you pocket to spend on something else. But you could turn around and sell the home and be left with a portion of the $20,000. There would be selling costs, so it all would not be profit.

Suppose you wanted to take your profit as soon as possible so you put the home on the market, but it took six months to find a buyer. Your six mortgage payments would eat up some of the $20,000 along with other normal selling costs. Even so, chances are you would still have a nice profit and all because you negotiated a below market purchase price.

What if you decide to find a tenant and rent the home for a couple of years? Oops! During those years the local economy falters and real estate in your area actually goes down in value by about 10%. That means your property is now worth about $90,000. Since you paid $80,000 you are still in a comfortable position… and all because you were smart enough to buy below market.

What if you find a house you would like to own, but the seller will only lower his asking price by a few thousand dollars. You need a little better deal to have a profitable investment. As part of your offer ask the seller to pay for your non-recurring purchase cost. Those expenses would include pre-paid interest, taxes, insurance impounds and so forth.

Lenders will allow 2% to 3% in seller-paid costs on a conventional loan. That means that you would be paying less cash out of pocket, or even no out of pocket costs if it were 100% financing.

The seller would pay those costs out of the proceeds of the sale. It's a painless expense for the seller since those expenditures are all items on a closing statement and the seller does not have to write a check for those costs.

This tactic is the same as getting a discount on the purchase price. Remember, as an investor your goal is to buy below full value and this is one little way to do that.

Now I must make a confession. For the last couple of years I've been able to buy nice homes in nice areas for full value and still make a fat profit. In my area prices had been climbing by 20% to 35% yearly. I could find a motivated seller, give them $1,000 to cover moving costs and buy their home by taking over the payments. Within 12 to 18 months I was able to sell that home and cash out for a profit of from $30,000 to $90,000.

Yes, it was an exciting time, but very risky. By paying full value there was no room for error. If values had plunged I would have been in a tight spot. So... the best practice is to always make your profit when you buy. You do that by buying 20% to 30% below market value.

Article Source: Mark Walters

Mark Walters is a real estate investor who shares his experience with others.

A Simple Real Estate Formula

It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.

When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.

The Simple Real Estate Formula

You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.

Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.

You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.

This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!

In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.

They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula.

Steve Gillman

Homeowner Associations "What's in It For You?"

Alabama Real Estate

•Acknowledge your ownership and take control of your property. There may be restrictions that you may not agree with some don’t make any sense. The only way to change them is to be an active participant in the process. Voting only takes place on items listed on the monthly agenda the board members and the management company set the agenda.

•Yearly elections of new board members. In the covenants you will find how many board members and for how long board members are allowed to serve. In most communities you are limited to 2 or 3 successive terms with half or a third of the board changing each year. Some areas allow the same board members to be re-elected continuously with out changing (these little kingdoms are where the problems are the most evident).

•Committees are another way to have your voice heard. The board is not always easy to be elected into you may find the process is similar to being a politician in local elections others are begging for home owners to participate. HOA’s are always in need of committee members and leaders to help spread the work, with amenities such as pool, tennis courts, playgrounds, common areas, and social functions these all need committees and committee leaders. These are good places to get your foot in the door to have your voice heard and listened to in regards to how the community is handled.

•Management companies can be the most helpful and useful to HOA’s. The better ones have experience in all areas of land, building, and amenities management and help direct the part time inexperienced board to knowledgeable decisions. When you are dealing with an inexperienced management company or a small one person manager the problems can get out of hand real fast. They normally don’t have the contractors support and are not available when you really need them. Also smaller operations don’t have the full time accounting departments to keep the books straight which can be dangerous if the board is not keeping track of the funds.

•Foreclosures have been out of hand in some communities. Non payment of association dues or fees has been the number one reason of foreclosures in condo and townhouse communities across the country. Families have lost there properties for $600.00 in over due payments, the real problem is $15,000 in added fees the management companies an attorneys are allowed to tack on which pushes the property in to foreclosure. I have interview many management companies and found that when they reference how their attorneys can speed up the collection process by foreclosure I show them the door. These are the people you don’t want anywhere near your community. They because of the tactics they use will drive down values of each individual property and are of no benefit to the home owner or the HOA.

Be active in your community protect your property and family from unscrupulous management companies, HOA board members, attorneys and investors who have their own agenda when it comes to your property.

Article Source - Bill Carey

Bill Carey has over 30 years in real estate sales, investments, and home building offers a unique perspective to the buying and selling process of residential real estate