Are Tighter Appraisals Hurting Home Sales?
RISMEDIA, June 22, 2009-(MCT)-Less than a week after putting his newly renovated house in Idylwood, Texas, on the market, Derrick DeCristofaro accepted a full-price offer of $242,900 on the 1940 bungalow.
But the appraisal on the 1,780-square-foot home came in at just $206,000. The buyer couldn’t come up with enough cash to make up the difference and DeCristofaro wasn’t willing to drop the price, so the deal fell through.
On top of already sluggish home sales, are appraisals becoming the newest threat to the local housing market?
Real estate experts said sales are collapsing because appraisers are being more conservative and valuing homes for less than what buyers have agreed to pay. Some owners can’t refinance because appraisers say their homes are worth less than they had counted on.
In DeCristofaro’s case, the low appraisal affected the would-be buyer’s ability to get a mortgage for the contracted price.
“Their lender naturally wouldn’t approve that,” DeCristofaro said.
His house is under contract again to a backup buyer, but because of new rules regulating appraisals, and a more conservative lending environment in general, DeCristofaro is worried about the new sale closing as well.
“It’s shocking. If we just pulled a buyer out of thin air, it would be a different story, but we had multiple offers coming in. It seems strange the lenders wouldn’t support that,” said DeCristofaro, an interior designer who is an investor in the home, which has two other owners.
Real estate broker Robert Searcy has seen a number of sales fall through because of low appraisals.
And that has the potential to hurt property values, too, he said.
“The biggest challenge isn’t the economy, or buyers who can’t qualify for loans. It’s appraisers coming in with ridiculously low appraisals,” said Searcy, who is listing DeCristofaro’s house.
Part of what’s at issue is a new rule that went into effect May 1 prohibiting loan officers, mortgage brokers and real estate agents from selecting appraisers.
New rules for lenders
The rule falls under the new Home Valuation Code of Conduct, the result of an agreement between Freddie Mac, Fannie Mae, the Federal Housing Finance Agency and the New York state attorney general to enhance the independence and accuracy of the appraisal process. It applies to lenders that sell single-family mortgage loans to the government-sponsored enterprises.
The rule was meant to prevent inflated appraisals like those that proliferated during the housing boom.
Houston appraiser Chris Catechis said there were a couple of times in recent years when he felt pressure from mortgage brokers to “hit a value” on a property. If it didn’t, they threatened to take their business elsewhere, which is what he said he advised them to do.While the appraiser, a partner in Catechis, Campbell & Associates, understands why the new rules were implemented, it has cost him business.
Lenders are now using more appraisal management companies when they select appraisers. These companies often charge a fee to the lender and pay an outside appraiser like Catechis a portion of that fee.
Unfamiliar with the area
One of the unintended consequences of this system, however, is the chance that a management company will hire an appraiser who isn’t familiar with the neighborhood where the house is being evaluated, said Catechis.
“When you have appraisers coming from different parts of town and not knowing areas, they aren’t doing justice to the people that are trying to refinance or sell,” Catechis said. “It really skews the whole appraisal process.”
The appraisal business, in general, has become more difficult in today’s residential real estate market because there are fewer sales — many of which are foreclosures.
Some OK with caution
Catechis said he’s now often required to get two comparable sales that took place within the past 90 days. If there are none, he’ll have to look at similar subdivisions nearby.“There’s a lot more detail involved in an appraisal for a lesser price,” he said.
Not everyone is as concerned about appraisers taking a more cautious tack.
David Zugheri, of Envoy Mortgage in Houston, said he hasn’t seen a high percentage of homes for sale not appraising.
While the industry is more conservative, “if the value is less than the sales price there’s a strong case that the value really is less than the sales price,” he said.
For more information on what your home's value is in today's market, call Julie Nellis, Long Realty, 520-990-8377 today, or visit www.tucsonhouses4you.com
Wednesday, August 5, 2009
Friday, July 17, 2009
Change in Law Limiting Protection of the Arizona Anti-Deficiency Statute
If you are considering letting your property go to foreclosure, read on to learn about the new law that can affect your pocket book. On July 10, 2009, the Governor of Arizona signed into law (effective September 30, 2009) a significant amendment to Arizona's anti-deficiency statutes. This new law decreases the protection to Arizona homeowners after they lose their home to foreclosure. The anti-deficiency statutes had not been amended since 1990.
The Arizona anti-deficiency statutes (primarily A.R.S. §33-814(G)) generally protect most homeowners from being sued after foreclosure by their lender for any unpaid balance of the loan, i.e., deficiency, if the home was "utilized" as a "dwelling." The Arizona courts have ruled that even vacation homes rented out by investors for only a few weeks of the year were being "utilized" as a "dwelling."
The new law states that homes must be utilized as a dwelling "by the trustor [borrower] under the deed of trust for at least six consecutive months...." (Emphasis added.) Therefore, occupancy of the home for at least six consecutive months prior to the foreclosure is now required.
You may want to consider other alternatives than foreclosure, such as short sale or loan modification.
For more information about Tucson's Foreclosures contact Julie Nellis, Long Realty, 520-990-8477, email nellisja@aol.com website www.tucsonhouses4you.com
The Arizona anti-deficiency statutes (primarily A.R.S. §33-814(G)) generally protect most homeowners from being sued after foreclosure by their lender for any unpaid balance of the loan, i.e., deficiency, if the home was "utilized" as a "dwelling." The Arizona courts have ruled that even vacation homes rented out by investors for only a few weeks of the year were being "utilized" as a "dwelling."
The new law states that homes must be utilized as a dwelling "by the trustor [borrower] under the deed of trust for at least six consecutive months...." (Emphasis added.) Therefore, occupancy of the home for at least six consecutive months prior to the foreclosure is now required.
You may want to consider other alternatives than foreclosure, such as short sale or loan modification.
For more information about Tucson's Foreclosures contact Julie Nellis, Long Realty, 520-990-8477, email nellisja@aol.com website www.tucsonhouses4you.com
Thursday, July 9, 2009
Buying a Short Sale in Tucson, Arizona
BUYING A SHORT SALE
Are you looking to buy a new home? Are you thinking that now’s a great time to find bargains? Well, it is a great time to buy but before you make an offer on a home you need to know more about the seller’s situation.
If a home is being sold for below what the current seller owes on the property, and the seller does not have other funds to make up the difference at closing, the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
YOU ARE A GOOD CANDIDATE FOR A SHORT-SALE PURCHASE IF:
· YOU’RE VERY PATIENT. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months (longer with Bank of American and Chase). If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
· YOUR FINANCING IS IN ORDER. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
· YOU DON’T HAVE ANY CONTINGENCIES. If you have a home to sell before you can close on the purchase of the short-sale property, or you need to be in your new home by a certain time, a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.
IF YOU’RE SERIOUS ABOUT PURCHASING A SHORT-SALE PROPERTY, IT’S IMPORTANT FOR YOU TO HAVE A QUALIFIED REAL ESTATE PROFESSIONAL.
· You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many short-sales they have done and, of those, how many have successfully closed. A qualified real estate profession will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communication.
· A good real estate professional will have a pre-lim title search done to see all the liens attached to the property. If there are multiple lien holders, it’s much tougher to get the short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval.
SOME OF THE OTHER RISKS FACED BY BUYERS OF SHORT-SALE PROPERTIES INCLUDE:
· POTENTIAL FOR REJECTION. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer.
· BAD TERMS. Even when a lender approves a short-sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short-sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
· NO REPAIRS OR REPAIR CREDITS. You will most likely be asked to take the property “As Is”. Lenders are already taking a loss on the property and may not agree to requests for repair credits.
The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.
For more information or assistance with buying or selling short sales in the Tucson, Arizona area, contact Julie Nellis, Long Realty, 520-990-8477 or nellisja@aol.com
www.tucsonhouses4you.com
info from National Association of Realtors
Are you looking to buy a new home? Are you thinking that now’s a great time to find bargains? Well, it is a great time to buy but before you make an offer on a home you need to know more about the seller’s situation.
If a home is being sold for below what the current seller owes on the property, and the seller does not have other funds to make up the difference at closing, the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
YOU ARE A GOOD CANDIDATE FOR A SHORT-SALE PURCHASE IF:
· YOU’RE VERY PATIENT. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months (longer with Bank of American and Chase). If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
· YOUR FINANCING IS IN ORDER. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
· YOU DON’T HAVE ANY CONTINGENCIES. If you have a home to sell before you can close on the purchase of the short-sale property, or you need to be in your new home by a certain time, a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.
IF YOU’RE SERIOUS ABOUT PURCHASING A SHORT-SALE PROPERTY, IT’S IMPORTANT FOR YOU TO HAVE A QUALIFIED REAL ESTATE PROFESSIONAL.
· You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many short-sales they have done and, of those, how many have successfully closed. A qualified real estate profession will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communication.
· A good real estate professional will have a pre-lim title search done to see all the liens attached to the property. If there are multiple lien holders, it’s much tougher to get the short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval.
SOME OF THE OTHER RISKS FACED BY BUYERS OF SHORT-SALE PROPERTIES INCLUDE:
· POTENTIAL FOR REJECTION. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer.
· BAD TERMS. Even when a lender approves a short-sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short-sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
· NO REPAIRS OR REPAIR CREDITS. You will most likely be asked to take the property “As Is”. Lenders are already taking a loss on the property and may not agree to requests for repair credits.
The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.
For more information or assistance with buying or selling short sales in the Tucson, Arizona area, contact Julie Nellis, Long Realty, 520-990-8477 or nellisja@aol.com
www.tucsonhouses4you.com
info from National Association of Realtors
Thursday, February 5, 2009
Buy Now Or Wait? Home Buyer Tax Credit
Buy Now or Wait?
The $7,500 First-Time Home Buyer Tax Credit¹
for homes purchased April 9, 2008 - June 30, 2009
What is the First-Time Home Buyer Tax Credit?
The Tax Credit is part of the Housing and Economic Recovery Act of 2008, signed into
law on July 30, 2008. The intent of the tax credit is two fold:
• To provide a financial resource for home buyers in the year that they purchase a home
• To provide a stimulus to the housing market and the economy, helping to stabilize home
prices and increase home sales
The law provides a tax credit equal to ten percent of the qualified home
purchase price. The credit is capped at $7,500.
The credit is essentially an interest-free loan. Home buyers are required to repay the
credit to the government, without interest, over 15 years in equal installments or when
they sell the house.
Who is Eligible?²
• First-time home buyers, defined as a buyer who has not owned a principal
residence in the previous three years
• U.S. citizens who file tax returns
• Eligible properties include any single family home that will be used as a principal
residence (including condos and co-ops).
• To qualify, buyers must close on the sale of the home between April 9, 2008 and
June 30, 2009.
Income Limits
• The full $7,500 credit is available for individuals with modified adjusted gross
income (per IRS definition) of no more than $75,000 ($150,000 for couples filing jointly).
• A partial credit is available for individuals with modified adjusted gross income between
$75,000 and $95,000 (between $150,000 and $170,000 for couples filing jointly).
Is the Tax Credit “Refundable?”
• Yes. The credit reduces the income tax liability for the year of purchase.
• The credit can be claimed even if the taxpayer has little or no federal income tax
liability to offset. Typically this involves the government sending the taxpayer a check
for a portion or even all of the amount of the refundable tax credit.
Payback Provisions
• Home buyers claiming a $7,500 credit would repay the credit at $500 per year via
their tax returns. They do not have to begin repayments until two years after the credit
was claimed.
• If the home owner sells the home, the remaining credit would be due from the
profit of the home sale.
• If there is insufficient profit from the sale, the remaining credit payback would be forgiven.
Contact Julie Nellis, Long Realty, to assist you with your Tucson Real Estate needs. www.tucsonhouses4you.com or 520-918-3843
The $7,500 First-Time Home Buyer Tax Credit¹
for homes purchased April 9, 2008 - June 30, 2009
What is the First-Time Home Buyer Tax Credit?
The Tax Credit is part of the Housing and Economic Recovery Act of 2008, signed into
law on July 30, 2008. The intent of the tax credit is two fold:
• To provide a financial resource for home buyers in the year that they purchase a home
• To provide a stimulus to the housing market and the economy, helping to stabilize home
prices and increase home sales
The law provides a tax credit equal to ten percent of the qualified home
purchase price. The credit is capped at $7,500.
The credit is essentially an interest-free loan. Home buyers are required to repay the
credit to the government, without interest, over 15 years in equal installments or when
they sell the house.
Who is Eligible?²
• First-time home buyers, defined as a buyer who has not owned a principal
residence in the previous three years
• U.S. citizens who file tax returns
• Eligible properties include any single family home that will be used as a principal
residence (including condos and co-ops).
• To qualify, buyers must close on the sale of the home between April 9, 2008 and
June 30, 2009.
Income Limits
• The full $7,500 credit is available for individuals with modified adjusted gross
income (per IRS definition) of no more than $75,000 ($150,000 for couples filing jointly).
• A partial credit is available for individuals with modified adjusted gross income between
$75,000 and $95,000 (between $150,000 and $170,000 for couples filing jointly).
Is the Tax Credit “Refundable?”
• Yes. The credit reduces the income tax liability for the year of purchase.
• The credit can be claimed even if the taxpayer has little or no federal income tax
liability to offset. Typically this involves the government sending the taxpayer a check
for a portion or even all of the amount of the refundable tax credit.
Payback Provisions
• Home buyers claiming a $7,500 credit would repay the credit at $500 per year via
their tax returns. They do not have to begin repayments until two years after the credit
was claimed.
• If the home owner sells the home, the remaining credit would be due from the
profit of the home sale.
• If there is insufficient profit from the sale, the remaining credit payback would be forgiven.
Contact Julie Nellis, Long Realty, to assist you with your Tucson Real Estate needs. www.tucsonhouses4you.com or 520-918-3843
World's Safest Banks
Global Finance Names The World’s Safest Banks
New York, 4 September 2008-
Global Finance magazine has released its annual ranking of the
World’s Safest Banks, which will be featured in the special October issue alongside several of the magazine’s renowned Best Bank awards.
The World’s Safest Banks were selected through a comparison of the long-term credit ratings and total assets of the 300 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used.
This is the 16th year that Global Finance has published its list of the world’s largest banks ranked by their creditworthiness. The 10 banks at the top of the list are designated as the “World’s Safest Banks”.
These banks will be honored at an awards ceremony to be held in Washington D.C. on October 13th to coincide with the World Bank/IMF annual meeting.
“These banks have demonstrated an appropriately prudent approach to risk in
providing international financial services,” says Global Finance publisher, Joseph D. Giarraputo. “More than ever customers are viewing strong
credit quality as an important feature of the banks with which they do business.”
WORLD’S SAFEST BANKS
Groupe Caisse des Dépôts (CDC) France
Bank Nederlandse Gemeenten (BNG) Netherlands
Landwirtschaftliche Rentenbank Germany
Rabobank Netherlands
Landeskreditbank Baden-Wuerttemberg-Förderbank Germany
Lloyds TSB United Kingdom
BNP Paribas France
Dexia Belgium
NRW Bank Germany
WELLS FARGO (Long Mortgage loans funded & Backed by Wells Fargo) UNITED STATES
Contact Julie Nellis, Long Realty, for your Tucson area real estate needs. www.tucsonhouses4you.com or 520-918-3843
New York, 4 September 2008-
Global Finance magazine has released its annual ranking of the
World’s Safest Banks, which will be featured in the special October issue alongside several of the magazine’s renowned Best Bank awards.
The World’s Safest Banks were selected through a comparison of the long-term credit ratings and total assets of the 300 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used.
This is the 16th year that Global Finance has published its list of the world’s largest banks ranked by their creditworthiness. The 10 banks at the top of the list are designated as the “World’s Safest Banks”.
These banks will be honored at an awards ceremony to be held in Washington D.C. on October 13th to coincide with the World Bank/IMF annual meeting.
“These banks have demonstrated an appropriately prudent approach to risk in
providing international financial services,” says Global Finance publisher, Joseph D. Giarraputo. “More than ever customers are viewing strong
credit quality as an important feature of the banks with which they do business.”
WORLD’S SAFEST BANKS
Groupe Caisse des Dépôts (CDC) France
Bank Nederlandse Gemeenten (BNG) Netherlands
Landwirtschaftliche Rentenbank Germany
Rabobank Netherlands
Landeskreditbank Baden-Wuerttemberg-Förderbank Germany
Lloyds TSB United Kingdom
BNP Paribas France
Dexia Belgium
NRW Bank Germany
WELLS FARGO (Long Mortgage loans funded & Backed by Wells Fargo) UNITED STATES
Contact Julie Nellis, Long Realty, for your Tucson area real estate needs. www.tucsonhouses4you.com or 520-918-3843
Wednesday, January 28, 2009
Searching for homes on the Internet
This is an article with sound advice for internet home searching. I hope you find it helpful. Julie
5 top blunders of Internet home buying
Here's some advice to help you avoid the common pitfalls of online real-estate searching.
By U.S. News & World Report
While the painful real-estate swoon appears likely to extend well into 2009 — at least — the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing.
According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87% of homebuyers used the Internet to search for homes last year. That's up steadily from 84% in 2007 and 80% in 2006.
But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real-estate searching more effective, here's a look at the top five Internet home-buying blunders and what you can do to avoid them.
1. Assuming you can do it all yourself
The Internet allows users to handle for themselves many of the tasks that could once only be performed by real-estate agents. The NAR profile, for example, found that the number of homebuyers who first learned of their homes on the Internet has been rising in recent years, to 32% in 2008, up from a tiny 2% in 1997. Accordingly, the number of homebuyers who first learned of their homes through agents has been declining, to 34% in 2008, down from 50% in 1997.
But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house — unless you are an experienced real-estate investor. Purchasing real estate can be extremely complicated from a legal standpoint, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars.
"Doing all the paperwork yourself is a huge mistake," says Joshua Dorkin, chief executive officer of BiggerPockets.com, a real-estate networking and information site. "There are so many things you can miss on a contract."
2. Looking too narrowly
The sheer amount of information about the real-estate market online can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real-estate search engines, such as Realtor.com, for their research. The problem with doing that, however, is that you're missing out on the biggest advantages that the Internet offers. [Realtor.com is a partner of MSN Real Estate.]
First, you're closing yourself off to a smaller cross section of the homes that are out there. "A lot of the sites aren't comprehensive and don't have all of the new listings," says Pat Kitano, a co-founder of Domus Consulting Group, which works with real-estate brokerage firms on technology marketing strategies.
Don't assume that because a house is on one real-estate Web site, it is on all of them, says Greg Healy, vice president of operations at ForSaleByOwner.com. "It's still very fragmented," he says. Healy recommends using several Web sites to get a more complete picture.
Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer. Blogs have become a popular resource for real-estate agents and others to post information as it happens. "If consumers are interested in a local area, they should find local real-estate bloggers who know this breaking information," Kitano says.
3. Ignoring the independents
One area that major real-estate search engines often overlook is the market for homes sold by the owners. "A lot of people forget to think how many homes are sold without agents," Healy says. The current estimate is that 20% to 25% of homes are listed by owner, he says.
Your dream house could easily fall into that 20% to 25%. So how do you bring homes sold independently into your online searches? "Craigslist is one of the best resources," Dorkin says.
4. Falling for fake listings
Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for.
"If there are no photos [of the house], that's a big warning sign. That's just people trying to collect page views," Healy says.
But even if the listing has photos, it's not guaranteed to be legitimate. Legitimate Web sites will put watermarks on their home photos to brand those photos as their own. If a home's photos have several different watermarks on it, then you can guess you are looking at the work of a scammer.
5. Putting too much stock in home-valuation Web sites
Sites such as Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers' fingertips. But they're not infallible.
Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home-valuation sites cannot incorporate.
"Take their values with a grain of salt," Dorkin says. He recommends using this information merely as a range. Conduct other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location — those are some of the factors that can raise or lower the value of a home.
By Matthew Bandyk, U.S. News & World Report
If you are seriously looking for the home of your dreams, call Julie Nellis, Long Realty, 520-918-3843 to end your search!
5 top blunders of Internet home buying
Here's some advice to help you avoid the common pitfalls of online real-estate searching.
By U.S. News & World Report
While the painful real-estate swoon appears likely to extend well into 2009 — at least — the number of Americans using the Internet to find the home of their dreams is poised to keep on climbing.
According to the 2008 National Association of Realtors Profile of Home Buyers and Sellers, 87% of homebuyers used the Internet to search for homes last year. That's up steadily from 84% in 2007 and 80% in 2006.
But despite its mounting popularity, the Internet home-buying process can present a host of pitfalls. To help make your online real-estate searching more effective, here's a look at the top five Internet home-buying blunders and what you can do to avoid them.
1. Assuming you can do it all yourself
The Internet allows users to handle for themselves many of the tasks that could once only be performed by real-estate agents. The NAR profile, for example, found that the number of homebuyers who first learned of their homes on the Internet has been rising in recent years, to 32% in 2008, up from a tiny 2% in 1997. Accordingly, the number of homebuyers who first learned of their homes through agents has been declining, to 34% in 2008, down from 50% in 1997.
But although the Internet can provide heaps of helpful tips and research, it would be a mistake to assume that the Web is all you need to buy a house — unless you are an experienced real-estate investor. Purchasing real estate can be extremely complicated from a legal standpoint, and it's easy to make a mistake if you don't have an expert advising you. And when it comes to something as expensive as real estate, those mistakes could cost you thousands of dollars.
"Doing all the paperwork yourself is a huge mistake," says Joshua Dorkin, chief executive officer of BiggerPockets.com, a real-estate networking and information site. "There are so many things you can miss on a contract."
2. Looking too narrowly
The sheer amount of information about the real-estate market online can be overwhelming. As a result, buyers can be tempted to stick to just one or two popular real-estate search engines, such as Realtor.com, for their research. The problem with doing that, however, is that you're missing out on the biggest advantages that the Internet offers. [Realtor.com is a partner of MSN Real Estate.]
First, you're closing yourself off to a smaller cross section of the homes that are out there. "A lot of the sites aren't comprehensive and don't have all of the new listings," says Pat Kitano, a co-founder of Domus Consulting Group, which works with real-estate brokerage firms on technology marketing strategies.
Don't assume that because a house is on one real-estate Web site, it is on all of them, says Greg Healy, vice president of operations at ForSaleByOwner.com. "It's still very fragmented," he says. Healy recommends using several Web sites to get a more complete picture.
Second, you miss all the breaking, up-to-the-minute information on the housing market that can make you a smarter consumer. Blogs have become a popular resource for real-estate agents and others to post information as it happens. "If consumers are interested in a local area, they should find local real-estate bloggers who know this breaking information," Kitano says.
3. Ignoring the independents
One area that major real-estate search engines often overlook is the market for homes sold by the owners. "A lot of people forget to think how many homes are sold without agents," Healy says. The current estimate is that 20% to 25% of homes are listed by owner, he says.
Your dream house could easily fall into that 20% to 25%. So how do you bring homes sold independently into your online searches? "Craigslist is one of the best resources," Dorkin says.
4. Falling for fake listings
Remember, the Internet is a giant playground for scammers, and unfortunately they have penetrated the world of online home buying as well. Combine big dollars for online advertising and a lot of people searching for homes, and the result is a proliferation of fake home listings. There are a number of red flags to look out for.
"If there are no photos [of the house], that's a big warning sign. That's just people trying to collect page views," Healy says.
But even if the listing has photos, it's not guaranteed to be legitimate. Legitimate Web sites will put watermarks on their home photos to brand those photos as their own. If a home's photos have several different watermarks on it, then you can guess you are looking at the work of a scammer.
5. Putting too much stock in home-valuation Web sites
Sites such as Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers' fingertips. But they're not infallible.
Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home-valuation sites cannot incorporate.
"Take their values with a grain of salt," Dorkin says. He recommends using this information merely as a range. Conduct other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location — those are some of the factors that can raise or lower the value of a home.
By Matthew Bandyk, U.S. News & World Report
If you are seriously looking for the home of your dreams, call Julie Nellis, Long Realty, 520-918-3843 to end your search!
It Is a Great Time to Buy Tucson Real Estate
Out of the 8,541 current active residential listings, 333 of them are Short Sales and 87 are Bank Owned or Foreclosure.
If you are interested in looking for a great buy, now is the time to buy Tucson real estate! Interest rates are at all time lows and the average sale price is down.
The Tucson MLS statistics for December 2008 shows the average sale price at $200,000.
In March 2006, when the average sales price in MLS was $281,000 and interest rates were 6.25% the monthly PI payment on a $281,000 loan would have been $1,730. Today with the average sales price of $200,000 and rates at 4.75% the monthly PI payment on $200,000 is $1,043. That's $687, a 40% difference!
As you can see......IT IS A GREAT TIME TO BUY REAL ESTATE IN TUCSON!
Call Julie Nellis with Long Realty, 520-918-3843 today to purchase your piece of sunny Tucson.
If you are interested in looking for a great buy, now is the time to buy Tucson real estate! Interest rates are at all time lows and the average sale price is down.
The Tucson MLS statistics for December 2008 shows the average sale price at $200,000.
In March 2006, when the average sales price in MLS was $281,000 and interest rates were 6.25% the monthly PI payment on a $281,000 loan would have been $1,730. Today with the average sales price of $200,000 and rates at 4.75% the monthly PI payment on $200,000 is $1,043. That's $687, a 40% difference!
As you can see......IT IS A GREAT TIME TO BUY REAL ESTATE IN TUCSON!
Call Julie Nellis with Long Realty, 520-918-3843 today to purchase your piece of sunny Tucson.
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