Are you thinking about renting?

Are you thinking about renting? Now it is cheaper to buy a two-bedroom home than to rent one in most major U.S. cities. According to real estate web site Trulia, buying was cheaper than renting in 74% of the country’s 50 largest cities in July.



In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying. In addition to a continuing decline in home prices, rock-bottom interest rates have added a lot of weight to the buy side of the scale. The overnight average rate for a 30-year fixed was just 4.19% on Monday, according to Bankrate.com. A 15-year fixed averaged just 3.43%.

The median price of a two-bedroom, two-bath condo or townhouse is about $60,000, according to Trulia, a ratio of only six times the median annual rent if you plan on renting of a similar rental apartment, which is $9,700.

NorthWest Real Estate

Banks Now Prefer Short Sales To Foreclosures

Banks dealing with lengthy, complicated and frequently messy foreclosures are starting to see "short sales" as a quicker and cheaper way of getting bad loans off their books.  The nation’s biggest mortgage servicers- Bank of America, JPMorgan Chase and Wells Fargo – are beginning to step up their efforts to ease the short sale process for borrowers who are unsuccessful in getting loan modifications and face the threat of foreclosures.  Servicers are attempting to reach out to borrowers and are paying out more incentives to those suffering financial hardship to help proceed with a short sale. They are also cutting down the time taken to approve short sales, although realtors still complain that the process takes too long. 

JPMorgan has processed 120,000 short sales through its proprietary program since June 2009 and now averages 5,000 short sales a month. The bank says its average response time to approve a short sales transaction is 30 days.  "We think the short sale is a good solution for many struggling homeowners and we let them know that it’s an option," said Christine Holevas, spokesperson for JPMorgan in an email. "Our outreach efforts have increased in the past year or so. Foreclosures can be an expensive and lengthy process for all parties. It’s a good deal for the homeowner and a good deal for us (a cheaper way to get a bad loan off the books.)"

The average time for the foreclosure process- from the time of notice to the completed foreclosures- is now 318 days in the U.S., according to RealtyTrac.  The foreclosure process in the state of New York, which follows a judicial process, took 966 days on average for properties foreclosed in the second quarter. New Jersey and Florida followed with an average processing time of 944 days and 676 days respectively.  The longer it takes for a foreclosures to be approved, the longer bad loans stay on banks’ books. Foreclosures are also more expensive than short sales, because of the legal expenses involved as well as the expenses for maintenance and upkeep while the property is in foreclosure.

Wells Fargo, for instance, incurred expenses on repossessed homes to the tune of $305 million in the second quarter and $408 million in the first quarter, according to data from SNL. Data for the other big banks wasn’t available.  According to real estate analytics firm CoreLogic, the number of short sales in the market have tripled in the last two years and transactions are anticipated to grow by 25% in 2011. The markets with the largest short sale volume are California, Arizona, Colorado and Florida.

NorthWest Real Estate

Home Inspection Process

When is a home inspection needed? Anytime and every time you buy a home. As a house purchaser / seller or property investor, you have got the right to know precisely what a common real estate inspection is.

A home inspection is an independent visible investigation into the physical structure, including all sections from the roof down to the foundations. Having a home checked is similar to giving it a physical check-up. If issues or symptoms are found, the home inspector may recommend further analysis. Most importantly, a home inspection is a visible survey of those simply accessible areas that an inspector can obviously see.

No damaging testing or dismantling is done during the course of a home inspection, thus an inspector can only tell a client precisely what was obviously in evidence at the time and date of the inspection.

The inspector’s eyes aren’t any better than the purchasers, except the inspector is trained to have a look for specific telltale signs and clues that may well lead to the discovery of precise or potential defects or inadequacies.

Inspectors base their inspections on the prevailing industry standards provided to them by their professional associations. These standards tell what the inspector will and can do along with what the inspector won’t do.

Many inspectors give a copy of the standards to their clientele. If your inspector hasn’t given you a copy, ask for one, or go to the North American Home Inspector Catalog and look for your house inspector’s organization.

There are plenty of excluded areas noted in the standards the inspector doesn’t need to report on, for example, personal water and sewer systems, solar systems, safeguard systems, for example. The inspector isn’t restrained by the standards and if the inspector wishes to incorporate extra inspection services (sometimes for an additional charge) then he / she may perform as many specific inspection procedures as the customer may request.

A few of these further services may include wood-boring insect inspection, radon testing, or a selection of environmental testing, for example. Most home inspectors won’t give decisive cost or guesstimates for repairs and replacements since the expenses can change considerably from one contractor to another.

Inspectors generally will tell clients to secure 3 trusty quotes from those contractors performing the sort of repairs in question. Life expectancies are another area that most inspectors try to not become involved in. Each system and component in a building will have a common expectancy. Some items and units may very well surpass those anticipated life spans, while others may fail much earlier than predicted.

An inspector may indicate to a customer, general life expectancies, but should not give actual time spans for the above noted reasons.
Inspections that take less than 2 hours usually are regarded as precisely hasty, ‘walk-through’ inspections and supply the customer with less info than a full home inspection.

Many home inspectors belong to nationwide inspection associations like ISHI, ASHI, and NAHI. These nationwide affiliations provide suggestions for inspectors to perform their home inspections. All inspectors provide clients with reports. The least fascinating kind of report would be an oral report, as they don’t protect the customer, and leave the inspector open for misinterpretation and culpability.
Written reports are much more fascinating, and come in a selection of styles and formats.

These are some of the more common kinds of written reports:

1). Tick list with comments.
2). Rating system with comments.
3). Account report with either a check list or rating system
4). Inspectors often will spend adequate time in all these areas to visually look for a host of red flags, revealing clues and signs or defects and inadequacies. As the inspector completes a system, major element or area, he / she’ll then talk about the observations with the clients, noting both the negative and positive features.

The checked areas of a home / building will contain all the major perceivable and accessible electro-mechanical systems as well as the major tangible and accessible structural systems and elements of a building as they appeared and worked at the time and date of the inspection.

This report just outlines some of the basic fundamentals of a home inspection. Every home inspector has their own style and level of competence. In my opinion it’s always best to get a referral from someone that has used his or her service.

NorthWest Real Estate

What to Expect At a Foreclosure Auction

Whether or not you are a stockholder that would like to get into purchasing repo’ed homes for your private use or to flip the property or if you’re having your house foreclosed on, you should really know what can be expected at a foreclosure auction. Naturally, the particular steps that’ll be taken can change a bit from one state to another and from house to house, but it is good to understand what you’ll be getting into when you go to a foreclosure auction.

Foreclosure auctions can be exciting, even fun, but knowing what should be expected will help you to make the maximum of the experience, whether or not you are a stockholder or a householder that’s trying hard to get your place back.

Before the sale you will likely learn about the foreclosure auction in a local paper and on the flier may be info to pre-qualify for bidding. This will enable you to put down a deposit so that the auctioneer knows you are a heavy bidder and can satisfy your bid if you’re the winning bidder.

In this time you need to also perform a little research on the house by looking into any liens that might be against the property, how much the property is worth, how much it has appreciated in the previous few years together with property values in the area. If the home looks like it’ll need some repairs, you need to think about this as well when making an attempt to come up with how much you’ll be willing to pay for the house.

Without this research, no sort of knowledge on the subject of what goes on at a foreclosure option will help you as you will not know where to begin when talking about essentially making a good bid. The sale will usually start with the auctioneer reading legal notices as well as a legal outline of the property.

The auctioneer will often then begin taking bids on the property. If the auctioneer has pre-qualified bidders the method is more streamlined, if not, every time a bid is formed the auctioneer will then ask for the bidders deposit check, which is often right around $5,000 for home auctions.

After each bid the auctioneer will try to look for bids for higher amounts. Each auction is dissimilar, but the sale increments generally are set by the auctioneer and might be by $100, $500, or $1,000 per bid.

A grace period will probably be given to permit the buyer to find financing or to come up with the funding to cover the total amount of the bid. After the honeymoon period a closing will happen, so the new owner can officially take the title to the property.

What happens now? The buyer can do what she or he meant to do with the property, whether or not it is to move into the home or to sell it for full market value.

At some foreclosure auctions there are lots of folk, at others there are just a few due to the location or simply the debt attached to the property, or the state of the property. If you’re serious about the property you need to pay close attention when bidding starts so that you’re sure you can get your bid in when you’re feeling it is time so you have the best probability of being the top bidder.

NorthWest Real Estate

Declines in West Coast Foreclosure Starts

The November 2010 Foreclosure Report by ForeclosureRadar shows that though there has been no major drop in delinquencies in the West Coast states of Arizona, California, Nevada, Oregon, and Washington, foreclosure starts have fallen to 2008 levels, continuing their two month decline. The company’s report deduces that the drop in foreclosures is due to robo-signing issues and the moratoriums that followed the controversy. Notice of default filings were down 9.3% month-over-month in California and notice of sale filings dropped a stunning 31.7% in Washington. The San Francisco, California-based ForeclosureRadar reports that starts in its five-state coverage area have dropped 25.5% since the robo-signing storm began.

In Arizona, notice of trustee sale filings dropped 24.4%, to the lowest level seen since March 2008. Foreclosure sales were down 14.8 from October to November and experienced a 26.9% drop in September to October. Sales have not been so low in Arizona since September 2009. California a 8.5% decline in cancellations of foreclosure sales, down a total of 54% from the June peak. The state also saw a 1% drop in notice of trustee filings, and a 9% drop in foreclosure sales. Foreclosure activity in Nevada experienced steep deterioration, with foreclosure sales down 22.1% from October to November and 50.5% from September to October. Notice of default filings dropped to 12.7%. Notice of default filings for Oregon decreased 25% from October to November. Notice of trustee sale filings decreased 26.7%. In one of the only increases reported, Oregon experienced a 34.8% increase in cancellations of foreclosure sales. Washington’s of trustee sale filings lowered 31.7% from October, but remain higher than November of 2009. Foreclosure sales also dropped to 38.1% but are up 29.3% from November 2009.

NorthWest Real Estate

Home Prices Up – for now

According to the S&P/Case-Shiller Home Price Index, national home prices jumped 3.6% in the past year. Prices also climbed 4.4% in the second quarter compared with a 2.8% plunge in the first quarter. “While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s. Home prices across the country could be substantially lower a year from now, according to Pat Newport, an analyst with IHS Global Insight. “It’s now apparent that the demand for housing is a lot weaker than anyone thought,” he said. That has resulted in a glut of inventory, which a slew of bank repossessions of foreclosed properties is only making worse.

Plus job gains are still proving elusive. “These three factors are enough to bring home prices down,” Newport said. A market basket of 20 metro areas tracked by the S&P/Case-Shiller home price indexes showed that prices gained in all markets but one. The index is up 4.2% year-over-year, well above a 3.1% forecast from industry experts as compiled by Briefing.com. The month-over-month gain was 1%. “Las Vegas was the only city to record a fall in prices during June (-0.6%), compared with a month earlier. All 19 other markets were either up or flat, with Chicago, Detroit and Minneapolis the biggest winners. Each gained 2.5%. Fifteen of the 20 cities recorded 12-month price rises, with San Francisco leading the way. Its 14.3% increase was one of three cities posting double-digit gains, with San Diego prices jumping 11.2% and Minneapolis 10.7%. Las Vegas had the biggest 12-month loss, down 5.2%.

NorthWest Real Estate

Homeowners Pessimistic About Future Home Value

According to the Zillow Second Quarter Homeowner Confidence Survey, U.S. homeowners were less confident about the value of their homes in the second quarter, with one-third believing home prices had not yet reached a bottom. Homeowners were more pessimistic about the short-term future of home values in their local market than they had been in the previous three quarters, with 33% believing home values in their local housing market had not yet reached a bottom, while 38% believed they had already reached a bottom. Nationally, 28% of homeowners said home values in their local real estate market would decrease in the next six months, up from 20% in the first quarter. Additionally, less than one-third, or 30%, believed home values in their local market would increase, down from 42% in the first quarter.

Zillow said less than a quarter, or 24%, of homeowners said their home had increased in value in the past year, compared with 27% in the first quarter. In reality, 34% of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports. 27% of homeowners believed their own homes’ values would increase in the next 12 months, 35% believed they will stay the same, 12% expected a decrease and 26% did not know. Of those who expected their homes’ values to increase, the median expectation was a rise of 6%, although that varied by geography. Despite the increasing pessimism, a large number of homeowners were anxiously awaiting the opportunity to sell. Indeed, 5% of U.S. homeowners said they were very likely to put their home on the market in the next six months if they saw signs of a real estate market turnaround. Zillow said this translated into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009. “As these homeowners hear news of stabilization in home values, they put their homes on the market, driving up inventory and keeping a cap on home value appreciation,” Humphries said.

NorthWest Real Estate

Mortgage Overhaul & What it Means for You

By the time you are reading this, the new 2300 page financial reform bill is likely to be making the headlines. The Senate has already approved the new bill and President Obama is expected to sign it into law this week ..despite the fact that many of the provision related to specific regulations have yet to even be written. If that sounds faintly disturbing, don’t worry…your concern is noted and shared by many experts through the nation. However, there are sweeping changes that are already apparent despite the lack of specific details.
Although broad in scope, home buyers and sellers are likely to be among the first impacted by the new provisions. They represent one of the most comprehensive – top to bottom changes to the finance, valuation, types of mortgage products offered and how lenders are compensated to take place in decades. In fact, there are even new rules for investors that provide capital for the purchase of mortgages.

A few of the most important points likely to make immense impact to buyers, sellers and investors is the language dealing with any type of mortgage outside of the “traditional” or “plain vanilla” category. Unfortunately, regulators have yet to fully define what will constitute a “traditional” mortgage under the new plan but it is clear that the line will be drawn to reduce the number of sub-prime borrowers as well as offerings of owner finance and other alternative forms of finance. Experts predict an immediate severe impact on many minority and low income borrowers; many who have already been impacted by far less severe measures. For example, according to FHA, rejection rates for African American and Latino borrowers have substantially increased among non-FHA loans.

The new FDIC and other regulatory oversight standards contained in the bill are expected to provide safer mortgage(s) instruments but at a higher cost and more stringent requirements for both banks and individuals. It is estimated that only five banks currently control more than 65% of the current mortgage market; the new bill is expected to further consolidate this trend by favoring big banks over small. In part, this is due to the belief that big banks are easier to regulate. However, at the same time, new controls and rules regulating private investors are also expected to take another two to three years to fully define…leading many to believe the bulk of mortgages will still be backed by the United States government for the foreseeable future.

NorthWest Real Estate