Bill Dafnis, ABR, SFR's Blog

Extreme Housing Overvaluation Deemed Nil

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Mon, 08 Sep 2008 09:43:00 -0700

Extreme overvaluation in the nation's housing market was "essentially nonexistent" in the second quarter, an indication that "the nation's housing 'bubble' has popped and house prices reflect a healthy balance in relation to long-term fundamentals," according to an analysis released by Global Insight Inc., Waltham, Mass. The quarterly housing valuation analysis, House Prices in America, found that prices fell in 152 of the 330 covered metropolitan markets in the second quarter, representing 46% of all single-family units in the United States. "Although the markets that were extremely overvalued two years ago are seeing expected price declines, other areas are seeing price declines due to weak economic conditions," said Jeannine Cataldi, senior economist and manager of Global Insight's Regional Real Estate Service. "The market has a lot of inventory to work through before prices will change course." The analysis is a joint effort of Global Insight and National City Corp., Cleveland. More information can be found online at http://www.globalinsight.com/housingvaluation

YOU now own a second home...

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Thu, 07 Aug 2008 12:13:39 -0700

YOU now own a second home--actually, thousands of second homes! The US GOVERNMENT just nationalized Fannie Mae and Freddie Mac, meaning that all taxpayers now guarantee all conforming loans, including the bad ones. FIXED INTEREST RATES increased slightly, but ARMs remain in the 5's. Prices are still dropping (at a slimmer pace), but it still looks difficult to predict when, or if, we hit the bottom.

Low-Cost Ways to Spruce Up Your Home’s Exterior

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:21:24 -0700

Low-Cost Ways to Spruce Up Your Home’s Exterior

Make your home more appealing for yourself and potential buyers with these quick and easy tips:

1. Trim bushes so they don’t block windows or architectural details.

2. Mow your lawn, and turn on the sprinklers for 30 minutes before the showing to make the lawn sparkle.

3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.

4. Install new doorknobs on your front door.

5. Repair any cracks in the driveway.

6. Edge the grass around walkways and trees.

7. Keep your garden tools and hoses out of sight.

8. Clear toys from the lawn.

9. Buy a new mailbox.

10. Upgrade your outside lighting.

11. Buy a new doormat for the outside of your front door.

12. Clean your windows, inside and outside.

13. Polish or replace your house numbers.

14. Place a seasonal wreath on your door.

5 Things to do Before Putting Your Home on the Market

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:20:35 -0700

5 Things to do Before Putting Your Home on the Market

1. Have a pre-sale home inspection. Be proactive by arranging for a pre-sale home inspection. An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.

2. Organize and clean. Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

3. Get replacement estimates. Do you have big-ticket items that are worn our or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace them, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be handy when negotiations begin.

4. Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other items that will remain with the house.

5. Spruce up the curb appeal. Pretend you’re a buyer and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are pretty flowers or plants framing the entrance? Is the walkway free from cracks and impediments?

8 Reasons Why You Should Work With a REALTOR®

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:15:05 -0700

8 Reasons Why You Should Work With a REALTOR®

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here's why it pays to work with a REALTOR®.

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Help finding the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. Experience. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. Even if you have done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Objective voice. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, homebuying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll every make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

5 Things to Know About Homeowner’s Insurance

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:13:38 -0700

Handouts for Customers
5 Things to Know About Homeowner’s Insurance

1. Know about exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These types of coverage must be bought separately.

2. Know about dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.

3. Know the replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.

4. Know the actual cash value. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value.

5. Know the liability. Generally your homeowner’s insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

4 Common Home Hazards

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:12:10 -0700

Handouts for Customers
4 Common Home Hazards

These issues don’t necessarily cause illness but are serious nonetheless. Pillar to Post, a home inspection company, reports the following common hazards its home inspectors often find:

1. Faulty electrical wiring
Watch for: overloading circuits, loose wires, missing covers on distribution boxes, abandoned appliances, or aluminum wiring, which can become problematic with age.

2. Loose guard rails
Watch for: stairway guardrails, especially exterior stairways, that are not securely connected, or decks — often are installed by home owners unfamiliar with building codes — that may have loose boards.

3. Unsecured shower doors
Watch for: shower doors that lack safety glass and are not properly secured. A home owner who slips when stepping out of the bathtub and grabs a glass door that is not properly fastened could be severely injured.

4. Drainage problems
Watch for: downspouts discharging next to an exterior wall or a negative grade that slopes toward the home and brings water toward the home, causing foundation deterioration. This can lead to water damage, often seen in the basement, and possibly mold growth. Look for cracks, foundation wall stains, and musty, damp smells.

Source: Pillar to Post

Simple Tips for Better Home Showings

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:11:07 -0700

Handouts for Customers
Simple Tips for Better Home Showings

1. Remove clutter and clear off counters. Throw out stacks of newspapers and magazines and stow away most of your small decorative items. Put excess furniture in storage, and remove out-of-season clothing items that are cramping closet space. Don’t forget to clean out the garage, too.

2. Wash your windows and screens. This will help get more light into the interior of the home.

3. Keep everything extra clean. A clean house will make a strong first impression and send a message to buyers that the home has been well-cared for. Wash fingerprints from light switch plates, mop and wax floors, and clean the stove and refrigerator. Polish your doorknobs and address numbers. It’s worth hiring a cleaning service if you can afford it.

4. Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows to air out the house. Potpourri or scented candles will help.

5. Brighten your rooms. Put higher wattage bulbs in light fixtures to brighten up rooms and basements. Replace any burned-out bulbs in closets. Clean the walls, or better yet, brush on a fresh coat of neutral color paint.

6. Don’t disregard minor repairs. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well-maintained.

7. Tidy your yard. Cut the grass, rake the leaves, add new mulch, trim the bushes, edge the walkways, and clean the gutters. For added curb appeal, place a pot of bright flowers near the entryway.

8. Patch holes. Repair any holes in your driveway and reapply sealant, if applicable.

9. Add a touch of color in the living room. A colored afghan or throw on the couch will jazz up a dull room. Buy new accent pillows for the sofa.

10. Buy a flowering plant and put it near a window you pass by frequently.

11. Make centerpieces for your tables. Use brightly colored fruit or flowers.

12. Set the scene. Set the table with fancy dishes and candles, and create other vignettes throughout the home to help buyers picture living there. For example, in the basement you might display a chess game in progress.

13. Replace heavy curtains with sheer ones that let in more light. Show off the view if you have one.

14. Accentuate the fireplace. Lay fresh logs in the fireplace or put a basket of flowers there if it’s not in use.

15. Make the bathrooms feel luxurious. Put away those old towels and toothbrushes. When buyers enter your bathroom, they should feel pampered. Add a new shower curtain, new towels, and fancy guest soaps. Make sure your personal toiletry items are out of sight.

16. Send your pets to a neighbor or take them outside. If that’s not possible, crate them or confine them to one room (ideally in the basement), and let the real estate practitioner know where they’ll be to eliminate surprises.

17. Lock up valuables, jewelry, and money. While a real estate salesperson will be on site during the showing or open house, it’s impossible to watch everyone all the time.

18. Leave the home. It’s usually best if the sellers are not at home. It’s awkward for prospective buyers to look in your closets and express their opinions of your home with you there.

Loan Types to Consider

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:07:36 -0700

Handouts for Customers
Loan Types to Consider

Brush up on these mortgage basics to help you determine the loan that will best suit your needs.

Mortgage terms. Mortgages are generally available at 15-, 20-, or 30-year terms. In general, the longer the term, the lower the monthly payment. However, you pay more interest overall if you borrow for a longer term.

Fixed or adjustable interest rates. A fixed rate allows you to lock in a low rate as long as you hold the mortgage and, in general, is usually a good choice if interest rates are low. An adjustable-rate mortgage is designed so that your loan’s interest rate will rise as market interest rates increase. ARMs usually offer a lower rate in the first years of the mortgage. ARMs also usually have a limit as to how much the interest rate can be increased and how frequently they can be raised. These types of mortgages are a good choice when fixed interest rates are high or when you expect your income to grow significantly in the coming years.

Balloon mortgages. These mortgages offer very low interest rates for a short period of time — often three to seven years. Payments usually cover only the interest so the principal owed is not reduced. However, this type of loan may be a good choice if you think you will sell your home in a few years.

Government-backed loans. These loans are sponsored by agencies such as the Federal Housing Administration or the Department of Veterans Affairs and offer special terms, including lower down payments or reduced interest rates to qualified buyers.

Slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. For help in determining how much your monthly payment will be for various loan amounts, use Fannie Mae’s online mortgage calculators.

7 Reasons to Own Your Home

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:06:29 -0700

Handouts for Customers
7 Reasons to Own Your Home

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.

5 Common First-Time Home Buyer Mistakes

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Sat, 21 Jun 2008 16:05:24 -0700

Handouts for Customers

1. They don’t ask enough questions of their lender and end up missing out on the best deal.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right agent who’s willing to help them through the homebuying process.

4. They don’t do enough to make their offer look appealing to a seller.

5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.

Source: Real Estate Checklists and Systems, www.realestatechecklists.com.

Economy/Rates

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Fri, 20 Jun 2008 18:24:23 -0700

ECONOMY/RATES
The good news is that the Chicago-area purchase market is showing signs of life. And MORTGAGE RATES are swinging like Sinatra in 1962: .25% intra-day rate swings are common. In todays up & down market, it's wise to associate with reputable licensed mortgage brokers with multiple avenues to lock you in one rate and if they come down, they are able to float you down or change lenders.

Home Buyer Checklist

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Fri, 13 Jun 2008 15:36:03 -0700

Home Buyer Checklist

The Home Buyer Checklist identifies some of the important factors to consider when choosing a home. In addition to an affordable sales price, you will also want to be sure that the neighborhood and house meet the needs of your family.

Take this checklist along when you go shopping for your house. It will help you evaluate the neighborhoods and assess the availability and condition of various features of up to three homes in a side-by-side comparison. Click here to print this page.

Home Buyer checklist	1	2	3
Property Address	.	.	.
Asking Price	$	$	$
Real Estate Taxes	$	$	$
The Neighborhood
Near Work	.	.	.
Near Schools	.	.	.
Near Shopping	.	.	.
Near Expressways	.	.	.
Near Public Transportation	.	.	.
Near Doctors / Dentists	.	.	.
Near Churches	.	.	.
Garbage Collection	.	.	.
Street Lights	.	.	.
Sidewalks	.	.	.
Streets / Alleys Well Maintained	.	.	.
Traffic Volume	.	.	.
Parks	.	.	.
Neighbor's Property Well Maintained	.	.	.
All Utilities Installed	.	.	.
Neighborhood / Restrictions	.	.	.
Near Trains / Airports	.	.	.
Area Zoned Residential	.	.	.
Near Industry	.	.	.
Proposed Special Assessments	.	.	.
Environment Concerns / Influences	.	.	.
The House
Age of House	.	.	.
No. of Stories	.	.	.
Wood Frame	.	.	.
Brick Frame	.	.	.
Wood & Brick Frame	.	.	.
Aluminum Siding	.	.	.
Roof Condition	.	.	.
Foundation Condition	.	.	.
Overall Exterior Condition	.	.	.
Garage Size	.	.	.
No. of Bathrooms	.	.	.
No. of Closets	.	.	.
No. of Bedrooms	.	.	.
Oil Heat	.	.	.
Gas Heat	.	.	.
Electric Heat	.	.	.
Hot Water Heat	.	.	.
Insulation	.	.	.
Central Air Conditioning	.	.	.
Energy-Conservation Features	.	.	.
Age of Heating System	.	.	.
Age of Water Heater	.	.	.
Capacity of Water Heater	.	.	.
Age of Electrical Wiring	.	.	.
Plumbing Condition	.	.	.
Estimated Water Bill	$	$	$
Estimated Heating Bill	$	$	$
Estimated Electric Bill	$	$	$
Living Room	.	.	.
Fireplace	.	.	.
Separate Dining Room	.	.	.
Family Room	.	.	.
Drapes - No. of Rooms	.	.	.
Carpeting - No. of Rooms	.	.	.
Kitchen Eating Area	.	.	.
Refrigerator	.	.	.
Stove / Oven (Gas / Electric)	.	.	.
Garbage Disposal	.	.	.
Dishwasher	.	.	.
Broken Windows	.	.	.
Storm Windows / Screens	.	.	.
Washer / Dryer Outlets	.	.	.
Laundry Space	.	.	.
Finished Basement	.	.	.
Attic	.	.	.
Sump Pump / Drainage	.	.	.
Connected to Sewer System	.	.	.
Patio	.	.	.
Backyard Fence	.	.	.
Landscaping	.	.	.
Property Boundaries	.	.	.
Security (dead bolts, detectors)	.	.	.
Building Code	.	.	.
Compliance	.	.	.
Ability to Expand / Enlarge House	.	.	.

RE/MAX Suburban 1808 N Arlington Heights Rd Arlington Heights, IL 60004-6047
Phone: <script type="text/javascript"></script> (847) 577-9797 Cell: <script type="text/javascript"></script> (312) 320-7132 Fax: <script type="text/javascript"></script> (847) 255-0492 <script type="text/javascript"></script> E-mail: bdafnis@comcast.net

FICO Credit Scores

Bill Dafnis, ABR, SFR (RE/MAX Suburban) — Fri, 13 Jun 2008 15:34:09 -0700

Scoring your Credit - How's your FICO?

In today's increasingly automated society, it should come as no surprise that when you apply for a mortgage, your ability to pay can be reduced to a single number. All the years you've been paying your mortgage, car payments, and credit card bills can be analyzed, sliced, diced, spindled and mutilated into a single indicator of whether you're likely to meet your future obligations.

All three of the major credit reporting agencies (Equifax, Experian and TransUnion) use a slightly different system to arrive at a score. The best known is called the FICO score, based on a model developed by Fair Isaac and Company (hence the name) and used by Experian. Equifax's model is called BEACON, while TransUnion uses EMPIRICA. While each of the models considers a range of data available in your credit report, the primary factors are:

Credit History - How long have you had credit?
Payment History - Do you pay your bills on time?
Credit Card Balances - How much do you owe on how many accounts?
Credit Inquiries - How many times have you had your credit checked?

Each of these, and other items, are assigned a value and a weight. The results are added up and distilled into a single number. FICO scores range from 300 to 850, with higher being better. Typical home buyers likely find their scores falling between 600 and 850.

FICO scores are used for more than just determining whether or not you qualify for a mortgage. Higher scores indicate you are a better credit risk, and thus may qualify for a better mortgage rate.

What can you do about your FICO score? Unfortunately, not much. Since the score is based on a lifetime of credit history, it is difficult to make a significant change in the number with quick fixes. The most important thing is to know your FICO score and to ensure that your credit history is correct. Conveniently, Fair Isaac has created a web site (www.myFICO.com) that let's you do just that. For a reasonable fee, you can quickly get your FICO score from all three reporting agencies, along with your credit report. Also available is some helpful information and tools that help you analyze what actions might have the greatest impact on your FICO score. Each of the credit services offers similar services on their web sites: www.equifax.com, www.experian.com, and www.transunion.com.

Armed with this information, you will be a more informed consumer and better positioned to obtain the most favorable mortgage available to you.