Miro Fitkova's Blog

Rate of Foreclosure Still High

Miro Fitkova (Fitkova Realty Group) — Thu, 02 Dec 2010 15:37:38 -0800

The topic of foreclosure has been on the minds of many Americans as the market makes it way towards recovery.

According to the Mortgage Bankers Association, the mortgage delinquency rate declined in the third quarter.

They report that in the United States, it "declined last quarter amid hints of improvement in the job market, but headwinds from defaults and a rising rate of new foreclosure applications keep the housing outlook muddied."

Still, some experts say the winter will continue to be cold for many fearing default.

Zillow.com reports that foreclosure liquidations have reached a new peak, with over 1.17 of every 1,000 homes slipping into foreclosure.

Their analysts predict that this high rate of foreclosure will continue due to high negative equity rates which increased to 23.2% from 22.5% in the second quarter. And Zillow experts expect it "will be weighing on housing demand for the next few years."

And unfortunately, home values are fairing little better.

According to the latest Zillow Real Estate Market Reports, "Home value depreciation began to accelerate again in September, fueled by lower transactional volumes and increased inventory levels. Home values dropped 0.4% from August to September and 4.3% from September 2009. With home values 25% below their peak and 51 consecutive months of declines, the length and severity of the current downturn is fast approaching the length and depth of the Depression-era housing declines. From the end of 1928 to the end of 1933 (60 months), nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States."

The top five hardest hit cities in the nation are as follows: Las Vegas, NV; Miami, FL; Chicago, IL; Phoenix, AZ, and West Palm Beach, FL. (Realtytrac.com)

Realtytrac.com also reports that as of October, there are 2,171,120 homes in foreclosure, with an average foreclosure sales price of just $173,331.

Changing the face of foreclosure, however, will take time. And whether this is done through fundamental changes to the way banks deal with defaults, invigorating the job market through purchase of Treasury bonds, or other stimulation efforts on the economy, many homeowners may have to struggle a while longer to hold on to their homes. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Mortgage Rates Spike Quarter Percent

Miro Fitkova (Fitkova Realty Group) — Thu, 02 Dec 2010 15:30:02 -0800

30 year fixed mortgage rates have risen a quarter point this week to 4.25% on plummeting mortgage-backed securities prices. MBS prices drive mortgage rates in the opposite direction. Conventional 15 year fixed interest rates are also up a quarter of a percent and are at 3.75% currently for well-qualified borrowers who pay a standard .07 to 1 point origination. Both fixed mortgage rates are up substantially from last week and at an immediate risk to rise further.

FHA loan rates move with conforming mortgage rates and are also up this week. Today's 30 year fixed FHA loan rate is at 4.125%, up from 4%. Although the same note rate is available on an FHA 30 year fixed mortgage as a conforming 30 year fixed loan, MI and other fees charged by the Federal Housing Administration make APR higher on an FHA mortgage.

Jumbo mortgage rates are unchanged. The current jumbo 30 year fixed rate is 4.875%

Wells Fargo, the nation's number one originator by volume, adjusted their advertised 30 year fixed rate from 4.25% to 4.625% with an APR of 4.812.

FreeRateUpdate.com surveys wholesale and direct lenders' rate sheets to determine the most accurate mortgage interest rates available to well-qualified consumers who pay an industry standard .07 to 1 point origination. These rates are commonly referred to as "par rates" by mortgage loan officers. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Ed Ferrara

Establishing Daily Priorities

Miro Fitkova (Fitkova Realty Group) — Thu, 02 Dec 2010 15:22:34 -0800

Establishing your daily priorities will help you make each day a "10”. I am giving you a tool that I created a few years ago that really enables you to get maximum value from your time. It is our Real Estate Champions Daily Priorities Tool.

Step #1: List the activities that need to be done for the day.

When you are listing activities on the right hand side of boxes, you are brainstorming to get your thoughts down on paper. Just focus on what needs to be done … all of it. Do not let your mind think about importance or order of completion. If you do, that will stop the brain storming process.

Step #2: Categorize the activities that need to be done.

Most people, once they create a list of activities, number them or create an order. The Champion categorizes them to determine their level of importance. Assign each activity a category based on A, B, C, D or E.

A – Something that has a serious consequence if you don't complete it today

B – Something that has a mild consequence if you don't complete it today

C – Has essentially no consequence if it is not completed today

D – Can be delegated to another person on your Team or an Affiliate

E – Should be eliminated because it is unnecessary

Once you have categorized them all using the system above, you are ready for the final step.

Step #3 – Prioritize the categories.

Select the A category activities and determine which one is the most important. Number them and write them in the squares on the left hand side.

My belief is that, each and every day for the remainder of your sales career, A-1 and A-2 are already spoken for. A-1 is always prospecting and A-2 is always lead follow-up. You are really starting at A-3 each day. I believe the most significant penalty or consequence comes from not prospecting and doing lead follow-up daily.

The reason most of us don't think there is a penalty for that is the results of not doing it doesn't show up today. It appears in ninety days when we fail to prioritize those activities higher on the scale and do them. It is usually easy to place something else in the A-1 or A-2 slot. Usually, the Quadrant I activities or emergencies will try to crowd out the prospecting and lead follow-up. The most important activities in the A category are the Quadrant II activities. They are the activities that, if they don't get done, have a significant penalty. You just can't see it today.

Proceed down through the Bs, Cs, Ds, and Es. If you want to earn what a Champion Agent earns, don't waste your time on Ds and Es.

For me, during my sales career, and even today, the most important question is did I get my As done? If I got that done, I had a great day. There were times that, when I really looked at my priorities for the day, the only As were prospecting and lead follow-up. I would give myself a choice on those days to go home or head to the golf course early after prospecting was finished as my reward!

Time management is a problem that will never go away for any of us. I view time management as a muscle that needs to be trained and worked out to strengthen the skill. It is a series of systems or skills that we all need to acquire. I have shared with you a tool that really works to help you take your time management skills to the highest level. Make the commitment to start using it tomorrow.

There is a law called the Law of Diminishing Intent. The law says that the motivation and desire and emotion to change is high when you first recognize a change is needed. The farther you get from that moment, the lower the probability that you will actually do it. Don't allow the Law of Diminishing Intent affect your desire and need to change your time management plan and skills. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Dirk Zeller

Real Estate Outlook: Growth Remains Sub-Par

Miro Fitkova (Fitkova Realty Group) — Wed, 01 Dec 2010 16:06:26 -0800

The National Association of Business Economics' latest report has revealed that projections for GDP growth remains in the first quarter of 2001 remains "sub-par". Concern about federal debt, unemployment, and business regulation ruled the NABE panel, causing experts to forecast only moderate growth in 2011.

The NABE also reports that "consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth."

On the bright side -- the chances of the economy slipping back into recession are considered low.

The housing market, however, continues to struggle. The National Association of Realtors reports that existing home sales fell in October after two months of gains.

Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue, but may improve come Springtime. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels."

The third quarter also saw levels of home value depreciation accelerate, this according to Zillow.com Real Estate Market Reports.

Their experts report that we have seen 51 consecutive months of declines, with values now 25 percent below their peak.

In comparison to Depression-era housing declines, "from the end of 1928 to the end of 1933, nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States."

In addition, foreclosure liquidations rose again, to a new peak for the third quarter. More than 1.17 out of every 1,000 homes was liquidated in September.

Yet, in almost contradictory news, the Mortgage Bankers Association reports that the mortgage delinquency rate in the U.S. declined last quarter "amid hints of improvement in the job market." Michael Fratantoni, the MBA's vice president of research and economics reported that "although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter." Therefore, the delinquency rate may have declined, but it remains high.

The National Association of Realtors echoes this sentiment, releasing a statement earlier this month noting that the housing market recovery depends on jobs, as well as access to credit.

"Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,” said NAR Chief Economist Lawrence Yun.

Helping this cause? Interest rates have dipped to the lowest in two decades, leaving housing affordability near its highest level nationwide for the seventh consecutive quarter.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

Determining Factors of a Qualified Prospect

Miro Fitkova (Fitkova Realty Group) — Wed, 01 Dec 2010 15:39:22 -0800

1. Strong motivation

Motivation is simply the desire to do something. The stronger the desires on the part of the Buyer, the easier it will be for you to satisfy or even exceed their expectations. The stronger the motivation, the lower the expectations they will have for a property or your service. A low motivation prospect is willing to look for extended periods of time until they find the perfect home. In essence, they are looking for something that doesn't exist in many cases.

Do they want it? Do they have to have it? Those are the key questions to review in your head while talking with the prospect. If they are hoping for or would like something to happen, the likelihood of it happening diminishes.

2. Financial capacity

We can find people who have a desire or high motivation to live in a much nicer home. That certainly needs to be balanced with financial capacity: the availability of a down payment, credit score, steady employment, and sufficient income. Most people want more than they can afford. A Champion Agent finds out before they invest time on a prospect what their true financial capacity is.

If you show property before you know clearly their financial capacity, you run the risk of disappointing your client. The Buyer ends up seeing homes they want but can't afford, causing them to become frustrated with the properties, themselves, and you. This is a sure way to lose the client.

3. Authority to take action

Do they have the authority to make the purchase? Are they the only decision maker, or is someone else involved or influential in this decision?

Far too frequently, low producing agents find out late in the game that parents, friends, aunts, or uncles will have an influence on the decision. This can easily cause a blockage to the sale. The other party, which is usually a parent, will come in after the home is selected and talk the Buyers out of the home they want. Knowing who will have influence on the decision is critical.

4. Realistic expectations, willingness to compromise

Qualifying and the Buyer Interview have so much value in determining this area. We are in a compromise business. The Buyer has to be willing to have realistic expectations of their desires and budget. They have to be able to forgo things that might be luxury items in their budget. They might not be able to afford that 3rd garage space based on their budget. They might have to forgo it because the area they really want to live is older, and very few of the homes have 3 car garages.

Agents are better at determining the desire level of a client than the expectation level. We have to guide the client to identify their desires for their next home, then to prioritize these items. What are have-to-have items, and what are really like-to-have items? What is a non-starter item that knocks out the home and what is it that they can live without?

Let's go back to our garage example. If the house didn't have a 3 car garage but had room to add on that garage and was in the right location and had all of the other features you were looking for, would that be okay?

In the end, none of us will ever own the perfect home. We have to be willing to compromise. If we have a client without realistic expectations or with a lack of compromise ability, we will end up with either a large amount of time invested to generate a commission check or no commission check at all.

5. Willingness to understand the marketplace and market competition

This has been a difficult area in the past. Buyers have not liked the bidding war in real estate. They have felt taken advantage of by the Sellers. In some cases, they lost a few houses or had to pay 5%, 10%, or over 20% above asking to acquire a home.

For a prospect to become a client, they must understand the marketplace, whatever it currently is. In the end, the market is the market! All real estate agents and Buyers can do is respond to the market. One thing an agent should always know is the percentage of list price to sales price for the homes in the price range their client is trying to purchase.

This knowledge needs to be shared with the client, so they understand what it is going to take, at a minimum, to secure a property based on the facts of today. We need to clearly explain to the client that, if they are trying to be the exception, there will potentially be a high level of frustration for them.

6. Commitment to work with you exclusively

My position on exclusive commitment is that they sign a Buyer Agency Agreement. The Buyer Agency Agreement is becoming more commonplace in our industry. There was even an article on the increase in frequency and acceptance of Buyer Agency Contracts in the December 2, 2004 edition of the Wall Street Journal.

I would suggest you secure a copy of the actual article to use in your commitment discussion.

Few journalists provide a fair and balanced picture of our services. I want to highlight such an article, which was published in the Wall Street Journal by Kelly Spors, that raises awareness and dialogue on Buyer Agency Agreements.

In the article, Ms. Spors shared with consumers that Buyer Agency is increasing in use nationally. She cited a survey by NAR that 64% of Buyers using agents used Buyer's representation in 2004. That was a 17% increase from 2001 when it was 47%. That means that almost two-thirds of people using a Realtor® to purchase a home are using an exclusive Buyer Agent relationship.

This article would have some value to have in your portfolio of tools. It could be shown to a Buyer to prove that the norm in the industry is Buyer Agency and exclusive right to represent. That 64% clearly backs up your desire to get an exclusive right to represent agreement signed.

There are questions it raises, as well, that we will need to prepare for:

1. What happens if the Buyer is unhappy with your service?

2. Are Buyer Agency terms always negotiable?

3. Do you think you might want to buy a For Sale By Owner?

4. What are the terms of the contract?

As a professional, by reading this article, you will be more knowledgeable as to the concerns of the Buyer. It will enable you to prepare for the questions and apprehension that most Buyers are experiencing when we ask them for a Buyer commitment.

I have always believed that the best approach with a Buyer is the straightforward one. Explain to a Buyer that this is the way you earn a living to feed your family. Then bring it to their level by saying:

“You would not go to work for a week or two and work real hard with just a hope of getting paid in the end would you? Since my income is not guaranteed, I owe it to my family to ensure I get paid for the work I do, just like you do. This is the only way I have to get paid. You can understand that can't you?”

Each of us needs multiple arrows prepared for us. This article could be another arrow to use in the right situation. The real value is that it comes from the Wall Street Journal, an independent third party that's highly respected.

The exclusive relationship, at its core, is about a trade of commitments. We are committing to provide a certain level of service, skill, expertise, and time to ensure the client achieves their goals. The client, in turn, must trade exclusivity and assurance of compensation for the services rendered. Anything short of full trade of commitments is damaging to either party.

I know of many agents who have a strong enough presentation and presence about them that they can get away with not getting a Buyer Agency Contract signed, but I don't recommend that. They will get burned every once in a while because of not getting a contract.

Why take the risk? I think that if someone is intent or even tempted to take advantage of you, it will come out during this stage when you are qualifying them for an exclusive commitment. You could even use a short list of services that you provide and ask for a trade of commitment, based on that short list of services.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Dirk Zeller

Holiday Home Safety

Miro Fitkova (Fitkova Realty Group) — Wed, 01 Dec 2010 15:35:19 -0800

The Holiday season is upon us, and for most it is a time full of joy, fellowship, and family. But the unexpected can and does happen.

So, from stopping theft to preventing fires, here are a few tips from the experts that can help keep your family safe this time of year.

Fire safety comes with the territory of the holidays. Trees and lighting can both be dangerous if not done correctly.

When selecting a real tree, be sure to buy one that is fresh. This means you should look for a fragrant tree that is a rich, deep green color. Also, the trunk should still be sticky with sap. Old trees are dry and brittle, and thus can be very flammable.

To keep your tree fresh throughout December, be sure to keep it immersed in water at all times. If needles start to fall off, give it more water!

For those with artificial trees, don't use electrical lights on metallic trees! And be sure to always turn your lights off you go to bed or leave the house.

Another fire hazard are those beautiful, twinkling lights. Every year's decorating should begin with checking light strands for cut or frayed wires.

Also, be sure that lights are used as marked. Indoor lights are for use inside only. Outdoor lights are kept outside.

Next, don't overload your outlets. Three sets of lights to an extension cord is plenty!

Another looming threat during the holidays is home burglary. Thieves prey on those that travel during this season.

To prevent thieves from targeting your home, you need to make your schedule unpredictable. That means keep your routine varied. Come home randomly for lunch one day a week. Leave for work at different times.

And to give the appearance that someone is always home, leave on a tv or use lights that are on timers.

Never post on social media that you'll be out of town or away from your house for extended periods of time.

And as added measures of security, consider installing an alarm system, or having a house-sitter stay at your home or check on it periodically during your vacation.

Use these tips to have a safe and merry holiday season!

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

It's a Good Time to Buy a Vacation Rental

Miro Fitkova (Fitkova Realty Group) — Tue, 30 Nov 2010 14:32:22 -0800

Right now, the languishing housing market offers some lingering upsides for those who have a pot of investment dollars to burn.

Home prices are low, financing is cheap and inventories are bulging.

The planets have aligned over vacation rental acquisitions.

The road's been rocky for real estate in recent years, but that means it's a buyer's market and good time to grab a piece of the American Dream as a solid, long-term investment.

"Vacation homes are almost always a good investment," says vacation rental guru Christine Karpinski, director of Owner Community for HomeAway.com, the global leader in vacation rentals, hosting some 540,000 vacation rental listings.

"First, if you're looking for a good long-term investment, real estate tends to be a good bet. Second, vacation properties have the ability to pay for themselves, and owners often earn a profit in rental income. Third, the investment comes with the desirable perk of having a place at the beach or in the mountains to call your own," says Karpinski, a vacation rental owner herself and author of "How to Rent Vacation Properties by Owner, 2nd Edition: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment" (Kinney Pollack Press, $26.00).

Vacation rental space is the place more and more travelers opt for when they want a bargain getaway with accommodations that provide all the comforts of home.

According to Karpinski, here's why you want to move on that vacation rental now.

Prices are as low as they are going to go.

Property prices are as low as they've been in ten years. Procrastination won't keep them low. Analysts say the housing market is scraping bottom and poised to move up.

"I don't take the plunge now, I'll look back ten years from now and say, 'Why the heck didn't I buy back in 2010?'" says Karpinski

Interest rates are likewise as low as they are likely to go.

Erate.com had the interest rate for 30-year, conforming fixed rate mortgages at 4.23 percent on Oct. 25 and says rates on non-owner occupied properties is about a half a percentage point higher -- with a virtually mandated 20 to 30 percent down payment.

Markets are flush with inventory.

The slow economy and even slower housing market has left vacation markets brimming with buying opportunities, from sellers looking to move on or up, to foreclosures that warrant careful scrutiny.

"One caveat: Before you let yourself fall in love with a property, make sure it is legal to rent it out as a vacation home. Some areas and homeowners' associations do not allow short-term rentals," Karpinski warns.

Good help is easy to find.

The recession weeded out incompetent, fly-by-night real estate people who jumped on the booming market bandwagon. Those who survived have been around the block a few times and know the game.

Say Karpinski, "Real estate professionals still working today are the top in the business," says Karpinski.

Renting a vacation property is easier than ever.

Vacation rentals are more popular than ever, thanks to their home-away-from-home allure but also because the Internet has made them eminently more visible.

"More and more consumers are choosing to stay in cozy condos, cabins, and chalets instead of cramped, impersonal hotel rooms when they travel. And as market demand has surged, organizations like HomeAway.com have sprung up to help connect vacation homeowners with these potential renters," Karpinski said.

The online vacation rental portals help owners market homes by posting photos, descriptions, testimonials and other marketing information to attract vacationers.

HomeAway.com also offers vacation rental owner support. It's Owner Community offers property owners expert information about proven best practices, setting up your business, upgrading amenities on a budget, handling complaints and cancellations and more.

After the Gulf oil disaster, HomeAway.com set up the unique HomeAway Gulf Coast Response Center to fill a void left by major media and to help Gulf area vacation property owners through the lost income claims process, to provide insight from experts and to offer a forum for sharing concerns, stories and frustrations.

"Ten years ago vacation rental owners were on an island, but now it's easy to get the support you need," said Karpinski.

Buy now, beat the 2011 peak season rush.

The longer you wait to buy, the more likely mortgage rates and prices will rise and the good properties will be snatched up.

Buy now and you've got plenty of time to prepare yourself and your property for thepeak rental season. Seasoned vacation property owners' rental fees generated during the twelve weeks between Memorial Day and Labor Day pay their mortgages for an entire year. Most inquiries come in between January and March.

"By buying now, you will have a cushion of time to get the home ready for your guests, take great photos for your property listing, and start marketing it to potential renters," said Karpinski. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Broderick Perkins

Mortgage Rates Settling Above All Time Lows

Miro Fitkova (Fitkova Realty Group) — Tue, 30 Nov 2010 14:15:08 -0800

30 year fixed mortgage rates are settling at levels significantly higher than all time lows set just weeks ago. Conforming 30 year fixed mortgage rates today are at 4.25% for well-qualified borrowers who pay a standard origination fee (points) of .07 to 1%. Current 15 year fixed mortgage rates today are at 3.75%.

FHA mortgage rates, which are driven by the same mortgage-backed securities prices as conforming fixed mortgage rates, are also up about a quarter percent higher than they were two weeks ago and are nearly identical to conforming mortgage rates today. Today's California 30 year fixed FHA loan rate is 4.125%. MI and other FHA fees make FHA loans more expensive than conforming mortgages.

Jumbo mortgage rates have avoided the spike that has hit conforming and FHA interest rates. Current 30 year fixed jumbo mortgage rates remain at a record low 4.875%.

MBS prices, which move mortgage rates in the opposite direction, have been gaining on low inflation, falling stocks, Euro debt concerns, and tension in Korea, helping to stabilize mortgage rates which had been rising quickly. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Ed Ferrara

Active Adult Housing Sector is Stalled

Miro Fitkova (Fitkova Realty Group) — Tue, 30 Nov 2010 14:10:56 -0800

Even as members of the baby boomer generation make their way into retirement, the active adult housing sector is stalled.

Builder confidence in the 55+ housing market has been tepid. The National Association of Home Builders studies this effect in the 55+ Housing Market Index, which evaluates markets based on a scale "50" or greater as "good confidence" and less than "50" indicating "poor confidence." Results for the third quarter 2010 weren't stellar, with the index basing its findings on current sales, prospective buyer traffic and anticipated six-month sales.

According to the National Association of Home Builders' Chief Economist, David Crowe, "While we have anecdotal information that some local 55+ markets are beginning to rebound, the third-quarter data show that national conditions for this sector have not yet turned the corner. Real improvement won't happen until we have better employment numbers, and consumers who are more confident of keeping their jobs. Those consumers will buy the homes of the 55+ age cohort, so that the mature buyers will be able to move to more appropriate housing."

As seen in other segments of the economy, much of the success of business is reliant on the overall state of our job market. Currently, unemployment is nearly 10 percent, with more jobless claims being filed each week.

On the Housing Market's "50" scale, the index is now a 15, with all categories seeing drops in confidence since last quarter. Overall, however, builders gave the majority of their confidence to expected sales.

Other segments of the active adult market were low as well. "The 55+ multifamily condo HMI also showed continued weakness, with an index level of 10, down from the previous year's 13. All three index components – current sales, expected sales and buyer traffic – declined during this period," the NAHB reports.

According to the National Association of Home Builders, the bright spots of the market continue to be multifamily rentals. Though production is low and expected to remain so, demand is in the high 20's. This has been the trend for the last year. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

A Housing Analyst's Top 10 Forecasting Tips

Miro Fitkova (Fitkova Realty Group) — Mon, 29 Nov 2010 14:43:20 -0800

Keeping track of Canada's volatile housing market hasn't been easy during the last several years. After almost a decade of extremely strong growth, the market took a dive during the recession. In 2009 it roared back and made up everything it had lost, catching most observers by surprise. Then 2010 was a tale of two markets – busy and active during the first half, then dropping into a stable, calmer state in the second half of the year.

Adding to the confusion is that everyone in the housing industry issues monthly reports and forecasts – the local, provincial and national real estate boards and associations; real estate companies; banks; mortgage brokers; home builders and their associations; private consultants – everyone has their say about what the market is doing and where it's going. It's not unusual to see a news headline stating the market is great, and another claiming the market is in the tank – on the same day.

Throughout it all, Canada's federal housing agency is responsible for predicting where the real estate markets are going, by providing market forecasts. It has done pretty well, nailing its predictions within about five per cent of the final numbers in recent years. Ted Tsiakopoulos, Ontario's regional economist for CMHC, shared his top 10 tips for forecasting the real estate market.

1. Beware of year-over-year comparisons. Comparing what's happening now to a year ago has its pitfalls because it doesn't take into account what happened during that year, says Tsiakopoulos. Such comparisons can make a balanced, stable market look like a disaster if compared to a booming market, or like a boom if the year before was extremely slow.

2. Track the trend lines. Headlines in the Toronto market in the fall of 2010 claimed that average prices were still climbing, since they were up from the same month a year before. But in fact, prices had peaked in the spring and were dropping slightly month-to-month. It's important to know the current monthly market trends.

3. Discount seasonal activity. "People love to buy in May," says Tsiakopoulos. In the Toronto market, May activity is usually about 35 per cent higher than average, as families prepare to move in the summer so their children can begin the fall term at their new schools. Conversely, sales drop off in December when people are preoccupied with the holidays and the winter weather kicks in.

"Forget the raw sales data and whether the sales and prices are up or down during those months – it just creates noise in the data," says Tsiakopoulos.

4. Remember the "handoff" effect. "The beginning of a year is probably going to start the same as the previous year ended," says Tsiakopoulos. Beware of making snap comparisons of one year over another.

5. Build in scenarios. "When you are forecasting, you are dealing with very volatile numbers," says Tsiakopoulos. "You have to look at a number of economic drivers and build in a number of different scenarios." For example, what impact will a hike in interest rates have on the market? An election? A major plant closing in a local market?

6. Units under construction are not necessarily a measure of supply. Toronto's downtown core has dozens of construction cranes building high-rise condominium buildings. It's easy to look at all this construction and wonder where the buyers will come from to fill all those buildings, and from that determine that the condo market is over supplied. But lenders typically do not provide financing to begin construction until up to 75 per cent of the buildings are presold. Some of the units will find their way back to the resale market as investors cash in their equity.

7. An aging population doesn't necessarily mean a supply glut and a price collapse. Tsiakopoulos says that most baby boomers are still many years away from retirement age, but even then, not all of them plan to move. Figures show that homeownership remains strong until the age of 75. The so-called "echo boomers" – the children of the baby boomers – are a large population group that should keep housing demand strong for many years.

8. A rule of thumb is that if mortgage interest rates rise by one per cent, housing sales will drop by five to seven per cent.

9. Housing sales rise six to nine months after jobs are created.

10. Immigrants buy a home three to four years after arriving in the country.

Perhaps the most important thing to remember is that all real estate is local. Average house prices for a country, a province or even a city don't matter as much as the prices on your street, which can vary widely from the prices a block away.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Jim Adair

Short Sale Disclosure Ruling Raises Other Questions

Miro Fitkova (Fitkova Realty Group) — Mon, 29 Nov 2010 14:24:46 -0800

Suppose you had a listing and that, because of some fact about either the seller(s) or the property, you believed that any transaction would stand a greater than normal chance of failing to close. (Yes, I've had one of those too.) Would you have a duty to disclose those circumstances to a prospective buyer even before they entered into contract? Apparently, "yes", if you do business in California's 4th Appellate District.

A very recent appellate decision (Holmes v. Summer) raises troublesome questions for real estate agents and brokers. Even if one agrees with the outcome in this particular case, the principles and reasons invoked could lead to problematic results in future situations.

Phil and Jenille Holmes (Buyers) entered into a contract to purchase a property listed by Seiglinde Summer and Beneficial Services, Inc. (Brokers). The buyers saw the listing on the MLS website where it was listed for sale at $749,000 - $799,000. A purchase price of $749,000 was agreed upon. According to the court records, "Unbeknownst to the buyers, the property was subject to a first trust deed in the amount of $695,000, a second deed of trust in the amount of $196,000, and a third deed of trust in the amount of $250,000, for a total debt of $1,141,000, and the lenders had not agreed to accept less than the amounts due under the loans in order to release their deeds of trust. According to the buyers, after they signed the deal with the seller, they sold their existing home in order to enable them to complete the purchase of the seller's property. Only then did they learn that the seller could not convey clear title because the property was overencumbered." The buyers, of course, filed a law suit. However, they filed it against the brokers rather than against the seller. The brokers then filed a demurrer, essentially a motion to dismiss the suit even if the factual allegations of the buyers were true. "They argued that the lawsuit was a disguised effort to require the brokers to guarantee the seller's performance. They also asserted that if the seller decided to sell the property at a loss, such that it would have to come up with cash to close the transaction, but then changed its mind, that was a business decision for which the broker could not be held liable."

The court agreed with the broker's demurrer, so the sellers filed an amended complaint. At the second hearing the trial court expressed the same sentiment as at the first. "I think you've got a great lawsuit against the seller of the property, but the seller of the property is not a named defendant in this case. I'm guessing that the seller, because the seller is upside down in this, is basically judgment proof. And so you're searching around for a deep pocket. The deep pocket is the brokerage. But the brokerage appears… under the circumstances to have done nothing that breached any duty to your client, certainly did not engage in the fraud that you allege. Basically, I think the ruling in sum is that you picked the wrong target here." It then upheld the demurrer to the amended complaint.

But the appellate court disagreed with the trial court. It reversed the trial court decision, holding that the brokers did, indeed, have a duty of disclosure to the buyers.

The discussion in the appellate decision is, to say the least, wide-ranging. A multitude of issues is discussed and numerous opinions and interpretations are rendered. Many of them have the characteristics of being both questionable and of having the potential for troublesome applications in future situations.

The court wrote, "…the brokers contend that to impose a duty upon them in this instance would be to fashion a rule that brokers are required to divine when sellers may breach their agreements and to disclose their forecast to the buyer." "Not at all," the court said. "Rather, the rule we articulate in this case is simply that when a real estate agent or broker is aware that the amount of existing monetary liens and encumbrances exceeds the sales price of a residential property, so as to require either the cooperation of the lender in a short sale or the ability of the seller to put a substantial amount of cash into the escrow … the agent or broker has a duty to disclose this state of affairs to the buyer…"

Now, I can imagine a number of people nodding their heads in agreement. Certainly, it is commonplace – though not universal – to disclose that a property will be a short sale. (That is more for the purpose of warning people that they are in for a long and frustrating experience than it is to inform them of the likelihood of failure.) But consider this: suppose that the agent has reason to believe that the seller is going to bring in the cash to close. Then would it be necessary to disclose that the property is currently upside down?

The appellate court opinion has nothing to say on the matter of whether the seller had the ability and the intention to make up the difference. We do know this: the first offer (for $700,000) had a sixty day escrow, and the seller's counter offer shortened it to thirty days. That would at least suggest that the seller was not intending to wait for the lenders to give short sale approval.

If the court had said that the brokers had a duty to disclose if they had good reason to believe that the seller couldn't or wouldn't cure the shortfall, that might be reasonable. But, in the absence of such knowledge, the broker is, indeed, being asked "to divine" that the seller is likely to breach the agreement.

Anyone who has been in the business for a while has had the experience of having a seller and/or a buyer breach an agreement. Usually this is a surprise, and a disappointing one at that. If an agent had a reason to think it likely that a breach would happen, maybe the agent would have a duty to disclose that to the other party. But, if the agent thought it were likely, the agent probably wouldn't be in the transaction anyway.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Bob Hunt

Passive Solar Homes

Miro Fitkova (Fitkova Realty Group) — Mon, 29 Nov 2010 14:10:09 -0800

It's all about choices when you decide to build your next home. From craftsman to colonial, what you choose for your home says a lot about you.

As energy prices rise and concern over the environment touches home for many Americans, one choice is gaining popularity. And that is passive solar homes.

They do not require any fancy photovoltaic panels, inverters, or batteries. It is simply the design of your home that will bring you energy savings.

Passive solar homes harness the power of the sun. They are designed to collect, store, and distribute solar energy. And they do this through strategically placed south-facing windows (otherwise known as the aperture), the use of thermal mass, absorbers, proper distribution of heat, and of course controlling the amount of sun and heat that actually enters the home.

Let's break those five elements down a little further.

By having lots of windows facing south, you are enabling your home to capture optimal solar heat.

Once the heat is captured, it must be absorbed. Brick walls or slab floors covered in tile (an exposed surface) work their magic by absorbing the natural energy.

Then "thermal mass" is what stores the energy. These are the materials below the surface.

Next, the solar heat must be distributed to other areas of the home. Many homeowners choose to use ductwork, vents, and fans.

And finally, the home must work to minimize heat during the super hot summer months. This can be done through awnings, fans, and shades.

How passive solar works may not be important to you, but the savings you'll see in your electric bill will be.

Be sure to talk to your builder or general contractor about passive solar house plans and what options are available.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

Fall May Bring Serious Buyers

Miro Fitkova (Fitkova Realty Group) — Wed, 24 Nov 2010 14:45:33 -0800

As the year winds down, many homeowners fear that now could be a bad time to sell their home. While it’s true that the holidays can deter some folks from house hunting and making a major purchase—don’t give up.

If your house is on the market, step up the action plan to draw attention to it. Don’t let the holiday blues make you feel like there’s no hope. Homes are sold and bought this time of year. But the ones that get snatched up are the ones that are enticing to buyers.

Because this is a very busy time of year with personal travel and holiday celebrations, many real estate experts note that if you have buyers dropping by your open house or making an appointment to view your home, there’s a good chance they’re serious buyers.

There are some things you can do to make your home more “showable”. We often say in the real estate industry, “the way you live in a home is not the way you stage a home.”

So, while this time of year often brings out all the holiday decor, there is such a thing as too much holiday cheer. No, I’m not the Grinch. It’s just that not all buyers celebrate the same holidays.

A good rule of thumb, is to keep decor simple and subtle. If you celebrate Christmas, go ahead and put a tree up but don’t put one up in every room. Remember that buyers will be looking at your home and imagining their own holiday celebrations there. So, be sure to leave them room to envision their lives in the home.

This goes for the outside too. Holiday lights can be placed outside very tastefully but ditch the huge inflatable characters that make it look like your yard is an amusement park. Instead, opt for a nice holiday wreath and some subtle seasonal decor. Keep in mind that curb appeal is what gets buyers in the door. If your home isn’t appealing from the outside, buyers won’t bother to stop for a look inside.

Stash the gifts. If you usually put them under the tree or around the house, save them for the day of your celebration. There are two reasons: presents take up precious floor space and they are a distraction. It’s a good idea to keep as many personal belongings as possible in a safe, private place.

Especially in cold weather areas, cinnamon pine cones or some other mild potpourris can be a pleasant welcome. But don’t go overboard with different fragrances in every room.

Another nice touch is to spruce up the mantle. However, if you usually hang stockings with your family’s names on them, you might consider using less personal ones while showing your home. It’s the same reason, stagers will put away your personal photos—to create a space where buyers can imagine their photos and belongings in.

Listing your home for sale during the holidays doesn’t have to make you blue; in fact it can truly brighten your spirits by putting some green in your bank account. Just be sure to focus on making your home a buyer’s dream this holiday season. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Phoebe Chongchua

Real Estate Outlook: Gloomy Numbers and Mixed Forecast

Miro Fitkova (Fitkova Realty Group) — Wed, 24 Nov 2010 14:31:25 -0800

It's a mixed, and somewhat gloomy, forecast for the housing market this week.

Concerns over the Fed's announcement to buy up Treasury bonds had far reaching effects. According to The New York Times, "When the United States Federal Reserve announced last week that it would buy $600 billion in Treasury bonds to help bolster the economy, it quickly came under attack from Germany, Brazil and China, which said America was trying to devalue the dollar to the detriment of other nations’ exports." Others worry it may undermine the global economic recovery.

Analysts also contend that the Fed's actions could signal our level of indebtedness to other countries, who have been actively engaged in buying up Treasury bonds.

But governor Kevin Warsh, from the Federal Reserve Board of Governors, took concerns even further. At the Securities Industry and Financial Markets Association, he spoke about how "after a cyclical boost early this year, the current state of the U.S. economy is unimpressive: modest growth in output, high levels of unemployment, stagnant wages, low levels of consumer and business sentiment, and volatile financial markets." He says what some economists call "the new normal," he calls the new malaise.

Warsh made it clear, however, that sole responsibility does not lie on the Federal Reserve to invigorate the market. He said policymakers "should set their sights higher than merely coaxing businesses to do today what they would otherwise do tomorrow." He noted that the supply side of our economy deserves more of their attention.

In housing, pending home sales are down, as well. The National Association of Realtors latest Pending Home Sales Index indicated that sales slipped 1.8 percent in September.

Lawrence Yun, NAR chief economist, said there is a mix of factors in the housing market. "Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead," he said. "Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. However, tight credit and appraisals coming in below a negotiated price continue to constrain the market."

Regionally, pending sales fell in all areas except the West, which instead saw a 3.5 percent rise.

All regions are still around 20 to 30 percent below pending sales for September 2009.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

Appraisers up Next for 'Wall Street Reform' Brand of Regulatory Do-Over

Miro Fitkova (Fitkova Realty Group) — Wed, 24 Nov 2010 14:19:33 -0800

Tolling the death knell for the Home Valuation Code of Conduct (HVCC), the Federal Reserve Board recently announced final regulatory orders for real estate appraisers.

The interim final rule for appraisers, part of the massive federal regulatory overhaul known as "Wall Street Reform" (officially, the Dodd-Frank Wall Street Reform and Consumer Protection Act), is designed to keep appraisers independent, free from third party pressure, honest and compensated fairly.

We'll see.

The Fed's interim final rule:

• Prohibits coercion and other similar actions designed to cause appraisers to base the appraised value of properties on factors other than their independent judgment.

• Prohibits appraisers and appraisal management companies hired by lenders from having financial or other interests in the properties or the credit transactions.

• Prohibits creditors from extending credit based on appraisals if they know beforehand of violations involving appraiser coercion or conflicts of interest, unless the creditors determine that the values of the properties are not materially misstated.

• Requires that creditors or settlement service providers that have information about appraiser misconduct file reports with the appropriate state licensing authorities.

• Requires the payment of reasonable and customary compensation to appraisers who are not employees of the creditors or of the appraisal management companies hired by the creditors.

Appraisers have been heavily pressured years -- before, during and after the boom -- to do the home valuation bidding of mortgage lenders, real estate agents, even buyers, sellers and refinancing homeowners who needed home values based on risky assumptions rather than true worth factors.

Bowing to pressure to over-value homes was one of the factors contributing thehousing market crash that spawned the greatest recession since the Great Depression.

Amid howls from appraisers and other real estate industry quarters, the Federal Housing Finance Agency (FHFA) implemented HVCC in May 2009, after the housing bust, purportedly to improve the independence of appraisers by prohibiting lenders and third parties from influencing appraisers' work.

Unfortunately, the code of conduct cut deeply into appraisers' income and, as the housing market floundered, it worsened working conditions for honest, hard workingappraisers, who have since been looking forward to new regulations.

Appraisers deemed the HVCC as a bogus effort to clean up the industry, because it didn't focus enough on appraiser competency; it undercut professional relationships between honest appraisers and reputable mortgage professionals; it increased the influence of bottom-line oriented appraisal management companies; and it encouraged the use of glossed-over appraisals that didn't reflect the true value of a property.

By and large, for those and other reasons, real estate agents, new home builders, even mortgage brokers and others likewise detested HVCC.

In advance of the new interim rules, Fannie Mae, working FHFA and Freddie Mac released its own Appraiser Independence Requirements -- new rules for mortgage companies selling loans to the government-sponsored enterprises -- which also overwrite HVCC rules.

Fannie's rules are in line with the new federal regulations, but all conventional, single-family mortgage loans must still be in compliance with HVCC until the release of the final Federal Reserve rules, effective April 1, 2011.

A public comment period on the new rules ends in December, but the interim rules will likely take hold with few changes. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Broderick Perkins

Equilibrium Communities Initiative: Your Start Point?

Miro Fitkova (Fitkova Realty Group) — Tue, 23 Nov 2010 13:53:35 -0800

In 2009, housing activity, including new home construction, and the sale and renovation of existing homes, contributed C$307 billion to the economy. According to the 2010 Canadian Housing Observer, a publication released by the national housing agency, Canada Mortgage and Housing Corporation (CMHC), this housing activity was more than one-fifth of Canada's total gross domestic product.

Since housing represents such a significant segment of the national economy, the lack of a national housing policy seems strange, but through CMHC the federal government does keep itself associated with many community-based housing initiatives. By announcing CMHC's involvement in promoting these projects, the federal government periodically attracts media attention to housing—not enough attention, but it's a start and there is room for improvement.

One of the latest "newsworthy" CMHC involvements is the EQuilibrium^TMEQuilibrium^TM Communities Initiative (ECI), launched on June 1, 2009. This is a three-year, C$4.2 million collaboration of Natural Resources Canada (NRCan) and CMHC under the Government of Canada's ecoACTION umbrella. ECI provides financial assistance for technical and promotional activities, not capital construction costs. Target projects are selected because of their push to improve on energy efficiency, environmental protection, land-use planning, and sustainable transportation approaches.

The Initiative continues momentum created by the initial EQuilibrium^TM Sustainable Housing Demonstration launched by CMHC in 2006 with support from NRCan. These government programs help private developers to "bring to market neighbourhoods that are affordable, energy-efficient, and environmentally sustainable."

Those interested in having more affordable, accessible housing in their neighbourhood and community may see opportunity in watching how and what the federal government does with this Initiative.

Does your group have constructive ideas on what government's role in housing development could evolve into?
Can you see how social media could solve some of the challenges that non-profit housing projects face in developing the range of housing needed in every community?
CMHC offers more than 60 years of experience to help Canadians house themselves and their neighbours. Has enough advantage been gained by using this resource?
Can you see opportunities that are being overlooked?
Even though, the Honourable Diane Finley and the other government organizations have not solicited your feedback, perhaps it's time to start a dialogue with them, or your local Member of Parliament.

For instance, the EQuilibrium^TM Communities Initiative was designed to showcase Canadian residential developers, planners, designers and municipalities who are intent on improving energy efficiency and the environment. ECI held a national competition and selected six projects that improve on community planning, water management and financial viability, and that will create sustainable, energy-efficient communities. Funding awards have been made to four:

Ty-Histanis Neighbourhood Development, near Tofino, Vancouver Island, British Columbia The Tla-o-qui-aht First Nations received C$433,990 to support this project with its central community core of multi-family buildings, a school, health clinic and community centre, designed to achieve a 50% reduction in energy consumption.
Regent Park, Toronto, Ontario This urban revitalization, which will transform Canada's oldest and largest social housing community into a mixed-income development for 5,100 households, received C$550,000.
Ampersand, Ottawa, Ontario The compact, mixed-use South Ottawa development received C$550,000.
Station Pointe, Edmonton, Alberta "Research into 'passive house' designs and 'district energy systems' as well as on-site waste water treatment will help us reach our target of a 75 percent reduction in energy use while maintaining affordable home prices," said Brian Scott, Vice-President of The Communitas Group Ltd. The developer received C$481,000 to support the community renewal project located on former industrial lands, and planned as a transit-oriented development which includes 220 affordable and market homes. Communitas, which has worked with a range of housing clients, including continuing housing cooperatives, home ownership cooperatives, mixed-tenure cooperatives, community-based land trusts, co-housing groups and non-profit companies on projects in Alberta, the Northwest Territories and Nunavut, has earned a reputation for involving end-users in the development process.

To receive ongoing information and results regarding EQuilibrium^TM Communities Initiative, send an email to: equilibrium.communities@nrcan-rncan.gc.ca.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by PJ Wade

Guarantors of Another's Debt Need to be Very Careful

Miro Fitkova (Fitkova Realty Group) — Tue, 23 Nov 2010 13:41:51 -0800

Loan guarantees are likely to be sought in an economy like this one. While the good news is that interest rates on mortgages and many other loans are at all-time lows, the not-so-good news is that credit has been extremely tight and loans are hard to come by. In many markets – certainly the local one here – it has become more difficult to obtain an extension of credit even in such a commonplace matter as a residential lease. Landlords want to see FICO scores; they don't like short sales or foreclosures in an applicant's history; they even want their tenants to have a seasoned and steady job!

In this kind of environment it is not unusual that a creditor may want some third party to guarantee the debt of a borrower. Parents may be asked to guarantee a lease for one or more of their offspring. (And which would you prefer: that you guarantee their lease, or that they move back in?) In-laws may be asked to guaranty some debt taken on by newly-weds; and a person venturing into a new business may need to turn to friends and/or family to guarantee a loan for start-up costs.

Guaranteeing a loan, just like providing a loan, is one among the many traditional ways that people – sometimes related and sometimes not – help others getting started in life and/or business. But doing so should not be taken lightly. Loan guarantors need to fully understand the terms of their guarantee.

A recent case from the California courts (Bank of America v. Stonehaven Manor, LLC et al., Third Appellate District) is instructive in this regard. Here, as is often the case, we folks of normal means can learn something from the mistakes made by players in the big (financial) leagues – people who should have known better.

In June of 2007, the Bank of America had extended a $150 million line of credit to Beck Properties, Inc. At the same time it entered into a guarantee agreement for the debt with three guarantors: Stonehaven Manor, LLC, Beck Investments Co. (BIC), and Linda C. Beck Holding Company, LLC.

Later that year the borrower defaulted. According to the court record, "A few months later, Bank sued guarantors BIC and Stonehaven on the Guaranty, and obtained an attachment against the property of each of them for the alleged debt balance of approximately $90 million. Bank did not seek attachment against Borrower or against guarantor Holding Company."

BIC and Stonehaven cried "foul" so to speak. They didn't think it was right or fair that they should be pursued while the original borrower and one of the guarantors stood by. However, the trial court ruled against them; and the appellate court sustained the trial court's decision.

There are two issues here that other, perhaps more pedestrian, potential guarantors want to keep in mind. More accurately, there is one main issue, and two examples of it. The main issue is simply this: IF YOU ARE GOING TO GUARANTEE A LOAN, BE SURE YOU READ THE DETAILS OF THE GUARANTEE CAREFULLY.

In a typical loan guarantee situation, one that follows the outline in the civil code, a creditor first has to pursue the security tendered by the borrower before the creditor can go after the guarantor(s). Suppose your brother-in-law borrowed money to start a business. He put up his home for security, but the creditor also wanted a guarantor. So you guaranteed the loan, and offered your home as security for the guarantee. In the typical situation, if your brother-in-law defaulted, the lender would first pursue the security (his home) that your brother-in-law had put up. Only if that failed to satisfy the debt would the lender then turn to you.

In the Stonehaven Manor case, however, the guarantors had, in the documents they signed, waived their right to this benefit. And, as the court pointed out, "That a person may waive the advantages of a law which is intended for his benefit is a clearly established rule of law." As we have noted, these parties were big, presumably sophisticated, players. But they didn't really pay attention to what they were doing when they signed the terms of the guarantee. We all should learn from this. Otherwise, an informed lender might ignore your brother-in-law's upside down house as security, and proceed directly after yours.

The other aspect of the proceeding that turned on the terms of the guaranty was that each of the guarantors agreed that they were "…jointly and severally, unconditionally … guarantees to [Bank]…" The guaranty specified that the bank "may pursue any Guarantor hereunder without being required (a) to pursue any other Guarantor hereunder…" "Guarantor acknowledges and agrees that Guarantor may be required to pay and perform the Guaranteed Obligations in full without assistance or support from Borrower or any other Person…"

Simply put, the bank didn't have to first pursue the borrower or look to any of the other guarantors. Suppose you and your offspring's in-laws had both put up your homes as security for the debt your newly-wed kids took on. If things went sour, and you had better equity, the lender could go directly after you, by-passing the others, if you had signed a deal such as Stonehaven Manor did.

The point is simple. If you are going to guarantee a loan – which may be a terrific thing to do for someone – be sure you read the terms of the agreement carefully. Have a trusted attorney review it. You could be glad you did.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Bob Hunt

Extension of "Operation Home Relief"

Miro Fitkova (Fitkova Realty Group) — Tue, 23 Nov 2010 13:33:23 -0800

The National Association of Realtors has extended its successful "Operation Home Relief" campaign, which is designed to give military service families a voice by contributing financial counseling and aid to help keep them in their homes. Though launched just last month, the NAR has already matched $20,000 in donations.

The NAR has used this Facebook campaign to promote USA Cares, an organization dedicated to providing aid to help post-9/11 veterans and active-duty military personnel avoid foreclosure.

Through the consumer website, HouseLogic.com, a free comprehensive website about homeownership for homeowners, Operation Home Relief aims to increase awareness, rally support and raise funding that provides foreclosure assistance in the form of financial counseling and grants to post-9/11 active duty U.S. military service personnel, veterans and their families."

"NAR believes that any family who loses a home to foreclosure is one family too many," said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. "Foreclosures don't just affect the families that lose their homes; a foreclosure lowers the value of every home in the surrounding neighborhood. That's why we're so pleased with America's response to Operation Home Relief, and why we're committing additional funds to support military families who need assistance."

What financial hardships do service members face? The NAR reports:

Reserves called to active service often find themselves earning far less money in the military than they did at their civilian jobs.
Spouses often have to cut back on working hours to take care of children, since they have no one to share childcare duties with.
Service members may find jobs gone when they return—the factory they worked for is now padlocked.
Service members may have injuries that prevent them from returning to the same jobs they had, and various disability programs don't make up the difference. Meanwhile, spouses have to take care of them, and
Service members' homes have lost significant value, making refinancing difficult.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

Turning A Tract Home Into a Custom Home

Miro Fitkova (Fitkova Realty Group) — Mon, 22 Nov 2010 17:19:45 -0800

For many, building their own home is just a dream. Financing the construction, buying the land, and overseeing the project are too overwhelming. So instead, many buyers purchase tract housing. Making that tract house look like a custom home is easier than you might think.

Debbie Kaplan loves her remodeled tract house. When you step inside it, you immediately feel like you're in a custom home. Amenities such as a smart coffeemaker that is plumbed so you never have to fill it, heated floors, a built-in trash compactor, a pantry, an over-the-stove pot filler, and a surround sound audio system that Kaplan controls with her iPod.

"There is nothing that we did that we would want to change,"

"Generally, the first thing is opening up the floor plan and creating a great room," says Design Consultant, Steven Mark of Marrokal Design & Remodeling.

He says in the past homes had more compartmentalized living areas. The floor plans were more confined and less flowing.

"We had smaller kitchens, small formal dining rooms, small living rooms, and small family living rooms--that people generally didn't use," says Mark.

The San Diego design-build firm is changing that. Homeowners are opting to open up the areas, making the house seem larger, and bringing the family together.

"Now, we open that up and have the living, the dining, and the cooking all together so the family can be altogether and share the space.

"When you're redesigning your house you can do all kinds of things," says John Davies, Dir. of Design for Marrokal Design & Remodeling. He says in some of the tract homes the kitchen may be on one side of the house and after their remodel it's in a completely new location.

Another sign of a custom home is utilizing the space outside. So for instance, if you have a master bedroom that is adjacent to a large backyard, many homeowners choose to open up that space.

"Quite often we'll create covered living spaces outdoors," says Mark.

In good climates, homeowners use those areas, that often attached to the house, just like indoor living areas. "People can have outdoor furniture, people can eat outside, have fireplaces, even have television sets. I find that my clients use those spaces a lot," says Mark.

Making a tract house into a custom home makes it feel more like yours. "It feels really good to come home," says homeowner, Pat Jones.

She bought her home in the eighties and remodeled it to suit her needs. Today, the home looks and feels like a custom home instead of a cookie-cutter house.

But, like many homeowners, she contemplated remodeling or selling her home in order to get what she wanted.

"When we actually went out and looked a little bit, we finally realized we'd probably be buying a fixer-upper even if we paying $800 to $1 million--everything still needed to be upgraded.

So if you're wanting a custom home but find your budget is more suitable for tract housing, know that some easy remodeling projects can change the look and feel of your home drastically.

"What was important to us was to be able to use all the space in our home. We're pretty much locked in here on a 60 x 120 foot lot. So we knew there wasn't room for a lot of expansion," says Jones.

"It's important for people to have a home that is special and custom designed to complement their way of life," says Mark. For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Phoebe Chongchua

Mortgage Rates Rise For the First Time in Eight Weeks

Miro Fitkova (Fitkova Realty Group) — Mon, 22 Nov 2010 15:21:17 -0800

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage (FRM) and the 15-year (FRM) rose dramatically this week, as did the 5-year ARM. The 1-year ARM remained unchanged from the previous week.

30-year fixed-rate mortgage (FRM) averaged 4.39 percent with an average 0.9 point for the week ending November 18, 2010, up from last week when it averaged 4.17 percent. Last year at this time, the 30-year FRM averaged 4.83 percent.

15-year FRM this week averaged 3.76 percent with an average 0.7 point, up from last week when it averaged 3.57 percent. A year ago at this time, the 15-year FRM averaged 4.32 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.40 percent this week, with an average 0.7 point, up from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 4.25 percent.

1-year Treasury-indexed ARM averaged 3.26 percent this week with an average 0.6 point, unchanged from last week when it also averaged 3.26 percent. At this time last year, the 1-year ARM averaged 4.35 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, reports, "Rates on 30-year fixed-rate mortgages were up to the highest level since early August and rates on shorter-maturity loans rose as well, although by somewhat lesser amounts. Retail sales rose by nearly twice the consensus in October and represented the strongest gain since March. Moreover, consumer sentiment, as measured by the University of Michigan, ticked up in November to the highest level since June."

He continues, "The housing market is showing some potential gains as well. Although new construction on one-family homes dipped 1.1 percent in October, homebuilder confidence rose in November to the strongest level since June, according to the NAHB/Wells Fargo Housing Market Index. In addition, median house prices showed positive annual growth in 77 out of 155 metropolitan areas in the third quarter of this year, with 11 exhibiting double-digit increases, according the National Association of Realtors ®; only 30 cities experienced positive annual gains in the third quarter of 2009."

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Green Living: Water Purification

Miro Fitkova (Fitkova Realty Group) — Mon, 22 Nov 2010 14:57:27 -0800

The safety of water in the developed world has grown by leaps and bounds over the last century. And while many countries, unfortunately, still deal daily with issues of water contamination, most Americans have access to clean water.

This luxury, however, may have caused some level of complacency concerning what goes into our water and thus into our bodies.

The copious amount of prescription drugs, bacteria, and hazardous chemicals (detergents, bleaches, etc) that are dumped into the water supply each day increases exponentially as our population grows. If the system works correctly, these chemicals are identified and processed out before water is directed into drinking supplies. But what happens when new chemicals and drugs are introduced to the water supply before there are standards for identifying and processing them?

A study by the Toxic Substances Hydrology Program of the U.S. Geological Survey (USGS) already indicates that a wide range of chemicals are occurring downstream from areas of animal production and intense urbanization.

The chemicals include human and veterinary drugs (including antibiotics), natural and synthetic hormones, detergent metabolites, plasticizers, insecticides, and fire retardants.

In 80 percent of the samples taken during the study, one ore more of these chemicals was identified. According to the study, "Half of the streams contained 7 or more of these chemicals, and about one-third of the streams contained 10 or more of these chemicals. "

The first study of its kind, it now is apparent that "knowledge of the potential human and environmental health effects of these 95 chemicals is highly varied; drinking-water standards or other human or ecological health criteria have been established for 14. Measured concentrations rarely exceeded any of the standards or criteria. Thirty-three are known or suspected to be hormonally active; 46 are pharmaceutically active. Little is known about the potential health effects to humans or aquatic organisms exposed to the low levels of most of these chemicals or the mixtures commonly found in this study."

Even known chemicals have found their way into common water supplies. In fact, a New York Times report this month in the city of New York indicated that higher levels of lead are found in homes of those drinking from city tap water sources. They recommended residents let water run for a period of time (30 seconds) before ingesting it.

As a green living solution to this issue, you have numerous options, three of which noted below, each with varying degrees of expense. One of the cheapest forms of filtration is a filter pitcher or a filter that attaches directly to your faucet. Research is key before you buy one of these products, however, as their efficiency ranges widely.

Be sure to research what chemicals and minerals your particular choice has proven to remove.

You may choose to buy distilled waters from your local grocery. This, too, can be another step towards healthier waters. Be sure to buy refillable jugs, however, so you don't contribute to plastic overuse!

And finally, there have been recent movements into purifying not only our drinking water, but all the water we use in our homes. Whole house water filtrations systems can be fairly inexpensive (in the $100's to low $1,000's) and can filter out such things as: chlorine, heavy metals, pesticides, and chemicals. They can last for years until you need to change your filter.

If you are concerned about chemicals that may be in your normal drinking water, you can order tests online or may even find them at your local hardware store. This is a great first step toward cleaner water for you and your family!

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

HOA Pocket Change Orders

Miro Fitkova (Fitkova Realty Group) — Fri, 19 Nov 2010 12:39:12 -0800

There is an old saying that goes "change is inevitable except from a vending machine." But when it comes to renovation projects, homeowner associations should be wary of "change orders". Change orders are a sneaky way for contractors to jack up the price of a project they've won with a low bid. But change orders are sometimes necessary since it’s impossible to identify all of the underlying conditions in a building or predict every potential problem before a project begins. Therefore, the key questions are: What are legitimate change orders and how much should be allotted for them?

Many HOA projects run over budget because the companies hired to prepare the scope of work don't spend enough time doing investigative work. This leads to costly change orders to address overlooked repairs that should have been spotted.

Don't Duplicate Work. On a typical project, the engineer or architect should conduct an thorough examination of the proposed work. Even the best design work is dependent on properly administering the quality of construction. That means you need to provide competent oversight by way of periodic quality control inspections to ensure you get what you bargained for.

Set Aside a Contingency. Every project should include a contingency of 10-20% of the total bid for unforeseen circumstances. A contingency gives the board the option to add items during the course of construction. The contingency is not intended to cover major changes to the scope of work that should have been accounted for during the design phase.

Two Requirements. To control excessive change orders, your agreement with the contractor should state that:

1. The price of a base bid item will be renegotiated when its quantity increases by more than 10% above what was specified in the original bid document.

2. All change orders are to be put in writing and signed by the board or manager before the additional work is undertaken.

To avoid unnecessary cost overruns, make sure to prepare a well investigated and comprehensive scope of work and never pay for any changes not approved in writing. That way, more of the "change" remains in the HOA’s pocket.

For more innovative homeowner association management strategies, seeRegenesis.net

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Richard Thompson

10 Tips For New Buyers

Miro Fitkova (Fitkova Realty Group) — Fri, 19 Nov 2010 12:21:42 -0800

It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices.

Here are 10 steps that buyers can take to make home dreams a reality!

1. Savings. You may already know how much monthly payment you can support (experts recommend no more than 1/3 your monthly income), but the buying process will also include upfront costs, such as a downpayment and closing costs.

2. Downpayment options. Do you qualify for downpayment assistance programs? Will you be able to get an FHA loan and pay 3.5 percent down? Do you have a relative that would like to make a downpayment gift? Many financial experts recommend a downpayment of 20 percent, so be sure to explore your options!

3. Check Credit Report. Your credit report says a lot about you. Lenders use it to evaluate your risk potential and to inform themselves on how responsible of a borrower you are. They use this report and subsequent score to figure your interest rate. The more stellar your report, the better your score and thus lower your rate. Be sure to check your report for accuracy, and report any errors to the credit reporting agencies.

4. Get Prequalified. It's time to talk to a lender! Pre-qualification will give you a ballpark figure of how much the bank would be willing to lend you. Are you looking for a $100,000 house or a $300,000?

5. Get Preapproved. This is the official letter from the lender that says they will be willing to lend you money. Many sellers look for buyers who are preapproved.

6. Affordability. The bank may tell you that you can afford a home worth $300,000. This does not mean you want to borrow to your max. A more modest home may fit better in your financial plans.

7. Housing Criteria. You have a budget, now develop a list of what you need and want. This can include anything from "must have 3 bedrooms" to "hardwoods" or "granite".

8. Neighborhood choice. Location strongly affects prices. A 3,000 square foot home in rural Kansas costs a fraction of one in New York City. Decide what neighborhoods and areas are the best fit for you. This will help narrow your home search.

9. Hire an agent. An agent can help you navigate the entire process from searching, putting in offers, to where to hire an inspector or general contractors.

10. Start the search! The MLS is a wonderful place to begin your search. Eighty-four percent of buyers now start their search online, so you'll be in good company.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill

Mortgage Rates Spike Quarter Percent

Miro Fitkova (Fitkova Realty Group) — Fri, 19 Nov 2010 12:15:09 -0800

Jumbo mortgage rates are unchanged. The current jumbo 30 year fixed rate is 4.875%

Wells Fargo, the nation's number one originator by volume, adjusted their advertised 30 year fixed rate from 4.25% to 4.625% with an APR of 4.812.

For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Ed Ferrara

Sellers: Don't Let Emotions Rule

Miro Fitkova (Fitkova Realty Group) — Thu, 18 Nov 2010 13:30:35 -0800

It can be easy for the selling experience to become clouded by emotion. A homeowner may have years of memories stored within the walls of a home. They look at a room, and instead of resale potential, they see a baby's first steps and early Christmas mornings. When the time comes to sell, however, the time has also come to sever emotional ties with a house.

Emotions can cloud your reasoning. And they can misguide you during a very expensive and important business transaction. Sellers sometimes overvalue their homes, adding in sentimental value on top of property value. They refuse offers that, while reasonable, don't add up to the value of their memories. Or they turn down a potential buyer, because they don't garden and won't "leave the rose bushes," or aren't the "type" of person they'd like living in their home.

For a smooth transition, hire an experienced real estate agent. Once you've turned yourself over to their guidance, you can then turn your focus onto the new phase of your life. And agent can help you establish a fair, and unbiased, asking price. They find the sellers. They show the house. And they help you sign on the dotted line. The middle man is extremely beneficial in separating from your emotions.

Your emotions may surface as soon as you list the house for sale, since many agents will suggest you remove many of your personal items from the house for staging. This is neither a personal attack on your decorating nor your memories. Staging is a wonderful way for homeowners to see the house as their future home, instead of seeing your house and your home.

Don't fret over lost memories; take pictures of your home and make a scrapbook. Channel your emotions into the joy of moving. And have fun imagining the new memories you'll make in your new place. This is not a time for mourning, instead it's a time for celebrating! For more information please visit: http://realtytimes.com/c/MiroslavaFitkova

Written by Carla Hill