Portfolio Realty Blog

3 Important Tips When Applying for a Home Mortgage

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 20 Jan 2008 23:52:18 -0600

The other day I received a call from a gentleman looking to refinance out of his 2-year adjustable rate home mortgage (2/28 ARM) that is now variable. These home loans are typically reserved for subprime borrowers due to a poor credit rating. Although this is not an ideal loan, he wasn’t in too bad of shape because he put a serious 20% down when he purchased the property. I couldn’t help but think that this guy took the 2-year ARM for a good reason (bad credit?). This wasn’t the case however. After running his credit and seeing that he had plenty of credit depth and an impeccable credit rating going back 12 years, I asked him why he took the 2-year ARM. Unfortunately this gentlemen had been duped!

He went into the story of how the original loan officer offered him an incredible rate for what he thought was for a 30-year fixed loan, and the closing costs he quoted him were half what he thought they would be, so all in all it seemed like an incredible deal at the time. The rest of the process went smoothly until the day of closing when he found out that the 30-year fixed rate was actually for a 2-year ARM with a 3-year hard prepayment penalty, and the closing costs ended up being twice what he imagined. None the less, the gentlemen went on to sign the closing documents because the loan officer said that he would refinance him out of this loan for free. He also had nothing in hand to call this loan officer out with since the loan officer never gave him three vital documents that could have avoided this serious train wreck… and he didn’t know to ask for them.

Here are the three documents you need to ask for when applying for a mortgage that will help keep your loan officer honest:

Good Faith Estimate (GFE) - This will break down all of the closing costs of the loan. These numbers are very difficult to get exact but the loan officer should never be off more than a couple hundred dollars.
Truth in Lending Statement (TIL) - This document will disclose several important numbers but most importantly the Annual Percentage Rate, and whether the loan has a prepayment penalty or not.
Financing Agreement - This document right here is gold and you should have a financing agreement early on whether the rate is locked or floating. The loan officer should issue this to you not only for your protection, but also for his since it lays out whether the rate is locked or if it is floating, the loan type, rate and any points being charged. If you’ve locked your loan in, you should immediately request this document as it tells you when the rate was locked and for how long the rate lock is good for. A lot of people feel that with just a GFE they are covered, but really it’s the financing agreement that gives you the most assurance of the loan you are being offered and keeps the loan officer honest. This is your insurance should anything change at, or prior to closing.

With these three items in hand you are now empowered to call the loan officer the day of closing to ask why your financing agreement says you are locked at a rate of 6.5% but the rate on the final loan papers is 7%, or why he is charging 2 points instead of the 1 on the GFE. You actually have a signed financing agreement from both parties that states your loan program, rate and points being charged. So any deviation from this is a call for action! A GFE on it’s own does not have as much power because as the name of the document states, “Good Faith Estimate” so don’t think you’re ‘good to go’ without your financing agreement.

If you keep these three documents in mind when applying for a loan you are insuring a smooth process. Not all loan officers conduct business in this manner so please don’t feel that I am saying that all loan officers need to be kept within arms reach. Like in many professions, the bad loan officers ruin it for the good ones, but none-the-less all loan officer should be offering these documents to you. You shouldn’t have to ask for them… Oh, and in case you are wondering, the loan officer I mentioned previously was never to be found by the home buyer after the closing– so there goes the “free” refinance…

Tips for Selling a High-End Home

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 20 Jan 2008 23:45:06 -0600

Even Oprah Winfrey might have a hard time selling a mansion in this real estate market. Homes in great neighborhoods possessing exceptional architecture and well-landscaped gardens are suffering. During the housing boom, these properties practically sold themselves. Now, it’s not as easy as putting sign in your font yard.

Here are some tips for selling a high-end home in a soft real estate market:

1. Proper Pricing – No matter the size of your home, pricing will determine how long your home sits on the market. Don’t be afraid to drop the listing price to gain more interest. The chances are the money you lose here will be substantially less than if you priced your home high and brought down.

2. Hiring a Realtor – A good Realtor adds enough value to your home (or generates a good offer) to cover the commission you will pay out. An important factor in choosing your Realtor is to make sure they’re familiar with the neighborhood. Knowledge is priceless when it comes to a Realtor selling your home. Also, how do they plan on marketing your home? Hiring a team of agents can assure you will have the proper representation when

3. Quick Fixes – Investing money in a huge remodel is not usually going to pay off. Unless there is a great need for a fix like a leaky roof, stick with easy inexpensive fixes like painting and landscaping.

4. Web Brokers – Using a service like HomeZill.com will reduce your overhead costs and allow you to sell your home paying a reduced commission. 95% of home buyers use the web when searching for homes so unlike in the past, it is important to have a tech-savvy Realtor with a large online market presence.

5. Staging – Hiring a staging company to fill your home with nice furniture and professional decorations will make your home more attractive to potential buyers. The offers that you will receive often will make up for cost of the staging.

6. Incentives – Think about it... The cost of giving away a plasma TV, paying for hardwoods, or a credit for new appliances is worth it. Especially, if your home is going to sit on the market forever. These incentives are not going to get someone to buy your home, but they definitely get people in the door.

There is no ONE secret that will sell your home, but you do have to consider what will work for your home. Some factors will be the quality of your home, the particular market, the neighborhood you’re selling in, and the condition of your home. Remember, price your home to sell in the beginning to avoid the pitfalls of buyers targeting a “desperate seller”.

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Thank You Bank of America! Sincerely, Countrywide

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 20 Jan 2008 23:43:26 -0600

Bank of America’s agreement to buy mortgage giant Countrywide Financial in a $4 billion all-stock deal put investors at ease yesterday, sky-rocketing shares of Countrywide by 51%, after the mortgage crisis sank the stock below the $5 level. The deal gives Countrywide 0.1822 share of Bank of America for each share they own, valuing Countrywide at $7.16 each, a 7.6% discount.

This deal is a landmark in the mortgage crisis, given the history of Countrywide being the nation’s biggest mortgage lender until recently.

Selling Your Home in 2008

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 20 Jan 2008 23:40:21 -0600

All of a sudden, a light bulb goes off in your head and you want to sell your home. Well, if you plan on selling your home in 2008, then you need a game plan on how to make yours shine above the rest. Remember it’s more important to keep your home clean, and looking spacious, rather than upgrading everything in sight. If your home is in need of remodeling and you don’t want to do it, it isn’t a bad idea to credit the buyer so they can do the work themselves.

If you want to save a few extra bucks, here are some tips:

Ask for advice. Call a HomeZill agent and we’ll stop by and offer some suggestions. Some little improvements will make a world of difference. Cleaning the carpets, painting the walls and removing wallpaper are common fixes that make your home look new. If you have a lot of extra stuff (a.k.a clutter), then you may need to rent a storage space while your home is on the market.

Inspect. If you own an older home, then think about getting a home inspection before you put it on the market. This will prevent any problems that could keep your home from selling. If a buyer finds something wrong when they go through their home inspection, they’re more likely to think that there are other problems that have been neglected.

Check the outside: Take a closer look at the exterior of your home. More specifically, take into consideration the siding and windows. According to the Cost vs. Value survey, a wood window replacement recovers an average 81% of cost at resale and a siding replacement recovers an average 83%, some of the best payoffs in the survey.

Think about the bathroom. Nothing needs to be cleaner in the house than the bathroom. Knowing that someone can use the bathroom right away without the look of disgust will leave people with a smile. Consider replacing cracked tiles, as well as the sink and the toilet if they need it. An entire bathroom makeover can cost as less as $500.

Don’t go all out in the kitchen: Remodeling magazine found that homeowners could recover 83% of the cost of a minor kitchen remodel at resale compared with 78% of a major kitchen remodeling. Replacing major appliances like the refrigerator and stove are not that important because buyers all have different tastes.

Make the smart decision and replace a countertop if it’s crumbling but not because it’s outdated. The only reason to upgrade to granite is if your competition has granite as well.

Good luck out there!

Buying a Home Online in the DC Metro Area

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 20 Jan 2008 23:38:36 -0600

HomeZill is like having a real estate professional at your fingertips 24 hours a day! You can make an offer on real estate in Virginia, Maryland and Washington DC. Whether it’s a town house in Northern Virginia, a DC condo in Georgetown, or investment property in Bethesda MD, simply fill out the Express Offer to get started! And, since you are doing a good amount of the leg-work, shouldn’t you benefit? Well with HomeZill, you do! You will receive up to a 2% cash back VA, DC or MD rebate!

Search for a Home
Our online navigation tools allow you to search condominiums, townhomes or single family homes in all price ranges, styles and locations. HomeZill incorporates the listings, location maps and aerial imagery for you to see for yourself. Once you find homes that interest you, select and save them to your favorites so you can view them later before scheduling appointments and making an offer online.

Get in Touch
If you are interested in a home you find, contact HomeZill’s 24-hour customer service line to schedule a time to view the property at 888-998-ZILL (9455).

Let’s Buy a Home
When you have decided on a NEW construction home that you would like to purchase, simply contact a HomeZill agent to schedule an appointment with the builder. For RESALE or EXISTING homes, simply fill out our HomeZill Express Offer and a real estate professional will contact you to review your offer and answer any questions you may have. You’ll have the comfort and guidance of an experienced ReMax agent every step of the way to help you understand and explain each document you sign.

HomeZill in your Corner
Your Re/Max agent will negotiate to get you the best deal by consulting the builder or listing agent about any competing offers or special terms. We do this through our years of experience negotiating real estate transactions and the extra mile we are willing to go to get it right the first time.

Closing up Shop
One last step before you move in…closing time. Closing usually takes place at an attorney’s office or title/settlement company and typically lasts about an hour. This is where the home buyer and seller gather to sign the documents, say our thank you’s and hand over the keys.

Begin searching for homes in Northern Virginia, Maryland and Washington DC, or buy your home online by making an offer.

Is Your Home Worth Remodeling?

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 23 Dec 2007 23:42:19 -0600

Are you still living in the same home that you purchased 15 years ago? If so, have you visited any homes that have been built in the past five years? I know you would enjoy a private retreat instead of a place where you can only lay your head. This would be a place to go relax, read, or soak in a hot bubble bath away from all the chaos. I’m talking about a master suite. Builders know that an immaculate master suite is on the top of buyers’ lists.

So maybe you have seen what all the hype is about. You want your home to look like the new neighborhood down the street. The only question that lingers in your mind is, “Will I get a return on my investment if I sell the house someday?” It’s a great question to ask before a blast-off into any remodeling, especially if the renovating is being done to make a few extra bucks on the sale.

The number one thing that I suggest is, do your research! There are some great materials available to you and believe it or not, Remodeling magazine publishes a study every year that is titled “Cost vs. Value.” The study looks at home improvements throughout the country. They then compile and analyze the data from agents and reveal the national and regional returns on investment for the range of home improvements.

Now, past results have shown that you will not recover your investment if you plan on selling your home within a year. However, there are exceptions depending on the quality of the remodeling, region, and the market itself.

You’re probably wondering what the best home improvements are. Which improvements will get the highest return on your investment (ROI)? For beginners, minor kitchen and master bath remodeling is always a standout. Some easy revamps are: granite countertops, new appliances, paint/replace cabinets, and recovering your floors. These examples are improvements that have a good chance of recouping the majority if not all of your money back. Of course adding a home office, a new bathroom, or replacing windows are going to be riskier, which may be a high return, but a big factor in your return on investment depends on where you live.

If you intend to live in your home for a number of years, remodeling might not be in your best interest for a short term return-on-investment. However, the longer you stay in your home, the longer you can enjoy your improvements that you’ve made. That my friends, you cannot put a price on!

Foreclosure Tax Relief Bill is Finally Passed!

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 23 Dec 2007 13:48:28 -0600

President Bush signed into law Tuesday a new bill providing tax relief for homeowners facing foreclosure or bankruptcy. The bill eliminates federal taxes due from homeowners who have had mortgage debt forgiven as part of a foreclosure, short sale or the renegotiation of a loan. Currently such debt forgiveness is treated as taxable income.

The bill came in response to the current mortgage crisis, which has become more prevalent in booming metropolitan cities over recent years including Northern Virginia and Washington DC. It is anticipated to reduce taxes on strapped homeowners by $650 million. “When you’re worried about making your payments, higher taxes are the last thing you need to worry about,” Bush said. With some 2 - 2.5 million adjustable-rate mortgages scheduled to reset through 2008, the new law will be a nice holiday gift for many homeowners facing foreclosure in Virginia and Washington DC.

If you fall into this group, be sure to ask your tax preparer what paperwork you may need to provide from your short sale or foreclosure in order to file the proper forms with your tax return.

Are You Preventing Your Home from Selling?

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 17 Dec 2007 14:08:29 -0600

Your home has been on the market for 3 months now and you're not getting any traffic coming through. You must be thinking, "Oh the market is slow right now, just give it some time." Then another 3 months pass by and you mutter the same thing to your wife. Well Sir, a half year is a long time in any kind of market. Did you ever think that you are preventing your home from selling?

First things first, you must hire a good agent to sell your home. 'For Sale By Owner' (FSBO) is less prevalent now-a-days and 85% of FSBO's end up listing with an real estate agent anyways (click here for FSBO stats). This is a big step and you want to choose a Realtor that will value this decision as much as you do. This is a no brainer- a HomeZill Agent!

Next, the price! Selling a home is a big decision and you have to consider the negatives along with the positives. Is this a smart time for me to sell? --in this market, it is if you are buying a more expensive home. How much could I possibly lose on this sale? Is my bottom line realistic? Remember, buyers don't care how much you "think" your home is worth. You have to put yourself in a buyer's position. They're going to do their research by visiting homes that are similar in your neighborhood. They will research what the comparables have sold for in the past few months. You want to price your home to sell, and not have a 'for sale' sign in your yard for multiple seasons.

Third, does your home show well? When you walk into your home, do you have to weave in and out of the clutter like a gauntlet? Though you might like the way your home looks, not everyone has the same taste as you. You want to clear out as much junk as possible. The less, the better. For paint and carpet, neutral colors also help the buyer to better picture themselves in your home. Again, remember to always put yourself in the buyer's shoes. Wouldn't you want to walk into a sharp looking home? Make it happen! Lastly, are you marketing your home enough? There are many methods for marketing your home, but there are only a handful that are effective. Your real estate agent should help you with this step. A HomeZill Agent will show you the best methods for getting the most exposure through online and traditional marketing tactics. They have done countless hours of research to come up with the most effective marketing strategy for selling a home in the shortest period of time.

To reiterate the aforementioned, the most important factor when selling your home is PRICE! Make sure that it is feasible to sell your home because if you have to accept your bottom line, you should be satisfied with it.

Home Buyer Statistics from the National Association of Realtors (NAR)

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 16 Dec 2007 22:05:33 -0600

Home Search (median):

Number of Weeks Searched - 8
Number of Homes seen -9

Method of Home Purchase, By Use of Internet:

Real Estate Agent/Broker - 81%
Direct from Builder (new homes only) - 10%
Direct from previous owner whom buyer didn't know - 5 %

Actions Taken by Buyers After Using Internet Site:

Drove by/viewed a home - 74%
Walked through a home viewed online- 61%
Found agent used to search/buy home - 23%

Prior Living Arrangement:

Owned previous residence- 49%
Rented an apartment or house - 38%
Lived with relatives or friends- 9%

Information Sources Used in Home Search:

Real estate agent - 85%
Internet - 80%
Yard sign - 63%
Newspaper - 55%
Open house - 47%
Home book/magazine - 34%
Builders (new homes) - 26%
Television - 11%
Relocation company - 5%

Where Buyer Found the Home They Purchased:

Real estate agent- 36%
Internet- 24%
Yard sign- 15%
Relative or friend- 8%
Builder (new homes)- 8%
Newspaper- 5%
Knew the seller -3%
Home book/magazine- 1%
OPEN HOUSE -Less than 1%!

What Repeat Buyers Want Most From Real Estate Professionals:

Help you find the right house to purchase -53%
Help with price negotiations - 13%
Tell you what comparable homes are selling for - 11%
Help determining how much buyer can afford - 11%
Help with paperwork - 8%
Help find and arrange financing - 2%

Definitely Would Use Same Agent Again: 66%

*Data from 2006-07 National Association of Realtors

Tips for a Painless Closing

Portfolio Realty Solutions (PortfolioRS.com) — Sun, 16 Dec 2007 19:09:53 -0600

The search is over, the negotiations have ended, the home inspection was a success, and the mortgage has been set. Finally, you come to the last step in the home buying process– Closing, or some call it Settlement. This is where the house transfers ownership and the title is in your name, home owner’s insurance is verified, you agree to the terms of the mortgage, and the keys are put in your hands. Once you leave the closing table, you can go to your new home as a homeowner! The build up of all the anticipation for the past few weeks is settled in usually under an hour at closing.

You typically want to estimate at least 2-3% of the sales price of the home for closing costs. You should receive a Good Faith Estimate (GFE) from your lender, which will include an estimate of the funds you need to bring to closing. The primary items at closing include: the settlement statement (aka HUD-1), the contract, the loan papers, title insurance, homeowners insurance, the Title or Deed, any down payment, and closing costs. It is important that you are adequately prepared when you go to closing. Although your agent will review the information that you need at closing, it’s a good idea to know what is going on in the event you need to handle it alone.

Important items for your closing:

Driver’s License or Government Issued ID: So the settlement company knows you are YOU

Certified Funds: You will need certified funds for closing costs and/or down payments. It’s best to stop by your bank the day before closing once you know the exact amount to bring. This is why it’s important to obtain the settlement statement in advance so there are no problems at the Closing table.

Homeowners Insurance Policy: This should be secured prior to the day of closing for a townhome or single family home. For a condo, the master insurance policy is typically included in the condo fee, you may want to obtain additional insurance for your property inside the condo.

Settlement Statement: Typically your real estate agent will look over a copy of the HUD-1 settlement statement within 24 hours of closing. It’s important to review it beforehand because it shows the total amount of cash you’ll need to bring to closing. It also gives you the opportunity to resolve any discrepancies. If you don’t receive a copy prior to settlement, don’t worry as you will be provided time at the closing table to look it over.

By being prepared in advance, you’ll be far less likely to encounter any unexpected surprises when you’re sitting at the Closing table.

When Making an Offer

Portfolio Realty Solutions (PortfolioRS.com) — Fri, 14 Dec 2007 18:27:23 -0600

In this market , it’s your game now Mr. Buyer. The offer that you decide to make only needs to make sense to you. Don’t worry about the thought of being rejected. The reason why, it doesn’t cost you a thing! However, an offer that doesn’t make sense to you could end up costing you a great deal of time and energy.

Problem properties usually can be purchased at great prices, terms or even both at times. When a property goes into foreclosure or has been sitting on the market for months, any offer may look reasonable to a seller. Especially if the property has developed a negative cash flow. The owner may have to pay a huge amount every month just to keep it. In this case, what would otherwise be an unacceptable offer might be honored. So don’t hesitate to make a low-ball offer!

Your offer is YOUR decision. Unless you’re making an ludicrous offer, don’t worry about it not getting accepted. Remember that the seller’s agent is trying to get the best possible deal for the seller, not you. At the same time, you have to keep in mind that the agent has a fiduciary responsibility to present your offer to the owner.

Like most people. you probably like to ask around for real estate advice from your friends and co-workers. I mean, who doesn’t like a friend's opinion? While it's helpful to listen to others, such as an attorney or Mr. Know-it-all, the offer is ultimately your decision. If they’re not heavily in the real estate investment game, then their opinion is as good as a donkey’s. YOU are the one making the offer and YOU are the one who will be making those payments every month.

Finally, when making your offer, keep in mind how your brain perceives things. When you go to the store and see something that costs $.99, it looks a lot more attractive than $1.00. The same goes for real estate. Keep in mind that $499,900 may seem to be a lot lower than $500,000 to a buyer. But what's a $100 in real estate? it's 60 cents a month on your mortgage payment. Your low-ball offer will also seem much more favorable to the seller using this technique when you offer $460,000 rather than $459,500. Thus giving you a much better chance of getting accepted!

Thinking About Trying 'For Sale By Owner' (FSBO)?

Portfolio Realty Solutions (PortfolioRS.com) — Thu, 13 Dec 2007 10:21:35 -0600

Each year, many do-it-yourself-ers eager to save money take the plunge by trying the ‘ole “For Sale By Owner” route to sell their home. These brave soldiers venture out into the marketplace, to face head-on, the duties of marketing, pricing, showing, negotiating, scheduling, screening, and paperwork. Though I do give them credit for their motivated efforts, many FSBO’s must learn by trial and error, the value of a real estate professional.

FSBO sales in 1987 (20%) … in 2006 (12%)

40% of all FSBO’s sold their home to someone they knew prior to the sale. Therefore only 7% of all home sales in 2006 were FSBO’s sold on the open market. The other 5% of FSBO’s were simply private sales without a real estate agent involved.

Homes sold with the help of a real estate agent in 2006 sold on average for 32% more than FSBO sales. The typical FSBO home sold for $187,200 compared to $247,000 for agent-assisted home sales.

This statistic means that even if you ARE successful in selling your home on your own, you won’t necessary save any money. What if just you did all that work and netted the same amount, how much would that suck? This is the reason why a GOOD real estate professional will always have a job.

FSBO Methods Used to Market Home:

Friends/neighbors (53%)
Yard Sign (51%)
Newspaper ad (31%)
Open House (29%)
Listing on the Internet (22% )

Most Difficult Tasks for FSBO Sellers:

Preparing/fixing up home for sale (18%)
Understanding paperwork (16%)
Getting the right price (11%)
Attracting potential buyers (9%)
Having enough time to devote to all aspects of the sale (9%)

***Data provided by 2006-2007 National Association of Realtors (NAR)

Are Commission Rebates Legal in Virginia, Maryland or Washington DC?

Portfolio Realty Solutions (PortfolioRS.com) — Wed, 12 Dec 2007 17:58:53 -0600

Many home buyers are not only unfamiliar with the concept of real estate commission rebates, but remain unsure whether commission rebates (sometimes called “credits” or “refund” or “cash back”) are even legal in Virginia, Maryland and Washington DC. I’ve run across the same questions time and time again from home buyers on this topic…Where does the money come from? How does a rebate work? Will a rebate effect the price I pay for the home? Now for the answers YES-commission rebates are legal in Virginia, Maryland and Washington DC. The money comes from the seller’s agent who offers the buyer’s agent a predetermined commission amount (typically 3%), agreed upon with the seller at the time the property is listed. The buyer’s agent rebates a portion of their commission to their client (buyer). Rebates DO NOT effect the price of the home- since the amount of the commission offered to the buyer’s agent is predetermined, it doesn’t effect the home price if you buy without an agent, the seller’s agent keeps the entire commission (many times 6%) and you don’t have anyone looking out for your best interests!

Still don’t believe me?? Well, check it out for yourself, realtor commission rebates ARE legal in VA, MD & DC according to the DOJ. The U.S. Department of Justice (DOJ) recently launched a new website on competition in the real estate industry. The Antitrust Division of the DOJ promotes and protects the competitive process through the enforcement of antitrust laws. Simply put–they prohibit price-fixing. The site was created to educate consumers about the benefits that commission competition brings to the consumer of real estate services. The chart below from the DOJ website shows the median commission paid by consumers per home between 1998-2007.

Rebates make buying a home less expensive… period. Most people generally think of a rebate as a cheap, small amount or barely even worth the effort of mailing out. However, when you talk about rebates in real estate, we’re talking thousands of dollars back to you, the consumer. I ran across an interesting piece on Cash Back Rebates to Home Buyers, posted by a real estate agent in Illinois. Btw, Illinois is among the nation’s 37 rebate friendly states.

To learn more about our 2% HomeZill rebate, click here.

Don't Be Scared of the Real Estate Market

Portfolio Realty Solutions (PortfolioRS.com) — Thu, 06 Dec 2007 19:46:52 -0600

If you’re as busy as the next person, then you probably have not had the time to pick up a newspaper or watch more than 30 minutes of the news. However, I’m sure you have heard from co-workers or friends about the negative press surrounding the mortgage and housing markets. The rancor of this situation has caused some sort of paralysis in the consumers. But where there’s adversity, there’s opportunity. By human nature, we tend to listen to our friends or mentors or should I say go along with what everyone else is doing. We wait for someone to say “It’s OK.” Just call this your little push in the back.

If you have been researching home prices then you have probably seen that the national average is down. This will continue, but remember three things. The first is that the markets that have been hit the hardest drag down the average depreciation. Secondly, homes that were priced $500,000 and higher were more inflated than the entry level housing. The bigger they are the harder they fall. When those homes depreciate, they will be affected more than the lower priced homes. Finally, because dismay can create an instinctive reaction among sellers and the market perception keeps buyers hesitant, prices may be lower on the way down that at the bottom of the barrel.

What does this all mean? It’s a GREAT time to shop for a moderately priced home. When the market has found a solid bottom and the demand returns, there will be a lot less ambiguity about what a home in your area is really worth. Sellers will be less willing to entertain offers, and selection will decrease.

The news might have you thinking that it’s impossible to get a loan these days. This is far from true. Experience has given lenders a clear picture of the kinds of loans that shouldn’t be offered again. But the loans that have performed more consistently are still available, and you might be surprised what you can qualify for.

Banks like to see strength in at least 2 of the 4 areas:

Credit Score
sufficient verifiable income for the payment amount
equity in the property or down payment
Liquid assets (money in the bank, stock market, IRA’s, 401k’s, etc…)

The items that will make your loan more difficult to obtain:

Non-Owner Occupied (investment property)
Stated or No Income (meaning you can’t prove it with W2’s or Tax Returns)

Bottom Line: If you can justifiably afford to make a regular house payment, there’s a great chance that this can be proven to a lender, who will in turn be glad to give you an excellent loan.

There’s even further incentive to act on this information. Even if prices decline another 10%, due to the market hysteria, there are sellers out there right now selling for 20% under current appraised value. So you might find a house for $300,000 today that will end up being worth $330,000 when the market bottoms out. A catch 22, but true. This also means that your value is likely to be at it’s highest as far as refinancing is concerned, and remember that equity is one of the positive factors banks consider.

Even Donald Trump Says that Now is the Time to Get into Real Estate

Portfolio Realty Solutions (PortfolioRS.com) — Thu, 06 Dec 2007 19:42:44 -0600

Several news sources, including this article from MSN Money, have been saying that now is a great time to buy into real estate. Whether as an investment or as your primary residence, real estate inventory and low interest rates are primed for a buyer’s market in Virginia, Maryland and Washington DC.

Recently on CNBC, even Donald Trump states that “now is the best time to invest” in real estate. Trump also mentions that home owner’s should “contact their bank to negotiate a deal on their mortgage” when facing foreclosure.

There is a small glitch in the middle of the video from YouTube which gets better after a few seconds…

Interest Rate Freeze on Subprime Loans

Portfolio Realty Solutions (PortfolioRS.com) — Thu, 06 Dec 2007 19:35:38 -0600

Foreclosures in Virginia, Maryland and Washington DC have been fueling price depreciation and a glut of housing inventory over the past several months. Today, the White House announced their policy to freeze subprime interest rates for 5 years in order to help hundreds of thousands of homeowners stay in their homes and avoid foreclosure. The deal with the mortgage industry is “a step in the right direction” after the increasing number of foreclosures have driven home prices down, hurt neighborhoods and threatened the economy.

The plan will not effect everyone facing foreclosure, but only consumers with subprime loans, which account for 47% of recent foreclosures. The plan only applies for people living in their homes and who have not missed any mortgage payments. Officials say they hope to save 300,000 families from falling victim to foreclosure proceedings and help curtail declining homes prices and access inventory over the next few years.

Many home owners unaffected by the plan are voicing their anger as they feel that the government should not step in to ’save’ people who made poor decisions to lock themselves in risky subprime loans…”Why should we have to pay for our high mortgage if subprime borrowers get an easy out?”

I’ll leave this up for discussion. Do you think the government should intervene in a situation like this? Should they specify only certain “subprime” borrowers? Is it fair to other homeowners facing foreclosure with similar adjusting rates that are not “subprime”?

Interests Rates Fall

Portfolio Realty Solutions (PortfolioRS.com) — Wed, 28 Nov 2007 02:00:36 -0600

30-year fixed rate at 5.82%; 10-year Treasury yield at 3.83%

Long-term mortgage interest rates were down Monday, and the benchmark 10-year Treasury bond yield dropped to 3.83 percent.

The 30-year fixed-rate average sank to 5.82 percent, and the 15-year fixed rate fell to 5.4 percent. The 1-year adjustable held at 5.53 percent.

The 30-year Treasury bond yield was down at 4.29 percent.

Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.

Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.

In other economic news, the Dow Jones Industrial Average plummeted 237.44 points, or 1.83 percent, finishing at 12,743.44. The Nasdaq tumbled 55.61 points, or 2.14 percent, closing at 2,540.99.

Stock figures are current as of 7:30 p.m. Eastern Standard Time.

5 Tips for Buying a Foreclosure

Portfolio Realty Solutions (PortfolioRS.com) — Sat, 24 Nov 2007 01:49:39 -0600

Searching for a home can be a very overwhelming experience, especially in today’s real estate market. With so many homes on the market right now, good real estate deals are increasingly difficult to find.

But there are bargains out there, for people who know where to look.

If you’re willing to do some research though, you will find that the foreclosure market in Virginia, Maryland and Washington DC has some of the best opportunities for savvy home buyers.

HomeZillBlog.com gives consumers the opportunity to subscribe to receive a free weekly foreclosure and REO list in their area of choice. A number of real estate databases have already compiled a list of over 550,000 foreclosure properties across the country!

Foreclosure properties can be a great investment, or if you want to get more home for your money, it can become a more affordable option than buying a traditional property. But don’t get ahead of yourself because they’re not a way to get rich quick. You need to manage the purchase in an educated manner.

Here are five tips to help you land a deal on a foreclosure property:

1. Know the different types of foreclosure properties, and the foreclosure process.

There are three basic types of foreclosure properties, representing different stages in the foreclosure process: notice-of-default (NOD) and notice of trustee sale (NTS), which are both pre-foreclosure properties; and real-estate-owned (REO), a foreclosure property which has been re-purchased by the bank. Once the lender officially reclaims a home, it becomes a real-estate-owned property (REO).

Pre-foreclosure: (Notice-of-Default, Notice-of-Trustee Sale) - Highest potential savings, Potential win/win scenario benefits all parties, Chance to evaluate property

Foreclosure: (Auction sale) - High potential savings, Immediate property ownership

Foreclosure: (Real Estate Owned (REO)) - Significant time to evaluate property, Traditional bank financing, Lender often rehabs property

2. Get Pre-Approved

It’s important for a buyer to be pre-approved before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate. Having approved financing in-hand makes negotiations with both the seller and the lender easier, and may even make it possible for the buyer to simply cure the default and take over the existing loan to reduce loan processing fees.

3. Contact a HomeZill Agent

“Buyer’s representatives” have the home buyer’s best interest at heart, and are determined to find the right property and negotiating the best price for their clients. They have access to reliable professionals (attorneys, lenders, inspectors and title professionals) to ensure that the buyer is in good hands and has an enjoyable experience.

4. Do your homework

It makes sense to give any property under consideration a thorough examination. Here are seven steps for doing a professional-level exam.

CHART: Foreclosure Examination Process

• Identify desirable neighborhoods – Identify specific neighborhoods where you’d like to live or own a home. This will limit your search to a manageable size for you and your real estate agent, and give you a sense of relative property values.

• Determine the property value –Look at the original purchase price, and recent comparable property sales to determine the current value of the property.

• Find out the amount in default and the remaining loan balance – In order to determine a reasonable offer price, you’ll need to know—at a minimum—how much money it will take just to satisfy the debt to the lender.

• Run a legal investing report – Before purchasing any foreclosure property, make sure it is free and clear of any bankruptcies, tax liens or other financial liabilities.

• Assess the condition of the property– If at all possible, visit the property, ask your realtor’s opinion, and review pest and structural reports to make sure that the property is in acceptable condition, or to determine how much of a rehab budget you’ll need to build in to your deal.

• Build a positive relationship with the seller – Before purchasing the property, try to make sure that you’re entering into a win-win situation with the seller, so that they’ll do what they can to make the process easier and leave the property in good condition

• Leverage your timing – Knowing when a property is going to be auctioned gives you an extra bargaining chip when negotiating with the seller or the lender.

5. Make a realistic offer

Two keys to a successful foreclosure purchase are diligence and patience.

As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and costs involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties may be open to a last-minute agreement. It’s not unusual to save anywhere from 10-30% of market value on a foreclosure property, and certain properties offer savings of even 50% or more! These are definitely a rare find, but they're out there, I've seen them with my own eyes! An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.

For a list of free foreclosure properties in your area, simply enter your email address in the box at the top of Homezillblog.com

Give a Little This Thanksgiving

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 19 Nov 2007 17:15:23 -0600

The year is coming to an end and we are all exhausted from our rigorous work schedules.We want to relax and unwind with the people we love. One of our favorite holidays is right around the corner. Thanksgiving!! We all talk about how much we’re going to eat and the dinners that we’re going to attend. The turkey, mashed potatoes, stuffing, sweet potatoes, green bean casserole, and all the other good food that causes us to loosen our belts.

While most of us get to spend the quality time with our families, others are not so fortunate. I know you would like to sleep in and get those extra 2 hours of shut-eye, but you can actually make a difference this year for a good cause. In the Northern Virginia, Washington D.C. and Maryland areas, here are some places you can volunteer your time at:

SOME (So Others May Eat)
On Thanksgiving Day, this organization holds its annual Trot for Hunger beginning at 8:30 a.m. at West Potomac Park in Washington DC. DC Mayor Adrian Fenty is the Honorary Chair of the 5K fun run and family walk that benefits programs for homeless men, women and children.

Food and Friends
This organization provides meals to support men, women, and children living with HIV/AIDS, cancer, and other life-challenging illnesses. Volunteers assemble and deliver Thanksgiving meals.

Capital Area Food Bank
Make a monetary donation or help the Brown Bag program deliver Thanksgiving food baskets to needy senior citizens. This is the largest, public nonprofit hunger and nutrition education resource in the region.

Bread For the City
WHUR DAY (at the Old Post Office Pavilion) is a food drive, cash drive, and telethon to benefit Bread for the City’s Holiday Helpings Program, providing Thanksgiving meals to low-income families. Volunteers collect canned food and cash donations and load and unload trucks of food.

Salvation Army – National Capital Area
Donate money or host your own personalized Red Kettle to gather donations from others. The international Christian organization strives to improve the lives of the needy and provide holiday meals.

Washington DC Jewish Community Center
Volunteers prepare the Thanksgiving meal for people in need in the Washington DC metropolitan area. Bring family and friends to make stuffing, sweet potatoes, green bean casserole, desserts and more.

Buying a Home After Foreclosure? There is still hope...

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 19 Nov 2007 17:11:36 -0600

Many of those who lose their home to foreclosure in Virginia, Maryland & Washington DC, are often interested in buying a home after foreclosure as quickly as possible. While the foreclosure will stay on the former homeowners’ credit for 7-10 years, this does not mean that they won’t be able to qualify for a new home loan in a shorter period than that. However, it takes work to be able to qualify for a new home after foreclosure. The quickest way to get a mortgage after facing foreclosure is to save up 35% as a down payment. Some foreclosure lenders will loan up to 65% LTV (loan to value) of the home right after foreclosure, or while still in foreclosure. Of course, other qualifications may apply, and rates will not be great if there was a previous foreclosure involved. But from a lenders’ perspective, having a substantial amount of equity in the property will give the homeowner a new cushion to prevent them from becoming a victim to foreclosure again.

However, if the homeowner doesn’t plan on saving tens of thousands of dollars, then they will have quite a bit more work to do in order to receive a mortgage. They need to get to a point in which the foreclosure is just one small mark on an otherwise pristine credit history.

After foreclosure, it is always best to begin working on repairing the credit situation as soon as humanly possible. Get negative information removed, negotiate with creditors, dispute debts, and many other techniques can be used to raise up the consumers’ credit score by over 200 points. Getting a credit card with a small balance, using it, and almost paying it off every month is another great idea. This way, they can carry a small balance and generate some positive credit history every month.

Also, there may be a need to speak with a financial advisor to work out a budget and put together a savings plan. Building an emergency fund, so that any other financial hardship won’t have such a devastating affect, is a smart idea. This also shows a bank that there is extra money in a savings account, which will help the lender decide that the applicant now deserves a loan approval. It also shows a lender the good spending habits of the consumer after the foreclosure.

The foreclosure victim should not expect to get a 100% LTV loan for their next house. This is why it is key to save up at least some down payment plus closing costs in order to qualify for a good loan. It takes some work, but homeowners can bounce back to a pretty full recovery within a year after foreclosure, and experience all the joys and responsibilities of owning their own home, again.

Builder Sale Event- Gainesville VA, Ashburn VA, Lansdowne VA…

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 19 Nov 2007 11:19:32 -0600

I came across this Centex Homes-Year End Saving Event ad in an email I received today. The sale includes brand new featured homes and new town homes in Northern Virginia with low prices and big incentives. You will typically find the best builder deals in Virginia, Maryland and Washington DC towards the end of the year (when builder’s need to hit certain numbers for their books), and when a community has only a few homes left. This particular sale includes homes in Ashburn, Gainesville, Lansdowne, Bristow, Stafford and Stephens City, Virginia.

Call us at 888-998-9455 for any questions or if you would like to schedule an appointment to tour a community. You will receive an additional 2% cash back from your HomeZill agent if you decide to purchase any of these homes- but you have to call us before you visit to receive the extra 2% incentive! See info on the specific homes here.

Water Cooler Chat

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 12 Nov 2007 14:37:00 -0600

Last weekend my wife dragged me to a neighborhood barbecue in Northern Virginia. While I was there minding my own business, I was approached by a group of “real estate investors” as they like to call themselves. We all know this group of people. They’re the bunch who has the need to boast about how many properties they own or how flipping properties is as easy as walking down the street. They also seem to carry this plethora of knowledge about the real estate market that not even a Realtor can get their hands on. As they introduce themselves, I saw a pattern begin to develop. Sure enough, not one of them was in the real estate business.

I found myself daydreaming as I stood there waiting for each of them to finish reeling off their superlatives. Then one chimes in with a question that snapped me out of my daze. The jolly fellow with the Cuban cigar asks me, “I bet business is slow with the market being this bad?” This is a typical question that every Realtor runs into at least once a week. I regroup and simply ask him, “Who said this was a bad market?” The gentleman responds with “My neighbor’s house has been on the market for 6 months now.” So at this point I began to enlighten their noodle boxes. This market that we are experiencing right now is not “bad”. Yes, it may be slow for people who want to sell their home. There is an overkill of inventory available right now. So if you want your home to sell quickly in this market, you need to price it right. If you can’t afford to price your home at a reasonable price, then it better be the next best thing to sliced bread.

As far as buying a home right now, the choices are endless. With sellers having difficulty and builders having so much inventory on their hands, buyers have a better chance of receiving a seller concession or an incentive. Don’t think that sellers won’t budge on their prices. If you didn’t already know, many homeowners have a lot of equity in their homes from the real estate boom a few years ago. Don’t go expecting to buy a home right now and turn around in a year from now and make a ridiculous profit. All I’m saying is if you’re in the market to buy a home, this is your chance to find a great deal!

Times Are a Changing

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 12 Nov 2007 14:35:21 -0600

As much as we don’t want to admit it, the Great Bob Dylan said it first, “The Times Are a Changing”.
Can you believe how much has changed just in the past ten years? Just think back to 1997. People didn’t even think about having a cell phone on them, email was only used by computer geeks talking to their cyber buddies, and the only popular thing on the internet was AOL.

Nowadays, people can’t leave the house without carrying their cell phones on them. Checking email is a daily routine and to some it’s a drug, checking their inbox at least 30 times a day only to find another piece of spam. You know who you are. And of course, the internet! It has evolved into something that this world could not live without. I mean new words are being added into Webster’s from the internet for crying out loud. Google is now in the dictionary. Family’s are booking vacations and wondering if the hotels are going to have the internet available or if they’ll get cell phone service on that remote island. We now are living in a technology dependent world. This is pushing everyone to adapt to the information super highway. Second graders are learning to use the internet when people in their 60’s don’t know where the Start menu is. “The Times Are a Changing.”

HomeZill realizes this change. Let’s be honest with ourselves, the majority of the technology savvy individuals fall between the ages of 15-45. For lack of a better word we’ll call these people, Zillers. Don’t blow a gasket Mr. 55 year old, you computer whiz, you’re not the majority. So, another majority are people who do not own a home. This majority happens to fall between the same age group of the technology savvy individuals. Do you see a correlation?

HomeZill Re/Max agents recognize the fact that these Zillers don’t want to deal with an agent in their face 24/7. HomeZill Re/Max agents make the home buying process enjoyable. With not enough hours in the day anymore, you can find your home at your convenience. When you’re ready to pull the trigger, that’s where they come in. When buying your home with HomeZill, you’re receiving up to 2% at closing. Yeah, you say to yourself 2% is dinky. Well it is if you’re buying a pack of gum, but when you’re buying a $500,000 home, that $10,000 isn’t so dinky, is it? You think this is good? It gets better when selling your home. You only pay a flat fee of $3,000. You’ll still get top of the line service but you’ll be more involved in the process. The HomeZill Re/Max agents are the professionals and they’re going take care of all the negotiations and paperwork. After all, Re/Max is the #1 brokerage worldwide.

Search for a home online, call HomeZill to do the dirty work, and receive money at closing. More freedom and control in your hands. Just what the Zillers asked for. Believe it or not, the internet is taking over. “The Times Are a Changing.”

Pricing Your Home....Right!

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 12 Nov 2007 14:30:38 -0600

So everyone remembers selling lemonade on the corner of your street when you were younger right? Of course, if Charlie Brown was doing it then it had to be cool. You had to compete with the other kids that were two streets over, and you weren’t friends with them because your parents wouldn’t let you ride your huffy off your street. Well whose stand did better? Maybe it was yours because you had your cute little sister holding the sign, maybe it was theirs because “Dad” got so caught up, he built a mini 7 Eleven, or maybe it was neither… It was the stand three streets down that always pulled their radio flyer back to their home with a jar full of George Washingtons–Their lemonade was priced right.

When it comes to selling your home, the most important factor is the price tag. You don’t want to overprice your home because you will lose the glow of the home’s attraction after the first couple weeks of showings. After three weeks, appeal and curiosity fizzle out. Don’t worry about pricing your home below market value because you will often times receive multiple offers, which will drive up the price to market value. I wouldn’t exactly call myself an expert, but here are some tips that are very helpful:

• Look at every similar home that was, or is listed in the same neighborhood or within a ½ mile over the past six months, paying attention to major streets, freeways, or railroads, and do not compare inventory from the “other side of the tracks.”
• Compare similar square footage, within 10% more or less from your property if possible as well as age, comparing apples to apples.
• To check out what other homes buyers will also be seeing, tour active listings. Make note of what you like and dislike, the general feeling you get upon entering these homes. If possible, recreate those feelings of reception in your own home.
• These homes are your competition. Ask yourself why a buyer would prefer your home over any of these and adjust your price accordingly.
• Same house, three different prices. After you have collected all your data, the next step is to analyze the data based on market conditions. For comparison purposes, let’s say the last three comparable sales in your neighborhood were $500,000. In a buyer’s market, your sales price might allow some wiggle room for negotiation but be strong enough (near the last comparable sale) to entice a buyer to tour your home. To sell in this market, you might need to price your home at $495,000, settling for $490,000.

Now you’re a little more prepared to compete out there. This time your lemonade is going to sell or maybe you’ll realize that you’re not ready in the current market.

Curb Appeal

Portfolio Realty Solutions (PortfolioRS.com) — Mon, 12 Nov 2007 14:29:05 -0600

As I was looking for homes the other day I came across a picture in the MLS that blew me away. It was the main picture of the home. I had not seen anything like this before and was flabbergasted by it. I mean, the Realtor that is selling this house must have no idea what gossip must be going on about this peculiar photo. If the owner of the house has not seen this photo yet, they are going to be thrilled.

This is the perfect example of what NOT to do. This is not your ideal featured picture for your home. First of all, a big yellow Penske truck blocking half of the house is a big no no! At least make it a U-Haul.

“A picture is worth a thousand words,” especially, when you’re trying to sell your home. You have the opportunity for thousands of homebuyers to see your home. You want it to look spectacular. The aforementioned photo is like wearing jeans and a t-shirt to Prom, you look awkward and everyone is going to laugh at you, unless of course you’re Jesse Katsopolis (Full House).

Curb appeal makes the difference between a prospective buyer stopping for a look, or moving on. Clear the front and back yard of toys, bikes, sports equipment and anything else that could be a distraction. Also be sure that shrubs are trimmed, weeds and past-their-prime annuals are removed, and the lawn mowed. If your car is usually parked in the driveway, park it along the street, away from your home, while photographing. Vehicles parked in the driveway block part of the view and detract from your homes overall visual impact.

A slightly overcast day provides optimum shooting conditions for exterior photography, as bright sunlight causes high-contrast light and shadowed areas on portions of your home and yard, and creates glare off of windows and metal trim. Should the weather not cooperate, stand within photo-taking distance of your home at different times of day to establish the best light conditions.

When photographing the exterior, position yourself to take the shot on a slight angle. You can also get down on one knee to take the picture at a slightly upward angle. Photographing from these positions will make the home appear larger and better show its character than a straight-on photo taken from a standing position, which tends to produce an image that looks “flat” and uninteresting.

“Say Cheese!”