Buying Rhode Island & Southeastern Massachusetts Real Estate

Real Estate Terminology: Gloassary For You: C & D

Real Estate Terminology: Glossary for You: A & B

Investing In Residential Property

Single-Family Rental Homes
First-time property investors have good reasons to start with these homes

Rents

How To Set The Right Rent

Rental Rates Have an Upper Cap

Market Statistics

Selling Your Home Without An Agent? Pros and Cons

For Sale By Owner Homes?

Real Estate For Sale by Owner

Your First Home: Some general considerations

Buying and Financing Investment Property in Rhode Island

Cost Effective Property Management: Why use a property manager?

Open House: Sunday, 1pm - 3pm, 50 Mohr St. Johnston RI 02919 Fresh Waterfront $299,900

"UP TO" $8000 - it is not an across the board $8000 first time home buyers tax credit.

Featured Listings: Rhode Island Real Estate

Home Buyer Tax Credits Expanded and Extended

Jury Duty Scam Verified By The FBI - Identity Thieves

Open House: 1618 Fish Road Tiverton RI Sunday Oct 25th 1pm to 3pm

Welcome aboard: New Agent: Nancy Rosedale. New Broker: Glenn Russell

Property flipping guidelines extended by FHA until May 2010! What does this mean?

Banks Making Short Sales Tougher: Will we see an increase in Strategic Defaults?

looking for a demolition crew to take down a 2 family house in East Providence, RI

Recruiting Agents: Southern RI and Kent County RI, Southeastern MA (Bristol County and the Cape

Mortgage Delinquencies - The Coming Storm

Seller wants to stay in house for 3 months after closing, rent free...

Economists: Expand the Housing Tax Credit

NAR makes call to action to extend the $8000 home buyer tax credit - good or bad?

It Takes More Than Just Saying You're an EXPERT to be ONE

Mortgage Loan Modification Program Picking Up Speed.

The Surprising Cost Of The First Time Buyer Tax Credit

Buying Rhode Island & Southeastern Massachusetts Real Estate

Real Estate Terminology: Gloassary For You: C & D

Real Estate Terminology: Glossary for You: A & B

Investing In Residential Property

Single-Family Rental Homes First-time property investors have good reasons to start with these homes

Rents

How To Set The Right Rent

Rental Rates Have an Upper Cap

Market Statistics

Selling Your Home Without An Agent? Pros and Cons

For Sale By Owner Homes?

Real Estate For Sale by Owner

Your First Home: Some general considerations

Buying and Financing Investment Property in Rhode Island

Cost Effective Property Management: Why use a property manager?

Open House: Sunday, 1pm - 3pm, 50 Mohr St. Johnston RI 02919 Fresh Waterfront $299,900

"UP TO" $8000 - it is *not* an across the board $8000 first time home buyers tax credit.

Featured Listings: Rhode Island Real Estate

Home Buyer Tax Credits Expanded and Extended

Jury Duty Scam Verified By The FBI - Identity Thieves

Open House: 1618 Fish Road Tiverton RI Sunday Oct 25th 1pm to 3pm

Welcome aboard: New Agent: Nancy Rosedale. New Broker: Glenn Russell

Property flipping guidelines extended by FHA until May 2010! What does this mean?

Banks Making Short Sales Tougher: Will we see an increase in Strategic Defaults?

looking for a demolition crew to take down a 2 family house in East Providence, RI

Recruiting Agents: Southern RI and Kent County RI, Southeastern MA (Bristol County and the Cape

Mortgage Delinquencies - The Coming Storm

Seller wants to stay in house for 3 months after closing, rent free...

Economists: Expand the Housing Tax Credit

NAR makes call to action to extend the $8000 home buyer tax credit - good or bad?

It Takes More Than Just Saying You're an EXPERT to be ONE

Mortgage Loan Modification Program Picking Up Speed.

The Surprising Cost Of The First Time Buyer Tax Credit

Single-Family Rental Homes
First-time property investors have good reasons to start with these homes

"UP TO" $8000 - it is not an across the board $8000 first time home buyers tax credit.

Selling Without An Agent

Advantages Of Selling A House On Your Own

Disadvantages Of Selling Your Home On Your Own

Hints For Selling Your Home "By Owner"

When Should You Sell Investment Property?

Choosing Your Investment

Planning an Exit Strategy

Determine your goals:

Selling Without An Agent

Advantages Of Selling A House On Your Own

Disadvantages Of Selling Your Home On Your Own

Hints For Selling Your Home "By Owner"

When Should You Sell Investment Property?

Choosing Your Investment

Planning an Exit Strategy

First Time Home Buyers: So where do you go from here?

Also See Our Financing Center for ideas about investment property loans, including:

What if values decline?

Economists: Expand the Housing Tax Credit

Related Topics

First Time Home Buyers: So where do you go from here?

Also See Our Financing Center for ideas about investment property loans, including:

What if values decline?

Economists: Expand the Housing Tax Credit

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Dec 2009 11:59:12 -0600

Carrying forward our real estate terminology glossary, here we cover terms starting with either the letter C or D: Hope you find this useful!

Comparable Market Analysis (CMA) -- A comparison of the prices of similar houses in the same general geographic area. A CMA is used to help determine the value of a property, either for a seller or a buyer. More...

Closing -- The process that effects the final transfer of the deed from the seller to the buyer, as well as finalize all aspects of the mortgage of the property. More...

Closing Costs -- Funds needed at the time of closing (separate from and in addition to the down payment). Loan origination fees, discount points, Attorney fees, recording fees and prepaids are some items that may be included. They often will total from 3% to 5% of the price of the home, payable in cash.

Contingencies -- In real estate terminology, these are conditions -- or "safety valves" -- written into Real Estate offers and contracts to prevent a buyer from being forced to buy a house that is unsatisfactory--either structurally or financially. Examples of contingencies are "This contract is subject to the buyer obtaining a satisfactory whole house inspection." or "Subject to the buyer being able to obtain a mortgage."

Condominium -- Housing where the owner owns only the unit in which the live--from the interior walls inward, generally--as well as a portion of the common area. More...

Debt to Income Ratio -- The ratio of a borrowers total of debt as a percentage of their total gross income.

Deed -- The document that, when recorded with your local government, determines ownership of a property. Transferred from seller to buyer at closing.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Dec 2009 11:47:36 -0600

We will be posting a series of posts which will, we hope, prove useful to our readers. These posts will provide plain language explanations about what are frequently confusing terms, and which are often misused by both professionals, and consumers. This post will provide a glossary for terms starting with real estate (we will do a similar post series for mortgage terminology as well after) terms begining with the letters A and B... we will post additional terms over the next few posts.

Agent -- In real estate terminology, an individual who represents a seller, a buyer or both in the purchase or sale of real estate. More...

Amortization -- The schedule of loan payments that establishes the amount of payment to be applied to the principal and the amount to be applied to interest, usually on a monthly basis, for the full term of the loan.

Annual Percentage Rate (APR) -- The TOTAL interest rate of a mortgage, including the stated loan interest as well as any up front interest paid in securing the loan. The APR will invariably differ from the mortgage rate quoted due to the inclusion of these items.

Appraisal -- An estimate of value of a Real Estate property by a professional third party. Virtually all non-owner financed mortgages will require an appraisal and is generally paid for by the buyer.

Adjustable Rate Mortgage (ARM -- A mortgage in which the Interest rate is adjustable, meaning that the rate can go up or down according to prevailing financial market conditions. More...

Assessment -- The value of a property as determined by the local tax jurisdiction which is used to determine the amount of your property taxes.

Buyer's Agent -- A Real Estate Agent that has made an agreement to represent the buyer exclusively, rather than the seller. More...

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Dec 2009 11:39:17 -0600

Residential real estate investments can be extremely rewarding. But there are some concerns that should be addressed before acquiring any investment property, and some special considerations when considering an investment in residential real estate in particular. This section of the website aims to demystify some of those concerns.

Determine your goals:	Topics on this page:
Monthly cash flow? Resale for quick profit? Long term appreciation? Tax shelter? Pride of Ownership	Single Family Homes Rents Setting Rents Rent Caps Statistics

When investors decide to acquire rental properties, they must first decide what they want to accomplish, and over what period of time. The same criteria that is used in any sound investment strategy or financial plan should be used in the rental housing business. If, however, you have decided that you just want to get rich quick, with no money down like they do on TV, get a grip on your world, then come back here when you have learned some real world basics and reality.

It is very important to understand that owning and operating rental property is not just an investment, it is a business. Before you purchase any property you should have a plan for how you intend to manage it. You can learn to do it yourself or get assistance by taking courses and joining some investor websites. You can also hire a professional property manager to operate you business for you.

Property managers typically charge a percentage of gross income. This usually varies from 5% to 10% of gross income, often with an additional charge for new leases.

The registered user areas of this site contain some good tools for the investor, but you can get an overview of the kinds of information you should know before buying income producing investment real estate here. You will get a good elementary education in this part of the site as we analyze many of the factors prospective landlords and investors must consider before making an income property purchase. They include the following pages:

When it comes to real estate investments, single-family homes are likely the best choice for first-time property investors.

As perhaps the most widely available form of housing, the single-family home is most coveted by buyers and renters. As such, the investment is easier to finance, refinance, manage and liquidate, when compared with larger, multi-family property investments. But residential property investments require up-front cash, financial feeding, management and maintenance -- especially during the early years.

Unless your down payment is at least 25 percent or more, the rent you can charge usually won't begin providing positive cash flow for several years after your purchase. Financing: Because the investment saps rental income, you can't use all of your rental income to qualify for investment property mortgages. The exact amount of rental income you can use to qualify depends on the lender, the property, your down payment, other financial obligations, outside income and other loan qualifying factors. From the start, an investment property will cost you more to finance than an owner-occupied home, but you can cut costs by purchasing a condo instead of a single-family detached home, a fixer-upper or a foreclosure property. Also, consider financing through the seller, borrowing against your other investments or retirement funds, or other creative financing tools. Don't expect to enjoy either income or appreciation, however, until after you've held the property for at least five to seven years.

Property with potential: To maximize your return, shop for investment property much in the way you'd buy your own home. Consider fixer-uppers that don't need major upgrades. Buy the cheapest home in the best block or buy into the cheapest neighborhood in the best community. Buy in areas where demand for housing will eventually exceed supply. And if possible, buy in a down market to later enjoy the equity-building benefits of an upturn. Because you'll have to keep tabs on your property, it's wise to buy it within easy access of your own home.

Investment management: Unless you have the knack and the time to manage tenants and property, your costs will include hiring a property manager. Along with advertising vacancies, screening tenants and looking after maintenance, a property manager can also help you project how much you can charge for rent, make sure you perform required disclosures and fill you in on renters' and landlords' rights.

Taxes: As investment property, all expenses, including utilities, repairs, property taxes, mortgage interest, maintenance and condominium fees are income deductions that likely will produce a taxable loss, subject to the passive activity loss limitations. You can also deduct depreciation over 27.5 years. Rather than net income from rental payments, most investment property owners hope to realize a return when they sell the property. How you sell determines how much, or how little income you'll realize once you pay taxes. Generally, when investment property is sold outright, any long-term gain (on investments held longer than 12 months) is taxed at a capital gains tax rate that ranges from 10 percent to a maximum of 20 percent, depending upon your tax bracket. Capital losses are deductible from capital gains and, to a limited extent, other income. If you choose an installment sale, you finance the purchase and any gain is realized and taxed over the loan's period. Also, you can conduct a tax deferred or tax free exchange. If you trade up to another more expensive investment property, taxes can be deferred. The trade can be tax free if you trade for another similar investment property.

Perhaps the largest tax savings are available to those who take advantage of the tax exemption designed for homeowners who live in their homes. You'd have to move into your rental property and convert it to your owner-occupied home for at least two years. When you sell, you'll benefit from the personal property tax exemption on $ 500,000 in capital gains for joint returns or $ 250,000 for single or separate returns.

In the years before Carter and double digit inflation rent rates were usually a simple factor of a property's value. Therefore, determining likely rents was relatively easy. A typical one or two family home rented for about 1% of the fair market value .

A landlord's success now depends on whether he is capable of finding, fixing and providing rental property profitably, at rents determined by forces that have little to do with a free market, or landlord's cost of doing business.

There are as many misunderstandings about how, when, and why landlords raise the rent, as there are misconceptions about landlords. Certainly, in a free market, competition is the most important single criteria. However, in the real world, (at least that of low and moderate income property) government now plays the major roll in setting rental rates.

Rent rates always depend on several factors:

Competition
Your ability to market the property
Government
Tenants ability to pay
Rent Control

Have you ever wondered if the rents you charge for your rental units are in line with the marketplace? Does it take a long time to rent up your property or does it rent in a day?

The worry, of course, is if you have more phone calls than you can handle, you may have priced the property too low. If you have no calls, maybe you're units are priced too high.

How do you find the best rates?

A good place to start is to look in the local Sunday paper. Notice that the classified section is divided by geographic area. Location is the most important guide to value for a renter. The same 3-bedroom, 1-bath house will rent for $ 500 in one part of town and $ 750 in another. Most people look for a location close to work or close to schools for themselves or their children. Many people also want to live in hip or trendy neighborhoods or in neighborhoods where they grew up in, close to friends or family members. Older renters like to live close to shopping and medical suppliers, like doctors or hospitals. Some renters want to live close to major arterials or freeways to speed up their driving around town.

Every city and town has different rental patterns, and in many cases those patterns relate to geography. You have probably heard of the "West Hills" or the "south part of town" or the "Northwest neighborhood." Sunlight drives value. The brighter the area and the better the views, the more motivated people are to live there.

The income or budget of the renter will also drive the decision of where to rent. Most tenants have limited funds and at the same time they have needs they want to fill with those funds. Some tenants want a swimming pool, some want a specific neighborhood and some just want a small studio while others need more room. In many areas square footage of the rental will drive the rental value. In other words, the bigger the apartment or house, the more money you will get.

Remember that when 67 percent of the nation are homeowners and only 33 percent are renters, there is a level at which renting a house does not make sense. Few will want to rent especially when the interest rates are low, builders have overbuilt, and financing with little down is very attractive. Also remember Uncle Sam helps ownership with interest deductions and property tax write-offs.

You could join the local apartment owners association to share rental rate information with other landlords. You will find that local trends will affect you as well as others in the marketplace. If you think you have set the rent right and the property still is not renting, maybe the property is facing an economic slump that is affecting all owners. Or maybe the lawn needs to be cut, or your "clean" is not as clean as the tenants would like it.

Maybe you are advertising in the wrong place. Is it is possible you bought your investment property in the wrong location? Just last week a tenant looked at one of our properties and was accepted as a tenant -- but decided to turn down the unit because it had ceiling heat and very high electric bills.

Basic amenities also drive the rents. Dishwashers, washer/dryer hookups (or a convenient laundry room), off-street parking, and cable TV hookup are some basic examples. If those are not available, consider renovating or find another angle that will attract tenants, like hardwood floors or views. Most tenants, being reasonable, are not attracted to dilapidated settings.

The magic of setting rents lies in your ability to track the market, which is fairly easy now with the Internet -- and be in tune with it. Great marketing and advertising will also have an impact on your ability to rent. It is important to keep track of market statistics. Factors like new job creation, new people moving into town (or out of town), rent control (which in some areas may limit your ability to charge market-rate rentals), the number of units in the pipeline, and new homes under construction will help give you a feel for the marketplace. This will let you know how to time your leases and their expirations as well as your rent increases. Sometimes in a weak market you need to offer some concessions like free rent, a TV, or lower move-in costs to attract tenants.

You can always set your rents a little high and see if the phone rings. It's easier to lower a rent than to increase it. It's smart to annually review the marketplace and stay in touch with changes in the marketplace. Nothing replaces the time you take to inspect the property and decide that this is where you could live.

Happy tenants stay longer and will pay rent increases.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Dec 2009 11:32:48 -0600

Selling your home? With the potential rewards that can be gained -- saving $ 4000, $ 8,000, $ 12,000 or more (minus your expenses) by not having to pay a Brokerage commission, many people wonder why less than 20% of home sellers undertake the task of selling their houses on their own. Possibly it has something to do with expertise. Many home owners who consider a self sale of their house back off when they see the level of knowledge and commitment that is needed to do an effective job.

If you decide not to contract Realtor services, we can still help you with your For Sale By Owner home. As CT, FL, MA and RI mortgage brokers, we have relations with many people looking to buy homes. It is in our interest to find them houses that meet their needs. Because we will earn our fees from the lending institutions, the home owner and the home buyer can benefit from our connection. Also, because we are also Realtors, we often have relations with home buyers as their Buyer's Agent. We can also help you set up open houses and showings, and post your home on the internet. Our goal here would be to gain access to the home buyers attending the showings to recruit mortgage clients. Selling real estate "for sale by owner" can be complex. We can help. Contact us today!

If you decide that selling your home your self is the best option, you will find the information on this Web Site to be of value. Most of what you will find here will be geared to monitoring the job that your Agent is doing, but it will never the less prove of immense value. The most successful home sellers are those who take an active role in the process, whether it is as a sale by owner or a sale by an Agent. If you elect to sell your home yourself, then information is crucial. Call us for a free consultation on how we can help you sell your own home! An excellent source of additional information is Steve Berges' newly revised For Sale By Owner. Steve details how to get the most out of your sales effort. This is a useful book for those using Realtors as well as for those selling on their own.

There is no Real Estate Brokerage Commission paid. You receive all of the Cash from the sale less your marketing costs. This is the biggest benefit of selling your own house.
You are in total control of the transaction, whether for good or ill.
If mistakes are made, they are your own. No one else will make mistakes for you.
You are always available at the home for showings, answering inquiries, etc.

You must rely on your own knowledge and intuition.
All marketing and advertising costs are paid by you. This can be expensive. We offer listing and marketing services for sellers working on their own. For more information, contact us.
Unless you pay to have your home listing included you will not have access to the MLS, the Multiple Listing Service, in your area. You must find buyers your self.
Without all the tools, you may under price or overprice the house. Knowing how much your home is worth is the first step in marketing the property.
If you are not skilled in negotiation, you may not get what you could have for the sale price.
The paperwork, legal forms, etc. are your responsibility and must be handled by you.
Your free time will be somewhat or severely limited during the time you have the house on the market.
Buyers often believe that if you not paying a commission, they, the buyers, should get the savings.
In negotiations you must relinquish emotional ties with your house. If you don't you be at a disadvantage.
You must be knowledgeable of legal and financial issues to be effective.

Don't short change your house preparation effort. You will be competing with houses listed by Agents who coach sellers about preparing their homes for sale, based on experience.
Be aware of legal requirements regarding disclosures in your area. Not disclosing necessary information or not using the correct form could result in legal action by a buyer.
Get good at advertising and marketing for sale by owner homes. Make your house stand out above the crowd.
Familiarize yourself with offers and contracts now.
Get maximum exposure. We offer a complete menu of services if you want to sell your home on your own. Packages available range from a comprehensive marketing plan up to a complete deluxe package that will market your property until it is sold and keep your home on the MLS and Realtor.com for up to 6 months.
Be aware of equal housing opportunity laws. Discrimination limits your potential market and is illegal with fines up to or beyond $ 10,000.
If selling your house on your own is your choice, this checklist will be of great value to you. If you think using an Agent is best, see the section devoted to finding and selecting an Agent.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Tue, 15 Dec 2009 11:40:18 -0600

Buying your first home can be one of the most exciting and memorable times of your life. In addition to providing the safety and security of home ownership, buying a home makes great financial sense. Not only can you deduct home mortgage interest and property taxes from you federal income tax returns, but also a portion of each mortgage payment you make will help build equity in your home. In addition, when the value of your home increases, so does your equity. Equity in these instances refers to the difference between what you bought the house for and what you sell it for. Assuminig the value increases and assuming you pay down the principle on teh mortgage loan, for your first home could become one of your best investments. In Rhode Island house prices have appreciated above national averages for the past 10 years.

For you to be able to realize your dreams and own a place you can truly call 'your home' you must first take stock of both your present and future circumstances. What are your earnings now? What are your chances of promotion? How much room do you need? How long a commute would you consider? How much money are you able to put down as a deposit? It is suggested that you should have approximately 1/4 of your assets in real estate - but if you have none, where do you start? How do you get a mortgage? How can you best prepare yourself to take this most important first step? We have gathered a wealth of information for first time home buyers here and on the associated pages of Buyer's Place. First time home buyers should review all the areas of this site to gain a strong understanding of what is involved in buying your first home.

First time homebuyers should review the links below. These links will take you to sections that outline many of the ways first time home buyers can prepare for the purchase of their new home. But the first thing to do as first time homebuyers is get your own financial house organized, and then check your credit. Then you can prepare a budget for the home purchase realistically. Once this is accomplished, your next step should be to get pre-approved for a mortgage. Of course, you should always feel free to contact us for assistance.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Tue, 15 Dec 2009 11:14:05 -0600

Real estate financing for your investment property can be simple or complex. Investment property mortgages, or commercial mortgages as they are sometimes known, are available for real estate investors, as is private money, but the decision to use investment property mortgages to finance your real estate investment depends on very specific aspects of the particular investment property, the current financial market, and the financial circumstances of the investor. Some things to consider are mortgage interest rates, tax issues (income vs capital gains), payment issues and rent collection, maintenance costs on the property, debt service, and other financial matters.

Registered users of this site can access comprehensive cash flow management tools to determine cash flow and other aspects of managing your investment property, to see what numbers work for you.

Commercial mortgage financing costs more in terms of interest than residential loans of the same value. This is because lenders consider the commercial mortgage somewhat more risky. After all, generally investors don't live in their investment properties, and view maintenance as an unwanted expense. Of course a real investor would want to maintain the value of the property and therefore would want to keep the property well maintained. In any event, in commercial mortgages, interest rates are higher, and the lender is generally more demanding in their criteria for approving the loan. We are talking about investment property loans from standard lending institutions. Private funding is also available, and while it does have advantages, it is is usually even more expensive that commercial mortgage money.

If you believe what it says, late night TV is full of great ways to invest in real estate. Most investors -- they seem to suggest -- are looking at big paybacks with no money down. That's unlikely, like going to the store to buy a watermelon and offering to pay for it with a paper clip.

It takes forethought and preparation to be successful in real estate investing. You need to realize that buying real estate is investing and with investing there is risk: If you don't know what you're doing, you can make a costly mistake.

Beginners to real estate investing should start with small projects, just like Walter from Hawaii. He's been involved in investing in real estate for more than 12 years and invested in various two- to seven-unit properties. Properties -- both commercial and residential -- in good locations have made money for him. The properties he purchased in marginal locations, with high leverage down payments and extensive tenant turnover have not worked out for him.

Walter started with a duplex, which he later refinanced to buy a four-plex. He painted and put a new roof on the four-plex, then sold it for a seven-plex. He also bought a four-plex with one-bedroom units. He renovated the units and installed new siding, but in the end, he was lucky to receive a return on his investment.

Living in Oregon, he was far away from his real estate investments in Hawaii and could not pay enough attention to the renovations. One moral of the story is that fixer-upper investments -- like real estate investments generally -- work best if you live nearby and, if possible, do the work yourself.

Other factors hampered the success of his investment, such as a market more suited to two-bedroom units rather than one-bedroom units. As to Walter, he learned more with each investment and he also learned to be conservative.

Whether you're looking to purchase a house, duplex, 50-unit apartment project, or commercial property, you need to carefully review the property's economics. Are the rents used in your projections realistic? Are the expenses correct? Can you live with the cost of investment mortgage financing? What happens when you have a vacancy? Is there enough cash flow to cover it?

xxxxxxx

Are you putting money aside in a reserve account? How much money do you have to spend on repairs? Some investors believe that they should never repair a property. Unit inspections in occupied units will uncover problems that can be solved while the tenants are still living there and while there is cash flow, rather than waiting for a vacancy.

The West Coast and the Sun Belt are currently better bets than investing on the East Coast. Larger cities tend to be better investments than small towns because there is a larger potential pool of tenants and buyers. Communities located on freeways also tend to be more attractive as investments because they have good access to metro areas. Vacation destinations or towns that are economically diversified will be more stable as well.

Another client had 13 houses in the 1980's and lost them all. So he went back to being a painter and started all over again one house at a time. His goal is to have 20 houses for retirement. He adds bedrooms, renovates, upgrades, and paints them, and then he either sells them so he can buy two more or holds them.

Remember that the economy, interest rates, layoffs, job opportunities, and construction trends impact every real estate investor. Watch the trends and speak with local real estate brokers, appraisers, investors, mortgage brokers, and real estate attorneys.

A real estate investor always needs an exit strategy, preferably more than one, when he or she buys property. You need to have a vision showing when you will sell, if you will take the money and pay taxes or complete an IRS 1031 tax deferred exchange. Is your plan to have enough money for retirement? Are you going to pay off the property or refinance it and use the proceeds to buy another investment?

If you live in a depressed marketplace you need to decide if the weak economy will last a long time or if the area will pull out of it. This information is critical to your exit strategy. If you cannot find a buyer when you're ready to sell, then what? Structure your investment property mortgages without prepayment penalties, or make sure that your loan can be assumed. Check what the loan assumption costs will be and if your real estate financing terms will change with an assumption. Remember banks structure loans to benefit their bottom line and financing can be very hard to assume or refinance. It pays to research financing options before you make a final decision, and interest rates should not be your only focus.

You have to think ahead and be prepared for a range of possible events. For example, you invest with your best friend and her husband, but she gets divorced and needs the funds out of the investment to pay off her husband, what would you do? Another variable is your health or your family's health: Will you may have to liquidate the real estate to pay bills?

Your exit strategy will help you make a better decision as you invest into the future. Plan your goals ahead. No one is forcing you to buy. Pick your time, and pick a property you can live with into eternity. Worst case, if the market does not move the direction you expect and the value does not go up, at least your tenants are paying off the loan.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Tue, 15 Dec 2009 11:07:21 -0600

There are several benefits you get from hiring a property management company. They include assessing the best possible rent for the property, calculating accurate income and expenses on the property, staying current on the legal environment and maintaining the asset.

Deciding to hire a property management company is only the first step. Finding the right company that's matches your goals for running your rental is the next critical consideration.

There are several questions to ask any commercial property management company before entering into a contract with them:

How long has the company been in business?
What types of properties does the company manage and in what geographic locations?
Discuss the management company's style of managing rentals.
Make sure the goals of the owner and the management company are the same.
What accreditations does the company have?
Is the company a licensed Broker and do the employees, such as a regional supervisor, have real estate licenses?

Determining if property management is the right investment for your rental is an important decision. Keep in mind that there are just so many issues now that can be sprung on a more or less innocent owner who just thinks the rental is a good investment. We think to protect that investment you really do need a property manager.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Sat, 28 Nov 2009 12:50:32 -0600

Open House Sunday November 29th from 1pm till 3pm: Call Mandie Sullivan for details: 401-293-0631!

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02919-Johnston

FOR SALE
$299,900 Reduced!

	Focus Professionals, Inc.

Mandie Sullivan Email Mandie Work: 401-293-0631 Cell: 401-474-1861 Fax: 401-633-6938
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	Address: 50 Mohr Street Type: Residential Style: Single Story Bedrooms: 3 Bathrooms: 2 Suite: No Living Area: 1,904 square feet Year Built: 1940 More Details

	Description


	Fabulous Fresh Waterfront ranch on Oak Swamp Reservoir! 2 docks for baot lovers, fishing, swimming, ice-skating & more. Classic Library w/ built in bookshelves, formal dining, living room, family room, Large Gazeebo and patio area. Marble fireplace. Beutiful wood burning stove. More Description

Brokered and Advertised by Focus Professionals, Inc.

Information is deemed to be correct but not guaranteed.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Mon, 09 Nov 2009 15:12:42 -0600

This is true for both the first time buyer credit, and the existing buyer credit... the amounts bantered about are MAX amounts, and not every purchase will get these amounts. Thought I would reblog this...

Via Kris Wales - Macomb County MI real estate blog & homes for sale search site (Keller Williams Realty - Lakeside Market Center):

One of the common misconceptions for home buyers (and some real estate professionals) is that the first time home buyers tax credit is $8000 for all buyers.

When reading the fine print of the IRS form 5405 there is an entry line to fill out asking for the smaller of 2 items: $8000 or 10% of the purchase price.

An example: Mr. Smith purchases a home for $65,000. If he meets the criteria to receive
the 1st time home buyers tax credit he would enter $6500 on line #1 of form 5405. If Mr.
Smith purchased a home for $90,000 then he would enter $8000 on that line.

Reiterating: The tax credit is for 10% of the purchase price of the home up to $8000. It is not a full $8000 for every home buyer.

Let's all help to stop the confusion to home buyers by using the words "Up to" in our articles.

Edit: The chart that NAR put out for their members to use states "$8000" but it doesn't say "Up to $8000". You may want to add the language to your own charts for accuracy.

Contact Kris Wales - A partner for your real estate needs in Macomb County MI

Search Macomb County MI homes for Sale with MLS provided data updated daily.

Want to chat about local real estate? Visit A Macomb County MI real estate blog

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Mon, 09 Nov 2009 15:08:30 -0600

Today I am starting a series of posts to provide links to our listings in Rhode Island and Southeastern MA... For today, I am featuring just Rhode Island real estate. Each week I will post other listings our agents have for sale.

For today:

24 Gallup Street, in South Providence (02805) -- 2 family house with 1st floor unit having 3 bedrooms, and the 2nd-3rd floor townhouse style unit having 4 bedrooms. The owner is also selling the vacant adjacent lot. For the house, $99.900. For the adjacent vacant lot: $36,500. If a single buyer acquires both, the seller is willing to negotiate the price of the parcel and house. See listing info: 24 Gallup Street Providence RI 02905

50 Mohr Street, Johnston RI (02919) -- Lakefront property on Oak Swamp Reservoir, with 2 docks for boating. 3 bed 2 bath, with detached garage and Gazeebo. Fanastic views. Classic library with built in mahagony book shelves. Wood buring stove. Marble fireplace. Reduced to $299,900. Will sell fast. See listing info: 50 Mohr Street, Johnston, RI 02919

20 Hall Avenue, in Warren Rhode Island (02885) -- Waterfront on Belcher's Cove. Multiunit capability, with 2 built out units currently existing. 2 buildings. Used to be a lumber mill. Possible 3rd and 4th units. Reduced to $299,900. Great investment property. See listing info: 20 Hall Avenue Warren RI 02885

Please call Mandie Sullivan, 401-293-0631, for details on these properties. I will be posting additional properties each week. Thanks.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Mon, 09 Nov 2009 08:13:20 -0600

The tax credit for first time homebuyers has been extended, and enlarged to allow hoigher income folks to receive the benefit. In addition, the credit has been extended now to existing homeowners who purhcase a new home. Here are some details:

First-time homebuyers

Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”

• A purchase must be under contract by April 30, 2010.

• A purchase under contract by April 30 must close no later than June 30, 2010.

• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.

• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.

Current homeowner tax credit

An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.

• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.

• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.

Additional changes

The tax credit extension includes other new rules, such as:

• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.

• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).

The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Thu, 29 Oct 2009 14:41:13 -0500

Thought this was worthwhile...

Via Heath Coker, Real Estate Broker (REindex.com & Cape Group Real Estate):

The FBI has verified, on their web site, that there is a "Jury Duty Scam". This is a phone related scam, so if you know anyone who doesn't use the Internet, especially older people, you should make sure they do not become a victim. The caller claims to be a court officer, and then accuses the victim of missing a jury duty appointment. After the victim is sufficiently worried about failing to report for jury duty, the caller then suggests that they verify if they have the correct person. It is at that point that they ask for ss number, birth date, and sometimes even credit information.

The caller works the conversation into a threat of a fine that can be paid over the phone by a credit card. What is amazing is that this has been going on in some form since early 2005! If you have one of these calls, or know someone who has, one thing to do is *69 after you hang up. This will give you the phone number that the call was made from. Then contact the FBI and report the incident.

You can also use *57 which records the phone call at the phone company as a "call trace". One web site says: "When you activate the Call Trace code (*57) immediately following the harassing call, the caller's phone number is recorded by the phone company." But *57 doesn't give you the phone number. The phone company has to get an authorization form before the harasser's phone number can be turned over to law enforcement and there may be a fee. Some phone companies charge you each time you use Call Trace and others have a monthly charge for an unlimited number of traces.

If the phone number is blocked, tracing the call may help the FBI or other law enforcement agencies gather enough information to go after the schemers even from the perspective of "Do Not Call" fines and penalties, especially if your phone is on the DNC list. In any case, don't get your identity stolen this way. Tell someone who might be a victim to be careful, too.
Heath Coker, Owner of Cape Group Real Estate
www.CapeGroup.com / capegroup@capegroup.com
508-548-8888 Licensed in MA
Its a beautiful day on Cape Cod!
@CapeGroup

REindex.com, The Site Engine®
508-495-1000 reindex@reindex.com
See our 2 Minute YouTube www.REindex.com/WhatIsREindex.html
@RealEstateIndex

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 23 Oct 2009 14:53:34 -0500

One of my agents is hosting an open house on Sunday, October 25th from 1:00PM till 3:00PM at 1618 Fish Road in Tiverton RI. This 2 bedroom house on just under an acre has been newly rennovated. Mandie Sullivan is the hostess for the open house, and we find this house to be a great location at a great price, and we welcome all comers.

The location is right off Route 24, about 20 minutes from downtown Providence and about the same to Newport. Boston is about an hour away.

The price has been reduced recently: See our listing information at http://www.homesalesri.com/CurrList_listing_5.php

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 23 Oct 2009 13:31:46 -0500

I wanted to take a moment to welcome Nancy Rosedale aboard to our real estate firm. She comes to us with 18 yrs experience as a mortgage loan originator, now affiliated with Shamrock Mortgage, with many years of experience as a property investor, owning a number of multi unit apartment buildings, and with great experience in real estate sales.

Nancy will be working the Northern Rhode Island region, from Providence North, and the Southeastern Massachusetts region, including Bristol County and the Cape. She will be working with buyers, listings, and of course, investors. She has been doing a large number of BPOs for foreclosed properties as well, and will continue to do so. Welcome Aboard Nancy!

We also want to welcome Glenn Russell to the world of brokers in RI... Glenn has been a Broker with us in Massachusetts for several years now, and just received his Rhode Island Brokers license this week. Congratulations Glenn on a job well done. Glenn is also a practicing attorney in MA, and has been handling a variety of property related cases there, including a land related suit that is precedent setting. We expect to hear about Glenn's work in this regard in the local and perhaps national media over the next few weeks.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 09 Oct 2009 13:20:16 -0500

Interesting notes on Property Flipping FHA Guidelines... Reblogged...

Via Colleen Craig (Southern California Mortgage Professional):

Property Flipping guidelines extended by FHA , until May 2010! What does this mean and who does this affect?

What is property flipping?

No .......it's not flipping your home with another couple as seen in trading spaces on TLC!



FHA GUIDELINES STATE THE FOLLOWING:

Property flipping is a practice whereby a recently acquired property is resold, often for a considerable profit.

Most property flipping occurs within days or a few weeks of acquisition and usually with only minor cosmetic improvements, if any.

While there is nothing illegal with selling properties within days of acquisition, some of these transactions are fraudulent because the condition of the property is misrepresented and/or the value of it is artificially inflated.

Effective June 9, 2008, FHA temporarily waived the property flipping rule 90-day waiting period, for homes that were foreclosed on and being sold by lenders or by property disposition firms on the behalf of lenders.

So if you have a property that was purchased by an individual investor,  or investment group, you must must wait 90 days to DO ANYTHING! We can not order an appraisal or case #, we can't open escrow, order title or apply for the mortgage. You can't even draw up the contract, or do inspections or the buyer will be in jeopardy of losing their deposit. There basically can be no record of any sale during that 90 day timeframe.

This has become an issue in recent months because of the lack of knowledge of the guidelines along with the anxiousness of all parties involved.   Day 91 is when it can all begin unless the exceptions apply.

We CAN however, apply for the mortgage with a property "to be determined "and get the buyer PRE-APPROVED.

So keep this in mind when you are putting your deal together and expecting your lender to jump through hoops on day 91 and close in two weeks!





The waiver applies to owner occupants only and does not apply to people/entities that purchase foreclosures either singly or in bulk for resale. Subsequent sales of such properties will continue to be subject to the standard regulatory requirements.

The temporary property flipping waiver has been extended and FHA will recognize sales agreements on foreclosed properties signed by the seller and buyer on or before May 10, 2010.

             Do you want more BORING                      but pertinent facts you MUST know if you encounter a flip     ????

The only exceptions to the FHA property flipping rule are:

1. Properties acquired by an employer or relocation agency in connection with the relocation of an employee.
2. Re-sales by HUD under its Real Estate Owned (REO) program. There are LOTS out there! And most homes can benefit from an FHA 203k streamline loan!

3. Sales by other United States Government agencies of single family properties pursuant to programs operated by these agencies.

4. HUD REO properties that were purchased by nonprofits at a discount with resale restrictions.

5. Sales of properties that are acquired by the seller through inheritance.

6. Sales of properties by state and federally-chartered financial institutions and government sponsored enterprises.

7. Sales of properties by local and state government agencies.

8. Sales of properties within Presidentially Declared Disaster Areas.

9. The restrictions do not apply to a builder selling a newly built home or building a home for a borrower.

10. The sale must be by the owner of record.

11. Appraisers are required to analyze any prior sales of a subject property in the previous three years for one to four family residential properties.

12. A lender must obtain a second appraisal by another appraiser if:
the re-sale date of a property is between 91 and 180 days following the acquisition of the property by the seller, and
the resale price is 100 percent or more over the price paid by the seller when the property was acquired
FHA reserves the right to require additional documentation from a lender to support the resale value of a property if:
the resale date is more than 90 days after the date of acquisition by the seller, but before the end of the twelfth month following the date of acquisition, and the resale price is 5 percent or greater than the lowest sale price of the property during the preceding 12 months.

Any subsequent re-sales of the properties must meet the 90 day threshold in order for the mortgage to be eligible as security for FHA insurance.

So remember to do your research!  We are the professionals and it is our job to know this information for our consumers. We will save time, money and problems if we know this up front.

Happy Selling, buying and financing peeps!



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Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 09 Oct 2009 13:06:07 -0500

Below is a news brief published by Busines Week Magazine today. My question is, if the banks make it harder to obtain a short sale, will this adversely affect the rate of foreclosures? Perhaps an "unintended Consequence" of making short sales tougher to gain permission on will result in an increase in foreclosures, which will then drive home prices down further, resulting in even more strategic defaults, and a viscious cycle of downward spiraling values, sales.

What is your opinion? How would you recommend banks handle this sort of thing so that there is less negative impact?

From Business Week today, as quoted at Realtor.org:

Banks are backing away from short sales, forcing sellers to pay extra at closing or demanding a promissory note for the amount due. One-third of borrowers owe more on their mortgages than their properties are worth, according First American CoreLogic.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

"It drives me up a wall," says Robert G. Hertzog of Summit Home Consultants in Phoenix. "[The bank is] holding my client hostage."

Source: BusinessWeek, Christopher Palmeri (10/09/2009)

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 07 Oct 2009 11:22:38 -0500

We have need of a quote for complete demolition of a 2 family house in East Providence... we are hoping to get this ASAP... anyone have a recommended vendor for this sort of thing?

It appears that the house is rotten in structurally important areas, perhaps even termite infested... the structure was built c. 1920... We are seeking to get a quote for demolition of the building as soon as possible.

If you know of a good demolition crew that you have actually used before, please either pass their info on to me, or have them call us at my direct line 401-293-0131

Time is of the essence on this, so please bear that in mind...

The vendor will also be asked to quote design build services, if they provide such services, at the same time...

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Thu, 01 Oct 2009 12:19:15 -0500

We are seeking to recruit motivated buyer and listing agents for Southern RI (Westerly area and West Greenwich) and Kent County RI. We are also seeking agents in Bristol County MA and the Cape. Compensation plan is very competitive, no desk fees, free website, well established lead generation system, no charge for leads.

We need buyers agents, and listing agents TODAY!

Give us a call 401-293-0131 or email us here...

We have loads of qualified buyers, and a great team.

Come aboard today!

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Thu, 01 Oct 2009 10:16:09 -0500

Great post below... worth reading...

Via Jeff Geoghan MBA - Lancaster PA Real Estate Expert (The Jeff Geoghan Realty Group, Coldwell Banker Lancaster PA):

This is one of those posts where I wish I didn't have to write it, but felt it was so important to my readers that I would be remiss not to at least talk about it.

Everyone out there probably knows somebody who is behind on their mortgage payments, looking for alternatives and likely also just finding out that their home's value has dipped below what their loan amount is. I know some within my own personal circles. It's a tough situation for me to advise them as a professional because it's such a personal challenge to their pride and self-worth, not to mention their plans and dreams for the family. The question we're asking is "when is this going to stop and where are we heading?"

I'm going to put up a few graphs that show the trends nationally with regards to mortgage delinquincies:

This chart is by quarter - Single-family mortgages set a new record delinquency rate in the second quarter of 2009, according to a quarterly survey by the Mortgage Bankers Association. Those of us in the real estate business see the foreclosure process (just visit the local Sheriff Sale docket to see the current numbers) but the looming delinqency-to-foreclosure issue is far, far larger.

The Wall Street Journal on 8/3/09 reported the following quote: “While subprime mortgages sparked the first round of housing problems two years ago, now "troubles are lurking further up the food chain," says Joshua Shapiro, chief U.S. economist at MFR Inc. White-collar job losses have accelerated while more adjustable-rate loans to prime borrowers are resetting to higher payments. ‘You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top,’ he says.”

The first objection someone may have would be to say "yes, but historically those who are delinqent usually get their act together and come current on the mortgage after a while". That WAS true, but not anymore! We call that the "Cure Rate", that is the rate of delinquencies that go back to current. The Wall Street Journal reported on 8/24/09 about a Fitch analysis that found that the Cure Rate from 2000-2006 was 45% (which means about half of people fix their delinquency). However, as of July 2009 the rate had dropped to just 6.6%! That means that over 90% of delinquent customers are going to foreclosure. Take a look again at the above chart...

The next thing someone will say is "well, that's the 'sand states' and not my area". Here's the chart for all 50 states showing the same breakdown of delinquencies and foreclosures. Guess what - most states have a significant problem, especially compared to historical figures.

Now the next thing someone may say is "aren't those loans going to get 'fixed' by a loan modification?" I know several people right now who are applying for a Lancaster County loan modification but are waiting and waiting. I hope it works out for them...

In reality, loan modifications are hardly making a dent. To me, that's a burning question. Why arent banks being more aggressive in giving customers the option to extend their loan and/or reset to a lower rate? Why are they being SO difficult? The people I know don't want to be foreclosed. They CAN make payments. They just need the terms redrawn to allow them to catch & keep up. Loan modifications are not helping us get this crisis under control.

What are the causes of all these delinquencies? Here's a chart that is enlightening:

We hear a lot about adjustable rate mortgages being the culprit, but the reality is that it's the loss of jobs and the tanking real estate market that's the perfect storm. See my previous post on unemployment in the nation, the state and Lancaster County.

Keep in mind, this post is not intended to give us "good news". You may be experiencing good things in your market and that's great. My intent is to get us thinking about the challenges that aren't going away and how we're going to address them as homeowners, agents and professionals. I'd love to hear your ideas!

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Sep 2009 14:49:13 -0500

I thought I had heard it all, but it seems I have not: we are trying to show a house to a buyer, and in the comments the MLS listing indicates that unless the buyer agrees to allow the seller to live in the house for 3 months after closing, they wont be allowed to see the house. Now you all may correct me if I am wrong, but this means that the buyer would have to go with investment property lending, as they would not be able to call the house "owner Occupied" when applying for the loan. Most likely the lender would not grant the buyer this concession. Also, because of this, the buyer would forgo the $8K tax credit, if they are first time buyers. After all, it would not be an owner occupied house.

Note that this house is listed at market value, without a discount for the rent!

Of course, we have seen deals go through that allowed the seller to stay, at a low rent, until such time as they found a place to move to, say, a month after closing. But again, all of the above applies, and at least in those cases the seller was willing to pay rent.

This seller wants to live rent free for three months AFTER Closing... not 3 months from today, but so much after the closing, rent free.

Other than a very generous investor, who is paying cash for the house, the house becomes essentially unsellable with these conditions.

Question: Have you seen such conditions on a sale? Should this house be permitted into MLS, since the conditions are prohibitive? What would you say to such a condition? Would you list such a house? Would you advise a buyer to take the deal?

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Sep 2009 12:50:12 -0500

Now we are seeing the banking industry, and academic economists, supporting an extension and expansion of the home buyer tax credit: I got this from the NY Times, and I have to say I agree whole heartedly... John Maynard Keynes used to call it priming the pump, but we have seen this called "socailism" by those obviously unfamiliar with what Socialism actually is...

I quote:

More than 40 percent of all home buyers in 2009 will qualify for the federal tax credit, costing the government about $15 billion, twice the original estimate, but most housing experts applaud the policy and favor expanding it.

Now the decision is up to Congress.

Mark Zandi, chief economist for Moody’s Economy.com, believes that the credit should be expanded to all homebuyers, even investors, through summer of 2010. “The risks of not doing something like this are too great,” he said. “I don’t think the coast is clear.”

James Glassman of JPMorgan Chase also favors expanding the credit but continuing to limit it to first-time buyers.

Industry members who are lobbying for the extension are optimistic and say they believe an extension will be approved in some form. “There will be a lot of water under the bridge, a lot of compromise, between now” and a final bill, said Richard A. Smith, chairman of the Business Roundtable’s Housing Working Group.

End Quote
Source: The New York Times, David Streitfeld (09/15/2009)

Given this, and the fact that the economy is still losing jobs at alarming rates, we should stimulate in many ways, and this is a good one, impacting many industries.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Wed, 16 Sep 2009 09:44:51 -0500

While I have heard some say that the real estate market in their area (esp. the Detroit area) was recovering without help from the tax credit, I find myself hard pressed to believe it... the credit, which may not have had as big an impact as hoped, never the less did have a large impact... we need to extend it.

Via Rob Arnold, metro Orlando full service, investor friendly & foreclosure Realtor (Sand Dollar Realty Group, Inc.):

The National Association of Realtors issued a call to action today to contact your Senators and Congressmen about extending the deadline on the $8,000 home buyer tax credit. Click the link above and you can see NAR's video on this subject.

While I am glad that the tax credit has probably helped stimulate the real estate market and the economy some, I also wonder about the longer-term effects of this so-called "stimulus" money on this nation's deficit and national debt.

I would rather see the money in the hands of the people as opposed to Wall Street fat cats or failing banks though. However I also hear stories on the news and elsewhere of people using the $8,000 to pay for frivolous items. Kind of a windfall shopping spree. I also don't like mortgaging the future of this country by giving free money to people while increasing massive debt that may end up crushing our nation one day (if it hasn't already). Kind of "socialized" real estate buying if you can call it that. Take from my pocket and put it in yours.

I did some quick research in our Mid-Florida Regional MLS system which covers portions of some 14 counties surrounding Orlando and Tampa. Of 55,500 sales since 12/1/2008, some 23,594 (42.5%) sold for all cash. Which means some 31,906 (57.5%) sold for some type of financing terms. I am assuming that most of the cash buyers are investors who won't be getting the tax credit, while most of the financed buyers are owner occupants many of which will be getting the tax credit. I'm not sure exactly what these numbers mean though. However it does show that many people are buying regardless of whether they are getting the $8,000 tax credit. Personally I bought an investment property earlier this year and didn't get a government check out of it.

So what's your take on extending the tax credit? Is that a good thing? Or should the government simply butt out and stop meddling with the economy? I haven't made up my mind, but overall I tend to be against most government programs that involve spending my tax dollars on items that aren't prescribed specifically in the Constitution.
---------------------------------------------------------------------------------------------------------------------

(Copyright © Sand Dollar Realty Group, Inc. All rights reserved.)

Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.

407-389-7318 / 1-877-389-7318 www.SDRhouses.com   www.WeBuyHousesFlorida.com

We sell foreclosure, short sale, and bank owned REO house home throughout Central Florida, metro Orlando, and the Space Coast. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.  Our firm also provides flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Florida including Orlando, Altamonte Springs, Apopka, Kissimmee, Sanford, Lake Mary, and Deltona.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Sun, 13 Sep 2009 09:59:23 -0500

Thought this was useful for consumers to see as well... Buyers: remember, just because a person tells you they are an expert, does not make it so... here is a great post from a reputable agent that explains in part what an expert would really be...

Via JL Boney, III Columbia, SC Real Estate (Russell and Jeffcoat):

There's no doubt in my mind that one of the most overused words in the world today in EXPERT. It seems that everywhere you turn there are tons of people in every field imaginable that are experts. But the truth is that it takes more than saying you are an expert to actually be one. Unless you are an expert at making claims and running your mouth, just making the statement won't really do you any good. But, if you want to be one, the answer is simple, work and learn.

Know your contracts and paperwork - What ever brokerage you work for, or where you are a lender, or appraiser, or anything else related to this business, you have paper work. Never ever have someone fill out paperwork that have not read from top to bottom. As far as a your contract is concerned, the one you use needs to be a reaction more than formality. You need to know it that well. The difference between an expert and someone who just claims to be one, is an expert has done what they need to do and learned what they need to know to succeed. So know your paperwork and your contracts, that way you don't look incompetent in the process on trying to convince someone that you're a big deal.

Know your area- There's nothing worse than someone trusting you to take them around and show them an area, and you don't know it that well yourself. You need to know off the top of your head as much as you possibly can about the area or areas that you service. Clients may want to know where the closest grocery stores, shopping malls, hospitals, or even Pizza Hut is from what may be there future home. If they want to be close to the interstate, then you need to know the communities that will put them within a close proximity to the interstate in question. It's your job to provide answers and take care of your client's needs, so you need to know your area in order to do that.

Know your market- The best way to know your market is to become an active part of it. Even if you have no clients to show around at this current moment, you still need to be ready for them when you do get one. That means staying on top of the current market trends. Study your MLS and check on communities for various price ranges. You need to know what's moving and what isn't. This helps you with both buyers and sellers. If a buyer comes to you and wants a home in a community that's flying off the shelf, then you need to make them aware of it. They may not believe you, but once that house sells out from under than, they will know you were serious. If a seller comes to you to list their house, then you need to be sure you can speak knowledgeably about what price range is moving well, that way you can immediately tell them what to expect.

Know what buyers want- This again will help you with buyers and sellers. If you list a house and you know that it's outdated because buyers are no longer into the bright, orange shag carpet, then you can explain to the seller that they need to be willing to make some upgrades in order to compete with the current market. If you are working with a buyer and you know what's popular in today's market for your area, then you can usually put them closer to a home that suits their needs sooner than if you are taking a shot in the dark. It just makes things run a little more smooth.

Know that you can't fake it- This is a hard one for people to except, but the days of fake till you make it are pretty much over. You may be able to fool a few, but eventually you will end up with a savvy buyer or seller and then the gig is up. If you don't know an answer, don't be afraid to admit it, just say you don't know but you will find out. They have Google too, so if you make up a lot of crap in an effort to make yourself look better, you going to look like a real idiot when they make it back to the laptop and they find out you lied. So just don't play that game. With the wealth of information available at the world's fingertips, you better be honest and upfront. Just do the right thing and work hard to learn the things you need to know. That way when you claim you're an expert, you can actually put your money where your mouth is when the time comes.

www.jlboney.com

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 11 Sep 2009 09:26:11 -0500

WASHINGTON – Sept. 10, 2009 – The Obama administration’s $50 billion mortgage relief program is finally picking up speed after a sluggish and disappointing start: Nearly early one in five eligible homeowners have been offered help so far.

The “Making Home Affordable” plan was launched with great fanfare in March. As of last month, lenders had sent out more than 571,000 offers to reduce borrowers’ monthly payments, the Treasury Department said Wednesday.

That’s 19 percent of the nearly 3 million U.S. homeowners eligible for a loan modification under the plan, up from 15 percent at the end of July.

“There are signs the plan is working,” said Michael Barr, assistant Treasury Secretary for financial institutions. “But we can do better.”

Of the modifications offered, about 360,000 borrowers, or 12 percent, have signed up for three-month trial modifications, which are supposed to be extended for five years if the homeowners make their payments on time.

To increase pressure on the industry, Waters and other lawmakers threatened to revive a failed proposal, opposed by banking lobbyists, to let bankruptcy judges rewrite the terms of a mortgage.

That change is necessary, consumer groups say, because getting a lender to do so voluntarily is still a time-consuming, bureaucratic nightmare. Many lenders are still scheduling foreclosure sales, and charging borrowers fees for participating in the Obama plan.

“The administration has got to put some teeth in this and really get some consequences for the lenders and servicers who are not cooperating,” said Bonnie Mathias, a board member of the Association of Community Organizations for Reform Now, or ACORN.

But mortgage executives say they are racing to implement the program, hiring thousands of workers to handle an unprecedented flood of calls.

“We fully understand the urgency,” Jack Shackett, Bank of America’s head of credit loss prevention, told lawmakers. “We understand that we have a long way to go under very challenging circumstances.”

Bank of America has doubled its number of trial modifications in two months to nearly 60,000. But it still lags its competitors, having enrolled about 7 percent of its 836,000 eligible loans, compared with 25 percent for JPMorgan Chase & Co.

The Treasury Department’s decision to publish those numbers has clearly provided a powerful inventive for many in the industry.

Lenders are “concerned about the report card showing them in a worse light than their peers,” said David Stevens, an assistant secretary at the Department of Housing and Urban Development. “Nobody wants to be a low performer on that score card.”

Industry executives also say they are planning to work with Obama administration officials on a possible extension of the program to unemployed homeowners. Also under consideration is finding a way to help borrowers with “pick-a-payment” or option ARM loans, which gave borrowers the ability to defer some of their interest payments and add them to the principal.

Treasury says 48 mortgage companies are now involved in the program, up from 38 in July. The companies have requested financial information from almost two-thirds of eligible borrowers and say they are on track to have 500,000 loan modifications in place by Nov. 1.

The program is voluntary, relying on subsidies to encourage mortgage companies to participate. Lenders must agree to reduce the loan payments to 38 percent of a borrower’s monthly pretax income. After that, the government and lender split the cost of bringing the payment down to 31 percent.

Borrowers can receive rates as low as 2 percent for five years.

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

Rhode Island Real Estate -- Focus Professionals, Inc. — Fri, 04 Sep 2009 10:22:15 -0500

An interesting perspective... I am not sure how the numbers were deveoped, as it seems pretty high to me... over head costs for the admin of the tax credit are spread over the same staff that handles other tax credits, I assume, so if tiese numbers are trying to attribute overhead to the credit, it would seem high...

It would be intersting to see the data on this, and the associated analysis...

Via John Mulkey, Housing Guru (TheHousingGuru.com):

Many see the $8,000 first time buyer tax credit as an excellent stimulus for an ailing housing market; and some are seeking an expansion that would extend the credit to all home buyers. Others have proposed increasing the amount to $15,000. After all, spending such small amounts is insignificant when measured against the stimulus and bailout packages that have cost trillions.

The first time buyer tax credit was intended to stimulate housing, to bring in more buyers; and it has succeeded. Just like the Cash for Clunkers program stimulated new car sales, the housing stimulus has brought in more home buyers. But what if we discovered that the $8,000 number didn’t really cover the cost? What if we discovered the actual cost of bringing in each additional buyer wasn’t $8,000, but was more than 5 times that amount? Would it still seem like a good deal—like a fair deal?

Well that’s the cost, more than $40,000 per each additional buyer. And the estimate is probably on the conservative side. Based on numbers from the NAR, the program is expected to cost just over $15 billion; and when you divide that number by the projected number of additional homes sold, you discover the “real” cost to the American taxpayer.

Is it worth it? Will it help restore stability to the housing market? Probably not. But it did at least keep a few billion away from Wall Street and put it directly in the hands of consumers.

Source: Calculated Risk Blog

The Housing Guru: The one source for all your housing questions

Paul Silver, Owner

Focus Professionals, Inc.

Rhode Island Real Estate Services

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