shanNdjones September 4th, 2010

Realtors all over the country scrambled in the early months of 2010 to find homes for buyers and sign purchase agreements by April 30, 2010, the deadline for the $8,000 first-time buyer tax credit.

Once the deadline for the first-time home buyer tax credit passed, real estate activity dropped, as evidenced by July’s statistics for pending real estate sales.  Many regions, including southern Oregon, have seen a corresponding drop in prices:  sellers whose homes didn’t sell in the wave of first-time buyer purchases have found it necessary to lower prices in order to entice buyers to look at and write offers on their homes.

Thinking about this logically, there is a far better long-term advantage to waiting and purchasing a home at the lower prices we are seeing in the market now than paying a slightly inflated price and receiving a one-time $8,000 tax credit.  Combine the lower prices with the historically low interest rates currently being offered by banks and mortgage companies, and those lower monthly payments could add up to far more than $8,000 over the life of a 30-year loan.

In an attempt to qualify for the $8,000 tax credit, many first-time buyers may have purchased a home as a hasty, emotional decision.  Without the pressure of a deadline, first-time buyers, working with qualified Realtors who have their clients’ best interests in mind, can now make rational, informed home purchasing decisions, and realize the long-term advantages of buying a home at a lower price.

Now there’s talk about bringing back the tax credit.  But as this article indicates, the tax credit in the most recent buying frenzy went to people who would have likely purchased homes anyway.  Thinking long-term, not re-instating the tax credit makes sense not only for first-time buyers, but also for the overall stability of the national real estate market, and the United States economy as a whole.

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shanNdjones September 3rd, 2010

Although this appeared in the newspaper, the sad fact is, it’s not news what is happening in the Medford real estate market.  It’s the same thing that happened all over the country:  over-inflated housing prices, decreased affordability, dangerous adjustable rate mortgages (with little or no down payment), all of it at unsustainable levels.  But you know the story!

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shanNdjones September 3rd, 2010

A recent article in the Wall Street Journal provides some great tips to keep in mind when buying a home.  This advice is especially important for first-time buyers, who easily fall into the trap of making an emotional decision when buying that first home.

1. Snubbing the real estate agent – Realtors are paid by the Seller (in most cases), so why not use an expert when buying your home?
2. Guesstimating how much you can afford – Get pre-approved before looking at houses.  You may learn that you can afford more than you think.  Or less than you think.  And in today’s market, most sellers (especially bank-owned properties) require that you submit a pre-approval letter with your offer.
3. Letting charm cloud your judgment – An older home can be charming, but can come with many hidden problems.  Pay for a home inspection, and realize that you’re going to need more money for maintenance than you would if you purchased a newer home.
4. Focusing on the house, not the ‘hood – Make sure you spend plenty of time in the neighborhood.  You can paint a room or change the carpet, but you can’t change your neighbors (well, at least not very easily!).  You’re probably going to be there a while, so make sure you LOVE it!
5. Make arbitrary offers – It may be a “Buyer’s Market,” but most sellers, even banks, won’t accept a low-ball offer far below market value.  Find the house you love, in a neighborhood you love, and make a fair offer.  There’s never a right price for the wrong house.

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shanNdjones September 2nd, 2010

In this just released video, the experts at Keller Williams Realty share some important tips about buying foreclosures, and explain why the current market provides a great opportunity at realizing tremendous value in purchasing a first home, or even an investment or vacation property.

Our experts specialize in well-priced homes; if you want more information on the current real estate market, give us a call!

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shanNdjones June 23rd, 2010

This week Fannie Mae announced a new policy that will cause “underwater” borrowers to think again before “walking away” from their mortgages.  Borrowers who do not attempt to remediate their default, or who can show no legitimate reason for default (loss of job, unforeseen medical problems, etc.) will be subject to deficiency judgment for the unpaid balance on the mortgage, not to mention having the foreclosure appear on their credit history for seven years.  Oh, and there are tax implications, too.

We’ve talked about the morals and ethics about strategic defaults here before, and we’re not the only ones who have thoughts about whether walking away is the right decision.

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shanNdjones June 8th, 2010

According to the most recent issue of This Month in Real Estate (June 2010), brought to you each month by Keller Williams Realty International, statistics just released by RealtyTrac show an overall decrease in foreclosure filings nationwide.

The reason for this decline could be that more homeowners are choosing a “short sale,” rather than defaulting on the mortgage (which typically results in foreclosure).

Check out the video for an overview of the short sale process.  Understanding the process increases the chances of success with a short sale.  For more information on recent foreclosure and short sales in Jackson County, click here.

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shanNdjones May 22nd, 2010

There’s been a lot of talk recently about investors beginning to “walk away” from their real estate investments that are underwater.  Aside from the moral issue that I discuss here, there can also be tax implications of turning the property back over to the bank.

According this to article, the amount of debt (mortgage) that is “written off,” actually becomes income to you, and must be reported on form 1040 just like any other income.

It’s definitely a good idea to think twice before walking away – whether it’s Uncle Sam, or a higher power – who makes you think twice.

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shanNdjones April 13th, 2010

Do you have good credit, low debt-to-income ratio, but no money to put down on a house?  You can buy one of these homes with just $100, plus get money back to make repairs/improvements!

AND there’s still time to qualify for the First-time Home Buyer Tax Credit (deadline April 30, 2010).

If you’d like more information on this program, give us a call – we’d love to help you buy your first home!

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shanNdjones April 12th, 2010

brought to you by Keller Williams Realty International

The average size of American home over the past 50 years has grown – from just under 1000 sq ft to over 2200 sq ft!  Home sizes are trending downward, though, as the baby boom generation is reaching retirement age and many homeowners are looking to down-size.  Interesting data to say the least.

For more timely information about the real estate market, check out our “This Month In Real Estate” Newsletter on our Facebook Fan Page (you are a fan, aren’t you?)!

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shanNdjones March 30th, 2010

A fellow member of the Homeowners’ Association of my townhouse development recently asked my professional opinion about the current real estate market in general and the value of our townhouses specifically.  The truth is, they have lost half of their “value” since being built in 2005, and of the twenty units in the development, more than half are in default or have already been foreclosed.  He wants to know what I think about the trend of “walking away” from a property that is upside-down.

There’s been a lot of talk about just this type of thing recently.  Consider this recent article in the Los Angeles Times about a homeowner in Palm Desert, CA (an area hit hard by the housing “crisis”).  While the vast majority of homeowners in default on their mortgages are hardship cases (lost jobs, medical issues, etc.), we are seeing a rising trend in the real estate market where investors simply stop making the payments or sign a deed-in-lieu and return the keys to the bank on properties that have lost 30, 50, or as much as 70% of their value.

Personally, I have a moral issue with that.  When I signed the mortgage on my investment property, I made a “promise to pay,” that was not dependent upon future market value of the property.  Simply because the market dropped does not relieve me of my obligation to pay.

You could call it “business.”  I call it “wrong.”

Make a comparison to buying stocks on margin.  When the value of those stocks drops, the investor still has an obligation to pay the brokerage firm for the full amount borrowed to purchase the stocks.  There’s no “foreclosure” process.

In this article in Investors Business Daily, the author editorializes, “…[J]ust because a home loan is “underwater” — meaning its value is lower than today’s current market price — why should a responsible person whine about it and walk away? Why not service this loan for the longer term and wait for prices to improve? That’s called personal responsibility.”

I couldn’t agree more.  That’s why, even though my townhouse is still losing value, I continue to make my payments, and will do so until the thing is paid off or the market recovers enough that I can withstand the financial hit.  It’s just the right thing to do.

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