REAL ESTATE TIPS...Home Selling Mistakes to Avoid

by Courtney Soinski

Do you ever find yourself completely overwhelmed by real estate advice from every direction on how to stage, market, negotiate, and ultimately sell your home?  With all the information we see on a daily basis, it’s easy to overlook to most important details.

Avoid these traps to get the best offer with the highest value, and take the stress out of selling your home.

1. Online-only Marketing. 

Don’t drown in the world wide sea of online data!  With the overload of information that is force fed to us every day, it’s important that everyone sees your home everywhere.  Advertising your home in print makes you stand out locally.  At The Real Estate Book, our magazines even use QR and text codes that instantly connect home shoppers to your home listing on their mobile phones.  You’ll reach home buyers where they live, shop, work and play.  Ask your agent about advertising opportunities with The Real Estate Book in your area!

2. Poor Pricing. 

No matter what they’re buying, it is not a surprise that consumers want the most bang for their buck.  Home buyers tend to stay away from overly high prices and are drawn to the homes that are priced competitively.  However, if the price is too low, buyers will wonder if there is something wrong with the property.  Make sure you research your competition and consult with your real estate agent before deciding on a price.

3. Hovering. 

Although you may want to stick around during a showing, it may not be the best idea.  There is definitely an emotional aspect when selling your home, so hovering while a potential buyer is touring your home may make it difficult for them to envision the home as theirs, and may feel uncomfortable or that they’re intruding on your space.  Take a breather and go run some errands while your real estate agent does the work.

4. Clutter Inside & Out. 

First impressions are everything, and the first thing that buyers will see is your home’s exterior.  Have a well-kept yard, clean driveway and overall curb appeal, which will increase the likelihood that buyers will want to see more.  Now for the interior . . . Make sure your home is absolutely free of all clutter – it should be clean and sparkling!  Help buyers imagine their own things in your home by stashing personal items, including photos and mementos.

5. Lack of Appealing Photos.

Before a buyer even thinks about contacting a real estate agent or coming to see a house to buy, they “pre-shop” online.  Be sure to provide photographs that frame your house and its amenities to sell. Capture full rooms that are well lit and don’t even think about including pictures of cluttered messy spaces!  Home buyers want to see what your home has to offer, and be able to visualize themselves living there.

As you go through the home selling process, avoid these traps to get the best offer quickly.  Remember that your real estate agent is more than happy to answer any of your questions and provide the most valuable help possible.  Be sure to always take advantage of all your resources.

Good luck and happy selling!

REAL ESTATE TOPICS...California November pending home sales and Market Pulse Survey

California pending home sales dial back in November

Statewide pending sales perk higher on annual basis for 13th straight month

LOS ANGELES (Dec. 22) – California pending home sales retreated in November primarily due to seasonal factors and delayed escrow closings caused by new loan disclosure rules, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

In a separate report, California REALTORS® responding to C.A.R.’s November Market Pulse Survey saw a small increase in the number of sales with multiple offers compared with October and an increase in the number of offers received. Listing appointments declined, while the number of floor calls and open house traffic stabilized, primarily reflecting seasonal factors. The Market Pulse Survey is a monthly online survey of more than 300 California REALTORS®, which measures data about their last closed transaction and sentiment about business activity in their market area for the previous month and the last year.

Pending home sales data:

• Statewide pending home sales fell in November, with the Pending Home Sales Index (PHSI)* declining 11.4 percent from 113.4 in October to 100.4 in November, based on signed contracts. The month-to-month decrease was the largest since December 2014. 

• On an annual basis, California pending home sales remained strong and continued to improve from 2014 with double-digit gains. Statewide pending sales were up 13.6 percent from the 88.4 index recorded in November 2014. Pending sales have been increasing on a year-over-year basis since November 2014.

• At the regional level, pending sales were higher on a year-over-year basis in all areas, with Southern California, Central Valley, and San Francisco Bay Area all increasing at a double-digit rate compared to last November. All regions experienced a month-to-month decline in pending sales.

• San Francisco Bay Area pending sales fell 11.8 percent to reach an index of 128.4 in November, down from October’s 145.6 but up 17.7 percent from November 2014’s 109.1 index.

• Pending home sales in Southern California decreased to 85.5 in November, down 9.3 percent from 94.3 in October but up 10.6 percent from an index of 77.3 a year ago.

• Central Valley pending sales slipped in November to reach an index of 85.1, down 4.9 percent from October’s 89.5 index but up 15.8 percent from November 2014’s 73.5 index.

Equity and distressed housing market data:

• The share of equity sales – or non-distressed property sales – dipped slightly in November but remained at the highest levels since the fall of 2007. Equity sales now make up 93.4 percent of all sales, up from 90.9 percent a year ago.

• The combined share of all distressed property sales (REOs and short sales) edged up in November to 6.6 percent of total sales but was down from 9.1 percent a year ago.

• Fifteen of the 44 counties that C.A.R. reports showed month-to-month decreases in their share of distressed sales, with Amador and Mariposa having the smallest share of distressed sales at 0 percent, followed by San Mateo (0.9 percent), and San Francisco (1.1 percent). Glenn had the highest share of distressed sales at 28 percent, followed by Tehama (22.6 percent), and Kings (21.5 percent).

November REALTOR® Market Pulse Survey**:

• More than one in four homes (27 percent) closed above asking price in November, and 40 percent closed below asking price. One-third (33 percent) closed at asking price.

• For the one in four homes that sold above asking price, the premium paid over asking price fell to an average of 8.9 percent, unchanged from October but down from 10 percent in November 2014.

• The 40 percent of homes that sold below asking price sold for an average of 13 percent below asking price in November, up from 12 percent in October and up from 12 percent in November 2014.

• About two-thirds (66 percent) of properties received multiple offers in November, indicating the market remains competitive. Sixty-four percent of properties received multiple offers in November 2014.

• The average number of offers per property was 2.7 in November, up from 2.4 in October and 2.4 in November 2014.

• With home prices leveling off in recent months, more sellers are adjusting their listing price to become more in line with buyers’ expectations. About one-third (30 percent) of properties had price reductions in November, down from 32 percent in October.

• REALTOR® respondents reported that listing appointments declined in November, but floor calls and open house traffic stabilized, mostly due to seasonal factors.

• When asked what REALTORS®’ biggest concerns are, more than one in four (28 percent) said a shortage of homes for sale, 22 percent indicated declining housing affordability, and 12 percent said overinflated home prices.

• REALTORS® were optimistic about next year’s housing market, with the vast majority (89 percent) expecting similar or better market conditions in 2016, the highest share since spring 2015.

REAL ESTATE TOPICS...California Housing FAST FACTS

FAST FACTS

Calif. median home price: November 2015:

• California: $475,000

• Calif. highest median home price by region/county:
  San Francisco, $1,323,830

• Calif. lowest median home price by region/county:
  Siskiyou, $165,000

Calif. Pending Home Sales Index:
Statewide pending home sales fell in November, with the Pending Home Sales Index (PHSI) declining 11.4 percent from 113.4 in October to 100.4 in November, based on signed contracts.  

Calif. Traditional Housing Affordability Index: Third Quarter 2015: 29 percent

Mortgage rates: Week ending 12/17/2015 (Source: Freddie Mac)

• 30-yr. fixed: 3.97% fees/points: 0.6% 
• 15-yr. fixed: 3.22% fees/points: 0.5% 
• 1-yr. adjustable: 2.67% Fees/points: 0.3%

REAL ESTATE TOPICS...Will El Niño hammer the housing market?

Orange County real estate investor Lin He isn’t worried about how his own house will hold up against this winter’s anticipated monster, El Niño.

He, who buys and flips fixer-uppers, is afraid the extreme storm system forecast to last into spring could create construction delays, add to his labor, material and carrying costs and soak up his earnings.

“The rain definitely washes away the profits for investors,” said He, 48. “It has more impact on investors than homeowners.”

With the strongest El Niño on record predicted by the National Oceanic and Atmospheric Administration, all types of property owners hope to get ahead of the storms. Roofers say the sudden rush to make repairs, some postponed for years, have created monthslong backups. Flood insurance policies are on the rise.

The concern extends beyond the coast and canyons. A real estate agent in Lake Forest, a Neighborhood Watch captain, is circulating tip sheets on how to prepare for the worst.

Many homesellers traditionally hit the pause button over the holidays or wait until after the Super Bowl to put a home on the Multiple Listing Service. Weather expected to be more severe than megastorms that have pounded Orange County in recent decades – leading to flooding and deadly mudslides – could create even more of a stall in the housing market.

But even if the storms spill into spring, some real estate industry watchers say they don’t expect El Niño to have a sustained effect on home sales in Orange County in 2016.

Some even see an upside.

SEASONAL SLUMP

The local housing market began its seasonal slump in October. Data firm CoreLogic reported 2,858 new and existing homes closed escrow, down 10.5 percent from September and 0.7 percent from October 2014.

It was the first year-over-year sales drop since January and was the smallest number of closings for an October since the market recovery began in 2012.

The median price of all Orange County homes – the price at the midpoint of all sales – dipped to $600,000, down 2.4 percent on the month. It was the second biggest September-to-October percentage drop dating to 1988.

Statewide, Property Radar, another data firm, characterized October’s numbers as “ho-hum .. disturbingly flat and unexciting,” and unlikely to change in the near future.

“If the El Niño turns out to be as bad as predicted then the potential impact of real estate sales would depend on two factors,” said Madeline Schnapp, director of economic research for Property Radar. “One, location and whether or not that area is at risk for mudslides and/or flooding, and two, the month with the highest rainfall.

“If heavy rainfall happens in December and January, then probably the impact on real estate sales and inventory is minimal, given the fact that both of those months are low sales months,” she said. “If, on the other hand, rainfall is bad in February, March or April 2016, then there will probably be some impact, as sellers choose to wait for better weather and buyers wait for more inventory.”

In late November, the Orange County housing supply had dropped by 624 homes, or 10 percent, to 5,885 homes for sale, according to Steven Thomas, author of ReportsOnHousing.com. Last year at the same time, there were 6,484 homes on the market, 599 more.

It’s been a “slight seller’s market” lately, Thomas said, meaning sellers have the upper hand.

As he looked to the winter and spring months, though, Thomas’ report made no mention of superstorms on the horizon.

“I remember the 1997-1998 El Niño, and it really did not have a negative effect on the housing market,” he said. “Currently, there is a lot of strength in the housing market with a limited inventory and buyers not having a lot of choices.

“Even with wet weather, buyers are going to pounce on homes that come on the market that are priced right.”

A TRUE TEST

Homesellers and their agents face the dual challenge of drumming up buyers willing to venture out in ugly weather and making sure that when they arrive, the house will be show-ready, or at least hold up under scrutiny.

“El Niño could be a true test to the durability of homes in an area where we do not normally see extreme weather,” said Andrew Karigan, an agent with Teles Properties in Newport Beach.

For those looking to sell, he added, “Preparation will definitely be an asset.”

Mary Schreiber, an agent with Coldwell Banker Residential Brokerage, recalled what happened to a neighbor’s Yorba Linda home during the 1997-98 El Niño. Water came through the back door and went out the front door. The culprit was a clogged drain.

Schreiber, who now lives in Silverado Canyon, discounts the notion that only those who live in the canyons or along the coast are susceptible to floods and mudslides.

“This event is going to affect everybody,” said Schreiber, who also is an emergency preparedness volunteer. “It’s going to be people who aren’t paying attention to the situation who are going to have more trouble.”

Many homeowners are paying more than attention. Workers at the Royal Roofing Construction Company in Placentia have been “insanely” busy, said Janine Ossenberg, the owner’s wife.

“It started a couple months ago. Every day we get calls.”

Business has picked up “99.9 percent” from last November, she said. Late last month, the company, with five crews of roofers, had a two-month backlog. While the roofers can do repairs in the rain, they can’t start new roofing jobs or tear-offs. But, she added, “A lot of them are really, really bad. They needed it (a new roof) years ago.”

Homeowners also are installing rain gutters, snaking out drains, giving windows fresh caulking, weather-stripping doors and stocking up on such emergency items as sandbags and plastic sheeting. And they’re buying flood insurance. Most homeowner insurance policies do not cover flooding.

“Even if you are in a low-risk zone that has not typically seen flooding, with what NOAA is predicting you should absolutely consider flood insurance,” said Nancy Kincaid, state Department of Insurance spokeswoman.

“If you’re ever going to buy it, buy it this year.”

While there’s an up to three-month lag in companies reporting newly purchased policies to the insurance department, “It does appear from at least initial indicators that people are paying attention and taking the El Niño flooding threat seriously,” said the department’s Mary Simms.

She noted that most flood insurance policies take 30 days to go into effect; officials urge homeowners not to wait until the water rises.

“In our neighborhood, everybody’s getting ready for El Niño,” said Tim Morissette, an agent with First Team Real Estate who’s also a Neighborhood Watch street captain in Lake Forest. Morissette, whose own house is set on a slope, is passing out the tip sheets.

FORGING AHEAD

He, the investor, said he won’t necessarily stop buying properties to flip or curtail remodeling projects, even at the risk of getting rained out. In addition to flipping homes, he’s a general contractor and real estate broker.

“I wouldn’t make a blanket statement,” said He, who deals with hard-money lenders charging 10 percent interest and 2 points, and needs the quickest possible turnaround on a flip to reap the greatest profit. “I’ll still look at houses to buy, but it will be case by case, taking into consideration all the potential additional costs.”

In addition to delaying construction, bad weather slows home shopping traffic, said housing analyst John Burns of John Burns Real Estate Consulting in Irvine. “And a year of bad weather would stop sales to people who just go out for the weekend with little urgency and end up finding the home of their dreams,” he said.

But fewer available homes could increase demand – and for some, that would be a silver lining.

“I don’t think it’s going to have a horrific effect,” said Mac Mackenzie, an agent at Coldwell Banker Residential Brokerage. “If inventory is cut 80 percent, the people (with homes) on the market are going to get better sale prices.”

Undoubtedly, new babies, growing children, job-related moves, divorces, personal finances and aging in-laws will prompt some homebuyers and sellers to forge ahead, no matter what the weather does.

“The people who are going to sell are going to sell,” Morissette said. “People who want to buy are out there in the rainstorms; they’re out there in holiday periods; they’re out there in snowstorms when they need to do it.

“I’m from the Midwest,” he added. “My brother sells real estate in blizzards.”

REAL ESTATE TOPICS...4 Numbers That Determine Your Buying Power

Make sure you have a sense of how you measure up in these four key ways before you start the house hunt.

When it comes to deciding on a home to purchase, the list of things to consider can be lengthy. But while you might be comparing square footage, finishes, and neighborhoods, mortgage lenders are looking at the specific numbers that make up your financial picture with the same discerning eye.

These numbers will not only impact your ability to buy that home for sale in Santa Fe, NM, but they will also measure your buying power.

1. Credit score

Your credit score is one of the most basic ways a lender can determine your creditworthiness, or your ability to pay your loan on time every month. Five key factors impact your score, each varying in importance: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%).

While having a low credit score (think below 620) doesn’t necessarily mean being approved for a mortgage is outside the realm of possibility, it certainly makes the situation more challenging. In addition, interest rates for scores in the 580 to 699 range could be anywhere from 0.5% to 4% higher than the lowest rate available — and that will make your mortgage more expensive.

On the flip side, a score of 760 to 850 could land you the best possible rate, and a score of 700 to 760 could put you just 0.25% above the lowest rate.

2. Down payment

Times have changed, but cash is still king in the home-buying game. This means the higher the down payment you’ve managed to put on the table upfront, the more overall buying power you are able to bank on in the end.

There are plenty of benefits to adhering to the often-repeated 20% rule of thumb, in which you come up with a down payment that’s 20% of the sale price of the home. Putting this much cash (or more) into a down payment can eliminate the need for private mortgage insurance (PMI), allow you to negotiate for a lower interest rate, and, in competitive markets, could place you above the competition.

It all boils down to looking committed and financially ready to make such a hefty purchase. In turn, you could significantly lower the amount you pay over the life of your loan.

3. Debt-to-income ratio

Making a nice, steady income is great, but that’s not everything when it comes to determining your mortgage eligibility.

Lenders want the reassurance that you will be able to pay your mortgage in addition to all other financial obligations you currently have. To do this, they will look first at your front-end ratio, or housing ratio — your monthly housing payment (including insurance, interest, taxes, and PMI, if applicable) divided by your monthly income. The general rule of thumb is to keep this at or below 28%.

Next, they will look at your back-end ratio or debt-to-income ratio, a calculation that determines how much of your monthly pay goes to service your existing debt (e.g., car loans, student loans, credit card payments, etc.). This calculation is your total monthly debt payments divided by your total monthly household income. The general rule of thumb for this calculation is to keep it at or below 36%.

While landing above the suggested ratios won’t necessarily end your journey to homeownership, it can certainly impact your loan terms.

4. Assets

A lender’s biggest concern is always whether the borrower will have the income coming in and the financial resources already on hand to stay up to date on payments, regardless of other financial storms they may be weathering.

Therefore, you will be required to provide a list of assets showing where money for the down payment is coming from (and whether the money is yours or a gift from elsewhere) and how healthy your savings and investments currently are. The bigger your cushion, the more likely lenders are to think you can pay for not only all necessary mortgage costs and fees, but also all home-related financial obligations afterward.

The bottom line

Paying careful attention to these numbers and making necessary changes before turning your attention to square footage and finishes can do wonders in ensuring your bank account will be ready when the time comes to make a purchase.

REAL ESTATE TRENDS... If You're a Millennial, These Tiny Apartments Are a Glimpse at Your Urban Future

By Jack Smith IVDecember 24, 2015 2:19 PM

Finally, saying "I live in a room the size of a closet" is something to brag about.

This month, New York City opened its first housing development filled with micro-units: tiny, 300-square-foot apartments built to make the best out of every inch of space. Twenty-two units are part of the city's affordable housing program: For those who won a lottery, those studio apartments rent for $1,000 to $1,500 a month in the quiet Kips Bay neighborhood of Manhattan, on the east side under 34th Street. 

WATCH VIDEO...

https://www.youtube.com/watch?v=ZR_pi7FsZLQ

The apartment uses an open floor plan and flexible, easy-to-shift furniture to instantly shift the purpose of the room from kitchen to dining space to bedroom or whatever else is needed. The Murphy bed folds up into the wall, the coffee table adjusts height and can become twice its length, and a small working desk by the door can seat 12 people for dinner if you pull it out

It's not just the furniture — other items in the home are optimized for space and efficiency. The desk lamp is also a bluetooth speaker, the stovetop is a pair of nimble electric plates built into the countertop and the home is tended to by Alfred, a virtual home concierge and maid service.

The millennial home: The stereotype that millennials don't want to own homes turns out to be largely untrue, but millennials are getting married later in life. Not having access to a second income and the potential promise of a future family means that even though millennials would mostly love to buy property, homeownership ends up a distant dream.

In response to the demand for a cheaper, more flexible house, dozens of options for small or portable homes have sprung up across the country. There are tiny houses that look like miniature woodland lodges that can be pulled around by trailer and plopped down. There are wind-powered "econocapsules" that look like space-age airstream trailers. And there are earthships, sustainable homes built out of tires and dirt to build luxury, self-sustaining ecosystems.

For the 14 affordable housing units first made available in the new Manhattan complex, there were 60,000 applications. 

No, tiny apartments aren't a solution to poverty, uncertainty in the housing market and rising levels of inequality. But for early adopters who want to try tiny, minimalistic living, going small isn't just economically viable — it's a choice for less waste and fewer material belongings.

And the demand is clear: For the 14 affordable housing units first made available in the new Manhattan complex, there were 60,000 applications.

REAL ESTATE TOPICS... 4 reasons 2016 is the year to buy a home

by Kathryn Vasel

If you've been on the fence about buying a home, 2016 is the year to take the plunge.

Mortgage rates have been bouncing around record lows for a while now. But even though they're likely to start going up, you haven't missed your chance to get a deal on a house.

A number of factors are coming together, making next year a good time to buy:

1. Home prices will finally calm down

Real estate values have been on the rise for a while, but are likely to slow their pace next year. Prices are expected to rise 3.5%,according to Zillow's Chief Economist Svenja Gudell.

Buyers who've been stuck behind the wave of rising prices may finally get the chance to jump in.

And that could lead to a flood of buyers, said Jonathan Smoke, chief economist at Realtor.com.

"We have the potential for about six million home sales just through the months of April through September; that is basically impossible to do," he said.

But not everyone will be in a position to take advantage.

Despite the slowdown, Zillow still expects home values to outpace wage growth, which can make it tough to afford a home, especially for lower-income buyers.

Plus, prices in the country's hottest markets -- like San Francisco, Boston and New York City -- aren't expected to pull back as much next year.

2. More homes will hit the market

The slowdown in home prices will prompt more owners to list their homes, Smoke said, giving buyers more choice.

"Because of the price appreciation they have experienced, you will have more sellers put homes on the market next year," he said.

The new home market is also expected to grow in the coming year with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers.

With more homes on the market, bidding wars will become less common and prices could ease even more.

3. Dirt cheap mortgages could disappear

The Federal Reserve is widely expected to begin increasing interest rates soon, which means the window for record low mortgage rates is closing.

While rates are expected to go up gradually, higher rates push up borrowing costs and monthly mortgage payments.

"You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better," said Smoke.

4. Rents will still hurt

Rent prices are expected to continue to climb in the new year, which means in most cities, buying will be cheaper than renting.

Even though mortgages could get more expensive, buying might still be the better deal.

Interest rates would need to rise to around 6.5% for the cost of buying to equal that of renting on a national level, according to Ralph McLaughlin, housing economist at Trulia.

REAL ESTATE TOPICS...More bad news for renters

by Kathryn Vasel

Bad news renters: Don't expect much relief in 2016.

Next year, experts predict rents will rise faster than inflation, increasing around 3%-5% on a national level.

"We are already in a rental affordability crisis, and 2016 won't let up," said Svenja Gudell, chief economist at Zillow.

In the years following the financial crisis, vacancy rates have plummeted as demand for renting rose, sending rents soaring.

But here's the good news: While rents are expected to continue to climb next year, the pace will start to slow in some areas.

Prices in the country's hottest rental markets, like San Francisco, Boston and New York City, are expected to plateau, according to Devin O'Brien, head of strategic marketing at rental platform Zumper.

Spillover from those hot markets, however, will push prices higher in surrounding areas as renters get priced out. For instance, O'Brien expects price gains in Oakland to outpace those in San Francisco in 2016. And rents in Cambridge will see a major rise as renters seek a cheaper alternative to Boston. He's also expecting strong rental growth in Austin, Dallas, Houston and Miami.

While new construction will bring new rental units on the market, it isn't likely to keep up with growing demand. Vacancy rates are so low in many places that it'll take at least a year for supply to catch up to demand, according to research from Yardi Matrix. Plus, new inventory tends to be high-end, which won't be much help with rental affordability.

Rising mortgage rates could also push rents higher. The Federal Reserve is expected to start raising interest rates for the first time in nine years, which could keep people in the rental market longer. Higher interest rates increase borrowing costs, boxing out potential buyers and sending rents even higher.

Paying more toward monthly rent makes it harder to save for a down payment and eventually become a homeowner, which could force people to stay in the rental market longer.

REAL ESTATE TOPICS...Selling a home in 2016? Here's what you need to know

by Dan Caplinge

Selling a home can be a stressful experience.

If you expect to put your home on the block at some point in 2016, here are some key factors for you to keep in mind before you address issues and concerns to make the best possible deal.

It's a seller's market ...

Many homeowners remember the fallout that the housing bust had on real-estate prices. Even though most investors think of the financial crisis as having hit its peak in 2008 and early 2009, it took three more years for home prices to hit bottom.

Yet since early 2012, prices have climbed higher, and the Case-Shiller National Home Price Index is coming within spitting distance of matching its highs from 2006 and 2007.

Where you live is a key factor in determining just how much of a seller's market you can expect. Hot markets like San Francisco have seen some housing-boom-era practices return to favor, with many reports of bidding wars that result in offers well above the asking price.

By contrast, areas where economic prospects are less favorable have never fully recovered from the housing bust. The more lucrative a region's economic future appears to be, the easier you can expect it to be to sell a home.

... but mortgages could get more expensive

One key factor in how much sellers receive for their homes is how much buyers can afford. Low mortgage rates have helped fuel price increases in recent years.

But some now fear that with the Federal Reserve having begun a new cycle of rate increases, a move higher for mortgage rates could make homes less affordable.

So far, the tiny quarter-point boost that the Fed made in mid-December hasn't pushed mortgage rates appreciably higher. Historically, though, tightening has generally led to increased rates on mortgage loans. Sellers need to be prepared for greater difficulty for prospective buyers trying to get financing.

Tax benefits still favor home sales

The biggest tax break for ordinary taxpayers is still the exclusion on capital gains for the sale of a personal residence. Single taxpayers can exclude up to $250,000 in gains from the sale of a home from tax, and joint filers get a double-sized exclusion of $500,000.

To qualify, you have to meet a couple of tests. First, the property in question has to be your main home. In addition, to get the full exclusion, you have to have lived in the home for at least 24 months in the past five years.

You can't have claimed a home-sale exclusion on tax returns for the previous two years. In some cases, partial exclusions are available, but getting specific tax advice from your accountant or tax professional is essential to make sure you're aware of all the tax implications of a home sale.

Get help at the right price

Most homeowners use a real-estate agent to help market and sell their homes. Historically, the typical 6% commission on home sales was sacrosanct, but some agents have increasingly been willing to negotiate lower commissions for their services.

Flat-fee brokerages have also popped up, offering a fixed cost that sellers can count on that's often lower than the percentage-based commission would be.

The issue raises a huge debate in the real-estate community, with full-service agents arguing that they fully earn their commissions by bringing in more potential buyers and eventually getting higher sale prices.

Yet with some agencies offering incentives to buyers and sellers that reduce net commission costs, sellers should realize that they have leverage in coming up with a deal that works for them.

Selling a home is a monumental event, and it can introduce a number of complicated financial considerations. Being aware of those considerations and making a plan to deal with them will help the selling process go a lot more smoothly.

REAL ESTATE TIPS...Understanding Home Warranty Vs. Home Insurance

by Jacklyn Renz

The home buying process can be an overwhelming one. At the end of the day, the right thing to do is to protect what is most likely your biggest investment. This is where home insurance and home warranties come in. These two items accomplish similar goals, but in varied ways.

Home Warranty Defined

A home warranty is something that either is or isn’t included in the purchase of your home. Often times, these warranties cover the major systems of the home such as plumbing, heating, and electrical systems. They also cover major appliances like the oven, stove, exhaust fans, garbage disposal, and refrigerator, if one is included. These are all things that aren’t typically covered in a normal home insurance policy, thus the appeal to buyers.

Benefits

The warranty, often paid for by the seller, may benefit both seller and buyer. The seller may be able to quicken the sell of a home by offering a “guarantee” of sorts that the major systems in the home will continue to work or will be repaired if they fail. This potentially protects the seller from any legal action that could happen if a system malfunctions, especially within the first few months after purchase. For the buyer, the warranty offers peace of mind, especially if the appliances and major systems of the home are older and no longer covered under manufacturer warranties.

Downsides to a Warranty

The biggest downfall of a home warranty is that the buyer will be required to use the contractor that the warranty company has hired. This means that the buyer cannot shop around for high quality work or check out reviews. The repair person fixing something as major as the plumbing of the home is someone selected by a company instead of you. There is also a service fee associated with each and every warranty visit.

Home Insurance Defined

In times of catastrophe, homeowner’s insurance is the key to getting your home life back on track. Home insurance is often required by mortgage lenders before the home buying process is even completed. Differing from a home warranty, home insurance is a policy, paid for monthly by the buyer, that protects the home and some of the possessions within the home.

What it Covers

Insurance protects your investment in a way that a warranty doesn’t: it provides the funds needed to replace and rebuild your entire house and some of the things within it if the need ever arises. Normally items like jewelry or computers aren’t covered; purchase separate insurance for these if need be. Many times a basic insurance package, referred to as an HO-2 policy, includes protection against fire, vandalism, theft, tornadoes, windstorm, hail, damage caused by vehicles or aircrafts, smoke, volcanic eruptions, weight of ice or snow, and freezing pipes. Flood protection does not come included and must be purchased separately, especially in a flood zone. Besides the house itself, fences and storage buildings are also under the coverage, as well as medical expenses in case someone is injured on your property.

When it comes to home warranties and home insurance, both are good ideas, but only one is required. Don’t let the lack of a home warranty hold you back from a house you love, as long as a good home inspection has been conducted by a trusted inspector. We hope this helps in your basic understanding of the difference between home insurance and home warranties…and may you never need to use either one.

REAL ESTATE TIPS...Things to Know Before Buying a Historic Home

by Jacklyn Renz

The charm of history beckons you from that historic home of your dreams. Intricate trimmings, charming architectural detail, and a story behind the whole thing all make a historic home an alluring package deal for buyers. Before you buy, take a second to think it over. Are there perks to purchasing these prized homes? What about any downsides? Here are some things you may want to know before buying a historic home.

Define the Home

Firstly, double check to truly identify whether or not the home is “historic”. You can officially check the historic status of the home with the National Register for Historic Places (NRHP) or a local historic board in your city. The Georgia Department of Natural Resources website explains that properties listed on the NRHP site “include buildings, sites, structures, objects, and districts that are significant in American history, architecture, archaeology, engineering, and culture.” Anything from a time period’s unique architectural style, to a famous person once living in the home could land a house on the NRHP list.

Financial Ups and Downs

There are several county and state governments that offer tax incentives for purchasing one of these homes. The government wants to see these homes preserved and what better way to preserve history than to get a loving home owner residing in it and doin the upkeep. Not all tax incentives are readily available to all historic home purchasers and there may be certain qualifications that must be met first. Also, some loans will offer lower interest rates for historic home buyers. Beyond the potential tax perks, check if the home’s neighborhood has tax downsides, such as higher property taxes. Monthly costs could be affected for a historic house too because of the lack of energy efficiency. Research past energy bills to get an idea on how much it will cost to heat and cool the home before you buy, as well as any safety updates or repairs that need to be completed before move-in.

Structural Check

Structural codes and health safety has changed much in the last decade, let alone the last century. A thorough home inspection is a necessity before purchasing one of these beauties. We recommend a home inspector who specializes in historic houses. Beyond the lovely looks could be lurking many issues including asbestos, lead paint, or mold from poor air circulation. Beyond structural problems, there are many restrictions on home improvements. This is because the hope is to preserve the historic integrity of the house in its original form. This means no second stories, no added square footage, and no replacing the windows with energy efficient ones. If for any reason there are significant structural issues in the home, don’t be afraid to walk away. Issues in this type of property could end up costing you more than conventional remodels and repairs in a newer home.

You may be just around the corner from purchasing your own historic home. When you are ready, be sure to keep this guide close by, as well as drawing from wisdom of experienced realtors and homeowners to help make an informed decision.  Happy historic home hunting!

REAL ESTATE TOPICS...What to Expect in a Real Estate Closing

The closing can feel like an almost mythical moment in the home buying process. It's that moment where, after all the searching, negotiating and number crunching, you finally sit down, sign paperwork and are handed the keys. It is also the easiest part of the home buying process, unless something goes wrong, in which case it can become the hardest part.

No need to panic. It probably will be a piece of cake. Your real estate agent, assuming you have one, will be holding your hand throughout the process (metaphorically, of course; if a real estate agent really held your hand, that would be weird). Still, things can go wrong. If you really want to be prepared, it can't hurt to know what's in store.

Setting the scene. You'll likely be in some cushy meeting room in a building or office park, and you'll be surrounded by a lot of professionals, who are all making money, thanks to this sizable contribution of yours to the economy.

Some of those professionals will likely include your real estate agent as well as perhaps a closing attorney, the title closer and the lender, says Matt Hackett, operations and underwriting manager at Equity Now, a direct mortgage lender based in New York City.

Hackett suggests that if you have a co-borrower, like a spouse, you sit next to each other and not across the table.

"it will speed the process to sit in a way in which it will be easy to pass papers around," he explains.

You can tell that he has been to this rodeo a few times.

And if you know any hand-stretching exercises, this would be a good time to do them.

"Expect a lot of paperwork to be passed around the table for multiple people to sign," Hackett says.

Keep TRID in mind. TRID stands for TILA-RESPA Integrated Disclosure Rule, which became the law the land on October 3. It ensures you'll be given forms designed to make it clear to you, the homeowner, exactly what you're spending to buy your house, and you'll have three days to look everything over

Before the new rules, buyers often wouldn't see their closing statement until the closing, or perhaps the day before, says Bill Golden, an independent real estate agent with RE/Max Metro Atlanta Countryside.

"If there are any significant changes to the loan terms, as described by the TRID rules, that will trigger another new three-business-day waiting period," Golden says.

Arguably, this is a good thing. Nobody wants to feel pressured into buying a house with terms they feel they never would have signed off on, had they realized exactly what the terms were. But an unexpected three-day business waiting period can have an unintended side effect.

"This can be tricky when folks have movers lined up based on their closing date, and even more so if there are multiple transactions contingent on one another," Golden says.

He also warns that while it may sound like it's all in the lender's court, you could be the one to cause the delays.

"It's imperative that buyers get all required documents and information to their lenders as soon as possible. Lenders can't make things happen on time if they haven't received everything they need from you," Golden says.

What sort of things? "A colleague of mine just told me about a deal in which the buyer dragged their feet in obtaining homeowners insurance, which is required for the lender to sign off on the loan," Golden says. "This triggered an additional three-day waiting period, which was not happy news to all others involved in the transaction."

A lot of real estate agents aren't too thrilled with TRID. On Inman.com, a real estate website for real estate agents and brokers, one agent wrote that TRID stands for "The Reason I Drink."

Golden admits that it has been a pain for agents, homebuyers and sellers, but he says, "I think in the end, it will be a much better thing for consumers. Unfortunately, it involves growing pains and getting used to doing business in a slightly different way. We all balked at the Internet's role in real estate when it first appeared ... It just takes time to work out the kinks and get used to it."

Don't buy anything expensive before the closing. You have just managed to get a lender to agree to loan you the money to buy a house. In this day and age of relatively tight credit, that's no small feat. Don't blow it now by suggesting that the lender made a mistake.

Yes, you want to buy furniture. Yes, you may want a brand new car to go in the driveway. Yes, you need a lawn mower, a snow blower, a rake , and you have an urge to clean out most of the aisles in your nearest home improvement store.

But you don't need it yet. Really, you don't.

"Never make any new financing decisions before your purchase," warns John Michael Grafft, a real estate agent in Chicago.

"No rented furniture and no new cars. I once lost a closing because they pulled his credit on the final day, and he had just done both," Grafft says. "Terrible decision."

Even if you know you can afford it, and your credit is stellar -- that Grafft's client was renting furniture suggests he couldn't, and it wasn't -- don't risk it. Sign the papers at the closing, get the keys and then if you want, whip out your credit card.

Bring proper identification. You don't have to worry about bringing along a bunch of forms.

"For the most part, the lender and title company or settlement agent will bring all the necessary paperwork," says Naveed Shah, a real estate agent with Keller Williams Realty in McLean, Virginia.

Most of that paperwork you'll go over with your agent or lender before the closing, says Shah, who encourages homebuyers to ask a lot of questions, if there are things you don't understand.

"This is a huge commitment, and there's no such thing as a stupid question," he says.

But there is one very important piece of documentation that only you can bring, Shah says, and you can't buy a house without it -- your driver's license, or some sort of government-issued photo documentation proving who you are.

"I've seen settlements delayed because someone has to drive home and get their ID," he says.