I hope you find this advice helpful. I couldn't agree more with the author's recommendations. Consumer confidence is improving and many are anticipating housing prices may start to rise again.  The GSE released its March National Housing Survey of just over 1,000 Americans and found more citizens expect rents and home prices to increase in the coming months, making today a better time to purchase a residence. If you are thinking about selling or buying, please give me a call.

5 Things to Avoid When Selling Your Home this Spring
By Paul Owers RISMEDIA, Monday, April 09, 2012

Home sellers find that interest from prospective buyers heats up in the spring as many families look to get settled in a new place before the school year starts in August. But the traditional March-through-May buying season can be a dud for sellers who don’t deliver what they promise or who stand over buyers as they open cupboards and peek in bedrooms.

“Some sellers are their own worst enemies,” said Michael Citron, an agent in Broward County, Fla.

Here are five things that turn off prospective buyers:

-A cluttered house or one that smells. When sellers have too many possessions, buyers have a hard time imagining themselves living in the home. Sellers should put their stuff in storage—or move out altogether, if possible.

Pet odors are also a big turn-off, as is a house that reeks of cigarette or cigar smoke. “If buyers smell smoke, they’ll walk out immediately,” said Jon Klein, an agent in Coral Springs, Fla.

-False or misleading advertising. Sellers and their agents stretch the truth by claiming a home has four bedrooms, but the fourth room isn’t a bedroom because it doesn’t have a window and closet. Joanne Caouette, a Canadian looking to buy in Broward, said one home was advertised as waterfront but only had a water view. “It’s a waste of our time,” she said.

-Sellers not committed to selling. Some sellers want to test the market, then waffle when buyers show serious interest. Others ignore offers or are insulted by what they consider low bids. “No offer is insulting,” said Bob Melzer, an agent in Boynton Beach, Fla. “It’s a point to begin.”

Wishy-washy sellers don’t use lock boxes that give agents quick access, or they’re not accommodating when it comes to scheduling showings. “If you want to sell your house, there should be very few times when you can’t show it,” said Cathy Prenner, an agent in northeast Broward.

-Overpricing the house. Many sellers are too attached to their homes and think they’re worth more than they are, agents say.

Even though prices are beginning to stabilize, a seller who misses the target likely won’t generate much interest.

Before hiring an agent, interview several. They almost certainly will have documentation that shows what comparable homes in the neighborhood are selling for.

“If you set the home at market price, you’re going to get that property sold,” said Summer Greene, a real estate manager in Fort Lauderdale.

-Sellers who stay for the showing. This is a pet peeve of buyers and agents, who say sellers should be long gone when prospective buyers show up.

Prospective buyers want to be free to tour the home without the owners present. They don’t want to carry on a conversation or listen to why the sellers think they should buy the house.

Citron strongly opposes sellers talking to buyers before they’ve signed a contract. By revealing their motivation, for instance, sellers can inadvertently give buyers more power in negotiations. “The only thing you can do if you talk to the prospective buyer is hurt the deal,” Citron said.

©2012 the Sun Sentinel (Fort Lauderdale, Fla.)
Distributed by MCT Information Services

After selling real estate for 20+ years you'd think I'd jumped every hurdle out there. I wish! Most snags are somewhat predictable, however there have been plenty of unexpected curve balls thrown at me. Before you read the following article, I thought you might like to hear about some...

Recently I helped a client (Eric D.) buy a house and we encountered 3 common road blocks with; Credit, Financing and Appraisal. I worked my way through each issue and now he and his wife are happily in their new home. Here's what happened.....

Credit:
Eric wanted to buy a terrific 4 Bed, 3 Bath house I had advertised for $1,700/month that would have rented for $2,700/month. He really liked the place, however his credit score was a little below the 620 minimum requirement. We chose Quicken Loans which has a computer program that analyzed his credit and recommended paying down/off particular debts which quickly improved his credit score to 620!

Eric's contract was accepted but I began to worry, "What if his credit score drops below 620 again?" He called me to say Quicken advised he pay one credit card down from $1,000 to $250. I remember saying,"Oh, this will work, he'll get a 33 point jump from doing this, I've seen it happen before." But guess what, his credit score soared to 733! Suddenly he had better than average credit, much better. Sometimes something little can make a big difference. Well that was not all...

Financing:
During underwriting, Quicken encountered a "problem" with an old tax debt. They thought it had become a lien (although it had not) which disqualified Eric from getting an FHA loan. I called in a very capable lender from Wells Fargo I had dealt with on numerous occasions and explained the situation. He assured me his bank would not have the same problem. I knew I could trust him on his word and we switched the loan. That was still not all...

Appraisal:
Unfortunately the house under appraised by $7,000. The sellers had bought it for $425,000 a few years earlier and were selling for $370,000 but it only appraised for $360,000. We approached the seller and said,"Look, the only way we can do it is if you drop the sales price."

I suggested the sellers take less even though (and this is the best thing) Eric had agreed to a clause stating the buyer would make up the difference by putting up more down payment. They realized the buyer's loan was otherwise approved and decided closing the deal was more important than the $7K.

Thankfully my experience, creativity and tenacity help me figure out a solution to each obstacle. It's often very difficult, but once overcome it's so rewarding to have a happy buyer move into their much deserved home. I hope you find this article helpful. Please let me know how I can help you.


5 Ways to Save a Failed Home Sale
See what the common glitches are — and what you can do about them.
By Marcie Geffner of 
Bankrate.com

Home sales get hung up for all sorts of reasons. Sometimes a buyer can't secure approval for a loan or a seller won't make repairs the buyer insists are necessary. Appraisal issues often result in delays or failed deals, as do complexities arising from short sales.

These problems are common, judging by a recent survey by the National Association of Realtors that found that 33% of real-estate agents surveyed had experienced one or more contract failures in 2011. That figure was up from 8% a year earlier.

These problems can be stressful. Granted, some sales are doomed never to close, but others can be saved with a little creativity and a lot of patience. Here's how:

Buyer financing fails
Many prospective homebuyers enter into a purchase contract with the best of intentions only to discover they can't qualify for a loan as easily as they had expected. Instead, "they get turned down," says Carolyn Hastings, a broker associate at J. Rockcliff Realtors in Blackhawk, Calif.

Documentation snafus, job losses and credit-score hiccups are but three examples of the types of problems that can derail a buyer's financing. Seemingly inexplicable delays by lenders can also stall a buyer's financing.

In some cases, the process "seems like it takes forever," dragging on so long that the buyer gives up and abandons the deal, says Phyllis Yanagihara, a certified senior escrow officer at Master Escrow in Glendale, Calif.

Still, many borrowers eventually do get a loan approval. Buyers need to stay in touch with their loan officers and buyers, and sellers need to be patient while the slow wheels turn.

"Sometimes," Hastings says, "the banks just make it a living hell for all of us — and then they end up closing it."

Short sale stalls
Another common problem is the slow pace at which lenders approve short sales, which occur when a seller is allowed to accept a sale price that's less than the loan balance, leaving the bank with a loss. These deals can be painfully slow if the seller has multiple mortgages, Hastings says

A lot of borrowers have second mortgages and sometimes third mortgages, "and one of the major problems with closing is that you can't get the first and the second on the same page," Hastings says. "The first will approve (the short sale) and the second won't, and then the second will approve it and the first approval will expire."

Many short sales linger beyond the point of salvation, but in other cases, patience and persistence are rewarded. Hastings recalls one short sale in which the seller had two loans held by the same lender, but the approvals were still out of sync. Time passed, the paperwork came together and eventually the deal closed.

'Low' appraisals
Often, home sales are victims of the "low appraisal" trap, which occurs when an appraiser's opinion of the home’s value is less than the agreed-upon sale price. This situation can be a major headache, especially for sellers. If they refuse to reduce the price, the buyer might cancel the sale through an appraisal or financing contingency. But if another deal is then subsequently struck with a backup buyer, the result might be just another low appraisal.

To overcome a low appraisal, the seller must persuade the appraiser to reconsider or negotiate a price that's acceptable to the buyer. This is rarely possible, and if the property is a foreclosure that's owned by an out-of-state bank, these negotiations can be even more difficult, says Jan Baron, an agent at HomeSmart Real Estate in Temecula, Calif.

The solution is "going back and forth, trying to justify the price," Baron says. "Or the seller is going to have to lower the price. If it's a bank, that's a big deal. They're going to drive a hard bargain. Moreover, if the bank is located in a different city such as Dallas or Minnesota, they have no idea what's happening in California."

Repair credit disputes
Buyers naturally want to purchase a house that's in good condition, while sellers usually don’t want to spend a lot of money to fix up a house they've put on the market. In some cases, the list of repairs is so long that buyers become nervous about the condition of the house, and that puts the sale in jeopardy, says David Moody, a broker at Sunrise Realty in Athens, Ga.

They start asking for a lot of things," he says. "There is no meeting of the minds, and it ends up squashing the contract."

One strategy to remedy this situation is for buyers and sellers to get estimates of repair costs and "start nibbling away" at what might seem like an insurmountable list of defects, says Patti Ketcham, owner of Ketcham Realty Group in Tallahassee, Fla.

"Don't let it overwhelm you," Ketcham says. "Get prices. I'm always amazed at the number of times (a repair) is not nearly as much as either party thought it was going to be."

REO title delays
Buyers who want to purchase a bank-owned property, also known as real-estate owned or REO, sometimes run into glitches in the chain of title or ownership, Moody says. This gap occurs when a home is put on the market and readied to be sold before all the last details of the foreclosure have been finalized.

"There is a gap in the title chain," Moody says. "It causes delays and a lot of buyers get frustrated and drop out."

The solution, again, is patience — and a lot of it. Moody recalls one sale that stretched out for four months before the problem was resolved and the transaction closed.

"It was a cash deal," he says, "and I was surprised they hung in there, but they did."

Mortgage deduction limits:
per residence, not per person
Real Estate Tax Talk By Stephen Fishman
Friday, March 9, 2012. Inman News®

Last week brought bad news for wealthy unmarried couples who own homes together. The U.S. Tax Court held that the $1.1 million limit on the mortgage interest deduction must be applied per residence, not per taxpayer, even where the co-owners are unmarried and file separate tax returns.

Home mortgage interest for a loan or loans totaling $1 million is deductible as an itemized deduction. Interest on a home equity loan -- for a primary or second home -- of up to $100,000 is also deductible. Thus, you can deduct the interest on a total of $1.1 million in home loans each year. If you borrow more than that, the additional interest is not deductible.

If a married couple own a home or homes and file a joint return, the $1.1 million limit applies to them both together. If they file separately, the limit is cut in half for each. So, either way, married couples are limited to deducting the interest on only $1.1 million.

But what about when unmarried couples purchase homes together and file separate returns -- does the limit apply to them both together or to each separately?

Charles and Bruce, an unmarried couple, purchased a principal residence in Beverly Hills, Calif., and a second home in Rancho Mirage, Calif., as joint tenants. They each filed separate tax returns. Their total mortgage debt was more than $2.7 million.

Charles and Bruce each deducted on their separate returns the interest on $1.1 million of their loans. Thus, together they deducted the interest on $2.2 million.

The Internal Revenue Service said that Charles and Bruce together could deduct only the interest on $1.1 million. The couple argued that because they were not married, the limitations on married taxpayers don't apply to them. Instead, they claimed that when unmarried people co-own a house the $1.1 million limit applies to each individual taxpayer.

The Tax Court sided with the IRS. It held that the $1.1 million limit applies per residence, not per taxpayer, even where a home is co-owned by unmarried taxpayers. Thus, even though they were unmarried and filed separate returns, Charles and Bruce could together deduct the interest on only $1.1 million of their mortgage debt.

Instead of deducting more than $76,000 in mortgage interest on their individual returns, they could each deduct only $38,000. Unmarried people who purchase expensive homes should keep this limitation in mind.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.
Copyright 2012 Inman News

Click here for original article

Springtime Curb Appeal
by Carla Hill

Springtime can present many difficulties when it comes to curb appeal. For many areas of the country, this time of year means brown lawns, leafless bushes and trees, and a depressing lack of color. Yes, we have the hope of the color splashes and lush landscapes that go hand in hand with summer, but what can be done now?  Improving curb appeal has shown to increase not only your property's value, but also the property values of your entire neighborhood.

Whether you are selling or staying put, here are five tips that can help you on your way to a beautiful home......

1. Sidewalks and Driveways:

This may be the first part of your property that your guests or prospective buyers step foot on. Literally.

An affordable, virtually maintenance free option for sprucing up your paths is concrete stain. It can cost around $30 a gallon and requires very little prep work. This is a do-it-yourself project.

Consider picking a color that is in the same color family as that of your home. A blue home could be happily complemented by a gray drive.

Another tip: Fix cracks and uneven sections. This project may require a bit more professional attention, but will give buyers the impression that your entire home, not just the entrace, has been maintained.

2. Accent Door:

It has been called the lipstick on the lady. It's inviting and it draws visitors – or buyers – in to your home. A plain door tends to recede into the background.

Consider a contrasting color to the siding of your home. On the color wheel, green is opposite red and yellow is opposite blue. Don't be afraid to be daring (think a fushcia door on a cream colored home). Just a pint of paint can cover most doors, and if you don't like the result – you can try another color!

3. Trimming Trees:

Stand in front of your home and take a close – and fresh – look at your trees and bushes. Are there branches that have become overgrown and now obstruct the view of the home?

You want your landscaping to complement your home, not hide it. Trees should frame paths and entries. To trim tree branches yourself you can buy a pole pruner or chain saw. Or you can hire a professional, who has experience in shaping trees.

Keep in mind, however, that spring is NOT the time to prune flowering trees or maples. These should be done in late Summer and early Fall.

4. Early Spring Planting:

The last frost date varies by area. It also varies from year to year in that area, but if you feel that your home will not see another frost, then you may be safe to plant a few hardy annuals to add some pops of color to your yard. Even if a frost catches you by surprise – you can cover the plants for the evening to save them from succumbing to the cold.

The plant must also have time to take good root before severe rains come.

Some plants that you can give you an early burst of color:

• Pansies: these bolts of color can even survive winter in some areas
• Calendula: these “pot marigolds” are a versatile plant
• Violets: heart shapes petals
• Other options: cornflower, foxglove, larkspur, sweet alyssum, dianthus, baby’s breath, bells of Ireland, blue sage, candytuft, celome, forget-me-nots, love-in-a-mist, snow-on-the-mountain, strawflower, and torenia

5. Outdoor Lighting:

Low voltage (12 volt) and solar lighting are great options for improving curb appeal.

There are hundreds of designs of solar lights. These small fixtures are generally set on stakes in the ground and can be used to accent paths or gardens. And they are a great do-it-yourself option.

Also, consider using uplighting on trees to create night-time focal points – great for buyers doing after work drive by inspections!

Published: February 15, 2010

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LivingRoom for iPad - Floor Plans & Interior Design by Planet Next Living Room is an app designed from the ground up to help you do floor planning. As a carpenter you will often need to visualize how big something needs to be in a certain space. This app will help you visualize just how big your next desk should be. If you need to do any kind of floor planning this is the app to get. Cost  $4.99

3 ways homebuyers kill their own real estate deals

By Tara-Nicholle Nelson
February 08, 2012

I recently bought a couple of spa treatment packages for a friend's birthday (as much as a gift to myself as to her, to be sure). The package included a pedicure and a massage for the price of the massage, but had a bizarro restriction that required I pick the gift cards up at least one day prior to spa day.

The problem: The spa was across a bridge from my town. Despite my very best calculations, I hit unexpected traffic and it took me an hour's drive just to pick them up.

It's a good thing for the spa that I was literally stuck on that bridge, unable to turn around; otherwise, that would have been an undone deal. I was very clear that the value of my hour far exceeded the value of those two "pedis."

In the end, the conditions I had to surmount to take advantage of the bargain negated the value of the deal -- and then some.

And that happens much more frequently than you'd think in the world of real estate. Today's ridiculously low prices and interest rates, combined, seem like the perfect storm for finding a great deal.

But some buyers run into -- or even unwittingly create -- circumstances in an effort to cash in on the bargain that deactivate or diminish the full value they otherwise stand to gain from buying at the bottom of the market, for both home prices and interest rates.

Here are three ways homebuyers are defeating their own deals in today's market:

1. House hunting too long. As many as 60 percent of the homes for sale in some markets are short sales. Many other listings are bank-owned (also known as real estate owned or REO) properties, and those homes tend toward two extremes: terrible condition, or so nice at such a low price they receive multiple offers.

Even the nicer, nondistressed homes on the market can end up in and out of contract over and over again due to appraisal or other lending-related issues.

As a result, it is not at all bizarre to hear homebuyers today say they've been house hunting for a year, 18 months, even two or three years. When you house hunt that long, you become susceptible to house hunt fatigue, which causes irrationally extreme overbidding out of sheer exhaustion.

Alternatively, it can cause you to settle for whatever house you can get, even if it doesn't actually meet your needs -- then spend the next 10 years obsessively spending to upgrade, improve, repair and furnish the place to try to make it more like the home you actually wanted.

Both of these outcomes negate and deactivate the bargain you stood to score.

To avoid house hunting too long, it's uber-important to get and stay clear on the differences between what you want and what you need, and to work with a local real estate professional you trust.

Look to your agent to get and keep your expectations centered in reality, so you can make more strategic decisions throughout your entire house hunt, like house hunting in a price range where you're likely to both find homes that will work for your life and be successful in your efforts to obtain one.

2. Making lowball offers way too low. Overbidding seems like an obvious way to cancel out the bargain potential of your deal. But making excessively low offers -- offers sellers couldn't afford to take if they wanted to -- can have the very same result.

Buyers who think they can operate strictly on the basis of buyer's market dynamics -- without realizing that most sellers will need to make enough to pay off their mortgage or at least receive the fair market value for their home -- are cutting off their own noses to spite their faces, all in the name of trying to score an amazing deal.

Note to "lowballers": If you don't actually secure the home, the superlow price you offered is no deal at all.

3. Freak-outs, stress, drama and mayhem. Once was, it was mostly the buyers uneducated about the homebuying process who tended to freak out and stress the most, especially at the top of the market. These were the folks who found themselves defeated at every turn by buyers who knew what they were up against and were prepared to make their best offer on their first offer.

Fast forward, and now the norm is for buyers to spend much more time reading up on what to expect, but the inundation of information can create brand new mindset management challenges.

Almost every buyer is stressed about whether they can qualify for a loan, and about buying into a down market. Some buyers try to apply national headlines about home prices being depressed to the superlocal dynamics of their neighborhood market.

This is unwise if you happen to be, for example, trying to buy a home in the boomtown real estate markets of Silicon Valley. Others go the opposite direction and deny that the basic truths about, say, buying a short-sale listing will actually apply to them (attention homebuyers: buying a short sale usually takes a long, long time).

The emotional freak-outs that result from having your expectations shattered, sometimes brutally, in the course of buying a home often lead to panic-based and fear-based decisions, which can be costly in the short and long term. Additionally, the stress itself can take a toll on your ability to be productive at work, and can even impair your relationship with your mate, neither of which are worth any deal you think you stand to strike.

Again, managing your expectations by working with a trusted broker or agent you feel comfortable relying on to understand the market in your neck of the woods and the type of transaction you want to pull off is essential to downgrading the role emotion plays in your real estate decision-making.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com.

Copyright 2012 Tara-Nicholle Nelson

What Happens When You Walk Away From Your Home?
By Chris Taylor | Reuters | January 30, 2012

It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust. Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

They were carrying a loan of $260,000 on their original home alone, meaning they were well 'underwater,' owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an "anchor around our necks," she says, threatening to gobble up all their retirement savings and leave them with nothing.

The couple made a difficult call: They would do a 'strategic default,' and simply stop paying the old mortgage. "We really had to wrestle with it," said Perkins, 60. "We had worked all of our lives to build good strong credit, and we're proud people. But it came down to, 'Can we keep doing this?' We had to say 'No.'"

As the housing bust drags on, many homeowners are thinking like Perkins. Almost 11 million homes are now underwater, says financial information provider CoreLogic. Around 3.5 million homeowners are behind in their payments and another 1.5 million homes are already in the foreclosure process, according to online marketplace RealtyTrac.

As banks start to work through their backlog of distressed properties, the New York Federal Reserve estimates that 3.6 million foreclosures will take place during the next couple of years.

So, the question is: Does it make sense to keep paying a massive mortgage, knowing that it might be decades before a home regains its prior value? Or is that akin to - as columnist James Surowiecki recently wrote in the New Yorker - "setting a pile of money on fire every month"?

"I constantly get the saddest e-mails from people saying, 'I've exhausted all my life savings, my retirement is gone, and now I have to default,'" said Jon Maddux, CEO of YouWalkAway.com, a foreclosure agency that helps clients with strategic default (and charges a fee for it). "But if they had seen the writing on the wall a couple of years earlier, stopped paying the mortgage and stayed in the home throughout the whole process, they would be in a much better financial position."

Moral Quandary

There's a moral component to that decision, of course. People naturally feel embarrassed about breaking a contract and not paying their bills; no one wants to be branded a deadbeat. But remember that companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process. Even the Mortgage Bankers Association itself, in a flourish of irony, arranged for a short sale of its Washington headquarters.

It's not personal; it's business. So think of strategic default as a business decision, and do a cold-eyed cost-benefit analysis of whether it makes sense for you, advises Carl Archer, an attorney with Maselli Warren in Princeton, New Jersey.

What Happens to Scores

Charlotte Perkins watched her credit score go from a pristine 800 to 685, dropping every time she missed a payment. Credit-scoring firm FICO estimates that someone with a 680 score would see that number sink between 85-100 points after a strategic default, and someone with 780 could crater 140-160 points.

Not desirable, of course, but not the end of the world either. For Perkins, for instance, she already had a loan on her Ford Escape, and the mortgage on her new house, before she even started the default process. She hasn't seen any changes on her credit cards since, in terms of limits or interest rates. Now that the previous home was auctioned off in December, she can slowly rebuild her credit, a process that should take about seven years.

Strategic default isn't a decision to be taken lightly, of course. If everyone did it, the housing market -- and the banks -- would be in much worse shape than they already are.

The following are some of the issues to keep in mind:

1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.

2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called 'non-recourse' states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they're only able to sell the property for $200,000). In other states they can pursue the difference, in theory - which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.

3. Use the interim to save like a demon. If you're in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. "Save money as if you were still paying the mortgage," says Archer. "If you don't, then you'll run out of both time and money, and then you'll be in a real tough spot."

4. Know the tax implications. Historically, if you have a debt that's forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though - so if it's not extended, you could potentially face a tax bill for the difference.

5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.

"Strategic default is not an easy decision, and there's a cost either way," said Gerri Detweiler, director of consumer education for Credit.com. "Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you're finally at the point where enough is enough."

Click here for the original article

Diggle's a wimp! Haha... In all seriousness the following article is not strong enough. This phenomenon is for real and I see it every day. In fact the houses I advertise for sale on this web site exemplify it.

We have seen rents increase from $1200 to $1600 to $1800 in just a few years. Plus landlords are tightening their credit requirements. This is making my customers pause and makes me wonder what people want.

Here's a real life example in Canton: 1016 Conkling Street
It's near Panerra and just down the street from Blue Hill Tavern. It's a big beautiful 2700 sq' house in Canton and perfect for house sharing. The private master suite occupies one whole floor and then the other bedrooms are upstairs. Beautiful roof top deck. amazing views, elegant.... I love it!

• Plus this house has a large "new construction" tax break for 5 years.
• It rented most recently for $2800-3000/month.
• In the first year, after tax deductions, the mortgage price would only be $1630!
• This is $1200 less than the rent of $2800! That's a lot of savings which we could all use, no?
• If you save $1200/month = $14,00 year in savings!
• Average length of mortgage (stay in a house) is 7 years = $98,000 in savings!
• That's impressive and if the market turns around in 7 years and this property is suddenly worth $100,000 more, you'll have all that equity. This scenaio is a growth of 5%/year. The market is already growing at 3% increase/year.
  

Many of you may scoff at the idea of the market turing around. Let me ask you a question. 7 years ago could you have guessed all this would have happened? Isn't is possible for it to surprise us once again and completely turn around? And aren't buyers so lucky for these lower prices and low interest rates to be able to make these purchases?

This house is now $359 and originally sold for $515-530. It had a higher price because it was the model home and has all the extras - built in surround sound... They are building another Harris Teeter within walking distance. Don't you think this property will become ever more attactive and the new grocery store will hel lock in the value?

In light of all this I'm not necessarily a hard-ass about buying - it's just so much cheaper. I know every one is so scared to buy. Let's do the math:

• If you rented out the top two bedrooms for $933 each = $1866/month
• You'd be living in this house for free plus making $266 profit/month!
• Purchasing rather than renting saves $2800/month x 12 = $3400 savings/year!!!!
• This means is if you have an income of $92K, it's like getting a raise of $34K. WOW!
• Obviously this house sharing scenario makes a lot of sense!
  

Obviously this house sharing scenario makes a lot of sense, but even if you don't share buying can be much less expensive. Check out the homes for sale on my site and PLEASE call or email me with any questions...

Home Buying Could Soon Beat Renting
By John W. Schoen, Senior Producer

Falling home prices have sent many would-be buyers to the sidelines. If all goes well, record low interest rates and rising rents may soon prompt some of them to take a second look at buying.Unfortunately, that's a big "if," according to Paul Diggle, a housing economist at Capital Economics.

Much of the decision to buy a house still depends on your personal finances and preferences, your career or family life, or level of financial security.

But if you’re comparing just the cost of owning and renting, buying a house may soon be the better choice, according to Diggle.

Until recently, home ownership was no bargain compared to renting, according to his analysis.  A 33 percent drop fall in home prices, a plunge in mortgage rates and 15 percent rise in rents since the housing crash has evened the scales. Today, the median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check. If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.

But that analysis doesn’t include the total cost of owning versus renting. A full accounting includes  closing costs, maintenance, insurance and property taxes, tax savings from mortgage deductions, gains or losses from home equity, among other factors. Renters have to think about broker fees and future rent hikes. Both have to make assumptions about future trends in housing prices and rents.

When you take those factors into account — which Diggle has done with a homegrown “calculator” — someone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental. Diggle’s calculation assumes that rents keep rising by about 3 percent a year and that house prices stay flat in 2012 and 2013 and begin rising in 2014 at about 3 percent a year.

If house prices fall further, all bets are off, said Diggle. In that case, the renters come out ahead. “At the moment, (that) downside scenario is more likely to materialize than the upside one,” he said.

Even if Diggle's calculator were to signal a “strong buy” for home ownership, he doesn’t expect that would spark a buyers' stampede. Most first-time buyers or households who lost a  home to foreclosure don’t have the 20 percent down payment many lenders are insisting on. They may also have trouble getting a mortgage without a credit score of 700 or more — a higher bar than the 650 score that was the norm for the past two decades.

“A large share of the population has dropped out of the pool of potential buyers,” he said. “Given that the choice between owning and renting a home is a luxury than many Americans simply do not have, the fact that this does appear to be the time to buy will have only a minimal effect on actual sales. Accordingly, we expect only a modest housing recovery over the next few years."

When would you consider buying a house? Leave a comment, let us know what you think?

• Now, thanks to falling prices and low mortgage rates
• Maybe next year if prices stop falling
• Never: I doubt I’ll ever be able to afford it

Another positive article.....

Rise in Home Sales Signifies Strengthening Market
By: Krista Franks  01/20/2012
DSNews.com

The long-awaited housing recovery is beginning to blossom, according to industry experts taking a look at recent existing-home sales.

While admitting home sales “are still very low,” Paul Dales, chief economist at Capital Economics, says “it is clear that housing recovery is now well underway.”

The evidence: home sales have been on the rise for the past three months, posting a 5 percent increase in December.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), concurs with Dales’ assessment, saying “The pattern of home sales in recent months demonstrates a market in recovery.”

Yun suggests consumers are gaining confidence from “record low mortgage interest rates, job growth and bargain home prices.”

In addition to the 5 percent increase in December, NAR reported a 1.7 percent annual increase in existing-home sales in 2011, a total of 4.26 million homes for the year.

Distressed homes made up 32 percent of sales in December, according to NAR’s existing home sales report for the month.

Foreclosed home sales closed at about 22 percent below market rate in December, a discount 2 percent higher than that recorded a year earlier.

Investor demand remains steady with 21 percent of homes sold in December going to investors after this category of buyers took 19 percent of purchases in November and 20 percent one year ago.

Cash sales – commonly linked to investors – made up 31 percent of December’s existing-home sales. This rate was 28 percent in November and 29 percent a year ago.

Purchases by first-time home buyers declined in December – both from the previous month and the previous year. First-time home buyers accounted for 31 percent of purchases in December, down from 35 percent in November and 33 percent in December 2010.

Housing inventory is on the decline and fell to its lowest level since March 2005 last month, according to NAR. Approximately 2.3 million homes are available for sale currently.

“The inventory supply suggests many markets will continue to see prices stabilize or grow moderately in the near future,” Yun said.

However, listed inventory is only part of the equation, and according to CoreLogic’s latest numbers, shadow inventory stands at about 1.6 million.

Regardless, Dales believes sales will rise this year. “Housing still won’t contribute much to GDP growth over the next few years, but at least it will no longer subtract from it,” Dales says.

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