The NAR reports that the best home improvement projects may also be some of the least expensive for 2009! This year forget the kitchen and bath projects, according to the 2009 Remodeling Cost vs. Value Report, focus on small-scale exterior projects as they are the most profitable at resale.

The report goes on to state that on a national level, 8 out of the top 10 projects that recouped their costs were “exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement – a new addition to this year’s list – recouped 128.9 percent of costs, followed by upscale fiber-cement sliding replacements at 83.6 percent. Wood deck additions recouped 80.6 percent of costs.”

“Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “With exterior projects returning a high percent of project costs upon resale, Realtors® can help give your home curb appeal while adding value to the real estate transaction.”

www.AthensGAHomesForSale.com

By Jed Smith, Managing Director, Quantitative Research

The Realtors® Confidence Index Survey estimates distressed property sales (foreclosures and short sales) on a monthly basis at the national level.

• The Survey is based on responses from approximately 1,500 Realtors® to an ongoing monthly survey; estimating error is in the neighborhood of 1 percent.
• The November Survey reported that total distressed property sales declined from 49 percent of total sales in March to 33 percent of sales in November.

Foreclosures and Short Sales as Percent of Total Sales

• Realtors® reported that both foreclosures and short sales were selling at prices significantly below the market price for comparable, non-distressed property.
• As of the third quarter of 2009, foreclosed property was reported as sold at a discount of 16 percent below market compared to non-foreclosed properties; short sales properties were reported at a 14 percent discount.

Percent Discount Relative to Market: Foreclosures and Short Sales

• The level of discount for a property relative to the market for non-distressed properties appears to fluctuate from state to state based on market conditions and property status.
• Responses from Realtors® indicate that delays in obtaining lender approvals tend to lower the ultimate sales price. Conversely, in some markets properties that are attractively priced are quickly sold. The physical condition of the property has a major impact on the price discount relative to market.
• In responding to the Survey REALTORS® provide their estimates of the discount to market (if any) and to rank the condition of the property on a scale of 1 (best) to 5 (“bottom 1 percent”). Given that conditions vary widely from area to area and that respondents are using a somewhat subjective ranking, the responses have been combined into three classifications: “average condition or better”, “below average”, and “bottom 1 percent”. In the case of foreclosures, the discount to market widens as property condition worsens. The same holds true for short sales, with the exception of the bottom 1%.

Distressed Property Discount from Market based on Property Condition

Copyright National Association of REALTORS®, Reprinted with permission.

www.AthensGaHomesForSale.com

According to a recent account, short sales (those homes listed for sale in which with a lender approval the seller may take less than debt on the property) account for roughly 10 percent of 2009 overall sales nationwide. There are local variations with short sales being a much higher percentage in regions where home values have dropped most severely. In these regions percentage of home inventory requiring a short sale is higher. On a national level, foreclosed homes (bank REOs) are getting bought up by buyers, but short sales are sitting much too long as lenders drag feet on whether or not to approve sales.

According to NAR data, short sales have sold over the past two (2) years at approximately a 13 percent discount to list price while foreclosures have seen a slightly higher 17 percent discount to list or offering price.

The Treasury Department has also recently passed new guidelines to allow them to offer financial incentives to lenders to approve short. These guidelines create an alternate path or course of action for lenders for a short sale or deed-in-lieu of foreclosure for borrowers who truly have a financial hardship. Especially those where loan modification is not a real option. The guidelines provide $1,000 for those that service the short sale process to offset processing costs, and up to $1,000 to investors to release subordinate or secondary liens.

www.AthensGAHomesForSale.com

Some Great Q&A from the IRS on the First Time Home Buyer and Extended Home Buyer Tax Credits; for more info from the IRS

Q. I plan to build a home and occupy it in 2009 or early 2010. Can I claim the first-time homebuyer credit now and use the funds toward the down payment or other ongoing construction costs?

A. No. To qualify for the first time home buyer credit, the residence must be purchased. By statute, a residence which is constructed by the taxpayer is treated as purchased on the date the taxpayer first occupies the residence. (05/06/09)

Q. I bought my home in 2009 (early) and filed my 2008 tax return claiming the $7,500 first-time homebuyer credit that has to be repaid. Now the expanded law provides for an $8,000 credit that doesn’t have to be repaid. What do I need to do to get the $8,000 credit that doesn’t have to be paid back?

A. You can file an amended return.

Q. If I purchase a home in June 2009, and have already filed my 2008 tax return, can I amend my 2008 return or will I have to claim it on my 2009 return?

A. You can either file an amended return to claim it on your 2008 return or claim it on your 2009 return.

Q: When must I pay back the credit for the home I purchased in 2009?

A:  Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009 or early 2010. The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.

Q:  I’m already a homeowner. If I buy a replacement home after Nov. 6, 2009, to use as my principal residence, do I have to sell my home to qualify for the homebuyer tax credit?

A:  If you meet all of the requirements for the credit, the law does not require you to sell or otherwise dispose of your current principal residence to qualify for a credit of up to $6,500 when you buy a replacement home to use as your principal residence. The requirements are that you must buy, or enter into a binding contract to buy, the replacement principal residence after Nov. 6, 2009, and on or before April 30, 2010, and close on the home by June 30, 2010. Additionally, you must have lived in the same principal residence for any five-consecutive-year period during the eight-year period that ended on the date the replacement home is purchased. For example, if you bought a home on Nov. 30, 2009, the eight-year period would run from Dec. 1, 2001, through Nov. 30, 2009. (11/17/09)

Q. I am a long-time resident (have owned and used my current home as a principal residence for five consecutive years out of the eight-year period ending on the date of purchase of the new residence) but my spouse has lived there for only three years. Can we qualify for the long-time resident homebuyer credit if we purchase a new principal residence?

A. No. Both spouses must have owned and used the same previous principal residence for five consecutive years out of the 8-year period ending on the date of purchase of the new principal residence to qualify for the credit. (12/14/09)

Q. How does the allocation provision work when unmarried taxpayers purchase a home together and both qualify for the first-time homebuyer credit under different tests?

A. Co-purchasers who are not married may allocate the credit using a reasonable method. A reasonable method is any method that does not allocate any portion of the credit to a taxpayer who is not eligible for that portion of the credit. The maximum credit for a taxpayer who qualifies under the long-time resident test is $6,500, and the maximum credit for a taxpayer who qualifies under the first-time homebuyer test is $8,000. One example of a reasonable method is to allocate $6,500 to the long-time resident homebuyer and $1,500 to the first-time homebuyer. (12/14/09)

Back on October 27, 2009, I wrote about how a given listing of mine was a great deal.  Well now I really can’t speak loudly enough, that if you want a deal and have been looking for homes for sale in Athens, GA, this one would be it.  Of all the houses for sale in Athens, GA this 4 bedroom with 3 full baths is located in a mature West Athens neighborhood where the Seller just wants to move on with their lives, and no, in a day of distressed sales, this isn’t one.  This is just a nice home in a nice neighborhood that is waiting for the right buyer to come along.

Contact me if you are interested and I can give you the details.  Any reasonable request in an offer will be looked at and considered including but not limited to allowances for upgrades.  You save money today on a new(er) home that is clean, fresh, and waiting for You!  This home is now a possible Short Sale; all offers considered pending Lender Approval.  The home is currently listed at $199,900, which is well below comparable “recent” sales for a 4BR home in this fantastic Westside location.  With this news of the home being able to be sold short of debt, someone is going to get a scorching deal!

http://www.youtube.com/watch?v=vz5hEQ4GlhA

http://www.AthensGaHomesForSale.com

Top Searches using search term “real estate” via Google Insights (Nov 2009-Dec 2009)

1. commercial real estate

2. real estate listings

3. atlanta real estate

4. real estate license

5. prudential real estate

6. florida real estate

7. coldwell banker

www.AthensGAHomesForSale.com

Well Christmas parades have come and gone and now it seems most are again concerned with either finding foreclosures, looking up tax credits information, how to rent property in Athens, and home buying in general again.  Top 15 or so Web searches over the past week that have brought Web traffic to the Athens GA Properties Blog.

2009-12-08 to Today

www.AthensGAHomesForSale.com

By Selma Lewis, Research Economist

_______________________________________________________

• The exhibit below shows the top five characteristics by eight categories used by academics when analyzing home values. The exhibit shows the total number of times a characteristic has been used in the studies and the number of times its estimated effect has been positive, negative, or not significant.
• In the structural category, the most common are lot size, square feet, age, number of bathrooms and bedrooms. All these boost the value of a home.
• The most frequent internal features are full bathrooms, half bathrooms, fireplace, air-conditioning, hardwood floors and basement. These characterises almost always boost the value of home, but sometimes do decreases or do not have any effect.
• External features that are most often mentioned are garage and garage spaces, deck, pool, porch, carport. All these help the value except the carport which decreased the price in one case.
• Environmental features including “views” all help to boost the price.
• Environmental characteristics due to location of the property, such as location within the metropolitan area, crime, distance, golf course and trees are all important.
• Other environmental features resulting from public services include the school district, percentage of minority in school district and access to a public sewer. In general, perceived school quality has a significant impact on house prices. Marketing, occupancy and selling characteristics include the assessor’s judgment of quality, the assessed condition of the house, whether the house is vacant at the time of sale, whether the house is owner occupied, and DOM. Measures of quality all help increase home prices, as does the owner-occupancy. Being vacant and lingering for a long time on the market have negative effect while other time trend variables do not show significance.
• The last category, financial issues, include financing, foreclosures situation and property taxes.
• Source: Macpherson, David A., Sirmans, G. Stacy, Zietz, Emily N. The Composition of Hedonic Pricing Models. Journal of Real Estate Literature; 2005, Vol. 13 Issue 1, p3-43, 41p, 21 charts

Copyright National Association of REALTORS®, Reprinted with permission.

www.AthensGAHomesForSale.com

Be Sure You Make the Right Moves

First-time homebuyers dominated the U.S. real estate market in 2009, accounting for roughly half of all residential transaction, according to the National Association of REALTORS^®.

That trend is likely to continue well into the new year. That’s because interest rates are hovering near all-time lows, home-price affordability is near all-time highs and a third factor – Congress’ extension of the first-time home buyer tax credit until April 30, 2010 – make conditions quite favorable for those considering homeownership for the first time.

Still, with the prospect of making one of the largest investments you’ll ever make in your life, you can easily become overwhelmed. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Will I qualify for the tax credit? Will I make smart home buying decisions? If you go into the process prepared, your first purchase – like the current timing – can be just right.

Resources–Before starting out, educate yourself on the process. Attend a home buyer seminar in your market, and check out myriad real estate resources online. Among those helpful online resources is prudentialrealestate.com, through which you can access millions of property listings and gain environmental reports, property profiles and value-range estimates for just about any residence in America.

Your real estate professional also is a great resource. Don’t hesitate to let him or her know that you are new to the process. Your real estate professional will expect you to have questions at each step, from house hunting to making an offer through closing.

The costs involved in the purchase of a home can seem overwhelming to first-time homebuyers. There are mortgage costs, the down payment, and closing costs to think about.

Affordability–By looking at your income and debt ratio, your sales professional can help you calculate how much you can afford each month in mortgage payments.  But before determining your price range, you should also take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, insurance, homeowner association dues, utilities and maintenance. And if your down payment is less than 20 percent of the cost of the home, you will be responsible for private mortgage insurance, more commonly referred to as PMI.

Mortgage payment–Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage where there are multiple offers for a specific property. In addition, the fact that your loan has already been approved is of great value to the seller because it shortens the purchase process, and there is less of a chance that the buyer will back out of the sale. If you don’t have a specific mortgage lender in mind, ask your sales professional for a recommendation.

Down payment–The down payment amount varies depending on the value of the home you choose and your mortgage lender. Your real estate professional will be able to explain the different options available to you.

Tax credit–The first-time home buyer tax credit, a key component of the American Recovery and Reinvestment Act of 2009, equates to as much as $8,000, or 10% of a principal residence’s purchase price, and is available to those who have not owned a principal residence in the past three years. You can use the tax credit to help purchase your home or help pay for its closing costs, or the credit can be used to remodel, refurbish and repair your property. See your tax advisor for details about the tax-credit program and how you may benefit.

Making offers–Don’t feel pressured into making an offer on the first home you see. This is a common mistake of many first-time homebuyers. Make sure you view different homes to get a feel for the marketplace. When you decide on a home to make a bid on, work with your real estate professional to get all of your questions answered before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

Above all, remember there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first home purchase is a rewarding experience.
www.Athens GAHomesForSale.com

According to a News Wire press release by Zillow, the weekly average rate Zillow Mortgage Marketplace borrowers were quoted for 30-year fixed mortgages “increased five points last week to 4.72 percent, up from 4.67 percent the week prior,” according to the Zillow Mortgage Rate Monitor, compiled by leading real estate Web site Zillow.com. Rates for a 15-year fixed mortgage rose very slightly to 4.21 percent from 4.20 percent, and 5-1 ARM’s increased seven basis points to 3.81 percent, from 3.74 percent the week prior.

www.AthensGAHomesForSale.com

Rising searches (since Jan 2008)

Rising searches are searches that have experienced significant growth in a given time period, with respect to the preceding time period. Search term ‘real estate’ and region of search Georgia; all metros.

According to the Internal Revenue Service, more than 1.5 million claims have already been processed from individuals and families who have purchased a home between January and September 2009, and the National Association of Realtors estimates that some 350,000 of these buyers would not have purchased the home without the tax credit.  This means that the original First Time Home Buyer Tax Credit has “cost” Uncle Sam approximately $12 billion per the IRS’ figures.

If we take the 350,000 homes that NAR says were purchased because of the credit all by themselves and multiply this by the $63,000 per home that most agree with as the economic benefit to the economy of each home sold, the tax credit through generating more home sales has actually put $22 billion back into the economy!  Is it working?  Based on these figures you would have to agree that the credit is stimulating the economy.  I read too many pieces that delve into the “cost” without ever putting together what benefits have been derived from the credit.  This tax credit is without question doing more to contribute to the economy than any other so-called stimulus that our Federal government has come up with thus far.

Now keep in mind, this current Tax Credit that now expires with homes that go under contract between now and April 30, 2010, is said to be the last and only extension.  We need to be “fiscally responsible” as our Congressmen put it.  What a joke.  Giving Americans back money they earned to begin with and paid into the tax system rather than our government spending it on “pork” is about the most fiscally responsible thing we can do.

Get ready, get set, go!

Analysts say that more than two-thirds of all homeowners and obviously just about all first-time buyers are eligible for the credit extension.

www.AthensGAHomesForSale.com

Just a note, even if the $63,000 figure that most economists agree with as being the benefit of  the “ripple” effect of one housing unit selling is debatable, I would counter that even if one chopped that number in half, if we added roughly the same money to the U.S. economy as money Uncle Sam handed out to tax payers in the form of tax credits, it still makes a sizable impact on the economy.  I would also argue that handing $12 billion back in the form of tax credits this year will have untold potential impact in adding economic benefit as well because people have more money in their pockets to spend.  This too is something that most don’t take into consideration.  That is, that putting $12 billion back in the pockets of consumers will most likely be spent!  Either way you slice it, this Tax Credit has huge future potential at driving the U.S. economy.

Last night Freddie Mac released the results of its Mortgage Market Survey in which it found the 30-year mortgage rate averaged 4.81 percent for the week ending December 10, 2009, up from last week when it averaged 4.71 percent.  Even with the increase of ten basis points, a year ago the 30-year averaged 5.47 percent.

The 15-year this week averaged 4.32 percent, up from last week when it averaged 4.27 percent. A year ago, the 15-year was at 5.20 percent.

“Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. ”The economy shed only 11,000 jobs in November, far fewer than the market consensus forecast, and the unemployment rate unexpectedly fell to 10 percent. In addition, revisions added 159,000 jobs to September and October.”

“Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage.”

www.AthensGAHomesforSale.com

It is funny how the world comes around sometimes.  Or does it?  A couple at our church has “religiously” tried to sell their Athens home FSBO for about the past year with little success.  They have done more than any other FSBO Sellers I know.  From listing it at fsbo.com, where it has sat now for 233 days (the current listing), to having Sunday afternoon Open Houses just about every week over the past year!

On the Web they have six (6) photos, no virtual tour, no slideshow, and no video.  The property had no extras listed on Zillow.com, Yahoo Real Estate, or Trulia either by the way, but they must have just about “Open Housed” themselves to death about now.

This morning I get an email from the husband that said, “As an Athens native, I have met or known of you by reputation for your integrity and determination in real estate.  My wife and I have been more or less casually (my comments here – except for weekly Open Houses as noted, that’s not too casual) trying to sell our home by owner during the real estate downturn because we were not in any great hurry.  We have decided it is time to entertain agents to represent our listing.  I would like to get an honest assessment from those interested on our home and your strategy to get it sold.”  Sounds good so far.  They emailed me and six or eight high rollers in the Athens real estate scene.

He continued, “As a heads up, I have used agents on spec homes in the past, yet because we have sold our homes by owner, my wife is still skeptical about agents. Be prepared to demonstrate the proven value of agent representation.”

Now this is where I must smile, and more than a little.  Basically “we know we need some help in selling our home, and we are going to interview Realtors,” but “be ready and you better come with both barrels loaded because “my wife” is skeptical about agents.”  He’s not skeptical after all.  It’s just his wife.

Is that a backhanded compliment or a backhanded insult?  Not sure.

After looking up his home on fsbo.com, I noted that he has been asking in the $375k range in an Athens neighborhood near Timothy Road.  He told me a year ago when I first spoke with him, back before he needed help of course due to his lengthy Open House schedule that was sure to succeed, that he needed $325k to sell.

Today after getting his email I looked up recent sales (all two of them) for 2009 and before committing to a listing appointment I asked to confirm that he still needed that $325k range to move.  Truth be told, and since I know this guy personally, and since he had a negative taste toward Realtors I wanted to make sure he heard the truth.  His home will not sell for over $300k right now.  The two sales in his subdivision in all of 2009 had a high of $285k.  I told him that if he still needed $325k he should wait another six months to a year before selling.  In my opinion it makes no sense to tell someone a pie in the sky price just to get a listing, sit on it for a year and not be able to sell it yourself and then confirm these people’s thoughts about Realtors. 

In the end, he hasn’t sold his price for two reasons.  Those two reasons are the two that I preach over and over again to Sellers.  In order to sell your home you must have 1. Exposure and 2. Price.  He has neither.

Talking exposure for a minute, did you know that Realtor.com ranks by the number of still photos you have online.  Realtor.com is the #1 Website in terms of real estate listing traffic.  Not an advertisement, just fact.  They rank all listings with the ones that have the 25 photo maximum first and then those with 24, 23, 22, and so on.  They also don’t do slide shows and virtual tours anymore because video technology online has become so fluent.  This fellow had just six photos online.  By the way, fsbo.com is not even in the top 100 as far as listing traffic is concerned.

Regarding price, I told him the truth.  He was too high.  Way too high.

It pains me, and while I would have loved to have told him that we could achieve $300k’s, I had to tell him what he needed to hear and not just be another one of those sales people that he apparently dealt with in the past. Please note, I didn’t say I could do any better than he has in selling his home while asking $75,000 too high.  Even with the right exposure, if you don’t get price right, you are not going to sell.

www.AthensGAHomesForSale.com