As the end date for the 2009 US tax credit nears, the nation waits to hear the outcome of the government’s decision whether to extend the credit an additional six months, or maintain the original completion date.

The credit was designed to further boost the real estate market through the worst of the financial crisis, offering incentives for the majority of buyers wishing to enter the market. While the credit has been available to all homebuyers with a gross income of up to $75,000, the final date for accessing the credit is November 30. As sales contracts can take up to 60 days to complete, time is running out for buyers wishing to take advantage of the credit.

Tax credits for real estate purchases are not a new addition to the US property market, yet the 2009 credit opportunity featured various distinct advantages in comparison to previous credits. Buyers who had obtained the 2008 credit were able to receive up to a maximum of $7,500 and were required to repay the credit over a 15 year period.

Announced in February, the 2009 tax credit for purchasing real estate offers up to 10% of the price of the home, or up to $8,000 for first-time home buyers. The classification of a first-time buyer has been generous in admitting any buyer who did not own their main place of residence during the three years prior to receiving the new tax credit. Another distinct advantage was that the 2009 credit is not required to be repaid on the condition that the property remains the main residence of the owner for a minimum of 36 months.

Since the introduction of the credit the US real estate sector certainly has started to revive, with prices beginning to stabilise across the market and slowly increasing in some regions. Buyers able to enter the property market in its present situation receive several advantageous benefits. Along with the tax credit, mortgage interest rates have been low for those able to access the market and property prices have been at their lowest in years.

While it is considered that the tax credit has assisted in stimulating the real estate market out of the worst of its slump, availability of the credit has only been accessible by a limited sector of the public. Job insecurity and bad credit ratings have kept a large sector of potential buyers out of the market. As an incentive to those who have been able to enter the property market, the tax credit has been used by a large percentage of those who have received the benefit to furnish their new homes.

Conflicting opinions abound over the possible extension of the tax credit. Initially offered as part of the government’s stimulus plan for the US economy, the potential costs associated with a six month extension of the credit are expected to reach around $15 billion, further straining the budget deficit of the US economy. Understandably, the financial aspect is the main concern over the approval of an extension of the credit following the November 30 deadline.

Over 1.2 million homes have been purchased using the tax credit since its introduction in February, evidently achieving the aim of stimulating the market. Property prices have been on the increase since April, with the number of re-sale property purchases in July being at the highest levels for the past two years.

As the recent market growth is being attributed to the tax credit, any decision against extending the credit is expected to affect the real estate market back into a downturn. Loan applications are expected to reduce, leading to fewer purchases and a possible drop in property prices once again.

Although various economists argue that the financial requirements of extending the tax credit could be better applied to other sectors of the failing economy, the impact of the credit is currently being evaluated prior to a final decision being released.

A seller and a buyer have different standards in home buying and selling. A seller would want to sell his or her property according to what the market dictates. Nevertheless, anything lower than that might be unacceptable. On the other hand, the buyer would want to make sure everything is in good condition. If they can still get an opportunity to lower the price, they would naturally grab it. 

But the good in home buying and selling is there will always be room for negotiation. Each of the desires of the buyer can be requested and the seller has the right to accept or decline. A seller can tweak their demands, and the buyer can, in return, accept or decline. Until such time, both parties agree and both of them would commit to the purchase agreement or contract. 

The scenario above may arise after a home inspection. Why? This is because home inspection uncovers defects of the house. Any major deviation from building codes and standards will be discovered through this process. As a result, a buyer would normally want to have these damages fixed before they pay for the property. This is where they make new conditions and create a new offer to satisfy their wants. 

One thing a buyer should keep in mind is that a seller is not obliged to fix every defect of the house. What more if they have disclosed the damages in the beginning. However, it is their responsibility to sell a property that is livable and at the right price. So you can expect major systems to be functional. Therefore, some of the defects may be taken cared of, but some may not. 

If the standards set by the buyer are not met, the next thing to negotiate with is the price. The original offer can slide down a few thousands. However, you also have to look into the original amount. If asking price is approximately equivalent to the fair market value and the defects were disclosed, be reasonable. Do not drive the price low more than it already is. For sure, the seller won’t accept. And this could mean losing your chances of obtaining the property.

Negotiation keep on going and going until both parties meet their demands. One thing buyer should know is the seller is not obligated to fix all the defects of the home, especially when they were advertised. Although, they have the right to keep on negotiating. There can be limitless offers and counteroffers, if both parties are really determined. However, a buyer should know when to withdraw an offer. If they could not just find a common ground with the seller, then there’s no point of pushing for what they want. Buyers would just end up wasting the seller’s time and their time to find another good property. 

Just keep in mind to withdraw an offer or purchase within a specific period. If the negotiation fails, do not dilly-dally. Otherwise, you may end up losing your earnest money and possibly be sued for failing to meet the terms of the contract.

- DETROIT, BIRMINGHAM, BLOOMFIELD, ROCHESTER, ROYAL OAK, TROY, MICHIGAN

I just had my first experience with Michigan’s new 90 day foreclosure moratorium laws and the meeting with a lender representative the laws mandate. It was pretty interesting.

A homeowner was referred to me to assist her with her meeting. Seems she’s been trying to get her FHA loan modified for over 6 months and has been getting the standard run-around. During this time she hasn’t made any payments and the lender was threatening foreclosure.

I had her send me over her budget and mortgage papers before the September 17th meeting, so I could be prepared to assist her. I also carefully reviewed HUD’s new guidelines for FHA loan modifications.

To be eligible for the this meeting, my client first had to meet with a housing counselor approved with the Michigan State Housing Development Authority (MSHDA) or the United States Department of Housing and Urban Development (HUD). As she’d already done this, I reviewed the paperwork they had given her, along with their budget suggestions. It was a joke. Their best advice was to work more hours or get a second job – easy advice to give, but not practical with unemployment as high as it is. The counseling session was required, but seemed to be a waste of my client’s time.

Interestingly, Michigan’s new 90 day foreclosure moratorium laws allow a homeowner to request that the housing counselor accompany them to their meeting with the lender’s representative. Based on the materials and suggestions they gave my client, I do not recommend this!

My client’s lender had selected a law firm in Southfield to be their representative. The firm states on their website that they have over 30 years of experience representing mortgage servicers and they’re a FNMA retained attorney for the state of Michigan.

I was expecting we’d meet with a seasoned attorney from the firm with an ego problem. Instead, we met with what appeared to be a junior attorney (who I’ll call “Sam”, but that’s not his real name) who was very nice and easy to deal with.

The session began with “Sam” printing out a modification analysis the lender had already done. The bad news was that according to the analysis, my client didn’t qualify for a loan modification. I’m not going to get into all the different variables and the math here, but the bottom-line was that her debt-to-income ratios were too high.

At least according to their analysis. There were several flaws in their analysis though. They didn’t have my client’s income or debts correct, in fact they were way off. We started to go over these errors with “Sam”, but he said he wasn’t authorized to change anything. He was nice enough though, to phone his contact at the lender and get her to agree to go on speaker phone. Let’s call her “Sarah”. “Sarah” was pretty nice, but talked a lot, so it was difficult at first to get her to listen. She seemed intent on just talking over us and telling us it was too bad they couldn’t do anything for my client. When I pressed her to explain how they came up with their numbers, she impressively rattled off a bunch of figures and calculations.

Right at this point an average homeowner would probably have given up and thrown in the towel – exactly what the lenders want. I can’t imagine a housing counselor being of any use at this point either.

I stood my ground though and kept asking questions. I also got “Sam” to print off HUD’s modification guidelines off the web (even though I had them with me) and asked “Sarah” to locate a copy also.

The first mistake they had made was in regard to my client’s income. Once I got “Sarah” to stop trying to talk over and intimidate us, I was able to show her where her mistake was. Seems they calculated and input my client’s take-home pay instead of the required gross pay. This was a mistake of almost 50%. “Sarah” tried to get around this by stating the guidelines allowed them to bump up the take-home pay by 125%. When I asked her to show me where this was allowed, she had “Sam” pull out guidelines she had earlier sent him. Indeed, what was written there supported her statement. Unfortunately for “Sarah”, the guidelines she referenced to support her position were not HUD’s latest guidelines. For someone that talked as much as she did, she didn’t have much to say when I pointed this out.

From there I dove into the mistakes they had made on my client’s debts and expenses. “Sarah” and I had an interesting discussion on the difference between a “debt” and an “expense”. Around this time, “Sarah” started asking us to hold while she went and checked with her manager on my questions.

In the end, my client was tentatively approved for a loan modification that would drop her payment by around 16% which equals just over $300/month. All she has to do to qualify is send in updated paystubs and prove her car is paid off. Of course she was hoping for even a lower payment (doesn’t everyone?), but what she got is the maximum allowed under HUD’s modification guidelines.

After we settled on everything, “Sam” surprised me by telling my client that she was smart to bring the right attorney to represent her, as every other homeowner he’d represented lenders against had brought an attorney that’d done nothing for their client, if they brought an attorney at all.

It was his turn to be surprised when I told him I wasn’t an attorney, but was a multi-certified mortgage lender. He then gave me perhaps the best compliment you can get from an attorney, telling me I should be one.

He also asked for my card and said he’d like to refer me to his own homeowner clients.

Those who are seeking a way to work from home can work as an affiliate for a company that practices foreclosure loss mitigation. There are many aspects to foreclosure loss mitigation that are used to stop foreclosure. As the number of foreclosures in the United States continues to climb, there is more of a need for those who are interested in working in this field to help those who are facing foreclosure on their property.

One way that those who want to help out and earn money by working from home at the same time is to get involved in an affiliate program for a loss mitigation company. Many loss mitigation companies are outsourcing some work such as loan modification processing to individuals who have been trained for this purpose. This is an ideal way for someone to make money from home and help other people at the same time. Right now, there are more people facing foreclosure than those who understand about loan modifications and how to process them. This is why this is such a good field to get into for someone who wants to work from home.

Another way to become an affiliate for loan modification companies is to draw people who are facing foreclosure to the company. Those who act as affiliates can simply market the loss mitigation companies so that those who are struggling to pay their mortgage payments get the help that they need.

Many people are struggling today each month to pay their mortgages. Although the value of homes has declined in recent years across the United States, the taxes have not declined. Nor have the mortgage payments. With many people losing their jobs and unemployment in the double digits, there does not seem to be an end to the problem any time soon.

Working with foreclosure loss mitigation companies as an affiliate can give those who are interested in helping others stop foreclosure the extra money that they need that can be used to make their own mortgage payments. Many people just need a few hundred dollars extra a month in order to survive and make their payments. Those who are involved in loss mitigation outsourcing can work as hard as they want to make as much money as they can either in a full time or part time basis.

Anyone who is seeking a way to find work that they can do from home should consider a loss mitigation company affiliate program that is designed to prevent foreclosures for struggling homeowners.

Controlling mold in your home

Molds are generally microscopic organisms found virtually everywhere, indoors and outdoors. They are living organisms, but are neither plants nor animals. It is a type of fungus. It is part of a group of living organisms that are very common and serve an important role in the environment. Penicillin, an antibiotic that has saved many lives, is a type of mold, and so is yeast, which is widely used in cooking. When tiny airborne spores of mold burst, and then land on a favorable surface, they proliferate into visible colonies, and find new favorable surfaces on which to further multiply. The three important factors that help mold growth are moisture, warmth and food. Hence, mold is most likely to find a place to grow in a bathroom, basement or kitchen, but it can grow in other rooms also if conditions are favorable. The climate in which you live and living habits in your household can greatly affect the ability of mold to grow in your house.

Mold normally thrives and reproduces in wet or damp parts of your home: areas that have had flooding or where leakage has occurred in roofs, pipes, or walls, or areas around house plants, especially ones that sometimes are over-watered. In just 24 hours, a moist environment combined with favorable room-temperature conditions and an organic food source can lead to mold growth. Some places where mold can grow in your home are: beneath the carpet, wet upholstery, drapes, clothing, if left unused for long periods, as well as store rooms that are not dusted and aired regularly. Once it gets the food it needs, molds can virtually move to any kind of surface. It is difficult to completely eliminate mold from our surfaces as they are an integral part of the atmosphere, but these need to be controlled as too much of mold can lead to diseases, especially  in children.

Some common steps that can be taken to ensure that mold does not interfere with your life are the following: Reduce humidity inside by airing your house regularly every day. If you happen to go out of home for a longer period, make sure that you leave atleast one ventilator open, so that there is sufficient air flow into the house. Prevent water leaks, and if they do occur, repair these quickly, within 48 hours. Try to water proof your house during construction, so that there are no seepage or drainage issues. Reduce usage of carpets, and if you do have them, make sure that these are dusted or vaccumed regularly. Driers or such appliances are best kept outside, especially in areas where there is sufficient sunlight. Porous materials such as wood, fabric, cushions, and mattresses retain water and are likely to be contaminated, making it difficult to clean them. In the event that these objects are contaminated, it is advised to dispose them, as these invariably become huge mold colonies.

One of the things that is inspected for when you’re looking to buy a house is dry rot; dry rot is a fungus that consumes the cellulose in the wood and thereby destroys the strength and structure of the wood on a cellular level.

Dry rot infestation is a bit of a misnomer; the fungi that cause dry rot actually require a relatively high amount of moisture to live and reproduce. The name dry rot originally referred to the fact that it was a condition of milled trees, rather than live ones. Ideally, dry rot prefers moisture levels of 28 to 30% but can sustain itself at levels damper than that as well. Constant saturation of wood or constant dryness wards against dry rot, however, constantly wet wood is at risk for other forms of rot.

Dry rot can travel through a building through materials other than timber and can spread quickly through your home which is one reason why dry rot is such a serious problem. If dry rot goes undetected—or worse, detected but ignored—then it is assured that the problem with get worse and may have catastrophic conclusions.

How do you know if there is a problem with dry rot in a home that you’d like to buy? Well, there are a variety of ways to tell. Wood that is infected with the dry rot fungus often shrinks or discolors; it also tends to crack against the grain into cube-like pieces as the fungus consumes the cellulose that gives the wood its cellular skeleton. Dry rot can also show as a skin over the wood or a cottony fibrous coating. The wood can also have a soft fungal growth that may look like a thick colored mold. A musty, moldy odour often accompanies dry rot. Your best bet when looking to buy a home—even if you do not suspect that it has dry rot—is to have the premises inspected for dry rot by an inspector.

There are some fillers that you can use to fill spots that have had the dry rot cleaned out of them which work to strengthen the wood and kill the fungus. There are also some good chemical liquids that can be applied to wood that prevent it from getting an infestation of spores, however any wood that gets wet repeatedly will be more likely to get dry rot even if these applications are used. The main problem is keeping the wood from getting damp in the first place.

Because of the seriousness of the structural damage that dry rot causes and the extensiveness of that damage it is best for a homeowner to call in a professional to determine the scope of the problem and to give an accurate idea of the work and money that will be required to rid the home of the fungal infestation. Do not agree to buy a property that has dry rot until you have an accurate idea of how extensive the dry rot is and who will be responsible for paying for the subsequent costs to fix it.

The different material that you use for real estate broker marketing are the most important thing in order to increase the exposure for property. Consistent distribution and use of materials will ensure that others are aware of the business and the services offered. Numerous materials are available, however the question remains on what materials work most effectively.

Before going and buying any real estate broker marketing materials, consider a few things. Magnets are one way to advertise and they work well for advertising on your car. Signs are the best way for advertising and promoting the various homes, while you are selling as well as alerting individuals to your open house.

Direct mailings and the addition of other promotion materials works well for allowing others to notice the business that you have to offer. When you want to reach other real estate agents and potential clients, real estate marketing is one of the most important things for you to do. This is something you will be able to do online as well to reach many people that you otherwise would not be able to reach

When you are in the process of selling, you are going to want to use your real estate broker marketing for drawing attention to the properties that you have. Use signs with bold writing and that are attractive. When you are placing the signs for open houses and banners, make sure to place them in an area that are easily seen and that will draw attention to the property.

When you use direct mailings, have the aim of making the message quick to read and easy to notice. The people that are part of your real estate broker marketing should be real estate agents and future customers. With the marketing materials that you use for direct mailings, they should be things as brochures, note cards, and magnets, along with a variety of other items.

Sending electronic mail becomes a possibility when you use the resources available online. In addition, you reach more customers than you would normally, by use of the internet. When you have a website, the ease of use is something that is important and something that you can easily to do by having a professional design it.

Combining different methods for your real estate broker marketing will allow you more success. Real estate agents are the people that will need your services and you are sure to want to sell at times as well.

Of course it isn’t difficult to find a real estate agent, but there are good and bad ones out there. The following tips should help you find the right one for you.

Your Real Estate Purpose

Which agent is best for you depends on your goals.  If you are buying a home for yourself, for example, you don’t need nor want an agent that is the top seller of commercial real estate. You want one that knows houses, and can help you quickly narrow your search to those that are right for you. In that case, call a few agent who have listings similar to the home you hope to find. See if they can relate to and understand what your needs are.

On the other hand, if you are looking for commercial real estate, you want the agent that has the experience in that area. Again, a good start is to pull out the newspaper and some real estate guides to see who is currently selling the type of properties that you are looking for. Talk to a few agents for a while to see if they have the experience and knowledge necessary to help you find the right investment.

Of course, if you are selling real estate you want an agent that both sells a lot and sells the type you have. Start with those listings in the paper and real estate guides again. This time pay special attention to how many listings each agent has. Many good agents are better at helping you find property than at selling it for you. You want someone who has experience selling. When talking to the agents, ask them about recent sales (there should be some), and how close to the selling price was to the asking price (this tells you whether they are good at determining the true market value of properties).

More Real Estate Agent Tips

It may seem like a small thing, but I prefer an agent that returns calls. Leave messages with a few and see who gets back to you that day. Especially if you are selling a property you want an agent that returns calls promptly, so you don’t lose a sale to a potential buyer.

If you are looking to buy a home, and you have some experience with this, and you don’t know an agent that you really trust, consider simply searching on your own. You can find virtually all property listings on line now, and when you see one you might like you can call the listing agent directly. One advantage of this strategy is that you don’t have to wait for “your” agent to contact the listing agent and that agent to get back with your agent who then has to contact you – all to get a simple question answered.

This is helpful with investments as well, because you’re not hearing things third-hand (seller tells agent who tells your agent ho tells you). Negotiating is more practical if there is only one agent between you and the seller as well. In any case, unless you have a buyers agent, they are all working for the seller’s best interest, even if they are working to help you find the right property. It’s easier to remember this when you call the listing agent for each property you want to see.

If you are investing, find a real estate agent that invests as well. At first glance it may seem like such an agent will be scooping up the best properties before showing them to you, but this is rarely a problem because all investors have slightly different goals, ideas, preferences and timing. The important point is that an investor is more likely to understand what another investor wants. Agents that sell homes may habitually look for “pretty” over cash flow, for example, even when showing investment properties.

Don’t be afraid to drop an agent if they can’t do the job. If you are a buyer this is easier. If an agent shows you three houses that have none of the things you said you are looking for, try another agent. If you are selling and the agent is doing a truly bad job, talk to the broker he works with and you may be able to cancel the contract. The bottom line with all of these tips for find a real estate agent is that you have the right to work with one that is right for you.

A good real estate investment club helps its members find investment opportunities. It also helps bring people together in profitable partnerships. It can be a place to find alternative sources of financing as well. Here are some tips for making your club work like it should.

Get The Right Members

There is no need to keep anyone from joining your organization, but you don’t want it to be nothing but beginning investors who haven’t yet bought a single thing. To be a valuable tool, an investment club need experienced investors too. To get them to join you may have to contact them directly. Talk to real estate agents to see who is actively investing in the area and sent them an invitation or call them on the phone.

First, let them know the club exists. Many investors understand the value of these organizations and will join as soon as they hear about them. Otherwise you might offer free membership for the first year, just to get them to join. Explain that even though you have many new investors, these “newbies” can find properties that they can’t afford or are afraid to invest in, and experienced investors can take advantage of these.

Have The Right Activities

If you don’t already have an “I have/I need” routine, start one. This is a time when every member announces what they have or what they need. For example, at a meeting of our real estate investment club in Tucson a few years ago, a member mentioned that he had good cupboards he had removed from a house he was upgrading. He made a little selling them to another member, and that investor saved perhaps a couple thousand dollars versus buying new cupboards for his fixer upper rental.

At another meeting a man mentioned that they had a great house to flip but didn’t have the money to do the deal. He wanted to sell the contract. I later overheard him negotiating the sale with another investor. He would make a few thousand for having found the deal, and the other investor hopefully made at least $20,000 fixing and flipping the property.

These “haves” and “needs” were written down on an overhead projector along with the person’s name and phone number. Members took notes religiously. On the “I need” side there were regularly investors who needed financial help with investments, providing great opportunities for those who had more money than time to invest.

Once per month seems to be a good schedule for meetings for a real estate investment club. Guest speakers and special presentations are a great way to make them more interesting, but always leave room for members to mingle with each other (this is one of the primary values), and for the “I have/I need” session. Membership dues should be reasonable, generally just enough to cover the rental of the space, minor advertising, perhaps coffee and cookies or some other snack.

Determining the value of your home can be advantageous, whether you are buying or selling it. For homebuyers, determining the value could help them make reasonable offers. If the seller counter-offers, they are able to negotiate properly since they would know what the property is really worth. On the other hand, this is the best way for the seller to price their homes. This is an objective way of creating a price tag. In the end, they property would not end up being stale on the market just because of being overpriced. Alternatively, it could be, they can sell the house and get proceeds, which is equivalent to the real worth of the house. 

Sellers and buyers can also be investors. Should both parties decide to enter the investment aspect of real estate, the value of the property will tell them if the investment properties are worth acquiring. 

How are home values determined? 

Get a Comparative Market Analysis 

CMA or comparative market analysis is a method of determining home value. Real estate are known to use this, especially in determining the price of the property. It is a comparison of several properties that are similar to yours that is located within the same area and were sold for the past 6 months. These properties are comps or comparables. Comps are not exactly the twin version of your homes. They have the same land area and may have several features like your own but not exactly alike. 

Obtaining a CMA is not difficult to do. If you work with a real estate agent, they can provide you with a CMA. They can use the Multiple Listing Services to generate the CMA. Alternatively, they can also pick out comps from the properties they have sold to make the CMA. It is very easy to make but it needs time and practice. You can even do it on your own. 

There are other tools online to get CMA. All you have to do is search them in the internet. You can visit sites like realestate.com. But nothing beats CMA generated from eyeballing properties. A real estate agent, who has generated CMA based on firsthand experience may be better than those who just relies on the listed features of the MLS. 

Get an Appraisal 

Appraisal is different from CMA. However, if you look at the report, it may contain information that can be seen on the CMA. Commonly, Lenders use an appraisal report rather than real estate agents. Buyers pays for this service to satisfy the requirements of their loan application. However, it is not exclusive for their use. If sellers want to get another opinion for pricing, an appraisal can be a reliable data. 

A professional appraiser does appraisal. They are independent parties hired to evaluate homes. However, they are not in nobody’s side. They are neutral. Therefore, you can expect an unbiased result. However, one has to be prepared for this because they do not come for free. 

Doing an appraisal requires some legwork and time. Therefore, you have to prepare for the cost in acquiring them. Otherwise, you can stick using the CMA.