Improve vs. Move

Dreaming of a gourmet kitchen, teenagers fighting over closet or bathroom space, tired of camping out at your kitchen table with your computer and wishing you had an office. If any of these things cross your mind you are probably asking yourself if its time to improve the house you live in or move to another.

If you are experiencing the delimma of moving vs. improving there are several questions you should ask yourself before making such an important decision. Additionally, homeowners who are happy with their current neighborhood and school district are especially wise to weigh answers to the following:

How long do you intend to keep the house?
This initial question has impact on several levels. First, it makes little financial sense to pour money into a house only to sell it. Second, if you've ever lived around and through a remodeling project, you know that the emotional upheaval you suffer during construction needs to be offset by enjoying the benefits once the improvements are complete.

Even if you aren't thinking of moving in the near future, be sure to do the math in the following question before wading knee-deep into a project.

Will you be able to recoup the cost of improvements when you sell?
A real estate agent can show you comparable properties (comps) of recent sales to determine how much if any the improvements will increase market value. If you make improvements that don't add to market value, be prepared to walk away from what you've spent especially if selling in a short period of time (less than five years on the average, depending on the type of improvement.)

Are the improvements you're considering logical given the age, size, and location of the house?
Just as you wouldn't install a new sunroof on a dilapidated car, making expensive additions to a house that's full of functional obsolescence makes little financial sense.

Many appraisers would tell you that it's much tougher to recoup the investment from home improvements if they aren't similar in style and design/era to the existing home. And before hammering the first nail, make sure you check the setback requirements for construction especially on rear and side lot lines. What a nightmare it would be to construct a room addition, only to have all or part of it in violation of zoning laws and/or owned in part by your neighbor!

Could additions/changes over-improve the house?
A house at the top of the market for the neighborhood can take longer to sell since buyers often purchase on the low side, hoping to maximize equity and improvements made over time. There are some additions that aren't welcomed by certain buyer segments.

For example, families with young children might shy away from owning a swimming pool since it's the number one cause of death for children under age five. A remodeled master suite in a third-floor loft could be undesirable if the prospective buyer/target was retirees. Even though you may want to make additions/changes based on your immediate needs and desires, it never hurts to look down stream at who a potential future buyer might be in order to avoid over-improvements you can't recoup.

By asking yourself these questions it is a great start in making a decision to move or improve!

Troubled Homeowner? New program to start in January 2011

The U.S. Treasury Department has approved CalHFA's plan to use nearly $2 billion in federal funding to help California families struggling to pay their mortgages.


The Keep Your Home California programs are focused on assisting low and moderate income families stay in their homes, when possible, and leveraging additional contributions from lenders and mortgage servicers.

Primary objectives for the Keep Your Home California programs include:

• Preserving homeownership for low and moderate income homeowners in California by reducing the number of delinquencies and preventing avoidable foreclosures
• Assisting in the stabilization of California communities
• Each of the Keep Your Home California programs is designed to address one or more aspects of the current housing crisis by doing the following:
• Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment, have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of this economic hardship when coupled with a severe decline in their home's value.
• Creating a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program's mission and purpose.
• Creating programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods

Two articles have been published this month with additional information in the San Jose Mercury News and LA Times

You can also visit the "Keep Your Home California" website for more information about eligibility.

5 Foreclosure Myths - BUSTED!

Four years into the housing crisis, myths about foreclosure still litter the minds of even the smartest of real estate consumers. When it comes to matters as high stakes as your home, confusion can cost you thousands - or even your home. Whether you’re a buyer looking at foreclosures, a homeowner struggling to keep your home or a seller concerned making sure your home can compete with the foreclosed homes on your block, these foreclosure myths are prime for the busting, with no further ado.


Myth #1:
Foreclosure happens fast. With unemployment and underemployment still affecting nearly 1 in every 4 Americans, no one is immune from fears that a pink slip might quickly turn into a foreclosure notice. According to NeighborWorks America, nearly 60 percent of families seeking foreclosure counseling cited a lost job or cut wages as the reason they were facing foreclosure.

While the Obama Administration's Home Affordable Programs haven't been nearly as effective as predicted in actually preventing foreclosures, they have had the effect of extending the foreclosure process for many families. Even though the legal process of foreclosure can happen in as few as 6 months in most states, it is currently taking much longer for the average foreclosure to get to completion. Recently, JP Morgan Chase revealed that their average borrower who loses a home to foreclosure has not made any payments in 14 months nationwide; 22 months in FLorida and 26 months in New York.

To be sure, some see this as a good, others view it as unnecessarily dragging out the overall market's recovery. Many insiders will point out that these delays in foreclosure may be calculated to save the banks the costs of owning and maintaining foreclosed homes, not to help homeowners. In any event, the fact that foreclosure does not happen nearly as fast, in many cases, as expected does give families who are temporarily down on their luck some extra time to try to get back on their feet and save their homes.

Myth #2:
Buyers can’t get clear title or title insurance on foreclosed homes. When the foreclosure robo-signing scandal first hit, there was widespread concern that buyers would not be able to get clear title on foreclosed homes, because the former foreclosed owners might be able to come get their homes back when the improprieties in the bank's foreclosure documentation processes came fully to light. At the same time, several of the country's largest title insurance companies publicly balked at issuing policies on bank-owned homes until the issue was resolved. At this point, the banks claim they have revamped their processes, and all banks have stated that they have found not a single borrower whose home was repossessed without them having missed the requisite number of mortgage payments. Nevertheless, a number of governmental investigations are still in progress.

The fact is, buyers of bank-owned properties in nearly every jurisdiction are protected from later title attacks by foreclosed homeowners by the bona fide purchaser rule, under which courts would prefer to simply award cash damages to be paid by the culpable bank to a wrongfully foreclosed-on homeowner, rather than reversing the sale or ownership to the new, innocent buyer. Additionally, the title insurers have now changed their tune and restarted issuing insurance policies on bank-owned homes which protect buyers' interests, after working with the banks for them to take responsibility in the event a former homeowner prevails in a wrongful foreclosure suit.

While there are still many intricacies of title to be resolved for foreclosure buyers who purchase homes at trustee sales and auctions, or for cash buyers who often went without title insurance in the past, on the average, Trulia-listed, bank-owned property purchased with an average mortgage and title insurance, the chances a buyer's title will later be successfully challenged by the foreclosed homeowner on the basis of robo-signing? Exceedingly slim.

Myth #3:
Buyers should wait for the shadow inventory to be released. Many a buyer, discouraged with the homes they see on the the form in their price range, has decided to sit still and wait for the banks to release for sale what is called their "shadow inventory" - rumored to be anywhere from 4 to nearly 6 million homes that have already been foreclosed, but not listed for sale, or will be foreclosed in the near future. The fact is, to the extent that the banks have acknowledged the existence of a pool of homes they own but are not selling, they have expressed that their reasoning for holding the homes off the market is to avoid flooding the market and driving home values down any further. For that reason, buyers should not expect to see a massive influx of these shadow homes onto the market anytime soon - if ever.

The banks' current modus operandi is that as they sell a home, the replace it with another home in that market - if they sell 50 homes in a town that month, they'll put another 50 on the next. So, don't hold your breath waiting for a fabulous new flood of homes. Instead, set up a Trulia alert to notify you when homes that fit your search criteria come on the market, and be ready to call your agent and go visit any and every one that looks like it might be a good fit.

Myth #4:
If you’re looking for a deal, you’re looking for a foreclosure. Despite what they may say, no buyer’s heart's fondest desire is to buy a foreclosure. But almost every buyer dreams of buying a great home - and getting a great deal on it. Many people think that to get a great value on their home on today's market, it means they must buy a foreclosure. As a result, the value and other advantages of buying an individually-owned home on today's market are frequently overlooked. Individual sellers with homes on the market right now are generally quite motivated, and understand that their homes are competing with discounted short sales and foreclosed homes. Many of these sellers are slashing prices in an effort to get them sold - the most recent Trulia Price Reduction Report revealed that 27 percent of homes on the market across the country have had at least one price reduction. Now that's what I call a sale!

Further, individual owners are often much more negotiable on a wide range of contract terms than a bank which owns a foreclosed home. You can work with non-bank owners on things like repairs, closing dates, choice of escrow provider, closing costs and even included personal property much more flexibly than you can when the bank is on the other side of the bargaining table. On top of that, many individually-owned homes are in pristine, move-in condition; that is much rarer with foreclosures. So, don't underestimate the value of the deal you might be able to get on a non-foreclosed home. Just get clear on what you can afford and look at all the homes that are available in that price range, without discriminating against non-foreclosures.

Myth #5:
Having a foreclosure on your credit history means it'll take years and years before you can buy again. One of the most Frequently Asked Questions in the Trulia Voices Community by homeowners who are facing or have just lost a home through foreclosure is how long it will take before they'll be able to buy again. Until recently, the standard wisdom was that 5 years, minimum, would have to have elapsed between the foreclosure and the new home purchase. Now, though, borrowers can obtain an FHA loan with the low, 3.5 minimum down payment requirement as soon as 3 years following a foreclosure. To do so, though, all your other ducks must be in a row.

Post-foreclosure buyers need a credit score of 620-640 to qualify for an FHA loan; higher for a non-FHA loan - given that the foreclosure itself usually dings anywhere from 100-150 points off the credit score (not necessarily counting a full year or more of pre-foreclosure missed payments), former homeowners who want to buy again need to ensure they have no other late payments or credit dings after they lose thier home. You must have clean credit with no derogatory marks like late credit card payments following the foreclosure, and you may also be required to document 12 to 24 months straight of on-time rent payments after the foreclosure.

Further, the bank may impose a lower debt-to-income ratio on post-foreclosure borrowers than on borrowers who have not had a foreclosure, in an effort to keep your mortgage payments low, keep you from overextending yourself and boost the chances you'll be a successful homeowner over the long-term this time around. The bank will also need to see 2 years of continuous employment history in the same field, and documentation that you meet other loan qualification requirements.

Article courtesy of trulia.com

Questions You Should Ask About Property Taxes

Property taxes are a major expense, one which often totals thousands of dollars per year. But property taxes are not the same for like properties or for every owner.

Property taxes provide much of the revenue used to fund local and state governments. As property values go up, property tax collections also rise which means additional dollars are available for more public services -- and perhaps even for tax refunds. Alternatively, if property values decline, then government programs tend to be squeezed or there is pressure to raise income and sales taxes to make up for short-falls.

How much you pay for property taxes depends on the value of your home and also local tax policies. In the usual case, a property value is established by government assessors. Once a value is set the tax rate is then applied. For instance, if the rate is $1.50 for each $100 in value, then a home worth $100,000 would have an annual tax bill of $1,500 or $125 per month.

The road from the tax assessment to a bill for property taxes is rarely straight, however. There are often complications, so it pays to ask questions:

• What value is used to assess taxes? You might think that a home's current market worth would be used to establish a value for tax purposes, but that's not always the case. In many areas under circuit breaker programs annual tax increases are limited so the tax can be less than current market values might allow. Another approach is to apply the tax rate to a portion of the assessed value and not the full worth of the property.
• What are the current owners paying? Is their tax bill consistent with neighboring homes of equal size and condition? If different, why?
• How will property taxes impact your ability to borrow? Lenders use a number of measures to qualify borrowers and one of the most important is the percent of gross monthly income spent for mortgage principal, interest, property taxes, and insurance -- what loan officers call PITI. Low property tax bills can make it easier to qualify for a loan.
• Has the tax bill been appealed or is it being appealed? Values by tax assessors can be contested if owners think estimates are too high -- perhaps because the valuation did not consider certain factors, the math was wrong, or an incorrect schedule was applied. Local assessment offices can tell you how to appeal and in many areas there are services which will do the fighting for you.
• Are you or the current owners entitled to an exemption? Local rules vary extensively, but those over 65, veterans, individuals with limited incomes, and others may be entitled to a full or partial exemption. If, for example, the current owner has an exemption which will not apply to you, then current tax costs may be effectively understated. C
• Can property taxes be deferred? To ease cashflow burdens for retirees, it may be possible to have property taxes accrue as a lien against a home. Owners in such situations need not pay some or all of their property taxes: instead, when the home is sold, taxes are taken from the sale proceeds. One jurisdiction, Montgomery County, MD, actually allows qualified owners of all ages to defer property tax payments under this system.
• What are the income tax benefits of property tax payments? In the usual case, property taxes are deductible from federal and state income taxes. For details, speak with a tax professional.
• Will the sale of a property trigger a different tax bill? A sale may suggest a new and higher value to assessors, past exemptions may not apply, and circuit breakers may be re-started or even turned off.
• How often are assessments made? In some areas physical assessments are only made every two or three years. This means that property taxes may be based on values which are out of date, something that can be important in communities where property values are rapidly changing, either up or down.

If all of this seems fairly complex, it is. The local tax assessment office can tell you how the system works while real estate brokers can provide general information. In the end, of course, there are always taxes to pay, the only question is how much.

Article courtesy of realtytimes.com

Foreclosure Freeze Coming to Resolve – But What does it all Mean?

In the past week there have been various news announcements stating that banks have started moving forward on foreclosures in most states. Bank of America will lift foreclosure freeze in 23 states by next week, and GMAC has lifted its freeze in the 23 states where it halted foreclosures - Less than a month from when the freezes started. This is a far faster resolution than the months of delays some analysts had predicted for the nation's battered housing markets.

Now that we know that banks are getting back on track with moving through the foreclosure process on thousands and thousands of homes across the U.S., you still may be asking yourself what this all means. Here is some background on how the freeze started and its impact on the housing market:

After evidence surfaced that mistakes where made in foreclosure documents and in some instances foreclosure documents were signed by mortgage companies without anyone reading them the nations largest banks—JPMorgan Chase & Co., Ally Financial's GMAC Mortgage unit, PNC Financial and Bank of America Corp., put a freeze on processing foreclosures. These banks are in the process of checking to see if their employees made errors in loan documents needed to complete these foreclosures. Other large banks such as Wells Fargo & Co. and Citigroup Inc. say they have no plans to suspend foreclosures and they are confident they have complied with state laws.

It appears that mortgage companies may have felt overwhelmed by the paperwork involving millions of foreclosures and defaults. These companies took shortcuts to manage the onslaught rather than hiring more staff. One short-cut used is to “robo-sign” thousands of documents that were not actually read.

By halting foreclosures most banks are still initiating foreclosures but are no longer evicting people or selling foreclosed homes in the states that require judges’ approval. However, Bank of America had stopped seizing foreclosed homes but continued to sell homes that had already been foreclosed on and are still processing new foreclosures.

The foreclosure freeze should cause only a temporary slowdown in the number of homes seized by lenders. One reason is that four states hardest hit by foreclosures—Nevada, Arizona, California and Michigan—aren't among the 23 states where many lenders are halting foreclosures.

In home markets where foreclosures are on hold, prices could stop falling, at least for a while. That's because fewer foreclosed homes will be for sale. Agents who manage sales of foreclosed homes are already seeing some of those sales put on hold. These agents can't complete transactions involving mortgages handled by the lenders that have halted foreclosures. And a major title insurance company, Old Republic National, has said it won't insure foreclosed homes sold by JPMorgan and Ally Financial. It says it worries that flawed foreclosure paperwork could put the home's ownership in doubt. Another, Stewart Title, is clamping down on sales of foreclosed homes that may be linked to flawed documentation.

If you are a homeowner in the middle of foreclosure you may be curious if you can possibly get your home back. You can hire a lawyer or approach a housing counselor who will examine your mortgage and foreclosure paperwork. Lawyers for homeowners will look for errors and use them to pressure lenders to at least forgive a portion of the homeowners' loans. But most experts say people who have lost homes to foreclosure don't have much hope in the long run, especially if banks can show judges that they have corrected any errors.

If you have recently purchased a foreclosed property you may be worried that somebody can take it back. However, in most cases this cannot happen. Previous owners can use the lender that sold the property but that won’t be easy. Even if such lawsuits succeed, title insurance protects homebuyers from any claim on the property that surfaces after the deal is closed.

About a third of all home sales right now are foreclosure-based. As such, freezing these sales, as well as current and near-future foreclosures, will arrest approximately one-quarter of all home sales. Moreover, home sales will likely become further depressed as many would-be homebuyers wait for the “flood” of foreclosed homes that will inevitably follow the freeze. When this flood happens, it may actually serve to spur property values overall. Experts are predicting a false positive gain during the fourth quarter due to elimination of a large number of sales at the bottom of the market. This could lead to a distorted picture of what the nature of the market really is.

The good news is we are moving out of this foreclosure freeze quicker than anticipated, so the impact may not be as significant as experts once thought.

Fall Home Improvements

Although lately it doesn't feel like Fall, this time of year is an important time to weather-proof your home. Cooler air is working its way across the country, and that means some home maintenance is in order.

Here are a few items you should attend to this season.

1.  Trim back nonflowering bushes: These plants are headed into their dormant stage, and that means you can get in one last trim before cold weather. 
2. Mums the word: Chrysanthemums are a great way to keep your frontstep colorful and inviting. Find your favorite color at your local plant nursery!
3. Fall cleaning: Clean-up isn't just for Spring anymore. Fall is prime time to pick up and put away gardening tools, summer toys, and pool supplies. Take advantage of the beautiful and temperate weather by tidying up your yard.
4. Seasonal items: Welcome mats and wreaths are easy ways to add a warm and welcoming touch to your home. 
5. Storm windows. Champions of keeping in heat on cold days, storm windows are something you can install on your own. To install, remove and store your screens. Clean out the window tracks. And then use a little spray lubrication to make the storm windows slide more easily into place. 
6. Clean the gutters. Throughout the season, leaves will fill your gutters. Be sure to keep your gutters clear of debris so that rain water does not do damage to your home.
7. Chimneys: Have each chimney cleaned and checked for cracks and leaks. A chimney fire would put a real damper on your holidays! 
8. Change filters: This should be done every 3 months, if not more frequently. Filters cost just dollars, and clean ones mean fewer allergens in your air.
9. Heater servicing: After sitting for a year, your unit will need serviced. This will ensure it runs smoothly when you really need it.
10. Hot water heater: Use Fall as the time to drain your hot water heater and to remove sediment from the bottom. This will improve your unit's efficiency.

Enjoy the cooler weather and get that home in order!

How Mortgage Rates Compare

You’ve heard it all across the media. Interest rates are at historic lows. If you are new to the mortgage process, these figures and statements give you little frame of reference. Let's take a moment to look at where interest rates have been over the last few decades, and what today's rates really mean for homebuyers.


Interest rates are affected by a gamut of factors.

According to the Federal Reserve Bank of New York, "Lower interest rates make it easier for people to borrow in order to buy cars and homes. Purchases of homes, in turn, increase the demand for other items, such as furniture and appliances, thus providing an additional boost to the economy. Lower interest rates mean that consumers spend less on interest costs, leaving them with more of their income to spend on goods and services." And this is, after all, what you want people to do in a down economy. You want them to reinvigorate the economy with spending. The Fed continues, "If the rates that consumers and businesses have to pay to borrow rise too rapidly, however, spending may decline, leading to an economic slowdown." So, it is an intricate dance the powers that be must perform in order to steer the economy the best they can. They, namely the Federal Reserve and Banks, are seeking stable prices, high employment rates, and sustainable growth in the economy.

30 years ago, in 1980, when many first-time home buyers parents were making home purchases, Freddie Mac reports that the 30-year fixed rate mortgage hit a staggering 16.32 percent.

Let's compare that in relation to today's interest rate, averaging around 4.5 percent.

• In the most basic terms, a 30-year fixed-rate mortgage for $100,000 at 16.32% will cost you around $1,450 a month.

• For the same mortgage at a 4.5 percent rate, you'll be paying $580 a month.

The difference is astounding, and this is the main reason the media is shouting news about interest rates. If you are in the position to buy, now could very well be the time.

Santa Clara County Market Conditions

Here is a quick snapshot at the Santa Clara County Market Conditions. This will give you an idea of how Santa Clara County real estate is doing now vs last year. Please keep in mind that the real estate market is a matter of neighborhoods and houses. No two are the same. For complete information on a particular neighborhood or property give me a call and I can get you that information.

Prices have gone up Year-Over-Year
 

Single Family Homes:

• Prices for single-family, re-sale homes were up in August, year-over-year, for the eleventh month in a row. The median price rose 13.7%, while the average price was up 15.4%, reflecting a higher share of $1,000,000+ home sales
• Sales of single-family, re-sale homes continued to slide and were lower than the year before for the third straight month: -13.1%.
• Inventory was higher than last year for the second month in a row: 18.4%. 

Condos:

• Median price for condos was up 5.3% year-over-year. This is the tenth month in a row the median price has been higher than the year before. After nine straight months of year-over-year gains, the average prices for condos dropped 1.7%.
• Condo sales were up 0.4% compared to last August. 
• Inventory for condos was higher than the year before for the third month in a row: 40.9%.

Simple ways to make your home more energy efficient

In this economy everyone is looking for ways to save a little extra cash here and there. One way to help save on your gas and electric bill is to make your home more energy efficient.

Now that summer is coming to an end and the cold months are nearly upon us we wanted to share some ideas about how to make your house more energy efficient. As much as 60% of you energy bill can go to heating your house. Here are some tips to cut down on the amount of energy you are losing.

• Set your thermostat on the lowest comfortable setting and leave it alone. You will adjust to lower temperatures and possibly sleep better as well. 68 degrees is a comfortible temperature.
• Insulate and weatherize your home properly. This is not an easy task if you have an old house, but some little things you can do relatively cheaply are: Put plastic on your windows. Use form weather striping around your doors. Close off rooms that you are not using. Shut vents to rooms that you don't use.
• Close drapes or curtains at night and on cloudy days.
• When the sun is shining, open drapes to take advantage of the natural warmth.
• Keep windows on the south side of your house clean to maximize solar gain.
• Keep windows near the thermostat closed, or the furnace may think it is colder than it actually is.
• Keep doors and windows closed. This may sound obvious, but many children tend to leave the door open when they go outside to get firewood.
• Keep your filters clean and check them monthly in your furnace.
• Contact your local energy department to see if they offer a free audit.
• Caulk and weather strip around doors and windows.
• Close your chimney damper when the fireplace is not being used.

Here some other things you can do that require a little more money, time and effort.

• Check your attic to see how much insulation you have. R-30 or R-40 insulation is recommended.
• Install better windows and doors if you don't have storm windows.
• Install an automatic thermostats that adjust the heat to your schedule.
• Plant hedges or install fences to serve as wind breaks. Cold wind usually comes from the northeast.
• Install foam gaskets and plastic plugs in all electrical outlets and switches on outside walls.

List reference - thriftyfun.com 

California Law To Require Carbon Monoxide Detectors

In case you haven't heard...A new law was passed that will affect nearly every California homeowner. Senate Bill 183 requires carbon monoxide detectors be placed in all California dwelling units. They have set a deadline of July 1, 2011 for single family homes, and January 1, 2013 for all other dwelling units (multi-family, apartments, motels, etc.).

Carbon monoxide detectors are a wise precaution to have. According to the American Medical Association, carbon monoxide poisoning is the leading cause of accidental  poisoning deaths in the US.  The California Air Resources Board has determined that 30-40 "avoidable deaths", on average, occur in California each year due to unintentional carbon monoxide poisoning. Additionally this is the cause of 175-700 "avoidable" emergency room visits and hospitalization in the state.

So if you don't already have a carbon monoxide detector in your home, grab one next time you are shopping and install it. It's a smart thing to do, and soon, it will be the law.

Improving your Credit Score

When purchasing or refinancing a property your credit score (FICO score) plays a huge factor. Banks want to see a high FICO score. If your FICO score is too low they feel that you are a risky borrower which in turn results in them giving you a higher interest rate on the money you borrow.  To get those amazing interest rates we have been seeing you must have a good credit standing.  If you are amongst the many that are looking for ways to improve your credit score than please keep reading. The following information can help you!  Please be aware of quick fix scams from companies that promise to improve your score fast.  Improving your score takes time and patience.

The following tips are provided from http://www.myfico.com/

Payment History Tips

• Pay your bills on time - Delinquent payments and collections can have a major negative impact on your FICO score.
• If you have missed payments, get current and stay current. - The longer you pay your bills on time, the better your credit score.
• Be aware that paying off a collection account will not remove it from your credit report. - It will stay on your report for seven years.
• If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. - This won't improve your credit score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time.

Amounts Owed Tips

• Keep balances low on credit cards and other “revolving credit” - High outstanding debt can affect a credit score
• Pay off debt rather than moving it around - The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score
• Don't close unused credit cards as a short-term strategy to raise your score
• Don't open a number of new credit cards that you don't need, just to increase your available credit. - This approach could backfire and actually lower your credit score.

Length of Credit History Tips

• If you have been managing credit for a short time, don't open a lot of new accounts too rapidly. - New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips

• Do your rate shopping for a given loan within a focused period of time. - FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
• Re-establish your credit history if you have had problems. - Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
• Note that it's OK to request and check your own credit report. - This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use Tips

• Apply for and open new credit accounts only as needed. - Don't open accounts just to have a better credit mix - it probably won't raise your credit score.
• Have credit cards - but manage them responsibly. - In general, having credit cards and installment loans (and paying timely payments) will raise your credit score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
• Note that closing an account doesn't make it go away. - A closed account will still show up on your credit report, and may be considered by the score.

UNDERSTANDING THE CURRENT SANTA CLARA COUNTY MARKET – IS IT A SELLERS MARKET?

As a homeowner, and a prospective seller, you may be wondering if now is a good time to put your home on the market. But how can you tell if the market is in your favor at this time? Will you lose money or make money? Is it a “sellers market”?These are all very important questions. And the answer is in the market statistics.

As a seller, one of the first things you must evaluate is the desirability of your location. Market conditions are extremely localized statistics. While the national economy and housing market tie every area of the country together to a certain degree, markets and their conditions range widely from state to state, community to community, and even neighborhood to neighborhood within a community.

You must ask yourself, and your real estate agent, “Is my neighborhood up and coming or has it already come and gone?” If you live in a neighborhood that is highly desired due to its school system such as Cupertino, or areas of status and Prestige such as Los Gatos and Saratoga, then you may find yourself in a continual sellers market, where you will always be in the advantage. 

Looking at the most recent sales in your surrounding area is very important. How much are homes selling for? And how does your home compare in size, location, upgrades, and condition?  Unfortunately, an issue completely out of your control can have a direct effect on your ability to sell your home, and for a good profit. Foreclosures in your neighborhood affect your home’s value. This isn’t fair, but it is how the market works. Buyers look for the best home for their dollar. If they are able to buy a home on your street for a foreclosure price, then suddenly your asking price must decrease in order to compete. Be sure to ask your agent for tips on how to make your home stand out again to buyers, despite this issue.  Another important statistic you should be aware of is “days on market.”  This means how long it takes a home to sell from the time it hits the market. In general terms, anything less than 6 months is considered a sellers market. If the average time is longer than 6 months, then the market is in favor of buyers.  This should be a consideration for when you look to buy your next home. Unless you are prepared to carry two mortgages, you will want to make sure your current home has sold before looking for the next. 

How is the local job market faring in your city? If you live in a town that has a healthy economy, then chances are you live in a sellers market. People who have steady jobs are more inclined to look to buy. The bigger the unemployment figures, then fewer buyers on the market. 

Another consideration is “appreciation.” In a healthy market, a home should increase in value each year. Many of the areas of the country, however, experienced a “bubble burst” after seeing years of record appreciation rates. As we all know, California and more specifically Santa Clara County was amongst these areas.  Homes bought during the bubble may very well be worth less now than their owner owes. However, it is important to understand the long term effects the market will provide. Although Santa Clara County has experienced dips in appreciation about every 10 years, the long term data shows that this market continues to consistently appreciate. 

Be sure to discuss all of these issues with your local real estate agent. They will be able to help you determine whether now is a prudent time or not to put your home on the market. 

To give you an idea of how the Santa Clara County market is currently doing we have included the most recent statistics on home appreciation and average sales price for this area.

Santa Clara & San Mateo County Housing Inventory Averages

Santa Clara and San Mateo County Housing Inventory averages on July 28, 2010.

 

*Numbers based MLS data for the specified date

Mortgage Rates Hit a Record Low

Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), with the 30-year and 15-year fixed-rate mortgages reaching record lows for this survey. (The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991.)

30-year fixed-rate mortgage (FRM) averaged 4.56 percent with an average 0.7 point for the week ending July 22, 2010, down from last week when it averaged 4.57 percent. Last year at this time, the 30-year FRM averaged 5.20 percent.


Click here to read the full study

Selling your home in Santa Clara County? How to Make YOUR Home the Home to Buy

Your home is a reflection of you and your style and most of us have put many years of work into making your house a home. Most of us love our home but when it comes time to sell, you have to take a step back and make your home be seen in the eyes of the potential buyer. That can sometimes be difficult.

It may be hard to disassociate yourself with your home but it’s important to try to do this. Soon your house will be someone else’s and they will want to put their own special touches on it to make it not just a house they purchased but their “home.” Getting into the right mind set is really the first step you need to take in order to prepare to sell your home. After you have established this mind set the rest can be very easy. 

There are a few basic things you can do in order to create a perfect space for a potential buyer. It can be as easy as clearing clutter, creating light and bright open spaces, adding curb appeal, a fresh coat of paint and/or clean or new carpet. 

Of course there are many things to consider when getting your home ready to sell. Mainly you should consider how much you should spend, do you have good curb appeal and how you will prepare the interior to create a space that is attractive to a wide variety of buyers.

When thinking about how much you should spend, on home improvements to help your home sell, the main factor should be “will your investment pay off.” You want to make sure that you will be getting back more money than what you put in. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. However, it’s possible that extensive changes may pay off in some instances. It’s always a good idea to consult your real estate agent about what home improvements you are planning and they can guide you on what is best for your particular home and the area you live in.

We all know that we need to make a good first impression. Curb appeal is your homes first impression. If you have bad curb appeal it can be forever damaging. While looking for homes some buyers will have a large list of houses they want to see. The first step is to drive by the property. If there is no curb appeal the potential buyer may never step foot into your home. It won’t matter how beautiful the inside of your house is if the outside doesn’t look nice. To create good curb appeal there are many things you can do.

• Keep the lawn edged, cut and watered regularly
• Trim hedges, weed lawns and flowerbeds, and prune trees regularly
• Check the foundation, steps, walkways, walls and patios for cracks and crumbling
• Inspect doors and windows for peeling paint
• Clean and align gutters
• Inspect and clean the chimney
• Repair and replace loose or damaged roof shingles
• Repair and repaint loose siding and caulking
• During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance
• Re-seal an asphalt driveway
• Keep your garage door closed
• Store RVs or old and beaten up cars elsewhere while the house is on the market
• Apply a fresh coat of paint to the front door

List courtesy of Realtor.com

There are some specific areas in your home that create widespread appeal. Updated kitchen and bathrooms are what many home buyers are looking for. Although, even if these rooms in your home are not updated there are specific things you can do in order to spruce them up and make them more appealing.

• Paint & replace hardware on the cabinetry
• Repair dripping faucets and showerheads
• Buy showy new towels for the bathroom, to be brought out only when prospective buyers are on the way
• If necessary, repaint dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum. This goes for all rooms in your home. It’s also advised to remove any dated wall coverings such as wallpaper or paneling.

In addition to just the bathrooms and kitchen some other basic areas to focus on inside are:

• Remove Clutter! This alone will make your house appear bigger and brighter.  Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, and more spacious look
• Hire a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere
• Repair cracks, holes or damage to plaster, wallboard, paint, and tiles
• Replace broken or cracked windowpanes, moldings, and other woodwork
• Inspect and repair any problems with the plumbing, heating, cooling, and alarm systems

No matter what you do in order to get your house ready-for-sale always remember that a home buyer’s greatest concern is functionality. You want a potential buyer to walk into your home and be able to imagine all the possibilities.

Silicon Valley housing market gaining steam, slowly

The San Jose Mercury News posted an article today which continues the conversation that house prices in silicon valley continue to rise. Click here to read the full article

Silicon Valley real estate: Median house price rises in June to $600,000

Courtesy of San Jose Mercury News -

In a mixed report on the Silicon Valley real estate market, MDA DataQuick reported today that prices climbed last month in Santa Clara County, but the number of sales dropped from a year earlier.

According to MDA DataQuick, Santa Clara County's median resale single-family home price last month was $600,000 — edging up 2.6 percent from May and climbing 23.7 percent from June 2009. The number of transactions, though, dropped 8.4 percent year over year.

Throughout the Bay Area, more higher-end homes sold than a year earlier, when the market was dominated by a wave of lower-priced foreclosure sales.

"The Bay Area market is getting a boost from super-low mortgage rates and a slightly friendlier lending environment for high-end borrowers," DataQuick President John Walsh said in a statement today.
Walsh said the market has benefited from federal tax credits of as much as $8,000. However, buyers needed to enter deals by April 30 to qualify for the incentive.

In the next several months, Walsh said, "barring new government stimulus, the housing market will be relying very heavily on improvements in the economy. A lot will depend on how many people find jobs, or stop worrying about losing the one they have."

In Santa Clara County, the median condominium price was $340,000, up 17.2 percent from June 2009. The number of transactions was 0.2 percent lower.

Understanding Your Credit Score

Having a healthy credit score is now more important than ever. When the mortgage crisis hit several years ago, lenders began tightening standards for loans. Even now, years after the onset of the crisis, changes in Congressional and housing agency legislation have made it more crucial to have your credit in order before buying. The days of zero down are out, and the days of healthy scores and equally healthy down payments are in fashion.

The first step towards homeownership is to get a copy of not only your credit score, but also your entire credit report. A credit score is a number from around 350 to 850, with higher scores being considered better. Any score less than 600 will put you in a hard place to qualify for a loan. What can make your score low? If you have defaulted on loans, made late payments, or filed for bankruptcy, these issues will have been reported to the credit agencies and will subsequently lower your score. A lower score means you are more of a liability to a lender.

A credit report, as opposed to the score, lists out all of your open and previously open accounts. It shows balances left on loans, default or late payments, high balances, and the like.

You can access both a report and a score at the government sponsored site, www.annualcreditreport.com. The government allows for you to access your report for free three times ayear, from one each of the major credit reporting agencies: Equifax, TransUnion, and Experian. You typically must pay a credit agency about $15 to see your actual score. One of the main reasons to check your report three times a year is to make sure it is accurate. Identity theft is rampant these days, and you want to make sure that accounts opened in your name are actually accounts that you opened.

If you feel that you are victim of identity theft, you can request that a “fraud alert” be placed on your report. According to annualcreditreport.com, “A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to protect you. It also may delay your ability to obtain credit. You may place a fraud alert in your file by calling just one of the three nationwide consumer credit reporting companies.” Many banks also now offer programs of added protection for under $20 a month that monitor your report for any changes, such as new accounts (e.g. Credit cards) being opened in your name.

First Time Home Buyer Tax Credit Extended to September 30, 2010

First-time home buyers now have until Sept. 30 to close on their home purchases and qualify for a tax credit under a newly approved extension bill. The closing deadline was originally set for June 30 has now been extended to Sept. 30.

To be eligible, buyers still need a contract that was in place by April 30.

For more information you can visit the IRS website.