5 reasons to buy a home now!

Home ownership has long been the American dream. While many of us who bought at the top of the market or refinanced and took equity out of our homes find ourselves underwater in our homes, if you are looking to buy, now is a great time.

Here are five reasons to buy now!

1) Homes are down 30% for their market highs making home ownership more affordable than it has been in 10 years.

2) Mortgage rates are at all time lows. Rates as of 9-3-2010 just hit 4.34%. That means that not only is it cheaper to get into a home than it has been for years, but they money you pay on that loan is less expensive than it has even been which extends your buying power even further.

3) Large amount of inventory to choose from. I can remember the days when buyers needed to make a decision during a single weekend or the home they wanted would be snatched up by someone else. In today’s market there is a surplus of inventory. That means for owners to compete, you are finding homes with upgrades you used to pay extra for listed at the same price as homes without.

4) Builder discounts. Builder’s competing in this market are offering countless incentives. From free upgrade packages, special financing, to paying for closing cost.

5) Tax benefits. Most mortgage interest is tax deductable. Check with your accountant, but typically home ownership is the single largest tax deduction for the average American.

Start your NEW HOME search HERE with The Cascade Team!

Seven must-have real estate contract conditions

It's a good idea to educate yourself on the not-so-obvious parts of a real estate contract

By: Amy Fontinelle
Investopedia.com

When you formally make an offer on a home you want to buy, you'll fill out a lot of paperwork specifying the terms of your offer. Aside from such obvious things as the address and purchase price of the property on which you're making an offer, there are some items you should be sure to include in your real estate purchase contract.

1. Finance Terms

If you are like most people and you won't be able to buy the home without obtaining a mortgage, your purchase offer should state that your offer is contingent upon obtaining financing at a specified interest rate. If you know you can't afford the monthly payment on the house if the interest rate is higher than 6 per cent, don't put 6.5 per cent in your offer. If you do that and you are only able to obtain financing at 6.5 per cent, the seller will get to keep your earnest money deposit when you have to back out of the offer.

If you need to obtain a certain type of loan in order to complete the deal, you should also specify this in your contract. If you are paying all cash for the property, you should state this as well because it makes your offer more attractive to sellers. Why? If you don't have to get a mortgage, the deal is more likely to go through and closing is more likely to happen on time.

2. Seller Assist

If you want the seller to pay part or all of your closing costs, you must ask for it in your offer. The offer should state the amount of closing costs you are requesting as a dollar amount (e.g., $6,000) or as a percentage of the home's purchase price (e.g., 3 per cent).

3. Who Pays Specific Closing Costs

The agreement should specify whether the buyer or seller will pay for each of the common fees associated with the home purchase, such as escrow fees, title search fees, title insurance, notary fees, recording fees, transfer tax and so on. Your real estate agent can advise you as to whether it is the buyer or seller who customarily pays each of these fees in your area.

4. Home Inspection

Unless you are buying a tear-down, you should include a home inspection contingency in your offer. This clause allows you to walk away from the deal if a home inspection reveals significant and/or expensive-to-repair flaws in the structure's condition. For example, if the home inspection reveals that the home needs a new roof at a cost of $15,000, the home inspection contingency would give you the option to walk away from the deal.

5. Fixtures and Appliances

If you want the refrigerator, dishwasher, stove, oven, washing machine or any other fixtures and appliances, do not rely on a verbal agreement with the seller and do not assume anything. Specify in the contract any fixtures and appliances that are to be included in the purchase.

6. Closing Date

How much time do you need to complete the purchase transaction? Common time frames are 30 days, 45 days and 60 days. Issues that can affect this time frame might include the seller's need to find a new home, the remaining term on your lease if you are currently renting, the amount of time you have to relocate if you are moving from a job, and so on. Occasionally, the buyer or seller might want a closing as short as two weeks, but it's difficult to remove all the contingencies and obtain all the necessary paperwork and funding in such a short time period.

7. Sale of Existing Home

If you are an existing homeowner and you will need the funds from the sale of that home to buy the home you are making an offer on, you should make your purchase offer contingent upon the sale of your current home. You should also provide a reasonable time frame for you to sell your home, such as 30 or 60 days. The seller of the property you're interested in is not going to want to take his property off the market indefinitely while you search for a buyer.

There are many other things that go into a thorough real estate contract, but for the most part, you shouldn't have to worry about them. Real estate agents will commonly use standardized, fill-in-the-blank forms that cover all the bases, including the ones described in this article.

If you want to familiarize yourself with the details of the purchase agreement form you're likely to use before you write your offer, ask your real estate agent for a sample agreement, or search online for the standard form that is common in your locality.
The Bottom Line

Even though these forms are common and standardized and a good real estate agent would not let you leave anything important out of your contract, it is still a good idea to educate yourself about the key components of a real estate purchase agreement.

9 Smart Ways to Come Up with Down-Payment Cash

By Luke Mullins Luke Mullins –


Although cheaper prices and record-low mortgage rates have made home buying increasingly attractive, tight lending standards continue to keep consumers on the sidelines. And while a beefed-up FICO score and documentation requirements may have slowed the process, it's the pile of cash needed to secure financing that prevents many would-be buyers from becoming homeowners, says Susan Dewey, executive director of the Virginia Housing Development Authority. "For first-time home buyers, generally the biggest obstacle to buying a home is the ability to have a down payment," she says. Consumers struggling to come up with a sufficient down payment, however, may have more options than they realize, as government programs, existing assets, and personal finance techniques can be used to obtain the capital. Here are nine ways that consumers can get their hands on the down payment cash they need to purchase a home.


1. VA, USDA: Veterans, active duty personnel, as well as some members of the National Guard and military reserves can qualify for zero-down-payment mortgages through the U.S. Department of Veterans Affairs. Such home loans are made by private lenders but backed by the agency. Although participants in this program must pay a so-called funding fee, its costs can be rolled into the loan. Closing costs, meanwhile, can be paid by the seller. "Essentially, the veteran can get into a home with no money out-of-pocket and the interest rates are typically very good," says Paula Miller, the Region 3 vice president for the National Association of Realtors. To qualify for the program, borrowers must meet the agency's income and credit standards. For more information, contact a VA-approved lender, one of the agency's regional loan centers, or a Realtor. Similar zero-down-payment mortgages are also available through the United States Department of Agriculture Rural Development program. To determine eligibility, contact your local rural development office.


2. State programs: Consumers can also get down-payment assistance through their local state housing finance agency. Although offerings vary by state, such agencies can help first-time buyers by providing grants, subsidized home loans, and other programs, says Dewey, who also serves as the president of the National Council of State Housing Agencies. The Virginia Housing Development Authority, for example, can provide eligible first-time buyers with federally-insured home loans that include second mortgages to cover the down payment and closing costs. "We can finance slightly above 100 percent [of the purchase]," Dewey says. Such buyers must meet requirements on credit, income, and home sales price. To find out if you qualify for similar assistance, contact your local state housing finance agency.


3. FHA: Borrowers who aren't eligible for such zero-down-payment mortgage programs can still obtain low-down-payment home loans through the Federal Housing Administration. The FHA is a federal agency that insures private lenders against default. Qualified borrowers can access FHA-backed mortgages for as little as 3.5 percent down. These liberal requirements have helped turn the once-sleepy agency into an essential component in the effort to revive the housing market. Although FHA-insured loans represented just 3 percent of the home-purchase mortgage market in 2006, the agency backs about 30 percent of home-purchase loans today. FHA-backed loans are subject to credit and mortgage-size requirements. To see if you qualify, contact an FHA-approved lender near you.


4. Gifting cash: If you don't have enough down payment cash on hand, a good first step is to see if anyone close to you does, says Keith Gumbinger of HSH.com. "Do you have anybody who can give you money--your parents, a rich uncle, or your grandparents?" Gumbinger says. Gifts from parents or other family members have long been a source of down payment cash for young couples or first-time buyers. "Those gifts have to actually be documented as gifts," Gumbinger says. "You must get something [in writing] from each of those donors that says there is no obligation to pay back the money." Be aware, however, that cash gifts from a single source that exceed $13,000 per individual--or $26,000 per couple--are subject to federal taxes.


5. Tap your IRA: Certain home buyers can use funds from their IRA to cover down-payment costs without incurring the 10 percent early withdrawal penalty. Individuals who are under age 59½ and have not owned a home within the preceding two years can withdraw up to $10,000--penalty-free--from their IRA to put toward a real estate purchase. The cash can be used for acquisition, financing, or closing costs associated with the purchase. Retirement savings, however, should not be the first place you look for cash. Only take money from your IRA after exploring all alternatives.


6. Use your 401(k): Although would-be home buyers may be able to access cash from their 401(k) for a down payment on a principal residence, they must first demonstrate a severe financial hardship. Many financial advisers advise against withdrawing funds from your 401(k) unless you have exhausted all other options. (That's your retirement nest egg, after all.) In addition, some 401(k) plans allow participants to borrow a portion of the funds they've saved up to cover a down payment or other expenses. Plans that permit such loans typically provide access to as much as half of the vested account balance, not to exceed $50,000. But once again, home buyers should consider tapping their 401(k) for down payment cash only as a last resort.


7. Savings plan: Although it might take a little time and discipline, an old-fashioned savings plan can be a great way for consumers to put together enough cash for a down payment. For assistance in creating a savings plan, consider reaching out to a certified credit counselor, says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling. "To have an objective third party look at your finances and find hidden money within your budget is a super idea," Cunningham says. "They can find things which you may not have thought of."


8. Selling assets: Some of your down payment cash could be sitting right in front of you, Gumbinger says. "You may consider looking through all of the stuff that you have accumulated and see if there are things that you might be able to sell that you don't need," Gumbinger says. "If you have got three flat screen TVs in your apartment because they were cheap and you just started accumulating them, see if you can't get rid of some of those assets and see if they can be turned into something that's going to be more productive for you." Once you've assembled an inventory of items you would be willing to sell, consider holding a garage sale or putting them on eBay.

9. Second job: Additional income, of course, can also help would-be home buyers save enough cash for a down payment. But with the national unemployment rate at 9.5 percent, such work may be difficult to find. Still, it's worth seeing if there is any freelance work you might be able to take on, or checking with your friends who work in retail to see about any part-time openings.

Foreclosure Hurts Values More Than Bankruptcy

Foreclosure reduces the value of a home by 27 percent on average, according to a new study from Harvard University and the Massachusetts Institute of Technology.

Other kinds of forced sales have less dramatic impacts, the study found.

An estate sale after an owner’s death reduces the price of the home by only 5 percent to 7 percent. A bankruptcy filing cuts the value by an average 3 percent.

Foreclosure discounts are especially large in neighborhoods that are low-priced already, researchers point out, apparently because of concerns over vandalism.

Search Washington State Foreclosures HERE:

Source: The Wall Street Journal, Nick Timiraos (07/26/2010)

Don't let the "Smell" stop the Sale!

If the reason you're reading this article has something to do with the picture.... Got Ya!

Spicy cooking can taste great. Some of your favorite ingredients may be cayenne pepper, garlic, cumin or peppercorns, but others may not find these smells so appealing. People will try to associate the smells of you home with living there with their families. If spicy cooking isn't their thing, this may tell potential buyers that this isn't their house. This doesn't mean you should stop cooking your favorite foods, though. Keep your kitchen's exhaust fan on and keep the windows open to let the air circulate. Also, boiling lemon or orange peels will help neutralize the odors.

House odors are number one on the home selling uh-oh list. And narrowing it down, odors from cigarette smoke and pets take top billing, with food odors and mildew not far behind.

If you smoke indoors--the house smells like cigarettes. If you have pets, the house might smell bad--even if you don't notice it. Ask someone who doesn't live there to take a sniff, and don't get angry when they tell you the truth.

Here are a few other tips to have a clean smelling and fast selling home:

1. Take out the trash before showing. That simple.

2. Tell the children to keep stinky shoes in the garage.

3. Sprinkle baking powder on the carpet before vacuuming.

4. Vinegar - your new best friend. Use vinegar to clean floors, countertops, and bathrooms. (1/2 cup to one gallon of hot water.) A stronger vinegar mix dissolves hard-water scum on shower tile and glass enclosures.

5. Add essential oil drops to final rinse for floors.

6. Use essential oils in a diffuser instead of artificial sprays that some home shoppers may find offensive; they may think you're trying to mask a bigger problem like mildew, or even worse, they may be allergic to the artificial product and think your house makes them teary-eyed and sneezy.

7. Keep up with the laundry. Wash sneakers with a half-cup of added vinegar.

8. Wash all bed linens, even blankets, which hold odors. Use non-allergic scented fabric softener.

9. Check window coverings for musty smells.

10. Run a grapefruit or orange skin through your garbage disposal for a refreshing clean smell a few minutes before showing.

Short Sale, Auction, Foreclosure or Straight Sale?

Looking for the best Real Estate Deals: Short Sale, Auction, Foreclosure or Straight Sale

• A Short Sale where you buy directly from the home owner before the bank takes over. The bank thus agreeing to accept less than what is owed for the property and thus avoid the foreclosure process. Home owners are most often responsible for the deficiency judgment created by this situation. The typical short sale process takes 4 to 6 months to complete from time of first offer.
• At an auction where you may be in competition with other buyers.
• From a Real Estate company or the bank itself. This is known as an REO aka Real Estate owned.
• An Arms Length Transaction. Where you buy directly from a home owner who is not in financial distress and close with all of the normal contingencies.

Short Sale:
In a short sale you get to do all your various due diligence including any home inspections and a title search to make sure there are no liens.

In real estate, a short sale is a sale of home or property in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to take a reduced amount on a loan balance, due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation department. The home owner gets a contract on the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. The net amount, after commissions and excise tax, is usually less than the outstanding debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Extenuating circumstances influence whether or not lenders will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation. If the home seller of a property has the financial ability to bring cash to the table at closing for a mortgage debt short fall, this scenario would not be considered a short sale.
A short sale is typically executed to prevent a home from going to the foreclosure auction, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe it will result in a smaller financial loss than foreclosing, as there are carrying costs associated with a foreclosure. A lender will typically determine the amount of equity, or lack thereof, by determining the probable selling price from a real estate Broker Price Opinion (BPO) (also known as a Broker Opinion of Value - BOV) or through a home valuation by an appraiser.

Auction:

Buying at an auction typically carries the most risk but also can come with the greatest reward.
Auctions are handled differently from state to state. Some are held right at the property and others at the local court house. Seattle area auctions are typically held through the courts.
Many times with an auction you are not allowed to inspect the property prior to the scheduled auction date. These types of sales tend to bring out more “investor” types as these properties can be bought on many occasions for a price that could warrant a “flip” where the buyer turns around and re-sells the property.

A buyer going to an auction will need to come up with a fairly large deposit and will be expected to show the lender that they have the ability to complete the purchase. The other consideration in the auction scenario is that you may have to spend time and money removing the previous owner. A task that most buyers don’t have the stomach for.

Bank Owned:

The REO scenario is usually the least risky as the bank has acquired the property and has wiped out the liens through purchase.

Once a home is Real Estate owned many banks will list these homes with a Real Estate Broker. The buyer gets clear title, is most often allowed to inspect the home, and is allowed to have a mortgage contingency. This is typically the best route for the non savvy Real Estate investor. These properties are typically sold "As Is" however, meaning that missing carpet or scatched floors and other cosmetic items cannot be addressed with the inspection responce like a typical arms length transaction.

A few other very important considerations in the foreclosure process in the “pre-foreclosure period” and the “redemption period”. The pre-foreclosure period is the time between a previous owner’s notification of default and the point when the property can be sold by the lender. This time period is also when the existing owner can make good on the note and keep their home, or sell it themselves. So the shorter the pre-foreclosure period, the more advantageous it is for the new buyer.

The redemption period is the time when the previous owner is allowed to buy back the home after the lender has sold it. Again, the shorter this time period, the better it is for the buyer.

And don’t forget the very often overlooked forth option in today’s market….

The standard “Arm’s Length Transaction”

Home sellers who are not dealing with a personal short sale or foreclosure still have to deal with a very competitive market made so by those very situations. Many home owners who bought more than 5 years ago and who placed 20% down and did not resort to interest only or adjustable rates are in great positions to sell. In these cases you can go in and buy a very nice home at today’s lower prices and not have to deal with all of the hassles of a short sale, or auction, or banks selling a home in “As Is” condition.

In these cases, you can make an offer, have your inspection and financing contingency, closes at escrow in 30 days and have an all around typically smooth transaction!

Brokers from The Cascade Team are trained in all these various home purchasing and selling processes. Please feel free to contact one here for more information.

The Cascade Team Brokers:

Deceptive Real Estate Advertising

Most real estate agents are very good and ethical. But, as with society as a whole, there are unfortunate exceptions. So please consider this a free public service announcement.

As a potential buyer or seller it is difficult to sort out the truth. Here are a few examples that may help the unsuspecting see through the rhetorical, to distinguish fact from fiction:

The Pitch: (in a recent mailer): “Are you think of selling? Do you want to get the highest possible price? (We) have closed more homes at a RECORD PRICE than any other (insert qualifiers here, like ‘all other agents in the county and for sure those who work as a team, particularly with their spouse, and especially on Tuesdays during an election year’).”


The Reality: “We are returning to this market after a four year absence, during which time the closest we came to a home seller was when our incoming moving truck accidentally backed over their yard sign.”


The Pitch: “We will complete your short sale at no cost to you!”

The Reality: Uh, it’s a short sale, meaning that the sale proceeds will be less than the amount owned on their loan(s). If the seller’s lender approves the sale, there are no costs to the seller. It’s SHORT. The lender is eating it! What remains unsaid, of course, is that the seller just lost their home, their credit for the foreseeable future, and whatever equity they once may have had. No cost?

The Pitch: A major franchise announces a very special, exclusive, limited-time program. “Missed the home buyer tax credit? Now there’s an even better Buyer Bonus! Get up to a $10,000 credit back at closing.”

The Reality: This ”credit” is subject to a seller participating in the program. Many are not. Then there is the fine print. “Any pricing decision is in the seller’s sole discretion and is subject to negotiation between the seller and the buyer.” Woo hoo!! Wait a minute. I got the credit, but they raised their price by an equal amount. Bummer. So I guess we are back to negotiating again. That’s so yesterday.

The Pitch: “Interest Rates are rising. A 1/2% increase can result in the loss of $50,000. Don’t wait to Sell!”

The Reality: I have seen this ad on and off for months, until the agent realized that rates had actually come down. If an ad sounds like a scare tactic, you have every right to question the motives of the agent promoting it.

The Pitch: “We have buyers! If you are thinking of selling, call us first!”

The Reality: It’s an old tactic to try to get in the door of an unsuspecting owner and score a listing. In some cases, the agent when called off this ad will tell the owner that he/she must first sign a listing agreement, and then they will bring the buyer by to see the home. Don’t buy this line. If they are really working with a buyer who might be interested in your home, most agents will be happy to simply have a Single Party Compensation Agreement signed by the seller, with the buyer’s name identified on the form. If they ask for more, tell them to take a hike.

The Pitch: “We have buyers for ALL neighborhoods!”

The Reality: Oh, please!


Unfortunately, there are many more examples of deceptive advertising. It’s OK for any agent to make a claim as long as they can back it up with facts. When interviewing an agent ask them to produce those facts — from the MLS, such as actual recent sales representing both buyers and sellers, or in the case of the busy buyer’s agent, the names of the buyers they claim to be working with. Agents using scare tactics might be delivering the truth — or not. And agents making grandiose, unsubstantiated claims might be able to substantiate them — or not. What’s important is that if you suspect you are being snookered, do your due diligence. And if it sounds too good to be true or just smacks of desperation, it usually is.

Get the Most out of Outdoor Home Improvements

Maximum Value Project Ideas from HGTV’s FrontDoor.com and DIYnetwork.com
by Stephen M. Fells on June 8, 2010

Summer Project Ideas Focus on Outdoor Living and Home Exterior

KNOXVILLE, Tenn.–(BUSINESS WIRE)–Take advantage of the warm weather by jumping into an outdoorsy home improvement project this month. HGTV’s FrontDoor.com and DIYnetwork.com offer expert advice, inspiration and step-by-step instructions to make the outdoor space as comfortable as the home’s interior. With new installments in the monthly ‘Maximum Value Projects’ series, these expert sites have tips for getting the most value out of outdoor renovations. (www.frontdoor.com/mvps)

Lighting:

Outdoor fixtures with a faux-finish or a higher-end metal can add beauty and value to any outdoor space. Artistic lighting also boosts curb appeal.
Pre-packaged outdoor lighting kits can be the perfect solution for a homeowner on a tight budget. These kits provide a dramatic effect without breaking the bank.


Patio:

Use colors, stains or stamping to turn an average slab of concrete into a visually appealing extension of the home.
Constructing a patio with regard to the proportion and property of the home will ensure the biggest return on investment.

Deck:

Multi-level decks with room for outdoor accessories and activities are becoming a trend. Depending on the size of the house, however, bigger is not always better.
“Go green” by constructing a deck with sustainable materials such as pine or composite wood. These materials are both long-lasting and environmentally responsible.

Outdoor Kitchen:

Outdoor kitchens can range from a basic island design to a wow-factor area filled with all a chef’s necessary appliances.
Stone veneers are a cost-effective way to give the outdoor kitchen a high-end look. They weigh less than regular stones and come in almost any texture, shape and color.

Simply renovating parts of a home’s exterior can give it a fresh new look for summer:

Gutters – rainwater collection systems allow collected rainwater to be recycled for reuse. This can cut down on water bills while also serving as a decorative piece.
Siding – siding can be vinyl, fiber cement, brick or stone, depending on the homeowner’s budget. Thanks to technological advancements, colors, textures and new grains make even vinyl look like higher-end material.

Windows – energy-efficient windows will update the look of the home as well as cut down on utility costs. The right windows are a perfect way to bring out a home’s unique architectural features.

Doors – consider steel doors to incorporate style and energy efficiency on a budget. Consider clean lines and rich colors over intricate designs for front entryways.
Roof – red, orange and even green shingles can add pizzazz and complement the surrounding landscape. Solar roofing panels can blend with almost any type of shingle.

For more ways to get the most value out of outdoor renovations, visit DIYnetwork.com or FrontDoor.com/mvps. Check back in July for Maximum Value Projects on big-ticket upgrades.

Building a Home Is a Bargain These Days

Builders, designers, and architects say now is a great time to build a new custom home or remodel an existing one.

Not only are there plenty of unemployed and under-employed workers available, but also property is for sale at bargain prices and construction materials are at bargain levels.

"It makes a lot of sense right now," said Stephen Melman, director of economic services for the National Association of Home Builders. "People are available to do the work. They are going to bid competitively so I'm sure that will drive the price down."

The only problem could be financing, which can be hard to arrange.

Source: Investor’s Business Daily, Marilyn Alva (05/27/2010)

See New Construction listings HERE

Overpricing in a Depreciating Market

Ever wonder why some homes sell in just a matter of weeks even in this market, while other languish on the market for months, slowly lowering their price every month or so, the stress of selling wearing on them more and more each day?

The answer is simple, yet often the hardest thing for sellers to grasp.... It's PRICE

Upgrades, views, location, Golf Course, you name it, they just don't matter as much as they used to in this market. The home buyer of today absolutely does not want to over pay for a home in this market, and that all comes down to (Price per Sq Ft)

Homes priced properly for current market conditions are selling, while those that we see sitting on the market for an extended period of time almost always started higher than market value. Then by the time they have adjusted down to where they should have started to begin with, their listing is old and stale, and even worse, the market has continued to drop and now they have to lower their price even further than before to get a sale. So in essence, they lost money, the extra time it took to sell, and added all of the stress having your home on the market can bring for nothing.

Remember. While current market value may not make you want to stand up and dance, you may look back in only a few short months and be wishing you could still get that price!

No Surprise: Murder Drives Away Most Buyers

Wells Fargo Bank was the only bidder this week for a house in Waterloo, Ill., where a former bodyguard apparently strangled his wife and two sons to death. The bank offered $256,420.

Other homes that were the sites of violent crimes also have attracted few buyers.

The Chicago-area home where John Wayne Gacy tortured and strangled at least 33 men, then buried them in the crawl space, has been torn down and a new home built on the lot. The three-story apartment building in Milwaukee where the remains of 11 of the 17 people Jeffrey Dahmer confessed to killing was demolished and the lot remains vacant.

Only two states – Alaska and South Dakota – require sellers to disclose if there was a murder or suicide on the property.

Source: Associated Press, Jim Suhr (05/25/2010)

Help Prevent New Tax Burdens on Real Estate

Background on Landlord:
Congress proposes that ANYONE who receives rental income will be required to file IRS Form 1099 reports if they make payments to any contractor (such as plumbers, HVAC repairmen, lawn services and the like) if they pay the contractor $600 or more in any particular year. Small landlords no doubt receive other Forms 1099, but may have little experience in actually filing them with the contractors and the IRS. The proposal is a trap for the unwary because they would be exposed to penalties if they fail to file these reports.

Background on Carried Interest:
Congress is considering taxing "carried interest" at ordinary income rates instead of capital gains. Currently, carried interests are taxed as capital gains (at 15%). Carried interest is the share of profits paid out as compensation to a general partner in a limited partnership or limited liability corporation. Forty-six (46) percent of partnership tax returns in 2005 were tied to real estate, according to the Institute of Real Estate Management (IREM). A carried interest is often provided to partner(s) providing the day-to-day management and operation of the partnership and its asset(s). The carried interest usually takes the form of a payment of a specific part of the profits generated when a property is sold, over and above the regular compensation

Real Estate Agent to English Translations

Ever read the marketing remarks on a home listing and wonder just what the agent or home owner are really trying to convey? Here is a quick little summary of 20 of the most commonly used terms along with the ‘practical’ translations.

Old charmer – an old and ugly house
Stunning house – the house is not ugly
Tudor – two bedrooms are in the attic which is not insulated; very hot in summer and very cold in winter
Cape Cod – styled after Third World slum dwellings
Sunny corner lot – noisy intersection of two busy streets
Easy freeway access – noisy arterial street close to freeway
Low maintenance lot – no yard; the kids will have to play in the street
Meticulously maintained in the original condition – the appliances are 50 years old
Ready to remodel – the house is about to collapse; you will have to invest twice the asking price in remodel before you can move in
Newly remodeled kitchen – 50-year old cabinetry and faucets have been replaced with cheap modern equivalents
Ready to move in – the interior has been painted with one coat of cheap paint
Desirable neighborhood – this little house is extravagantly overpriced because the neighborhood has a snobbish reputation
1 car garage – you can drive your Ford Escort into the garage but there is no room to open the door
In-city living – it is not safe to walk in this neighborhood after dark
Recreation room with wet bar – basement has been painted and has a faucet
Large family room – large basement
Bedroom in basement – basement has a 1′ by 2′ window
Lots of storage space – basement too small to be called a family room
Partial mountain view – you can see the tip of Mt. Olympus if you climb the roof
Territorial view – good view of your neighbor’s bedroom window

10 Ways to prepare for a showing

An agent left a message on your voice mail. She will be at your home, buyers in tow, in less than forty five minutes. Sound the alarms, all homeowners to battle stations, you are about to encounter a showing appointment!

Oddly enough, buyer showings seem to occur more often than not at the worst possible times. So what do you do when you need to prepare for a showing without a lot of time? Let's take a look at 10 ways to prepare for a showing:

Mini mop ups
Sweep the kitchen, bathroom, and entry way. If needed, use a cleaning towel or sponge to clean any spots or debris.

Dust the furniture
A quick wipe down of the furniture, TV screens, and computer monitors can help make each room shine.

Clean off counters
All counters should be clean and clear. Remove clutter as well - small appliances, knick knacks, and odds and ends should be stored.

Beds made
All the beds in the home should be made. If your bed spreads are faded, dated, torn, or ripped consider updating them with new covers.

Garbage cans empty
All garbage cans need to be empty. Also wash them out once a week and give them a quick spay of disinfectant to cut down odors.

Carpets vacuumed
Give the carpets a quick once over to fluff them up. Focus your efforts on the entry and living room.

Lights on
A dark home is gloomy. Turn on all the lights in the home, and open drapes and blinds to brighten the home. Also be sure your windows are clean.

Load the dishwasher
Clear the dishes off the counters by loading the dishwasher but don't start the cycle if it will be running during the showing.

Load the washer and dryer
Clothes should be picked up and either placed in a hamper or loaded into the washer or dryer. Again don't start the cycle if it will be running during the showing.

Pick up every room
Work backward from the entry point of the home to the furthest bedroom picking up everything up off the floors and counter surfaces.

Wow you have a lot to do in forty five minutes! Not to worry - if you can get the entire household to pitch in to help (bribery is a great motivator) you will be amazed at what you can get done in a short amount of time. Also don't be afraid to pick your battles. If you can't do everything, do the most important things first and if you're lucky the agent might even be late!

Questions to ask before choosing a mortgage broker

Mortgage brokers are engaged in the business of finding you the best home loan. Their true clients are the lenders, and their real "job" is to deliver good, creditworthy borrowers like you.

Mortgage brokers have encountered a formidable competitor in the past decade or so, called the Internet. Borrowers can compare loans through sites like Trulia Mortgage, eloan.com and LendingTree.com. Fill out a credit application and receive several offers. When banks compete, as the slogan says, you win.

That's a good way not only to pit lender against lender (a subject for another chapter), it's also useful keep your broker honest as well. Your job is to monitor the market. Why? Because loan rates change daily. A broker acting in sheer self-interest could bait you with one rate (possibly lower than reality), knowing you can't "lock" that rate until you complete the full application process. It's always a good practice to be skeptical and do you homework.

Why haven't I seen a rate like this elsewhere?
Ask this question only after having done some homework. A similar scenario would be a broker who advertises rates below market to get you in the door, and then lists all the fees necessary to make that rate possible — even including lofty origination fees.

What are the fees and costs associated with the interest rate you've quoted?
(Above-the-board brokers welcome questions like this.)

Fees take many forms. There are charges for your credit report, appraisal, title insurance, deed-recording, overnight deliveries, etc. For a rate quote to meaningful, it should be accompanied by a list of all related fees and costs.

Your broker must supply a Good Faith Estimate of all charges before the closing. The estimated figures aren't set in stone because "third party" costs such as title insurance premiums can change. But it's possible to know the total tab, or a figure pretty close to it, several days in advance.

Ads and other promises aside, you don't really know what you'll be paying until your rate is "locked". Brokers have been known to game this process. For example, a broker might say your rate is locked when it's not, and if rates go down before closing, he could sell you the higher rate you agreed to and pocket the difference. A broker who plays this game and loses (because rates go up) could tell you that your rate wasn't really locked — it was a misunderstanding.

If your rate truly is locked, your broker will have proof of it. Hence this line of inquiry:

May I see the lenders commitment letter that shows my rate is locked in?
Many states have started licensing brokers. This is a positive development, with potential to weed out the few bad apples remaining in the business. In the past, going into business took nothing more than a web site and a shingle. Licensing requirements will prevent scams. Still, one very basic question is always in order:

How long have you been in business?
Longevity is important--time and nature have a way of separating the wheat from the chaff. With the array of available mortgage products more complex than ever, experience is important too. Look for at least five years in the business. With that as a minimum, your broker will have seen good times as well as bad.

More Mortgage Information here:

Using the power of price points

The Pricing Pyramid above demonstrated the importance of optimally pricing your home for the market to maximize showings.

Imagine yourself as a homebuyer. You are excited and motivated to begin looking at homes in your local market, so like most home buyers you hop online or head down to a local real estate office to begin your search. In either case you will probably do something very predictable. You, as a typical homebuyer, will pick two price points as in - We would like to look for homes between $200,000 and $225,000 dollars. Interestingly, even if you have been told by your lender that you are qualified to purchase a home up to $229,400 dollars, inevitably you will just round down to $225,000 or round up to $230,000. Because of this savvy sellers often use price points as a way to gain maximum exposure for their home. How? By slightly adjusting their listing price to a more strategic price - a price where more buyers are likely to see their home.

To understand the importance of using price points, let's try a thought experiment. Suppose a buyer walks into a real estate agent's office and asks to see homes priced between $400,000 and $450,000 dollars. Would this buyer be exposed to your listing if it were priced at say $457,000? Nope. A common misconception among home sellers is that all buyers are automatically exposed to their home just because it's listed in the MLS database. Not true. The only time a buyer will see your home is when it falls between the two price points the buyer has set as their acceptable price range. Miss the mark and you miss the opportunity. To gain maximum exposure for their home, successful sellers use price points to their advantage. For instance let's analyze three different sellers with three different pricing challenges.



The first homeowner, seller A, has listed his home for $307,000 dollars. The challenge with this number is that a typical home buyer isn't likely to say - "Let's look for homes from $292,000 to $308,000". So pricing a home at $307,000 doesn't make a lot of sense. Instead a strategic price for this home would be either $305,000 or $310,000. By making this simple adjustment homeowners can help keep their listings in the sweet spot for buyer searches.

Now let's look at Seller B. Seller B has priced his home at $283,500 dollars. A better pricing strategy might be to list the home for either $280,000 or $285,000. In addition, you might notice there is another category for this home, called the Major Price Point. A Major Price Point is any $25,000 pricing increment. Major Price Points are important to recognize because these are generally the diving boards that buyers and agents spring their home searches from initially, and then slowly ratchet up from later. Because of this a seller who wants to secure a sale quickly may consider adjusting his price down to the nearest major price point. In Seller B's case that would mean a price of $275,000.

Finally, let's review seller C's strategy. Seller C has listed her home for $196,000 dollars. But could she improve this pricing strategy? Yes, but before we discuss her options let's put something controversial on the table. How many times have you heard the urban legend about a seller who, after unsuccessfully marketing their home, actually increased their price and then, bingo, sold the home. The truth is it can happen. How? The seller hit a more active price range. For instance take a look at this sample data:



Obviously the most active price range for this particular market is the $200,000-$225,000 price range. It goes against the grain of traditionalist thinking which always says to price a home based on its individual merits compared to other similar homes, but this often ignores the overall market reality. If seller C is currently priced at $196,000 it might be a smart play to consider adjusting the price upward to $200,000 dollars. Why? There are significantly more sales in that price range. Of course this works both ways. For instance, a seller who was considering a strategic price of $230,000 may be wise to move down a category and price her home at $225,000. Why? For the same reason - it's a better pricing strategy!

To decide on a pricing strategy that is competitive and appropriate for your home, consult with a local agent and request a list of recently sold comparables to review, as well as a breakdown of sales by price category. This is often referred to as a competitive market analysis (CMA) and is often prepared free of charge.

More information at. www.TheCascadeTeam.com

What you need to know about mortgage points.

Homebuyers looking to finance the purchase of a home with a mortgage have no doubt run into the term, "points." Just what are points, what do they do and how can they help? Read on for more information.

Discount points are fees/pre-paid interest paid to a lender at closing to buy down the interest rate on a mortgage for a home for a certain amount -- the more points you pay, the lower your interest rate. Each point will cost you 1 percent of the loan amount and may be able to lower your interest rate by at least .25% (one quarter of a percentage point). So, if you are borrowing $100,000, a point will cost you $1,000. If you are borrowing $300,000, a point will cost you $3,000.

The other kind of "points" are "origination points" that lenders will charge you to cover the costs of the loan. When a borrower considers purchasing additional points, they are discount points -- the ones that can buy down an interest rate.

Pros of discount points
If you expect to stay in a home for a long period of time (e.g., at least three to five years), discount points will save you money in the long run, since they reduce your interest rate and lower your monthly payment for the life of the loan.

Paying a little more for your loan at closing in discount points will help lower your monthly mortgage payments. For example, if you have a $300,000 mortgage for 30 years at a 6% fixed rate, your monthly payment would be just under $1,799. But if you purchased one point (at a cost of $3,000), you may be able to lower your interest rate to 5.75%, meaning a monthly payment of about $1,751 -- a savings of $48 a month. It varies how much a lender will reduce an interest rate for a point. (E.g., from one-eighth to one-quarter of a percentage point.)

Discount points are deductible from your taxes and you can get them deducted in the same year as your home purchase. (They usually are deducted under Schedule "A" of your IRS 1040 tax return.)

Cons of discount points
You will need more cash at closing to purchase your home. If you need to keep your closing costs as low as possible, you may want to consider not purchasing additional points.

You must stay in the home for a number of years before the points pay for themselves. For that $300,000 loan we talked about above, it would take nearly 63 months (or more than five years) to earn back the $3,000 you paid in points. So if you were to move before the five years, you would have wasted your money on the points.

You can find more mortgage and finance related information by clicking HERE

10 Selling incentives to motivate buyers in a down economy

Everyone likes a bargain, a sale, or a giveaway. What's not to like? In real estate sales incentives can be a great way to motivate a reluctant buyer to take the plunge and consider making an offer on your home despite the current economic downturn. So as a seller what are some ways you can use sales incentives to drive up interest in your property?

Let's take a look at 10 selling incentives to motivate buyers in a down economy:

1) Pay the points
What are points? Points are fees charged by lenders to provide financing. In general one point equals one percent of the mortgage balance. For instance a buyer paying 1 ½ points on a $200,000 loan will pay $3000 in loan fees. As an incentive to write an offer, some sellers offer to pay points on behalf of the buyer.

2) Buy down the interest rate
Many buyers are unaware that they can secure a lower interest rate by paying additional points at closing. Just like the points discussed above, a point, when buying down the interest rate, is one percentage point of the sales price. For example, a buyer who is securing a $300,000 mortgage, paying one point in loan fees, and then another two points to buy down her interest rate will pay a total of $9,000 dollars in loan costs at closing! If she can save any portion of this amount by choosing one home over another it might very well sway her decision.

3) Pay for closing costs
Closing costs are fees charged by escrow companies and lenders to process the paperwork necessary to close the sale. Sellers generally pay for insuring clear title by purchasing title insurance on behalf of the buyer, but many homeowners also decide to offer to pay for the buyer's closing costs as well. However, in doing so it is wise to put a cap on the amount of closing costs you are willing to pay by stating that you will pay "up to" a certain predetermined amount.

4) Pay for inspections or compliance work
Inspections are typically required by lenders before funding a buyer's loan. While in many areas of the country these are typically paid by the buyer, they are almost always negotiable. The same is true of any needed repairs that might be revealed by the inspections. To secure a sale many sellers will offer to pay for inspections and or compliance work "up to" a reasonable amount.

5) Carry the contract
Owner financing means that the seller acts as the bank by agreeing to accept payments from the buyer. The advantage to offering owner financing is that buyers will be able to save thousands of dollars in loan fees and can often close the sale very quickly. The downside is that you take on additional risk should the buyer default at some future point. Before offering or accepting a sale with owner financing always seek the advice of legal counsel.

6) Upgrades
Many builders now allocate as much as 5% of their sales price to sales incentives that they offer back to buyers in the form of upgrades. Following suit many homeowners have caught on that this technique can be a great way to set their home apart from the competition by offering kitchen and bathroom upgrades, landscaping upgrades, or even carpet upgrades, to motivate buyers to take action.

7) Allowance
If your home needs a facelift but you don't have the money to do the work yourself you might consider providing the new buyer with an allowance. An allowance is a credit given to the purchaser to compensate for accepting a home's defects - things like worn out carpets, failing plumbing, or poor drainage.

8) Free appliances
Many sellers are now offering to provide buyers with their choice of brand new appliance packages. From front load washers and dryers to new convection ovens, and even plasma televisions, these incentives can be a real plus for buyers who have never owned a home before. They can also be a plus for any buyer who wants new appliances, like just about everyone.

9) Pre-paid utilities
Like getting stung by bee once a month, adjusting to a new mortgage payment can be painful. One way sellers swab on the calamine lotion and make it easier for a buyer is to pre-pay utilities over a certain period of time. This could range from pre-paying for gas, electricity, cable TV, or even internet services.

10) Pre-paid services
Owning a home isn't easy. You have to clean the darn thing, mow the grass, maintain the heating and air condition systems, clean the pool, clean the gutters, and even change the light bulbs once in a while. Because of this some sellers throw in a pre-paid service like a lawn mowing service, pool cleaning service, or even a housekeeping service, to encourage buyers to step up and write an offer.

Consider your options carefully. Selling incentives can often be just the catalyst your home needs to make the jump from being just an active listing competing with hundreds of other homes for a buyer's attention to a home that sports a pending sale sticker. The key is to choose an incentive that fits your budget and your market. For guidance, explore what other sellers are offering to motivate buyers to take action and consult with a local agent.

Everything you need to know about deeds

For the home buyer, the deed is the heart of the real estate transaction. Your real estate contract will specify the terms of the sale, but it's actually the signed deed that will transfer ownership -- called "title" -- of the home from the home seller to you, the buyer.

This legal document must be in writing and must be signed by the seller, and in many cases, by the buyer too. Your real estate broker and your attorney should be able to help you in drawing up this document.

Often it is necessary to have the document registered with the county recorder's office in the county where the property is located and to be signed in a notary's presence to authenticate the signatures.

There are several types of deeds, but the one that will protect you the most as a buyer is the warranty deed in which the seller promises that he does indeed have title to the property, has a right to sell the property and is transferring it to the buyer.

The seller also promises or warranties that there are no "encumbrances" (something that gives somebody other than the buyer a right to the property, such as liens) or "defects" -- errors or flaws in a deed that may affect transfer of the property. Very similar to the warranty deed is the grant deed.

The riskiest type of deed for a buyer is the "quitclaim" deed, which offers no warranties for the buyer. Make sure you speak with your attorney about the type of deed you'll be receiving and about any cautions, if any, associated with it.

Since the deed is a legal document that's crucial in the legal transfer of a home, it's crucial that you properly review the deed in its entirety before the transfer is completed and the deed is recorded. Among the items you should carefully check in the deed are:

The seller
The deed must correctly identify the seller by name (and sometimes by address). The seller is known as the "grantor" in the deed.

The buyer
As the buyer, you should be the "grantee" specified in the deed. Look to see that your legal name is spelled correctly, and if a street address or post office box for you is given, that it's correct.

The legal description of the property
In the deed, your property will be described according to an accepted survey, which will refer to your property by lot number, section and possibly metes and bounds. The street address for the property may also be noted.

Finally, for a deed to become valid, it must be delivered to and accepted by both the buyer and the seller. Once every detail is properly executed with the deed, you are the rightful owner of your new home!

What is the difference between short sale and foreclosure?

If you have found yourself behind on mortgage payments recently, chances are you have been anxiously debating your next step. Do you let the bank take the home back, hand them the keys, and ride off into the sunset, or do you think more creatively and consider other options? Rather than tossing the dice on your financial future, let's explore the difference between a foreclosure and a short sale.

Foreclosure: A foreclosure is the legal term used to describe how a note holder (your bank or lender) goes about stripping you of the title to your home. In the real world the process can take anywhere from a few months to well over six months from start to finish, depending on the type of financing instruments that were used to secure the debt. But losing your home is only the beginning. Once completed, depending on the borrower, a foreclosure can also result in a credit score reduction of 200-300 points. This means you will have a much more difficult time securing credit in the future when you wish to purchase a car, obtain lines of credit, or even get new credit cards. When you do find someone to give you a loan, be prepared to pay much higher interest rates. To top it off, if you are searching for a job, be aware that many employers conduct a credit check on new hires and a poor credit score can be used as a reason to toss your resume.

So if a foreclosure is so bad, what other option can a homeowner consider? Many homeowners use a short sale to avoid a foreclosure.

Short Sale: A short sale, sometimes known as a "pre-foreclosure sale", occurs when a bank agrees to accept less than what is owed on a home in order to avoid a foreclosure. Remember, lenders don't want to own your home. Because of this they will often accept a reasonable loss to avoid the costs and hassle of adding another home to their growing national inventory. Though a short stale will still hurt your credit score, it will be looked upon by future creditors far more favorably than a foreclosure. For instance, Fannie Mae recently adjusted their guidelines to require only a two year waiting period for sellers who used a short sale to purchase a new home. At the same time, they lengthened the waiting period for sellers who have fallen victim to a foreclosure to five years. Why the difference? A short sale is seen as a satisfaction of at least part of the debt, rather than a complete write down. In addition recent federal legislation, in most cases, has removed the burden of a tax liability for the forgiven debt on primary residences.

So which is better a foreclosure or a short sale?
Without question a short sale is almost always the best option. To explore using a short sale to sell your home, talk to a local agent, preferably one with experience in pre-foreclosure sales, and request a short sale package from your lender as soon as possible.

You can learn more about The Cascade Team Short Sale program HERE