Foreclosures Climb Again

Property Wire reports that Texas is now leading the real estate crisis in the US with a 35% increase in February in the number of foreclosed properties according to the latest figures.

The articles stated; “It was the highest monthly gain of any state in the country, according to data from ForeclosureListings.com”. The information was gathered from foreclosurelistings.com, an online foreclosure marketplace.

Michigan had the second highest increase at 17.5%, followed by California at 11.9% and Florida at 4.7%. Other states that continue to experienced high foreclosure rates are Georgia with 5.5% and Arkansas 28.6%. One in every 418 homes received a foreclosure filing, reaching more than 300,000 for the 12th straight month, according to the report which describes the current situation as bleak.

Las Vegas led all cities with the most foreclosures in February with more than 3,100 filings, a 29% increase from January. Denver had the second highest foreclosure gains among cities with more than 2,000 filings in February, despite the 5% drop from the month before. The 34% increase in Phoenix pushed that city to the third spot with more than 1,600 filings.

The National Association of Realtors (NAR) believes that there is little chance of home prices increasing as long as foreclosure rates remain high and ongoing. A fall in the number of sales of previously owned homes in the in February is also sure to hurt home values again.

The report from NAR showed sales fell 0.6% in the month of February to an annual rate of 5.02 million units. That’s from 5.05 million the previous month. Las months delicne was the third consecutive month sales have dropped.

The trend has raised concerns that the market may be heading for a double dip in both activity and prices. Chief Economist Lawrence Yun, with NAR, said; ‘Although sales have been higher than year ago levels for eight straight months and home prices are much more stable compared to the past few years, the housing recovery is fragile at the moment.’

Meanwhile, Treasury Secretary Timothy Geithner said fundamental reform of the property market is needed. ‘The housing finance system clearly cannot continue to operate as it has in the past. Fundamental reform is required with stronger regulation, more effective consumer protections and a clearer role of government with less risk borne by the American taxpayer,’ he said.

The role of government in free enterprise, especially where real estate investing is concerned is uncharted territory. Does heavier regulation mean price controls? Do those controls portend a maximum price/sq.ft. that can be charged for rent or for purchase?

Nobody knows the answers to these questions or what affect it will have on the real estate investment community? The only sure thing based on today’s data is that the Banks have paid back the TARP funds and now are taking the opportunity to finish the ugly task of cleaning up their balance sheets.

As banks continue to get their fiscal houses in order this summer investors can expect sliding home values and more foreclosure buying opportunities as we enter the predicted double dip recession that many economist have predicted.

Tax Credit Deadline Looms!

There is a great article on MarketWatch.com about the tax credit and how it works. (see linke at the bottom of this post) A reader wrote in to inquire whether two people who are planning on getting married can by a home before they are married and then both claim the $8,000 credit.

The answer was a resounding NO! Here are some important things you need to know about the Federal Tax Credit for purchasing a home.

1. It's not really $8,000... ...That's right, its 'up to' $8,000. The law actually says that the credit is $8,000 OR 10% of the purchase price of the home, which ever is lower. This means homes less than $80,000 yield a lower credit.

2. It is for first-time home buyers. The definition of a first-time home buyer is anyone that has never owned a home or who has owned a home in the past but has not been a homeowner for the past 3 years.

3. You can only take a credit equal to what you paid in Federal Income taxes. There are some disputes on this one so anyone considering purchasing a home should check with their accountant or CPA.

4. Multiple buyers of a property, i.e. spouses, betrothed, life partners, friends, etc, can only split the tax credit. So if there are two people, each owning 50% interest in the property, then they don't both get $8,000. They would have to split it.

5. And LAST OF ALL! The tax credit is set to expire December 1, 2009! That's right! Get out there and get shopping if you are a first time home buyer and if you are a builder, Realtor or investor, get to marketing that home. After December 1st it may be a tougher sell!

Read the article that inspired this one and many others on this blog at http://marketwatch.com/ For the specific article that relates to the tax credit got to http://www.marketwatch.com/story/expert-gets-it-wrong-on-home-buyer-tax-credit-2009-07-24?link=kiosk

Luring the Right Buyers

Whether you are a real estate investor and you want to use a ‘flip’ strategy or you are a homeowner ready to sell your home fast so you can take advantage of the current market to upgrade. Luring the right buyers is critical in this type of real estate environment.

With the federal tax credit of up to $8,000 and now with HUD allowing for the issuance of short-term ‘down-payment’ loans for those that qualify for the credit, a bevy of new buyers are hitting the streets. You can sell a home and in some areas you can sell it fast if you do the right things and deploy the correct strategies.

The Finer Points of Selling

As a seller there are some critical mistakes that you don’t want to make and there are some important things you can do to make sure that your home is above the rest. Learn the psychology of today’s buyer and you’ll achieve success.

Remember that people are nervous right now. They are willing, but reluctant, players in the real estate game. Most buyers understand that they can get a great deal but are still nervous about the economy. They also are ‘novice’ buyers and many don’t want to buy a home that needs a lot of work.

Understanding how to overcome these buyer’s objections and knowing how to create excitement and buzz is critical to getting offers and receiving a contract that is close to your original asking price.

Point 1: Create an Emotional Connection
It is all about that first impression. One thing that many people forget is that the front of the house is the first thing a buyer sees. Make sure you spend a little extra time creating some flair and excitement there.

It’s kind of like staging the inside of a vacant home (which we’ll get to in a moment). You want to focus on some key areas. Take care of the simple stuff. Edge the driveway and curb, Paint the front door and shutters, cut large shrubs back and replace dead shrubs. Add some color by planting seasonal flowers and ‘limb up’ trees with low hanging limbs so the house is visible from the street.

You can even move to the backyard and create a little outdoor living space by adding some lawn furniture. Kick it up a notch by having a pitcher of lemonade and some to-go cups when ready when you know the showing is going to happen. Just before you leave, place the lemonade on a table outside and put a note on the back door inviting them out for a cup! Be creative and create an emotional tie!

Point 2: Stage and Declutter
I cannot emphasize this enough. Even if you do a great job of making a beautiful connection outside, it can all be lost once the prospect walks through the door. That is why it is critical for vacant homes to be staged and for occupied homes to be decluttered.

Staging is about making a connection with potential buyers. They want to know that they can truly ‘live’ in the home. You don’t have to stage every room and you don’t have to set up a complete room of furnishings, however, making sure that you have some nice pieces of furniture, fresh flowers and colorful vases and lots of lamps and light are a must.

Decluttering is also important. The trick is to create a showroom appeal. You want a modern, clean feel and you don’t want to make the family feel like they are living in ‘your’ home. Some experts even suggest removing all pictures of family and replacing them with pictures of scenery, flowers and other serene settings.

Lastly, staging is not only about the look of the place. Staging can include sights, sounds and smells. Pleasant music on in certain rooms can evoke a since of calmness and fresh baked chocolate chip cookies never displeases. Again be creative and get potential buyers thinking about where the furniture goes instead of looking for problems with the home.

Point 3: Don’t Be Cheap
Remember, this is a buyer’s market and buyers know it! Don’t be cheap, offer right out of the gate that you are willing to pay closing costs. This may help you get an offer that is higher right from the start.

Also make sure that you don’t snub lower offers. Remember that people are trying to find a deal and these days they can. If they make an offer on your house then that means they are probably truly interested. Every offer deserves a counter offer; it’s basically a conversation starter that could lead to a sale!

Point 4: Warranties & Protections
Some creative strategies that could get your house sale moving and attract more quality buyers to the table are the exact right incentives for today’s market place! First, offer a home warranty, even an extended home warranty. This can be a great way to get people in the door.

But don’t stop there, some lenders and many real estate firms offer policies from affiliated insurers that protect the buyer in case of job loss. Offer to pay for insurance that will make payments for the buyer if they lose their job. Many times this can get a buyer over the hump and help them make an affirmative decision to buy!

In Conclusion; Be Creative

There are many other creative ways to get your home sold. Everything is on the table these days from Life Insurance that pays off the mortgage if someone should die to paying the first year of utility bills for a full price offer.

If you are a real estate investor attempting a quick-turn strategy you should employ all of these strategies to create a sale in a short period of time for top dollar. If you are a homeowner attempting to sell, these strategies should make your home stand heads and tales above the rest!

Remember that an emotional connection, imagination and strategies to overcome buyer’s fears and concerns is the way to a successful transaction in a shorter period of time. Good luck and happy selling!

For more information and to read the article that inspired this one go to http://www.marketwatch.com/story/story/print?guid=05010834-B368-4E28-A473-A3E147D3D657