Meeting the Stager

This afternoon, my clients and I met with the stager to arrange decor of a house we're marketing. I knew that the old "Bone" and "Swiss Coffee" combination that Realtors had been using were not enough to compete in this market, where buyers expect a house to stand out from the rest.
In terms of dollars, painting is a considerably low investment that a home seller can make and receive a higher rate of return at closing.
Home Staging is all about presenting the house for sale at its best. When potential buyers come through a house for sale, they are attracted to a property for many reasons. The mood that a house presents is very important. The interior wall color or colors are extremely significant in helping to set this mood. Wall color can turn a House for Sale into the Home They Love.
Home Stagers, through wall color consultations, assist in making a house as warm and inviting as possible. Whites, although very neutral, tend to present a colder setting, and blues, although recommended for relaxation by some, can present a cooler setting in rooms. More dramatic colors of red, yellow, darker greens, and orange are more personalized colors, which are fine for decorating, but not for staging to sell. Wall color should be a non-factor within a room, just helping to set the mood. Medium hues of browns, golds, taupes, and sometimes greens (we chose "Celery" for the hall bathroom) will warm up a rooms setting….making it feel inviting and cozy to potential buyers. Darker hues of any color within rooms can make the room appear to be smaller, but we used an accent color to make a dining area feel like a separate dining room.
Paint can be a great help, if color is chosen wisely.

Scary News for Local Housing

President Obama’s budget proposal was released today this morning. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. I just received an email from the National Association of Realtors. NAR is 100% opposed to a provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.
As currently drafted, the plan changes this deduction by reducing the amount of mortgage detectability on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values....especially in expensive areas such as ours. If this proposal is enacted it will lead to a new round of price depreciation, and will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved.
NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, it will be expressing our concerns directly to President Obama, to all members of the House of Representatives and the Senate, and placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal.

Who Can We Believe?

In the President's speech to Congress and America last night, he promised to move forward with the economy, partly by loosening the purse strings of lenders who are frozen into inaction.
But a column this week by real estate expert Kenneth Harney described the new rules that Freddie Mac and Fannie Mae will impose, starting on April 1. Loan applicants will find that there are new loan fees added, even if they have high credit scores. Home buyers will be dinged with a "delivery fee" of anywhere from 1/4% to 1 1/2%, depending on their down payment and credit scores. Buyers of a condominium will pay a 3/4% loan penalty unless they come up with a 25 percent down payment, and duplex buyers with perfect credit who come up with a 50% down payment will still have to pay a point.
The agencies say that these fees counter higher risks, but as recently as two years ago, FICO scores in the high 600's were enough to qualify buyers for prime financing. Now bare minimum scores of 729-740 are needed to avoid these high fees, and are still not good enough for condo or duplex buyers.
FHA mortgages are fast becoming the only show ion town.

More About the Seniors

The Mercury News featured an article this morning that describes a recent study out of UCLA. Its findings were that 47% of Californians 65 or older are unable to pay for their basic needs. Choices such as "food or medicine?" are being made every day.
Amazingly, the data that they used was from the 2007 census, and doesn't take into account the latest economic crisis. They also use a fifty year old federal measure to determine who is above the poverty line.
More up to date is a September 2008 study from AARP. Most people think that older homeowners would have substantial equity and low interest loans, immune from the current mortgage crisis. But this study reveals that 684,000 Americans age 50 or over are delinquent on their first mortgage, are in foreclosure, or have already lost their homes...28% of all homeowners in this situation.

Conforming Limits Restored

Benefit #4 — $729,750 FHA and Conforming Loan Limits Restored in High Cost Areas.
The $729,750 maximum loan limit had been in force throughout 2008, but was
reduced to $625,500 in 2009. The economic stimulus plan restores the $729,750 maximum. This makes higher cost homes more affordable — especially in the coastal housing markets that tend to have higher than average home values. Our local areas have average prices that fall in the higher range, also, and the high interest on traditional jumbo loans has been pricing out many buyers who might qualify at the new conforming rates.

For The Seniors

Here's one of the stimulus package benefits that should help our senior homeowners particularly. One of the problems with reverse mortgages has been the low amounts that are available in our area, where equity can be quite high.
Benefit #3 — Higher Reverse Mortgage Loan Limits

The loan limits for FHA-insured reverse mortgages have been increased to
$625,500 across the entire country - not just the higher cost areas. The previous limit was $417,000 across the country. This is especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated.
This coincides with another little-known change in the reverse mortgage
arena: the availability of reverse mortgages on home purchase transactions. This is a fantastic opportunity for senior citizens to buy a new home and live mortgage
payment-free without having to wait for their old home to sell. Seniors could also use this strategy to buy a new home and turn the old property into a rental or otherwise wait for market conditions to improve before trying to sell the old home.

Another Benefit...The Tax Credit for Buyers

Benefit #2 — Expansion of First-time Home Buyer Tax Credit

The tax credit available to first time home buyers was increased from $7,500
to $8,000 for homes purchased between January 1, 2009, and December 1, 2009. Also, the credit no longer needs to be paid back as long as you live in the home without selling it for at least 3 years. The previous version of the credit expired on
July 1, 2009, and required home buyers to pay the funds back over a 15 year time frame.
The income limitations remain the same ($75,000 for single tax payers claiming the full credit and $150,000 for married tax payers), as do most other qualification requirements. Also, the credit remains refundable. This means that first-time home buyers who owe less than $8,000 in taxes for the year are still eligible for the full $8,000 credit when they file their tax returns. In that case, the IRS will write you a check for the difference between $8,000 and your actual tax bill. In fact, the credit can be claimed on your 2008 tax returns that you file by April 15, 2009, even if you buy the home in 2009.
There is one catch, however: if you bought the home in 2008, the credit remains $7,500, and it still needs to be paid back over a 15 year time frame beginning in 201 when you file your 2010 returns.