• Sellers Market:  1 to 5 months supply of homes – home prices increase
• Balanced Market:  6 months supplies of homes – home prices are stable
• Buyers Market:  7 or more months supply of homes – home prices decrease.

Recently I have done several estimates of market value which showed that in some areas there is now a 4 month (or less) supply of homes on the market.

This provides a unique timing opportunity. Buyers now realize that prices are close to bottom or rising, so they are actively seeking the best buys in the market. Sellers can now take advantage of more buyers and less competition in selling their homes. This means that eventually home prices will moderately increase.

The easiest way to understand current and future conditions is to monitor the movements in the real estate absorption rate.  Mathematically, this is the measurement of current housing supply divided by the current rate of sales, expressed in months of supply. In Santa Cruz County the months of supply is 6.7 and depending on the area, this number drops significantly.

Have you been on the fence about selling? Now is a perfect window of opportunity. Give me a call at (831) 457-5510 or contact me today for any real estate need.

When applying to your lender, be certain you are getting pre-approved, which is a significant step past pre-qualified. If you are only pre-qualified, you will have a good estimate of how much you can borrow, but it does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

Pre-approval is basically a promise from the lender that you’re qualified to borrow up to a certain amount of money at a specific interest rate. The first step is applying to a lender.  You will want to do a little shopping around. 30 years is quite the commitment, and you will want to feel comfortable with your choice. Be aware that interest rates change daily, so you are shopping more so for a loan officer.

What Do You Need for Pre-approval:

• Pay stubs and W2s (lenders are looking for income verification for two years)
• Two or three months of bank statements
• If you are self-employed, you will need tax returns from the last two years
• Divorce decree (if applicable)
• Loan documents on your current home (if applicable)
• Many lenders and brokers will ask you to pay for the credit report required for      pre-approval, but this is generally the only fee you will encounter during pre-approval (sometimes, though, a lender will charge a fee; be sure to ask if it’s free)

After you have submitted your documents and they have verified your ability and willingness to repay the loan, your loan representative will submit your complete application to the underwriter. The underwriter will return one of four decisions: approval, approved with conditions, suspended (which means they need more documentation from you before they can make a decision), or denied. Once approved, your lender will issue a loan commitment.

For more information, contact us today for a referral of an experienced and well-respected lender in the Santa Cruz area. I hope this information helped you. If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind.

Before searching for an agent, you must understand some real estate jargon: Real Estate Agent, REALTOR(R), and Broker. The terms real estate agent and REALTOR(R) are interchangeable. These terms stand for a person with a state license to represent a buyer or seller in a real estate transaction in exchange for commission, while working under a Broker. A Broker may have more knowledge, training and experience by may not be as hands on. Remember though, that not all real estate agents are REALTORS(R), only those who are members of the National Association of REALTORS(R) have the right and priviledge to call themselves REALTORS(R).

After you understand the real estate language, now it is time to narrow down your choices by knowing what you want from your agent. There are always many different brokerages. They all can legally sell your property, and each will handle your sale with their individual and possibly unique procedures.

Many agents may have a niche that would be more tailored to your needs. If may be a simple choice of a listing agent versus a buyer’s agent or you may need special assistance due to a distressed situation. In such a case, be sure to seek an agent with specific certifications or training, ie: short sale, foreclosure preventions, internet marketing, luxury homes, etc.

Once you’ve narrowed down your options, create a list of questions to ask during each interview. This will showcase how each agent will work towards selling the home with your requirements. After all the interviews, review all applicants to a high standard. Your real estate agent should have extended experience, a strong commitment and a passion for real estate.

I hope this information helped you. If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind.

1. Clean, Clean, and more Cleaning: There’s no surprise here, cleaning is the first step. From those pesky cob webs in the ceiling’s corner to the dust on the baseboards, everything should look spotless. Children’s toys should properly be stored in a discreet area. This is grueling and tedious work. You may want to hire a cleaning service and possibly a carpet cleaner.
2. Yard work: Be sure the outdoor area is pristine: lawn mowed, shrubs shaped and leaves raked.  If you have any additional assets like pools, storage building, etc… they should be cleaned and organized, as well. Clean out the gutters and pressure wash the home’s siding. If your home’s exterior isn’t well-maintained, buyers will think you’ve slacked off throughout the rest of the house as well.
3. Add a Touch of Color: Use fresh or silk flowers to breathe life and color into the main rooms. A colored afghan or throw on the couch will jazz up a dull room or aged furniture. Analyze your walls. If you’ve been putting off painting, now is the time.
4. Pamper your Bathroom: Replace old towels with freshly washed or inexpensive newly purchased towels. Hide personal toiletries and restock your soap and toilet paper with high quality products. Be sure to add a new shower curtain.
5. Make the rooms seem bigger: Put away kitchen appliances, enhancing counter space. If capable, take away large furniture that may be crowding a room.
6. Depersonalize your home: Put away family photos, mementos, and distinctive artwork.
7. 30 minutes before people arrive: Turn on lawn sprinklers for 10 minutes so the lawn sparkles. Put a batch of cookies in the oven to add a charming smell and cozy feeling to your home. Depending on the season, start a fire in the fireplace or open windows. Lastly, secure any valuable items and turn on all your indoor lights.
8. Leave: During the hours of the open house, you and your pets should leave the home. This will alleviate any awkwardness you or the prospective buyers may feel while viewing the home.

Now that you have finished all of these steps, you may relax and let your REALTOR® take over. I hope this information gave you some food for thought. Here are some other tips to get your Santa Cruz home sold fast.

If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind. We’ll sit down for 15-20 minutes… no high-pressure, just plain, honest talk about what it’s going to take to achieve your personal goals. Go ahead, pick up the phone and give me a call. I’d love to help from you!

1. Keep the property, make the payments and live in it.  If you’re doing that now, great. Keep doing it if that’s your choice. No one is MAKING you sell your home right now if you’re making your payments.

2. Keep the property, make the payments, and rent it out.  If it’s been a rental, you can choose to keep it one. If it’s been your primary residence and you want to turn it into a rental, talk to a property manager, your tax advisor or CPA about what that will mean for your cash-flow and tax status for the property. (Capital gains, etc)

3. Keep the property, make the payments, and just maintain it vacant, or use it part time as a 2^nd home/vacation home. Again, talk to a PM or your tax advisor about what that means to you.

4. If you have Equity… Sell the property. Price it well and sell it now.  You CAN do this in most markets. Homes ARE selling if they are priced correctly. Note that your competition for buyers is Banks (REO), Short Sales (combined Owner and Bank), and other “Desperate Sellers with Equity”.  You MUST price it with that in mind to sell in this market. Period.

5. If you do NOT have Equity… Sell the property and bring money to closing to do so.  Note the pricing statement above.

6. If you do not have Equity and do not have Cash… Sell the property via a Short Sale. Find an experienced real estate agent to assist  you in this process as you will need Bank approval.

7. Do a deed-in-lieu of foreclosure if your Bank will approve it.

8. Allow the Bank to Foreclose on the Property.

Note #1: Options 1-5 do NOT damage your credit. Options 6-8 do damage your credit to varying degrees. Be sure you understand before choosing an option.
Note #2:  There is NO OPTION to price the home higher than it’s worth. It’s the same as option 1,2,3, or 8.
Note #3:  Why would someone sell when prices are low? They have to. They simply WANT to, and have the financial ability to take the loss. They want to buy another property and will MAKE UP THE LOSS ON THE PURCHASE.

I hope this information gave your some food for thought. If there is ever any way I can be of service to you or anyone you know, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind. We’ll sit down for 15-20 minutes… no high-pressure, just plain, honest talk about what it’s going to take to achieve your personal goals. Go ahead, pick up the phone and give me a call. I’d love to help from you!

The ability to reap additional profits on the sale of your Santa Cruz area home can be accomplished easily enough, if you make the right improvements. Many changes can provide the prospective buyer with enhanced feelings about your home. Feelings of more space, more light, more rooms, more closet space, greater privacy, warmth and security. Basic, simple and inexpensive improvements can provide an improved emotional response in a potential buyer.

An example could be something as small as a crack on a wall. By simply applying some plaster and touch-up paint, you eliminated what may be an unstated concern that your home was poorly maintained. Though the feeling may be unconscious, it’s just as important that the potential buyer feel an overall sense of emotional desire for your home. If you are working with a small budget, these simple techniques will work absolute wonders.

1. Bring Old Floors Back to Life!
Nothing turns off a potential buyer quicker than dull, dingy, disgusting-looking floors. Whether you have wax, wooden or tiled floors, do whatever you can to make them shine again! For wax floors, either rent a floor machine and do it yourself, or hire a professional if it’s in your budget. If you have carpeted floors you should either have the carpet steam-cleaned or, if it’s in your budget, install new carpeting. This may sound expensive, but new carpeting can add thousands of dollars to the value of your home.

2. Bring in Some Plants
Having plants in the house is not only healthy for you but you create a warm feeling with them. Ficus trees or Dracenas have become very popular and they can be purchased inexpensively. Attractive pots such as ceramic, brass, or even designer plastic will add a designer flair to your home. Hanging plants are easy to care for and would go great in your new home wherever you move.

3. Clean Up the Bathroom
We’ve probably all heard that phrase a hundred times growing up as children! Well guess what? It’s still valid. Give your bathroom a face-lift if needed. Fresh paint, some decorative moldings, tile grout, new designer faucets are attractive eye catchers.

4. What is That Smell?
People don’t like to admit it but, everyone’s home has a certain smell to it. We just never notice because we live with it day in, day out. Strategically placing fresh scent devices throughout the home will be pleasant to the nose of any potential buyer. If there are or has been a pet in the house, this can be very offensive to many potential buyers. Remove the pets bed, clean out a litter box, clean carpets, open windows, etc. As a matter of fact, an old REALTOR® trick is to pop some cinnamon rolls in an over 5 minutes before a showing. I bet you thought all REALTORS® just had a sweet tooth!

5. Adding a Room Without Calling in the Contractor!
This simple but seldom-used technique can give a buyer the feeling there are more actual rooms in your house. Floor-to-ceiling room dividers are inexpensive and simple to install. When a buyer walks through your home, they will generally count the rooms in a subconscious manner. Each room will present an emotional response as they walk through your home. By dividing and designing each side of your room, you create a “separate room” feeling in the potential buyer. It may sound crazy, but it works!

6. The Magic of Mirrors!
Mirrors can provide a greater sense of space and elegance when properly placed. Be careful not to overdo it, but when placed properly throughout your home, each area will seem larger to the potential home buyer. Try looking in your attic or basement for any old mirrors, but be sure they have a nice frame or at least give the frame a new coat of paint. You may also want to visit a local flea market or garage sale- you can often find a great deal on an old mirror or tow. Putting one- foot square mirrors on a close door in the master bedroom is always an attractive touch.

7. Adding Additional Closet Space
One of the biggest complaints heard from potential buyers is that there just isn’t enough closet space! Simply purchasing an inexpensive closet organizer and installing it in any or all of your closets can make all the difference. The idea here is to be creative so that the “fake closet” looks as though it was a part of the room.

8. Make a Wall Beautiful
Wallpaper is inexpensive, quick and easy to do! The right wallpaper can brighten the room or hallway and bring it back to life. Be careful to choose something with a neutral design or pattern. Remember, you’re trying to move out!

I hope you found these suggestions valuable and if there is ever any way I can be of service to you or anyone you care about, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind. We’ll sit down for 15-20 minutes… no high-pressure, just plain, honest talk about what it’s going to take to achieve your personal goals. Go ahead, pick up the phone and give me a call. I’d love to help from you!

Reprinted from a Post By Linda Goold, March 11, 2012 @ 1:07 pm In Consumer News and Advice. This column is brought to you by the NAR Real Estate Services group.Below is some general information you need to know about this law and cancellation of mortgage debt.

General Rule for Debt Forgiveness
If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply for bankruptcy, insolvency and certain other situations, including mortgage debt.

Current Law for Mortgage Debt
(Jan. 1, 2007 through Dec. 31, 2012): A borrower can be excused from paying tax on forgiven mortgage debt. The debt must be secured by a principal residence and the total amount of the outstanding obligation may not exceed the original mortgage amount plus the cost of any improvements.

Does the relief apply only to a sale?
No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a short sale (when value at sale is less than the amount owed) or in a foreclosure where the debt is wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not be taxed.

Can the homeowners in a short sale or foreclosure claim a loss?
No. The loss is considered a personal loss and is, therefore, ineligible for either capital loss or ordinary loss treatment.

What happens to the seller when mortgage debt is forgiven?
Until January 1, 2013, the homeowner will pay no tax on any forgiven amount.

Does this provision apply to a refinanced mortgage?
Only in limited circumstances. The relief provision can apply to either an original or a refinanced mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the amount of the original debt (plus the cost of any improvements). Tax relief is generally not available for second mortgages or home-equity lines of credit where the funds are not used for home improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.

How does the homeowner get the correct information to the IRS?
The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven.

What if a property declines in value but the owner stays in the house?
The provision would not apply. The provision applies only at the time of sale or other disposition or when there is a workout (reduction of existing debt) with the lender.

Do all lenders forgive mortgage debt when property values decline or the home is in foreclosure?
No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the borrower has other assets. Forgiveness of debt is always at the lender’s discretion.

Linda Goold is the Tax Counsel for National Association of REALTORS®.

1. Distress Selling: At times, selling quickly is unavoidable. That’s when knowing the right techniques to sell your home, without looking desperate and making yourself a target for low bidders, really pays off. Know all there is to know about your market before listing and work hand-in-hand with the right real estate professional. Ensure you are not settling for the first offer through the door.
2. Best Home in the Neighborhood: Your home is one of your most personal possessions. Don’t be blind to flaws and needed cosmetic improvements. This will cause overvaluing of the home, hurting its chances to be sold. Listing with the right agent gives you a well-informed third eye that will help you price your home at a fair market price.
3. Limited Home Viewing: Buyers want to view a home on their own time schedule. Unfortunately their time schedule does not always coincide with your time schedule. Leave a lockbox or key with your agent so your home can be shown when you are not around. You never know if the one who got away was your next home buyer.
4. Restrain Emotional Decisions: Don’t allow a few hundred dollars, which would mean very little to you in the long run, ruin a sale. Take a look at the big picture and react rationally. Use sounds business judgment!
5. Make Cosmetic Improvements: Prospects make up their minds within the first few minutes. First impressions can make all the difference in selling your home. Spending $1,200 on new carpet might add another $4,000 to the price of your home. Get an objective point of view from your real estate professional. They can provide you with a list of items that will maximize the profitability of your homes sale.
6. Disclose Property Flaws: Property disclosure laws require sellers to list any flaws required by your state. If you are unaware of flaws or worse, attempt to cover them up, you risk losing the sale and finding yourself in court. Get professional assistance from your agent, who can introduce you to qualified inspectors and ensure the smooth sale of your home.
7. For Sale By Owner: Most homeowners who decide to sell their own home, do so because they believe they can save the commission paid to the real estate agent. Everything has a price, and selling a home carries a high one. The amount of time and effort required to sell a home often surprises the For Sale By Owner. Furthermore, many costly mistakes can be avoided with the right guidance.
8. Refusing to Trust Your Agent: Would you tell a physician that you’ve decided to run your own tests and come to your own diagnosis? By choosing the right REALTOR®, you can relax and trust their judgment. The right agent is a valuable team member, who will protect your best interests and make your sale as profitable as possible
9. Know Your Market: Most homes that do not sell in their first listing period are priced too high. Consequently, most homes that sell quickly are priced too low and cheat the homeowner out of profits. You need to understand your market and evaluate the value of your home based on fact, not gut instinct or conventional wisdom. A professional agent will know and understand your market.
10. Choosing a Realtor Based on Personal Relationships: Home sellers often pick a friend or family member as their agent. Choose an agent with a strong track record and aggressive marketing plan. A top producer knows their market well and can generate many buyers. Selling your home is one of the most important decisions you’ll ever make! Base it on good, sound business sense and the rewards will add up.

Before you make one of your most important decisions (whom to list your home with) shouldn’t you become as informed as possible? By aligning yourself with a top agent you ensure that all the significant and seemingly insignificant, (but very important), details are handled professionally. Your home sale should not be a grueling ordeal. And the more informed you are, the better chance you have of making a good sound business decision.

I hope you found these suggestions valuable and if there is ever any way I can be of service to you or anyone you care about, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind. We’ll sit down for 15-20 minutes… no high-pressure, just plain, honest talk about what it’s going to take to achieve your personal goals. Go ahead, pick up the phone and give me a call. I’d love to help from you!

The 0.10 percent MIP increase will be effective on all loans with case numbers assigned on or after April 1, 2012. The additional 0.25 percent for mortgages exceeding $625,500 will be effective for case numbers assigned on or after June 1, 2012. The UFMIP increase will be effective for case numbers assigned on or after April 1, 2012.

Just a reminder a case number assignment cannot be ordered until loan documents and a signed application is received from a borrower. HUD is closely monitoring this requirement to ensure case number assignments are not being ordered to locked down guideline changes.

FHA estimates that the UFMIP increase will cost new borrowers an average of approximately $5 more per month, based on the borrower’s ability to include the increase in the balance of the new FHA loan. Taken together, these premium changes will increase FHA’s revenue more than $1 billion through Fiscal Year 2013.

However, over half of the FSBOs said that they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBOs told me the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the fees paid to consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising, they would have been better off to have paid the broker’s fee that would have included many of these charges.

Selling a home requires an intimate understand of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBOs discovered that they lost money as a result of poor marketing decisions. In the final outcome, this far outweighed the commission they would have paid.

Before you decide to sell FSBO, consider these questions and weigh the consequences of assuming the responsibility versus employing a professional. A little time spent investigating now could pay off tenfold in the end.

QUESTIONS TO CONSIDER:
1. Do I have the time, energy, know how, and abiltiy to devote a full forced effort to sell my home?

One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn’t available to show the property. Realize that a certain amount of time each day is necessary to sell your home.

2. Am I prepared to deal with an onslaught of buyers who preceive FSBO’s as targets for ‘low balling’?

Another challenge of selling a home is screening unqualified prospects and dealing with “low-ballers.” It often goes unnoticed that much time, effort and expertise is required to sport these people quickly. Settling for a “low ball” bid is usually worse than paying broker commissions.

3. Am I offering financing options to the buyer? Am I prepared to answer questions about financing?

One of the keys to selling, whether it’s a home, a car… anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time you purchased something of value, did you make a decision before you had “all your ducks in a row”? By offering financing options, you give the home buyer the ability to work on their terms. You’ll open up the possibility of selling your home quicker and more profitably. A professional real estate agent will have a  complete team for you to profit from…lenders…title reps…inspection companies…they’ll be completely at your disposal.

4. Do I fully understand the legal ramifications and all the necessary steps required in selling a home?

Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state’s disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, you may want to consider consulting with a professional.

5. Am I capable of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?

Ask yourself: “Am I well-versed in legalese? Am I prepared to handle disputes with buyers?” To avoid any disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misinterpretation of what was negotiated.

6. Have I contacted the necessary professionals…title, inspectors, attorneys, and escrow, etc?

Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps, Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction. Be careful!

I hope you found the ideas valuable and if there is ever any way I can be of service to you or anyone you care about, please contact me at (831) 457-5510. There is never a charge and you’re under no obligation of any kind. We’ll sit down for 15-20 minutes… no high-pressure, just plain, honest talk about what it’s going to take to achieve your personal goals. Go ahead, pick up the phone and give me a call. I’d love to hear from you!