For the week of
December 1, 2008

 
Did You Know?… The latest consumer survey of home buyers and sellers shows first-time buyers have risen in market share and plan to own their homes longer than buyers in the past. According to the 2008 Profile of Home Buyers and Sellers, the number of first-time buyers rose to 41 percent from 39 percent of transactions in last year's survey and 36 percent in 2006.
 
Lawrence Yun, NAR chief economist, said a higher share of first-time buyers makes perfect sense, and it’s a trend he expects to grow. “First-time buyers are much more flexible in entering the market because they aren’t concerned about selling an existing home,” he said. “Given low home prices, plentiful supply and affordable interest rates, it’s been an optimal time for entry-level buyers with a long-term view.
 
The number of first-time buyers rose to 41 percent from 39 percent of transactions in last year’s survey and 36 percent in 2006. “Although modest, this is a meaningful gain for the 12-month period ending at the close of June, and more recent independent data show a stronger uptrend in first-time buyers who are helping to reduce excess inventory,” Yun said.*
 
According to the NAR study, the median age of first-time buyers was 30, down from 31 in 2007, and the median income was $60,600. The typical first-time buyer purchased a home costing $165,000 and plans to stay in that home for 10 years, up from seven years in 2007.
 
The median downpayment by first-time buyers was 4 percent, up from 2 percent in 2007; the number purchasing with no money down fell from 45 percent in 2007 to 34 percent in the current survey. “The study covers transactions through the middle of 2008, so we can assume the downpayment numbers have shifted recently because credit tightened and no-downpayment loans all but disappeared around the close of the survey,” Yun explained.
 
Of first-time buyers who made a downpayment, 69 percent used savings and 26 percent received a gift from a friend or relative, typically from their parents. Another 7 percent received a loan from a relative or friend, while 16 percent tapped into a 401(k) fund, stocks or bonds. Ninety-two percent chose a fixed-rate mortgage.
 
The Real Estate Report Mortgage Rate Outlook

The overall cost of mortgage money, as gauged by HSH's Fixed-Rate Mortgage Indicator (FRMI), spiked 34 basis points (.34%) higher, making it the third consecutive week of at least a 30- basis-point movement in rates. However, the swings from week to week are becoming somewhat smaller; they've moved 40 basis points up, then 37 down, and now 34 up again. Five-one Hybrid ARMs jumped 11 BP, leaving the most popular alternative to the traditional 30-year fixed rate at 6.80%.

The price of a conforming 30-year fixed-rate mortgage nudged 33 basis points higher, while privatemarket 30-year Jumbo fixed rates finished the week at 7.90%. There's plenty of negativity to go around these days, and October will finish as one of the most difficult months ever for financial markets.

That said, the sheer volume of new programs put in place by regulators, as well as the attempts to re-liquify the financial markets by the Treasury and Federal Reserve, means that we may just be enduring the worst period at the moment, with better things to come. If nothing else, the passing of the election cycle, with its unending repetitions of negative messages, should produce a level of quiet not enjoyed for many, many months.

That's not to say there's all that much to cheer about, given all the troubles which face the economy. Still, there are encouraging signs here and there which get pushed out of the headlines, downplayed, or outright ignored. Take home sales, for example: last week, Existing Home Sales popped much higher than expected, only to have detractors claim that they would have fallen if not for discounted prices for foreclosures. That's equivalent of saying "That store would have closed except for that big half-off sale!" The point here is that even good news — in this case, that home sales are rising — is too often treated with scorn.

Such was the case this week for sales of New Homes. The unexpected lift in sales to an annualized 464,000 in September was, in part, explained away by the 9% yearover-

year decline in the cost of a new house. We prefer to focus on the fact that despite challenging financing conditions and a troubled economy, homes are being sold. Better yet, inventory levels are now well below the present rate of sale, and this in turn suggests that at least some life in the building trades may be coming before long.

The Real Estate Report

With credit tight and standards even tighter, finding the money to buy a home in today’s market can be a challenge. In today’s market, the best place to find a mortgage might just be your local credit union. Credit unions never got involved with sub-prime mortgages, and are, therefore, very solvent and have the money to loan.

Of course, their lending is more along the lines of Jimmy Stewart’s “it’s a Wonderful Life”, which means youDll have to document everything. The interesting thing about credit unions is they are non-profit. That means loans are not only competitive with banks that sell their loans on Wall Street, but are usually lower than bank mortgages.

Credit unions use their own money to lend and then keep the loans in house and return the “profit”, the interest payments, to their members. Credit unions serve their members who pool their money together with the expectation they'll get a return on their investment.

According to the National Credit Union Administration, credit unions, through September, saw an increase of 15.1% in the number of ix-rate mortgages outstanding comparedto the same period in 2007. Adjustable rate mortgages were up 11.8%.

Membership Eligibility. By current federal statute, credit unions cannot serve the general public. People qualify for a credit union membership through their employer, organizational

qaffiliations like churches or social groups, or a communitychartered credit union. To find a credit union, go here: http://www.findacreditunion.com/

Another place to find a mortgage is a local bank. As with credit unions, local banks will look long and hard at your application. You will need to have a down payment. Local banks are not going to give a loan to someone who can’t afford it.

To find a credit union, go here: http://www.findacreditunion.com/ Another place to find a mortgage is a local bank. As with credit unions, local banks will look long and hard at your application. You will need to have a down payment. Local banks are not going to give a loan to someone who can’t afford it.

Even if you’re not in the market for a home right now, it will pay off in the future to gain membership in a credit union and/or open a bank account at a small local bank.

Hello Elite,

As promised, I will continue to provide my fellow Real Estate Professionals with valuable industry related education and information.

I want you to rely on me not only as your Fidelity National Home Warranty and Disclosure Source NHD representative, but as a source for Real Estate industry news and information.

Yvonne Nelson                                                                                        

Assistant Vice President

Fidelity National Home Warranty & Disclosure Source

800-308-1424 ext 3518

**********************************************************************************************

REO Disclosures: Who Discloses What?

Author: Chuck Piro, VP Disclosure Source

Okay……..so you're ready to submit an offer on a REO property, but you're really unsure of what disclosures you can expect from the bank.  In fact, the asset manager has confirmed that the property is being sold "as is".  So, does "as is" mean no disclosures for your buyer to review?  Not necessarily!

When representing a buyer on a bank-owned property, Realtors need to recognize what disclosures the buyer is entitled to receive from the bank.  Yet, this is an area that seems to be confusing to, not only Realtors, but the REO lenders themselves.   

As you know, owners of bank-owned properties are not legally obligated to provide you with the same disclosures that you would demand from a traditional seller.  But that certainly doesn't mean that the bank is exempt from providing prospective buyers disclosures regarding potential hazards that may affect the property. 

In fact, the REO lender is required to disclose certain conditions that may affect the value or desirability of the property.  Even though they may be exempt from many obligations, they must still comply with many others.  So, even though the property is being sold "as is"; you need to know what to expect in terms of disclosure for your buyer. 

To help clarify the matter of disclosures on REO property, The California Association of Realtors has made available the REO Advisory (C.A.R. Form REO 4/08) that goes along with an offer on a bank-owned property.  This form clearly defines disclosure Exemptions and Requirements that pertain to REO property transactions.

Obviously, the bank never lived in the house, so they are exempt from providing the Transfer Disclosure Statement. Additionally, REO lenders are exempt from disclosing Mello-Roos and 1915 Bond Act Assessments, as well as Private Transfer Taxes.  And, they are not obligated to provide you and your buyer with the Residential Environmental Hazards Booklet.   

Included on the list of EXEMPTIONS is the Natural Hazards Disclosure Statement (NHDS), but…….REO lenders are "…not exempt from applicable statutory obligations to disclose earthquake fault zones, seismic hazard zones, state responsibility areas, very high fire hazard severity zones, special flood hazard areas and flood hazard zones…"  Of course, this information is typically included in disclosure reports obtainable from third-party disclosure companies.

But, keep this is mind….whether the bank discloses or not, Realtors should take a moral approach to real estate disclosure.  Obviously you want to avoid lawsuits and reduce liability.  However, reduced liability is a marginal benefit of disclosure; it shouldn't be the primary motive.  The best reason…….it's just the right thing to do!  Instead of focusing on liability, you ought to be supporting the best interests of your client.  Who is the beneficiary of a disclosure report?  It's your buyer!  Realtors, who pursue that approach rather than the legalistic one, enjoy rewards.  Not only do they build solid reputations for honest, ethical business practice, but they receive repeat business and referrals created by a sound reputation.   Weather the bank is or not…..you should be practical about disclosure.  Remember, you're in the service business.  Treat your clients the same way you'd like to be treated.  If you approach your dealings from this prospective, you will surely succeed in building a solid business with referral clients and repeat customers for years to come.

A BETTER GREEN HOME INSPECTION COMPANY 

Our company has partnered with a State Licensed Termite Inspection Company for you convenience.

(Buyers, Sellers and Agents)

Also every inspection shows you how to make your home a Greener Home. We provide over 35 pages of information on how to cut costs from Heating and Cooling to Duct Sealing and Programming of Thermostat to save money. Our reports are computer generated with summary of all issues and photos The report will be completed within 24 hours and sent to you via e-mail, mail, or fax.

In-Demand Property Inspections is a Green Premier Residential & Green Commercial Inspection Company. We offer our services for the concerned & well informed smart home buyer or sellers. We provide comprehensive, professional, and thorough inspections. We have 2 offices for your convenience; one in the Sacramento Valley and one in the SF Bay Area.

STRUCTURAL SOUNDNESS

VISIBLE ASPECTS OF INTERIOR

ELECTRICAL SYSTEM

EXTERIOR OF HOME

HEATING & COOLING SYSTEM

ROOFING, GUTTERS & FLASHING

PLUMBING SYSTEMS

GROUNDS & OUTBUILDINGS

IN-DEMAND PROPERTY INSPECTIONS CONTACT INFO.

DIRECT(415)760-6040 SEVAN TELLEZ

DIRECT(916)870-4588 ALFREDO TELLEZ III

DIRECT(916)662-1924 ALFREDO TELLEZ JR. HABLA ESPANOL

NAR Opposes Full Privatization of Fannie Mae and Freddie Mac and Adopts Secondary Mortgage Market Principles

 During its annual convention in Orlando , NAR adopted principles recommending continued federal government involvement in the secondary mortgage market. In light of disruptions in the credit markets and the conservatorship of Fannie Mae and Freddie Mac, NAR developed the principles for consideration of the 111th Congress and the Obama Administration.

The goal of the principles is to ensure there is sufficient capital to support mortgage lending to qualified borrowers in all market conditions and in all markets throughout the country.

 
Housing Markets Ready to Rebound?

While the national news still continues to focus on the challenges in the national housing market, many local markets are poised to rebound, according to SmartMoney Magazine. The editors researched all of the major metro areas in the US to find markets that aare primed to see home values increase. Some of these areas include, Seattle , WA , Des Monies, IA, Raliegh , NC , Philadelphia , PA , Birmingham , AL , and Denver , CO . To learn more visit www.SmartMoney.com/mag.   

 
Also - there's an interesting tax credit for first time homebuyers available through mid-2009:

http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf 

Mortgage Market Update

After weeks of sizeable swings in mortgage rates, last week saw rates move significantly less. Most rates drifted downward, as evidence of the economic slowing mounted.

Retail sales dropped for the fourth month in a row, plummeting by a record 2.8%. The week was also filled with announcements regarding numerous government  programs related to housing. Both the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation announced programs offering bounties to mortgage servicing companies for announcement that the $700 billion dollar Troubled Asset  Relief Program would not be used to buy toxic mortgage debt off financial companies’ books.

While financial markets may continue to be rocked on a daily basis, we hope to see mortgage rates remain calmer again this week. If data from the Industrial Production numbers and both the CPI and PPI point to economic slowing with lower inflationary pressures, rates may continue downward.

 
Mortgage Rate Trend Index
NATIONAL OVERNIGHT AVERAGES

30 yr fixed mtg        6.08%    
15 yr fixed mtg        5.76%    
5/1 ARM        5.95%    

Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.

This week, more than half of the panelists believe mortgage rates will fall over the next 35 to 45 days. The rest are about equally split between those who think rates will rise and those who predict that rates will remain relatively unchanged (plus or minus 2 basis points).

A BETTER GREEN HOME INSPECTION COMPANY

This week will feature

A representative from the Real Estate Finance Forum will be present to discuss recent changes to homebuyer assistance programs, interest rates and all things real estate. Those in attendance are welcome to partake in a group discussion. This is a great opportunity to share your thoughts or concerns with fellow SAR Members and receive their input.

A BETTER GREEN HOME INSPECTION COMPANY

Our company has partnered with a State Licensed Termite Inspection Company for you convenience.

(Buyers, Sellers and Agents)

Also every inspection shows you how to make your home a Greener Home. We provide over 35 pages of information on how to cut costs from Heating and Cooling to Duct Sealing and Programming of Thermostat to save money. Our reports are computer generated with summary of all issues and photos The report will be completed within 24 hours and sent to you via e-mail, mail, or fax.

In-Demand Property Inspections is a Green Premier Residential & Green Commercial Inspection Company. We offer our services for the concerned & well informed smart home buyer or sellers. We provide comprehensive, professional, and thorough inspections. We have 2 offices for your convenience; one in the Sacramento Valley and one in the SF Bay Area.

STRUCTURAL SOUNDNESS

VISIBLE ASPECTS OF INTERIOR

ELECTRICAL SYSTEM

EXTERIOR OF HOME

HEATING & COOLING SYSTEM

ROOFING, GUTTERS & FLASHING

PLUMBING SYSTEMS

GROUNDS & OUTBUILDINGS

The above inspector has been professionally trained to perform home inspections in a licensed home inspection training programs, provided by Inspection Training Associates, the National leader in home inspection training. ASHI and CREIA endorsed.

Well, as we all know… consumer confidence is quite low and the Fed’s know this also. To stimulate the economy, there is no “Magic Bullet”. The only thing that can help is time and patience. Expect 2008 to end on the downscale and a recovery to occur in some period of 2009. Since the Fed’s know the economy needs a kick-start to stimulate recovery, look for them to cut rates another .50 basis points. They’ll need to use everything they have in their tool kit to get the economy on the positive!

Keeping you updated on the market!

For the week of
October 27, 2008

The Real Estate Report

C.A.R. 2008 Survey of California Home Buyers

Declining home prices coupled with low interest rates prompted more home buyers to purchase in 2008 compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) “2008 Survey of California Home Buyers.” Sixty-nine percent of all home buyers reported that price declines encouraged them to buy a home, while 40 percent said that low interest rates enabled them to move to a better location. Seventy-seven percent of first-time home buyers said lower home prices played a role in their decision to purchase a home.

“The housing market has confronted headwinds on several fronts since early 2007,” said C.A.R. President William E. Brown. “Lax underwriting standards that left some subprime borrowers unprepared for rate adjustments, the global liquidity crunch, sluggish economic growth, and higher fuel and food prices are some of the factors that led to the downturn in the housing market.”

“As the housing market dropped sharply from record sales levels set in 2004 and 2005, and prices began to soften, home buyers dramatically changed their attitudes and behaviors towards home buying and adapted to the new housing environment,” he said.

The Internet continued to be an integral part of the home-buying process, with 78 percent of buyers utilizing it to search for a new home and find a real estate agent, compared with 72 percent in 2007. The share of traditional buyers – those who did not use the Internet during the home-buying process – decreased from 28 percent in 2007 to 22 percent in 2008.

Both Internet and traditional buyers spent considerably more time searching for a home with their agent than in previous years, a reflection of the variety of home choices available in today’s market. Internet buyers spent an average of 8.3 weeks looking for a home with their agent, an increase from 5.2 weeks in 2007, and nearly quadruple the number of weeks from two years earlier when Internet buyers spent 2.2 weeks looking for a home. Traditional buyers spent 10.3 weeks looking for a home with their agent, compared with eight weeks in 2007. Traditional buyers also visited nearly twice as many homes with their agent, averaging 23.3 homes, compared with Internet buyers, who visited 12.7 homes.

Due to the high inventory of homes on the market, and uncertainty about the direction of home prices, buyers are more cautious and are moving at a slower pace during the home buying process than in previous years,N Brown said. MThe Internet also continues to play a vital role in this process and has solidified the relationship between REALTORS ® and home buyers.

According to the survey, 72 percent of home buyers either “agreed” or “strongly agreed” that using the Internet helped them better understand the role of real estate agents, and increased their appreciation for real estate professionals and how key they are in the home-buying process. More than half of Internet buyers thought the information their real estate agent provided was more useful than the information they gathered on the Internet. None of the Internet buyers reported that the information they found on the Internet was more useful than the information provided by their real estate agent.

Other key findings from C.A.R.’s 2008 Survey of California Home Buyers include:

  * Internet buyers spent significantly more time considering buying a home before contacting an agent, averaging 8.2 weeks than did traditional buyers, who spent 3.6 weeks.

* Nineteen percent of all buyers were first-time buyers, who spent on average 9.6 weeks with their agent, compared with 5.8 weeks in 2007. Repeat buyers spent 8.5 weeks with their agent in 2008, versus seven weeks in 2007.

ATTN: AGENTS PLEASE GIVE THIS LINK TO YOUR CLIENTS.THE LINK SHOWS THE ENTIRE HOME INSPECTION PROCESS AND EVERY PART OF THE INSPECTION.IT WILL HELP YOUR CLIENTS UNDERSTAND THE HOME INSPECTION PROCESS.

http://www.ashi.org/customers/vhi/vhi.htm

INFORMATION PROVIDED BY IN-DEMAND PROPERTY INSPECTION.

IN-DEMAND PROPERTY INSPECTIONS CONTACT INFO.

DIRECT(415)760-6040 SEVAN TELLEZ

DIRECT(916)870-4588 ALFREDO TELLEZ III

DIRECT(916)662-1924 ALFREDO TELLEZ JR. HABLA ESPANOL

INDEMANDPROPERTY@GMAIL.COM

(Property Inspectors)

The above inspector has been professionally trained to perform home inspections in a licensed home inspection training programs, provided by Inspection Training Associates, the National leader in home inspection training. ASHI and CREIA endorsed.