How to Hire a Winner in Real Estate

 

How to Hire a Winner in Real Estate

by Amy Lignor

 

You want to buy that new house because the twins are on their way. Little Betty and Little John are already there, but who knew you would have even more so soon? What’s that? Oh…well, of course, in order to buy that new home with four bedrooms instead of two, you will also need to sell your present homestead in order to get the money needed to start paying on a new one. And, of course, you not only need an agent who’s honest and fair with you in order to get both facets of this deal done, but you also need one who wants to get you the best deal on the best house in the best neighborhood so your kids can go to a good school, feel safe, and even, perhaps, save money. (Jeez…don’t want much, do you?)

Real Estate, Professional, For Sale by Owner, mortgage interest rates, home prices, marketing plan, Reviews, testimonials

All kidding aside, this can be done. There are plenty of real estate agents out there in the world that do think about you and your family. Of course they care about their commission. After all, the real estate agent, just like your family members, has a job to do and they need to make their own money and pay their own bills. However, there are those out there who have built not only stellar careers but also have earned the respect of the entire real estate community. So…how do you get one of these winners to be your real estate agent?

 

Whether buying or selling a home, or both, you are talking about an extreme and stressful adventure, which means knowing that you need an experienced Real Estate Professional to help is the first thing to know. Although many out there believe they can put up that ‘For Sale by Owner’ sign and cut out the middle man in order to pocket all the cash, they do not usually have any idea the spider web of issues and problems they will be walking into.

 

The market, for one, continues to pick up steam. Projections of higher mortgage interest rates and home prices are being reported, which means you need to know what to ask the agent before hiring them in order to ensure that you are getting the best candidate for your home, family and future.

 

We start with experience. This is absolutely the number one piece of data you need to know. Experience can’t always guarantee skill; however, most agents with years of experience have garnered the great reviews and can show you a high success rate. Learn up front if they are full-time or part-time agents, how many homes they sold in the past twelve months, how many sellers they are currently representing and what designations/certifications they have in regards to education and industry training. You need to make sure that this is a licensed agent with the right credentials. Therefore, also inquire if they are members of the National Association of Realtors. Simply put, if they are that means they have agreed to abide by a solid code of ethics.

 

If the answers, education and background all work for you, then move on to step two. You want to know exactly what their marketing plan is for selling your home on today’s market. This involves both online and offline marketing, which means you want to know their personal approach. Do they use professional photographers for online shots? Do they stage the home and they shoot video to add to the website? What marketing materials will they create, and will your home be listed on multiple websites? Great photos and staging make a strong first impression and allows your home to stand out from the online crowd. But just be absolutely clear that there is an aggressive marketing plan in place before hiring said agent.

 

Lastly, just as it is with any other job resume or interview, make sure you approach this deal by placing yourself in the CEO’s chair, so to speak. Make sure to request data on any service providers they know and work with on a daily basis. Make sure this agent is well connected within the industry. Maybe they have specific lenders they work with and can possibly assist you in choosing everything from a mortgage company to a home inspector to a handyman to fix things up. Make sure you know how much work this agent will do that can help relieve your stress during the buying and/or selling process.

 

And as all CEO’s end meetings, make sure to get references they can provide. Reviews and testimonials from their recent clients are necessary to make sure you can trust your agent implicitly. After all, the twins are on their way. You need to make sure the real estate agent you hire is the absolute best he or she can be, and has not only the experience, but also the hard work gene, education and contacts that will allow them to present you with nothing less than a complete success.

 

Source:  Baret News

Castles in America

 

Castles in America

by Amy Lignor

 

Robin Leach and his “Lifestyles of the Rich and Famous” taught us all long ago that we absolutely love to sit and view ridiculous luxury (usually owned by people who inherited all of it and didn’t work a day in their lives). See that? We had to complain about something as we were beguiled by the amount of money people would send to own or create the “best of the best.” Even though some things were referred to as the “gaudiest of the gaudiest,” we still loved to take a peek.

 

Now, according to Forbes, NYC has taken the top spot over dear, old London as being the most expensive when it comes to real estate properties. But, for those who don’t know, there are castles not set in the Big Apple, but ones America can definitely claim. Although Europe will always be known as having the ancient dwellings with the most elaborate castle motifs (AKA: moats and drawbridges), America does have some stunning homes that cannot be categorized as the normal “McMansion.”

Chrismark Castle

For instance, in Woodstock, Connecticut (for the low, bargain price of $39 million), Chrismark Castle can be had. Not only does the buyer receive an 18,777-square-foot Gothic-style castle, but they also receive a dwelling with a scandalous past. No, not scandalous like having a guillotine in the backyard and taking out various Queens, such as England can boast, but definitely a home that has an air of controversy brought about by a website that once operated there. Advertising women, rating them on how “ethnic” they were, people could purchase $125 per hour “photo sessions” with one of them. But if scandal is an interesting thing for you, buying this castle also gives you nine bedrooms, ten baths, an auditorium, a stage, a group shower (hmm…) and, yes, a real moat and a real drawbridge. Add in a 126-foot high glass-topped observation tower that is the centerpiece of the whole property and it makes Game of Thrones fans positively giddy. Why hasn’t it sold yet? Perhaps the scandal combined with the group shower makes them feel a bit odd.

 

In New York State, Bolton Landing to be exact, Highlands Castle is up for sale for a mere $12.8 million. There’s a bit of a scandal that goes along with this one too; but, depending on how you look at it, anyone could be the villain. It was in 1975 that John Lavender promised his son that he would build a castle just for him. (Crazy father or spoiled rotten kid? You be the judge.) Highlands Castle came into being after that vow, offering a Great Hall with 25-foot-high beamed ceilings and over twenty floor-to-ceiling windows set into real stone walls. A private drive that runs a third of a mile long brings you to the castle that has 180-degree views of the Adirondack Mountains. So while you drool over the scenery, you can also revel in the absolute seclusion. There are no historical landmarks that will bring tourists around to annoy you, and you have enough land and water to make your very own moat…if you wish.

 

But it’s not only on the East Coast where castles can be found. In gorgeous Versailles, Kentucky, for $15 million (only), a buyer can get Castle Post. 16 bedrooms and 16 baths, the castle was built after a local contractor, Rex Martin, and his wife, Caroline, vacationed in Germany. Although it looks far more like a French castle, the building was started, divorce occurred and the Post family bought it in 2003 at auction for a reported $1.8 million; they went on to finally complete the structure.

 

What it became (and is currently) is a boutique hotel that is referred to by one and all as the “Crown Jewel of the Bluegrass.” Guests receive a lot for their $195 to $420 a night, including, tennis and basketball courts, a library, billiards room, game room, card room, and a banquet hall that’s actually modeled after the real Versailles. Of course, the buyer can shut down the hotel upon purchase, and can also easily raise horses on this 50+ acre property. Apparently the land is quite nutritious and is perfectly suited for those who wish to be a large part of the racing industry in Kentucky. And let’s face it…you get a real deal here. Only 6 years ago this castle was listed at $30 million. Now you can get it for just half that price. Talk about a bargain.

 

In other words, take that London! The Americans have their own brand of scandal and intrigue and the castles to prove it. So, as Robin Leach would say, here’s to champagne wishes and caviar dreams.

 

Source:  Baret News

New Home Sales Jump in April

 

New Home Sales Jump in April

By Burt Carey

Sales of new homes hit their highest rate since 2008 in April, according to the Commerce Department’s U.S. Census Bureau.

April sales increased 16.6 percent over March figures, which correlates to a seasonally adjusted rate of 619,000 home sales projected for the year.

new homes, highest rate, market pressure, new home builders, housing inventoriesThe median price of those new homes was $321,000, the highest median price ever recorded. That’s up 9.7 percent from sales one year ago. The median price reflects the number at which half of the homes sold at a higher price and half were lower.

While the sales point to improving employment rates and continued low interest mortgages, the 619,000 homes expected to sell this year lags behind the decade from 1990 to 2000, when Americans bought an average of 716,000 homes per year. New home sales peaked in 2005, with 1.3 million sales. The market began crashing in 2006 and by 2011 was selling just 300,000 homes per month. In 2015, Americans bought 503,000 new homes.

New home builders were surprised at the figures released this week but are buoyed that the spring sales are a harbinger of the industry’s best year in a decade.

Tuesday’s report showed that low housing inventories are holding back the overall market and have contributed to prices rising faster than wages for most would-be home owners. Analysts say it would take 4.7 months to sell the 243,000 new homes now on the market if the current pace holds up. In March, new home inventories were expected to sell in 5.5 months.

Inventory numbers in new homes are joined by low inventory numbers of existing homes, putting even more of a squeeze on first-time home buyers, and driving up prices.

New home sales are important to the overall economy because they create construction jobs as well as demand for building materials, such as lumber, bricks, cabinetry, bathroom fixtures and appliances. Construction expenses and commissions are used to calculate the country’s gross domestic product.

The news boosted the stocks of several publicly traded builders. Toll Brothers saw its stock jump 8.71 percent, KB Homes was up 7.46 percent, and Beazer saw a 9.17 percent increase.

Economists quietly worried that the April surge may be limited because of the inventory shortage and reluctance by builders to ramp up to pre-recession building levels. Such market pressure could result in even higher prices that would cause the number of sales to drop.

Regionally, new single-family homes sales increased 15.8 percent in the South to the highest level since December 2007. Sales soared 52.8 percent in the Northeast to their highest level since October 2007. Sales in the volatile West climbed 18.8 percent after dropping 15.2 percent in March. The only part of the country to see a decrease in new single-family homes sales was the Midwest, which fell 4.8 percent.

 

Source:  Baret News

Tips for Building a Farm Pond

 

Tips for Building a Farm Pond

By Burt Carey

Growing up in rural Northern California, my two brothers and I were blessed to have a down-the-road neighbor who allowed us to fish in his farm pond just about anytime we wanted. It came to be known to us as Jack’s Lake.

The pond sat across a fallow cattle pasture at the bottom of a natural gully that collected rainwater farm pond, increase property value, pond purpose, tips, considerationsfrom hundreds of surrounding acres. Jack’s Lake stretched nearly a quarter-mile north to south and was about 150 yards wide across its widest span. Its upper half was shallow and teeming with water grass. Trees lined its shoreline. The dam at the south end was braced by a row of trees whose water-bound roots and crooked branches provided habitat for various fish species, songbirds, waterfowl, frogs and more.

We spent endless hours catching its bounty of largemouth bass, bluegill, channel catfish and bullfrogs from a homemade boat with 6-inch aluminum pontoons that made the craft sturdy and kept it afloat. Paddles were our only mode of power. Mom never had to worry where we would be, and she could catch occasional glimpses of us out the east-facing picture window of our house.

Years after I had left home, our neighbor sold the lake and his property, pocketing a sum unknown to me but surely significantly higher than the price he paid for it in the 1960s.

Aesthetically, a farm pond can be the biggest enhancement a landowner can build. Financially, a properly built pond will increase the value of a property when it comes time to sell. And most people who opt for living in the country at some time or another will make a decision to build one or not. Here are some things to consider.

Let’s start with the big picture: What would be your pond’s purpose?

Few farm ponds are mere pools of water that collect in a low spot. In short, ponds are there for one or more reasons. Will it be used to provide water for cattle or other livestock? Perhaps you just want a small fishing pond. Or will it be for aesthetic purposes only, something to look at from your front porch?

Once you’ve decided what you want a pond for, you’ll have several things to consider, such as location, water sources, size, structure, drainage, emergency spillways, and perhaps the biggest potential hurdle, legality.

State resources agencies can guide you and help walk through whatever permitting process might need to be negotiated. If you have neighbors who share a creek, for example, their short- and long-term interests in that water flow could be impacted by a pond. Not all waterways fall under federal jurisdiction but very well may be controlled by one or more state agencies.

Your geographic location and water source (a spring, surface runoff, stream or well) will dictate the size and depth of your pond. Ponds in wet and humid regions – the East, South and Pacific Northwest – can be as shallow as 5 to 7 feet deep. In arid regions such as the West and Southwest, the minimum recommended depth is 8 to 14 feet.

The size of a watershed drainage area surrounding a pond fed by surface runoff is critical. Filling a one-acre pond with 5 feet of water in a wet, humid area might require a watershed as small as 15 acres. That same size pond in an arid location could require up to 500 acres of watershed drainage.

Actually constructing your pond might sound exciting and enticing. Here’s a word of caution: Don’t do it. Unless you have the proper training, this is where it’s best to hire a professional. You’ll have to conduct soil tests, build a dam that can withstand floods, earthquakes and other calamities, and install drainage and overflow outlets. Depending on the stream bed, you might also be required to fortify the spillage area with riprap or other materials to prevent soil erosion.

Keeping the law of gravity in mind, water always flows to the lowest elevation. This is most likely your starting point. A dam will have to be constructed, beginning at the bedrock level and preferably a location with a natural clay material. Dams on farm ponds are typically up to 10 times wider at the bottom than the top, and constructed of a clay core surrounded on both sides by a non-porous earth material.

You’ll also need to know what types of plants are good or bad for your pond, and how to control their growth through the use of fertilizers and chemicals or with fish species. Plants also act as natural means of soil erosion, which will help extend the life of your pond. Most ponds, regardless of erosion-control methods, require occasional dredging roughly every 20 to 30 years.

Whether your pond is a half-acre or bigger than 20 acres, it will become home to fish and other wild creatures. The best part is that you get to pick which species inhabit your water. Check with your local office of a state fish and wildlife agency if you aren’t sure what types of fish to plant. Commercial fish growers can sell seed stock and make recommendations for ratios of forage fish to sport fish, and the best ways to maintain proper ratios for healthy fish populations.

Once built, your pond will become a centerpiece of your property that will be enjoyed for generations.

 

Source:  Baret News

Is Buying a Hobby Farm in Your Future?

 

Is Buying a Hobby Farm in Your Future?

By Burt Carey

More and more Americans are escaping big city or suburb life for one in the country on their own 40 acres, trading traffic and honking horns for the quieter, simpler life of a farmer. They’ve traded business apparel for denim, floppy hats and boots.

Is Buying a Hobby Farm in Your Future?Buying a hobby farm can be exhilarating and frustrating all at the same time, even for the most prepared among us. Here are some things to consider before moving to the countryside.

First, you won’t find your Green Acres by driving around looking at properties with for sale signs. Whether you want to grow vegetables, raise cattle or other livestock, or buy a retirement cottage in the woods with a pond, employing a real estate agent that specializes in farms will save your time and money.

Also consider that you’re not likely to find a turn-key operation that suits yours desires perfectly. The majority of hobby farm owners develop their properties over time, adding barns, stables, fencing and other amenities as they go.

Hobby farms come in a variety of styles to match with the owners’ goals. Some farmers want to raise livestock, pelts or produce to sell at local markets, which requires locations relatively close to urban population centers. Farms farther away from big cities are less expensive than those close to a city.

Hobby farms can range from hunting properties to country estates to a house with outbuildings. What typically happens with these farms is that the house is in pristine order but barns, stables and other outbuildings have been neglected, or vice-versa. You’ll need to consider the types of floors used for the outbuildings, whether they are dirt, gravel or concrete, how well or whether they are insulated, and the availability of electricity and water.

For those who want a farm for personal use, such as for horses or growing gardens to produce their own vegetables and fruits, a small tract of land in the 5- to 10-acre size is probably plenty of space. But if you’re looking to market what you grow, you’ll be looking for a farm anywhere from 20 to 50 acres in size.

The history of any farm you want to buy may dictate what types of vegetables or fruits will grow there. Here you can’t study enough. Your research should include soil types, the availability of water, the chemicals used by nearby farming operations, terrain, climate, and the marketability of the produce your wish to grow.

On the animal husbandry side of farming, your farm will need barns, paddocks, chicken coops or kennels, depending on the number and type of animals you want to raise.

As you look to purchase a farm, whether for personal or commercial use, be sure to ask about existing equipment, livestock and other assets. Many sellers will include tractors, chickens and existing crops in the sale price.

 

Source:  Baret News

10 Easy Tips for First-Time Home Buyers

 

 

10 Easy Tips for First-Time Home Buyers

By Burt Carey

Buying a house for the first time is an exhilarating experience, and knowing which potential pitfalls to avoid will ensure that your elation continues for many years. Here are some tips to help make that happen.

  • Get your finances in order now!

First-Time Home Buyer, Read your contract, buying a house, long term, budgets, great tipsA clean credit report and saving for a big down payment are the two biggest keys to getting the best mortgage terms possible with the least number of extra fees. If you don’t know what your credit score is, you’re already slipping toward an abyss. Order a free copy of your credit report from the site www.AnnualCreditReport.com.

  • Understand the housing market

Wanting to buy a home and actually doing it are wholly different things. In most of the U.S today, there’s a shortage of houses for sale, and what is for sale is rising in price. You will be competing for purchases with people who have home-buying experience. Check with a reputable realtor to figure out a strategy that benefits you.

  • Get your financing pre-approved

Having your credit checked and a good FICO score is a great start. Now your best move is to use those assets and your income to get pre-approved by a mortgage lender. There are lots of mortgage options to choose from. As new home buyers, shopping around and finding the best deal for you will pay huge dividends before you sign a contract. Sellers like to know potential buyers are pre-approved, too.

  • Make a list, check it twice

Get with friends, co-workers and family members to find out the good, the bad and the ugly about their home-buying experiences, and then make a checklist list of everything you want, things you should inspect or items you should ask about while searching for a house. Make it a printable checklist so you have one for each house you see. Buying a house can be an emotional experience. The list keeps you grounded.

  • Think about the long term

If you’re planning to have a family, have relatives move in with you, or any other special arrangements, the houses you look at need to meet all of those needs. Think of your needs five to 10 years from now.

  • Is the house re-sellable?

That’s not a cheeky or flippant question. A house in a good school district will maintain or gain in value where one in a poor school district may not. You should also consider your community’s demographics and look at long-term trends. An urban area with young, upwardly mobile middle-class residents today may not look the same in a decade. You should definitely avoid buying in a neighborhood with a high number of rental properties.

  • What’s your real household budget?

Your monthly household budget doesn’t stop at the mortgage payment. Add to that insurance, interest, taxes, maintenance, utilities and remodeling/upgrades. Even the cost of commuting to work can be a burden if you fail to plan for it now.

  • See beyond a realtor’s fluff

Selling agents are marketing professionals who know how to set up a house for sale. But in their glitzy little staging schemes, you’ll find some peculiarities such as lamps positioned in places where there are no wall sockets. They put the fluff there to make it look appealing. It’s your job to ensure it’s functional, too.

  • Check out homeowners associations

After you buy a house is not the time to discover you’ve moved into a neighborhood with restrictive covenants that prevent you from following your own plan. Homeowners associations have evolved well beyond being arbiters of mere architectural design elements. Get a copy of the HOA bylaws and covenants before making an offer on a house.

  • Read your contract before signing it

There will be an attorney, possibly two, present at the closing meeting. You have hired these people to represent you. Real estate attorneys handle closings multiple times each week. You don’t. Read every document and make sure you understand all terms and conditions before you sign them. Don’t let an attorney or anyone else try to rush you through the process. If you read something you don’t understand, have them explain it to you.

Source:  Baret News

November Sales of Existing Homes Plummets

November Sales of Existing Homes Plummets

By Burt Carey

Sales of existing homes plummeted 10.5 percent in November, the largest such decline since July 2010, according to the National Association of Realtors.

The decrease could be an ominous signal that the U.S. economy is slowing as the seasonally adjusted annual rate of sales is now at 4.76 million homes, down from October’s estimated annual rate of 5.32 million. Every region of the country experienced declines of existing home sales in November.
National Association of Realtors. Real Estate, U.S. economy, NAR, Federal ReserveThe NAR reported that some of the decrease could be an anomaly related to a recent change in the length of time it takes mortgage companies to close loans. The Know Before You Owe initiative, which went into effect this fall, is causing longer closing times.

The NAR’s Realtors Confidence Index suggests 47 percent of respondents reported experiencing longer closing times in November compared to a year ago; 37 percent reported longer closing times in October.

“It’s possible the longer timeframes pushed a latter portion of would-be November transactions into December,” said Lawrence Yun, NAR’s chief economist. “As long as closing timeframes don’t rise even further, it’s likely more sales will register to this month’s total, and November’s large dip will be more of an outlier.”

Despite the wait times, the median price of existing homes continues to climb although the amount of time it takes to sell existing home inventory is increasing. The median price for all housing types in November was $220,300, according to NAR, which is 6.3 percent higher than in November 2014 ($207,200). There were 2.04 million existing homes for sale at the end of November, a 1.9 percent decline from a year earlier. The amount of time to sell that inventory has increased to 5.1 months, up from 4.8 months in October.

“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales,” Yun said. “However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it’s highly possible the stark sales decline wasn’t because of sudden, withering demand.”

First-time buyers are still relatively absent from the market. First-time buyers in November made up just 30 percent of sales, a sluggish performance NAR chalks up to affordability. In its quarterly Housing Opportunities and Market Experience survey, the NAR found that current renters who are 34 years of age or younger overwhelmingly want to own a home but simply can’t afford it.

“The Federal Reserve’s decision this month to raise short-term rates is the first of many increases over the next couple of years,” says Yun. “Although this first move will likely have minimal impact on mortgage rates, additional hikes will push borrowing costs to around 4.5 percent by the end of next year. With home prices expected to continue rising, wages and new home construction need to start increasing substantially to preserve affordability.”

 

cc.largeImage:Housing Market

 

Source:  Sportsmans Lifestyle

Why Buying a House Now Might Make Sense

 

Why Buying a House Now Might Make Sense

By Burt Carey

Housing booms and busts are a way of life in the United States. Oftentimes, home sales figures can be indicators of an economy’s strength or a foreteller of future economic times.

More than just a few key factors must be at work for a robust housing market to take place. No longer do economists look at the simplicity of
buying a house, home-buying conditions, warning signs, housing trends, home-buying market, Zillowan improving jobs market to determine future home sales. Nowadays, mortgage loan rates, government regulations, the cost of renting, overall home prices, and consumer attitudes must also be factored into any sober discussion about housing.

That’s why even housing experts are hedging their bets about 2016 and whether it will be a good time to buy a home.

Several forces are at work, some indicating good home-buying conditions, and others that could be warning signs.

Brandon Cornett of the Home Buying Institute says it’s difficult to make predictions about 2016 because housing conditions vary from city to city. He points out that Atlanta has enjoyed an 11 percent increase in home prices this year, with another 5.2 percent expected in 2016. But in Orange County, Calif., home prices have fallen 1.5 percent, and there’s little hope it will improve next year.

“As a home buyer, the first thing you need to realize is that housing trends and conditions vary widely from one local market to the next,” Cornett says. “So take with a grain of salt all of the mainstream news stories that talk about ‘the’ housing market. Those stories may or may not apply to you.”

Analysts say one national trend they expect will hold up in 2016 is that home price increases will moderate somewhat. Zillow chief economist Svenja Gudell joins with Lawrence Yun from the National Association of Realtors in predicting overall increases in the 2-4 percent range.

On the other side of that equation is that while overall unemployment has fallen, wages are expected to remain flat. Home sales suffer anytime increases in home values outpace wage increases.

Experts do expect to see more homes for sale in 2016, and builders are said to be focusing on starter houses and middle-range homes, according to Zillow.

Virtually the entire industry agrees that interest rates have hit bottom and will continue climbing through 2016. As the Federal Reserve raises its rates, mortgage bankers will follow suit with gradual increases. “You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better,” said Jonathan Smoke, chief economist at Realtor.com.

 

Rental prices are not expected to decrease in the next year, and that could push even more buyers into the home-buying market.

If you’ve been sitting on the fence, waiting for conditions to be right for buying a house, 2016 could very well be your year.

 

Source:  Sportsmans Lifestyle

Real Estate Appraiser Numbers Keep Falling

 

 

Real Estate Appraiser Numbers Keep Falling

By Burt Carey

When the housing bubble burst in 2008, lawmakers, bankers and mortgage company executives collectively pointed fingers at each other and at real estate appraisers.

In response, Congress passed the Dodd-Frank Wall Street Reform and Protection Act of 2010, which limited direct contact between mortgage Gingerbread_House_Essex_CTcompanies and appraisers, and put in place sweeping procedural changes that have led to serious concerns that the cost of home appraisals could skyrocket as the number of professional, credentialed appraisers in the United States continues to decline.

The country had a robust population of more than 92,000 appraisers in 2007. Today that figure has dropped to 78,500, and only about a third of them work in residential real estate.

There are several reasons appraisers are leaving the industry. Retirement is claiming a large majority of appraisers, but heavy workloads, lower pay, an aversion to technology and a failing marketplace (not enough sales) are also taking their toll.

What concerns industry executives most is that few young professionals are entering the appraisal field. The Dodd-Frank legislation unwittingly cut out the profession’s future by dictating a list of requirements for appraiser trainees that has become more and more stringent with each passing year.

Trainees must take at least 75 hours of classroom instruction and more than 2,000 hours working for low pay under a qualified mentor. To become licensed as a residential appraiser, allowing the appraiser to value homes up to $1 million, requires another 150 hours of classroom time. Those who stick around several years can become a certified real estate appraiser, which requires another 210 hours of classroom time studying advanced finance, valuation and market analysis.

Beginning this year, new appraisers must have a four-year college degree. Recent college grads, however, aren’t willing to work for $150 for an appraisal that takes an average of eight hours to complete.

No longer is it possible for a mortgage company using a Fanny Mae or other government-sponsored loan to work directly with an appraiser. Dodd-Frank led to the creation of appraisal management companies. The lender contacts an AMC with a potential home sale, and the AMC contacts and works with the appraiser through the process.

Mortgage lenders maintain lists of appraisers (called panels) it has approved. (Trainees are rarely approved for such panels.) The AMCs also require appraisers to register, including updated copies of annually renewed licenses, continuing education, and proof of general business and errors/omissions indemnity. The AMCs also eat into the dollars that traditionally went to appraisers, generally cutting payments to appraisers in half.

Every mortgage company and AMC has its own requirements of appraisers, which oftentimes means producing as many as 30 pages for a single appraisal on a home. Many now require more comparable sales than in years past, and some even demand to see other active sales listings that are comparable to the subject home. For their part, appraisers must physically inspect and measure the subject home, and physically see and photograph comparable sales.

One significant challenge with AMCs is geographic in nature. An AMC headquartered in Southern California, for example, may be assigning appraisers to jobs anywhere in the country. The assigned appraiser may be licensed in that particular state but may not be familiar with the county, city or neighborhood of their subject property, and could be assigning values based on incorrect data.

All of the changes since the housing bubble have led to a disgruntled population of aging appraisers. The Chicago-based Appraisal Institute projects that 3% of appraisers will retire every year over the next decade. By 2025, the country’s appraiser population could be as low as 58,000. The profession’s demographics tell the story: In 2007, about half of appraisers were age 51 or older. Today that figure is 62%. Only 24% are between 36 and 50, and 13% are younger than 35.

How all of this affects home buyers – the ones who usually pay for appraisals – is yet to be seen. A supply-and-demand cycle may lead to increased prices for home appraisals, as fewer residential appraisers are available, or AMCs and mortgage lenders may turn to data sampling products to determine values.

Source:  Sportsmans Lifestyle

Housing Sales Increase but Questions Remain

Housing Sales Increase but Questions Remain

By Burt Carey

 

Big bankers and mortgage lenders like Bank of America and Merrill Lynch say changing demographics are fueling a first-time home buyers market in 2015 that may be short-lived.

Real estate, it seems, is heating up – at least for value seekers. At the current rate, home sales are on pace to post
their best year since 2007, even with increased prices. Fueling the action are two important elements: Millennials have suddenly become home buyers, and Baby Boomers are downsizing and moving into retirement communities.

Millennials, baby boomers, first-time buyers, mortgage rates, renters, buyers, home

 

With a job market that is showing some strength and mortgage rates still relatively low, home ownership is on the rise. But the question is, for how long?

“What we’ve seen is that demand is off the charts in 2015 – and that is really boosting sales,” said Nela Richardson, chief economist at the brokerage Redfin. “Last year, buyers were dipping their toes in their water. Now, they’re diving in.”

That news comes on the heels of a report earlier this year by the Census Bureau that the number of renters throughout the country was at an all-time high at the end of 2014 and beginning of 2015, and the number of home owners had dipped to a 30-year low.

Bank of America Merrill Lynch isn’t buying into the glowing home ownership news. “New households will tend to rent and live in urban centers,” a June 23 report states. “There already is a dramatic decline in the homeownership rate, falling to 63.8% from 69.2% at the peak in 1Q05. The decline in the homeownership rate reflects a combination of foreclosures, a tight mortgage market and a severe economic recession. The drag from foreclosures has largely passed, although there is still some distressed inventory to work through. Restricted supply of mortgage credit and potential preference changes toward renting will continue to weigh on the homeownership rate.”

First-time buyers traditionally make up about 40 percent of the market, leading some to believe the 32 percent clip of first-time buyers in May is another indicator of a still-weak economy that’s not clicking on all of its cylinders. Another sign that the slumping economy hasn’t fully recovered is that the price of some 5.1 million homes – more than 10 percent of current mortgages – is less than what is owed.

The National Association of Realtors reported this month that sales of existing homes rose 5.1 percent in May to a seasonally adjusted 5.35 million homes, marking the third consecutive month home sales eclipsed 5 million homes. Even with the average home price reaching nearly $229,000, the 7.9 percent gain over the past 12 months is still more than $1,700 short of the market’s peak 10 years ago.

With the unemployment rate dipping to just 5.5 percent, some 3.1 million more people in the workforce could soon find themselves in a position to take advantage of low mortgage rates. Last week’s 30-year fixed rates were hovering around 4 percent a week ago, but they are rising from a low of about 3.5 percent less than a year ago.

Millennials, baby boomers, first-time buyers, mortgage rates, renters, buyers, home

 

Source:  Sportsmans Lifestyle