Flat Fee MLS, For Sale By Owner, Home Buyer Rebates

Flat fee mls listing still remains the most popular alternative to commission based real estate brokerage services. Most home sellers who have utilized a flat-fee mls service are astounded that the service is available at such a relatively low cost, especially compared with the cost of using a traditional broker. Instead of paying a commission of 5-6%, flat-fee MLS listing services can usually be found in the $300-$500 range. That’s a significant savings for most home sellers.

Many sellers opt to use a flat-fee mls listing service on a trial basis to see if they can sell their own homes without paying a listing commission. They reason that at the $300-500 price point, why not give it a try for a few weeks, as opposed to using other more conventional methods of real estate advertising such as classifieds and online “for sale by owner” websites. Unfortunately most FSBO sellers, unfamiliar with the home selling process, tend to panic after a few weeks of being on the market. They worry what the neighbors might think about their house not selling, or that their somehow just not “doing it right” and end up handing over the listing to a full-service, full-commission real estate broker (who most often beats them up about lowering the price until the house finally sells).

However the sellers who are most often successful using flat-fee mls listing services are the ones who stick it out for up to 6 months or more. Considering that even traditional real estate agents often take many months to sell a property, these savvy sellers know that it pays to have the confidence to hang in there and wait for the right buyer to come along. Of course, pricing the home correctly is an important consideration in either case. But with the low cost of flat fee mls you have the luxury of being able to be more competitive with your pricing since you’re not having to give up so much of your equity to real estate commissions.

Especially in today’s real estate market, flat-fee mls can be the tool that helps you sell your home or property – if you have the patience and confidence it takes.

The Standard & Poor’s/Case-Shiller home price index released Tuesday showed housing prices up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. That’s the 5th month in a row that the index has increased showing that recovery efforts have been at least somewhat successful in the residential real estate market.

Although a large supply of house still remain on the market, the upward trend in home prices and a improving employment outlook helped raise the Consumer Confidence Index as well. Home price gains since the summer reflect the rush of homebuyers trying to close their deals before the original expiration date of a federal tax credit. The Nov. 30 deadline was extended last month to April 30.

NAR chief economist, Lawrence Yun, is counting on the tax credit to provide temporary support for housing markets until the economy recovers enough to start fueling sales. He predicts price improvement in 2010 of more than 3%. “The headwind we face is rising mortgage interest rates,” Yun said, “but the compensating factors will be the homebuyers tax credit in the first half of the year and increased job creation in the second half.”

Time may be slipping away for consumers to take advantage of one of the best opportunites for home buyers in U.S. history. The continuing buyer’s market has been fueled by a much larger than normal supply of housing; the federal tax credit gives home buyer’s unprecedented tax savings; and interest rates have remained extremely attractive – thanks in part to a Federal Reserve program to buy mortgage back securities. However signs are that the party may be coming to an end. Just this past week mortgage interest rates have climbed above 5% for the first time in 2 months. The home buyer tax credit expires in April and is not expected to be extended. And, according to Amy Crews Cutts, deputy chief economist at Freddie Mac, interest rates are likely to rise to 6 percent by the end of 2010. “Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it’s hard to imagine that the rates can go much lower than they are,” Crews Cutts said. “Anything we get at or below 5 percent is a gift at this point.”

Existing home sales rose 7.4% in November and prices have steadied according to a new report from the U.S. Commerce Department. However, buyers and sellers need to take advantage now as the tax credit and low interest rates are not expected to last past the 2nd quarter of 2010. Lawrence Yun, chief economist for the National Association of Realtors®, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010.

NAR President Vicki Cox Golder said conditions are optimal for buyers in the current market. “Inventories have steadily declined and are closer to balanced levels, which indicate home prices in many areas are either stabilizing or could soon stabilize and return to normal appreciation patterns,” she said. “This means buyers still have good choices but are purchasing near the bottom of the price cycle with historically low mortgage interest rates. Throw a tax credit on top and it really doesn’t get any better for buyers with secure jobs and long-term ownership plans.”

Seems like there’s always someone out there willing to take advantage of people who are already having a tough time. The U.S. Department of the Treasury has issued a consumer advisory detailing common mortgage modification scams. These are a few of the fraudulent tactics that con artists may use to put distressed homeowners into an even worse situation…

Ten Warning Signs of a Mortgage Modification Scam

1. “Pay us $1,000, and we’ll save your home.” Some legitimate housing counselors may charge small fees, but fees that amount to thousands of dollars are likely a sign of potential fraud — especially if they are charged up-front, before the “counselor” has done any work for you. Be wary of companies that require you to provide a cashier’s check or wire transfer before they take any action on your behalf.
2. “I guarantee I will save your home – trust me.” Beware of guarantees that a person or company can stop foreclosure and allow you to remain in your house. Unrealistic promises are a sign that the person making them will not consider your particular circumstances and is unlikely to provide services that will actually help you.
3. “Sign over your home, and we’ll let you stay in it.” Be very suspicious if someone offers to pay your mortgage and rent your home back to you in exchange for transferring title to your home. Signing over the deed to another person gives that person the power to evict you, raise your rent, or sell the house. Although you will no longer own your home, you still will be legally responsible for paying the mortgage on it.
4. “Stop paying your mortgage.” Do not trust anyone who tells you to stop making payments to your lender and servicer, even if that person says it will be done for you.
5. “If your lender calls, don’t talk to them.” Your lender should be your first point of contact for negotiating a repayment plan, modification, or short sale. It is vital to your interests to stay in close communication with your lender and servicer, so they understand your circumstances.
6. “Your lender never had the legal authority to make a loan.” Do not listen to anyone who claims that “secret laws” or “secret information” will be used to eliminate your debt and have your mortgage contract declared invalid. These scammers use sham legal arguments to claim that you are not obligated to pay your mortgage. These arguments don’t work.
7. “Just sign this now; we’ll fill in the blanks later.” Take the time to read and understand anything you sign. Never let anyone else fill out paperwork for you. Don’t let anyone pressure you into signing anything that you don’t agree with or understand.
8. “Call 1-800-Fed-Loan.” This may be a scam. Some companies trick borrowers into believing that they are affiliated with or are approved by the government or tell you that you must pay them high fees to qualify for government loan modification programs. Keep in mind that you do not have to pay to participate in legitimate government programs. All you need to do is contact your lender to find out if you qualify.
9. “File for bankruptcy and keep your home.” Filing bankruptcy only temporarily stops foreclosure. If your mortgage payments are not made, the bankruptcy court will eventually allow your lender to foreclose on your home. Be aware that some scammers will file bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and make it seem as though they have negotiated a new payment agreement with your lender.
10. “Why haven’t you replied to our offer? Do you want to live on the streets?” High-pressure tactics signal trouble. If someone continually contacts you and pressures you to work with them to stop foreclosure, do not work with that person. Legitimate housing counselors do not conduct business that way.

The Consumer Advisory can be found online at http://www.occ.treas.gov/ftp/ADVISORY/2009-1.html

Everyone knows Spring is real estate season. That’s the time of the year when more houses go on the market and people are out shopping for a new home. However, what you don’t always hear is that plenty of houses are selling during the Holidays. In fact, according to National Association of Realtor statistics fully 12% of existing home sales take place during December and January (compared with 19% in April and May). Here are some of the top reasons to sell during the holidays:

1. Home Buyer Tax Credit Extended. This year presents a unique reason to sell during the holidays. The extension of the HomeBuyer Tax Credit means that more people will be looking to take advantage of a once in a lifetime chance to save big on their home purchase. This represents a huge savings for home buyers and there’s not much time to take advantage of it as it ends in April 2010.
2. Less Competition. Selling during the Spring means that your property will be competing with far more others for the pool of existing buyers. Selling in December and January means less competition which means you’ll likely sell faster and for a higher price.
3. Homes Feel Homier. What’s more inviting than a home at Christmas time? Holiday wreaths, holiday lighting, the smell of the Christmas tree and mistletoe, the warmth of hearthfires burning, etc. make for that feeling of home we all long for and enjoy. Who wouldn’t want to buy a Norman Rockwell lifespace?
4. You’ve Already Cleaned Up. Chances are with the Holidays you’ve already cleaned up your home in anticipation of coming the procession of holiday guests. What better time to show your home to prospective buyers than when you can “kill two birds with one stone”?
5. Serious Buyers. It’s a fact. People are buying homes all year long – even on Christmas eve. If someone’s out looking for homes during the holidays they are intent on buying a home – and soon. Instead of people drapsing through your home at all hours you’ll likely only get people who are ready to buy right now. Fewer showings – higher likelihood of selling.
6. Hungrier Agents. Not only are buyers more serious this time of year, agents are more intent on making a sale. With fewer sales during the winter months agents are having to work harder than usual to make a living. This is a powerful combination – motivated buyers and agents both working to get your home sold.

If you do decide to join the hundreds of thousands of sellers who sell each year during the Holidays, make sure you’ve got the house in tip-top shape. As always showing well and pricing right are the two main determinates as to whether or not your home sells.

According to a new report published by home valuation website Zillow.com housing prices are finally stabilizing. Cheif economist for Zillow, Stan Humphries said that properties in 48 of the 154 markets tracked by Zillow rose in value this year. “We believe that demand will come under downward pressure as mortgage rates creep back up after the first quarter and that housing supply will experience upward pressure as the volume of foreclosures continues to remain high. Both these factors will challenge the recent stabilization of home prices,” Humphries said in a statement.

Areas where home prices rose the most in 2009 were:
Boston
Providence
Denver, Colo.
Atlanta, Ga.
Rochester, N.Y.

Areas where homes continued to lose the most value:
Los Angeles
Chicago
New York
Miami-Fort Lauderdale
Phoenix

The Wall Street Journal reported that the housing inventory picture is continuing to improve. Citing a study by compiled by ZipRealty, WSJ said “the supply of homes available for sale in 27 major metropolitan areas at the end of November was down 2.4% compared with a month earlier”. The November inventory in the 27 metro areas was down 28% compared with the year-earlier period, according to ZipRealty. Markets with the most dramatic month-over-month inventory declines: Boston, down 8.5 percent; Minneapolis-St. Paul at 6 percent; Washington, D.C., down 5 percent, Denver at 4.4 percent and Chicago at 4 percent.

The National Association of Realtors® (NAR) annouced that October was the ninth consecutive month of increases in the number of pending home sales. The NAR index rose an unprecendeted 32%. Between September and October NAR’s Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That’s the biggest year-over-year gain in the history of the index. There is now a seven month supply of homes on the market at the current rate of sale. which is down from 10.2 months a year ago. Lawrence Yun, Chief Economist for NAR, predicted that housing conditions could return to near normal and home prices firm up by mid-2010.

The Commerce Department said Wednesday that sales of new homes rose 6.2 percent last month to the highest level in more than a year. The resale market is also strong. The National Association of Realtors® said Monday home resales rose 10 percent from September to October, the biggest monthly increase in a decade. Along with the tax credit, buyers are being attracted by low prices and mortgage rates. And rates on 30-year fixed-rate home mortgages averaged 4.78% this week, matching an all-time low in Freddie Mac’s weekly survey of conforming mortgage rates, released Wednesday. “If you’re looking for a sign that builders will need to start swinging their hammers again soon, this is it,” wrote Mike Larson, real estate analyst at Weiss Research.

The National Association of Home Builders (NAHB) has posted a Frequently Asked Questions section for the Move-Up/Repeat Home Buyer Tax Credit that went into effect November 6, 2009. The FAQ answers questions regarding a $6,500 tax credit for existing home owners purchasing a principal or primary residence before April 30, 2010 and closing no later than June 30, 2010.

Among the requirements of the tax credit are that the home buyer must have owned and resided in the same home for 5 of the past 8 years prior to the purchase date. And they cannot make over $125,000 (or $225,000 for married taxpayers). The maximum sales price eligible for the credit is $800,000. However, unlike some other tax incentives, the new residence does not need to be more expensive than the prior home.

The great thing about this tax credit is that it is refundable. Even if you have little or no federal tax liability you can claim the credit and receive a check from the IRS.

In a new report issued this week ” ECONOMICS AND MORTGAGE MARKET ANALYSIS”, Fannie Mae’s Doug Duncan and Orawin Velz said that the end of the longest recession since the Great Depression is ‘unofficially’ over. The Fannie Mae economists are projecting sales of new and existing homes to increase 11 percent next year and that national home prices will finally stabilize.

“Our forecast continues to show that growth is likely to moderate somewhat in the current quarter and early next year, before strengthening in late 2010.”… “It appears that the economic recovery is here,” Doug Duncan and Orawin Velz said in a report summarizing their economic and mortgage forecasts, although they expect it “will be relatively weak compared with previous recoveries from deep recessions”.

Lawrence Yun, Chief Economist for the National Association of Realtors told a group of Realtors to expect a 15% increase in home sales for 2010. Citing the extension of the home buyer tax credit, Yun said that the supply of homes should stabilize at the historic norm of six to seven months which should bring more balance and stability to the housing market.

Here are the rules for the Home Buyer Tax Credit that went into effect November 7, 2009 and end on April 30th, 2009. For more details, go to federalhousingtaxcredit.com, a website sponsored by the National Association of Home Builders.

• First-time home buyers still get a credit of as much as 10% of the purchase price, up to a maximum $8,000. “First-time” means people, including both partners of a married couple, who haven’t owned a principal residence for three years before the purchase.
• Current home owners are eligible for up to $6,500 but must have used the home sold or being sold as principal residence consecutively for 5 of the 8 previous years.
• Contract date on or before April 30, 2010 and Settlement before July 1, 2010
• Income caps: $125,000 – Single; $225,000 – Married. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
  Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
• Under the new law, as under the old, 2009 home buyers may claim the credit on either their 2008 or 2009 returns, and 2010 buyers may claim the credit on either their 2009 or 2010 returns.
• The credits offer dollar-for-dollar reductions of tax and are refundable. This means that a taxpayer who doesn’t pay enough tax to offset the credit can get a refund. For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you could receive a $3,000 check from the Internal Revenue Service.

To take advantage of the tax credits, a buyer must have a contract in place before May 1, 2010, and the deal must close before July 1, 2010. No further extension is expected.

For cash strapped homeowners, flat fee MLS listing provides a welcome alternative to traditional commission based real estate brokerage. With the devastating equity plunge felt in many area markets, quite a number of home owners simply don’t have the ability to pay a 5-6% commission. Faced with the alternative of selling by owner with limited access to the market compounds an already dire situation.

Fortunately, companies like Bloomkey.com offer a respite from the harsh economic climate. For a low, flat fee Bloomkey offers home owners the ability to affordably reach the market through the Realtor® Multiple Listing Service (MLS) as well as real estate search sites such as Realtor.com, Trulia.com, Zillow.com, brokerage IDX sites, and search engines like Google® and Yahoo® Real Estate.

In fact, Bloomkey is the only flat-fee listing company to currently offer payment plans for MLS listing packages. For as low as $89.95 a month real estate home and property sellers can have the same or better marketing exposure as those properties listed with traditional brokers charging up to 6% or more of the property’s sales price. Now that’s a stimulus package everyone can appreciate.

Congress today passed a bill to extend the first-time homebuyer tax credit. The credit remains capped at $8,000 but income limits are higher under the new bill. President Obama is expected to sign the bill. The bill passed unanimously in the Senate and by an overwhelming majority in the House. Under the new legislation, income limits for the credit will be raised from $75,000 to $125,000 for individuals and from $125,000 to $225,000 for couples. The maximum sales price for eligible homes is capped at $800,000. The bill extends the $8,000 first-time home buyers’ tax credit that was set to expire at the end of this month. The credit will apply to all house contracts entered into before April 30, 2010, and closed by June 30. It also creates a new $6,500 credit for existing property owners looking to sell their home and buy another during the same period of time.

The National Association of Realtors® (NAR) announced Monday that the volume of signed contracts to buy resale homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires November 30th, 2009. It was the highest the index has been since December 2006 and over 21 percent above a year ago. Its seasonally adjusted index of homes under contract rose 6.1 percent from August to 110.1. Congress is set to extend the home buyer credit until April 30, 2010. Legislators have also propsed a $6,500 credit for resale buyers as long as they have been living in their current residence at least five years.

The NATIONAL ASSOCIATION OF REALTORS® thanked Congress for speedy action in passing a congressional resolution yesterday that would extend the current higher Fannie Mae, Freddie Mac, and FHA loan limits through 2010. The present loan limits would expire at the end of 2009 and revert to previous lower limits.

“NAR commends both houses of Congress for their quick action in continuing these higher limits during a time for recovery in the housing market and national economy. The higher limits, along with the home buyer tax credit extension, are necessary to keep the markets moving at this critical time,” said NAR President Charles McMillan.

“Home sales have shown significant movement upwards in the past six months and reduced inventory in some segments of the housing market, but not in all. Home purchases in the middle-income and higher brackets have not moved much, and those markets must improve before we can experience a fully sustained housing recovery. These higher loan limits will help motivate qualified home buyers to purchase in those markets,” McMillan said.

The resolution would extend the present conventional loan limits for Fannie and Freddie through the 2010 calendar year at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000.

The resolution now goes to President Obama, and he is expected to sign it today or Saturday to avoid a government shutdown.

From Realtor.org

Interest rates climb for the third week in a row and the average 30 year mortgage is still attractive for home buyers at 5.03%. The Federal Reserve has pumped $1.25 trillion on mortgage-backed securities in an effort to lower rates on mortgages and loosen credit. And, slowly, Wall Street is retaking it’s place in the credit markets. The volume of mortgage securities, the largest segment of the credit market, is on track this year to nearly match the peak levels of 2005. “The core consumer finance sectors seem to be reasonably intact,” says Joseph R. Mason, a finance professor at Louisiana State University.

However, this year government-backed loans have accounted for 99% of mortgage securities. The breakdown between the government and private equity has been more like 80/20 in the past. “The government is literally plowing trillions of dollars into the U.S. mortgage market to keep it afloat,” says Guy D. Cecala, publisher of Inside Mortgage Finance. The Fed has said it intends to quit buying mortgage securities by the end of March.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.
From Realtor.org

Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., in the Senate are proposing a plan that would would extend the real estate $8,000 tax credit — which expires Nov. 30 — through March 31. Under their proposal its value would drop by $2,000 for each of the subsequent three quarters of 2010. The plan is a alternative proposal to the bipartisan plan that would extend the $8,000 credit through June 30, 2010, boost the income cap for eligibility and open the credit to all buyers, rather than just first-timers. Yet another proposals currently in the Senate would increase the deduction to $15,000 and open it up to home buyers with higher incomes. Proponents of both plans say the tax credit has helped revive the housing market and say that if it’s cut off as scheduled at the end of next month, home sales could drop off.

The National Association of Realtors® said today that home sales rose 9.4 percent to a seasonally adjusted annual rate of 5.57 million in September. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” said Lawrence Yun, NAR chief economist.

Sales of existing homes bounce back to their highest level since July 2007. The Federal Reserve’s “Beige Book” report, released Wednesday, points to housing as a bright spot in the economic landscape. The U.S. Labor Department said that real estate was one of the industries with the strongest economic gains.

Home sales had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters. The median sales price was $174,900, down 8.5 percent from a year earlier, and slightly lower than August’s median of $177,300.