I’m not blowing my own horn (although I’m not above that), I am truly honored to become a writer for Agent Genius. Agent Genius is the first multi-author real estate blog designed by and for real estate agents nation wide. Unlike other real estate blogs that blog at the consumer, we blog beside the consumer. We [...]

Breaking News!

Fannie and Freddie are changing the rules on how payments on existing primary homes are treated when a buyer is purchasing a new home and plans to rent out the old house. In the past, we have been able to offset the payment on their existing home by showing a lease for the house and counting the rental income to cover the house payment.

Under the new rules, this will only be possible if there is a minimum of 30% equity in the existing home. So, if the house had a $200,000 mortgage on it, then it would have to be valued at over $285,000 to be acceptable as a rental conversion. Otherwise, the buyer has to be able to qualify with both house payments and has to have 6 months of house payments in reserve after closing. Ouch . . .

This change in guidelines appears to me to be directly related to a new phenomenon; people buying a new house and then letting their old home go into foreclosure after closing on the new house. I have been reading about this on the web. The idea is if you owe more than your home is worth then you go out and buy a new home at a great price. You indicate that you are going to be renting the old house out. After closing on the new house you stop making the payments on the old house which has negative equity and it goes into foreclosure. Sure your credit is wrecked but you already bought a new house and your bank loses all of the money on the old house. Some great scam eh?

I don’t know who comes up with these ideas but it is bad for everyone. Forces home values down further and adds to the steep losses which are seriously undermining the banking industry in the U.S. Whatever happened to the idea of living up to your obligations?

The bottom line is that the effort to close up loop holes like this is making it harder for legitimate buyers to keep their existing homes, rent them out and buy a new house. Stay tuned. The currents are changing on a daily basis and I’m just trying to keep you informed.

Yep, once again, it is that time again. Time for those scissors to get some use in response to something I saw posted online. This occasion comes from a post from the Mayor's blog regarding the subject matter that I pointed to yesterday. A reminder... I'm not writing the following as a personal attack against the author or anyone else. I'm merely exercising my right to perhaps disagree a

There are many conflicting views of how Mr. Bernanke should have handled the Fed after the departure of the true overlord, Alan Greenspan. Reducing interest rates to soften the landing of the real estate crash - did he go overboard? was it enough? I’ll leave the debate to the armchair economists, but I do know that the whole industry is going through a huge transition due to the power of the intertubes and the desire of information to be free.

Our friends at RentBits.com created this montage of Ben Bernanke using Real Estate Web 2.0 logos. We’re honored to be included and to be a part in making the RE2.0 transition happen.

RE2.0 Montage Of Bernanke
(photo courtesy RentBits.com)

Gearing up for 4th of July festivities, busy work week, lots going on.  Presenting the highlights of the week, in photos, so far:

The New Logo, finalized:

Checking out retro 50’s Homes:

Interviewing and auditioning new photographers:

Tucson’s newest Associate Brokers at Long Realty and lunch at Cafe Poca Cosa:

Dappled light through a ruby grapefruit tree and ripening pomegranates:

 

Turns out, this is what storm windows look like, on a lovely wire cut double red brick house.  A rarity in these parts.  The storm windows, that is:

   

Have a safe and happy 4th of July!

Fellow Nestorionos!

Great news, we’ve just gone live with Nestoria Italia!

Just as in the UK and Spain, anyone hunting for a home to buy or rent can now use our simple interface to start their house hunt. In total we have over 250,000 properties all across the country. We’ve partnered with strong on and offline classifieds brands like 123Case, Casa.it, Idealista, Repubblica, Casaclick, Immobiliare, and Trovocasa, and of course we will look to add more partners in the future (as we’ve recently done in the UK).

A big grazie to all the beta testers for the valuable feedback. Please keep it coming (via our Italian feedback form - we know there are still some very rough edges and we still have a lot to learn about how Italians want to search for their next home. There will be lots of fine tuning in our future. But the basics are there:

• a comprehensive database, sorted by relevancy
• great local data and photos about the location your interested in
• tools for property searchers like RSS and our Italian Facebook app
• easy to use tools for Italian webmasters
• goodies for developers like a full API and KML
• and of course, the Nestoria Italia blog to keep our users informed (please subscribe)

We look forward to learning from our users and partners! If you’re interested in learning more, yesterday I did a brief interview over at Renthusiast that goes into a bit more detail.

Happy house hunting to our Italian friends!

Puts down celebratory glass of prosecco and shuffles back to desk to work on nestoria.de launch.

Any housewives/househusbands/students/work-from-homers will probably be well aware that, between breakfast and lunch, BBC scheduling is all about property. One of these property show offerings (the one with the very tall presenter, can’t remember the name) has an interesting feature where the house-hunters can ‘test drive’ a property. After being toured around three properties that match their needs, they choose their favourite and get to move in for 24 hours before deciding if they want to put an offer on. I’ve always thought this was a great idea, granted it’s probably completely impractical in the real world, but it’s the perfect way to make sure you’re happy with going ahead with the purchase.

Interestingly, someone from Strathclyde Homes must also be a fan of the show. They’ve just announced that they’ll be offering a ‘rent to buy’ scheme at a number of their new developments. Under the new scheme, potential homebuyers can rent their selected home for up to 19 months and then, if all is hunkydory, they can buy it. If you don’t want to buy it, you haven’t really lost anything by renting it, and if you do buy it you’ll be sure you really want to live there. Not only that, but 50% of what was paid in rent will be given as cashback if the sale completes.

Strathclyde Homes sales and marketing director Neil Gaffney had this to say…

“Our ‘Rent To Buy’ scheme is designed to get homebuyers into their new home as quickly as possible. It allows them to save towards a deposit while they are living in the new home they will eventually own. As an added assistance we will arrange for our mortgage broker to visit our new tenants to offer help and advice for mortgage options later in the rental term. The rent will be set at a fair rent for that type of property, and with half of it going back to the tenant, it’s a win-win for homebuyers.”

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Well, then check out this article in the local C-Ville weekly.

It was a lot of fun to be interviewed, but it couldn’t have happened without the help of our wonderful designer, Andrea Phillips.  She receives well-deserved mention in the article, but what it doesn’t say is that she was able to pull together a design for our house in less than a week.

How it started

Phone rings. . . voice answers:

“Hello, this is Erika.”

“Hi Erika, this is Daniel Rothamel, you called me about featuring me in your “A Room of Their Own” series.”

“Oh, hi Daniel, thanks for getting back to me.”

“No problem. I listened to your voice mail, and the first thing I thought of was my car.  I mean really, my car is the place I relate to the most.  See, my wife and I recently moved into our house, and we really haven’t gotten around to decorating all that much.  It’s kinda spartan.”

“Hmmm. . .that’s a little far afield for this type of story.  I’m sure we can do something on your house. It doesn’t have to be extravagant.”

“Well, I guess I could figure something out, when do you want to do the interview?”

“How about next Wednesday?”

“WEDNESDAY!  Today is Thursday.”

“I know, but we had someone else cancel.”

Moment of terror.  Then an instinctual response.

“Sure, I guess that will work.  Come on over.”

As soon as I hung up the phone, Kari and I looked at each other and said, “oh, crap.  We are going to need some help.”

Luckily, Help Came Fast

Kari called Andrea next.  Andrea lives in our neighborhood, and we had already talked with her about helping us out with our interior decorating. In fact, we had talked with her weeks before the interview, but we hadn’t really committed the way that we should have.  We desperately wanted to have a home that reflected our style, but we just couldn’t find the time to make it happen.  We work so much that we need our home to be a sanctuary, we just needed some help getting there.  This interview provided the perfect occasion and motivation to get it done.

That is where Andrea came it.  Kari and I are very good at helping people buy and sell homes, not so good at decorating them.  For Andrea, however, It is something that she loves doing, and had done before for friends and family.  We love her and her sister Laura, who is our fabulous real estate assistant).  We also know a dynamic duo when we see one ;-).  Andrea told us that she and Laura could get it done, so we told her to go for it, and that she had less than a week.

“No problem.” she said.

Boy, was she ever right.  She met with us and asked us what type of style we were looking for, things that we liked, things that we already owned that we wanted to use, all of those types of questions.  We told her.  She asked how much we wanted to spend.  We told her.  She did the rest.

What she was able to pull together over the next few days was nothing short of a miracle.  She decorated our entire main living area.  The only pieces we provided were the couch, chair, tv, entertainment stand, dining room table, some shells, pictures and shell postcards we had bought in Florida.  She did all the rest.  She did it on time, and under budget (and that budget was not large by any means).

The result was magnificent.

She took us from having a house, to having a place where we feel at home.  As I said in the article, every day we say, “man, I love this house.”  It is all beautiful, and we couldn’t have gotten there without Andrea.

Help us thank Andrea

We can’t thank Andrea enough.  What we can do, hopefully, is help her do what she loves, designing rooms and decorating them for people like us.  So, if you are in the Charlottesville area, and you need help with your interior decorating (admit it, most of us do), then call me or send me an email.  I’ll get you in touch with Andrea.  You’ll be glad you did it.  I know we are.

Before I begin... I have to say that I am impressed with our new Mayor and his blogging skills. His blog on the Kingman Daily Miners website is worth frequenting. Today I find that he submitted some words about that old cantankerous issue known as 'KINGMAN CROSSING'. Go here. Give him some feedback. (I have to say that it is a pretty good feeling finally being able to link to other local

We often hear that XYZ is the ‘latest victim of the falling housing market’, but this US story is truly tragic.

Yesterday morning, 73 year old Robert Arnold Johnson fatally shot 34 year old Troy Vanderstelt during a meeting at the victim’s office in Michigan. The agent had sold Johnson a property in 2005 and Johnson was now looking to sell the property with a different agent. This second agent had told Johnson that, because of the slumping housing market, the property was not worth what he had paid for it in 2005. Johnson felt he had been taken advantage of by the agent and took revenge by taking his life.

It goes without saying that property is never a fail-proof investment and individual agents cannot be blamed for deteriorating housing prices. But Johnson, who is now in police custody, obviously failed to see that. A very sad story.

Hat tip to the Phoenix Real Estate Guy for this.

Last week, Savills reported a decline in prime central London property values of 5.5% over the second quarter of 2008 (read the full story here). Today, Knight Frank have published their results which are similar, but not quite as stark.

According to Knight Frank figures, the monthly fall in property prices in prime central London accelerated in June, from a 1.5% decline in May to a 1.7% decline over the past month. Prices have now fallen for two consecutive months and are now 3.1% lower than three months ago, and although this quarterly decline is not as drastic as the one Savills recorded, it is the largest recorded quarterly fall in the Knight Frank index since 2002. The volume of sales has also declined, by around 60% over the past year.

But don’t worry, if you’re super gorgeously rich and your butler is reading this to you then you’re in for some slightly better news. Super-prime properties (£10m+) have remained relatively immune from the slowdown, with prices only falling by 0.9% last month, they still stand 22.7% higher than a year ago.

Today, there are 67 listings marked as “bank owned,” 110 marked as “lender-owned,” and an additional 63 listings marked as “REO” in the Tucson MLS.

The name of the game with lender owned homes: patience.  Banks, in general, don’t care about your timelines. 

As long as there’s no bidding war for the home - as can happen when the lenders price the home to sell and FAST - then here’s how this usually plays out:

1. Submit an offer to the listing agent, who then submits it to the bank.

2. Wait.  Sometimes wait much longer than the expiration date on your offer.

3. The bank sends back some addendums for you to sign, and may counter offer some of the terms of your offer.  There are many, many pages of addendums, in which you give up a plethora of rights, agree to numerous bank-specified terms, and generally agree to abide by their rules, where they have lots of rights and abilities and you have none. 

4. You deliberate.  You consider.  You sign the addendums and send ‘em back.

5. You wait.  Again.  Deal’s not a deal yet until the bank signs it.

6. The bank signs the addendum and sends it back via the listing agent.  Sometimes, the bank even deigns to send it back within a day or two of them executing that addendum.  So that they only eat a few days of your limited inspection period.

You want to buy a lender owned property?  No problem.  But be prepared to be patient.  Some banks respond in a day or two, some respond in a week or two.

Actually, that’s nothing compared to the wait times for Bank responses on short sales.  But that’s a story for another day.

Photo via Flickr, courtesy of zoomcityzoom

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