According to the Los Angeles Times, closing costs–the fees associated with closing a transaction, most notably title insurance, document fees and applicable taxes–across the nation have been going down in price. Usually, if not always, closing costs are in correlation with a sales price, so this news may not shock our readers as we’ve all seen prices coming down over the year.  That said, the LA Times article notes that despite comparisons of similarly priced homes, the cost to close is still dropping.  Yet another perk to buying in a distressed market.

Nationwide, the average closing fees on a $200,000 mortgage, with 20% down and a 30-year fixed-rate loan, totaled $2,732, down from $3,118 in 2008, the study found. Closing costs for home buyers haven’t been this low since 2007, the survey said.

Average U.S. closing costs fall; San Francisco grabs the No. 4 spot [LA Times]

So, what do you think?

If you haven’t heard of Twitter, you have been living under a rock.  There is not a day that goes by that the word Twitter or Tweet is not in the news, heard around the office or in line at the grocery store.  Just in case you’ve been asleep for the last year and don’t know what Twitter is, we’ll fill you in here–It’s micro-blogging service that limits your message to 140 charachters and has been taking the marketing and business world by storm.  The San Francisco based company started modestly as a means for bike messengers to communicate and the service has now grown into a ubiquitous business tool to get messages out to customers.  Sure, it’s used on a social level between friends or as a voyeuristic means to see into the lives of our favorite celebrities,  but more recently real estate professionals have been actively using this tool as a means to promote themselves, their listings or to gain an audience to share their thoughts and ideas.  More recently, Twitter has become a forum to  sell homes!  Twitter’s co-founder, Biz Stone “tweeted” about selling his Berkeley, CA home last month and it caused such an online ruckus that the site temporarily crashed.  Since this incident, other sellers, including owners (non agents) have been trying to sell thier homes via Twitter.

eRealInvestor has a Twitter account too and we encourage you to follow us, we just may follow you back.  Either way, we’d love to hear your thoughts about using Twitter as a means to market property, find buyers, sellers and promote your brand.  Please make comments here, we’d love to hear what you think about the micro-blogging world. 

S.F. man tries selling his condo on Twitter [SF Weekly]
Twitter Co-Founder Biz Stone’s Berkeley Home [Home Girl]

We’ve mentioned it before and we’ll mention it again…there are thousands of foreclosures through the country and several more are expected over the course of the next couple of years.  Some of these buidings sit around and cause blight while others move very quickly.  NPR has published an extremely detailed, intereactive foreclousre map, by county.  We recomend that you take a look to find where some of the most hard-hit areas are and then do a property search for “real deals.”  Pick a few of the properties and analyse them back-to-back.

Click the map to see it in action.  It is a graphic reprentation of how the recession has cut deeply into housing security, employment and income of many Americans.  The interactive maps show foreclosure and jobless rates as well as household income by county.

Interactive Map: The Economy Where You Live [NPR]
property search [eRealInvestor]

Buyers in many areas are finding that real-estate owned (REO) properties—homes that have been
repossessed by lenders and put back on the market—often are selling in one day, sometimes faster.
According to the founder of Foreclosure.com, offers on REOs are coming in immediately after the listing
comes on the market, and some homes have been put into contract in less than 90 minutes.

KEEP THIS IN MIND

• On average, inventories of California homes priced less than $300,000—the most-popular
price point for foreclosure buyers—have shrunk from a nearly 10-month supply a year ago, to
less than a three and a half-month supply in July, according to the CALIFORNIA
ASSOCIATION OF REALTORS® (C.A.R.)

• Because inventory levels of homes priced in the lower end of the market are low, some buyers
are finding that sellers are not willing to negotiate on the price. In many instances, sellers
expect the first offer to be the best and highest possible for the buyer.

• Instead of holding onto REOs for the best prices—and paying the property taxes and
maintenance and heating costs—many banks are selling the homes as quickly as possible,
according to Foreclosure.com. “In this market, if they can liquidate them fast, it makes more
sense to get them off the books,” said the company’s founder.

• Despite efforts by lenders and the government to prevent foreclosures, many economists and
housing analysts predict there will be another wave of foreclosures by year’s end, and many of
those properties will be offered for sale. According to the U.S. Comptroller of the Currency, 53
percent of loans that were modified in the first half of 2008 fell back into arrears.

Buy foreclosures now - before it’s too late [CNN Money]

According to CNN Money today:

The median home price plunged a record 15.6% during the second quarter, versus a year earlier, according to a report from the National Association of Realtors.

But on a more upbeat note, the median home price rose 4% in the quarter versus the first quarter of 2009, rising to $174,100 from $167,300.

Stocks sustain gains after Fed [CNN Money]

From the Housing and Urban Development Website:

WASHINGTON - U.S. Department of Housing and Urban Development Secretary Shaun Donovan today announced the Federal Housing Administration (FHA) has implemented changes to its loan modification program to ensure consistency with the Obama Administration’s Home Affordable Modification Program. By August 15, FHA borrowers will be able to significantly reduce their monthly mortgage payments by seeking a loan modification through their current mortgage company or loan servicer under the new FHA-Home Affordable Modification Program (FHA-HAMP).

“Today, we’re bringing another important tool to the table to help struggling families who are desperate to keep their homes,” said Donovan. “Tens of thousands of FHA borrowers will now be able to modify their mortgages in the same manner as so many others who are taking advantage of the Administration’’s Making Home Affordable program. This is just the latest tool we are providing to help homeowners prevent foreclosures through the Making Home Affordable program. Earlier this month we announced an expansion of the Home Affordable Refinance Program to borrowers who are up to 125 percent underwater. Together, these actions will significantly increase the help available to homeowners.”

The Helping Families Save Their Homes Act of 2009, signed into law on May 20, allows FHA to give qualified FHA-insured borrowers the opportunity to reduce their monthly mortgage payment by modifying the mortgage through FHA-HAMP. FHA released the program’s implementation guidelines today. FHA expects all servicers to implement the changes by August 15. The program permanently reduces a family’s monthly mortgage payment through the use of a partial claim, which defers the repayment of mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off.

(more…)

RE/MAX North Central introduced a new service (our service!) to consumers to make online home searches easier than ever. Through an agreement with eRealInvestor, Inc., RE/MAX North Central is the exclusive regional provider of eRealAnalyzer(TM), the real estate industry’s first one-click financial analysis application. The relationship between the two organizations represents the first of its kind for eRealInvestor, as RE/MAX North Central becomes the first region of a national realty company to offer the service through its online listings. The relationship significantly expands eRealInvestor’s presence in the market for homeowner and residential investor search and analysis.

When homebuyers or real estate investors search for Minnesota or Wisconsin properties on remax.com, including those listed through other realty companies, they can now access information that automatically calculates a wealth of relevant financial information. By clicking on the “Cash Flow Analysis” button on remax.com and using simple sliding bars, homebuyers can set their offer price, down payment percentage, mortgage rate and other financial factors into the system, and eRealAnalyzer will present monthly mortgage payments and equity calculations. The service also allows users to compare the financial ramifications of different scenarios - lower down payments, different purchase offers, interest rate, etc. Property investors also can obtain rental data, create a cash flow analysis of potential investment property, view more than 15 charts and graphs, export the detailed results to Excel and print PDF reports.

Click here to see the Cash Flow Analysis button in action!

About RE/MAX North Central

Since its inception in 1985, RE/MAX North Central has grown to nearly 200 offices with more than 2,100 sales associates throughout Minnesota and Wisconsin, providing residential and commercial real estate, as well as relocation and referral services. RE/MAX North Central is affiliated with RE/MAX International. For more information, log onto www.remax.com.

Leading Real Estate Companies of the World® has aligned with eRealInvestor, Inc. to provide the network’s 600 brokerage firms a web-based suite of financial analysis software for residential real estate investors. The relationship is part of LeadingRE’s Leading Real Estate Solutions® division, which endorses fine real estate products for the network’s 600 member firms.

eRealInvestor’s patent-pending flagship service, eRealAnalyzer™, is the real estate industry’s first one-click financial analysis application. The solution enables the analysis of thousands of properties listed on real estate portals and websites. eRealAnalyzer™ includes automated rental data import and display, multiple scenario comparisons based on buyer criteria, simple and intuitive portfolio analysis, and one-click export to Excel and PDF reports.

eRealInvestor’s recently introduced eRealAdvantage solution provides an automated system for real estate brokers and agents to facilitate the cultivation of relationships with investment-minded buyers.

“eRealInvestor offers one of the most innovative products I have seen, giving investors a comprehensive solution for identifying and analyzing properties which meet their financial criteria, while providing real estate agents a highly targeted, effective way to reach these customers,” notes Leading Real Estate Solutions® Vice President Phil Edwards.

“There are many attractive buying opportunities in today’s market. Our solutions help agents identify and market these properties to buyers who are focused on the long-term investment value of a home,” notes Mike Genstil, founder and CEO of eRealInvestor. “eRealAnalyzer gives homebuyers and investors the data they are seeking, while eRealAdvantage provides savvy agents unparalleled branding and marketing opportunities to help them serve this niche audience. We are very excited to partner with Leading Real Estate Solutions® to offer these new resources to all 600 plus brokerage firms in the LeadingRE network.”

Leading Real Estate Companies of the World® is a global real estate network comprised of over 600 of the best-known local and regional real estate firms. With more than 5,000 offices and 150,000 sales associates in the United States and 35 countries abroad, LeadingRE members sell more than any other national brand. Our members are the Number One firms in more of the top markets in the United States than any national group, representing a powerful force in American real estate.

Leading Real Estate Companies of the World [website]
eRealinvestor [website]

Most banks, investor and real estate agents know that the annual income of a property should have a direct impact on the price of a home or building. Just because agents think they know or understand the correlation, doesn’t mean they follow any sort of formula. What do you think… Should the rent-roll have anything to do with how much a property sells for?

It’s hard to believe that prices likely still haven’t hit the bottom in many markets.  The unemployment rate doesn’t seem to be easing, rumor has it that banks have thousands of foreclosures that have yet to hit the market and overall buyer skeptisim will likely keep prices from climbing any time soon.  According to Bloomberg:

“Affordability is no longer the driving issue in the housing market, and we believe prices still have a ways to fall in many areas before home prices reach their trough,” [a] Deutsche Bank analysts wrote.

The 15 areas with the highest probability of lower prices in 2011 each have a 99 percent chance, PMI said. They include Miami, Fort Lauderdale, West Palm Beach, Orlando, Tampa and Jacksonville in Florida; Riverside, Los Angeles, Santa Ana, Sacramento and San Diego in California; Las Vegas; Phoenix; Providence, Rhode Island; and Detroit.

Edison and Newark, in New Jersey, have a 97 percent and 96 percent chance, respectively. Nassau, New York, has a 92 percent chance. New York City showed an 88 percent chance of lower prices, according to PMI.

U.S. Home Prices to Fall Through 2011’s First Quarter [Bloomberg]

Be safe, have fun and enjoy your holiday weekend.  Below are some fun events going on in various cities around the country.

[Atlanta, GA] Fun on the Fourth: Atlanta Holiday Guide [City Search]
[Boulder, CO]The Best 4th of July Fireworks Shows in the Denver / Boulder Area [Associated Content]
[ Chicago, IL] Celebrating the Fourth of July in Chicago - 2009 [About.com]
[Fargo, ND] 4th of July Fargo ND [directory M]
[Las Vegas, NV] Fourth of July (In Las Vegas) [Review Journal]
[Manhattan, NY] Spare Times [New York Times]
[Memphis, TN] Fourth of July Celebrations In The Mid-South [wreg.com]
[San Francisco, CA] Holiday Weekend Schtuff: July 4, 5 and 6 [San Francisco Schtuff]

California allocated $100,000,000 for a tax credit to help stimulate home purchases for first time home buyers.  The California tax board was allocating credit on a first-come, first-served basis and once the $100,000,000 was allocated, the tax credit would no longer be available.  Certificates of credit started to be allocated on May 1, 2009 but as of June 29, 2009, California has reached $100 million in new home credit applications and will no longer be accepting applications. Congratulations to those California home buyers that got to take advantage of that credit!

Tax Credit for New Home Purchase [CA Franchise Tax Board]
 

In its rawest form, a free market  will determine the value of a good or service based on the elementary principle of supply and demand.  A good or service is worth what any person is willing to pay for it on an open market.  Real estate doesn’t work as simply due to the fact that most homes are purchased through a financing program, thus, the “free market” is cluttered with multiple purchasers (the borrower and the financier).  Usually, a buyer must borrow money to be able to afford an assest as large and expensive as a home, but before the bank shells out in upwards of 80% of the “value”, said bank wants to make sure they are lending on a valuable asset.  This brings us back to appraisals and the challenges they are currently creating for buyers, sellers and lenders alike.

On May 1, 2009, the rules of appraising property has changed.  Now, lenders that sell loans to Fannie Mae or Freddie Mac are required to set up a firewall between appraisers and loan officers to prevent improper influence. The rules are the result of an agreement between the mortgage buyers and New York Attorney General Andrew Cuomo, who said an investigation found appraisers inflated values under pressure from lenders.  Buyers and real estate professionals are finding that many of the most recent appraisals are coming up short of what the buyer is willing to pay for a home, thus, limiting the amount of financing the bank will provide.

We want to hear from you, real buyers and sellers. What do you think a home should be worth?