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]

Qualifying for a jumbo loan—loans higher than the conventional conforming loan limit of $729,750—is more difficult than it was a few years ago.

While rates on jumbo mortgages have historically been higher than rates on conforming loans, jumbo loans are still available, but often require the borrower to jump through several hoops and pay more for them.

Prior to the credit freeze, borrowers of jumbo mortgages could qualify for loans with a 5 percent down payment, credit scores of 620 and enough money in the bank to cover two months of payments. Now, borrowers typically must have six months’ reserves, a 700+ credit score and a down payment of at least 20 percent.

Securing a Jumbo: No Small Task [New York Times]

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?

A study conducted by economists at the University of Chicago, Northwestern University and the European University Institute found that:

Up to 26% of U.S. homeowners who stop paying their mortgage may be doing so intentionally, not because they can’t make the payments but because they don’t want to put money into a house that’s worth less than what they owe. [The study] raises some doubt about the approach the Obama Administration has taken toward stabilizing the housing market.

We’d like to hear from our readers.  Have any of you decided to stop paying your mortgage because you’re under water?

Mortgage Defaults: Many Are Intentional, Study Finds [TIME]

According to Bloomberg.com:

Delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.

Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008.

For all those investors out there, perhaps it’s time you snatch up some of these distressed properties?  Take a look here to see what’s available and Analyze.

Delinquencies Double on Least-Risky Loans, U.S. Says [Bloomberg]
Property Search [eRealInvestor.com]

As we mentioned in our last post, Vero Beach, Florida was recently ranked the most undervalued real estate market in the nation by CNN Money.

“The report claimed the most undervalued metro area in the nation is Vero Beach, Fla., where the median home price has fallen 29.7% since the first quarter of 2005 to $125,400. That is 42.5% below the expectation. Houma, La., prices, at a median of $113,500, are undervalued by 41.4%. Las Vegas prices have dropped more than 46% since 2005, and the city is now undervalued by 40.9%.

To arrive at these figures, the analysis focused on three key factors of home affordability: income, housing densities and historical prices.”

There are several active homes in Vero Beach right now and we’ve found a couple of great deals by searching through the available properties and using our Analyze button to determine how good of an investment we could make.

Most over- and under-valued housing markets [CNN Money]

Lots of good stuff at this year’s Inman Connect.   We had our first booth - and it turned out to be a great use of resources.  Real estate agents, foreclosure portals, and website hosting firms expressed interest in deploying our technology on their sites.

I was most intrigued by what I heard Brad Geisen, CEO of foreclosure.com say. They are now buying properties directly from the bank and holding 15-day auctions, where they will participate in the transaction. The ROI for this model is significant, and seems to be a good way to supplement their solid subscription revenue base.

Auctions are great for eRealInvestor, since we can facilitate them by enabling buyers to evaluate the buy and hold opportunity for properties being auctioned. We allow buyers to compare and contrast scenarios real-time, and we pull in live rental comps so you can see what a property should rent for.

I got to see the WalkScore application for the first time as well, and I really like it. It provides a unique view of the location/ neighborhood of the property.

In the last couple of years, a rather sizeable percentage of both home sales and home purchases have occurred for for investment purposes! In 2006 for example, 40% of all home sales and 28% percent of all home purchases were made as an investment according to a report from the NAR.

Many Realtors ignore the fact that potentially 30%–40% of prospective buyers and sellers may actually be “investors”. According to the NAR, these “investment home buyers” are different from “vacation home buyers”. They tend to be younger (49 years old vs. 52 years old), have slightly lower incomes, and purchase “investment” property an average of 15 miles away from their primary residence.

Like any other investor, these buyers need tools and resources to help them with their decision making process. eRealInvestor’s powerful set of financial modeling and analysis tools allows these “investors” to save time and make better educated decisions about a property listing. eRealInvestor allows “investment home buyers” to consider the implications of different down payment and loan options, view pre-tax and post-tax scenarios, compare multiple scenarios and properties side-by-side and analyze other important financial and tax information. At the end of the day, eRealInvestor also empowers them to engage in a more effective dialogue with their Realtor and mortgage broker!

As I pointed at out in my previous post, more and more Realtors (as well as a growing number of partners) are integrating eRealInvestor’s analytics capabilities into their listings! By offering our tools, these real estate professional make their listings more appealing to investment home buyers, which is important, especially in today’s competitive marketplace! eRealInvestor frees these real estate professionals from having to creating cash flow spreadsheets for their clients. If you are interested, register to find out how simple it is to get integrated!