The Beach Show Secrets to Success

This is really not a tip, rather an explanation of what Jason and I are up to and how and why we do the thing we do (sounds like a song). As many of you know, for the past 19 weeks we have been having a great time doing thebeachshow.com. It is the ONLY INTERNET TV SHOW ALL ABOUT REAL ESTATE on Panama City Beach. If you know both of us and many of you do, I do not have to tell you who the techno brain child is. . . AND it ain’t me.

Realtors and others call me each week to find out how can they get on our goofy little show and does it cost anything for their property to be featured? So I thought an explanation was in order. Jason came up with the idea that this format would be an incredible, far reaching way to get the word out about hot properties and be an incredible marketing tool. It has far surpassed that and we are having a great time while doing it. WE do not charge any money for listings to be on our site and we have a high integrity level of what makes the grade for the show. I am in charge of searching the internet and the streets in hot pursuit of what I think is a great deal. We consider price, rental dollars, affordability and basically finding what the real customers are looking for. Bottom line, if it looks great to me I bet you will like it too.

Each week I pick 3 great deals and many times they are not our listings so I call and get permission from the listing Realtor and we go shoot a video. WE give a very informal preview of the home and why we think it is a hot deal. It is not rehearsed as you can tell and we just want to be fun and informative. It is our quest for people to feel like we are having a conversation with friends about the Real Estate that we find while living and loving our beach. We have met so many nice people because of this adventure and have built great relationships with other Realtors as well. We just love it when one of the properties sells whether it is ours or not. It is kind of our version of paying it forward.

We shoot every Tuesday, rain or shine, and Jason spends the better part of that day and night uploading and editing the video. About midnight I usually write my Real Estate tips because who wants to do it early? Thanks to Hunter Palmer each week for providing us with a Mortage minute. You will find thebeachshow.com on the air and up and running each Wednesday at 11:00 AM and again on PCBdaily the following Monday. Please feel free to share it with your friends and let us know what you think.

You will notice that sometimes we keep visiting an area and it seems that some areas become hot areas because the price has finally hit the point where people start buying. A perfect example of that would be Wild Heron. Last year much of nothing sold and this year it has busted wide open with over 20 houses and condos selling since January, not to mention the lots are moving now as well. I am excited to say that condos on the beach are moving too and the buyers just keep on coming.

We so appreciative of all the Realtors who have been so kind to cooperate with us and also are tickled when they call us up and say, “Karen I think I have a hot one.” If we think it is a super deal then we may switch properties at the last minute and go shoot that one. Last week was great example as we were heading in one direction and found out about a foreclosure that just hit the market we turned the jeep around and headed west. Of the 3 properties that we featured in Episode 18 we are happy to report that 2 out of 3 are under contract. Wow you just gotta love it!!!!

What an exciting time to be a Realtor, no more business as usual. But who wants business as usual, NOT ME. I love that we are having to stretch and grow and reach and climb and find different ways of reaching our market. I think the thing I most like about challenging times is the power and the persistence that I see in people. Creativity is born and new ways of doing life are fostered. Hellen Keller put it just right for all of us today. . . “One can never consent to creep when one feels an impulse to soar.” I do not know about you but I am not much for creeping and it is a good thing because our market today calls for us to SOAR!!!!!!

Mixed Signals in Housing Data

We got a mixed bag of economic data on the housing front this week that, on one hand disappointed, but upon closer analysis showed yet another sign that the battered housing market is recovering. On Tuesday the Commerce Department said that initial construction of new homes fell in July after surging in June. Housing starts fell 11% to a seasonally adjusted rate of 581,000 down form 587,000 in June. Commerce also reported that applications for new building permits also fell in July by a more modest 1.8% though both reports came in below economist’s forecasts.

One caveat, however, was that when broken out by construction type, housing starts for single-family homes actually posted a 1.7% gain in July and applications for single-family permits rose by 5.8%. This is the silver lining in these reports as single-family homes are considered the core of the housing market and the overall numbers include the hard hit multi-family sector.

Mortgage rates remain very attractive after last week’s meeting of the Federal Reserve’s Open Market Committee reassured investors that interest rates would remain low for the foreseeable future as inflationary pressures are anticipated to remain weak for some time. Stocks have also helped out rates as consumer spending and consumer sentiment figures released last week have cast more doubt about a speedy recovery for the economy.

The thirty-year conforming fixed rate is sitting right at 5.25% for single-family purchases and the fifteen-year is at 4.625%. Government rates have been just a tad higher at 5.50% and 5.00% respectively. As long doubts linger over the economy, we will continue to have the uncertainty factor that tends to maintain demand in the bond market and keep rates low. Without any inflationary pressures in the short-run, I don’t see any significant rise in rates over the coming weeks and we may even see some further easing.

Rates Ease and Home Prices Post Record Fall

Mortgage rates have eased since last week with the rate on the benchmark thirty-year, fixed-rate falling back below 5.50% to settle in at 5.375%. That’s a .25% improvement since last week’s spike up to 5.625%. Rate shave been benefiting form some profit taking in the stock market which has cooled a bit in August following it’s month long rally in July. This is interesting considering last Friday’s unemployment report for July showed far fewer jobs lost for the month than economists expected and an actual decline in the overall unemployment rate to 9.4%. News like this usually provides the impetus for renewing a stock rally as it indicates an economy that may be pulling out of recession and stocks did surge on the news but have since pulled back as worries that we’re not out of the woods yet continue to linger. I have felt all along that the optimism on Wall Street over the better part of this year has been premature and has put the cart well before the horse. The fact bond prices have remained high and rates low supports this theory.

After a plethora of good news on the housing front we finally received a sobering report on June home prices this week. The National Association of Realtors on Wednesday said that home prices fell a record 15.6% for the three month period ending June 30 compared with the same period in 2008. Analysts attribute much of the decline on the excess inventory of distressed properties on the market, those that are either in foreclosure or short-sales, as these properties on average sell at a 15% discount compared to non-distressed properties. Yet there was a glimmer of hope in the report as median home prices actually rose 4% and quarter-over-quarter home sales rose 3.8%. Though fairly typical of a normal spring buying season, it is yet another sign that the worst of the housing market correction may be behind us.

Part 3 Debunking the tax credit Myths

You know how you receive those lovely thick pieces of hard to open Junk mail that say in bold big letter, “TIME SENSITIVE ” well this is your online version of that but it really is TIME SENSITIVE, so in an attempt to wrap this topic, up here we go.

Tax Credits are a wonderful way for saving money on that dreaded tax bill but there is still much misinformation out there. This will be my third and final attempt to seperate the fact and fiction surrounding the tax credit for New home buyers. We have addressed some of the other questions in prior articles but there are a few myths that remain. . . So we will try to stick to “just the facts Ma’am”

Myth #1 To qualify it has to be a house.
NO, a home is different for everyone and the only definition that need apply for a home is a residence. With that in mind then you may purchase a detached single family, a duplex, townhome, condominium, pre-manufactured home (mobile home) and even a house boat!!! The only restriction that the program requires is that you are not able to buy a home from your parents, children,grandchildren or spouse. In other words it must be an “Arms length transaction”

Myth #2 I have to fill out loads of paper work before I even purchase my home.
There is no paperwork to file ahead of time to receive the credit. You just need to fill out the IRS tax form 5404 when filing your income tax return. Then, follow the instructions on the tax forms. Again, as in all things, discuss your personal situation with your lender and he will guide you through the process.

Myth #3 I have to buy an existing home.
NO absolutely NOT. This one is timely right now however and if a home is not already started you may be pushing the envelope a bit. Remember you must close on or before November 30, 2009. You are allowed to apply the tax credit for an existing home or a newly constructed home. If you own a lot and construct your home yourself, or with a builder, your date of ownership is considered to be the date you first occupy the home. For homes that are built by a developer/home builder, eligibility is determined by the settlement date. I have one couple doing this but the home was already started so borrowing any acts of Nature then they should be just fine.

Myth #4 I must be a US citizen to utilize this program.
An alien resident who has not owned a home in the past 3 years, and is within the income limits, may also claim the tax credit if he meets all other requirements.

For space and time and my writing skills we can not address every issue that comes up but his should get you started. Please discuss this with your Realtor, banker and accountant to see what best fits you. Hopefully if you are looking forward to the credit to help buy your home you have already started the journey and if not what are you waiting on???? Get on your boogey horse and GOOOOOO.

Let's Clear the Confusion – Home Buyer Tax Credit

I always share as I write that I am not an expert and I do not even play one on TV so I want to make some of last weeks article a little more clear if I can. As my husband says, “lets see if we can make this as clear as mud” There is still confusion surrounding the tax Credit with the emphasis on CREDIT and not deduction. Please take my limited knowledge and run straight to your banker and your favorite Realtor and see what you can come up with. I have borrowed some examples that may apply to you and have consulted again with my banker friends that are wiser than me.

A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference
In the case that you owe $4,000 in income taxes at the end of the year you would pay nothing to the IRS and and receive a $4,000 payment from the government.
If you are due to receive a $1,000 tax refund from the government, your refund would grow to a whopping $9,000. ($1,000 plus $8,000 from the home buyer tax credit)
If your final tax liability is $6,000, but you’ve underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)

This is short and sweet this week so you will have time to run on down and get all your ducks in a row so you can get that house. I like to think of this as a little house warming present. Some of my buyers are looking at it as a discount so to speak on their home and with money being tight that is a welcome and one more reason to purchase their first home. I will leave you with some resources that may help you clear up the process and navigate you to a successful purchase.

First-Time Home Buyer Tax Credit information from the IRS.

State Housing Agencies with programs that provide short-term loans that may be used to fund a downpayment in conjunction with the tax credit.

Buying and Owning a Home Freddie Mac

Buying a Home Department of Housing and Urban Development

Buying and Owning a Home Freddie Mac

Buying a Home Department of Housing and Urban Development

The Home Buying Process Federal Housing Administration

FHA Loans Federal Housing Administration

Homeownership Resources Fannie Mae

NOTE: Please know that much of this knowledge is general in nature and your local lender will let you know what is available in your location.

Rates Rise – Home Sales Too

Mortgage rates held up well last week as the Federal Reserve auctioned off a whopping $200 billion in US Treasury debt and even managed to improve somewhat by week’s end as I had predicted. This week has been another story however. After sliding to 5.25%, the rate on the benchmark thirty-year, fixed-rate climbed back to 5.50% as the ten-year Treasury note yield rose to 3.73% by Wednesday morning.

Bonds prices have been falling in reaction to positive economic news and a renewed rally in the stock market though stocks looked ready to pull back by mid week. After a period of relative calm over the past several weeks, we are seeing a return to volatility and I expect to see some see-sawing of rates over the short-run as investors try to digest the mix of economic data and corporate earnings.

Yet another sign of a thawing housing market could be seen in a report released on Tuesday that showed pending home sales rose for the fifth consecutive month in June. According to the National Association of Realtors, the Pending Home Sales Index rose to 3.6% during June. That was 6.7% higher than in June of 2008 and the first five consecutive month increase since July of 2003. The number surprised most analysts who had expected a meager .7% increase. The majority of the sales were in the lower-end segment of the market indicating that many first-time buyers are getting off the fence, lured by low rates, low prices and the $8,000 tax credit. With a deadline closing date of November 30 to be eligible for the credit, I expect we will see a surge of first-time buyer activity in the next ten weeks or so.

4 Questions (and answers!) About the Homebuyer's Tax Credit

Somethings in Real Estate can wait but getting a move on with the HOMEBUYERS TAX CREDIT cannot wait. So, this is a timely message for all of you home buyers that have been doing my favorite exercise. . . Procrastination. I have addressed this before but thought since time is running out for this great savings, I should bring it to the forefront again. As I always do I am going to answer some ACTUAL real life questions that people have brought to my attention and have consulted other legal resources for my answers. (Federaltaxpayerscredit.com)

Q. What if you have already owned a home or you are married and your spouse has already owned a home, can you qualify?

A. This is a big misconception that people have when you talk about the First time homebuyer credit because YOU CAN qualify even if you have already owned a home per the “Economic Recovery act” definition is as follows:

“The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.”

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter.

Q. What if you already have a partnership in a vacation home can you still qualify?

A. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer. This is a big question I have gotten from many people and the answer was quite surprising to me as well. What a great surprise!!!!

Q. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?

A. The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous “credit” was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

Q. How about short sales at this stage of the game? Should I buy a short sale or a foreclosure?

A. Now that could be a whole other article. Let me preface this by saying. . . “don’t shoot the messenger!” All short sales are not inherently bad, but I would at this point ask your Realtor if it is possible to close in time. It may be a risky venture for a home buyer and they should know the time frame going in. Most foreclosures are not complicated and can close in a timely fashion so they should be just fine. Again seek the consult of your trusted Realtor and lender, and they can help you with this on a case by case basis.

A big thing to remember that makes this so wonderful is that this is NOT a deduction, it is a CREDIT meaning that you actually get the check up to $8,000 if you qualify. You may use the money as you see fit. You may want to pay yourself back for the down payment or closing cost or you may purchase a home that needs a little face lift. You DO NOT have to justify your expenses it is your money to spend. Another huge bonus is that in addition to this money you also will be able to take a tax deduction for interest payments.

So now that you know and you have just enough information to get excited, give us a call and we will send you a Reference guide to the “Economic Recovery Act of 2009” You can also call your lender and he will help walk you through this process but you only have until November 30 to close so. . . on your marks – get set – GOOOOOO.

Rates Hold, Home Sales Picking Up

Mortgage Rates have managed to survive some significant volatility in both the equity and bond markets over the past week to remain at 5.50% for thirty-year, fixed-rates. Stocks reacted positively last week after some better than expected initial corporate earnings but have since pulled back on more sober earnings reports and a second monthly decline in consumer confidence. Bond market volatility has been driven by a reaction to stocks along with a massive $200 billion government debt auction this week.

It is expected that the Chinese and others will readily buy up this new debt but concerns linger as to how much of an appetite they will have in the long run as the Federal Reserve raises an unprecedented amount of cash to pay for stimulus and the purchase of mortgage-backed securities. As I have discussed before, it is this delicate balance between the issuance of new government bonds, creating excessive supply, and the purchase of mortgage-backed securities, to create demand, that has managed to keep rates low thus far. If bond prices can hold up through this week we should see reduced volatility and perhaps a slight dip in rates next week.

Last Friday the National Association of Realtors released June existing home sales figures that, while showing an increase of 3.6%, also showed prices of existing homes were 15.4% lower than in June of 2008. Still, the 3.6% increase in sales was slightly better than the 3.4% most economists had expected. On an even more positive note, the government said on Monday that new home sales rose by a whopping 11% in June to a seasonally adjusted 384,000 homes. And while that was still 21% below the same month last year, it still easily beat economists’ forecasts of 352,000 new homes sold.

Perhaps the best news of the week came on Tuesday when the Case-Shiller index of home prices was released for May showing that home values rose on a monthly basis for the first time in nearly three years. The .50% increase was the first month-over-month increase since July of 2006. The Case-Shiller index also showed that home prices for May were off some 17.1% in the 20 major markets but May also marked the fourth straight month where the year-over-year decline lessened in those markets.

I have been reporting a lot of real estate statistics over the past eight months and what jumps out at me most is that in January it seemed for every positive report on housing, there were two that were negative. . . a kind of ‘one step up and two steps back’ scenario. By the middle of the spring, I was reporting roughly a 50/50 split between good news and bad news but now, for the last several months, all I am seeing is positive news. Granted, much of it, though positive, has not exactly been enough to make one jump for joy for a resurgent real estate market but it has been encouraging nonetheless. Two things are abundantly obvious in the recent data. Home sales, both new and existing, are rising and home prices are stabilizing. This has what has long been needed to correct the oversupply of housing through lower prices and increased demand. Let us hope this positive trend continues.

4 Common Questions About Short Sales

Not only have I gotten phone calls about short sales this week but I find myself struggling over interpretation of short sale protocol. So many questions and so many varying answers it is hard to determine what the exact course of action should be. A customer called me tonight concerned that her short sale offer was going to be bumped by a higher offer, but according to all that I am reading and studying her offer should be the only offer on the table at the time. Any other offers that come in should be considered back up offers and will only be addressed when the first signed offer is disposed of. This week I am going to answer some pressing questions that I have been presented with and will do so with the help of our good ole FAR guidelines and MLS rules which I need to add are still our benchmark.

Q. What is the short sale addendum and what is the ruling force? And, furthermore, this form or our MLS and FAR guidelines?
A. If you have done a short sale or if you know someone who has then you know you will be asked to sign a FAR Short Sale Addendum that says the seller may “accept other offers and submit them to the lender.” This does not mean that all offers are presented at the same time and the bank chooses the best one. According to FAR the addendum is designed so that the seller may continue to solicit offers and hold them in a a back-up position. The contract on the table is considered complete other than the contingency of lender approval with seller acceptance. Another important protection in the addendum is the pronouncement that the sale is contingent on the seller agreeing to the lenders conditions.

Q. Why does a potential sale show up as contingent instead of pending in the MLS?
A. Although the contract has been signed by the seller and the buyer it is considered contingent upon lender approval. It will become pending once the bank has accepted the short sale and the usual closing procedures such as appraisals and inspections begin. Our MLS rules and not the addendum give us Realtors our direction in this matter. There is still debate among Realtor sometimes on how to apply this rule.

Q. What is the purpose of a back up offer and are they worthwhile?
A. There was a time in the market that people would fight over a property so back up offers were used quite frequently and now they are used again but with a different end in mind. Because of the precarious nature of short sales a back up is a great idea because many times the buyer gets leery of waiting and decides to move on to something more reliable. I have had more sales fall out in the last 2 months than I have had in all my years of being a realtor. For this reason I love a back up offer and so does your seller and the new buyer is delighted as well.

Q. How reliable are the Realtor Remarks in determining what a lender will take for a short sale?
A. I will say a big hardy NO to that one. Keep in mind that Realtor remarks are put in when the listing was taken and many things can change in the course of a listing especially a short sale listing. It is almost impossible to know up front what a bank will take until they have already gone through the process with another offer. Your best bet is to call the Realtor and ask her questions about her ideas of what a reasonable offer would be based on offers turned down and her assessment of the market value. Many times you do not have a handle on the price that a bank will take until they do their own BPO (brokers price opinion). Many times prices on Short sales are really abstract in that no one really knows what the “loss mitigation “department will take.

I love how real life keeps throwing me curve balls and challenges to be met each week. Please be patient with your Realtor as she helps you wade these waters for they are uncharted for all of us and we are learning as we GROW!!! I am grateful that I am surrounded by some really smart Realtors that keep me on my toes so know that we are NO experts….. just hard working folks looking for the best way to serve our community and each other.

Mortgage Rates Hold Steady at 5.5%

Mortgage rates have managed to hold steady despite renewed optimism in the stock market spurred by better than expected corporate earnings reports and evidence the recession is nearing an end. The benchmark thirty-year, fixed-rate is right at 5.50% with no points and we are seeing more parity with other mortgage programs lately as both FHA and VA thirty-year rates are also at 5.50%. The rate on the fifteen-year, fixed-rate stands at 5.00%.

Mortgage rates have benefited from reassuring remarks from Fed Chairman Ben Bernanke who on Tuesday told lawmakers at his semi-annual address before congress that he plans to keep monetary policy “extremely accommodative” for some time meaning no rate increases are likely for the foreseeable future. I do not expect to see rates rise over the next week unless the stock market gets on an exceptional run of gain. Many analysts still feel the market exuberance seen of late is still premature as investors continue to cheer less than expected losses instead of actual increases in net profits.

We had some great news on the housing front last Friday as the government reported that initial construction of homes as well as new applications for building permits surged more than economists had expected. Housing starts rose to as seasonally adjusted annual rate of 562,000 in June, up 3.6% from May. The consensus estimate was for an annual rate of 524,000. Single-family housing starts were up a whopping 14.4%. Building permits rose 8.7% in June to an annually adjusted 563,000 while economists had expected only 530,000. This was the highest number of new permits since December and the second straight month of increases since the all-time low set in April. All this is just more evidence that the battered housing market has bottomed and finally on the upswing despite a continuing rise in unemployment.