Banks aren’t ditching foreclosures at nearly the rate they were last year, which is helping to keep the housing market stable. But a recovery hinges on how long it takes to dispose of the huge backlog of distressed properties.

By Melinda Fulmer of MSN Real Estate

Distressed properties — those in some stage of foreclosure — edged up to 28% of all U.S. residential sales in the first quarter from 27% the previous quarter, according to RealtyTrac.

The percentage would have been higher, analysts say, but overall housing demand is weak and the banks are not disposing of these assets at nearly the rate they were at the same time last year, when distressed properties made up 29% of all sales.

The numbers tell the story: In the first quarter of this year, 158,434 bank-owned properties (or those in the foreclosure pipeline) were sold, a 36% decline from the first quarter of 2010 and a 16% decrease from the fourth quarter of last year.

Compare that with the nearly 350,000 distressed properties sold in the first quarter of 2009, and you can see why the foreclosure pipeline is so bloated.

"According to our numbers, if you just look at the properties in foreclosure or on the banks’ books, it will take us three years to work through that inventory at the current rate of sales," says Rick Sharga, senior vice president of RealtyTrac.

Of course, this slowdown in foreclosure sales is — at least in the short term — a good thing for the housing market, helping to keep home prices more stable, Sharga says.

"The downside is that this approach ensures that we will be in the doldrums in housing for several more years," he says.

Indeed, with such a large supply of distressed properties and foreclosures, the timing of a recovery hinges in part on how quickly banks and servicers dispose of these holdings.

Foreclosure bargains
The average sale price of properties in some stage of the foreclosure process — from default to bank-owned — was $168,321 in the first quarter, down 1.9% from the fourth quarter of last year and 1.5% from the first quarter of 2010, according to RealtyTrac.

Homes in some stage of foreclosure traded on average at 27% below the average for standard sales — a bigger discount than the 26% discount posted in the first quarter of last year.

Bank-owned properties sold for the largest discount — 35% on average, slightly more than the 33% discount taken by lenders at the same time last year. A total of 107,143 bank-owned homes sold in the quarter, comprising 19% of sales.

Pre-foreclosure properties — those in default or scheduled for auction (often short sales) — sold for an average discount of 9%, an improvement from the 14% average discount taken on them in the first quarter of last year. Sales of 51,292 such properties were recorded in the first quarter, down 45% from the same period last year.

While sales in this category overall were much lower than last year, some reports point to a recent pickup in short sales. That’s what Luis Mendoza, a real-estate agent with Century 21 Award in San Diego is seeing in his area.

"I have seen a huge increase in short sales," Mendoza says, as some loan modifications have fallen apart. These short sales are bargains too, he says, trading at about a 15% to 20% discount to the houses around them.

This decline in prices is making mortgage payments rival rents in many areas. In downtown San Diego, he says, a two-bedroom condo can be rented for $2,500 a month, or bought for the same monthly mortgage payment.

Indeed, affordability has gotten a larger number of investors out in the market, says Christian deRitis, director of consumer credit analytics at Moody’s Economy.com.

"They’re buying up foreclosures, fixing them up and turning around and renting them," he says.

Foreclosure hot spots
Not surprisingly, the most foreclosure sales are being posted in boom-and-bust areas of the West.

Sales of properties with foreclosure filings accounted for 53% of all residential sales in Nevada during the first quarter, the highest of any state, but down from 59% in the first quarter of 2010. Because so many of the sales there are foreclosures, and have been for so long, the discount rate is declining, Sharga says, reaching 18% in the first quarter.

California foreclosures accounted for 45% of all residential sales during the first quarter, up from 43% in the previous quarter, but down from 48% at the same time last year. The average foreclosure property in the Golden State sold for 34% less than the average price of homes not in foreclosure.

Foreclosures made up 45% of all residential sales in the first quarter in Arizona, down from 50% the previous quarter, and 47% in the same period a year earlier. Foreclosures here traded for a 25% discount to the average traditional listing.

Other states where foreclosures accounted for at least one-quarter of all sales were Idaho, Florida, Michigan, Oregon, Virginia, Colorado, Illinois, Georgia and Ohio.

The biggest discounts on foreclosure properties were in Ohio and Illinois, where foreclosures traded at an average 41% discount to the average nondistressed listing.

Could foreclosures kill the recovery?
To be sure, the large numbers of distressed properties in the housing market are taking their toll on prices this year.

The Federal Housing Finance Agency’s Home Price Index, which uses home-sale price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 2.5% lower on a seasonally adjusted basis in the first quarter than in the fourth quarter of 2010, the biggest quarterly decline since the fourth quarter of 2008, the agency said Wednesday. Prices fell 5.5% between the first quarter of 2010 and the first quarter of 2011.

And that picture wasn’t looking any rosier, as the country entered what is traditionally the peak selling season. In April, the U.S. median home price declined 5% to $163,700 from the same time a year earlier, according to the National Association of Realtors.

Given the large backlog of distressed properties and the sluggish economy, Moody’s predicts a 5% decline in home prices for 2011 overall.

If banks decided to sell off a much larger number of the distressed properties on their books, analysts say, prices could erode further, postponing a recovery.

However that’s not something Sharga and deRitis are predicting.

"Banks are in a much better position now than they were in the past," deRitis says. "They are not as desperate. I see a much more orderly process going on."

2011 first quarter foreclosure sales by state
Foreclosure properties — bank-owned homes and those in some stage of foreclosure — continued to make up a large number of all home sales across the country. And with discounts averaging 27% below the average price of homes not in foreclosure, they weighed heavily on prices. Here are the foreclosure sales by state and the discount these distressed properties commanded.

By: The Editors of This Old House, This Old House online

Get Ready for the Cold Season

Fall means vibrant red, orange, and yellow foliage, lots of pumpkins, and refreshingly cool temps. But, it also means winter isn’t far away. Here are a few projects—from looking after your exterior to maintaining your heating system—that can help your home brace for the cold and save you some cash.

Install and Maintain Paths and Walkways

When crossing your muddy yard to fetch the daily paper turns into an obstacle course of slips and slides, perhaps it’s time to think about an alternative path—literally. Holiday guests to come would also appreciate safe passage to your door. So, take a weekend to lay a brick walkway.
Make sure you check sidewalks and driveways for cracks. If you don’t fill them now, water can seep in and freeze, making them even larger. Take the time to resurface worn concrete now and save you a whole lot of time and money later.

Light the Way With Outdoor Lanterns

Less daylight calls for illumination. You can also enhance the nighttime curb appeal of your home, while adding a measure of safety and security, by installing low-voltage landscape lighting. These exterior-grade fixtures are typically placed along walkways and driveways, but they’re also ideal for illuminating steps, trees, stonewalls, fences and other prominent garden features.
You can also add a charming lamppost to mark the start of your driveway.

Prep Your Landscape and Start Composting

"Grass roots keep growing until the ground gets down to around 40 degrees," says TOH landscape contractor Roger Cook, "so this is a good time to feed them." Apply a high-phosphorus (12-25-12) mix to lawns in fall to encourage roots, so turf greens up earlier in spring.
It’s also a good time to seed a new lawn, start a compost pile, and trim shrubs and trees.

Build a Trash Shed to Hide Unsightly Containers

Nothing mucks up the holiday season curb appeal of your house more than a bunch of beat-up trash cans and overflowing recycling bins scattered next to the side door.
Build a sturdy storage house that hides two 32-gallon trash cans and several stacked recycling bins. Flip-open lids give it easy access so that you can quickly toss something away in the right place. Bifold front doors make it easy to move heavy cans in and out.

Put Light Where You Need It With a Garage Floodlight

If you’ve never been stuck with the task of taking out trash after dinner clean-up, then lucky you. But, in the fall and winter, the last haul often goes out after-dark. Install a motion-sensor garage floodlight to keep you company. It’ll also welcome you and your guests home with its warm illumination.
Speaking of garages, now’s a good time to tidy up the place. For most, the garage sees a lot of action during the summer with yard tools and pool accessories moving in and out. It might be handy to actually get the car in there now that winter weather is on the way. Create a garage storage plan and build a work bench to stow tools if you have the space. Consider replacing the stained concrete slab with an epoxy-coated garage floor that’ll resist oil stains, bead water, and wipe clean.
TOH Tip: While you’re in the garage, fuel up the snow blower so you’re not caught with your gas down when the white stuff comes. Take some time to put your lawn mower to bed with a tune-up that’ll ensure it’s working like new come spring.

Freeze-Proof Exterior Faucets

Even the most intrepid do-it-yourselfer shudders at the thought of a burst water pipe. If not immediately noticed, a ruptured pipe can be both expensive and time-consuming to clean up.
Fortunately, the pipe that’s most susceptible to extremely cold weather—the outdoor hose faucet—is also one of the easiest to protect from freezing. Replace an existing hose faucet with a freeze-proof faucet. You can do it yourself in just a few hours.

Get Your Entry Guest-Ready

Unfortunately, a door’s weather seals, if it has any at all, can rip, compress, bend, or wear out over time, leaving chilly winter air free to enter (or expensive air-conditioned air to leave). Lucky for you, making your door draft-free is a straightforward exercise, far cheaper and faster than installing a new door.
Once that’s done, enhance curb appeal with aesthetic entry upgrades like adding exterior trim, flanking the door with sconces, throwing down a doormat, and swapping entry locksets.

Build a Mudroom Bench With Storage

Fall means back-to-school. Create a stopping area just inside the entry where everyone can leave the weather and dirt from their day behind. Build a mudroom bench that’s the perfect catchall, complete with an open top shelf, coat hooks, and flip-top bench storage.

Maintain Your Washer and Dryer

Left unattended, a burst washing-machine hose can spill hundreds of gallons of water an hour. Likewise, a dryer can erupt in flame if lint is allowed to build up inside the machine or its ducts.
Preventing such mishaps is as easy as replacing a washer’s old rubber hoses, ideally with steel-jacketed ones that can’t split open. Or discarding the dryer’s flimsy—and flammable—vinyl duct and putting a metal one in its place.

Drape Away Drafts

Even after you’ve weatherstripped and caulked them, windows in older homes can still be drafty. Here’s another line of defense against the chills: window treatments.
The right shades, curtains, and even blinds will help retain some portion of the estimated 10 to 30 percent of heat lost through windows in wintertime. Install window shades and you’ll also gain control of natural light.

Give Your Fireplace a Facelift

Chipped bricks, a stained hearth, and years of accumulated soot can turn what should be the focal point of a living room into an eyesore. Replacing a hearth and surround—either with seamless stone slabs or with stone or ceramic tiles—makes a big difference in the way a fireplace looks. Take a look at our 8 steps to giving your fireplace a facelift. For added safety, consider adding glass fireplace doors.
Adding an insert is a smart investment that’s pure win—it’ll keep you warm and slash your heating bills all at once. Complete this energy-efficient upgrade before December 31, and you’ll score yourself a tax credit from Uncle Sam.
TOH Tip: The National Fire Protection Association recommends that getting chimneys swept at least once a year at the beginning of the winter to remove soot and debris. Find a certified sweep in your area via the Chimney Safety Institute of America.

Add Warmth Underfoot With Cork or Carpet

Nothing’s worse than waking up to the icy shock of a cold floor. Resilient yet durable, stylish yet earthy, adding a natural easy-install cork floor can turn any cool room into a cozy haven.
Cork not your thing? Warm up rooms with traditional carpets; here’s how to install wall-to-wall carpeting yourself with professional results.

Create an Efficient Home Office

Few people today would consider remodeling a house without making room for a home office. Chalk it up to the spike in part- and full-time telecommuting, after-hours e-mailing, and an effort to keep the Internet out of kids’ rooms.
Whether it’s a bare minimum desk off the kitchen or a full-blown study with custom cabinets, multiple work surfaces, and extensive file storage, here’s how to create a workstation that’ll work for you.
For added storage in your workspace, build a bookcase or put up wall-mounted shelves

Get Your Heating System Serviced

Before the chill sets in, make an appointment for your furnace’s annual checkup. Without this yearly cleaning and inspection, a system can wear itself out quickly, pump deadly carbon monoxide into your home, or simply stop working.
If you have forced-air heating, change the furnace filter. You’ll notice a difference in the air quality, and your furnace will run more efficiently.

By Scott Van Voorhis of Bankrate.com

Risky foreclosures could help savvy sellers

The cloud over foreclosures comes with a silver lining for homeowners who are seeking an edge when they sell real estate in a strong buyers market.

The good news for sellers is that foreclosures look risky again. Savvy sellers — or those who have equity and are current on their house payments — could turn the tables and use the robo-signing follies to their advantage, experts say.

"I am not seeing buyers afraid (yet) to buy a foreclosure," says Elizabeth Weintraub, a real-estate broker in Sacramento, Calif. "They should be."

The robo-signing controversy has led to a slowdown in foreclosures. The lull is likely temporary, and sellers’ advantage from a drop in foreclosures is potentially fleeting, with many markets still flooded with distressed properties, says Katie Curnutte, a spokeswoman for Zillow.com. There might even be a boomerang effect later this year after banks get back up to speed with auctions, she says.

Here are tips for home sellers who want to take advantage of a rare lull in the foreclosure crisis.

1. Sell sooner rather than later

If you don’t have to sell in this market, don’t. But if you must, take the plunge now.

Sure, the slowdown in foreclosure activity could mean less competition now. But you should account for a boomerang effect: The number of foreclosures is expected to skyrocket later this year.

2. Get your story out

Foreclosure sales used to be rare. But in some markets, they now comprise 20% to more than half of all sales.

If you are a long-term homeowner who has kept up on your mortgage payments, you must deliver that message. This is your key advantage over a lower-priced foreclosure, especially in light of the robo-signing mess.

Buyers will know from whom they are buying the home —no title issues here. You can get this point out tactfully in your ads with phrases such as "long-term ownership" and "been in the family for decades," Weintraub says.

3. Do your homework

Savvy buyers will come in with a stack of comps, or comparable properties, and many of them will be rock-bottom foreclosures. Provide your own market analysis, which can help highlight the challenges facing foreclosed properties.

The first report should be of comparable homes sold in the past few months, with foreclosures broken out separately, if mentioned at all, says Jim Kimmons, broker-owner of Gallery Realty of Taos, N.M. The second should detail homes on the market now. This will help you frame the decision on favorable terms: Buyers should consider homes like yours instead of foreclosures.

4. Price aggressively without undercutting foreclosures

The aim is to sell your home, maybe with a small gain. Forget about making a killing. Few homeowners who are current on their mortgage can match a foreclosure price.

But buyers are still looking for low prices. Look at what other nondistressed properties are selling for in your neighborhood and set your price below them. Drive home the point that the price is the price — with foreclosures, a bank can take a better offer until the day of the closing, Weintraub says.

5. Burst those foreclosure fantasies

Many buyers haven’t a clue about what it takes to buy a foreclosed home. In many cases, individual buyers don’t stand a chance because they compete with investors who are ready to pay cash, Kimmons says.

If buyers or agents don’t know this, enlighten them.

"There is a significant percentage of buyers (who) could not buy a foreclosure if they wanted to," Kimmons says.

By Dana Dratch of Bankrate.com

Searching for value

Today’s homebuyers want it all.

Items on their shopping list include a home in great condition with rooms that can do double duty. Areas that mingle indoor and outdoor living — patios, porches, decks and outdoor rooms — are always a plus. So are features that offer a little luxury, such as garden tubs, first-rate appliances and high-dollar countertops.

They’re also going back to basics and searching for solid, well-maintained properties that will give them their money’s worth.

"I think this year, they’re buying properties that are in good mechanical condition that have inherent value," says Ron Phipps, president of the National Association of Realtors.

But more than anything, buyers want to drive a hard bargain.

They want "great deals," says Patricia Szot, president of the MetroTex Association of Realtors in Grapevine, Texas. "And no matter where a seller prices their property, they’re looking to negotiate."

Here are nine items popular with buyers this year.

1. Homes in good condition

Buyers demand homes that are well-maintained, Phipps says.

"There’s not a lot of flexibility in that," he says.

The attitude is: "I’d rather spend the money getting into the house" and not have to spend more money later, he says. Buyers don’t want an unknown expense hanging over their heads.

Pat Vredevoogd Combs, past president of the NAR and vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich., says she agrees.

"I’m not working with too many people who want a fixer-upper," she says.

One big reason: "Buyers have limited amounts of cash" in most transactions, Phipps says. "Even if they want to do a fixer-upper, they don’t have the money to do it."

"Buyers have enough money to buy," he says. "They don’t have enough money to buy and improve. And the lenders make it really difficult."

2. Rock-bottom bargains

"(Buyers) are more focused on negotiating, drawing limits in their mind and focusing on the strategy," says Justin Knoll, president of the Denver Board of Realtors.

Some of it is a point of pride, he says: "They want to tell their friends and family that they really got a smokin’ deal."

They also want value, says Alice Walker, president of the Greater Nashville (Tenn.) Association of Realtors.

"They are very picky. They’re just a lot more critical," she says. "They are not going to settle because they know they don’t have to."

Her advice to sellers: Repair, update, clean and stage.

"You have to remove every obstacle possible for the buyers," Walker says.

The more-for-less approach even holds when buyers consider bank-owned properties, says Joan Pratt, a real-estate broker at Re/Max Professionals in Castle Pines, Colo.

"They want the short sales and the foreclosures, and they want them to look like they’re owner-occupied," she says. "They don’t want to paint. They don’t want to put carpet in. They don’t want to clean."

And they’re surprised when they don’t find homes in this condition, Pratt says.

3. Outdoor living areas

"The thing that we’ve seen over the past couple of years is more outdoor living areas," says Laurie Knudsen, president of the Charlotte (N.C.) Regional Realtor Association.

Some popular features include screened porches, outdoor kitchens and two-way fireplaces.

"It’s a selling point if a house already has it," Knudsen says. "It’s going to make it more competitive on the market."

4. Incentives

Call it "Rock-bottom deals, part two."

Along with pricing, "it’s all about incentives," says Mabél Guzmán, president of the Chicago Association of Realtors.

To pique buyer interest, sellers offer everything from gift cards for new furniture and paint to financial assistance at closing.

Szot says she agrees and laments that this has made the road more difficult for sellers.

"Not only are (buyers) asking them to lower the price, but they are asking for a lot more," Szot says. "So negotiations are a lot more difficult now."

5. Practical ‘green’ features

Call it "Yankee frugality," Phipps says. What he sees on buyers’ shopping lists is a home that is easy on the planet because it’s easy on the wallet, he says.

Buyers are looking for features such as triple-glazed windows, high-efficiency boilers and energy-efficient appliances.

"The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible," Phipps says.

Another popular item: green features that aren’t tech-related. Buyers are looking at how sun exposure relates to energy efficiency, he says. That will vary by area, he says.

"In some areas, you want larger overhangs to minimize the sun," Phipps says. "In my area (New England), lots of windows on the southern side to maximize the sun would be smart."

6. Open kitchens

"The wall between the kitchen and the family room is evaporating," Phipps says.

"The kitchen is becoming part of the gathering space. And it’s ironic — it’s the way it was 300 years ago. We’ve come full circle."

7. Repurposed materials

Buyers like a material that looks or feels natural, even if it’s not genuine, Phipps says.

"Granite (for counters) is still popular, but it doesn’t have to be granite," he says. "It can be stone, another natural material or something that looks like stone.

"We’re seeing lots of different materials and lots of reusable materials, which is interesting. Also, (we’re seeing) a lot of unusual uses of hardwood, like pine flooring reused for counters," and glazed terra-cotta slabs used for countertops.

8. Smaller, less formal homes

Buyers are buying smaller homes, but they want to be able to use every inch of space, Phipps says.

"They are being much more strategic and efficient with how they use it," he says.

Formal spaces that might be used only three or four times a year are disappearing.

"The slipcover rooms are gone," says Phipps.

That has "led to a repurposing of space," he says. Formal living rooms have been added to great rooms or converted into home offices or entertainment rooms.

"Three to five years ago, if (buyers) could get a loan that would get them into a McMansion with stone and tile and brick and more rooms than they needed, they would do it," says Jeff Wiren, president of the Portland (Ore.) Metropolitan Association of Realtors. "Now, they’re saying, ‘I don’t know if I want to heat that place and clean it.’ They’re being much more realistic."

9. Touches of luxury

Buyers like luxury. Sometimes, the amenities that convey the feeling of living large are relatively simple and inexpensive.

One example is coffee bars in the master bedroom.

"It’s like a butler’s pantry in your bedroom — an area for your coffee pot and accoutrements and a little fridge," Pratt says.

The feature has been popular, especially in high-end homes, for about five years, she says.

Another luxury touch: high-dollar finishes in less-expensive homes, Knoll says. Granite counters and stainless-steel appliances, marble tiles in the bathrooms, and vessel or undermounted sinks continue to impress, he says.

Buyers also like "a living space where you can have bar stools and do some entertaining," he says.

"There is a sex appeal about housing," Knoll says, "and (buyers) do get excited about those kinds of things."

By: Les Shu

Published: February 17, 2011

Downloadable iPhone and Android apps offer ways to maintain, improve, and save money on your home.

Smartphones like Apple’s iPhone and those based on Google’s Android do more than make calls, thanks to hundreds of thousands of downloadable mini-software items called apps. There are many home improvement apps designed to help you save money or take care of projects. Here are some of the best:

Match that paint color

If you see a color at a friend’s house that would look great in your home, use Benjamin Moore’s Ben Color Capture or Sherwin-Williams’ ColorSnap, free mobile apps for iPhone, to conjure up a matching paint color and code in a jiffy. Take a photo with your phone, and the app matches the paint as closely as possible, and will display secondary and complementary colors. (ColorSnap is also available for BlackBerry.)

Get rid of stains

Good Housekeeping magazine has placed all their best stain-removal and cleaning advice into their free @Home app. It also includes decorating ideas and a searchable list of the 5,000-plus products that have earned a Good Housekeeping seal.

Look for recycled stuff

If you’re searching for a cheap replacement part, or looking for a deal on slightly-used appliances and materials, eBay’s free Mobile app lets you search the auction site’s entire marketplace from iPhone, Android, Windows Phone 7, and BlackBerry devices. You can also put any of your disused-but-functional household items up for sale and recoup some cash.
For listings close to home, search the popular Craigslist site through the free Craigsnotifica for Android or Craigspro for iPhone.

Price comparison

Finding lower prices on electronics and appliances used to mean driving from store to store or scanning Sunday circulars. With the free Price Check by Amazon, you can scan a product’s barcode at a store and compare the price against Amazon and other merchants. (Android and BlackBerry versions are also available.) PriceGrabber has a similar app for iPhone and Android.

Carpenter’s tools in one

For $1.99, the iHandy Carpenter app puts a ruler, protractor, bubble level, surface level, and plumb bob into your iPhone, allowing you to make measurements without lugging out the tool box. It’s perfect for simple jobs like hanging frames and mirrors.
Need just a level? There’s a free app for iPhone from iHandy and for Android from Johnson.

Calculate materials you’ll need

Before you approach a home improvement project, use the $1.99 Handy Man DIY to record dimensions of flooring, windows, walls, and more. It calculates how much material you’ll need and gives you a cost estimate.

Order supplies

If you’re in the middle of a home improvement job and need supplies, use the $4.99 Work Shop app to order them from your iPhone. It’s also a great tool for keep track of expenses or plan your budget for a future project.

Light the way

With the iPhone’s bright display and the super-bright LED flash, you can use it in place of a traditional flashlight to illuminate crawl spaces, attics, cabinet recesses, and other dark spots. There are many apps for this purpose, but two favorites are the 99-cent Flashlight (and 99-cent Flashlight+.

Know what and when to plant

Wonder why certain vegetation isn’t growing in your yard? Landscaper’s Companion provides a reference guide to more than 2,000 plants. You can search for a plant based on your garden’s sun exposure and garden zone, helping to ensure you won’t get any dead leaves after planting. The app costs $9.99.

Find a stud

Using your iPhone’s magnetometer, StudFinderPRO can help you locate studs by locating the magnetic fields emitted by metal objects like screws and nails. The app costs $2.99. A free Magnetic Stud Finder is available for Android devices.

Hire a virtual designer

Need decorating ideas for inspiration? Check out Home Interior Layout Designer—Mark On Call for $2.99. Created by an interior designer, the app can help you plan a space and determine if furnishings will fit. Also consider the $4.99 Living Room app for iPad and the 99-cent Dream Home app for iPhone. 

Some people love negotiating and others hate it. Regardless of which side of the sold sign you fall on, the best possible deal is what both buyer and seller want. Arriving at that price can be a lesson in frustration or even cause a complete shut-out.

So what’s the X factor? In real estate, many buyers will shop around, find the home they really like, and then, rather than make an offer based on the value of the home to them (taking into consideration comp prices too), they’ll say, "How much less should we offer off the asking price?" That’s the X factor.

It’s as though there’s a magical X percentage that should automatically come off the listing price, regardless of what the asking price is. Many times the home is priced realistically––right in line with the comps. Buyers still want a deal and may want to start with a low-ball offer. Doing this can slow the process and not necessarily result in the outcome the buyer wants–the seller, feeling insulted, may halt any negotiation. If you’re a serious buyer looking to purchase a home, it’s a good idea to really heed the comps, and consider the value of the home to you–especially if the home you found meets your needs and desires.

Arriving at a purchase price for a home is very personal. What one buyer would pay, another might not for the very same home. Of course, there are appraisals to make sure that the home’s price is in line with how much the bank is willing to lend the buyers. But the buyers’ needs, the home’s location, amenities, and its overall appeal, significantly factor into its value. On the other side, the need to sell, the timeline, and the pressures of needing the money out of the home to purchase another property affect the sellers’ decision to accept an offer.

All kinds of negotiations begin when it comes to buying a home. Art, drapes, dishes, timelines… many different things are thrown into the negotiating process. If there’s something you absolutely must have, of course, negotiate to get it. Just understand that negotiation means compromise, so both sides will give a little and ideally both sides will win–not by a winner takes all stance but rather by each side getting their specific needs met through a compromise process.

If as a buyer you have a list of your top priorities jotted down before the process begins, it will be easier to keep them straight and ensure that those items are secured when the negotiating begins. Then, if suddenly, a non-top priority pops up and is causing the process to stall or come to a halt, you can re-evaluate your top priorities to see if this is truly a must-have or if, perhaps, you’ve fallen into the "winner must-take all" syndrome of negotiating. A lot of times emotions get ignited and sometimes the negotiation process becomes more about winning than really getting what the party needs or wants. In the end, that will create an unsatisfactory sale or no sale at all.

Meeting in the middle can often be a good tool for buyers and sellers who can’t come to an agreement on things like who will pay for the recording fee or certain cosmetic repairs. Splitting the costs can be less expensive than haggling for weeks, losing time, money, and maybe even the deal.

If you reach a really sticking point in negotiations, table it for a bit. Move on to other negotiations and see how many areas there are that both parties can come to agreement. Often the issue that was holding things up will then appear in a different light to both buyer and seller once the bigger items are resolved.
Written by Phoebe Chongchua

Plan ahead, keep your cool and the process will go smoothly.

By Shannon Petrie, FrontDoor.com | Published: 11/10/2008

The holidays are stressful enough on their own, but trying to sell your home during this busy season can seem like too much to handle. Luckily, if you plan ahead and keep your cool, the process of selling your home during the winter months can go smoothly. Try these tips to ease your holiday selling stress so you can enjoy the season.

· Prepare your home well in advance. If you know you’re going to have to sell during the holidays, the sooner you can get your home ready to put on the market the better. Several months before you have to sell, start clearing out clutter and personal items such as family photos and knickknacks and cleaning your home from floor to ceiling. Getting these chores out of the way early will give your more time to enjoy the holidays.

· Take care of holiday errands early. Don’t procrastinate on your Christmas shopping. Selling your home is stressful enough, so you don’t want to be stuck fighting traffic and long lines at the mall as well. Think ahead and get your errands done before everyone else enters holiday panic mode.

· Hire someone to help with the cleaning. You’ll need to keep your home immaculate for showings, which is easier said than done when friends and family are frequenting your home for holiday parties. Spending a little extra money on a housekeeper for this hectic season can pay off by saving you time and energy.

· Look on the bright side. While maintaining your home’s curb appeal is still important in the winter, just think of the things you don’t have to do, like mowing the lawn or weeding flower beds.

· Don’t schedule showings when you have houseguests. Your friends and family won’t be pleased if they have to vacate every time a buyer wants to take a look. If you plan on having holiday visitors, let your agent know that these dates are off-limits for showings.

· Keep the weekends open for showings. Homes show better when it’s bright out, but as the days get shorter, buyers may have less time to squeeze in daytime visits during the workweek. Be prepared to open your home to buyers over the weekend.

· Don’t fret over a lack of lookers. Fewer people viewing your home doesn’t necessarily mean fewer offers. When you sell a home in the spring, you’re likely to get a lot of visits from people who are just casually looking to buy. You may not get as many visitors during the holidays, but the ones you do get will be serious about buying.

· There’s always next year. If you don’t manage to sell during the holiday season, don’t let it get you down. Sales should pick up as spring approaches, so you could have more luck then.

Get a head start on the holidays with these seasonal updates designed to put you in festive mood for fall.

myhomeideas.com

Deck the Door

Let the neighbors know fall is here with a festive wreath hung on your front door. You can make it yourself using vines that are still pliable, wrapped in the shape of a wreath.

Add fall embellishments, such as leaves, acorn clusters, and pinecones, and then secure them with wire and hot glue. Finish off the wreath with a bow on the bottom. Make two or three, and you can add one to your mailbox as well.

Colorful Front Entry

Add some container plants. Plant yellow and gold chrysanthemums in large terra-cotta pots and arrange them with several autumn pumpkins on your front steps as a welcoming entrance for guests.

Chrysanthemums come in several colors, including white, off-white, yellow, gold, bronze, red, and burgundy, so choose a variety of colors.

Fall for Your Foyer

Freshen up your foyer with a new accent rug. To warm up the entrance, choose a darker color that will hide the dirt that gets tracked through your home now that sandals have been replaced with boots.

Accentuate With Pillows

Accent pillows are the easiest accessories to change out for a quick update. If your current pillow covers are not removable, buy a yard or two of a fall textile at your local fabric store and sew some new covers with a button or zipper closure to go over your current pillows.

Choose heavier fabrics with a comfortable texture. This will carry you through winter and is more reasonable than pricey custom pillow covers.

Shades of Autumn

Find some new lampshades in hues of cranberry, rust, dark chocolate brown, or forest green. Or, add color to your current white lampshades by trimming the edges with ribbon.

Remember, autumn is known for the rich colors in the falling leaves, so let nature be your inspiration when choosing your shade.

Drape Update

You can make your own curtains to switch out with lightweight summer selections. Buy a heavier fabric such as velvet or acrylic to cover windows, and line the back with a heavy canvas material.

Lining windows with thick, sturdy treatments will also help keep your power bills lower by helping to block out cold air that seeps in through the windows.

Natural Arrangements

Use natural items as a centerpiece. Fill a glass bowl or vase with a colorful mixture of seasonal fruits such as pomegranates and kumquats.

For a taller centerpiece, use an arrangement of dried fall flowers, and fill the bottom of the vase with acorns gathered from your own yard.

Kitchen Color

Don’t forget about the kitchen. Give your kitchen a fall update with dried flowers, wreaths, and woven baskets. Nix the fruit basket, and fill a glass bowl with a range of seasonal vegetables, such as acorn squash, pears, quince, figs, and small pumpkins. Display fall-colored hand towels, oven mitts, and aprons to splash your kitchen with seasonal colors. Also, fill your dispenser with citrus- and pine-scented hand soaps for earthy fall scents.

Cozy-Up Comforter

Add a winter quilt on the end of your bed for a splash of fall color and added warmth on those chilly autumn nights. Pick one with a darker neutral color (such as chocolate brown) to easily match your current bedding.

Learn what features consumers are looking for in design and construction this year.

By Hannah Shipley, FrontDoor.com | Published: 7/20/2010

During a panel at the 2010 International Builders Show, Eliot Nusbaum, executive editor for home design for Better Homes and Gardens, explained that practicality and price are fueling decisions on how homes are designed and built.

Nusbaum says the homeowner of today is "looking for a home that fits the entire family — from a multi-tasking home office, to expanding storage space needs, to a living room that can adapt to advancements in home entertainment and technology."

A Smaller Home

Today’s consumers are buying homes with less square footage. Purchases of smaller homes are up 36 percent from last year.

But just because a home is small doesn’t mean homeowners are sacrificing precious living space. Open concept floor plans are the resounding trend in smaller homes, where higher ceilings and an easy flow maximize perceived living space and allow rooms to serve multiple purposes.

Energy Efficient Appliances

Saving energy and money go hand-in-hand when using Energy Star appliances in the home. These eco-friendly products use less electricity, thus helping to lower your utility bill

Efficient HVAC Systems

Today’s HVAC systems are far more efficient than those of a few years ago. Not only do they bring increased comfort and improved air quality to the home, but they also use less energy and help to lower utility costs.

An Efficient Design With Lots of Storage

Homebuyers are looking for ways to maximize space and make better use of a home’s square footage.

An efficient design, with an open floor plan and multi-functional rooms, is complemented by a lot of storage.

With more people buying small homes, unique and practical storage solutions allow homeowners to have enough space to stay organized.

More Natural Light

Going with the theme of eco-friendly living, homes that maximize natural lighting don’t require as much energy to stay well-lit inside.

Plus, by adding more windows (or just larger ones) to bring more natural light into your home, you’ll make your living space feel larger and get better outdoor views.

A Separate Laundry

Being able to keep the family’s personal items out of sight is a luxury many homeowners want in their home. No one wants to feel like the washer and dryer are in the middle of the cooking or entertaining area.

A home with a separate area for laundry, whether it’s a designated room or just a space away from the higher traffic hot spots, offers a world of convenience.

An Outdoor Living Area with Private Backyard

A well-constructed porch, deck or patio can do wonders for a home’s perceived square footage. Plus, with proper landscaping, the backyard can allow for outdoor fun and relaxation without feeling like the whole neighborhood is watching.

Eat-In, Partially Separated Kitchen

A designated spot for dining in close proximity to the kitchen is important to homeowners, as is a partially separated kitchen. Being able to maintain an easy flow of space while keeping the kitchen from overflowing into other parts of the home allows families to dine together with ease, but it keeps the hustle and bustle of a kitchen from taking over the rest of the house.

Guest Bedroom and Bath

You want your overnight guests to enjoy their visit. You don’t want them feeling like they’re taking over an office or living room by sleeping on a foldaway couch.

A guest bedroom with additional bath may seem like an extravagance, but the extra living space adds value while also offering guests a private area where they can feel more at home.

A Comfortable Family Gathering Space

Think of a family room as a combination of a formal living room and a den — a place where the family can gather together for fun and relaxation. With family time a priority, many homeowners are coming up with new and inventive ways to customize a designated space to share with their loved ones.

A Home That Multi-Tasks

Today’s home office is more than just a desk and some shelves. Homeowners want a designated, functional space that allows them to work away from the rest of the family and not have to run back and forth throughout the home to get things they need. They are integrating features for productivity and convenience, such as a media system with TV, Internet and phone service, and refrigerator and freezer drawers for enjoying drinks and snacks without leaving the room.

Improved Home Electronics

Today, technology can integrate all sorts of home systems, allowing devices to "talk" to each other and share information. Home entertainment systems can be designed to stream content from your TV, Internet or DVDs. Smart phones can be connected to your alarm system, security cameras and lights so you can access and activate them when you’re not at home. Plus, energy dashboards let you monitor the energy you use and how much it costs.

Large Three-Car Garage

The garage has come a long way from being the place where you park your car. A large garage is a necessity for homeowners with multiple recreational vehicles, like motorcycles or boats. Other people will section off part of the garage and use it for storage, as a workout/gym area or as specialized work space, like an artist studio or workshop

A Low-Maintenance Exterior

Homeowners don’t want to spend time and money continually repairing siding, re-sealing the deck or dealing with other home exterior hassles. They want healthy landscaping and a beautiful home without having to keep up with all the maintenance.

Thanks to more durable building materials, like vinyl, cement fiber siding and composite woods, exterior upkeep is much easier. Plus, low-maintenance landscaping requires less water and less time for weeding, mowing or pruning.

Homebuyers should be prepared for extra costs and delays as cautious mortgage lenders order stricter reviews.

By Marcie Geffner of Bankrate.com

Homebuyers and sellers who expect an appraisal to sail through to closing without a hitch may be surprised to discover that home appraisals today can be problematic. The reasons for the change are complex, but there’s no question that mortgage lenders have started to demand more reviews and do-overs.

Rob Johnson, vice president of lending at San Diego Funding, a mortgage company in San Diego, attributes the increase in home appraisal reviews to lender-specific requirements imposed because of past problems with certain types of home loans. For example, a mortgage lender might demand more scrutiny of an appraisal if the borrower has a marginal credit score or high debt level relative to income or if the property was a foreclosure that was fixed up and flipped by an investor.

Appraisals may lag home prices
Home prices are also a factor. When prices are on the rise, perhaps because buyers have bid more in a multiple-offer situation, appraised values might still be lower. The reverse is also the case.

"Any time you have a market in transition, appraisals aren’t going to keep up because the appraisal is based on historical data," Johnson says.

Inadequate "comps" can present problems as well. ("Comps" are recent sales of nearby homes that are similar, or comparable, to the home that’s the subject of the appraisal.) The mortgage lender may deem the comps inadequate if the homes were too far away or were sold in such nontraditional circumstances as a short sale or foreclosure or if the sales occurred too long ago. If the comps aren’t sufficient, the lender may order a review or second home appraisal to verify that they were chosen correctly.

"If (the appraiser) can’t find three comps within that area and has to expand, that is where you start to get appraisal reviews or secondary appraisal requirements to make sure the appraisal was valid or that (the lender) was comfortable," Johnson says.

The term "second appraisal" generally refers to a new, start-from-scratch valuation. An appraisal review could be a "desk review," in which the appraisal gets a second look by an office-bound person, or a "field review," in which the appraisal is subject to another drive-by or in-person inspection of the property. A review is more common than a second appraisal.

New guidelines distance lenders from appraisers
Leslie Sellers, president of the Appraisal Institute in Chicago, says a lender might order a new home appraisal if the first one was based on factual errors or the appraiser wasn’t competent in the area.

Some second appraisals, he adds, result from a misunderstanding of the Home Valuation Code of Conduct, guidelines that were meant to prevent undue pressure being placed on appraisers to inflate home valuations, but that may have caused some lenders to cut off communication with appraisers.

"The banks are thinking they can’t even talk to the appraiser," he says.

Sellers can offer comps to appraiser
An appraisal review can cost several hundred dollars while a second appraisal generally involves a second full fee, says Sara Schwarzentraub, owner of Inter-State Appraisal Service in San Diego. These costs usually are paid by the buyer.

"It’s commendable that the lenders are being cautious and having stricter criteria to protect themselves, because in the long term that protects everybody, but it does make it more costly," she says.

Home sellers can offer the appraiser information that might affect the appraiser’s opinion of the home’s value. This information is best handed over before the appraisal is prepared.

"If you know of a sale that’s similar to your house and it was a foreclosure, short sale, divorce or anything of that nature, make the appraiser aware of that," Sellers says.

Real-estate brokers can help buyers and sellers find comps to offer the appraiser, Johnson says. If the broker believes comps may present a problem, the buyer and seller can plan accordingly.

"A good real-estate agent is aware of these issues. Many times, an agent will call us and say, ‘I know we are going to have problems with comps on this," he says.

Neither the buyer nor seller can choose the appraiser, but Sellers says buyers can insist on a minimum competency, which he defines as having local market knowledge and being certified as well as licensed.

Buyers and sellers also can agree on longer time frames for the home appraisal contingency and closing date. Schwarzentraub says that asking for a 45- or 60-day closing, rather than 30 days, is not unreasonable.

Buyers are entitled by federal law to a copy of any appraisal for which they’ve paid a fee. Buyers should look over the appraisal and notify the lender of any errors that could have affected the appraiser’s opinion of the home’s value.