Focus on Real Estate

`Extreme'ly Cool!

M/I Homes joined forces with Extreme Makeover: Home Editionto build a new home for the Thomas family in Whitehall.

Ex-Marine Jason Thomas was living in New Jersey at the time of the 9/11 terrorist attacks and helped save two trapped police officers in the World Trade Center ruins. He remained unidentified for his act of bravery until he came forward in August, following the release of the movie "World Trade Center."

The Thomases home at 4699 Harbinger Circle West in Whitehall was completely leveled and rebuilt -- including adding a basement -- in 110 straight hours! All the drywall was installed in one hour!

The massive project involved hundreds of area businesses and volunteers working day and night. It is believed the episode will air in February. We'll keep you posted as to the exact date when confirmed.

Renting can cost more than seven times annually than owning

The Federal Reserve Board estimates that homeowners have a net worth nearly 36 times more than that of renters. Over the past 10 years, the cost of rental housing in the United States has increased an average of 3 percent per year; average rents are projected to rise 4.1 percent this year alone. With a 3 percent annual increase, a current rental payment of $1,000 per month would increase every year and amount to $137,567 after 10 years, with no wealth accumulation.

In contrast, a $210,000 home purchased today with a down payment of $10,000 and a 30- year fixed rate mortgage at 6.5 percent would cost a steady $1,100 per month and yield a net worth of $138,521 after 10 years, assuming an historic 4.5 percent annual appreciation rate.

First-time home buyers who choose to `play it safe' and keep renting are essentially postponing the opportunity to build household wealth. Currently, with rental vacancy rates tightening, they can probably expect to see an increase in the rent they pay. No one can accurately predict the peaks and valleys of the housing market. If you try waiting for the absolute best deal, you could end up literally waiting for years, missing out on the opportunity to become a homeowner while prices are moderating.

Pension Fund Investing

Many people don't know that they can use their pension funds to invest in real estate. The truth is it's entirely possible and perfectly legal -- with a truly self-directed pension plan.

If a buyer doesn't have enough money to buy real estate outright with pension funds, they can combine one or more smaller funds together to make a single purchase, or they could approach one of a growing number of mortgage brokers and financial institutions that offer loans to self-directed pensions. This is a particularly effective strategy to use with the Solo 401(k) plans, as these plans don't require them to pay tax on the earnings that are derived from loans to the pension plan.

FHA Mortgages Looking Good!

Recent improvements to the FHA mortgage application process and efforts to make the program more user-friendly. These include:

l Eliminating the gift restriction on down payments. Now a buyer's entire down payment can be a gift from a
   family member, employer, charity or local government entity.
l Allowing the seller to contribute as much as six percent of the home's price toward closing costs. This
   helps buyers who may have limited cash on hand to complete the purchase.
l Giving buyers who don't have a credit history the opportunity for home ownership. An applicant cannot be
   turned down for an FHA insured mortgage based solely on lack of credit history.

Ask your local lender.

Beware of Trigger Lists!

"Trigger lists" are registers of mortgage applicants who have paid lenders to pull their credit reports. Once the repository receives an order, it places the applicant's name on the list with hundreds or thousands of other applicants, and sells the list to other lenders or brokers, who immediately contact people with what are claimed to be better offers.

Concern #1 -- deals could be put on hold or even short-circuited completely if a would-be buyer bites at an offer from another lender.
Concern #2 -- members are often accused by their clients of selling their personal information to the list generators when they, in fact, have nothing to do with it.

Now you can tell your buyer to "opt out" of having their names placed on trigger lists. However, be aware this advice may be considered anti-consumer.

Both NAR and the National Association of Mortgage Brokers have raised concerns about the practice. NAR has met once with the Federal Trade Commission and plans to meet with them again yet this year.

NAR to purchase Senior Advantage Real EstateCouncil

The Real Estate Buyer's Agent Council of the National Association of REALTORS® (REBAC) announced that it has signed a letter of intent to purchase the Seniors Real Estate Specialist (SRES) program from Real Estate Business Services Inc. (REBS), a wholly-owned subsidiary of the California Association of REALTORS®, and begin conferring the SRES designation. This potential purchase will make SRES part of the official National Association of REALTORS® family of professional certifications and designations. The SRES designation is available only to REALTORS®, and certifies that a REALTOR® is proficient in serving clients aged 50 and older. The move underscores the growing significance of the over-50 market.

Survey shows buyers want personal services

Technology is dominating many aspects of the real estate transaction process, but the most important factors are purely human, according to the National Association of REALTORS® 2006 Profile of Home Buyers and Sellers. Most sellers prefer full-service brokerages, where professionals handle all aspects of the transaction process from listing to closing. The survey finds 83 percent of sellers use full service brokerage, nine percent limited services and eight percent use minimal service, such as simply listing a property in a MLS.

Additional findings show consumer satisfaction with the level of brokerage service varies, with 71 percent of sellers being very satisfied with their full-service experience and another 24 percent somewhat satisfied. Limited services also received high marks with 76 percent being generally satisfied. However, 50 percent of sellers using minimal service were dissatisfied with their experience.

Buy Now Campaign

In response to the predominantly negative media attention bestowed on housing these past few months, the NAR Public Affairs Division launched a counter attack with their `Buy Now' campaign that included ads, press releases and live interviews in November.

NAR President Thomas Stevens did 40 interviews within a 14-hour time period. Ads were placed in six of the nation's leading newspapers. FYI - CBR ran the ad 11/10/06 in The Columbus Dispatch.

The message is simple -- "It's great time to buy or sell a home."

l Interest rates are low
l A good inventory of homes is available
l Prices have stabilized and are starting to rise
l The future of the housing market and the economy is positive

Included in the December In Contract and available online at ColumbusRealtors.com is a flier created by NAR which you can use to help your buyers understand that now is the time to buy!

Consumers still confident of home values

Americans remain highly confident about the nation's housing prospects, with more than four out of five homeowners expecting the value of their home to appreciate over the next five years and nearly seven out of 10 calling it their most valuable investment, according to results from a new nationwide survey conducted by RT Strategies. The polling found that 81 percent of homeowners believe that the value of their homes will rise over the next five years. Only 13 percent felt their home would fall in value, while four percent expected no change and three percent were unsure. In addition, 69 percent of the respondents listed their home as their most valuable investment.

By contrast, this was followed by 401(k) and other retirement accounts, with just 11 percent of those polled citing this as their top investment.