Homeowners will be protected by a new Federal Trade Commission rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable.
“At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results,” FTC Chairman Jon Leibowitz said. “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.”
The FTC is issuing the Mortgage Assistance Relief Services (MARS) Rule to protect distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis. Bogus operations falsely claim that, for a fee, they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale, or other relief from foreclosure. Many of these operations pretend to be affiliated with the government and government housing assistance programs. The FTC has brought more than 30 cases against operations like these, and state and federal law enforcement partners have brought hundreds more.
Advance fee ban
The most significant consumer protection under the FTC’s new rule is the advance fee ban. Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.
Disclosures
The Rule requires mortgage relief companies to disclose key information to consumers to protect them from being misled and to help them make better informed purchasing decisions. In their advertising and in communications directed at individual consumers (such as telemarketing calls), the companies must disclose that:
they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
the lender may not agree to change the consumer’s loan; and
if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.
Companies also must explain in their communications to consumers that they can stop doing business with the company at any time, can accept or reject any offer the company obtains from the lender or servicer, and, if they reject the offer, they don’t have to pay the company’s fee. The companies also must disclose the amount of the fee.
Prohibited claims
The MARS Rule prohibits mortgage relief companies from making any false or misleading claims about their services, including claims about:
the likelihood of consumers getting the results they seek;
the company’s affiliation with government or private entities;
the consumer’s payment and other mortgage obligations;
the company’s refund and cancellation policies;
whether the company has performed the services it promised;
whether the company will provide legal representation to consumers;
the availability or cost of any alternative to for-profit mortgage assistance relief services;
the amount of money a consumer will save by using their services; or
the cost of the services.
In addition, the rule bars mortgage relief companies from telling consumers to stop communicating with their lenders or servicers. Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.
Attorney exemption
Attorneys are generally exempt from the rule if they meet three conditions: they are engaged in the practice of law, they are licensed in the state where the consumer or the dwelling is located, and they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorneys must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts.
All provisions of the rule except the advance-fee ban will become effective December 29, 2010. The advance-fee ban provisions will become effective January 31, 2011.
The FTC rulemaking proceeding was conducted pursuant to Congressional legislation sponsored in 2009 by Senators Jay Rockefeller and Byron Dorgan. The Final Rule applies only to entities within the FTC’s jurisdiction under the Federal Trade Commission Act, which excludes, among others, banks, savings and loans, federal credit unions, common carriers, and entities engaged in the business of insurance. In June 2009, the FTC issued an Advance Notice of Proposed Rulemaking seeking comment on the practices of for-profit mortgage relief companies. In February 2010, the FTC announced a Notice of Proposed Rulemaking and sought comments from interested persons, including advocates for consumers, the business community, and the legal profession.
Thursday, February 24, 2011
Friday, October 29, 2010
Home Renovation Scams To Avoid.
Here is a great article about contractors and home renovations.
Home Renovation Scams To Avoid
By Michael Sanibel, Oct 18, 2010
1. One-Time Special
It's a very rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change anytime soon.
If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, a dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references.
2. I Might As Well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
This approach is often used to entice you into doing things that are visible from the outside like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
3. Cash before Work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
A reasonable down payment is expected to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value and it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction.
4. Financing Offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
5. Fly-By-Night Contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone that enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify their name, business name and license number, address and telephone number. Ask for their insurance papers, and verify that they are bonded in accordance with applicable laws.
6. Model Home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. In exchange for your agreement to the proposed work, you will likely be tempted with a deal that seems too good to pass up.
Chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work and if they needed one, they wouldn't use an occupied home for that purpose.
The Bottom Line
Use resources such as the Better Business Bureau, Department of Consumer Protection, and the local license board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are all reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project and if there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.
This is great advice to follow.
Home Renovation Scams To Avoid
By Michael Sanibel, Oct 18, 2010
1. One-Time Special
It's a very rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change anytime soon.
If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, a dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references.
2. I Might As Well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
This approach is often used to entice you into doing things that are visible from the outside like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
3. Cash before Work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
A reasonable down payment is expected to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value and it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction.
4. Financing Offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
5. Fly-By-Night Contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone that enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify their name, business name and license number, address and telephone number. Ask for their insurance papers, and verify that they are bonded in accordance with applicable laws.
6. Model Home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. In exchange for your agreement to the proposed work, you will likely be tempted with a deal that seems too good to pass up.
Chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work and if they needed one, they wouldn't use an occupied home for that purpose.
The Bottom Line
Use resources such as the Better Business Bureau, Department of Consumer Protection, and the local license board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are all reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project and if there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.
This is great advice to follow.
Tuesday, September 22, 2009
Short sales leave frustration in their wake CHICAGO – Sept. 21, 2009 – A few years ago, few people in the housing market had ever heard of a short sale.Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale.The Obama administration is aware of the frustrations. In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages.Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks.Meanwhile, homeowners like Dallas O’Day are in limbo.O’Day, a Chicago attorney, and his family relocated from California in June 2004 and bought a Mediterranean-style home in Chicago’s Beverly neighborhood for $395,000. They rewired the house, stripped and refinished the wood floors and the woodwork and did other work to restore its charm.Last year, personal circumstances prompted them to list the home for sale just as the housing industry’s meltdown was picking up steam. With no takers and no longer even expecting to break even on his investment, O’Day relisted the 2,700-square-foot home in January as a short sale.Four months and three price reductions brought the house down to $384,900, at which point a potential buyer made an offer in late May. O’Day accepted it and submitted the paperwork to the lenders holding first and second mortgages on the home.He has yet to receive a response. Meanwhile, the family has moved into a North Side apartment, the refrigerator has broken in the home and there’s evidence of mold in the basement.“The only thing we keep hearing is they keep wanting current payroll stubs, bank statements and taxes,” said O’Day’s real estate agent, Pam Decker at Prudential Biros Real Estate in Evergreen Park.“What has astonished me is that in the presence of one of the softest housing markets I can remember, we’re hitting up on four months and they’ve just had a person assigned to look at it, that they would move at such a glacial pace,” O’Day said. “My expectation is I’ll be renting until whatever blemish is gone. I’ve just accepted the fact that at some point it’ll be foreclosed upon because I just don’t think the banks will pull it together. I feel like I’ve done everything I can do.”During the second quarter, 14 percent of all home sales were short sales and they were made primarily to first-time buyers who may have more flexibility to deal with the long wait times, according to a survey by Campbell Communications. The sales volume could be much greater. Two out of three short sales never close.“In general, you have to have three offers for every completed short sale,” said survey designer Thomas Popik. “The first offer, the buyer walks before they get a yes or no. On the second offer they walk a good part of the time. The third offer is the charm because it’s been in process long enough at the lender that [the lender] knows they want to do this.“Home buyers are now putting in half a dozen verbal offers, hoping that on one of them the lender will say yes. What this is doing is bogging down the approval [process] at the mortgage servicers. It’s just gotten to the point that everyone has started engaging in unproductive behavior. It’s a vicious cycle.”The process of getting a short sale approved involves a packet of documents that includes bank statements, tax returns, letters explaining any other sources of income and a hardship letter explaining why a short sale is being sought.After the packet is submitted to a mortgage servicer, it has to be entered into the system, a person has to be assigned to it, and an appraisal has to be ordered for the property. On average, it took loan servicers 9 1/2 weeks to respond to a short sale offer, Campbell’s survey found.“You’ve got to stay on top of these banks,” said James Orrico, a real estate agent at Professional Residential Brokerage LLC in Oak Brook. “I call on my files every day. If you don’t stay on top of them, you’ll lose it.”But not every real estate agent is willing to deal with the process. Online realty company Redfin doesn’t show or write offers on short sale properties “because of the slim chance that you’ll get the home,” according to its Web site.A number of factors are contributing to the delay. Lenders say their top priority is keeping people in their homes, and their own and the government’s loan modification programs are taking the bulk of their resources.“The modification [program] was just like an atom bomb that dropped on [servicers],” said Matt McCabe of National Short Sale Center, a company that acts as a negotiator between borrowers and mortgage lenders. “They had a really hard time reacting to that increased demand.”Wells Fargo Home Mortgage, which services more than 8 million mortgages, said it has cut the average 60-day response time on short sale offers to 30 to 45 days.“We’re not satisfied with that number,” said Tamara Swain, senior vice president of real estate owned and short sales at the lender. “The current goal is 15 to 20 days. This has been a big learning process of a function that wasn’t very prominent a couple years ago.”Also delaying the process is that if a home can’t be saved, servicers are keen on trying to recover as much as possible for what could be multiple investors and that requires a fair amount of due diligence.“The challenge is buyers always want to pay as little as possible and sellers want to receive as much as possible,” said Tom Kelly, a spokesman for JPMorgan Chase, which services 10.3 million mortgages. “The bank is the server in the middle.”From a prospective buyer’s standpoint, purchasing a short sale property can be preferable to a foreclosure because if the borrower stills owns the home, he or she is likely to take better care of it.However, with so many distressed properties for sale, and other homes selling conventionally at drastically reduced prices, there’s a wealth of inventory available allowing buyers to get a quick yea or nay to their offer. Some buyers make offers on multiple short sales or write the offers so they can walk away if a lender doesn’t respond within a certain time frame.Xia Zhao and her family thought they’d found their next home when they walked into a Jefferson Park townhouse that was listed as a short sale. It was large and near her son’s school. However, they walked away from the offer after a month because they still hadn’t received a response and were worried they wouldn’t be moved in by the time school started.Instead the family bought a new town home with a price that was cut by the developer in the city’s Old Irving neighborhood.“I guess we’re not people with extreme patience,” Zhao said. “What if you wait for a couple months and this goes away? You have to start all over again.”“Most people really aren’t in a situation where they can deal with the uncertainty,” said Zhao’s real estate agent, Eric Rojas at Prudential Rubloff. “Even when you explain that it’s not accepted until the bank accepts it and you build these safeguards into the contract, people are dropping out, left and right. These sales would get done, but people just can’t wait.”Chicagoan Marie Cabrera, a real estate agent at Baird & Warner, is hoping she has found a purchaser with some patience.After being unable to sell her own condo in the luxury Palmolive Building, Cabrera decided she didn’t want to simply wait for her lender to foreclosure on it. Earlier this month she listed it as a short sale, priced at $1.15 million. Within a week, she had a cash offer of $1 million that she sent to her lender.“I have no idea whether the bank will take it,” Cabrera said. “I have an offer that’s solid and they’re willing to wait.”Copyright © 2009 Chicago Tribune, Mary Ellen Podmolik. Distributed by McClatchy-Tribune Information Services
Thursday, September 17, 2009
TALLAHASSEE, Fla. (AP) – Sept. 17, 2009 – Companies offering hurricane and other property insurance coverage may need to raise rates because they’re losing money, even though Florida hasn’t had any serious storms in the past couple years, the state insurance commissioner said Tuesday.Commissioner Kevin McCarty told Gov. Charlie Crist and Florida Cabinet members, who oversee McCarty’s office, that 84 companies writing policies in the state had underwriting gains in the first six months of the year compared with 102 that had losses.“There are only two alternatives: Increasing rates, which is really just affecting the symptom, or looking back at the core problems and what can be done,” McCarty told the panel.He later said it may take a combination of both.“We clearly have to have companies that are writing homeowners’ insurance in Florida that make money,” McCarty said. “Otherwise their appetite to continue to do business will go away.”Crist, who has led the charge to reduce rates, paused when asked about McCarty’s statements.“We’ll see,” Crist said. “Hopefully most of them don’t” raise rates.Crist also pointed out rates have dropped an average of 16 percent during the past 36 months.McCarty said some cost-drivers are outside the state’s control, including backup coverage called reinsurance that companies purchase on the global market. Losses elsewhere around the world have driven up reinsurance costs, he said.Jim Massie, Florida counsel for the Reinsurance Association of America, later said rates for the backup coverage actually have declined but costs are up because companies are buying more of it.Other factors include rising fraud, duplication in applying discounts to some policies, the expense of investigating sinkhole damage claims and the worldwide recession.Dealing with some issues will require legislative action on the state or national level, McCarty said. He has been pushing for a national plan similar to Florida’s Hurricane Catastrophe Fund that provides additional backup for insurance companies.Coastal states from Maine to Texas are having the same problems as Florida, McCarty said.“Large companies are managing their exposure,” he said. “That’s a code word for they’re not writing on the coast.”McCarty also provided the panel with figures on 29 new companies recruited in the past couple of years to help take up the slack from a planned pullout by State Farm Florida. The state’s largest private homeowner insurer, State Farm has about 700,000 policies.Of 21 new companies currently writing policies, only six had underwriting gains while 15 had losses in the first six months of the year, McCarty said.Older companies, though, are expected to pick up the bulk of State Farm’s policies, McCarty said.He also warned it’s not unusual for new companies to lose money because of startup expenses.“Companies do fail,” McCarty said. “That’s the reality we live in.”He said his office will try to make the transition smooth through mergers and acquisitions or receivership.McCarty said he’s also still trying to negotiate with State Farm to keep the company in Florida even at a smaller size.Copyright © 2009 The Associated Press, Bill Kaczor, Associated Press writer.
WASHINGTON – Sept. 17, 2009 – The White House is considering extending an $8,000 tax credit for first-time homebuyers.Spokesman Robert Gibbs says the administration’s economic team is evaluating the tax credit’s impact on new home sales and will make a recommendation to the president.The federal tax credit covers up to 10 percent of the home price, or up to $8,000, for first-time buyers. Home sales must be complete by the end of November.The tax break is credited with helping the number of U.S. home sales rise slowly. Builders and real estate agents say that trend could be reversed if the credit isn’t extended.Copyright © 2009 The Associated Press. All rights reserved
Wednesday, September 16, 2009
Credit crunch deters international homebuyers
2009 Profile of International Buyers in Florida
NAR also researched a report specific to Florida’s international homebuyers, which make up 23 percent of all international U.S. sales. It’s available on floridarealtors.org’s website here.WASHINGTON – Sept. 16, 2009 – Interest in U.S. real estate by international buyers declined due to the worldwide recession and severe credit crunch, according to the 2009 National Association of Realtors® (NAR) Profile of International Home Buying Activity, which surveyed Realtor members of NAR.The share of Realtors’ clientele who are foreign buyers is smaller than in previous years, but among those purchasing nearly half paid cash – bypassing the mortgage process. Twenty-three percent of Realtors surveyed had at least one international client in the 12-month period ending May 2009, down from 26 percent in the 2008 study. During this period, an estimated 154,000 homes were sold to foreign nationals, down from approximately 170,000 international transactions during the previous 12 months.The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100 – higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.Lawrence Yun, NAR chief economist, said recent improvements in the credit market will help reverse the slide in foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens.The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13.0 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer a relatively mild climate.California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year. “Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California,” Yun said.The study shows 69 percent of international purchases were single-family homes, while condos accounted for 18 percent. Townhomes made up 8 percent of transactions, with commercial property at 4 percent. Nearly 46 percent of properties were in suburban areas and 25 percent in urban environments. The rest were evenly split between resorts and small towns or rural areas.The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009. The full report is available at www.realtor.org/research/research/reportsintl.© 2009 Florida Realtors®Credit crunch deters international homebuyers
2009 Profile of International Buyers in Florida
NAR also researched a report specific to Florida’s international homebuyers, which make up 23 percent of all international U.S. sales. It’s available on floridarealtors.org’s website here.WASHINGTON – Sept. 16, 2009 – Interest in U.S. real estate by international buyers declined due to the worldwide recession and severe credit crunch, according to the 2009 National Association of Realtors® (NAR) Profile of International Home Buying Activity, which surveyed Realtor members of NAR.The share of Realtors’ clientele who are foreign buyers is smaller than in previous years, but among those purchasing nearly half paid cash – bypassing the mortgage process. Twenty-three percent of Realtors surveyed had at least one international client in the 12-month period ending May 2009, down from 26 percent in the 2008 study. During this period, an estimated 154,000 homes were sold to foreign nationals, down from approximately 170,000 international transactions during the previous 12 months.The median price for a home paid by foreign buyers for the year ending in May 2009 was $247,100 – higher than the overall national price of $198,100 in 2008. A significant number, 45.8 percent of foreign buyers, paid cash, in part because obtaining a mortgage was more difficult than in prior years. The total dollar volume was $38.7 billion.Lawrence Yun, NAR chief economist, said recent improvements in the credit market will help reverse the slide in foreign buyers. “Stock market gains and improving bank balance sheets will permit a greater amount of lending for second home purchases,” he said. “In addition, expanding foreign economies for international buyers and favorable exchange rates give them more purchasing power, particularly in a period of record high affordability conditions in the United States. Property investment here generally builds wealth over the long term.”U.S. laws do not restrict or scrutinize most property purchases by foreign nationals. There are few barriers to owning property here, unlike transactions in many other countries, although immigration laws prohibit foreigners from remaining in the U.S. continuously for more than six months without a special visa. In addition, international investors are afforded the same property rights as those enjoyed by U.S. citizens.The top five countries of origin for foreign buyers were Canada, with 17.6 percent of buyers; the United Kingdom, 10.5 percent; Mexico, 9.8 percent; India, 8.5 percent; and China, 5.4 percent. The percentage of buyers from Canada, the U.K. and China declined from the previous study, while purchasers from Mexico and India increased.Although most buyers were from North America, Europe and Asia, buyers from Latin America, Africa and Oceania also purchased U.S. real estate.Foreign buyers were active in every state and the District of Columbia, with the most popular states being Florida, which accounted for 23.0 percent of all foreign purchases; California, 13.0 percent; Texas, 10.7 percent; and Arizona, 7.1 percent. These states are major gateways into the U.S. from other countries and also offer a relatively mild climate.California saw a notable rise in foreign interest as affordability conditions improved markedly in the state last year. “Florida is the most popular state for European and Latin American buyers, while Asian buyers are drawn to California,” Yun said.The study shows 69 percent of international purchases were single-family homes, while condos accounted for 18 percent. Townhomes made up 8 percent of transactions, with commercial property at 4 percent. Nearly 46 percent of properties were in suburban areas and 25 percent in urban environments. The rest were evenly split between resorts and small towns or rural areas.The prime purpose for purchasing a property in the U.S. is to use it for a vacation home, cited by 33.9 percent of respondents; for both investment and vacations, 23.5 percent; as a residential rental property for investment, 18.3 percent; and commercial property for investment, 3.5 percent.The 2009 NAR Profile of International Home Buying Activity is based on responses from 3,785 Realtors and describes international home buying activity in the U.S. over the 12-month period from the end of May 2008 to May 2009. The full report is available at www.realtor.org/research/research/reportsintl.© 2009 Florida Realtors®Credit crunch deters international homebuyers
Tuesday, September 15, 2009
MANY buyers today — unsure whether prices have gone as low as they will go — aren’t looking for just a good deal. They’re looking for a steal.
For sellers, that means that to create even the slightest frisson to lure in buyers, they must either price their homes at distressingly low prices or present a property that is in turnkey condition.
Even if real estate values have started to level off, most buyers are still intent on paying rock-bottom prices. And once they have bought a place for a song, they are in no mood to spend a penny on remodeling. They want to do nothing more than unpack a toothbrush and move right in.
This means, of course, that any apartment with a 1980s renovation or more than slightly worn countertops is destined for intense scrutiny and many weeks on the market.
Some sellers are making the bold move of renovating their homes to sell them. Brokers say that this strategy can help keep the price out of the basement, and more important, help the home sell much more quickly.
…
“Buyers loved what they did to the place,” she said. “There’s no question it made it 100 percent easier to sell.”
A search of listings in recent weeks produced several sellers who went well beyond clearing out clutter, deciding to pour thousands of dollars into renovating their homes before putting out a for-sale sign. The improvements ranged from refacing cabinets and installing new appliances to gut renovations of kitchens and bathrooms.
Some of the owners suspect they may lose money when they finally sell, but they are united in the conviction that the wait will be shorter than it would have been without the renovations.
_______________________________
Real Estate sales in the Tampa Bay market has picked up over the past months, the sales have been the combination of the best product mixed with the best price. Buyers are willing to pay a little bit more for the home that is renovated and does not require spending further dollars to improve the home. Our website offers 2 great links to help you on your way to selling your home fast! Our preferred vendor list will help you with interior design, repair, or remodeling to get your home at the top level to sell. We also have a Smith & Associates Real Estate tailored CMA that will help you find out What Your Home is Worth. An agent will work on the information you provide to come with a suggested list price for the market. When determining the value of a home it is important to consider features such as the interior, the view, the street and surrounding neighborhood, and recent upgrades as compared to other available property in the area. Unlike the available national resources, our agents are experienced, local real estate professionals who know every nuance of every home in the neighborhoods we serve. It is only with our knowledge of the area and careful consideration that we can truly provide you with your home’s accurate value in the current market environment.
An excerpt from:
THE NEW YORK TIMES REAL ESTATE SECTION
By Vivian Toy
For sellers, that means that to create even the slightest frisson to lure in buyers, they must either price their homes at distressingly low prices or present a property that is in turnkey condition.
Even if real estate values have started to level off, most buyers are still intent on paying rock-bottom prices. And once they have bought a place for a song, they are in no mood to spend a penny on remodeling. They want to do nothing more than unpack a toothbrush and move right in.
This means, of course, that any apartment with a 1980s renovation or more than slightly worn countertops is destined for intense scrutiny and many weeks on the market.
Some sellers are making the bold move of renovating their homes to sell them. Brokers say that this strategy can help keep the price out of the basement, and more important, help the home sell much more quickly.
…
“Buyers loved what they did to the place,” she said. “There’s no question it made it 100 percent easier to sell.”
A search of listings in recent weeks produced several sellers who went well beyond clearing out clutter, deciding to pour thousands of dollars into renovating their homes before putting out a for-sale sign. The improvements ranged from refacing cabinets and installing new appliances to gut renovations of kitchens and bathrooms.
Some of the owners suspect they may lose money when they finally sell, but they are united in the conviction that the wait will be shorter than it would have been without the renovations.
_______________________________
Real Estate sales in the Tampa Bay market has picked up over the past months, the sales have been the combination of the best product mixed with the best price. Buyers are willing to pay a little bit more for the home that is renovated and does not require spending further dollars to improve the home. Our website offers 2 great links to help you on your way to selling your home fast! Our preferred vendor list will help you with interior design, repair, or remodeling to get your home at the top level to sell. We also have a Smith & Associates Real Estate tailored CMA that will help you find out What Your Home is Worth. An agent will work on the information you provide to come with a suggested list price for the market. When determining the value of a home it is important to consider features such as the interior, the view, the street and surrounding neighborhood, and recent upgrades as compared to other available property in the area. Unlike the available national resources, our agents are experienced, local real estate professionals who know every nuance of every home in the neighborhoods we serve. It is only with our knowledge of the area and careful consideration that we can truly provide you with your home’s accurate value in the current market environment.
An excerpt from:
THE NEW YORK TIMES REAL ESTATE SECTION
By Vivian Toy
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