RISMEDIA, September 3, 2010—Following a sharp drop in the months immediately after the expiration of the home buyer tax credit, pending home sales have modestly risen, according to the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1% below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Yun added, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”

The PHSI in the Northeast rose 6.3% to 62.5 in July but is 21.1% below a year ago. In the Midwest the index increased 4.1% to 66.7 but remains 25.7% below July 2009. Pending home sales in the South rose 1.2% to an index of 86.3, but are 15.6% lower than a year ago. In the West the index jumped 11.6% to 95.0 but is 17.6% below July 2009.

The national index had fallen 29.9% in May and another 2.8% in June.

For more information, visit www.realtor.org.

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Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, September 2, 2010—“The Federal Housing Administration (FHA) is giving homeowners and buyers until October 4, 2010 to lock in a low monthly insurance premium,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that trains and certifies mortgage bankers and brokers. “After October 4, the monthly insurance premiums on FHA loans will increase by over 63%.”

What does this mean for home buyers?
A home buyer purchasing a $200,000 home using a $193,000 FHA mortgage before October 4 would pay an insurance premium of $88.46 per month. If the same home buyer waits until after October 4, the insurance premium would jump to $148.01.

“In this example, the home buyer would lose $59.55 per month, or $7,146 over a ten year timeframe,” Nicholas said. “Although the upfront mortgage insurance premium is going down after October 4, the real impact to the home buyer is actually a net increase in their out of pocket costs because the monthly premium is going up by 63%. Remember, sellers can pay the upfront premium or it can be financed into the loan amount, so home buyers rarely pay the upfront premium out of pocket. On the other hand, the increase in the monthly premiums will be paid right out of the home buyer’s pocket with their mortgage payment each month.”

Ironically, home buyers who plan to be in the mortgage for less than three years and decide to pay the upfront fee themselves (instead of having the seller pay it for them), may actually save money by waiting until after October 4 to apply for an FHA loan. “Home buyers with a short term time horizon may actually benefit from this change because the upfront premium will be reduced to 1% from 2.25%,” Nicholas said. This change will impact over 30% of the home buyers in today’s market who use FHA-insured financing. Home buyers considering an FHA loan should find and contact a CMPS professional in their area to discuss their options and what this means for their situation. Also, you can follow CMPS Institute on Twitter to stay updated on these and other mortgage and housing industry developments.

For more information, visit www.cmpsinstitute.org.

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Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Be sure to check out these headlines on RISMedia.com:
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RISMEDIA, August 31, 2010—A home buying guide published recently by the Appraisal Institute teaches home buyers when to buy, how to find a real estate agent, how to choose the best home on the market and more—all from the uniquely unbiased perspective of a real estate appraiser. An Insider’s Guide to Home Buying by Mark R. Rattermann, MAI, SRA, notes that real estate appraisers are professionally trained to render an objective opinion of a home’s value. Because they are not paid by sales commissions, they have the unbiased perspective needed to help home buyers weigh their options carefully, make logical decisions and effectively navigate the sales negotiation and mortgage application processes.

Rattermann provides expert advice that will help protect consumers from abuse, explains biases that exist in the real estate industry and provides clues to possible problems, potentially protecting home buyers from significant financial losses.

In the book’s introduction, Rattermann writes: “The goal of this publication is to help home buyers ask the right questions. In many cases, people wish they had asked a few more questions before making significant decisions. Because the real estate industry is constantly changing, buying real estate requires you to stay current, research popular trends and attitudes and become an informed buyer.”

A real estate appraiser and agent in Indianapolis, Rattermann has worked in the real estate industry since 1979. He has written seven books about real estate and appraisals, some of which have been translated into Korean, Greek and other languages, and has lectured on a variety of real estate topics in 45 states and five countries. He has written 15 real estate training seminars and also writes on residential topics for The Appraisal Journal, the Appraisal Institute’s quarterly technical and scholarly publication. The Appraisal Institute is one of the nation’s largest professional organizations of real estate appraisers.

For more information, visit www.appraisalinstitute.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 30, 2010—Are more Americans positioning themselves for home purchase? Although May’s data showed that home sales were down 26.8% as the home buyer tax credit concluded, a new survey conducted by Relocation.com suggests some families are opting for renting while they research—cash in hand—for deals on a new, more desirable home in their area.

Among the key findings of the survey: Of the 60% of individuals moving into rentals, 24% were previous homeowners who are renting temporarily while they look for a new home to purchase. Underscoring this finding is the fact that for many of these families, foreclosure was not the reason for moving—in fact, the number of consumers who moved due to foreclosure dropped by 70%.

Furthermore, many of these families stayed in the area (one in three made a short distance move of 100 miles or less), opting to remain in a location where they already know their schools, shopping districts and prime neighborhoods.

“While the housing market continues to flux from month to month, we’re seeing strong, continued interest as consumers looking to move start their research with us,” said Relocation.com Chairman and Founder Sharon Asher. “These findings suggest that more Americans may be poised to re-enter the housing market this year.”

The Relocation.com survey was conducted in early June 2010 and is a continuation of consumer surveys conducted since March 2009 to gauge moving and relocation attitudes and behaviors.

For more information, visit www.relocation.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 27, 2010—(MCT)—Everywhere you look, July was not ideal for real estate—that’s one thing on which the economists and the statistics agree. Sales figures released recently for the first month in 19, not invigorated by government tax credits, offered a poor prognosis for the housing sector.

Nationally, sales of previously owned homes plunged 25.5% from July 2009—numbers the National Association of Realtors said had not been so low since 1999. Single-family home sales were at their lowest since May 1995, during the last housing bust.

Wall Street took the announcement by the Realtors’ association badly, and at the close of the trading day, the Dow was down 133.96 points.

“We knew that there would be payback for the government’s incentives but we didn’t think it would be so bad,” said Joel L. Naroff, of Naroff Economic Advisors in Holland, Pa.

The end of the tax credit “hit with full force” in July, said economist Nigel Gault, of IHS Global Insight in Lexington, Mass. “The most worrying feature of the recent housing data is the absence of evidence of any underlying improvement in sales,” Gault said. “All of the action earlier this year appears to have been driven by the tax credit. Mortgage applications for purchase have been moving sideways since June, even as 30-year mortgage rates have headed into the low 4s.” A sustained housing upturn “will depend on an improvement in the jobs market, which at the moment is slowing down rather than gathering pace,” he said.

Realtors’ association economist Lawrence Yun acknowledged the downturn, but also offered perspective.

“Since May, after the April 30 deadline, contract signings have been notably lower,” he said, “and a pause period for home sales is likely to last through September.”

Still, Yun said, annual sales are expected to reach five million in 2010 because of the healthy activity in the first half of the year. “To place that in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years.”

Thanks to the tax credit, home values have been stable for 18 months, Yun said.

In July, the nation’s median price rose 0.7% over July 2009, to $182,600. The median is the middle value; half the homes sold for more, half for less.

Yun insisted that record-low mortgage interest rates, now averaging 4.5% would encourage the wary to get back into the hunt.

In fact, rate-conscious buyers are just about the only ones in the market these days. They waited for rates to dip even further, more eager to save thousands over the life of their mortgages than to snag a one-time tax credit available only to qualified buyers.

Michelle Nnolum recently closed on her first home, a condo purchased for $195,500 with a $5,500 seller’s assist at Chanticleer in Cherry Hill, N.J. She signed the agreement of sale in July. “I never thought I could qualify to buy, but I kept hearing about these low rates,” said Nnolum, whose home-based business, ClassiFit, does custom alterations of gowns and evening wear.

She looked at four houses for sale with her agent, Giovanni Judenic of Long & Foster, before settling on a completely renovated two-bedroom, 2 1/2-bath condo that had been on the market for just three days.

Her rate: With a 20% down payment, 4.75%. But thanks to a “buydown” incentive from the mortgage broker, she will pay 3.75% for the first year, “which equals what I was paying for rent,” she said.

“I think values will go up,” said Nnolum. “With 20 percent down, I’ve started with a lot of equity already.”

Chris Bolli of Bristol, Pa., is equally interest-rate-conscious as he searches for a house.

A Navy veteran who sells prosthetic devices to area hospitals, first-time buyer Bolli has been looking for a three-bedroom, two-bath house with a garage for six months.

“Buying a house is a long-term investment, and finding the lowest fixed rate over 30 years is more important than $8,000 up front,” he said. “I wasn’t going to be pressured into buying something.”

One problem with his search has been that “sellers haven’t caught up yet with the realities of the market,” said Bolli, who considers $250,000 the middle of his price range.

“We looked at a house in an area where renovated houses were selling for $270,000, but the owner, who bought at the height of the market, wanted $380,000 for a house with 1950s fixtures,” Bolli said. “It wasn’t worth it.”

Anthony Sanders, professor of real estate finance at George Mason University in Virginia, said many sellers were “holding on to their overpriced housing, hoping that they won’t get damaged even further. There’s been a change in consumer psychology, and it’s difficult to reverse.”

Naroff, who recommends waiting until the fall before making judgments, said that “unless households and businesses have confidence about the future, they are not going to buy homes or invest, regardless of the interest rate.”

Housing’s double dip should not cause a double dip in the broader economy, said Mark Zandi, chief economist at Moody’s Analytics.

“The recent weakness in housing won’t be severe or long enough to undermine the rest of the economy,” Zandi said. “It will be close, however, and it will be very uncomfortable through the remainder of the year. Nothing works all that well in the economy when housing is struggling.”

(c) 2010, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 23, 2010—The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury has released the August edition of the Obama Administration’s Housing Scorecard (www.hud.gov/scorecard), a comprehensive report on the nation’s housing market. In July, housing prices remained level after 30 straight months of decline, while some price predictions have improved. In addition, historic low interest rates continued to promote home affordability and refinancing options for the nation’s families. However, the market remains fragile with foreclosure starts showing a slight increase and serious delinquencies continuing to work through the pipeline.

“While there has been some stabilization in the housing market, it remains clear that we have more work ahead,” said HUD Assistant Secretary Raphael Bostic. “Through the Obama Administration’s efforts over the past 16 months, we have seen increased price stabilization and improved home affordability for prospective, qualified homebuyers. At the same time, we know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation’s hardest hit neighborhoods.”

The August Housing Scorecard features key data on the health of the housing market including:

• Stabilizing housing prices drive improving expectations in some regions. After 30 straight months of decline, home prices have leveled off in the past year; futures indices have shifted upward since January 2009 as signs of recovery continue, although overall housing outlook measures remain mixed.

• More than twice as many modification arrangements begun compared to foreclosure completions. More than 3.15 million modification arrangements were done from April 2009 through the end of June 2010. This includes more than 1.3 million trial Home Affordable Modification Program (HAMP) modifications started, over 472,000 Federal Housing Administration (FHA) loss mitigation and early delinquency interventions, and 1.4 million proprietary modifications under HOPE Now. The number of agreements offered continues to more than double foreclosure completions for the same period (1.24 million).

• More than 4.2 million families have benefited from housing counseling since April 2009. Working with a HUD-approved housing counselor can help borrowers manage debts apart from a mortgage – car payments, credit cards and personal loans, for example – and help them avoid falling into default.

• More than 37,000 homeowners received a HAMP permanent modification in July. While the pace of program entry has slowed due to upfront documentation requirements in place since June 1, this policy change streamlines the process to help more eligible homeowners convert to a permanent modification. Homeowners in permanent modifications are experiencing a median payment reduction of 36 percent, or more than $500 per month.

“HAMP, which represents just one, targeted piece of the Administration’s larger efforts on housing, has so far offered more than a million and half responsible homeowners the chance to modify their mortgages. This program has helped to stabilize a housing market that remains fragile and has redefined the modification standard for the industry – both of which are delivering real benefits to struggling homeowners in communities across the country,” said Treasury Assistant Secretary for Financial Stability Herb Allison. “Currently servicers are working through their pending modifications, and while Making Home Affordable works for a number of homeowners, many others are offered other means of avoiding foreclosure. As careful stewards of the scarce resources of the American taxpayer, we see this as prudent progress – and we will keep working to help the Americans hardest hit by this crisis.”

Data in the scorecard show that the recovery in the housing market continues to remain fragile, with some measures suggesting recovery will take place over time. For example, foreclosure starts went up slightly in July from the previous month, but remain well below July 2009 levels.

Foreclosure completions also inched upward as the volume of serious delinquencies continues to work through the pipeline.

Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration’s unprecedented housing recovery efforts, including assistance to homeowners through the FHA and HAMP.

The Obama Administration’s complete Housing Scorecard available at: www.hud.gov/scorecard

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RISMEDIA, August 20, 2010—(MCT)—Facing new penalties if they lowball estimates of upfront mortgage costs, lenders and brokers appear to be coming clean about how much borrowers will pay. As a result, the so-called good-faith estimates that mortgage providers must give to prospective customers show closing costs soaring 36 percent this year, interest-rate tracker Bankrate.com said in a report this week.

The main reason for the increase, according to Bankrate: Lenders are giving more accurate estimates because they now must pay to cover the difference if they underestimate the costs, according to Bankrate.

In other words, the good-faith estimates are, well, being made in better faith.

Before Jan. 1, there was no penalty for giving bad estimates, so lenders battling for mortgage business had more of an incentive to give lowball quotes.

Lenders told Bankrate that actual closing costs rose modestly this year, in part because regulators and loan buyers Fannie Mae and Freddie Mac are requiring mortgage firms to do far more fact-checking than during the boom years.

Consumer advocates say the report demonstrates how lenders took advantage of lax regulation during the housing boom by often keeping borrowers in the dark about costs until they were faced with nasty surprises when their loans closed.

“Why is transparency such a challenge for them?” said Alan Fisher, executive director of the California Reinvestment Coalition.

According to Bankrate’s survey, which obtained online good-faith estimates for loans of $200,000, estimates of closing costs charged directly by lenders are up 23 percent from a year ago. Estimated charges for third parties such as appraisers and title insurers soared 47 percent.

California was among the highest-priced states in the survey.

The only states with higher fees than California were New York, with costs averaging $5,623, followed by Texas at $4,708 and Utah at $4,605.

Arkansas was the least expensive state, with costs averaging $3,007.

The most expensive component of closing costs was a title search and insurance to protect the lender from the possibility that title is not held free and clear.

These title costs averaged just $1,011 in Arkansas and $1,141 in North Carolina but set Los Angeles borrowers back an average of $2,391 and San Franciscans an average $3,181, Bankrate said.

The increase in estimates of closing costs stems from regulations issued by the U.S. Department of Housing and Urban Development.

(c) 2010, Los Angeles Times.

Distributed by McClatchy-Tribune Information Services.

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RISMEDIA, August 19, 2010—(MCT)—As director of the Joint Center for Housing Studies at Harvard, Nicolas Retsinas has had a front-row seat for the real estate market’s dramatic boom and bust. After 12 years at the center, Retsinas left the director’s job to teach housing finance at Harvard Business School. He spoke recently with New Jersey’s The Record about why buyers got mortgages they couldn’t afford, and why real estate matters so much.

Were you surprised by the magnitude of the housing bust and how long it has lasted?
Nicolas Retsinas: Yes, by the severity of the housing bust but even more so, how credit just seized up.

When do you see any kind of loosening-up of the credit markets?
NR: I would suspect we’re likely to see the same dominance of the government at least through the balance of this year. One of the big issues facing public policymakers is what to do with Fannie Mae and Freddie Mac. If we want to attract private capital, not only from this country but also global capital, some part of that credit risk has to be borne by the government.

One of the biggest factors in the bust was that credit standards got too easy. Buyers who weren’t qualified got mortgages. Do you have any ideas about why this happened?
NR: In part, people were granted mortgages not on their ability to repay the mortgage, because it was clear that wasn’t going to happen. But there was an expectation that even if they couldn’t pay, the future increase in the value of the property would end up being the collateral for that loan. For a long time, that was a formula that worked. But we reached a point where even with these exotic—what turned out to be toxic—mortgage terms, they just weren’t affordable.

What has been the biggest human cost of the housing bust?
NR: The biggest human cost is the millions of people who have lost their homes. One can look back coldly and say, “Well, maybe a lot of them shouldn’t have bought a home in the first place.” But a lot of people lost their homes the old-fashioned way: they lost their jobs.

Who has benefited from the bust?
NR: Beside the investors who played with different sorts of financial products, I think the key winners probably have been first-time home buyers, who have maybe longed to buy a house but could not afford to. Now we’ve essentially transferred wealth from existing homeowners to new homeowners.

Some observers have been disappointed by the number of homeowners helped by the federal loan modification program.
NR: In defense of the government, when they designed this program 18 months ago, they based it on a premise that the principal problem in the housing market was egregious mortgage terms. And if those mortgage terms could be reset and recalibrated to more typical mortgage terms and could be afforded, through subsidy or whatever means, by the borrower, that would stem the hemorrhage of the defaulted loans and foreclosures.

As we moved into 2009, the problem was less about the subprime loans and more the traditional reason why people have problems making ends meet—which is that they lost their jobs. If you modify the loan so that your monthly payments are only 31% of your income, and your income is zero, that’s probably not going to work. The problem outran the solution.

Will home-price appreciation return anytime soon?
NR: The next couple of months will be an interesting test because we’ve had the withdrawal of the home buyer tax credit. I think we’re likely to have a sort of trawl-along-the-bottom type of recovery, a little bit lumpy for a year or so.

Congress is looking at new financial regulations. What effect are these likely to have on mortgages?
NR: I think it’ll make it more difficult to go back to the Wild, Wild West. There will be a new consumer financial agency, and I think that will be more likely to look at some of these (mortgage) products. I think that’s going to be critical. RE

(c) 2010, North Jersey Media Group Inc.

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RISMEDIA, August, 18, 2010—(MCT)—With sweeping financial reform legislation enacted, the White House and Congress now must focus on fixing the mess created by the failed housing finance giants Fannie Mae and Freddie Mac. It’s a complex challenge with high stakes for taxpayers and the struggling real estate market.

On Tuesday, key administration officials conferred with about 200 industry executives, affordable housing advocates and other experts about the role the government should play in the nation’s housing finance system. Treasury Secretary Timothy F. Geithner asserted that federal involvement still was needed, but he promised “fundamental change.”

“It is not tenable to leave in place the system we have today,” he said, adding that Fannie and Freddie will change dramatically when they emerge from government control.

Pressure is growing to remake or replace the mortgage leviathans, which were seized by the government in September 2008 after huge losses from subprime mortgages put them on the brink of bankruptcy. The bailout has cost U.S taxpayers nearly $150 billion. But lawmakers must tread carefully to keep from further damaging a housing market that Fannie and Freddie almost solely are supporting. The two companies, along with the Federal Housing Administration, collectively guarantee more than 90 percent of all new U.S. home loans.

“Nobody wants to mess up the mortgage market,” said Douglas Elliott, an economics fellow at the Brookings Institution think tank. “And any transition with Fannie and Freddie is going to be fraught with some risk.”

Tuesday’s event came as the second anniversary of the government seizure of the firms approached, a bailout that left taxpayers as 80 percent owners. The administration faces a January deadline, added by lawmakers to the financial reform legislation, to make recommendations to end the expensive federal conservatorship of the firms.

Congress plans to ratchet up its involvement as well, with House Financial Services Committee Chairman Barney Frank, D-Mass., saying his committee will begin hearings when members return next month.

That’s not fast enough for many Republicans, signaling another bitter partisan reform fight. They have been pushing the administration for more than a year to address the mounting losses at Fannie and Freddie by getting the government out of the housing finance business.

“It is past time to rid the American taxpayer of the liabilities of these financial institutions once and for all,” Rep. Mike Pence, R-Ind., said Tuesday as he blasted the Obama administration for continuing the bailouts of Fannie and Freddie begun under President George W. Bush.

But the Obama administration has been moving slowly for fear of further harming the housing market. There was fresh evidence of problems Tuesday as Southern California home sales plunged 21.4 percent in July compared with a year earlier, according to research firm MDA DataQuick of San Diego.

“It’s much more important to get this issue right than to do it fast,” said Michael Berman, chairman-elect of the Mortgage Bankers Association.

Shaun Donovan, the secretary of Housing and Urban Development, said the stakes were high not just for the financial system but also for average Americans because of the major investment in their homes.

Donovan said the federal government’s involvement in the housing market needed to be reduced. And Geithner said there was a strong case for a “carefully designed” government mortgage guarantee in the future, a point echoed by panelists at the conference.

There also appeared to be consensus among the participants that any government guarantee needed to be explicit, not murky and implicit like the guarantee that stood behind Fannie and Freddie as private, government-sponsored enterprises before they were seized.

William Gross, managing director of bond fund giant Pimco, said government guarantees were crucial to the housing market, helping keep mortgage rates low.

But there still is major debate about how to structure such a guarantee and what size mortgages it should cover.

“The challenge is to make sure that any government guarantee is priced to cover the risk of losses, and structured to minimize taxpayer exposure,” Geithner said.

Fannie and Freddie were created by Congress and later turned into private, government-sponsored enterprises mandated to expand homeownership with requirements to purchase a set amount of loans made to low- and moderate-income borrowers.

Fannie and Freddie combined hold the credit risk on about $5 trillion in mortgages, and losses from loans made during the housing boom have continued to mount. The Treasury Department has pledged it will cover an unlimited amount of losses through 2012. As of June 30, the department had pumped $144.9 billion into the two companies.

Federal officials have stressed that the losses came from loans purchased before the government seizure and said standards at Fannie and Freddie have tightened significantly since then. And as the housing market has stabilized, the losses at Fannie and Freddie have lessened. Fannie lost $1.2 billion in the second quarter, down from $11.5 billion in the first quarter. Freddie lost $4.7 billion in the second quarter, down from $6.7 billion in the first quarter.

Still, the losses meant the two firms would need an additional $3.3 billion from the Treasury Department, bringing their bailout cost to $148.2 billion.

(c) 2010, Los Angeles Times.

Distributed by McClatchy-Tribune Information Services.

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RISMEDIA, August 18, 2010—Nationwide housing starts inched up 1.7 percent to a seasonally adjusted annual rate of 546,000 units in July from a downwardly revised figure in the previous month, according to U.S. Commerce Department figures released today. The gain occurred entirely on the multifamily side, with single-family housing production falling 4.2 percent to 432,000 units.

“Builders are very reluctant to build more homes in view of the current state of the economy and weak buyer demand,” noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

“Right now the housing market is essentially in a holding pattern,” acknowledged NAHB Chief Economist David Crowe. “As our latest member surveys have indicated, builders are seeing greater hesitancy among potential home buyers who are uncertain about what’s in store for the economy and jobs going forward. That said, favorable home buying conditions including historically low mortgage rates and low house prices should help spur additional demand as the job market gradually improves later this year.”

The entire 1.7 percent gain in housing production this July was due to a 32.6 percent jump on the more volatile multifamily side, which brought that sector back closer to trend at a 114,000-unit rate following a major dip in the previous month. Meanwhile, single-family housing production declined 4.2 percent to a seasonally adjusted annual rate of 432,000 units, its lowest mark since May of 2009.

Two regions registered improved starts activity in July, with the Northeast and Midwest each posting double-digit gains, of 30.5 percent and 10.7 percent, respectively. The South, which is the country’s largest housing market, posted a 6.3 percent decline in starts this July, while the West posted no change in starts activity.

Permit issuance, which can be an indicator of future building activity, declined 3.1 percent to a seasonally adjusted annual rate of 565,000 units in July. Single-family permits fell 1.2 percent to 416,000 units, while multifamily permits fell 8 percent to 149,000 units. Regionally, permits fell nearly 26 percent in the Northeast, 1.1 percent in the Midwest, and 4.9 percent in the West, but gained 3.9 percent in the South in July.

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RISMEDIA, August 17, 2010—Real estate professionals nationwide are calling 2010 “the year of the short sale,” where homeowners who owe more on their properties than what they are worth sell at deeply discounted prices—with the blessing of their lender.

Here is how to go about successfully buying a short sale:

1. Search for short sale properties
Most short sales are listed by real estate agents. You will find these listings on local websites and in MLS feeds. Some lenders have complained about advertising that identifies the home as a short sale, because the lenders feel it puts them at a disadvantage when it comes to home pricing. This is accurate, as buyers generally offer less when the property is advertised as a short sale.

Read the listing carefully. Agents slip in words that identify the listing as a short sale. Look for the following terms:

• Subject to bank approval
• Pre-foreclosure
• Notice of Default
• Give the bank time to respond
• Preapproved by bank
• Headed for auction

2. Select a real estate professional
Professionals with short sale experience can help you navigate the short sales process in your local market. The buying process is often far more complex—and far longer than typical sales–so a trained ally on your side can make your experience successful.

3. Investigate the mortgage and liens on the property
Here’s where a good short sale real estate agent is worth his or her weight in gold. Uncover how much the mortgage is worth. Find out how much the current owners paid and when. Find out how many liens are on the property. Find out which lender is the primary lien holder. Research comparable sales in the area.

4. Have a home inspection
Short sales are typically sold “as is,” with no contingencies allowed. That short sale is no bargain if you discover—after the closing—that it requires major, unexpected repairs. A thorough home inspection will provide a clear view of the home’s condition, allowing you to make educated decisions on whether or not to purchase.

5. Write a complete offer
Remember, the lender—not the owner selling the property—is calling the shots and decides whether your offer will be accepted, rejected or countered. Helping the lender, whose agents may be overloaded with a glut of short sales, fully understand the financial picture will support your bid. Include the following materials with any short sale offer:

• Cover letter
• Signed owner/borrower short sale purchase agreement
• Seller hardship letter
• Seller payroll stubs
• Two years of seller tax returns
• Market comparables
• HUD-1 closing net sheet
• Repair cost estimate
• Pictures of property

6. Negotiate
Like any real estate transaction, successful negotiation is required to strike a deal. If the lender rejects or counters your written offer, you’ll have to negotiate with the lender by making a higher offer. Be prepared to offer more money to close the deal, or to walk away if it doesn’t make financial sense.

7. Be Patient
Short sales, which have increased in volume and frequency, are overloading some lenders. Be aware that processing and decision-making times for some lenders can be quite long—up to a year or more. Decide if you have flexibility in your timing, and if so, know that you may be waiting for awhile.

Dan Steward is president of Pillar To Post Home Inspection.

For more information, visit www.pillartopost.com.

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RISMEDIA, August 17, 2010—A new study released by Bankrate, Inc. reveals that the costs associated with buying a home may are on the rise. Bankrate’s 2010 Closing Costs Survey reveals that the average origination and title fees on a $200,000 mortgage this year totaled $3,741, up from $2,732 in 2009. The full results of the study can be seen here: http://www.bankrate.com/finance/mortgages/2010-closing-costs/.

In the study’s geographical breakdown, New York leads the nation at an average fee of $5,623, with Texas, Utah, San Francisco, and Los Angeles rounding out the top five. Arkansas is the least expensive area with an average fee of $3,007, replacing Nevada, now number 34, at the bottom of the list.

One of the reasons for such a dramatic rise in the average estimated closing costs across the nation has to do with new regulations implemented in January of this year. When providing a potential borrower a Good Faith Estimate (GFE) of costs, regulations now require lenders to provide a Title and Closing Fee estimate within 10 percent of what the final cost will be; in previous years, estimates could fall lower on the spectrum without penalty for the lender.

“The big rise in average closing costs may scare some homebuyers, but it’s important to keep things in perspective,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Increased regulation on lenders’ GFEs means more accurate estimates and less expenses popping up for consumers on the back end.”

For this study, Bankrate surveyed one area in 49 states, two areas in California (Los Angeles and San Francisco) and the District of Columbia. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate’s survey includes lenders’ origination fees and title and settlement fees, and not taxes or prepaid items.

To see the full results visit http://www.bankrate.com/finance/mortgages/2010-closing-costs/ or for more information, visit Bankrate.com.

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RISMEDIA, August 9, 2010—The real estate industry and especially the mortgage industry have been overwhelmed with changes, regulations and consolidations recently. In the last couple of months, many transactions nationally have experienced delayed closings or worse as a result of the application of new guidelines affecting APR, Good Faith Estimates (GFE), Truth in Lending (TILA) and condo project approvals to name a few.

There is one more issue that is critical for real estate agents, loan officers, and anyone else who deals with consumers purchasing a home or obtaining a refinance. Effective with applications on or after June 1, 2010, Fannie Mae has issued new lender mandates (FNMA LL-2010-03 Loan Quality Initiative) on a national basis that, if not understood properly, could have devastating consequences for many buyers and sellers. We want to be certain that everyone understands the implications of the new rules and ensure that all interested parties know what they need to know to minimize negative repercussions.

The intent of this initiative is to assure that all applicant information is disclosed and is honest and accurate as of the moment of closing. Lenders will now be required to re-pull credit report information just prior to closing, re-verify employment, validate Social Security numbers, verify intent to occupy and verify that all parties to the transaction have been checked against the national “excluded party” list, which is managed by HUD and by the General Services Administration. Changes in any of these factors are likely to result in a re-underwrite, the need for additional documentation, or suspension of loan closing.

The most onerous of these is the credit re-pull. It is important that this is done as a “soft pull” so it does not show as an inquiry, which could potentially change the borrower’s credit score. Firms will, however, have to match the outstanding debts and inquiries with the report used to approve the loan. Additional credit or increased balances that change the debt-to-income ratio more than 2% (or less if it now exceeds guidelines) will require the loan to be suspended and re-submitted to underwriting.

Any additional delinquencies will result in a new, full credit re-pull and re-underwriting, utilizing the new credit. Any and all inquiries from other lenders or credit suppliers must be verified by the credit bureau and certified that new debt did not occur. If new credit has been extended, the new debt must be included in the borrower’s debt-to-income ratio and the loan must be re-underwritten.

Other considerations are W-2 employees that may own more than 25% of a business, mandating business returns and cash flow analysis and full disclosure of child support and alimony. Changes could render the applicant unqualified or could delay the closing. As a result of TILA, GFE and risk-based pricing changes, additional debt could result in re-pricing the loan due to a change in credit score, which even if approvable, would delay the closing three business days as re-disclosure would be required.

So How Do We Manage the New Process?
Real estate agents and lenders must impress upon the applicants the need for full and honest disclosure at the time of application, during the loan process and at closing. Buyers must be cautioned against applying for new credit during the process, changing jobs (30-day pay stub requirements are being enforced), and charging to their credit cards. It is imperative that they notify the lender if anything changes from application to closing.

We must all be aware that an applicant that signs an erroneous initial or final closing application could be committing fraud. Lenders choosing to approve loans without the proper loan quality processes and documentation are only endangering the buyer. Any lender or real estate agent that encourages someone to falsify information could be equally responsible. It is noteworthy to mention that many loans go through an immediate quality control audit post closing, so this could affect highly qualified applicants as well. Identified fraud of this nature could be investigated by the FBI.

While this new policy was implemented first by Fannie Mae, it is already a mandate of all national lenders and, based on experience, will soon be required on every loan. It is important to keep this in mind on every deal, not just ones that may involve Fannie Mae.

Jim Dinkel is vice president of FM Lending in Raleigh, North Carolina.

Ken Trepeta is director of Real Estate Services for the National Association of REALTORS®.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 6, 2010—(MCT)—Bruce Baldwin is well past the “extreme excitement” he felt when he became a first-time homeowner three years ago. In fact, the cabinetmaker has now joined thousands of homeowners who face foreclosure. He says he feels so snake-bit by homeownership that he doubts he’ll ever buy again. “It was the American Dream. Now I could care less if I ever deal with a bank again,” said Baldwin, who lives in Ocoee, Fla., not far from Orlando. “What I went through was an absolute nightmare.”

Values for residential property have dropped nationwide. In the Orlando area, half of all mortgaged homes are worth less than their mortgage debt. What was once seen as an opportunity to build wealth has, in some cases, turned into dead weight.

It’s unclear whether residents’ appetite to own homes can survive the record real estate downturns.

“For 30 months, this has been nothing but a financial anchor,” said Baldwin, who was unable to refinance or permanently modify his $204,000, 12% adjustable rate mortgage after the housing-construction slowdown killed his cabinetry business.

The push to get buyers to purchase homes has played such a central role in the state’s economy that, as recently as 2008, Florida and Hawaii were more reliant on construction and real estate services than any other state in the nation, according to U.S. Department of Commerce data. That economic infusion makes few people willing to publicly question the longtime pursuit of the American Dream.

Few organizations, for instance, have seen the frontlines of foreclosure outfall like Consumer Credit Counseling Service of Central Florida, which recently added CredAbility to its name. Despite seeing families’ finances undone by the mortgage meltdown, CredAbility interim director Richard Schram said homeownership remains essential in the U.S.

“I don’t know if it should be reconsidered,” said Schram, who advocates counseling as part of the home purchase process. “One of the things that has been the hallmark of the American economic system is pride in homeownership. It still drives the economy.”

While the federal government has pushed tax credits to boost home buying during the past 18 months, U.S. Department of Housing and Urban Development now measures its successes based more on home affordability than ownership.

HUD’s Housing Scorecard released in July touted that “home affordability in the U.S. remains near the most attractive levels in 10 years.”

During the Clinton and Bush administrations, HUD pushed ownership, particularly for minorities. Federal data shows that, at the peak of the market in 2007, Hispanic home buyers in Central Florida got a disproportionately high number of subprime loans and they were more likely than other borrowers to get the highest interest rates on adjustable-rate mortgages.

Sanz said Hispanic buyers who were saddled with those onerous loan terms have been especially hard hit by foreclosures.

At a conference of real estate journalists in Austin in June, Clinton-era HUD Secretary Henry Cisneros said his agency pushed specifically for minorities to purchase homes because “homeownership is the key to middle class. When they own a house with equity, that constitutes wealth.” But, he added, “clearly some people should have never been purchasing homes.” The problem became unscrupulous lenders who sold mortgages to buyers who could not afford them, he added.

Rollins College political-science professor Richard Fogelsong noted that HUD’s push for minority homeownership continued during the Bush era.

Fogelsong is finishing a book about former U.S. Sen. Mel Martinez, whose Cuban immigrant story helped launch his ascension from the Orange County Commission to HUD secretary and then the U.S. Senate.

Titled Immigrant Prince: Mel Martinez and the American Dream, the book refers to Martinez’s drive to push minority homeownership at HUD with initiatives that included a traveling bus called American Dream Express. Martinez declined to comment for this story.

“The sad story from the Bush era was that there was a significant increase in homeownership among minorities, but those were the first people to lose their homes,” Fogelsong said.

(c) 2010, The Orlando Sentinel (Fla.).

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 5, 2010—Pending home sales edged down with near-term sales expected to be notably lower in contrast to the spring surge when buyers rushed to take advantage of the home buyer tax credit, according to the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator, declined 2.6% to 75.7 based on contracts signed in June 2010 from an upwardly revised level of 77.7 in May, and is 18.6% below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”

Yun expects mortgage interest rates to remain historically low for the balance of the year, with very modest growth in employment. “We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he added.

The PHSI in the Northeast dropped 12.2% to 58.8 in June and is 25.4% lower than June 2009. In the Midwest, the index fell 9.5% to 64.1 and is 27.8% lower than a year ago. Pending home sales in the South rose 3.7% to an index of 85.8, but are 13.3% below June 2009. In the West, the index slipped 0.2% to 85.1 but is 14.2% below a year ago.

The National Association of Realtors, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

For more information, visit www.realtor.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 3, 2010—(MCT)—The 4.5% fixed-rate mortgage is here, although more than 14 months late. That magic number, or a close approximation, was reached recently, when Freddie Mac reported a 30-year rate of 4.54%. The possibility first arose in early 2009, when the government began mass-purchasing mortgages from Fannie Mae and Freddie Mac to prop up housing. Just about everyone predicted the rates would hit what builders and real estate agents call a “sweet spot” in a few months, and the housing recovery would begin, especially if consumer confidence had recovered to prerecession levels as well.

“What gets people buying again?” asked mortgage broker Peter Buchsbaum of Arlington Capital Mortgage in Horsham, Pa. “The answer is confidence—confidence in the value not falling and confidence they’ll still have a job.”

Even if behind schedule, the 4.5% rate has arrived, but in an environment that buyers perceive as anything but inviting.

Consumer confidence fell again in July, and why? Jobs and sagging real estate values.

“People will start buying houses again when they feel securely employed, house prices are rising, and they can make low down payments,” Bankrate.com columnist Holden Lewis said. “I don’t see any of those conditions coming anytime soon, at least in most parts of the country,” Lewis said. “Job security is the most important factor.”

Suburban homebuilder Marshal Granor said that “when we went under 6 percent, I was amazed and excited, but 4.5 percent artificially increases affordability. If rates start to climb, it will severely dampen already-spotty sales.”

Moody’s Economy.com chief economist Mark Zandi concurs. “The key to more homebuying is more jobs,” he said. “Once job growth kicks in earnestly, household growth will ramp up, and so will demand.”

Zandi added that despite these “extraordinarily low rates,” many prospective buyers have little savings for a down payment and tattered credit scores.” The securely employed appear to be nibbling at the bait, however.

“There’s a new group of buyers just entering the market because of the low rates,” said Art Herling, regional vice president of Long & Foster Real Estate, although the weather is keeping them “from totally getting into the buying mood.”

Buchsbaum also reports “a greater influx of buyers than past summers.”

Philadelphia Realtor Fred Glick compared the economy to a driver with his “feet on both the accelerator and the brake at the same time.”

“Until the jobs are produced, the banks start lending, and the underwriting guidelines start to make sense, we’ll be caught in this conundrum,” Glick said.

What about home prices?

Although the Case-Shiller Home Price Index rose again in May, economists believe that prices nationally will drop 6-8% more through the end of the year.

May’s increase, economists say, is attributable to the federal tax credit that expired April 30, and to seasonal buying patterns that typically boost prices.

The indexes are three-month moving averages, “so May’s readings reflect transactions in 20 markets that closed in March, April and May,” IHS Global Insight economist Patrick Newport said. With the credit gone, “we expect them to rise for two months, then start to decline,” with recovery in 2011.

That means a lot of buyers will remain on the sidelines until prices level off completely. The lowest fixed interest rates in 50 years won’t be enough to draw them in.

“Many people are bottom-fishing,” Herling said.

On the other hand, “People are starting to view houses as places to live and build equity over time, not financial assets where they can make a killing,” said economist Joel L. Naroff of Holland, Pa. If that is the case, demand for housing would rise much more moderately. “Add to that the lack of equity and the difficulty in qualifying for a mortgage, and the outlook for sales is not great,” Naroff said.

Interest rates are rock-bottom because the economy is rock-bottom. As more investors shift their money out of a volatile stock market and to the safety of Treasurys, rates will drop further, at least in theory.

Assuming “the debt crisis abates and the economy doesn’t double-dip, both of which seem more than likely,” Zandi expects rates to close in on 5% by year’s end and over 6% next year.

“I wouldn’t bet my mortgage payment on rates remaining this low for a long time,” Lewis said. “If I were refinancing, I would lock now instead of floating in hopes of rates falling further. I think there’s a greater possibility of rates rising than falling.”

(c) 2010, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, August 2, 2010—The economy is stabilizing and home prices are holding. It’s not just as good a time as ever to buy a house—it’s one of the best times ever.

ForSaleByOwner.com presents five overlooked reasons why now is a great time to buy a house.

1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. That means they have a little give to absorb a few ups and downs as the still-recovering housing market gains traction.

2. Houses are in move-in condition. Homeowners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. Homeowners who have been holding back, kept their houses in good shape while they waited. As those houses enter the market, they are in marked contrast to tattered foreclosures.

3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system—and this is just the opportunity that owners of many desirable properties have been waiting for.

4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market. This ensures that today’s deals will make it over the finish line.

5. Plenty of programs. Homes are more affordable than they have been for years, but communities have stuck by “workforce housing” programs that encourage middle-class families to buy houses. Buyers who qualify can get a big boost by combining one of these programs with today’s low mortgage rates.

For more information, visit www.ForSaleByOwner.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, July 30, 2010—A wide array of organizations including the American Land Title Association, the National Association of Realtors, AFSCME, Vote Vets, the Center for Responsible Lending, the Property Rights Alliance and the Institute for Liberty recently launched The Coalition to Stop Wall Street Home Resale Fees with an appeal to United States Secretary of the Treasury Timothy Geithner to ban dangerous Wall Street Home Resale Fees (also known as “private transfer fee covenants”), which have already been restricted in 17 states because of their adverse impact on homeowners and home buyers.

Members of the Coalition delivered a letter to Secretary Geithner and representatives at the U.S. Department of Housing and Urban Development, Federal Housing Finance Agency, Federal Trade Commission, Securities and Exchange Commission, Farm Credit Administration, Department of Veterans Affairs, Federal Reserve Board, Deferral Deposit Insurance Corporation, National Credit Union Administration and Office of Thrift Supervision, declaring their opposition to Wall Street Home Resale Fees and calling on the Obama Administration to ban their use.

“This dangerous new fee is a prime example of Wall Street investors trying to profit from unsuspecting homeowners,” said Kurt Pfotenhauer, President of the American Land Title Association. “We’re asking Secretary Geithner to stand up for Main Street homeowners and buyers and stop the use of Wall Street Home Resale Fees today.”

Manhattan-based Freehold Capitol Partners is leading the push to add these fees to home purchase contracts. The fees require that a percentage of the final sale price of a home be paid to a private third party every time the property is sold, typically for 99 years. Freehold is attempting to then sell the right to collect these fees on Wall Street.

“As the leading advocate for homeownership and housing issues, the National Association of Realtors strongly opposes home resale fees, or private transfer fees,” said Lucien Salvant, Managing Director for Public Affairs at the National Association of Realtors. “They add an unnecessary and unfair burden to the real estate transaction for either buyer or seller.”

The Coalition to Stop Wall Street Home Resale Fees has already been active, raising awareness about the issue and taking action to stop these dangerous fees.

To date, 17 state legislatures in Arizona, California, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, North Carolina, Ohio, Oregon, Texas and Utah have recognized the dangers of Wall Street Home Resale Fees and have restricted their use.

An official with the U.S. Federal Housing Administration confirmed that the government will not insure mortgages for properties with Wall Street Home Resale Fees and the U.S. Department of Housing and Urban Development confirmed these fees violate HUD’s regulations.

“At a time when state and local governments are cutting services to the bone, it makes no sense to force them to use tax-payer dollars to dole out unearned profits to Wall Street,” said AFSCME President Gerald W. McEntee. “This financial scheme is a pipedream for Wall Street and a nightmare for everyone else.”

“Owning a home has always been part of the American dream—for veterans and non-vets alike,” said Jon Soltz, Co-Founder and Chair of Vote Vets. “We fought to preserve the American dream for all, but these greedy Wall Street Home Resale Fees mislead homeowners and make that dream more difficult to attain.”

“This country has seen enough abusive financial practices to last a lifetime,” said Uriah King, Vice President of State Policy at the Center for Responsible Lending. “Now, yet again, homeownership and family wealth are at risk because of Wall Street’s unscrupulous practices.”

“One had thought that the concept of serfdom had been abolished centuries ago, but Wall Street is trying to re-introduce the concept through these near-perpetual fees,” said Andrew Langer, President of the Institute for Liberty. “When I own my home “free and clear” it means that I have the right to keep any profits through its sale. This practice forces a landowner into a third-party’s fiefdom, watering down individual rights in the process.”

The Coalition to Stop Wall Street Home Resale Fees has organized to fight the dangerous financial scheme of transfer fee covenants and to protect homeowners across the country.

For more information, visit http://www.stophomeresalefees.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, July 29, 2010—Reflective of the real estate buyers’ market conditions in many regions in the U.S., satisfaction with real estate companies among home buyers has improved from 2009, while satisfaction among home sellers has declined, according to the J.D. Power and Associates 2010 Home Buyer/Seller Study.

The study, now in its third year, measures customer satisfaction of home buyers and sellers with the largest national real estate companies. Overall satisfaction is determined by examining three factors for the home-buying experience: agent/salesperson; office; and variety of additional services. Four factors are examined for the home-selling experience: agent/salesperson; marketing; office; and variety of additional services.

Overall satisfaction among home buyers averages 803 on a 1,000-point scale in 2010—increasing by 12 points from 2009. This improvement is primarily driven by increased satisfaction with agents and salespersons. In contrast, overall satisfaction among home sellers has declined by 40 points from 2009 and averages 742 in 2010. Among home sellers, satisfaction has decreased in all four factors, with the largest declines observed in marketing of the home and the variety of additional services offered.

“Among both home buyers and home sellers, the importance of agents and salespersons has increased substantially in 2010, compared with 2009,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates. “Buyers are increasingly relying upon negotiating skills of agents and seem to be satisfied with the purchase prices they are obtaining. Despite the fact that selling agents appear to be doing a good job of negotiating and marketing on behalf of home sellers, the tough economic conditions are negatively impacting their overall satisfaction with real estate companies.”

In the home-buyer segment, Keller Williams ranks highest for a third consecutive year, with a score of 817 on a 1,000-point scale. Keller Williams performs particularly well in the agent and office factors. Following in the rankings are Prudential (811) and Coldwell Banker (805). Prudential performs well in the additional services category.

Among home sellers, Prudential ranks highest with a score of 760 and performs particularly well in the marketing and agent factors. Prudential is the only company to improve in home-seller satisfaction in 2010, compared with 2009. Following Prudential in the rankings are Keller Williams (751) and RE/MAX (744). Keller Williams performs particularly well in the office factor.

The study finds that fewer than one-half of home buyers and sellers indicate their agent asked them to provide a referral or recommendation to a friend or family member.

“Positive recommendations are a critically important driver of new business for agents, and there is ample opportunity for improvement in this area,” said Howland. “Particularly during tough times in the real estate market, asking for referrals and recommendations should be considered an essential part of doing business.”

J.D. Power and Associates offers the following tips to consumers who are buying or selling a home:

- Finding the right agent to suit your specific needs is critical. J.D. Power research has consistently demonstrated that having the right agent is critical to a satisfying home-buying or -selling experience. Due to the unique nature of real estate transactions, clients often form bonds with their agents, as a single buying or selling transaction can take several months or more to complete. For customers who have previously bought or sold a home, the right agent might be someone they’ve worked with successfully in the past. For first-time buyers, seeking recommendations from friends, relatives and colleagues is critical. Increasingly, agents and brokers are advertising their services on the Internet, so this can be a good starting point for research, particularly for someone moving far away from their current location.

- In addition to a buying or selling agent, consider the additional services you may require. Buying and selling a home is a complex undertaking with many “moving parts” to consider. In addition to the real estate agent you work with, you may also need to work with a loan officer, a financial institution, title/escrow company, inspectors, appraisers, home warranty agents, movers, storage services, contractors, etc. One of the advantages of using a full-service real estate company is that they can assist with finding and coordinating some of these necessary additional services.

- For sellers, marketing one’s home should be a primary focus. In addition to finding the right agent, home sellers should pay special attention to tools used to market the home. When selecting an agent, find out their approach to open houses and online marketing, in particular. J.D. Power research finds that home buyers often search for homes online long before they engage a buying agent, or even attend an open house. Ask about which websites will contain the home listing, the number of home photos that can be included and if any special features will accompany the listing, such as virtual tours or mortgage calculators. Tools that assist prospective home buyers may help attract attention to the listing.

- For buyers, it’s important to understand the full cost of the home prior to making a purchase. It’s prudent for home buyers to establish a housing budget and to expect agents to show homes in the appropriate price range. Particularly for first-time buyers, it’s important to understand all the associated fees and expenses that go along with purchasing a particular home. These can include one-time expenses, such as ‘points’ that lower mortgage rates, title fees and appraisals, as well as ongoing expenses such as homeowners association fees, property taxes, or other specialized local taxes that can impact your monthly payments.

For more information, visit www.jdpower.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

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RISMEDIA, July 29, 2010—After getting the keys to their new homes, many first-time home buyers are excited about finally having the opportunity to personalize and furnish their new house. From coffee tables to lamps to lawnmowers, many previous renters leap into homeownership quickly realizing they need to do a lot of shopping to truly make their house a home.

“Whether you’ve been living in an apartment with roommates or at your parents’ house, many first-time home buyers do not think about all the items they need – and want – when moving into a house,” said Janice Jones, national vice president of merchandising for Centex. “With a little advance planning and budgeting, you won’t break the bank to make your new home a reflection of your personal style and showcase your pride of homeownership.”

A typical home buyer spends $7,400 on average on their home, with more than half of that spent in the first year after purchase, according to the National Association of Home Builders.

While many first-time home buyers may not have accounted for this level of spending, Jones offers advice on what types of items to purchase to not only properly maintain and live in the home, but also more importantly, items that help new homeowners feel like their house is a place to call home.

Furnishings
Many first-time home buyers no longer want their parents’ hand-me downs or their childhood bedroom set. From sofas to dining room sets to mattresses, many first-time home buyers take the opportunity to upgrade their furniture when moving into their new home. According to an NAHB study, furnishings take the biggest chunk of the budget, with home buyers spending about $5,300 on furnishings during the first year after buying a home. The biggest ticket item for all households is bedroom furnishings, including mattresses, followed by sofas.

Window coverings and linens
The median square footage of homes bought by first-time buyers is 1,500. So, you can only imagine the number of windows that need to be covered to ensure privacy and security in a home. According to Jones, many home buyers don’t account for this in their budget. Additionally, with the ability to now paint and decorate each room, new homeowners find that they want to purchase new bedroom and bathroom linens.

Garden tools
Since a first-time home buyer is likely to move into their home from an apartment, unless you plan on hiring a gardener, you’ll need to purchase a few basic gardening tools, including a lawnmower, garden hose, sprinkler and a shovel (for winter weather).

Flat screen TV
Let’s face it: many home buyers shop for their new home while taking into a consideration how a new, large, flat-screen television set will be situated in their new living space. So, it’s not a surprise that a hot item on the list is purchasing an entertainment system.

However, you’ll also need the basic appliances in your new home: a refrigerator, stove, and a washer/dryer. While many existing homes usually come with appliances, a home buyer needs to take inventory as to whether or not they will need to purchase these big ticket items before they purchase their new bedroom set.

Basic tool kit
Every home needs a well-stocked tool box. Many home improvement stores have sets you can purchase, but make sure it includes a hammer, screw drivers, pliers, wrenches, a tape measure and a staple gun.

“My biggest piece of advice for new home buyers is to be creative and tackle this room by room,” said Jones. “For example, after outfitting your home with the necessary items—like appliances and window coverings—move on to the kitchen and family room spaces. This area is the heart of your home where everyone gathers.

“Look for great values on the items you need that will be utilized most. Take your time and get the feel of how you want to use each space for both function and enjoyment. This strategy allows homeowners to stage their purchases and add new furnishings as the budget allows. Decorating your new home should be fun and a reflection of your personal style.”

For more information, visit www.centex.com.

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