More Good News for Borrowers

Posted on January 10, 2014 by Erin Johnston

The mortgage fee increase on loans backed by Fannie Mae and Freddie Mac that was supposed to go into effect this Spring, has been postponed by the FHFA for further evaluation. Fannie Mae and Freddie Mac do not issue loans, but instead purchase them and use these fees to safeguard against risky borrowers who may default.

The fees were set to add thousands of dollars to the initial cost of mortgages that are insured by Fannie Mae and Freddie Mac. Of course the amount of fees does depend on the amount of the loan and borrowers would have paid the fee up front in the closing or could have rolled the fees into the interest rate which could have ended up in high monthly payments by as much as a quarter percent.

As a result of the lower default rates in recent years, Fannie and Freddie have been able to increase their profits and pay back nearly all of the $187 billion tax-payer-funded bailout, thus making any fee increases unneeded.

Distinctive Properties, Inc.

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Mortgage Forgivness Debt Relief Act Has Ended

Posted on January 9, 2014 by Erin Johnston

January 1st hailed the expiration of the Mortgage Forgiveness Debt Relief Act that was created by Congress back in 2007, to assist homeowners who were struggling due to the loss of their homes. The relief act allowed homeowners behind in their mortgage to take a deal from the bank, whether reducing the loan principal or forgiving the remaining balance of the mortgage after a short sale, and not have to pay taxes on the amount of debt forgiven, which traditionally the IRS considers a taxable income.

Having the Relief Act in place contributed to the ongoing recovery of the housing market, however since the recovery is still ongoing; reinstituting the tax may harm or even halt the market recovery some experts believe. There are still an estimated 7.1 million homes with mortgages still in the negative, and 1.2 million in some stage of foreclosure. It is believed that by allowing the act to expire would cause many struggling homeowners to just stay in default until foreclosure or simply walk away from the property. Either choice could affect the market as foreclosures and vacant houses tend to drive the values down in the surrounding neighborhood.

Distinctive Properties, Inc.

Source: http://money.cnn.com/2013/12/06/real_estate/mortgage-debt-forgiveness/index.html?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

http://www.washingtonpost.com/business/mortgage-forgiveness-tax-break-needs-to-be-restored–immediately/2014/01/07/5c2d2bfa-77df-11e3-8963-b4b654bcc9b2_story.html

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Growing Your Business in 2014

Posted on January 3, 2014 by Erin Johnston

A new year is fast approaching and with that comes the need for strategic planning and preparing to meet or exceed our present year’s accomplishments.

To truly grow our business, however, we must learn from our past and change those things that prevented us from succeeding. It’s almost impossible to improve (either professionally or personally) without this perspective and clarity. So, before we look at ways to set the stage for 2014, let’s take a look at this past year and determine the areas where modifications in what we have done, or are doing, need to be made.

First, take some time to read over the following questions:

  • Did you meet your 2013 goals and if not, what were the factors that prevented you from doing so?
  • Which single change did you make this year that brought the most profit?
  • Where did your business come from in 2013?  (With a good tracking system in place, this information should be readily available to you.)
  • Are you satisfied with your business growth this year over last?

Now, write down the answers to these questions, but beware. Be truthful in your answers!  Taking your own inventory can be uncomfortable, but it is this discomfort that brings real change and forward momentum. With these questions answered you will be better equipped to focus on what you need to do to make 2014 a stellar year.

Looking ahead, there are four distinct areas that, when defined and documented, will ensure your success in the coming year(s):

1. Professional Goals

Be realistic in your goals, but don’t shortchange yourself either.  If you feel a 15 percent growth in commissions is too conservative, reach for 20 percent.  Break down what your desired percentage increase would look like on a monthly basis. Is it doable? If not, determine what you need to do to ensure that it is. If you are a single agent, maybe adding an assistant/transaction coordinator to help with your nonsales tasks will free up your time to sell more.  Or maybe you know of someone who would like to join you as a buyers agent.

2. Evaluate Strengths

We excel in both areas of strength and interest. What you gravitate toward are also within these two areas.  With this in mind, when looking at your sales from this past year, where have they come from?

  • Marketing online
  • Marketing offline
  • Referrals
  • Social media
  • Niche marketing

Whichever it is, that is where your strengths lie and where you should focus your attention moving into the new year.  If you are not a great writer or cannot maintain a blog, don’t continue trying. But if you’re seeing great results from marketing on social channels, do it more.  Think: The path of least resistance.

3. Take Stock of Your Tools

If you are anything like me, when you go into your closet and look around, you’ll see many pieces of clothing that you haven’t worn in a very long time but just can’t seem to let go of.  You say to yourself, “Oh, I’ll wear them again. I can’t get rid of them….”  But we never seem to, and they just keep taking up space.  The same can be said about our business tools.  Take a look at which tools you have and weed out those not serving their intended purpose. This could include software, hardware, apps and more.

4. Personal Goals

Having been an entrepreneur for 12 years, I know first-hand how difficult it can be to take time for yourself. But, taking time and setting personal goals are just as important as your professional aspirations, if not more.  Schedule time on your calendar now for vacations, books you want to read, and anything else that will fulfill your social dreams.

We hope these ideas will help make your upcoming year a record-setting one for you.  Here’s to a happy, healthy and profitable 2014!

Source: http://www.realtor.com/advice/setting-the-stage-for-2014/?cid=EML301578#.UscyF2eA05s

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7 Housing Trends for 2013

Posted on January 2, 2014 by Erin Johnston

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As 2013 comes to a close and real estate experts predict where the housing market is headed in 2014, a look back reveals several trends.

“In 2012 we saw the housing market recover and, going into 2013, we expected continuing recovery,” said Lawrence Yun, chief economist of the National Association of REALTORS®. “Instead, the recovery accelerated a lot faster than we anticipated, which was great for sellers and for the 75 million homeowners who saw their home values appreciate.”

1. Housing Prices Rose Faster Than Expected

The national median listing price was $179,900 in January 2012 and rose to $180,000 by December 2012, according to realtor.com® research. The pace of price appreciation accelerated quickly over the year to reach a median list price of $199,500 by September 2013.

2. Mortgage Rates Rose but Remained Low

“We expected mortgage rates to rise in 2013, and they started to increase in the late spring, but they’re still very affordable when you look at rates on a historical basis,” Yun said. “They just aren’t at the super-low point we saw earlier.” According to Freddie Mac, 30-year fixed-rate loans were as low as 3.45 percent in December 2012 and rose to 4.49 in September 2013. Barry Habib, co-owner and chief market strategist for Residential Finance Corp., said mortgage rates are likely to stay low and perhaps even drop between now and March 2014.

3. Bidding Wars Returned

The combination of rising prices, low mortgage rates and low inventory led to a sense of urgency among buyers and the return of bidding wars, said Don Frommeyer, president of the National Association of Mortgage Brokers. According to realtor.com® research, inventory in 2012 reached a high of 2,083,710 homes on the market, then steadily declined to a low of 1,583,497 homes in February 2013. At the end of September 2013, 2,210,000 homes were for sale, approximately a five-month supply.

4. Housing Affordability Remained High

“Housing affordability has come down a little this year because of double-digit home value appreciation and the fact that income isn’t rising in comparable amounts,” Yun said. “Rising mortgage rates, even though they’re still low, also have an impact. While affordability right now is at a five-year low, it’s still the fifth highest for the past 30 years.”

5. All-Cash Buyers Continued to Be a Strong Market Segment

Yun said a continuing surprise is that about one-third of all home purchases were made with cash, a market share that has been consistent for the past three years. While some of these cash buyers are from overseas and some are institutional investors, others are “mom and pop” investors who have had trouble getting financing. “Even some owner-occupant buyers are cash buyers because of the excessively tight underwriting standards for loans,” Yun said. “Some people are getting help from relatives to buy, and then they plan to take out a home equity loan later to repay them.”

6. Mobile Apps Accelerated Connections Between Buyers, Sellers and REALTORS®

Nearly every REALTOR® and brokerage in the country introduced a mobile app this year to make it easier for buyers and sellers to access information from their smartphones and tablets, including realtor.com®. “Everyone realizes that it’s inconvenient to be tied to a desktop when you’re looking for housing-market information and homes,” Yun said. A recent study by Google and the National Association of REALTORS® found that 68 percent of homebuyers used a mobile app during their home search and 89 percent used a mobile search engine at the onset of the home-buying process and throughout their research

7. Rising Rents and Pent-Up Demand Pulled More First-Time Buyers Into the Market

“Right now we’re seeing replenishment of renters who want to buy homes,” Habib said. “At the peak in 2002, nearly 70 percent of people owned homes and 30 percent were renters; now 65 percent of people are homeowners and 35 percent rent. Not only are rents rising faster than home prices in many markets, but there’s pent-up demand from people who don’t want to live at home with their parents and who want to buy a home.”

 

For more information go to http://www.realtor.com/news/7-housing-trends-for-2013/?cid=EML301575#.UsXr6meA05t

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Tri-City Real Estate Statistics

Posted on December 31, 2013 by Erin Johnston

SKMBT_C45213123113130qHere are our year-end stats for Kennewick, Richland, Pasco, West Richland and Benton City.

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Excellent 2013 Housing Market for the Tri Cities

Posted on December 27, 2013 by Erin Johnston

IMG_0853In 2013, more homes sold in Pasco, Richland & Kennewick than in each of the preceding 3 years. This year alone 3,364 homes have been sold in the Tri Cities, causing the home market to rebound in the area. This is up 11% than last year in total homes sales and the average sale price is up roughly 7% since 2010. Although the homes sold this year is similar to last year’s 3,327, the average sale price is higher by nearly $14,000.

Since the cities of Richland, Pasco, and Kennewick have a higher inventory of houses on the market and in combination with the low rates, the current market here in the Tri Cities is a great one for buyers. Over 31% of the homes sold this year in the Tri Cities were sold within the last 3 months. This may help continue the typical 3% climb in home prices the Tri Cities sees each year.

Because of today’s still historically low interest rates, buyers are now able to afford more home than in 2010 and because of the housing market nationwide on the comeback due to population and job growth, market stability is expected to remain for buyers next year also.

http://www.tri-cityherald.com/2013/12/24/2746281/tri-city-home-sales-up-11-for.html
 
Distinctive Properties, Inc.
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Ready for Retirement?

Posted on December 23, 2013 by Erin Johnston

Retirement planning is among the top financial worries for Americans. The best way to help alleviate this anxiety is to become proactive about it and the best time to start is now. Being wise with your investments can offer several advantages such as tax-free and aggressive growth, so here are a few tips to consider when taking action with your retirement.

  1. There are several types of IRA plans out there with the most common ones being a Traditional, Roth, and Simplified Employee Pension. A person can have more than one IRA plan to choose from depending on age and income.
  2. After choosing which IRA best suites your needs, there is a variety of products such as lower risk savings accounts, certificates of deposit (CDs), or higher risk stocks, bonds, and mutual funds to choose from. Again choose the plan that is best for you and gauge whether you are willing to take a risk of losing more for a higher return or just stay with the slow and steady return.
  3. Cds and online savings accounts offer a more secure growth for your retirement. They are less risky or you could also roll existing IRAs , 401ks, or 403bs into a single IRA for stable rates.
  4. Consider using an online bank instead of a branch bank as those online banks without a physical location can possibly offer lower rates as well as competitive rates.
  5. Make sure you are aware of the restrictions on any IRA you choose. Your tax professional can help you with this. Remember straightforward retirement products are better as they can help you reach your retirement goals faster.
  6. Directly rolling over you retirement is usually easy and doesn’t have tax withholdings or reporting requirements of a personal withdrawal transaction, so don’t be afraid to move you retirement money around to maximize its return.

This article is not intended to give legal advice and you should contact your personal accountant for any such advice.

 
Distinctive Properties, Inc.
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Financial Safety on the Internet

Posted on December 20, 2013 by Erin Johnston

Laptop & PapersWith the technology of today allowing for easy online banking from computers as well as smartphones, cybercriminals are creating new and sophisticated ways of hijacking your accounts. Even though financial institutions are taking all the precautions they can, it still does not block 100% of attacks. The malware created can create fake sights and capture your passwords as well as account numbers, if you are not careful. What you believe to be a legitimate site could very well be a clone.

Cybercriminals are creating over 5000 malicious websites a day and with more than 60 percent of consumers shopping or banking online and 1/3 of those store their online banking info on their browsers; it gives the criminals an easy paycheck.

There is technology out there designed to protect you from these attacks and here are a few tips of extra precautions you can take to help prevent your money from being stolen.

  1. When the internet asks you if you would like to store your password, you should always decline and do not allow any site automatically log you in.
  2. Don’t forget to log out EVERY time you leave a site and close the browser window on any computer or smartphone you use.
  3. ALWAYS check with your bank if you receive and email from them asking for account information. Never click any link in the email, either call them to verify or type the URL out.
Distinctive Properties, Inc.
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Low Down Payment Loans Available

Posted on December 18, 2013 by Erin Johnston

For those of us who may not have the recommended 20% down for purchasing a house, there is good news. Instead of being forced to turn to the FHA for a low down loan there are now some banks who are offering loans for as little as 5% down. Banks like TD Bank, Bank of America, and Wells Fargo are offering their home loans with down payments for as little as 5% down.

Over the last few years, the FHA has been raising premiums because after the housing bubble burst the FHA dominated the low down payment market causing them to take on many high risk loans and depleting the agencies reserves. This has caused many potential borrowers to look elsewhere and certain banks think they can offer a much better deal than the FHA.

 Although the low down payment loans were very risky before, rising home prices have reduced the potential loss on these types of loans. Though these banks are offering the 5% down loans, they will also require you to purchase private mortgage insurance until the typical 20% equity in the home is built up.

If you are thinking of making a home purchase and don’t have the full 20% down, check out several mortgage lenders in Pasco, Richland and Kennewick  to see if anyone of them will offer you a low down payment loan.

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