Connect2Agent - Home Buyers and Sellers

Batman returns and so will real estate in the Boston area (Part II)

This is the second of a two-part post from an interview I conducted with Lynne Eliopolous, a Connect2Agent member and real estate agent in Boston (Metrowest). In Part I, Eliopolous shared with me her views on real estate and its constant, cyclical nature.

She also shared some not-to-be-missed tips for real estate buyers who are looking to interview a real estate agent.

In Part II, Eliopolous shared with me some tips to help homeowners and real estate sellers succeed in the (Metrowest) Boston real estate market.

Rebecca Levinson: Lynne, can you please define the area that is considered the (Metrowest) Boston real estate market?

Lynne Eliopolous: The area from Boston Massachussets to Worcester Massachussets.

RL: What would you say to homeowners who are considering selling their house in the (Metrowest) Boston real estate market?

LE: You need to price your house well to get it sold. Homeowners who purchased their house between 2002 to 2005 and need to sell it now may get less money than what they paid for their house. If your house hasn't sold 90 to 120 days after you have made an offer, something is wrong. The price is directly related to the number of days your house sits on the real estate market. 

RL: What types of questions should a seller ask when interviewing real estate agents to list their house?

LE: A seller should ask these four questions:

1. How long have you been working in the industry?
2. How familiar are you with my area/neighborhood?
3. What is the average days on market for one of your listings?
4. What is your marketing plan? How will you expose my property?

Homeowners: Stop being doormats and start speaking up

What happens after a seller signs a listing agreement with a real estate agent? Too often, a homeowner's participation in the sale of their home just fades to black after the ink dries on the listing agreement. Homeowners will commiserate online, talk to their friends and expound with their family about their real estate listing. 

Put that same homeowner face to face with their real estate agent, and suddenly they are mute--devoid of opinion and conversation.

Most homeowners have questions to ask their listing agent--but they don't. They spend their time fretting over how long their house has been on the market. They worry about the lack of activity they are getting on their house. They direct these concerns to everyone but their listing agent.

Meanwhile, critical marketing time gets wasted because homeowners are not communicating with their real estate agents.

Should you hire a property manager to protect your real estate investment? (Part I)

If you own real estate investments and have been overwhelmed by the responsibility of keeping up with tenants and maintenance on your properties, it may have crossed your mind to get some help. How do you know if hiring a property manager is the best way for you to protect your real estate investment and your sanity? 

I conducted an email interview with Connect2Agent member Russell Atkinson, a real estate agent in the Glendale, Arizona, market. Atkinson lends insight on this topic:

What kinds of things can a property manager handle?

An experienced Broker/Property Manager (PM) is absolutely necessary in two scenarios - purchasing and management. When an investor is thinking about buying investment properties and does not have the knowledge to handle the details of leasing and managing those properties, a PM can make the difference between success and failure. 

A PM who is also licensed for Buyer Representation can help the novice investor in the selection process. In most cities, there are some areas that function much better as rentals than others. This knowledge alone can substantially reduce vacancy rates at a later time--increasing profits and ultimately increasing capital gain on the property. A competent Buyer Representative will help the investor-buyer through the complexities of a successful purchase.

What you should know about appraisals

This is the second in a three-part series on appraisals from guest contributor Sara Goodwin. Goodwin specializes in residential real estate appraisals in the Portland, Oregon, area. Read on for her guest post on the makings of an appraisal.

What is an appraisal?

An appraisal determines value. The value is usually a single number that the appraiser lists as an opinion of value per the day of the inspection of the subject property. However, the value can be expressed as a range or it can be as of a future or past date depending on the scope of work and what the client's reason is for the appraisal.

A report is usually in writing, but can also be given as an oral report. A written report will often include at least one of the following approaches to value:

• Sales comparison approach
• Cost approach
• Income approach

Reports may include site and neighborhood information, photos of the exterior and interior of the property, photos of comparable properties used in the report, a sketch of the building and an addendum. 

The addendum is a statement with narrative information provided by the appraiser to fully explain how the determination of value was reached so that the intended user is well-informed.

What makes an appraiser qualified to value your house?

What credentials should an appraiser have to be able to value your house? I spoke with real estate appraiser Sara Goodwin, with PDX Appraiser in Northwest Oregon and Southwest Washington, and asked her about the credentials of an appraiser and the makings of a good appraisal. 

Following is Goodwin's first guest post--one of a three-part series--on the credentials of an appraiser.

Who is an appraiser?

A real estate appraiser is a professional who determines property value. 

All appraisers who provide appraisal services for lending institutions must be licensed through a governing state appraisal board. There are three levels of appraisers:

1. A residential appraiser. He or she can appraise non-complex residential properties (1 to 4 units) up to $1,000,000 in value or complex properties up to $250,000 in value.
2. A certified appraiser. He or she can appraise residential properties (1 to 4 units) regardless of value or complexity.
3. A certified general appraiser. He or she can appraise all residential or business/retail properties.

How to choose an appraiser to value your house

Are you thinking about putting your house for sale on the market? Are you considering improving or refinancing your house? If so, one of the first things you will need to know is its value.

I conducted an email interview with Michael Tarabotto, a certified appraiser and owner of California Appraisal Solutions Corporation, on how to choose an appraiser to value your house. Tarabotto lends the following insight into this topic:

Q: What skills and services should an appraiser have?

A: An appraiser should be able to tell a good story--one that the intended reader can follow, trust and use efficiently. This skill generally comes with experience. However, twenty years of experience will not always translate into a quality appraisal. An appraiser with a diversified portfolio (or base of experience) will often provide a more meaningful product. Whether you need an appraisal for bankruptcy, probate or a mortgage loan, every assignment presents a unique problem that can be addressed in a variety of ways. A skilled appraiser can tailor their report in a way that best fits the situation and makes the most sense to its audience.

Q: What should a good appraisal include?

A: This depends on the purpose of the assignment and the intended users. For example, appraising for mortgage purposes is quite standardized. The appraisal generally includes maps, photos, sketches and basic addendums that support the opinion of value for the underwriter. Attorneys, on the other hand, have a variety of needs that can call for "letter-only" appraisals to "full narrative" reports. The amount of information, such as addendums and exhibits, will be predicated by the purpose of the assignment and the end user's understanding of the appraisal process itself.

Q: How long is an appraisal good for?

A: First, we should distinguish between the appraisal report and the opinion of value. The appraisal report for a mortgage loan is generally good for about four months after the effective date (or date of inspection) before a recertification or update is needed. The appraised value or opinion of value is only good for the effective date of the appraisal. Hence, the report generally has a life span of four months before an update is required by a bank, but the opinion is "good" as of the specified effective date only.

Four considerations when choosing a color to paint your house

When you put your house on the real estate market, your real estate agent might advise you to first paint it. Before you go out and buy the paint or brush a stroke on your walls, read on for the top four considerations in color psychology.

In the article, "Using Color Psychology to Sell Your Home", Jeanette Joy Fisher gives real estate sellers the top four considerations in selecting their paint colors:

1. The Exterior--Muted shades with tints of gray or brown are attractive to high-end, luxury home buyers. Shades of yellow or tan with blue, green or white trim are great colors for lower-priced houses.
2. The Interior--Home buyers prefer color to white walls. Entryways, living rooms and family rooms look great in muted versions of the exterior color of the house. Kitchens shine in natural shades of browns, greens and yellows. Master bedrooms can be painted in colors that elicit intimacy, such as medium shades of blue, green or red. 
3. The Season--Choose cool colors such as blues and grays for winter. Paint in warm colors during the summer season, such as yellows and maroons.
4. The Intensity--The hue for the color that you choose is important. Pale, sunny yellow exteriors sell the fastest. Exteriors in a green-yellow hue or orange hue are a turn-off to home buyers.

Make sure to get recommendations from your local real estate agent when choosing a paint color for the interior and exterior of your house. Ask your real estate agent what colors would help to sell your house quickly and if there are any trends you should be aware of.

You also might want to consult a professional home stager or interior designer. Some real estate agents are home stagers or have an interior designer on their team, so make sure you ask for a recommendation first before you try to find someone on your own.

Posted by Rebecca D. Levinson

Bank of America will continue Countrywide's efforts to help subprime borrowers

In a press release circulated on the wires last week, Bank of America announced it is purchasing Countrywide Financial Corporation. This purchase should help strengthen Countrywide's troubled situation in the mortgage market.

For homeowners who have a mortgage with Countrywide, the combined partnership of Bank of America and Countrywide have committed to continuing the relief efforts for subprime borrowers.  These efforts include:

• Participation in the New Hope Alliance--A letter campaign that assists delinquent borrowers by providing counseling.
• Participation in California Governor Arnold Schwarzenegger's November 2007 subprime ARM Program--A program with three other loan servicers to help keep subprime borrowers in their houses at their initial interest rate if they are living in their houses and making their payments on time, but cannot afford the interest rate when their loans reset.
• Participation in the American Securitization Forum's December 2007 reset freeze framework--This is for 2/28 and 3/27 adjustable rate mortgages (ARMs). Streamlines process for loan services in loan modifications.

How to get money for your house bills

Do you have debt that you need to pay off because of home improvements? Do you need cash to pay for
home repairs or house bills? 

There is an online practice called person-to-person or social lending, in which you can seek funding from individuals online and bypass the banks.

One website, Prosper.com, allows consumers to find individuals who are looking to lend money. To get a personal loan, you first need to complete a free registration form to become a member of the website. You will receive an email verification once you have completed the registration. Click on the link provided in the email and it will activate your membership.

The next step is to verify your driver's license number and Social Security number to prove your identity. You will provide your checking account information so the funds can be deposited when your loan has been approved.

How to get rid of private mortgage insurance

If you bought a house with less than a 20% downpayment, then chances are high that you are paying private mortgage insurance (PMI). This is a monthly premium added on to your payments to help protect mortgage lenders against a loss in case you stop making your mortgage payments.

You might be able to eliminate your PMI and save yourself a few hundred or more dollars a year. Financial website Bankrate's article, 9 steps to cancel PMI, provides the following tips for homeowners who are looking to save money by getting rid of their private mortgage insurance:

• Check with your mortgage lender to see if you qualify. Most homeowners will be able to eliminate PMI once their equity has exceeded 20% of the loan amount. However, some FHA and VA loans will not waive private mortgage insurance.
• Know the amount of equity you have in the house. Your current mortgage needs to be 78% or less of the original loan amount.
• Find out the current value of your house. Contact your lender to see if a formal appraisal is required to have your PMI eliminated. If the appraisal shows that the house has appreciated, you may have enough equity in your house to eliminate your PMI.
• Make extra payments. If you can make extra mortgage payments, you will build up equity faster in your house and get closer to eliminating your PMI.
• Call or write your lender. Once you have determined that you're within 78% or less of the original loan amount on your mortgage, contact your lender to request that your PMI is eliminated.

Have you been able to eliminate your PMI? Connect2Agent asks that you share your story by commenting below.

Posted by Rebecca D. Levinson