Making 2010 the best year ever for owners

And, as this is the last existing home sales report of 2009, we can tell you that for all of last year, there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008 and that’s the first annual sales gain since 2005.

In other news this week, President Obama went to Capitol Hill to continue a Washington tradition – delivering his State of the Union address. In a difficult political and economic climate, the President focused on the needs of the middle class – quality education, affordable college tuition, responsible retirement planning, quality health care – and most important of all – protecting a family’s biggest investment – their home.

The President spent much of his address discussing ideas for generating more jobs, keeping the lines of credit open for more Americans and continuing the process of economic recovery – all crucial areas of interest for the American homeowner.

Existing-home sales in the Northeast dropped 19.5 percent to an annual level of 910,000 in December but are still 21.3 percent above a year ago. The median price in the Northeast was $241,700, that’s a jump up 3.2 percent from December 2008.

In the Midwest there was a considerable drop of about 25 percent in December, but that’s still 8.5 percent higher than December 2008. The median price in the Midwest also saw a rise to $143,200, which is 1.8 percent above a year ago.

In the South, existing-home sales dropped 16.3 percent but are 15.5 percent above December 2008. The median price in the South was $152,000, down just 1.0 percent from a year ago.

And finally, existing-home sales in the West declined just 4.8 percent to an annual rate of 1.38 million in December but are still 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.

So though we’re seeing a fall in sales, that’s not unexpected. The rises in price, however are extremely promising signs and with what promises to be a busy spring market ahead — 2010 really could be the best real estate year ever.

This new website is called HouseLogic.com and is the latest tool brought to homeowners by the NATIONAL ASSOCIATION OF REALTORS®. With content covering home improvement, maintenance, taxes, finance, insurance, and even ways you can get involved in and enrich your community, HouseLogic can help you increase and protect the value of your home by helping you make confident decisions.

This site is a little like buying a whole bunch of home improvement and landscaping books, from your local bookstore. It will help you plot out about just about any kind of project from your help — from the inside out. It will help you decide which projects you can take on yourself and which you need to farm out to a contractor. It will help you calculate costs of projects and work out the schedule. It will even help you sniff out when contractors aren’t being completely up front with you.

It can help you decide which projects are in your budget range and which are going to pay off best in the end. Considering adding a bathroom? HouseLogic.com will help you decide whether another bathroom makes any sense given your particular home and, should you go ahead with the project, it will help you decide the essential parts. And, maybe best of all, HouseLogic doles out tips on how to make projects get done more quickly and for less money.

Here’s how it works:

1. Start by going to HouseLogic.com and creating a profile for yourself. It will send you to a personal binder the site creates for you. From there, start looking around for, say, information on easy ways to uncover air leaks and how to fix them. Once you find the information you are looking for you can drop it in your binder and assign yourself a deadline to finish this particular project. It will remind you when your due date is coming.
2. Once a project is finished the website helps you keep track of the costs as well as how much value has been added to your home. For projects like replacing appliances with energy efficient ones, it will help you keep track of how much money you save monthly.
3. The website will calculate all the costs and benefits to your home, keeping a running tally for you of how much value you are adding to your house or condo.

HouseLogic.com will guide you through all those projects that homeowners think about. New kitchens, new bathrooms, adding a deck. It’s all there. But, it can also give you some ideas you might undertake in your neighborhood to improve the quality of life for you and your neighbors, such as creating a neighborhood emergency preparedness plan, organizing a holiday block party or initiating a useful project like a Christmas tree recycling program — all ways to create strong bonds with the neighbors. It might not actually have a huge impact on the value of your home, but it will make living there more desirable.

Perhaps most importantly, there is a whole bunch of information about money. The site will keep you informed of the latest tax incentives for homeowners. And, the site will help you determine how to get the most insurance for least amount of money.

So, go and check it out today. Just about everyone who logs on will find something that is going to be useful for them.

Whatever the reason, it’s devastating for millions of Americans every year. Losing your house is bad enough, but it gets worse, because when you lose a house to foreclosure, your credit score plummets. Sometimes so low, you can’t even rent an apartment.

But you might be surprised to learn that foreclosure might not be the only way out. There are alternatives — they all may not apply to your individual situation, but they might! So let’s take a look:

A good first step would be to visit the government’s ‘Making Home Affordable” website. What you’ll find there, is lots of information about whether you qualify for loan modification under the government’s plan. But, this isn’t for everybody. If you don’t have a loan guaranteed by Fannie Mae, or if your loan amount is too high, you won’t qualify. But again, it’s a good first step.

Next — and this is an important one — talk to your lender.

I know, sometimes it’s tough to admit you’re in financial trouble. But the worst thing you can do is stay quiet, while you miss payment after payment. If you think you might not be able to make a payment – even one payment – then by all means call your bank or mortgage company and tell them about it — they might be able to help.

And this brings us to the second point: Remember, you’re not alone. Millions of Americans are suffering the pains of foreclosure. So many that banks and mortgage companies have developed new strategies not to take your house, but rather, to help you stay in it! Remembering that it’s happening all over America, and probably in your own neighborhood, might give you the courage to make that call.

When you do, be realistic about your financial situation. Tell the bank or mortgage company the truth about how much money you have coming in, or if you have none at all. If you have sufficient income, the bank might be willing to modify your loan: they might be willing to change the terms, so that you can pay!

• In some cases, they might be able to lower your interest rate.
• In others, they might convert your loan so that you only pay interest, and no principal.
• And sometimes they can adjust the length of your mortgage… for example, making a 30 year loan into a 40 year loan.

And every one of those steps will have the same result: your monthly payment will go down.

Unfortunately, in some cases a loan modification won’t work at all, because you’ve been laid off. Sure, you’re out there looking for a job, and maybe you’ll get one. But in the meantime, there’s no way you can make that payment. In your case, the lender might be willing to allow what they call ‘forbearance.’ That just means they’ll defer your payments. One month, two, maybe even three months, during which you don’t have to make any payments at all. The bank has to agree to it, and what they usually do is tack that unpaid period onto the end of your loan. So instead of paying off your mortgage in 25 years… it becomes 25 years and three months.

Another good thing about forbearance and loan modification agreements, is that in those scenarios, your credit score will usually stay intact. Because you haven’t actually defaulted on the mortgage; you’ve just changed its terms. So they’re options that are worth looking at seriously.

Sometimes the best option, is to try to sell your house. Talk to a REALTOR®, and tell them exactly what your situation is, and what you hope to achieve. You might be able to help sell your home for more than you think. Plus, there’s the expanded and extended tax credits out there now, which could mean more buyers will be interested. Plus, interest rates are still really low. So trying to sell your house should always be your first move. Unfortunately, though, a lot of people who sell won’t make a profit…because many of them owe more than their house is worth. If that’s you, consider looking into a short sale. In a short sale, the bank agrees to let you sell the house for less money than you owe. The bank takes the hit. Up until last year, you had to declare the bank’s loss as income on your tax return, but not anymore. So basically, you sell the house for less than you owe, and just walk away from it.

If you decide to try for a short sale, there are some important things you should know.

• The first is obvious: you won’t make any money on the house. If you sell your home for less money than you owe, then everything you put down on it, and all that equity you might have built up in the past is gone. But your monthly mortgage payment will be gone too. So will the tax bills, the utilities, the homeowners insurance and the upkeep — it may just be the fresh start you and your family needed.
• Short sales are not a sure thing! Some banks do not allow them. While some will allow them only under the most dire circumstances. So if you’re thinking about a short sale, you’d do well to find out first, if your bank or mortgage company will give you the ‘OK.’
• In a short sale, your credit score will take a big hit. Usually, it will drop hundreds of points. That’s difficult, especially in an era when credit scores are so important. But it’s the kind of hit that you can recover from eventually, especially if after the short sale, your finances are easier to handle.

You might think that now we’re about to talk about foreclosure itself. But hold on…there’s one more option.

In a foreclosure, the bank goes to court, proves you haven’t paid your mortgage, and the court orders that the bank can take over the house. However, there’s one last way to walk away without foreclosure. It’s called ‘Deed in Lieu of Foreclosure.” It’s really a simplified version of foreclosure. Except that instead of the court getting involved, and ordering you to leave the house, you do it voluntarily. And you agree to just sign the deed over to the bank. No court orders, no court proceedings — you just give the house back.

What’s the up side? Well, for one thing, you won’t have a foreclosure on your record! you have somewhat more involvement, and control; over the situation. You can work with the bank on a time frame for instance, rather than just being ordered out of the house, which can happen in a foreclosure.

As for the bank, it avoids the enormous time and money involved in a foreclosure. But just like short sales, there’s no guarantee your bank or mortgage company will allow a ‘Deed in lieu of Foreclosure” process. And you won’t know unless you ask them.

The down side to it? It becomes part of the public record, and the next lender will want to know why you had to go in that direction.

Finally, there’s foreclosure itself. In that court-ordered procedure, you lose the house, and your credit score will take a huge hit of several hundred points. And the foreclosure becomes part of the public record. We all know that sometimes you just can’t avoid foreclosure. And remember, you’re not alone. It’s happening all over the country, and of course, the rate of foreclosures is increasing in these tough economic times. But as we’ve seen, there are ways around it. And they all begin with talking to your lender, and your REALTOR®. You might be surprised at just how willing they are to help. But they can’t help you, if you don’t talk to them. So if you’re in trouble, give them a call.