Real Estate Information Archive

What is a Short Sale? You may have heard this term but weren’t sure exactly what it means. So what exactly is a short sale? It’s the process by which a homeowner can sell their house for less money than he or she actually owes on the mortgage(s).

The process goes like this: The Borrower provides proper documentation to his or her mortgage lender(s) to show a hardship to pay the mortgage and requests the lender take a “short” payoff on the outstanding mortgage balance. The mortgage lender (or bank) takes a loss (or write-off) on the mortgage because the value of the home has fallen below the mortgage balance and the homeowner has suffered a legitimate financial hardship that has caused the borrower to fall delinquent and is unable to continue to pay the mortgage on time.

Once the bank approves the “short” payoff on the mortgage, the home can be sold for a price near the market value without the Seller having to come up with cash to cover the shortfall. The mortgage is satisfied and the foreclosure process stops. It is recommended that a homeowner considering a short sale consult with a CPA, attorney, and of course, a qualified real estate agent experienced in short sales.

Luckily, here in the Greater Baton Rouge Area we have not experienced many of these types of properties on the market, but we have seen enough that two team members have become Certified Distressed Properties Experts.  If you wonder if you might qualify for this type of service to get out from under your mortgage, give us a call and let us see what we can do for you.

How to Avoid a Huge HVAC Mistake…and a Big Expense

As things heat up in the greater Baton Rouge Area, we wanted to take the chance to remind you of the importance of regularly caring for your HVAC system. We just returned from vacation with our house at 92 degrees!  It was a bad capicitor and luckily it was quickly repaired.  Things can go wrong even after you have your unit inspected, and we know here in the heat of summer, the units really take a beating so it is really important to pay attention to a few things.

Failing to properly maintain your HVAC can cost you thousands of dollars. Unfortunately, we’ve had clients confronted with HVAC nightmares due to lack of consistent maintenance. And as a Member of the Top 5 in Real Estate Network®, I, along with my team, understand how important it is to keep your home’s value intact…especially in today’s market.

The good news is, while the cost to replace an HVAC system can be in the $10,000 range, simple maintenance is not costly at all. A filter is usually less than $10 and replacing it monthly keeps your air cleaner and your house less dusty.

Filters should generally be replaced every month when the system is running. Replace filters with the same kind and size as the original filter. If your filter is not disposable, follow the manufacturer instructions for cleaning. If you're using a high-density filter such as an electrostatic filter, check with your local HVAC expert, who can raise the external static pressure of your system. If the external static pressure exceeds the design criteria of your system, it can negatively impact the performance and life of your equipment.

Your air filter should be located in either the blower compartment of the furnace, in an attached filter case, or in a return air grille in a wall of your home. If you cannot find the air filter, contact your local HVAC dealer for assistance.

Have your local HVAC dealer perform preventative maintenance before the start of summer and then again before winter kicks in.  I always suggest to potential sellers to have this done before putting the house on the market - it would be nice to know before you negotiate a sales price on the house if you are going to have any big expense on replacing or repairing your HVAC!!  If you haven't had yours serviced in 6 months, I would highly recommend doing it now.  Some preventative maintenance upfront can save you a big headache when your unit fails on a weekend this summer (and it seems they always fail on the hottest day!!). Many companies offer service agreements that may include reduced rates on labor and parts and provide priority response. Service/maintenance agreements may also cover:

-Cleaning indoor and outdoor coils
-Tightening electrical connections
-Checking supply voltage and operating current
-Checking refrigerant charge
-Measuring temperature differential at supply and return registers
-Cleaning blower wheel and motor
-Inspecting and adjusting the burner
-Checking heat exchangers
-Cleaning drain lines and pan
-Checking ductwork for leaks and insulation
-Checking the thermostat

Like many of us, your home is most likely your biggest investment. Simple and regular maintenance will not only preserve your home’s value but help you avoid a potential crisis and unexpected expense. For more information or for a recommendation on a local HVAC expert, please e-mail our team. Be sure to forward this  on to your fellow homeowner friends as well!

Mortgage Rates Might Not Be Low for Long according to this news article.   The near-record low mortgage rates seen during the past few weeks may not be around much longer.   These low rates have been fueling the Greater Baton Rouge Real Estate market and a lof o us have thought the low rates would continue for the next 6 months.  However, this article dispels that thought.

Signs of improving economic conditions could lead Federal Reserve Chair Ben Bernanke to raise key interest rates, driving up mortgage rates, says Stephen Stanley, chief economist at Pierpont Securities LLC.

The evidence includes more consumers are paying their bills on time. Past-due accounts at American Express declined 34 percent compared to a year ago, and Target Corp. reported its lowest delinquency rate in two years during the second quarter.

In another sign of economic improvement, fewer banks reported tightening lending standards this month, one reason consumer borrowing rose for the second time in three months.

“If lending standards start to stabilize, that’ll be another reason to remove the emergency measures, including the zero rate,” says Jay Bryson, a senior global economist at Wells Fargo Securities LLC in Charlotte, N.C., who formerly worked at the Fed in Washington.

Source: Bloomberg

For those of you who follow Dave Ramsey, you have probably already read this article.  It was so good, I thought I would repost it here, with a few additions!

Five Things to Know About a Real Estate Agent
What's Your Number? – Ask how many properties the agent has sold. You want to see a proven track record, and someone who sells 10 homes a year probably won't get the job done as well as someone who sells 50 or 60 homes. Also, you want to find someone who is experienced in selling homes in your neighborhood.

It Ain't Pretty – A good real estate agent will make nice but honest suggestions on how to cosmetically improve your home. Don't take it personally. Listen, make the changes, and get your home sold. Simple.

Out To Lunch – Do they work full time? The odds are that agents who sell homes part time or just on the weekends won't be available when you need them. Ask them about their system for finding buyers and communicating with you as the seller, as well as if they have a team to cover for them if they are sick or on vacation.

Show Me the Odds – Ask what the agent's list-to-sell ratio is. What percentages of houses that they list actually sell, and what percentage of asking price do they get? The agent who wants to sell a house for the highest price is probably not the right person. Anybody can ask a high price, but that doesn't mean they can sell it for that.

Not All in the Family – Don't list your house with a family member or friend just because of the relationship. This is a business transaction, and if they are not good at the business, then your house doesn't get sold. If they are the top real estate agent in the market, then that's a different story. But hiring someone based purely on relationships is always bad.

The Pat Wattam Team at RE/MAX First has always addressed these questions with our clients.  We believe you need to know how we sell houses, how we communicate with you, and what are our back up systems when one of us is out (like last week when Buyer Partner, Kyle Petersen and wife Michele enjoyed the birth of their son, Connor!). 

Our goal is to take the mystery and the hassle out of the home selling and home buying process so that you, our client, can make the best possible decision.  Call us anytime for a free consultation!  225-298-6900 #realestate

Prices for previously owned homes rose in more than 40 percent of U.S. cities in the fourth quarter of last year, including Baton Rouge, as massive federal spending helped the housing market show signs of stability.

The National Association of Realtors said Thursday that the median sales price for previously occupied homes rose in 67 out of 151 metropolitan areas in the October-December quarter versus a year ago. That’s a sharp improvement from the third quarter, when prices rose in only 20 percent of cities.

In Baton Rouge, where the housing market has never cratered as bad as it has in a number of other markets nationwide, the median home price for a previously occupied home rose $1,000 to $157,400, an increase of 0.6 percent.

The housing news reflects what I consider to be the health of our economy.  With a great selection of homes to choose from, buyers will enjoy taking advantage of the tax credit as well as the excellent value here in the greater Baton Rouge Area.

As reported in the Business Report today, the number of Louisiana households facing foreclosure dropped 24% in January, compared with the month before. According to RealtyTrac, a Web site that follows foreclosure activity, 1,202 Louisiana homes were in some form of foreclosure last month, ranging from a default notice to bank repossession. That figure translates to an average of one foreclosure per 1,567 Louisiana households, well below the national average of one foreclosure per 409 U.S. households. Louisiana ranked 37th nationally for foreclosures.

This continues the trend we have seen since the housing market collapsed across the nation a couple of years ago.  Although we are seeing a few more foreclosures in the Baton Rouge Real Estate Market, they tend to be on the high end homes or the low end.  The middle prices seem to be doing quite well, and that is probably still fueled by the tax credit. 

There are plenty of great homes for sale in the greater Baton Rouge area and with the Tax Credit, it's a great time for people to make that move!

Making plans to purchase a new home or even to make a move up requires financial planning.  As a Member of the Top 5 in Real Estate Network®, home buying clients often ask for advice on the best ways to manage and save money. Here are some tips from www.bills.com:

1. Make a plan. Create a straightforward budget for the year and monitor it monthly or weekly. Each month, review your progress and revise where necessary. Make a date with yourself or your significant other each month and make it mandatory.  Come prepared with updated records.

2. Use cash. This is probably the single biggest idea to start creating wealth!  Move away from credit cards and avoid going into debt, especially for daily, routine and ongoing purchases. Write checks or use automatic bill payments for bills, and withdraw enough cash or use a debit card for other expenses. Track withdrawals diligently to avoid going into overdraft. It's hard to do but after a year you will find it very easy, and your credit cards will no longer be a drain!

3. Pay bills on time. This sounds like a 'no brainer' but in this economic climate you need as perfect credit as you can to buy a home, and just being late 1 time on your mortgage will keep you from buying another house.  The most important element of good credit is paying bills on time. Keep bills in one location and check that spot weekly. Set up online payments or write due dates on a calendar to stay on track.

4.Save, Save, and then Save some more!  Your goal should be to save 10% or more of your income, but starting with even a few dollars a week is a great way to develop the habit of saving. You can always add more to your savings at any time. For example, after you pay off a bill, add the amount you would normally pay toward the bill to your savings instead. If you get a raise, bonus, cash gift or other one-time monetary receipt, save it—or at least a portion of it. Skip eating out one day a week, or, get this - skip the fancy coffee.  At $4 a pop, times 5 days a week x 52 weeks a year......well, you the picture!

5. Practice preventative health. Case in point:  my brother knew something was wrong with his foot but just kept putting off going to the doctor - until he got really sick and was running a fever.  Come out to find, he had diabetes and ended up with a toe amputated - just because he refused to take the time to go to a doctor.  Money cannot buy good health, but in today’s world of skyrocketing medical and insurance costs, getting sick can cost you. Exercise and eat well, get enough sleep and, in these stressful times, take time to pursue relaxation practices, whether that means spiritual practices, meditation, a workout or coffee with a friend.

6. Think twice before spending. Find creative ways to cut back on expenses—take care of household maintenance, barter services or goods with friends or neighbors, and fix up old belongings rather than rushing to buy new ones. Some statistics say that people buy 30% more when shopping with a larger cart, so even a small change like avoiding the store cart when possible could save you money. Once you go to an all cash plan this is easier to control.

7. Participate in a retirement plan. Many believe now is a great time to invest for the long term. Especially if your employer matches contributions, contribute to a business retirement plan. If you are on your own for retirement savings, invest in an Individual IRA, Roth IRA and/or plan for self-employed persons.

8. Have the right insurance. Insurance protects against expenses you cannot cover yourself. Be sure you have life insurance to protect your family, auto insurance to cover your car, health insurance to provide for at least major medical incidents, and home or renter's insurance to protect possessions from theft or disaster.  Remember, the insurance company doesn't want to pay you so you have to be very persistent when you are due - but don't use it unless you absolutely have to - your rates will probably be raised if you use it a lot.

9. Pay taxes on time. File your income tax return on or before April 15, with any tax due, to avoid penalties. At the same time, adjust withholding if needed to account for changes in income. That step might be especially important this year for those with lost or reduced work. If your refund was large, have fewer taxes withheld so you are not giving an interest-free loan to the government.

10. Get help if you need it. If you lose your job, file for unemployment quickly. If you are worried that you will be unable to pay rent, mortgage or other obligations, talk to your bank or a reputable debt resolution company to learn about your options.

Remember that today’s attractive housing prices, combined with the government’s expanded and extended home buyer tax credit, make investing in a home one of the best ways to secure your financial well being. If you would like more information, e-mail me, and please forward these sound financial tips to your family and friends.

The Expanded Tax Credit for home buyers is creating a buying frenzy around the country!  Time is of the essence for those of you who want to receive this FREE money. 

One of the requirements for becoming a Member of the Top 5 in Real Estate Network® is to provide my community with critical real estate information so you can make the best possible decision when buying or selling a home. To that end, I wanted to pass along some key facts about the extended and expanded tax credit that are critical for you to understand in order to take advantage of this opportunity:

1.    Eligibility: The tax credit is now available for first-time home buyers and eligible current homeowners. A first-time home buyer is an individual who has not owned a principal residence during the three-year period prior to the purchase. This law applies for both parties in a married couple; if you haven’t owned a home for three years, but your husband has, then neither one of you can qualify for the tax credit. A qualified current homeowner who wished to move to a different home, must have owned and resided in their residence for five consecutive years out of the last eight.

2.    Salary requirements: Single taxpayers with incomes up to $125,000 and married couples with a joint income up to $225,000 qualify for the full tax credit. Single taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

3.    Amount of credit: The maximum credit amount for first-time home buyers is $8,000; the maximum credit amount for current homeowners is $6,500. The federal tax credit amounts to 10% of the cost of the home, up to a maximum credit of $8,000 for first-time home buyers and $6,500 for current homeowners. Under the new legislation, a tax credit may only be issued for homes purchased for $800,000 or less. The tax credit is a true credit—it does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.

4.    It’s refundable: The tax credit is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if you owe no tax or the credit is more than the tax owed. The credit is claimed using Form 5405, which you file with your original or amended tax return.

5.    Timeline: The credit is available for homes purchased on or after November 7, 2009 and before May 1, 2010. The federal income credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home (newly-constructed or resale, single-family detached, townhomes or condominiums) between the dates of November 7, 2009 and April 30, 2010. Home purchases subject to a binding sales contract signed before May 1, 2010 will also qualify for the tax credit as long as closing occurs by June 30, 2010.

Give us a call and we'll get you under contract in time for you to take advantage of the tax credit!

The statistics for Greater Baton Rouge Real Estate  for 2009 show that our prices have finally felt some decrease in the average sold price in the 3 main parishes the Pat Wattam Team serves (Ascension, East Baton Rouge, and Livingston).  Some interesting facts - that even though the average sales price has decreased a little and the days on market have certainly increased, the average sales price for these 3 parishes combined are still significantly higher than the end of 2005 and are only slightly lower that 2007!!! 

The tax credit for first time home buyers helped us have a strong finish to 2009 but the start of 2010 is dramatically different, and it is strictly due to the tax credit extension and the additional tax credit for existing home owners.  I have never seen a January so busy!  We have been told that the Federal Government will NOT extend the tax credit again and for us to get that word out to our clients!!

So, let's get into the statistics for 2009.  

This Graph shows the average list price for the new Listings, the homes currently on the market, the homes pending, and finally the homes sold.

Sold Statistics for 2009 (EBR, ASC, and LIV parishes)

Ave List Price:  $197,861      Ave Sold Price $192,081    Median Price  $168,000 

Average Days on market were 94 - up 2 from last year.  This is the number to keep watching.  This should stabilize but it significantly longer than the past 5 years.

Comparison Stats:

YEAR   AVE LIST $$     AVE SOLD $$     MEDIAN $$      DAYS ON MARKET

2009     $197,861           $192,081            $168,000              94

2008     $208,438           $202,994            $171,500              92

2007     $201,342           $197,313            $167,103              69

2006     $211,550           $208,798            $193,000              41

2005     $187,685           $184,514            $152,000              32

2004     $157,173           $152,890            $133,000              44

Another interesting note is that the closed price vs listing price is still very close.  Many people think they can come to our area and get a house 20-30% off list price need to look at these numbers!  This shows that we have a very healthy and stable real estate market!!!

 If you want to keep up with the real estate prices for your home, and you are in my MLS area, sign up for the Market Snapshot.  It's an automated system that will send out a report to you once a month with properties for sale and sold within a half mile of your home.   

This graphy shows the type of loans most popular with buyers.  FHA (government backed loans with 3.5% downpayment) have become very popular again - much like they were 20-30 years ago.  Buyers are scraping togehter downpayment money but asking nearly every seller to contribute (rather, let the buyer fincance in their purchase price) money at closing to pay for the buyer's closing costs and prepaid items.

I hope you find this information useful!  If you have any specific questions, please call or email me anytime!