BUYER BEWARE OF FREEBIES

The ABQ Journal had an interesting article on buyer incentives. Realtors use incentives to "draw blood" and bring prospective buyers to see a home when the inventory is high. The one I never understood as a real estate professional is when the seller gives the realtor more commission or SWA tickets. It assumes that we would "push" a buyer towards a particular home and that is disgusting to me.

There are, however, legitimate incentives for buyers in this market, but the buyer needs to make sure that the incentive helps them resolve an issue or barrier they might have in getting the house. For example, if the buyer is short of cash for the $2500 or so needed at closing, then assistance with closing costs is a good thing. If the incentive is buying down a point on the loan, that might work if making the monthly payment is going to be tight for the new buyer as it will reduce the interest rate abit. But if the seller offers a $2500 flat screen TV, I would advise my buyers to instead take that much off the price of the house. The mortgage will be less and the taxes based on purchase price will be less so it's a better long term value. Other incentives that could work would be covering homeowner association fees for a year or a few months' of mortgage payments if getting into the house will make the buyer cash poor for a few months.

Bottom-line, the buyer needs to understand what will be the most benefit in the short term and look at long term benefit such as a lower interest rate or price. Both buyers and sellers forget that items such as TV's or furniture items are personal items, not real estate, and should be done separately from the real estate transaction. Why pay for a $2500 TV within a 30-year mortgage? Note also that many lenders now will not allow for "repair allowances" to cover updates or replacements such as a roof that the seller might offer. The work needs to be done and paid for before closing or just take the amount off the price. Well, it's complicated, but that then is why realtors are worth their weight in gold advising what's best for their client.

GRANITE COUNTERTOP DILEMMA

To use granite or not, that is the question. Personally, I love the look and cool feel of real granite, but it is soft and porous so stains, it is hard to maintain and expensive to install. One decorator friend says that the only way to do it is to get the most expensive, hardest stuff but that raises the price. Natural stone is definitely sought after. It is generally cut thick and will last a lifetime. Granite is heat tolerant and scratch resistant if it is polished and sealed properly and annually. The price is $75 - 100 a foot, but it looks so good!

Countertops are the first thing you see in a kitchen or bath. The eye is automatically drawn to the surface so it has an immediate impact ...... it is a moment of truth about the home. It is said to be the single thing a homeowner can replace to get the most impact. But it is expensive and if you are going to replace the countertop why not put in the stainless steel appliances and the expensive cooktop, and so the cost spirals up and up.

So what are the alternatives? Corian is a good substitute for looks, but to me is a definite "wanna-be" in terms of looks and feel. It is just too symetrical in the pattern and is not cool to the touch. So who are you fooling? Nobody. It says "I was too cheap to put in real granite." It's not cheap either.

There are now a couple of alternatives that "pass". One is silestone which Lowe's carries and another composite or solid surface countertop with granitelike appearance. These alternatives can often be laid right over the existing countertop so the installation takes just one day. The granite is crushed and mixed with a polymer to create quarter-inch slices. Its more resilient than solid granite and costs around $70 per foot to install. One company has a thermoplastic coating that is sprayed onto the existing countertop that comes with a 10-year guarantee installed for $30 per s.f. This one is a good choice for someone who is cash strapped but needs to spruce up the look of the kitchen for resale.

My choice? Granite. When working with buyers, we often set up a search to include granite countertops even if the cabinets are dated. The latter can be replaced or refinished, but granite is such a big expense that can be avoided if the home already has it. However, I do see older homes that replace only the granite to "justify" an inflated listing price, and that strategy does not work. Buyers aren't fooled. For me, I am saving my money for granite and stainless steel!

NM IN THE RECORD BOOKS!

This just in: NM ranks 13th-fastest-growing state in the nation up 1.4% in 2007. With a total state population of more than 1.9 million, the state added 27,000 residents last year. More are coming, but waiting to sell homes out-of-state. Almost everyday, ABQ shows up on top of some USA ranking list. The ABQ metro area tops the list of "Hottest Buyers Market". Median price has increase 9% in 2007 as other markets decline. CNN Money also says metro ABQ is the best real estate market in the West and the third best in the nation! Albuquerque is on the radar screen for individuals and companies. We are being “discovered” and not just because of our governor, Bill Richardson.

2008 Design Trends from Lowe's

Take a cue from high-end homes. Luxury homes showcase the latest in
floor plans, appliances and décor. Checkout your local tour of homes or visit
some open houses in new construction neighborhoods. Living spaces like
mudrooms and home offices are all the rage; formal living rooms are not.
Stick with your style. Many experts agree that your remodeling projects should reflect the style of your home. For example, if you live in an ultra-contemporary condo, a quaint country kitchen might seem out of place and turn off potential buyers when you’re ready to sell.
Kitchen updates. The kitchen is the heart of the home for many families and in
addition to food preparation it’s also a place to pay bills and do homework. Today’s kitchens tend to be open and often include cabinets for TVs, computers and small appliances.
Go outside. Outdoor living spaces are the latest trend in adding a room without
adding four walls. At the high end of the market, outdoor living rooms, kitchens and fireplaces are becoming standard.
Technically speaking . . . As our lives become more dependent on technology,
homes will become “smarter”, allowing homeowners to remotely arm a home
security system, turn appliances on and off, and control thermostats.

Good Real Estate News for December

Check out my link for a short video summary of what is happening on the real estate front. http://realtytimes.com/vnc/JudyPierson

This week's segments are full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.Some of the topics covered this week are:Real Estate Outlook - The economy's messages for real estate in the past week have been just about as mixed as you can get.Mortgage Moment - Jan Demas discusses making "Mortgage Payments online".Market Condition - Kihei, Hawaii, fueling a healthy housing market is super healthy job growth -- reported in the last few year at 17.94%.report local experts.Ask the Expert - "My grandfather is giving me his home. There is a $20,000 mortgage balance. The lender says that I cannot get a loan unless my grandfather sells the house to me for at least the $20,000 value. He says my grandfather can "give" me the equity. Do I have to do it this way?" Video of the Week - This week's amazing video.You can also tour my latest
listing as well as view some of my personal favorites.I hope you enjoy this week's show. If you have any comments, please e-mail them to me.

Judy Pierson

Senate to vote on FHA Improvement

TOP NATIONAL NEWSFHA Loan Expansion Heading to a Vote Washington Post (12/14/07)

P. D1; Cho, David Senate legislation to revamp the Federal Housing Administration mortgage program has finally moved out of committee and is expected to be passed in the next couple of days when it comes up for a full floor vote. The bill would reduce the required down payment on FHA-insured mortgages to 1.5 percent from 3 percent and open the program to pricier housing markets by letting the agency insure mortgages up to $417,000. With nontraditional mortgage originations on the decline, the FHA anticipates a surge in applications to 1.4 million this year from close to 680,000 in 2006. The bill, intended to provide borrowers with a less risky alternative to subprime loans, will qualify hundreds of thousands of minority and low-income borrowers for low-cost, low-down-payment loans backed by the U.S. government.

Keeping Your Credit Clean

Many homebuyers frequently wonder, "If I am shopping for a home loan will my credit be affected each time a credit report inquiry is made?"
It's a logical and intelligent question to ask; the answer is: not significantly, if the credit checks are done in a short period of time.
When a credit check is made by a potential lender it is called a hard inquiry. When a hard inquiry occurs it does have an impact on your credit score. However, when you're shopping for a mortgage or a car loan, credit bureaus typically cluster the hard inquiries together because the credit reporting bureaus understand that the consumer is shopping for the best loan.
"So for example, if you're shopping for a new mortgage and three potential lenders pull your credit score within three weeks, that is looked at as one inquiry for that purpose," says Steven Katz a spokesperson for TransUnion's TrueCredit.com.
Keeping your credit clean is critical. Katz offers the following advice to help ensure healthy credit.
One card you should not carry. Leave your Social Security card at home. "There is basically no reason that you need to carry that with you," says Katz.
Most people have their Social Security card number memorized. If you're not one of those people, then only carry your card with you when you know you need the information on it. Your Social Security card number contains personal information that if it gets into the wrong hands, can cause major credit dilemmas.
Lock it up. Apartment complexes and condominiums typically have locking mailboxes, but these types of secure mailboxes aren't as common in residential, single-family neighborhoods.
"If at all possible, people should have a locking mailbox," says Katz.
Katz says mailboxes with locking devices are becoming more popular at hardware stores because identity theft is spreading. Taking precaution to protect your personal information can save you months of agony.
Shred your documents. Katz says if you don't shred your personal documents and criminals access the information, the result can be devastating to your credit. Criminals will often attempt to open new accounts using your name and information. If they're successful, they will use the new account and divert the account information to the criminals' address or post office box.
"So, you'll never even know that the account was established. They'll be receiving the bills and then just throwing them out. It's ruining your credit." explains Katz.
Keep an eye on your credit card: Katz says while it is difficult, people should not let their credit card out of their sight or else they run the risk of becoming a victim of skimming.
Skimming has become prevalent at some restaurants and gas stations where a clerk might have a small device that scans the consumer's credit card.
"It's a very small scanner that captures all the information that is on the magnetic strip, and then the card's information can be cloned," explains Katz.
Of course, keeping your credit card visible at all times is nearly impossible. Katz says, "If you're going to go to a restaurant in an area that you're a little uncertain of -- that's in a fringe area or you're in a foreign country and you're not too certain about where you're dining -- attempt to use cash."
Also, when using credit cards be sure that the receipt you leave with the merchant does not have your credit card number exposed. Most merchants have credit card systems that only print out the last four digits of a consumer's credit card; however, some still show the entire account number on the print out. If your full credit card account number appears on the receipt, scratch it out with a pen. Additionally, in rare cases where carbon copies are used, ask for the carbon.
Check your credit history.
Consumers can check their credit history for free once a year at annualcreditreport.com. Katz says that the free reports will not contain an actual credit score, but you can get the scores for a fee.
Another good credit-checking resource is found at truecredit.com. The website offers access to tools to manage a consumer's credit health by receiving credit reports, credit scores, credit monitoring, and informational materials. Written by Phoebe Chongchua
Wondering What Your Home Is Worth? -- Let me show you. Feel free to call me at (505) 220-9193 or email me through my website. Just a click away. Or for more news link to my video real estate update at http://realtytimes.com/vnc/JudyPierson or my blog at http://judypiersonassociates.blogspot.com/.

How to Halndle that "Low Ball" Offer

If your house has been on the market for quite a while, you may have already dropped your price and now you're waiting for the buyers to rush in and make wonderful offers on this now-priced right property. And then it happens.
The lone buyer does appear, like a bandit in the night and offers you even less than what you just agreed to. Quite a bit less -- about 10 percent less. So on your $350,000 house, that you just dropped to $324,000, you now have an offer for $299,000. With a seller subsidy request of $5,000. At this point, your net is $294,000.
So how do you handle such a low-ball offer. Well, first of all -- don't panic, get angry or lose sleep. Especially, don't reject the offer right off the bat and tell them to come back when they're serious. Remember, it's now a negotiation game and the buyer IS serious or he or she would not have made an offer.
Several things have happened before this offer came in. The buyer, with his agent, has researched the market, walked through as many as 30 or 50 properties, conducted a study on the value of the property and written an offer for your house. Remember, you just won the lottery. They could have written on any other house, but they selected yours. So let's get busy.
First of all, do an analysis of your own goals and needs. How much do you really need to come out of this house to meet your goals of moving to your next home? What could you really live with and what amount are you going to counter. Remember this last point -- what are you going to counter? This is assuming that you're not rolling over and that you're going to stay in the game.
Next, conduct a comparative market analysis of the house once again. What's happened in the market to get this buyer to offer such an offer (notice I didn't say 'low'). It might be that your house is now worth that amount. And if it is -- that's okay, because it probably means the house you wanted to buy up into is also worth less. At the worse, you're going to take away less money. The best thing to look at, however, is that now you're going to buy up with a smaller down payment because the buy-up property is also less.
Now, let's start the negotiation. Keep in mind, this is for the long haul. Keep it alive as long as the buyer will keep it alive. Give up a little bit at a time. If you reduced the house to $324,000, expecting an offer of $319,999 with closing costs of $10,000 -- then start there. You're already willing to accept a net of $309,999, so you're not really that far off. Understand you're not going to get top dollar with no seller subsidy. So come down to $320,000 and give them their closing costs. So now, your net has come up to $315,000.
Hey -- you're actually ahead of the game if they accept. Oops -- they don't. Now they've countered to $309,000 and still want the $5,000 in closing. (Now our net's at $304,000). Great. Just think. When you started, you were $324,000 apart (remember, you had NO offer at all). Now, you're only $5,999 away from the net you were willing to accept in the first place.
We're almost there. Now, before I go much further, here's a negotiation tip -- keep this civil. Use a lot of complements about the offer, the buyers and the agent. "What a great offer. Thanks so much for writing. We are very excited about selling this house to you."
You want the buyer agent and his/her clients to know you're wanting to work with them. You've been waiting six months for this day (negotiation day) and you want to keep everyone engaged in the process to get your goals met -- sold and on your way to your new home in the country.
Now offer your final counter (or maybe next to final). You definitely want to use the complements at this point: "We are so close." "I can't wait till we wrap this up, then we can all celebrate."
At this point, you know the buyers want to buy and your sellers are ready to start packing, so emphasize that you're very close. Use a dialogue like this: "We are so close. We have some goals to meet, just like you do. And I hope we can bring this together to get us both where we want to be."
This is when you make the final offer and stick with it. If you offer $314,000, they definitely get what they need and you get closer to your final net -- which at this point would be $309,000 -- just $999 off of your initial goal. Then you know if it goes forward or you're back on the market. However, don't be so stubborn that you lose the lone buyer because of $2,000 or so.
If the buyer is stretching and this won't work, this is when the honesty comes out. The agent may tell you, If we can't do $309,000, it's just not going to work. It goes too far beyond their qualification." Then you can decide whether to keep it on the market (hoping you don't have to drop the price again), or you cut the loss and move forward with settlement.
Be patient with the process. Don't get upset, remember, they're trying to meet goals just like you are. By working together, both can get what they want. Written by M. Anthony Carr
Wondering What Your Home Is Worth? -- Let me show you. Feel free to call me at (505) 220-9193 or email me through my website. Just a click away. Or for more news link to my video real estate update at http://realtytimes.com/vnc/JudyPierson or my blog at http://judypiersonassociates.blogspot.com/.

New Mexico Bucks the Trend.

NM ranks #1 in the USA for home appreciation at 9% for 2007. Go figure. We also have seen a 30% drop in foreclosures which rose 58% nationally. Our rate was 1 in 395 households compared to 1 in 134 nationally. Our market has slowed but is quickly getting to a normal volume and rhythm now that investors are mostly gone. Homes are on the market 1-2 months and sellers have to be prepared to consider a lower price. The ole “assumed high appreciation” just isn’t what it was two years ago. But the prices are fair and have appreciated, and the seller who tests the market with a high price loses time and money in the end.

The number of homes nationally that went under contract in November went up by almost 1% for the second consecutive month. The NAR predicted trend for next year is a gradual rise in existing home sales. This optimism is fueled by interest rates that are hovering just over 6%. And buyers aren’t stupid. They know that the inventory is still very high with sellers getting more motivated as each month goes by. One interesting fall-out in the real estate crisis is that remodeling is not worth what it used to be. Sellers are finding a lower return on their remodeling investment. Get some professional advice from your realtor before spending your money there.

Give me a call at 505) 220-9193 or go to www.judypierson.com for more details on the area or to search all listings.. THANKS! Judy

Should I take my home off the market during the Holidays

When you look at your calendar you may find the months already overloaded with seasonal obligations -- shopping, entertaining, children's pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in "showtime" condition. And that could be the last thing you need before the holiday spirit is broken. It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded with not enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Most top Realtors agree that taking your home off the market during the Christmas season is a mistake. The house surely isn't going to sell off the market! What is the advantage of that? So you're busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things.

The holidays are a wonderful selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. Most agents like the holidays because the buyers have more time, and they can look at homes together.
Before you take your home off the market, consider the following points:
Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Agents believe the home market is no more affected at Christmas than during other "busy" periods. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.

Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn't a consideration. Finding the right home at the right price, however, is.
Relocating families often don't have a choice when they can leave for their new destination. Although 68% of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year's Eve, the timing couldn't be more perfect.
At Christmas time, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.

When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.
With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if you marketed your home during a busier time of the year.

If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn't an option, you can put in the closing date of your choice. Most people can close 30 to 60 days after a contract is written, so there is plenty of time. Possession and closings are very negotiable.

Written by Blanche Evans