It may be time for you to submit a tax appeal relating to your home. If you purchased a home from 2005-2007, there is a fairly good chance your property value has gone down. The means you should be able to submit a tax appeal to your county assessors’ office.

Go to the Internet and enter key words – tax assessor county state (in which your property is located) – there you will be able to locate information on the assessment appeals process. It generally involves an analysis of sales data similar to your home and an estimate of value that supports your claim of a lower assessment value. Lower that value, and it lowers your tax amount.

An Automated Valuation Model estimate (AVM) will use sales from around the area near your home; apply statistical analysis modeling techniques to estimate current value. If this value is lower than you assessed value, submit it to the assessor and let them know you want a reduction in your property taxes. It could save you hundreds or perhaps thousands of dollars each year. You won’t know unless you try it. Check it out at www.homesmartreports.com main webpage.

Home Tracking is an automated method to continuously track key performance information about your home over time. The service will be available in early 2009. There are four substantial benefits in doing this;

1) The first is to stay aware of changes in the local market. Increasing values are sure to follow the declines we have experienced in recent years and you will want to stay aware of such trends. In addition, if there are risky conditions in the area, you’ll want to be aware of them when it comes time to sell, so you can correctly price your home.
2) If you purchased your home in 2005 through 2007, you may be due a significant reduction in your assessed value, but you have to make an appeal in most cases.  This can lower your property taxes by hundreds, if not thousands of dollars each year.
3) Did you buy your home with less than a 20% down payment? If so, you are paying Private Mortgage Insurance (PMI) fees. The amount of your fees depend on your FICO score and the loan-to-value ratio (also known as LTV). LTV is calculated as follows; loan amount divided by sale price equals LTV. If you bought your home for $100,000 and took out a 90,000 loan your LTV would be

      90,000    or 90% LTV.
     100,000

      PMI insurance can range from $50 per month to several hundred dollars per
      Month.

4) When your LTV is lower than 80% you can sometimes qualify for a lower interest rate on your home mortgage rate.

Items 2, 3 and 4 can keep dollars in your pocket, but you have to be proactive and have a Home Tracking process that will allow you to do it easily. So, are you going to leave money on the table for your tax collector, the PMI Insurance companies and your mortgage lender, or keep it in your own pocket?

I’ll tell you a personal story of how I got lazy. I fully intended to appeal my taxes on a home I bought in Riverside County, California. The Riverside Assessor was brilliant and sent out a notice that my property taxes had been automatically reduced (temporarily) by about 10% due to market conditions. This saves me over $500 per year. It made me complacent because I probably could have gotten a 20% reduction had I been aggressive. But, it does show that money can be saved.

Your can track your property today at HomeSmart Reports www.homesmartreports.com by running a manual report and it could save you a great deal of money and also keep you up on the current market conditions in your area.

 

The current market has seen in incredible degree of inertia by buyers to get out there and purchase a home. Let’s run through the standard set of excuses for not buying in today’s market.

1) Is the market still going down?
2) Will I be able to afford the payments?
3) What is the economy doing?
4) Will the current market affect future value?
5) Are there adverse conditions in the immediate area? (Foreclosure, flipping, etc).

Every one of these questions has one thing in common. A BUYER NEEDS MORE INFORMATION! They need SUPERIOR INFORMATION! People are sick of earning 2% on their certificates of deposit. They are tired of renting. They want a place to call their own. They want to invest.

Aa a buyer you need to get the answers you need.

If you feel the market is going down, try to get to a price you feel gives you a buffer to account for a little more market softness.

As to affordable payments, make sure you sit down with a reputable mortgage lender so they can see what you’ll have to pay and how much disposable income you will have for contingencies.

How is the economy doing? “If you wait for the economy to turn in the other direction, you will pay substantially more for this home. Trying to pick the absolute bottom of the market is like trying to do the same in the stock market. Real estate is a longer term investment and if you can’t come to grips with that, you may never buy a home. Real estate is “on sale” right now and interest rates are low”. It’s a good time to buy especially for first time homeowners. If you don’t believe that you should think about the ramifications of being a lifetime renter. If you don’t have the conviction this market will turn in the right direction in the foreseeable future, then renting may be the way to go.

Will the current market affect future value? “You’re asking me to get out the crystal ball and I won’t do that”. I will tell you that values vary by area and some do better than others but when the real estate tide begins to rise, almost everyone will make money. If you’re in before it happens, you’ll make more than most. If wait for the tide to rise, you’ll probably earn less money than most.

What about adverse conditions like foreclosures and flipping activity. Great question! Almost no area is immune from foreclosure activity these days. The question is, has the community performed well over time? If you’ve done your homework and you can say “This area has done relatively well over time" (and here’s the evidence), you have answered a key question for your client.

If you are going to make an endless stream of reasons not to buy, no one can help you. If you are going to take the initiative and proactively find the answers you need to make a good buy decision, it's probably time that you buy a home. Your objective is to find the best deal you can given the market conditions and what you will accept in your everyday life. Much of that will depend on the information you posess and if it will help you feel comfortable with the offer you are making. While you checking for quality information, check out www.homesmartreports.com.

 

One of the biggest challenges in completing a short sale is making sure the lender knows what they are up against in a local market. The decision to make a substantial "write-down" by a lender isn't a small item to consider. Imagine yourself as the person in charge of disposition of assets for a major lender and then doing so without sufficient documentation. If you make a few wrong decisions because you went with your gut feeling, or the gut feeling of a local real estate agent (trying to close a deal), you will soon be out of a job. So, put yourself in the shoes of a lender and think about the documentation and the data they need to make an informed decision.

First of all, the decision maker is probably a long way away from the property and has no idea about the local market conditions. You can help, and you must. MLS data is good in terms of what has closed, what has expired, what is on the market, how many months/years of inventory are available given the current absorption rates and so on. An added dimension can be provided by letting them know about the flipping rate in the area, foreclosure activity, median price trend, cost per square foot trend and other data that will allow them to size up the market.

Even so, you should size up the market for them. Draw some key conclusions as to why they should sell it now for the price your client has offered. Base your conclusions in sound facts so that if they have to defend their actions to their bosses in accepting your offer, they will have a substantial amount of information upon which they based their decision. Make it happen, don't wait for a lender to try to figure it out on their own. They have mountains of files and they are going to give yours one good look and make a determination.

To recap:
1) Create a concise one-page summary overview of the market.
2) Support it with facts from the MLS (on market, expired listings, closed sales)
3) Support it with facts about foreclosure and flipping conditions (www.homesmartreports.com) can help.
4) Inventory backlog summary - how many months/years of inventory are there on the market based on current absorption rates?
5) Let them know your buyer has stretched to make this deal and that they are qualified to close.
Don't leave these things to chance. The more effort you put in on building your case with documentation, the better your chance of closing a transaction. Keep it short and concise and make a compelling closing argument for the lender accepting your offer.
 

 

Nearly six years ago, I was introduced to the perils of Mortgage and Real Estate Fraud. It was as sobering an introduction to yet another form of crime as I had ever seen. I’d heard of scams where senior citizens were duped by unscrupulous operators, but I never imagined there were highly sophisticated and systematic criminal rings whose sole purpose it was to defraud lenders or consumers. It’s getting worse.

Fast-forward to today and recent news from Bloomberg tells us that the FBI has assigned 150 agents to work on over 1300 mortgage fraud cases. The Bureau appears to ready to slug it out against perpetrators of fraud. Where this type of fraud occurs en masse, by the way, home values usually go down. The reason is that the homes are dumped back on the market after foreclosure process has occurred and it creates excess supply that lowers prices. These are things buyers and sellers need to know.

The FBI  recently reported that the top 10 hot spots for mortgage fraud were Florida, Georgia, Michigan, California, Illinois, Ohio, Texas, New York, Colorado and Minnesota. Other states that have been "significantly affected" by mortgage fraud are Arizona, Maryland, Utah, Nevada, Missouri, Indiana, Tennessee, Virginia, New Jersey and Connecticut. That’s 20 states and most of the largest in the country.
What this means to buyers is that you have to look at more than just Listings and recently closed sales. You need to understand foreclosures, flipping activity, a property’s history and market trends. You can’t afford not to know. “I didn’t know” just isn’t a valid excuse because the information is out there and available. Uncovering potential risk factors can save you from making a wrong decision that you’ll have to live with a long time and you may well lose money in real estate if you aren’t informed.
Real estate agents should also heed this call to “discover” potential risks on behalf of your client. You may delay a deal closing, but you will likely have a client for years to come if you help them avoid risky areas. Even if they go ahead and buy in a risky area, the reports will help them negotiate and they will have knowledge of what they are getting into with the purchase. Try www.homesmartreports.com  to discover a means to avoid risk.

Home values have taken a beating as we all know but the end of that downturn is getting closer. Sales volumes increased in April and May’s sales news isn’t far away from release. The value decline has begun to decrease which it must do before values can turn around.

To agents, this means you need to give your clients more and better information upon which to base their decisions. There are a lot of people who want in but they want to make their decisions based on better facts. Give them more than sales data upon which to make their call. Let them know what foreclosure activity is like and also the stability of the market.

Consumers are smart and can navigate a tough market provided you give them enough good data to review. People are buying cars in this tough economy and doing more research before doing so. A home cost about ten times the price of a car so you ought to give the more House Facts.

To Hell with Price, what’s the VALUE of that house? We obsess about home prices, when we should really obsess about home VALUE. So what’s the difference? When pricing a home, nearly everyone focuses on sales comparables. Those who are a little more informed also look at current listings when working on pricing a home. That’s usually where in ends with price estimation most of the time.

When valuing a home, sales comps and current listings are very useful but you need to understand the local market under-currents. By also knowing the foreclosure activity, the flipping activity, the market trends and individual property foreclosure history you will understand underlying market conditions.

There’s a good analogy to be gained from ocean beaches; swimming between the green flags with lifeguards around is generally as safe an area as you’ll find. If you swim near a red flag, there is a strong possibility of a riptide that could carry you out to sea or underwater. So it is with real estate. If you don’t pay attention to everything going on, including foreclosure and flipping activity, you could find yourself underwater in your investment property or home in a hurry.

A HomeRisk Report from www.homesmartreports.com will help you avoid real estate riptides.

I have bought and sold real estate in the past and would consider myself a fairly knowledgeable investor. Over this last weekend, however, I decided to “walk the walk” of real estate investors who are GENUINELY in the game of finding good opportunities in this market. I learned a great deal in the process and had a list of 30 REO properties around Southern California all available at discounted rates through a few lenders. The more you buy from them, the greater the discount by the way.

Seeing that many properties in a day is a grind and to make matters worse, the temperature was over 100 degrees everywhere I went. What a day, so bring lots of water when you go out looking! Here are some stats.

The lenders represented that 93% of the properties were occupied by tenants. According to my observation, only 53% were occupied. That’s one the big values in a visual inspection. The properties ranged from fair condition to very good. None of them were in either poor or excellent condition with this group. 97% had a least two properties for sale around them within visual range, and about 50% of them had other vacant properties near them that were not on my list to see. So, be alert for other properties not on your search list as they may represent opportunity for you and it can affect valuation if too many properties are for sale in the area...

Prior to setting out on the inspection, I ran all of the properties through www.homesmartreports.com to determine a valuation and a risk or market strength score to try to weed out poor properties. I was able to find solid information on 29 of 30 properties. On one property, the address did not exist on that street! It’s either a transposed street number of fraud is involved! By the way, HomeSmart Reports can analyze an entire portfolio of property (hundreds or thousands at a time) and it can save you incredible hours in individual property look-up times. Don’t forget to put a value on YOUR TIME in this process!

Taking that information, I added a photo, assessment of exterior condition, landscape assessment (33% had dead landscaping), traffic volume (quiet, medium, busy) as it would affect value, occupancy and confirmed number of stories which HomeSmart had correctly so that future references could be made. I considered this analysis at least equal to a Broker Price Opinion as I am about to make an investment and I trust my own research. Plus, I was able to do it in a hard day’s work and I’m ready to act which I will do later today or tomorrow. Other people will have to wait longer and that should give me an advantage.

So, in the end, automated property research with HomeSmart Reports data helped me a great deal in weeding our very risky properties. Having a specific plan literally mapped out using Mapquest saved me a lot of driving time. I find that having gone through the process I am more motivated to get on with an offer since I don’t want all the research to be wasted and I expect to buy at least one house. I’ll get back to you all with how things came out if this is of interest to you. I’ll judge that by how many people comment on my little escapade.

By the way, for real estate agents with a good plan to show lenders for marketing their REO's, this whole thing represents a great opportunity.

How many people out there are still burying their heads in the sand and not acknowledging that with any real estate transaction there is risk? This is particularly true today. If you want to buy or sell a property today you had better understand that there is more to establishing value than looking at “sales comps” and “current listings” in your favorite MLS. MORE INFORMATION IS BETTER!

What buyers, sellers and real estate agents need to understand is that you need to have more and better information in preparation for doing a real estate deal. We have come into a time where we now know that foreclosures and flipping activity dramatically affects market conditions – especially in local communities. Better still, you now have the where-with-all to research way beyond price, or comps as they are known.

Sellers, you are where you are and you own that home. If you are selling, price it right. Buyers, you still have a choice as to whether you’re going to buy into and area. Look at history, look at foreclosure activity, look at flipping, look at overall market volatility in addition to price and you’ll be prepared to make the right decision. Sure, you’ve got to love the home you’re buying, but if you can’t sell it when you need to, you’ll come to hate what you used to love in that home.

Real estate agents, you owe it to your clients to get them into the right property with full disclosure. You do and you’ll have a long-time customer and many referrals. Do it wrong and you may get a one-time commission, but that will probably be the end of it with that client. www.homesmartreports can help you do it right, whoever you are. Have a look and learn about the real risks of foreclosure.

 

You may be making the biggest mistake of your life if you don’t really understand the underlying “value” in the area surrounding your home. Buying a home is an emotion driven event and it is a very exciting thing to do. However, when the reality of such a commitment begins to “hit home”, all kinds of doubt creeps into the picture. It doesn’t matter if you’ve bought one home, or three or four. In fact, the more experience you have in buying and selling the more you realize the importance of valuable information before you step up to a purchase.

In this uncertain market especially, you need to do more research, not less of it. So many mortgage lenders have “dumped” homes on the real estate market; there is an extraordinary amount of excess supply. It has caused prices to continue their downward spiral and forced sellers to sit tight or take a big hit on equity. So, when is a deal a good deal? You have to consider the history of an area not only in terms of price, but also in terms of negatives like foreclosure and flipping activity. Is the area in a state of negative appreciation?

Real estate agents need to inform their buyers about local conditions and sellers need to get realistic market data to price their homes properly. Market data goes way beyond sales comps and listed properties. You have to look at the downside trends. Neighborhoods don’t clean themselves up overnight. If an area has a tough history, that history doesn’t correct itself for years. Buyers need this knowledge going in a transaction. Sellers need to price their home right from the start.

Check out a few of the following websites to learn more.

www.homesmartreports.com
www.corelogic.com
www.firstam.com

It will help you get an idea about real market conditions and the data will be better support for your decisions.

We are nearer to the bottom of the real estate market than we were when 2008 started. Prices have gone down but interestingly, the number of homes that have sold has increased each month in 2008. Let me quickly point out that year-over-year, sales volume is still off if you compare quarter 1, 2007 against quarter 1, 2008. Still, prices are down, and we’re closer to the bottom of the market. Another way of looking at it is that homes are “on sale”.

When the market hits bottom, there will be an amazing rush to get in line to buy homes. Lenders will be overwhelmed with the volume of applications. Real estate agents will be in shorter supply because many have left the business due to these difficult times. Some homes will very likely be the target of multiple offers, and that will drive the prices of certain homes higher than they might normally go. Escrow periods will take longer as the real estate transaction “machine” begins to pick up speed. Interest rates may go up as confidence in the real estate market returns.

When these market factors begin to assert their presence, home prices will go up though maybe not as fast as in the previous upturn. Market forces will combine to drive prices higher than they are today. Instead of  buyers’ having their “pick of the litter” at an affordable price, they may well have to settle for less than they wanted or pay a higher price due to a multiple offer scenario.

Lenders have dumper homes on the market causing excess supply and the overall demand isn’t there due to this excess…yet. It will be eventually and buyers will have a tougher time getting the home they want, for the price they want. In my lifetime, there have several occasions when I’ve said to myself, “Why didn’t I buy that property when I could have?” If you can afford to buy, or if you are an real estate agent with a client who is on the fence, it’s time to get out the prodding stick and finalize a deal on the home of your dreams. As a buyer, you’ll be happy you did because the market will come back. As and agent, you’ll have the satisfaction of knowing you steered your client in the right direction at the right point in time.

As always, do your research and understand a home’s value by reviewing prices, trends and any underlying risks in the area around the home. www.homesmartreports is one place you can look for that information.