LANCASTER REAL ESTATE

Your credit score, calculated from information in your credit report, is a measure of how good a risk you are to a credit grantor.

You can obtain your score from many firms in the business, including www.equifax.com, www.transunion.com,www.experian.com and www.myfico.com.

1.-Pay on time: The core rule is to meet your debt obligations on-time, every time. If you have had payment lapses in the past but your habits have improved, time is on your side. The credit scoring rules weight recent experience more heavily than older experience.

2.-Correct mistakes in your credit report: Your score should not be reduced by reporting mistakes, which are all too common. I have an article on my website on How to Correct Mistakes in Your Credit Report.

3.-Detach yourself from the "wrong vendors": Because finance companies lend to relatively poor risks, the credit score of any borrower owing money to a finance company is lower than it would be if the creditor was a bank. By the same logic, borrowers who have credit cards of department stores are penalized, relative to what their score would be if they had cards issued by banks.

4.-Reduce balances on revolving credits to less than 50 percent of the maximums: A high utilization ratio is read as a sign of weakness and potential trouble, reducing your score. Credit cards are the most important type of revolving credits, but HELOCs belong in this category as well. A HELOC used to purchase a house or to refinance a mortgage, where the initial utilization ratio is 100 percent, will jolt your credit score.

Note that utilization ratios can be reduced by getting the maximums raised, as well as by paying down the balances. In many cases, credit card issuers are willing to raise the maximum at the borrower's request.

5.-Minimize the number of "hard inquiries": Hard inquiries are requests to a credit agency for your credit score from a credit grantor, insurance company or other entity to which you have applied and to which you have entrusted your Social Security number. "Soft inquiries" made by you or by firms looking to sell you something for which you have not applied don't require your permission and don't impact your credit score.

The credit-scoring systems may or may not penalize borrowers who shop multiple credit grantors within a short period -- unfortunately, you can't be sure.

The credit agencies tell you that multiple inquiries within a 15-day period count only as a single inquiry, but in fact inquiries for mortgage, auto and student loans would probably count as three inquiries, and even three mortgage inquiries could count as three inquiries, depending on how the credit grantors are identified to the credit scorer. I will have an article abut this in the near future.

The bottom line is that in applying for credit, find your own score that you can deliver to the vendors you are shopping who need the score to set the price. The vendor you select will verify the score through his own inquiry, but it will be only a single inquiry.

Pay off collection accounts: This may actually reduce your score in the short-run by converting the account from an older entry with a low weight to a new one with a higher weight. However, you can't get a loan with a collection account on your record, so you must pay it off -- the sooner the better

Top Five Reasons to Use a Local REALTOR®1. All local real estate licensees are not the same. Only local real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. Local REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again. 2. No matter where you live in Lewis County, there is a REALTOR® who lives and/or works nearby. All aspects of your transaction can be handled on a more personal and “hands on” manner. An out-of-town REALTOR® cannot provide the same level of hands-on service. Local REALTORS® work well together on a daily basis which can help to make a transaction move smoothly through the process.

3. Many of the local Real Estate agencies have national affiliations which can provide buyers and sellers with access to nation-wide services and marketing. Many out-of-town agents represent independent or “Boutique” agencies which do not have access to the same powerful tools.

4. Local REALTORS® have access to the same technologies available to REALTORS® in the larger cities north or south of us…the same Multiple Listing Service, the same website presence, etc.

5. Local agents have the “home field” advantage of knowing issues pertinent to our area such zoning, flood areas, neighborhoods, land use, septic requirements and much more. Many out of town agents are not familiar with issues which are specific to a more rural community…they may know how to sell a tract house, but do they know about significant issues such as septic design, use class, invalidity or even what a “perk” hole is?

When selecting an agent, remember that if you chose an out-of-area agent, you have chosen to work with someone who is not familiar with our area AND is farther away. Local REALTORS® have the skills, knowledge and technologies that can go to work for you with that “local” edge which can make the difference.

With falling home prices and higher inventories, most of the public views real estate as a “buyer’s market,” in which buyers hold more of the control and sellers will more eagerly accept lower offers just to sell. 

Not so fast, say buyers and sellers. More buyers are finding the sellers in the driver’s seat. 

Buyer Young Hammack gave up looking for homes for a while after being outbid on three properties in California. "It's a false buyer's market," Hammack says. "If you think prices are cheap, wait until you start putting offers in."

Many sellers may be unable or unwilling to lower their home prices — mostly because they may be underwater on their mortgage — so buyers are increasingly finding lower offers than list price denied. Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say. 

Traditional buyers also are finding even buying a foreclosure can be difficult as they’re increasingly outbid by investors who are willing to pay cash. 

"There's a shortage of attractive inventory," says Glenn Kelman, chief executive of Redfin Corp. "Customers just keep getting outbid on the houses that they want." 

Real estate professional Steve Capen with Keller Williams Realty in St. Petersburg, Fla., says that the homes most in demand among buyers often don’t require much repair work and are located in good school districts and choice neighborhoods near transit hubs.

"What's selling is the cream of the crop, and they sell fast," Capen says. "If it's not cream of the crop, it's getting hammered."

“A short sale occurs when the lender agrees to take less than the full loan payoff of an owner’s property. The homeowner is most likely behind on payments and owing more than the home is worth.


Foreclosure is where the bank takes possession of the property because of non-payment for a long period of time or an unapproved short sale.


An REO is a bank-owned property (“real-estate owned”), when homes go into foreclosure they are sold at a trustee sale, if no one purchases it at the trustee sale, they become REO properties. Later they are often listed by Realtors hired by the bank.”

Houses look more affordable than ever. But prices will have to fall further before many Americans can actually afford to buy one.

The end of 2010 brought the start of a double dip that left U.S. home prices down 31% from their mid-decade peak. The latest slide puts the price of the average dwelling far below its long-run average as a share of per capita income, according to Paul Dales of Capital Economics in Toronto.

More, please

Housing is "exceptionally undervalued" by this measure, Dales writes. He says houses are trading at a 21% discount to their average price as a multiple of income, going by the S&P Case-Shiller national composite index.

Cheap houses and low interest rates seem to point toward a housing renaissance. A buyer who takes home the median per capita income can acquire the median-priced house while spending just 13% of disposable income on monthly housing bills, Capital Economics estimates. That's another low.

Yet low monthly payments alone won't be enough to keep house prices from spiraling downward again over the next year or two. The issue isn't what houses fetch now, it's what they might be worth in the near future – and how many people might be able to foot that bill. Both of those numbers look to be headed sharply lower.

Consider that mortgage rates, though about a percentage point above last fall's deflation scare low, remain 2 percentage points below their long-run average. With the bond markets at loose ends about the price to be paid for U.S. fiscal laxity, a further rise in mortgage rates looks likely.

Higher rates raise monthly financing costs, cutting the amount buyers can put toward principal payments – and driving down prices in lockstep. Why step in front of that steamroller now?

The other bad news for house prices lies in weak employment and wage trends and tightening standards for financing – which may help explain who has been buying houses lately.

With banks increasingly demanding substantial down payments, even supposedly affordable houses are a stretch for many. The median sales price of a new house in 2010 was $222,600, according to Census Bureau data. That means saving a $45,000 nut, plus closing costs, on the median per capita income of $26,530.

At the average U.S. personal saving rate of 5.8%, doing so would take 29 years. Even using the household median income figure of $49,777, you're looking at 15 years or so just to get the down payment on hand.

Prices for existing houses, which have been accounting for the vast majority of sales, are lower, which makes the savings math a bit less daunting. Even so, those numbers say the pool of potential homebuyers is not terribly large right now, not with unemployment running near 9% and the labor force thinner than it has been in 26 years.

And so it is that more than two-thirds of existing home sales since last summer were made to cash buyers or investors, while a mere 6% of purchases were made by first-time homebuyers, Dales says.

First-timers accounted for 41% of house sales in 2009 and between 35% and 39% from 2005 to 2008, according to the National Association of Homebuilders. The 2009 number was surely boosted by first-timer tax credits, but it's clear that it's not out of line with the recent average. 

So like it or not, house prices are going to keep falling until jobs become plentiful, wages start rising and the outlook for rates becomes clearer. That is, until it becomes clear that a good portion of the population can actually afford those affordable prices.

California Passes Large Tax Credit
for Homebuyers

California has initiated its own homebuyer tax credit. The credit is for 5% of the purchase price, with a maximum credit of $10,000. That’s a dollar-for-dollar reduction against income tax payments that would otherwise be due. Homebuyers must claim the tax credit in equal installments over three consecutive years, beginning with the year of purchase. Purchasers are required to live in the home as their primary residence for two years or forfeit the credit.

To be eligible, first-time homebuyers can purchase a new or existing home. Repeat or move-up homebuyers are eligible for the credit only if they buy a new home.

Buyers of existing homes must close escrow between May 1 and December 31, 2010. The credit is available to buyers of new homes who sign purchase agreements between May 1 and December 31, and close escrow by August 1, 2011.

Separate from the California tax credit is the federal tax credit. The federal homebuyer tax credit will expire soon. If your clients want to take advantage of this tax credit, they must act fast. The tax credit is available to buyers who sign purchase agreements on a new or existing primary residence home between December 1, 2009, and April 30, 2010. Buyers have until June 30 to close the mortgage loan on their new home.

If you have any questions about how the California or federal tax credit may benefit your clients, please call me today.

18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME .
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

February 2010 Existing-Home Sales Ease with Mixed Conditions around the Country
RISMEDIA, March 24, 2010—Existing-home sales declined slightly in February 2010, with modest gains in the Northeast and Midwest offset by softer sales in the South and West, according to the National Association of Realtors. Existing-home sales, which are finalized transactions that include single-family, townhomes, condominiums and co-ops, slipped 0.6% nationally to a seasonally adjusted annual rate of 5.02 million units in February...

Governor Schwarzenegger today signed AB 183 providing $200 million for home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.