Welcome to the "Z" Team!

The tightened lending standards are keeping a lot of young professionals on the sidelines in home buying today. That’s where more parents are stepping in! 

More parents are taking on the role as mortgage lenders to help their kids take advantage of low home prices and record-low mortgage rates. In fact, one in three first-time home buyers either received a gift or loan from their families for a home purchase made in 2011, according to National Association of REALTORS®’ research.

But parents who enter into a gift-giver or mortgage lender role need to make sure they follow some tax guidelines. We coordinate family like this with CPA’s , attorneys, etc!  

For one, the federal government has rules on how much you’re allowed to gift. For 2012, individuals can give up to $13,000 tax free in one year without having to pay gift taxes. Married couples can give up to $26,000 a year. 

More information at source: “Become Your Kid’s Mortgage Lender,” Fortune (February 2012)

Other news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of Northern California at: www.sierraproperties.com or www.dougandbudzeller.com

The Appraisal Foundation’s Appraisal Practices Board is seeking public comment on a proposal about how to adjust comparable sales for seller concessions when making valuations.  

“A common tool used to help facilitate a property transaction is to have the seller provide financial assistance or incentives to the buyer,” the board’s proposal states. “Such assistance may be considered a seller concession or financing concession and this is important because it may have an influence on the contract price. The purpose of this guidance is how to identify, verify, analyze and adjust sale comparables for both seller and financing concessions.” 

You can view the appraisal board’s second draft at the Appraisal Foundation Web site, and submit public comment on the draft proposal through Feb. 29. 

We believe financial assistance or incentives often help families buy a home. Appraisers can reflect and adjust for concessions in their analysis. This has been our experience here in the “Sierra Foothills” region of Placerville, El Dorado County, California.   What comments or recommendations could you offer?

Source: REALTOR® Magazine Daily News

With Marcus & Millichap’s National Apartment Report showing that the U.S. average for asking rents in 2011 came in at $1,061 a month, housing analysts believe more tenants will look to own. 

Some expect the average monthly rent to rise to as much as $1,101 this year, which Paul Bishop of the National Association of REALTORS® says should prompt more potential home buyers to “think twice before renting.”

Plus, another reason some consider buying is that a limited supply of rentals exist fitting their needs. This has been the case in our Placerville, El Dorado County region of California for the past few years.

 Source: “High Apartment Rents Seen Pushing People to Buy Homes,” Investor’s Business Daily (Jan. 27, 2012

 More news at: www.sierraproperties.com or email: zeller@realtor.com

When you compare the cost of owning a home to renting, you’ll find that buying may soon make more sense, Paul Diggle, a housing economist at Capital Economics, told MSNBC.com. 

Diggle’s analysis of the housing market showed a 33 percent drop in home prices, record-low mortgage rates (with 30-year fixed-rate mortgages available under 4 percent now), and a 15 percent rise in rents since the housing market turned sour are making more consumers take a closer look at buying. We find this is applicable to the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California.

“The median monthly mortgage payment of about $700 has fallen to about the level of a median monthly rent check,” an article at MSNBC.com notes about Diggle’s analysis. “If mortgage rates keep falling and rents keep rising, the equation will tip even further toward owning.”

Case in point: Diggle says that a buyer who purchases a median-priced home and stays there for at least seven years would likely come out ahead by about $9,000 than if they chose to rent for those seven years. Diggle’s calculations factor in rents continuing to rise 3 percent a year. Plus housing prices staying flat for the next two years before rising in 2014. 

But while more Americans may be motivated to buy, many still can’t, Diggle notes. Home owners who lost their home to foreclosure may be forced to wait on the sidelines before owning again, other Americans may not have a 20 percent down payment that more lenders are wanting, lack a high credit score to qualify for the best financing, or have steady employment. 

Source: “Home Buying Could Soon Beat Renting,” MSNBC.com (Jan. 23, 2012)

 More assistance at: www.sierraproperties.com or email: zeller@realtor.com

Fallen home prices and record-low mortgage rates have pushed housing affordability to a 40-year high. Meanwhile, rental prices are continuing to rise at a fast pace, according to a new report released by Hotpads.com, a rental listing service. 

Rental prices in many areas like ours in the Placerville, CA. increased about 3.5 percent in 2011, and prices are expected to continue to rise in 2012. Meanwhile, home prices fell by about 1.5 percent in 2011 but are expected to level out in 2012. 

“In a lot of cases it’s getting to a point where it makes more sense for people to buy because rent has been going up significantly faster, while home prices have been falling,” Paul Gleger, author of the report, told AOL Real Estate. 

Source: “U.S. Rental Market Stays Hot in 2011,” Hotpads.com (January 2012) and “Rental Prices Climb, Buying Remains More Affordable,” AOL Real Estate News (Jan. 18, 2012)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or email: zeller@realtor.com

In markets where foreclosures and distressed properties are common, experienced appraisers should be used to conduct the complex appraisals, says Appraisal Institute President Sara Stephens.

However, the Appraisal Institute has acknowledged that new rules blocking lenders from hiring their own appraisers mean that appraisers are often hired by appraisal management companies, which generally absorb some of the fee that appraisers earn. 

The National Association of REALTORS® has long asserted that appraisals conducted by less experienced appraisers can derail transactions and impede the market’s recovery. A recent REALTOR® Magazine webinar addresses these issues and offers advice on how to work with appraisers. Download the presentation slides or playback the event recording.

 Source: “Unskilled Appraisers Seen as Problem,” NASDAQ (01/17/12)

This is likely occurring in your region as we contend with it in the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California. More information at: www.sierraproperties.com or www.dougandbudzeller.com

Several recent indicators for the real estate industry are pointing to a market that is on the mend and entering recovery mode. 

Housing experts’ predictions for the new year tend to center around a market stabilizing before entering a gradual, albeit very slow, recovery. However, the tone is more upbeat than it has been in years for the housing market. This reflects current trends in the Placerville, El Dorado County, CA., regions.

Here are a few of the signs that are showing the market moving in a more positive direction: 

Home sales: Existing home sales are expected to increase 12 percent this year, following a 2 percent jump last year, Moody’s Analytics predicts. The signs are already showing: In November, pending home sales — a gauge for future home buying — reached its highest level in 19 months, the National Association of REALTORS® reported. (Read more.)

Consumer confidence: With mortgage rates at record lows and housing affordability high, about 71 percent of Americans say now is a good time to purchase a home. Also, more Americans are optimistic that home prices will rise over the next year — about 26 percent say prices will rise in 2012, an increase of 4 percent over the last survey, according to Fannie Mae’s December National Housing Survey

More information at sources: “Housing Outlook Is More Upbeat,” USA Today (Jan. 15, 2012) and “Consumers More Confident, Survey Says,” Deseret News (Utah) (Jan. 16, 2012)

Borrowers who have a history of paying rent on time may see a boost to their credit score.

Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers. Now the two other major credit reporting companies are following suit. 

recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

“Evidence of positive rental payments could be a plus for consumers,”  Joanne Gaskin, FICO’s director of product management global scoring, told The New York Times. 

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores. 

For former home owners who lost their homes to foreclosure, they may be able to rebuild their credit histories more quickly now by showing they are “very responsible renters,” Tim Grace, senior vice president of CoreLogic, told The New York Times. 

Full article at source: “A Good Rental History Can Help Borrowers,” The New York Times (1/ 5/12), other news from Placerville, El Dorado County, CA. at: www.sierraproperties.com

New programs and “housing policy interventions” are needed to help the real estate market rebound and boost growth in the overall economy, three Federal Reserve policymakers said Friday. 

The latest statements join a range of calls by the Federal Reserve in the last week urging for more government intervention to help the housing market. Last week, the Fed released a 26-page white paper  providing an outline on how the government needs to take more aggressive action to prevent home values from falling further, seek solutions to the foreclosure crisis, and loosen stringent underwriting standards that are keeping borrowers from securing mortgages or refinancing. 

New York Fed President William Dudley said on Friday that the housing market is “only one factor behind the frustratingly slow” economic recovery, but it’s an “important one that deserves our attention.”

“Forceful and effective housing policies have the potential to significantly influence the speed and strength of our recovery,” Fed Governor Elizabeth Duke said in separate comments made last week at an event in Virginia. 

Source: “Fed Officials Focus on Housing ; Emphasis put on Importance of Sector to Overall Economy,” Bloomberg News (Jan. 9, 2012) and “Fed Officials Push More Stimulus for Housing,” Reuters News (Jan. 9. 2012)

Freddie Mac announced it has eliminated its minimum credit score requirement for borrowers wanting to refinance, but they must have at least 20 percent equity in their home, HousingWire reports. Freddie Mac used to require a minimum credit score of 620. 

In following instructions from the Federal Housing Finance Agency, government-sponsored enterprises Freddie and Fannie Mae are both looking at how they can ease requirements to spur more refinances so more borrowers can take advantage of record-low mortgage rates.

Fannie Mae has removed a refinancing requirement that lenders must determine the borrower’s ability to repay — aimed at increasing refis and helping more underwater borrowers stay current on their mortgages. 

HousingWire reports that about 4 million loans serviced by Fannie Mae and Freddie Mac are underwater, in which the borrower owes more on their loan then their home is currently worth. 

Source: “Freddie Cuts Some Refi Credit Score Requirements,” HousingWire (Jan. 5, 2012)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com