August Newsletter

Reminder: We are not printing newsletters to mail out so if you want a hard copy of this great little piece you can print out the PDF. Enjoy!

http://teampatereau.files.wordpress.com/2013/08/over-the-fence-august-2013.pdf

Home Warranties - Not Just for New Homeowners

We've had some conversation today about how home repairs get to be more and more of a burden the longer the homeowner has owned it. A good solution to these high repair costs is to purchase a home warranty. With this program a homeowner pays an annual premium and a fixed co-pay for each service call. While we have our favorite to recommend, we're being fair and giving information on three very good companies that service our area and all of California.

Fidelity National
American Home Shield
Old Republic Home Warranty

Here's short video that explains what home warranties are:



We have many homeowners who buy these programs year after year. We also have several investment property owners who buy them for their rental properties. Hope you find this information useful. Let us know if you decide to purchase one of these policies.

Home Improvements – Some Pay Off, Some Don’t

Before you find yourself saying, “What was I thinking?” see what five home upgrades topped last year’s list of loss leaders.

Then take a look at an infographic just published by CAR – California Association of Realtors, with home improvements that do pay off.

 

Extreme Exterior Paint – Be Careful

Check out these extreme exteriors to learn how your home’s fresh coat can look good and preserve the worth of your home and neighborhood.

Home Values, Sales and Housing Starts on Track for Big Growth Year

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

The housing market kicked off 2013 with an energetic bang, with January marking the 15th consecutive month of home value gains and a positive report from Fannie Mae last week that noted housing is “on a sustained growth path,” despite a potential damper on overall economic growth at the federal level.

Home values were up 0.7% in January from the previous month, and up 6.2% year-over-year, according to the latest report from Zillow. It was the largest annual gain since July 2006, when home values rose 7.5% year-over-year.

Zillow’s home value index averaged $158,100 in January. The last time home values were this high at the national level was June 2004.

The rise in values is spreading out as well. Major markets that saw the biggest annual increase in home values were Phoenix (21.9%), San Francisco (17.2%), San Jose (16.8%), Las Vegas (16.2%), and Sacramento (13.7%).

And thanks to rising home values, Zillow estimates that 2 million homeowners are no longer underwater.

In a separate report released last week, Fannie Mae made some predictions for housing this year and gave an overall conclusion that this growth will keep up.

Fannie Mae economists predict the median price of an existing home will rise 2.3% in 2013, to $181,000. They expect the median price of a new home to increase 1.6% to $248,000. And they predict a further increase of 2.8% for both types of housing in 2014.

Growth, not recovery.

Of course, not every market will be enjoying this growth – many are still in recovery mode. But Fannie Mae expects existing home sales, new home sales and single-family housing starts to see substantial increases from 2012. The mortgage financier predicts existing home sales will rise 11.5%, new home sales will climb 12.5%, and single-family housing starts will shoot up 23.7% this year from 2012.

The substantial increase in housing starts is telling of the activity expected in the market for new homes this year and in coming years. We’ve talked here before about how investors are betting bigger on home builders this year, with the first builder IPOs debuting this year in nearly 10 years. We know the demand is there in many markets that suffer from lack of supply – so this is great news to see housing starts increasing.

As anticipated, 2013 is showing signs of breaking out of a recovery pattern and growing faster and with more force. Hold on tight – the ride is getting intense!

The Science of Which Day to Debut Your Home for Sale

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Any good real estate agent knows that listing and selling your home can be a science. From finding just the right price point to attract offers to staging and curb appeal, there are many details that when strung together meticulously can add up to a smooth transaction in which your house sells at the best price point in the shortest period of time.

With all of that in mind, a good question on sellers’ minds often is, “What is the right day of the week to list?”

It’s a valid question because many years of experience shows us time and again that a listing tends to grab the majority of attention on the day it debuts. The Wall Street Journal recently ran a story citing Redfin research that found that Friday apparently is the best day to list your home. How did they come up with that? They found that listing a home on a Friday versus a Sunday, which they found was the worst day to debut, could mean a difference of nearly $5,000 on a $500,000 house.

They also found that homes listed on Fridays sold in an average 81 days – the fastest of any other day of the week in their sample.

Why is that?

It almost seems counter-intuitive to say that debuting on a Sunday is the worst day. After all, Sunday is the day when most buyers are out viewing homes and visiting open houses.

But in reality, Sunday listings tend to sit around a few days before buyers start setting up their home tours for the following weekend. (Because by the time Sunday comes around, they’ve already put their viewing schedules together.)

Fridays are better because anyone planning Sunday tours is likely either starting or finishing up their list of homes late Friday or Saturday. And any new listings are going to pop up on their radar right away.

What’s the key take away from this info?

Well, first off always remember that every market is different and fluid.

For buyers in competitive markets, it’s a good reminder to not overlook those Sunday listings. Have your agent run through the MLS before you start your tour to see if something new came on the market. It may be worth tacking on a tour on Monday if you can squeeze it in.

For sellers, while the notion of the best day to list is interesting, it’s important to remember that there are many other factors that affect your sale price and time it takes to close. It’s more important to price right and have your home in the best shape possible when you hit the MLS. No theory on which day works better is going to help you if you don’t have these two things right.

Once you have those down, it doesn’t hurt to ask your agent for insight on which day has worked the best in your current market.

Contact Team Patereau for their insight. Rick and Susan will help you with which day to list, as well as every step of your real estate transaction.

Changes to Mortgage Insurance Premiums

This information was just released by HUD, regarding FHA, and in particular FHA’s Mortgage Insurance Program requirements.

FHA will increase its annual mortgage insurance premium (MIP) for most new mortgages by 10 basis points or by 0.10 percent. FHA will increase premiums on jumbo mortgages ($625,500 or larger) by 5 basis points or 0.05 percent, to the maximum authorized annual mortgage insurance premium. These premium increases exclude certain streamline refinance transactions.

FHA will also require most FHA borrowers to continue paying annual premiums for the life of their mortgage loan. Commencing in 2001, FHA cancelled required MIP on loans when the outstanding principal balance reached 78 percent of the original principal balance. However, FHA remains responsible for insuring 100 percent of the outstanding loan balance throughout the entire life of the loan, a term which often extends far beyond the cessation of these MIP payments. FHA’s Office of Risk Management and Regulatory Affairs estimates that the MMI Fund has foregone billions of dollars in premium revenue on mortgages endorsed from 2010 through 2012 because of this automatic cancellation policy. Therefore, FHA will once again collect premiums based upon the unpaid principal balance for the entire period for which FHA is entitled. This will permit FHA to retain significant revenue that is currently being forfeited prematurely. Read FHA’s new MIP Mortgagee Letter 

Intero Real Estate Services Finds the Luxury Market Hot Through the Winter

Here’s a press release from our Intero corporate office about our high-end luxury listings and how we handle them. Call Team Patereau about your luxury property. We’re trained and ready!

Multiple luxury homes sold over the holidays through Intero Real Estate’s luxury division.
CUPERTINO, CALIFORNIA (January 27, 2013) –The holidays are traditionally a quiet time for buyers and sellers of luxury homes, but Intero Real Estate Services found different this season closing on several Prestigio listings recently. Intero’s luxury property marketing program, Intero Prestigio has been in effect since last March and has definitely seen much success in its first year. “Case in point, year over year through November, Intero registered an increase of 73% of listings sold over $1.5M, the entry level to tier 1 of the Prestigio program,” says Alain Pinel, Senior Vice President/General Manager Intero Prestigio international. “It’s been a strong year for the luxury market and we’re looking forward to 2013 being even better,” says Gino Blefari, President and CEO of Intero Real Estate Services. “The Prestigio program has helped us to make our mark in the high-end.”

Four of the most notable homes sold included 16350 Matilija Drive. Located in Los Gatos, the property is a modern architectural masterpiece. Sold for $6,500,000, the home includes a breathtaking view of San Jose to San Francisco through its floor to ceiling windows.

The second home, listed by Cathy Jackson of Intero’s Los Gatos office and Karen Black of Intero’s Willow Glen office, sold for $6,000,000. 221 Jackson Street located in Los Gatos is approximately 10,700 square feet of Mediterranean charm on a 1.7 acre lot. The property includes an electronically gated entrance, 3 car garage, wine cellar, exercise room, mahogany paneled library, and cabana.
The third property at 1171 Ruth Drive was also listed by Cathy Jackson of Intero’s Los Gatos office alongside Kris Myers of Intero’s Willow Glen office. The property which is located in San Jose’s extremely desirable Willow Glen neighborhood sold for $1,550,000. Custom built, the home is full of exquisite details including beautiful flooring, high ceilings, and extensive molding with quality finishes.

The fourth home of mention closed in the beginning of January to kick start 2013. 388 Marich Way located in Los Altos sold for $2,416,000 by Dominic Nicoli of the Intero Los Altos office. This custom Mediterranean style home was built in 2005 with every detail considered. A 5 bedroom, 4.5 bathroom home with approximately 4,345 square feet on an approximate 10,200 square foot lot, features an enchanting courtyard, beautiful marble staircase, gourmet kitchen, luxurious master retreat and three courtyard terraces.

When asked about her experience with the Prestigio program, Cathy Jackson states, “It’s quite amazing what [agents] can take advantage of through the Prestigio program. The broad marketing plan, which includes extensive international exposure, was definitely a factor in our ability to sell quickly. Having everything outlined from the beginning helped to keep our clients in the loop regarding what marketing was taking place when. Intero agents are lucky to have this unique program to take advantage of.”

To see more homes like these and learn more about Intero Prestigio visit www.interoprestigio.com.

Short Sale Soundoff: Fannie, Freddie change Requirements for Short Sales

Fannie Mae and Freddie Mac announced changes to their servicing requirements for short sales. Please be aware of the following key changes for all parties involved in a short sale. These changes apply to all Fannie Mae and Freddie Mac short sales, with an offer and without an offer.

Title Transfer requirement change:

• The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.
• After a 30 day period, and until 90 days from the date of the deed, the buyer is further prohibited from selling the property for a sales price greater than 120 percent of the short sale price.

Note: The above restrictions will run with the land and are not personal to the grantee.

Relocation Assistance:

• The borrower may be entitled to an incentive payment of $3,000 from Fannie Mae / Freddie Mac to assist with relocation expenses following successful completion of a short sale unless:
• The borrower is required to contribute funds or execute a promissory note.
• The borrower has Permanent Change of Station (PCS) orders and receives a Dislocation Allowance (DLA) or other government relocation assistance.
• The servicer has knowledge that the borrower is receiving relocation assistance from another source other than the servicer.

Note: If the borrower receives relocation assistance from a source other than Fannie Mae, Freddie Mac, or the servicer, the difference in the relocation assistance amount up to the $3,000 incentive maximum may be provided. If the borrower will receive relocation assistance from a source other than Fannie Mae, Freddie Mac, or the servicer and the amount is equal to or greater than $3,000, no relocation incentive will be provided.

This Week-End’s DIY Project for Team Patereau

We have cracking caulk in our Master Bathroom. It has led to some moisture seepage and damage to some drywall. We are going to work on this project this week-end so we found a DIY video about caulking that will help a lot. Next, drywall repair. Do you know anything about drywall, or have any advice?

 

Home Prices to Continue Rise in 2013 as Inventory Remains Tight

All housing and real estate indicators point to the fact that there just aren’t enough houses on the market for sale. We’ve included below Intero’s CEO, Gino Blefari’s comments about this condition. Now is certainly the time to list your property if you’re considering the possibility. Prices are as high as they’ve been since the recession began, and every correctly priced property gets sold quickly. Don’t put it off! Contact us to discuss your property, your price, and the possibilities. We’d love to hear from you.

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

Now that many of us agree that 2012 was the bottom for most markets, things are already heating up. This week, we received news on home prices and a few predictions about where things are going this year.

CoreLogic released its latest Home Price Index this week, showing home prices increased 7.4% in November 2012 (on a year-over-year basis), the largest increase and highest level since 2006 when the market began to slide.

The rise in prices is due to steady demand from buyers, fewer bank-owned (REO) sales and a restricted inventory of homes for sale. Lack of inventory is expected to be the major market driver in 2013. Many owners in 2012 struggled with loan balances greater than the value of their homes, which made it impossible for them to sell and move up as they traditionally would do. While inventory will still be an obstacle in 2013, the rise in values will help more owners out of the underwater situation.
The best part of this news is that the increases are not completely contained within a few states. In fact, the index shows that all but six states are experiencing year-over-year price gains. The five states with the highest home price appreciation (including distressed sales) were Arizona (20.9%), Nevada (14.2%), Idaho (13.8%), North Dakota (11.3%), and California (11.1%).

In terms of price depreciation, the five states with the lowest home price depreciation were Delaware (-4.9%), Illinois (-2.2%), Connecticut (-0.5%), New Jersey (-0.5%) and Rhode Island (-0.3%). And excluding distressed sales, only two states experienced home price depreciation in November: Delaware (-3.5%) and Alabama (-2.2%).

Also, of the top 100 statistical areas measured by population, only 13 show year-over-year declines in November, which is seven fewer than seen in October, CoreLogic reported. That’s a marked improvement for sure.

The research firm expects bank-owned sales to decline this year, which it says will also help with overall home values as these properties tend to sell at a discount compared to comparable homes.
All the pieces are in place for housing to break out of “recovery” mode this year and move into growth. The inventory hurdle may turn out to be a good thing if it can help to push up prices a bit more this year. Then maybe in 2014, we’ll see even more homeowners pull out of their underwater loans.

It’s time to get your property on the market

Time to get started on Getting Organized

One of our New Year’s Resolutions is to organize our garage. In the months just before the holidays we were doing some clean-up, fix-up, painting inside the house. A lot of stuff was moved to the garage and a great deal is not going to be moved back in. With the new year, it’s time to address the mess. To get started, we found this video by home organizer Alejandra Costello who demonstrates her system for organizing items you wish to donate, sell, return, or exchange. You designate an area in the home, preferably near an exit, for the stuff you don’t want to forget to take out the door with you. What we really liked best about this video is that she includes tips for keeping your downsizing efforts on track. Hope you enjoy it.

Housing Market Wins with Fiscal Cliff “Deal”

 

The deal that Congress struck to prevent falling of the Fiscal Cliff strongly favored the housing market. The three biggies for homeowners include:

The mortgage interest decudtion was not touched.
Tax relief on mortgage debt relief extended for one year.

Deduction created for private mortgage insurance.

Here’s a link to a CNBC report from Diana Olick, their Real Estate Correspondent.

For the moment, we’re OK. Good start to 2013.

Homewonership Rocks

Don’t Rock the Boat! Keep the Mortgage Interest Deduction

Congress, as part of negotiations on avoiding the “Fiscal Cliff,” has made direct references to “closing loopholes” and “limiting deductions” as a way to raise revenues. Clearly, the mortgage interest deduction is high on this list of revenue raisers.

Losing the Mortgage interest deduction will disproportionately affect the middle class because a larger proportion of the middle class takes the deduction. In California 89% of those who took the mortgage interest deduction earned less than $200,000. Losing the deduction would cost the average California taxpayer over $3,900.



What you can do to help:

Call Congress. First and foremost, we are urging the public to get involved by calling Congress to ask that the mortgage interest deduction be preserved. The public may reach Congress by calling 202-224-3121 begin_of_the_skype_highlighting 202-224-3121 FREE end_of_the_skype_highlighting. The Capitol switchboard operator will help callers identify their member of Congress and connect them.

The public can reach Congress by calling (202) 224-3121 begin_of_the_skype_highlighting (202) 224-3121 FREE end_of_the_skype_highlighting
Monday-Friday from 9 a.m. – 6 p.m., Eastern Time.

Get the word out. Many people seem to be blissfully unaware that their mortgage interest deduction is in danger. Please do the following to make sure that the message spreads.

1. Forward this message to your family, friends and clients.
2. Post this information on your personal and office websites and blogs.
3. Share this information on Facebook and urge others to share it as well.
4. Tweet about it on Twitter and urge others to retweet. Use the hashtag: #keepthemid.
5. Link to the following web page: www.KeepTheMID.com . This site has information about contacting Congress, more information on the MID and links to articles.
6. As you see new information and articles, share these on all your social networking sites.

Here’s some recent news and commentary on the mortgage interest deduction and fiscal cliff negotiations:
Editorial by Ben Stein
President Obama’s comments on the MID
OTUS story on the MID
Editorial in the Santa Cruz Sentinel
Marin Journal story about the MID

Tax Break Expires, and other Real Estate News from CNN

Home sellers, who sell through the short-sale process currently don’t have to pay federal taxes on the amount of debt that is forgiven because of a bailout-era law knows as the Mortgage Relief Act. That act is set to expire December 31^st and unless it is extended, taxpayers will be taxed on that relief. According to RealtyTrac, the average amount of debt that is forgiven in a short sale is $95,000. See CNN video and article.

Recovery for Former Homeowners

The recent San Jose Mercury News article about foreclosure victims buying again is good news all around. As we all know, Americans want to be homeowners. And they want to own a home so much that they forget about the pain and sadness their last experience caused. So, for many, just three years later they are ready with their down-payment and their moving boxes, and they’re saying, “Let’s do it again!”

Fortunately, there are ways to accomplish home-ownership for these people with the help of the government backed programs like FHA. Read the article, and if you’re ready to be a homeowner again, contact us and we’ll get you on your way.