Warren Buffett Is Betting on Housing

Posted By susanne On March 3, 2012 @ 12:01 am In Business Development,Business Outlook,Consumer News and Advice,Finance and Economy,Home Owner News,Real Estate,Real Estate News,Real Estate Trends,Today's Marketplace,Today's Top Story - Consumer | 

From the Los Angeles Times

The U.S. housing market disappointed Warren Buffett last year, but he hasn’t given up hope.

Buffett said in his annual shareholder letter that he was “dead wrong” when he predicted last year that the rebound in U.S. home prices would begin within a year.

This year, though, he’s betting again that the housing market will recover, and for an interesting reason: hormones.

As Buffett explains it, the housing market is currently depressed because young Americans have stayed at home rather than going out and setting up their own households.

“People may postpone hitching up during uncertain times, but eventually hormones take over,” Buffett wrote in the letter to shareholders in his investment company Berkshire Hathaway. “And while ‘doubling-up’ may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure.”

That is not the entirety of his argument. He also says that home builders are not creating enough new supply. As a result, the excess inventory that built up after the financial crisis is slowly disappearing, paving the way for new demand.

During an appearance on CNBC, Buffett said he would buy up millions of U.S. homes if it were possible.

Data out Monday seemed to support Buffett’s contention. The National Association of REALTORS® announced that the number of people buying used homes in January rose to a 21-month high.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com

Pet Odor Can Chase Away Buyers

Don’t let pet odors derail your home sale.

Air your house out. While you’re cleaning, throw open all the windows in your home to allow fresh air to circulate and sweep out unpleasant scents.

Once your house is free of pet odors, do what you can to keep the smells from returning. Crate your dog when you're out or keep it outdoors. Limit the cat to one floor or room, if possible. Remove or replace pet bedding.

Scrub thoroughly. Scrub bare floors and walls soiled by pets with vinegar, wood floor cleaner, or an odor-neutralizing product, which you can purchase at a pet supply store for $10 to $25. 

Try a 1:9 bleach-to-water solution on surfaces it won’t damage, like cement floors or walls. 

Got a stubborn pet odors covering a large area? You may have to spend several hundred dollars to hire a service that specializes in hard-to-clean stains.

Wash your drapes and upholstery. Pet odors seep into fabrics. Launder, steam clean, or dry clean all your fabric window coverings. Steam clean upholstered furniture. 

Either buy a steam cleaner designed to remove pet hair for around $200 and do the job yourself, or pay a pro. You'll spend about $40 for an upholstered chair, $100 for a sofa, and $7 for each dining room chair if a pro does your cleaning.

Clean your carpets. Shampoo your carpets and rugs, or have professionals do the job for $25 to $50 per room, depending on their size and the level of filth embedded in them. The cleaner will try to sell you deodorizing treatments. You'll know if you need to spend the extra money on those after the carpet dries and you have a friend perform a sniff test.

If deodorizing doesn't remove the pet odor from your home, the carpets and padding will have to go. Once you tear them out, scrub the subfloor with vinegar or an odor-removing product, and install new padding and carpeting. Unless the smell is in the subfloor, in which case that goes next.

Paint, replace, or seal walls. When heavy-duty cleaners haven’t eradicated smells in drywall, plaster, or woodwork, add a fresh coat of paint or stain, or replace the drywall or wood altogether. 

On brick and cement, apply a sealant appropriate for the surface for $25 to $100. That may smother and seal in the odor, keeping it from reemerging.

Place potpourri or scented candles in strategic locations. Put a bow on your deep clean with potpourri and scented candles. Don’t go overboard and turn off buyers sensitive to perfumes. Simply place a bowl of mild potpourri in your foyer to create a warm first impression, and add other mild scents to the kitchen and bathrooms.

Control ongoing urine smells. If your dog uses indoor pee pads, put down a new pad each time the dog goes. Throw them away outside in a trash can with a tight lid. Remove even clean pads from view before each showing.

Replace kitty litter daily, rather than scooping used litter clumps, and sweep up around the litter box. Hide the litter box before each showing.

Relocate pets. If your dog or cat has a best friend it can stay with while you're selling your home (and you can stand to be separated from your pet), consider sending your pet on a temporary vacation. If pets have to stay, remove them from the house for showings and put away their dishes, towels, and toys.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

 

Doug Reynolds Real Estate has upgraded their Marketing Department to better serve Buyers, Sellers and Investors in Sacramento Real Estate

We’ve Upgraded our 

Marketing Department !!!

My Daddy is working hard every day to provide you with great real estate content so that you can stay up to speed with the current market. Pwease like him on Facebook, Subscribe to his YouTube channel and follow his blog.  New stuff is added nearly every day and it’s also a great way to refer a buddy, co-worker, family member or play-date that needs to buy or sell in the Sacramento Area.  Did you know that: there is currently more demand for houses in our area than there is supply and that a few more homes on the market in our area would be a good thing, the current buyers would quickly absorb that extra supply…or that Mortgage interest rates are now lower than they have ever been in history.  Well, don’t worry, my Daddy knows all that and even more.  Thanks for supporting him.

Gold fishes and cartoons,

Daddy's Little Girl

Doug Reynolds

916.494.8441

www.SellWithDoug.com

             

He loves referrals. It means he can work with people just like you!

Basketball Legend Michael Jordan’s Home for Sale

 ^[1]Recently, the longtime personal residence of NBA legend Michael Jordan in Highland Park, Illinois, was presented for sale by Katherine Chez Malkin and will be marketed globally by Luxury Portfolio International. With an asking price of $29 million, the secluded compound offers over 56,000 square feet of livable space on three levels; including nine bedrooms, more than 15 baths, and five fireplaces.

Designed to Jordan’s exacting specifications, the tastefully furnished and luxuriously appointed property will afford its owner the ultimate in privacy, security and amenities.

 ^[2]In addition to the main residence, the estate features an attached and beautifully appointed three-bedroom guesthouse, an indoor/outdoor entertaining and pool area, an outdoor tennis court, a putting green, a deep water pond, and three separate climate-controlled multi-car garages. The residence was constructed between 1993 and 1995, and extensively renovated in 2009.

Among the most extraordinary features of the sprawling estate is the attached indoor basketball complex. Completed in 2001, the recreational facility has a separate entry and nearby parking area. It features a full size regulation basketball court with specially cushioned hardwood flooring, adjustable backstops and baskets, and competition-quality high-intensity lighting. The court also has a one-of-a-kind sound system with speakers expressly “tuned” to provide perfect acoustics within the court space.

Requests for information about purchase of the property should be directed to listing broker Katherine Chez-Malkin at Katherine.chezmalkin@bairdwarner.com ^[3].

clear skies,

Doug Reynolds

 

www.BHGshortsales.com

Answers for First-Time Buyers

March 2, 2012| by Sarah Stelmok, ABR, GRI, e-Pro

Many people in the market today are first-time home buyers who would not have been able to buy when home prices were higher. Enticed both by lower prices and bank promotions, these eager hopefuls are have taken the signs of deals as the best chance to make their first real estate move  .

While all home buyers need help with the short sale process, it’s especially challenging to address the needs and concerns of a first-time home buyer who has decided a short sale is the home for them. Here’s how to get answers to first-time home buyers’ top three questions about short sales.

1. How long does it take for a bank to approve a short sale?

This is the million-dollar question. While it takes an average of three to six months, the timeline – and the process – vary quite a bit from one bank to another.

Short sale approval timelines depend on the bank (some just take longer than others). While each bank has different short sale guidelines, the short sale has to make sense to the bank. The more sense the short sale offer makes to the bank, the faster the approval process.

Here are some things that slow down the process by several weeks or more – these usually involve more people or more factors:

·         Multiple liens on the property

·         A third party negotiating the short sale on behalf of a seller. Some states allow third parties to do this, for a fee; some states, like Virginia, limit this to real estate licensees, attorneys, and employees of attorneys.  

·         Private Mortgage Insurance (PMI) on the property

·         Additional investors

Action: To make an accurate prediction about the short sale timeline for a particular property, research the bank’s general timelines, the property’s liens, and whether there is PMI before writing the offer.

2. Will the bank make repairs to the property?

The short answer is, probably not.

Here’s why:

·         The bank does not have possession of the property and has no authority to make repairs on behalf of the seller.

·         Many short-sale sellers do not have the financial means to make repairs.

·         Many banks require the short sale to be sold strictly “as-is” and do not allow the seller to pay for any repairs.

Why wouldn’t a bank allow the seller to make repairs? your buyer may ask. A short sale is a sticky situation for a bank, and that the bank wants to avoid potential liability. For example, if the bank allowed the seller to make repairs and the repairs proved to be faulty, the buyer might potentially hold the bank liable, since the seller doesn’t have money (which is how the short-sale situation came about in the first place).

Action: Find out how the bank and the seller feel about making possible repairs. A short-sale buyer needs to understand that the home will most likely be sold strictly “as-is” and all repairs will be at their expense.

3. How do other types of debt affect the short sale outcome?

Many short-sale sellers are more than just “house-poor.” Many have additional debts that place a cloud on title. These include tax liens – income and property, medical liens, mechanic’s liens, and child support judgments.

Depending on your state, some creditors can try to collect debt by going to civil court and getting a judgment lien placed on the property against the homeowner. These liens must be cleared before the short sale transaction can be closed.

·         Surprisingly, tax liens are probably the easiest to clear off the title. The IRS has several avenues to collect back taxes, and doesn’t want to become a real estate holding company. Removing a tax lien can take up to 120 days, so it is imperative that this process is started well in advance of the short sale.

·         Medical liens can usually be negotiated and a payment plan worked out. However, this is a time-consuming process and needs to be started as soon as possible.

·         Mechanic’s liens are a little harder to get removed. There is not much recourse for tradespeople and bad debts.

·         Child support judgments are also difficult to remove because they usually involve government agencies.

In short, additional debts can tie up the short sale process.

Action: Make sure to ask the listing agent if a preliminary title search has been performed on the property so you can know about possible obstacles.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com

Top Reasons Your Offers Are Not Getting Accepted

Doug Reynolds, Sacramento Area Realtor, discusses the recent sellers market in Sacramento Spring 2012.  He shares tips with buyers as to why your offers are not getting accepted when you are competing with other buyers:
- Price (low ball offers no longer work)
- Financing (Cash is best, then conventional, then FHA and last VA)
- Needing a credit from seller for your closing costs
- Terms (break down of closing costs)
- Lender (small, direct, local lenders are the best right now)
- If it's a short sale, the commitment you are showing the seller.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com

Cleaning House: Secrets of a Truly Deep Clean

Deep clean your house and you’ll brighten rooms and help maintain your home’s value.

De-bug the light fixtures

See that bug burial ground within your overhead fixtures? Turn off the lights and carefully remove fixture covers, dump out flies and wash with hot soapy water. While you’re up there, dust bulbs. Dry everything thoroughly before replacing the cover.

Vacuum heat vents and registers

Dirt and dust build up in heat vents and along register blades. Vents also are great receptacles for coins and missing buttons. Unscrew vent covers from walls or pluck them from floors, remove foreign objects, and vacuum inside the vent. Clean grates with a damp cloth and screw back tightly.

Polish hardware

To deep clean brass door hinges, handles, and cabinet knobs, thoroughly wipe with a damp microfiber cloth, then polish with Wright’s or Weiman brass cleaner ($4). Dish soap shines up glass or stainless steel knobs. Use a Q-tip to detail the ornamental filigree on knobs and handles.

Replace grungy switch plates

Any amateur can wipe a few fingerprints off cover plates that hide light switches, electric outlets, phone jacks, and cable outlets. But only deep cleaners happily remove plates to vacuum and swipe the gunk behind. (OK, we’re a little OCD when it comes to dirt!) Make sure cover plates are straight when you replace them. And pitch plates that are beyond the help of even deep cleaning. New ones cost less than $2 each.

Neaten weather stripping

Peeling, drooping weather stripping on doors and windows makes rooms look old. If the strip still has some life, nail or glue it back. If it’s hopeless, cut out and replace sections, or just pull the whole thing off and start new. A 10-ft. roll of foam weather stripping costs $8; 16-ft. vinyl costs about $15.

Replace stove drip pans

Some drip pans are beyond the scrub brush. Replacing them costs about $3 each and instantly freshens your stove.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

Don’t Forget To Save Money On Your Taxes This Year

Homeowners should be aware of these tax breaks that they may be eligible to receive. Consult a Certified and licensed Tax Professional.

• Mortgage interest: Homeowners are generally entitled to reduce their taxable income by the amount of mortgage interest they pay, as long as they itemize deductions on their tax returns. 
• Private mortgage insurance: Homeowners who are paying PMI likely will be able to fully deduct the amount, as long as their adjusted gross income is $100,000 or less ($50,000 for married taxpayers filing separately).  Borrowers with incomes above $100,000 may qualify for a partial deduction.
• Energy-efficient home improvements: If windows, doors, or skylights that meet the requirements of the federal Energy Star program were installed in 2011, homeowners can get a tax credit equal to 10 percent of the product’s costs.
• Points: The charges a borrower paid in points to get a mortgage are generally deductible if it was a first mortgage on the property.  In the case of a refinance loan, all or some of the point charges might be deductible, but it gets complicated.

·         Property taxes: The amount paid in property taxes is deductible as long as it is based on the assessed value of the property.  If the mortgage company collects money for property taxes, the amount actually paid should be on the 1098 form lenders send out each January.

clear skies,
Doug Reynolds
 
www.BHGshortsales.com

 

Where Are All the Home Sellers?

As we’ve been discussing in our Sacramento area: low inventory, high demand and a flattening sales price.  It’s happening in other parts of the country as well.  Check out this article from the Wall Street Journal.

By Nick Timiraos of the Wall Street Journal

Inventories of homes listed for sale in January dropped by 6.6% from December to 1.77 million, the eighth straight month that listings have declined. For-sale listings are 23.2% below year-earlier levels and at the lowest point since the housing bust accelerated five years ago, according to data from Realtor.com.

All but one of the 146 markets tracked by Realtor.com had fewer homes listed than one year earlier, with Springfield, Ill., as the outlier.

Compared with one year earlier, listings were down by a whopping 55% in Fort Lauderdale, Fla., and by nearly half in Miami, Phoenix, and Bakersfield, Calif. Markets with the smallest declines included New York (-1.7%) and Philadelphia (-3%).

Housing inventories typically rise heading into the spring selling season, but only four markets saw inventories increase from December, all of them in Florida. San Francisco and Boston, reported some of the largest monthly inventory declines, of 16% and 10%, respectively.

The Realtor.com figures include sale listings from more than 900 multiple-listing services across the country. They don’t cover all homes for sale, including those that are “for sale by owner” and newly constructed homes that aren’t always listed by the services.

The National Association of Realtors estimated on Wednesday that there were nearly 2.31 million homes for sale at the end of January, a 21% decline from one year earlier. The NAR estimates that at the current pace of sales, it would take 6.1 months to clear that inventory, the lowest level since April 2006, before home prices began falling.

Low inventories are a prerequisite for any housing recovery because a glut of unsold homes has been one factor pulling down prices.

clear skies,

Doug Reynolds

 

www.BHGshortsales.com