WILL 2014 BE THE YEAR FOR MOVE-UP BUYERS?

The housing market has enjoyed a strong rebound over the past few years with sales and median prices steadily improving across the country and especially here in the Bay Area. For a variety of reasons, one segment of the market has not bounced back quite as fast: the “move-up” market. But that could change in 2014.

The recession took its toll on many homeowners, especially those who bought near the peak of the housing market. As property values dipped, many of these consumers found themselves “underwater” on their mortgage – that is, owing more than it is worth.

But as home prices continue to climb and home equity levels steadily improve, more homeowners are once again in a position to trade up. The National Association of REALTORS® expects the median sale price nationally to be up 11 percent in 2013 from the previous year. And some parts of the Bay Area have seen median prices jump 15-20 percent or more.

Move-up buyers are gradually coming back into the market due to improving equity, according to a new report from FNC, a real estate data and technology company.

If you have outgrown your existing home or simply want to buy another home in a more desirable neighborhood, now may be the time to make your move.

Interest rates may have ticked up a bit over the past year, but remain attractive. And your current home may be worth more than you think, giving you more money to put into a down payment on your next home.

Buying a home when you currently own one does have its challenges. If you sell first, you may be left scrambling to find a new place to live or forced to settle for a house that isn’t right for you. But if you buy first, you may not have the cash to put down on your next home – even if you do qualify for another mortgage. And you run the risk of having to make two house payments each month while you own both homes.

But some careful planning and the guidance of a professional REALTOR® can help you overcome these challenges and take advantage of the move-up market. Here are a few tips from the National Association of REALTORS® to get you started:

• Assess the market. Compare your current and future neighborhoods and determine which area is a buyer’s market and which is a seller’s market. If your current neighborhood is a hot seller’s market, you may be better off buying elsewhere first and then selling yours since it might be easier to find a buyer.
• Selling your home first. If you end up selling your home before buying another, you will need a place to live in the meantime. One option is to enter into an occupancy agreement with the buyers of your home to enable you to retain possession for a short period of time.
• Other temporary options. If the buyers of your home need to move into your home immediately after escrow closes you may be able to stay with family or find a short-term lease on an apartment. Many “extended stay” hotels and apartments offer leases for a month or longer. You’ll have to put many of your possessions in storage, but they’ll be packed and ready to go when it is time to move into your new home.
• Buying your next home first. If you end up buying your next home before selling your first one there are a couple of ways to come up with the new down payment. Check with your lender to see if you can secure a home equity line of credit. The interest rate may be tax deductible up to $100,000 and it could be paid off once you sell your home. Be sure to check with your lender before you make any decisions to determine what options may or may not be available.

With homeowner equity rising and interest rates still historically low, now may be the time to cash in on your existing property and make the move to the home of your dreams. I’m ready to help. Give me a call at (510) 314-6684 and we’ll get started today!  Visit me at www.RealtorLisaWu.com or email to RealtorLisaWu@yahoo.com

©2014 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned by a Subsidiary of NRT LLC. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully. CalBRE License #01908304

How Important Is Down Payment in Determining Default?

Source: DSNews.com

The Federal Housing Finance Agency (FHFA) recently released a working paper on the impact of down payment amounts on loan performance at the GSEs and Federal Housing Administration (FHA). In light of new regulations and increased focus on underwriting standards, the agency issued the findings, and overall found a nonlinear relationship between loan-to-value (LTV) ratio and foreclosure rates.

Making sense of the story

• For loans with FICO scores of 620 and debt-to-income (DTI) ratios of 31 percent, the foreclosure rate for GSE loans with 100 percent LTV is a little more than twice that of loans with 80 percent LTV.

• When it comes to FHA loans with the same credit characteristics, the foreclosure rate is almost three times as much among loans with LTVs of 100 percent compared to loans with LTVs of 80 percent.

• LTV ratios hold a stronger relationship with foreclosure rates among FHA loans than GSE loans.

• The FHFA found that the LTV-foreclosure rate relationship is sensitive to FICO. This finding was evident when observing various LTV ratios among different classes of FICO scores.

• According to the FHFA, once LTV rises above 95 percent, the foreclosure rate tends to correlate less with LTV ratio.

• The relationship between LTV and foreclosure is most dramatic between LTVs of 90 and 95 percent when it comes to FHA loans.

Amid new regulations and increased focus on underwriting standards, the Federal Housing Finance Agency recently released a working paper on the impact of down payment amounts on loan performance at the GSEs and Federal Housing Administration (FHA).

Overall, the federal agency found a nonlinear relationship between loan-to-value (LTV) ratio and foreclosure rates.FHFA also determined that credit score plays an important role alongside LTV ratios in determining the likelihood of foreclosure.

LTV ratios hold a stronger relationship with foreclosure rates among FHA loans than GSE loans, according toFHFA. “The implication is that the same level of change in original LTV requirement would have a larger impact forFHA borrowers than for GSE borrowers,” the FHFA stated in its working paper.

Among loans with FICO scores of 620 and debt-to-income (DTI) ratios of 31 percent, the foreclosure rate for GSE loans with 100 percent LTV is a little more than twice that of loans with 80 percent LTV.

For FHA loans with the same credit characteristics, the foreclosure rate is almost three times as much among loans with LTVs of 100 percent compared to loans with LTVs of 80 percent.

When observing various LTV ratios among different classes of FICO scores, FHFA found, “the LTV-foreclosure rate relationship is sensitive to FICO.”

For example, raising LTV from 80 percent to 90 percent on a loan for a borrower with a FICO score of 620 increased the likelihood of foreclosure by 4.46 percentage points.

Making the same change in LTV to a loan for a borrower with a FICO score of 700 increased the likelihood of foreclosure by half that—2.23 percentage points.

For FHA loans, which are more sensitive to changes in LTVratio, the relationship between LTV and foreclosure is most dramatic between LTVs of 90 and 95 percent. This trend carries across all FICO scores observed.

Once LTV rises above 95 percent, the foreclosure rate tends to correlate less with LTV ratio, according to FHFA.

Meanwhile, DTI ratio correlated strongly with foreclosure rate. “As expected, across all LTV levels, borrowers with a higher DTI had a higher foreclosure rate,” FHFA stated.

However, the “LTV-foreclosure rate relationship has a relatively modest sensitivity to the DTI level,” FHFAfound.

When comparing LTV rates among delinquency rates,FHFA found similar relationships to what it found among LTVs and foreclosures.

Homebuyers love the Internet, but they still want an agent | Source:Inman News Nov.4, 2013

click here  Homebuyers love the Internet, but they still want an agent | Inman News

SELLING A HOME DURING THE HOLIDAYS

click here to view November Article

Coldwell Banker's Cutting Edge Digital Marketing

October-Article

Marketing a home has changed dramatically in just a few short years. It wasn’t that long ago that selling a property meant sticking a for-sale sign in the front lawn and taking out an ad in the local paper. Those days have changed!

Real estate marketing isn’t just print advertising anymore – or radio, or TV, or direct mail, or even online, social media, blogs or Twitter. It’s ALL of these marketing tools and more. And it’s critical if you’re thinking about selling your home to select a REALTOR® and a brokerage that understands how to market in the digital age.

When it comes to digital and social media marketing, Coldwell Banker Residential Brokerage leads the way.

We deploy a comprehensive, cutting edge marketing strategy that capitalizes on all the important new digital channels without forgetting the traditional marketing tools that still work well.

Why is digital marketing so important when it comes time to sell your home? Consider this:

•On an average day there are more than 400 million tweets, 500 million active LinkedIn and Google Plus accounts and 3.2 billion likes and comments on Facebook;

•More than one billion unique users visit YouTube each month;

•Over 6 billion hours of video are watched each month on YouTube (that’s almost an hour for every person on Earth);

•Nine in 10 homebuyers today rely on the Internet as one of their primary research sources, according to the National Association of REALTORS®.

As the leading brokerage in Northern California, we have been at the forefront of the revolution in real estate marketing, deploying a multi-pronged marketing strategy to reach consumers in the channels they use today – and that’s increasingly online, social media and mobile communications.

While some other real estate brokerages still rely primarily on traditional and limited marketing programs, we understand the vital role that social media and digital sources play in effectively selling a home to modern consumers.

At Coldwell Banker Residential Brokerage, we like to think about real estate marketing as spokes on a wheel. These various marketing tools, like spokes, may be pointing in all different directions. But they all work together, overlapping, reinforcing each other, and all pointing back to the center of the hub. That hub is our website, CaliforniaMoves.com, and by driving traffic to it, we are also increasing the visibility of your listing.

Earlier this year, we launched a comprehensive new digital marketing initiative which leverages Google advertising, local TV station websites, a wide variety of popular real estate sites, YouTube videos, Facebook, Twitter, and many of the other top-ranked social media sites -– in addition to major print publications.

It’s estimated that this new digital marketing program will attract an additional three million viewers every month and help drive more potential buyers to CaliforniaMoves.com, our Coldwell Banker Residential Brokerage website, and again, ultimately to your listing.

Real estate marketing has indeed changed dramatically over the years. So it’s more important than ever to work with a REALTOR® that “gets it” and truly understands how to use a cutting-edge digital marketing program to sell your home.

For more information about Coldwell Banker Residential Brokerage’s digital marketing strategy and how it can help you sell your property or help you find your next home, please contact me today. I’m ready to help! Visit me at www.RealtorLisaWu.com 

©2013 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Coldwell Banker Residential Brokerage Office Is Owned by a Subsidiary of NRT LLC. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully. BRE License #01908304

What Foreign Buyers Need to Know About Buying a US Property

Source: Bay East Association of Realtors
Summer 2013

The United States places very few restrictions non-US citizens buying, selling and owning real estate in the United States. As an international buyer purchasing property in the United States you may acquire, transfer, or be involved in a real estate transaction without the permission or approval from any federal, state, or local government. However, there are some countries that may place restrictions on its own citizens from buying real estate in the US – therefore you should check the rules of your country to verify you are not under any home country restrictions.

Buying real estate in the US is safe and secure, as all transactions are subject to US contract law and are handled by neutral third party escrow companies who oversee all aspects of the transaction between seller and buyer. For a successful efficient transaction, international buyers should have a good REALTOR®, a good attorney, and if you are financing, be working with a good bank.

International buyers and sellers also need to comply with visitor visas and immigration laws, federal taxation rules and reporting and compliance.

Withholding of Tax on Dispositions of U.S. Real Property Interests

This article, from the IRS, explains the rules for proper withholding of tax on the dispositions of U.S. Real Property interest. It also clarifies who is obligated to conduct the required withholding of tax upon the foreign investor’s disposition of real property interests.

For more details Visit Me at www.RealtorLisaWu.com

Survey: 1 in 3 Buyers Would Bid Over the Asking Price

Source: Inman News July 2013

One in 3 buyers are willing to bid higher than a home’s asking price, according to a survey conducted by Trulia in partnership with Harris Interactive. That was just one of several other findings of the survey that appear to show that homebuyers are feeling the squeeze of market conditions that are significantly altered from those of a year ago. At the same time, they capture improved sentiment towards the housing market. Today’s tight home inventory appears to be pushing some buyers to use aggressive tactics to beat out competing buyers, the survey found. In addition to a third of buyers being willing to make above-market offers, 1 in 4 said that they would offer to pay a seller’s closing costs. “Tight inventory means slim pickings for buyers. Even though inventory is starting to expand, and rising home prices should bring more for-sale homes onto the market, people who actually want to buy within the next year are feeling the pressure of competing buyers and limited inventory,” wrote Trulia Chief Economist Jed Kolko in blog post about the survey. Also seemingly a symptom of today’s limited housing stock, homebuyers who plan to buy within the next year said that finding a home that they like is their biggest worry. And highlighting two other defining characteristics of today’s market, consumers who said they might buy someday indicated that their two greatest fears were that mortgage rates and home prices would rise further. But in a sign that people’s attitudes towards homeownership have recovered significantly since the downturn, 60 percent of respondents said that they thought homeownership is one of the best long-term investments they could make, up from 47 percent two years ago.