In addition to a beautiful little house, you get to hear the fantastic “Closer to Fine” by the Indigo Girls.  It’s a win win!

Just like real estate agents are not fortune tellers, lenders are also not psychics.  While they do have a pretty good idea of someone’s payment history thanks to credit reports,they can not predict what a property will be worth in the future.  Any lender or realtor worth their weight will confirm that a house is only worth what it is worth now, today, this moment.

However, Zillow is predicting home values will continue to decrease according to Bryan of Loan Rates,

Zillow, a real estate listing website, estimates that home values are going to fall another 3.7 percent before the end of this year.  Considering how low some asking prices already are in the current market, another decline in average values means that it may actually be worth waiting to buy a new home.

While this might be good news for buyers, it could also confuse them when they think we are already at the bottom. The good news is that mortgage rates are expected to be steady at 4 percent for the next several months.

Cash buyers accounted for a whopping 38 percent of home sales in 2011, up 4 percent since the previous year.  According to date compiled by Housing Research Pro, the cash trend is expected to continue,

Between tight lending standards and a desperate search for yield by investors, cash purchase of homes (especially distressed properties) became even more common in 2011 than last year.

Investors are the key buyers in the cash market as regular buyers are sticking with their current homes and opting to rent.

I have been so tempted in the past to buy a timeshare property after hearing lines like,

“Aren’t you worth an annual vacation?”

“Don’t you love each other enough to do this?”

“Spending time with your family is the most important thing for families.”

Almost as bad as, “What will it take to get you to drive a new car today?”  Ay yi yi…

I have an aunt who went all-in for a time share and now owes tens of thousands of dollars for her hundreds of thousands of points.  She only ever goes from Southern Indiana to Nashville.

So what does it take to get rid of a timeshare you no longer want?  WalletPop helps answer that question,

You need to determine whether you have a deeded timeshare or a leased timeshare property. A deeded timeshare bounds you to the contract as an exclusive owner, while the leased timeshare means you are only the owner for a set number of years. If you have a deeded timeshare, you have the option to sell it to someone else. If you have a leased timeshare, you may have to keep paying your annual fees until the lease expires.

There are more really great tips at the site. I’ll forward the link to my aunt now!

Photo by Victor Martinez via flickr creative commons.

As you consider a way to insulate your home to keep your heating and cooling bills low, perhaps a lesson can be learned from our neighbors in Norway,

Norwegians have been planting greenery atop their houses for hundreds of years. Some have flowers mixed in with grass, and a few even have small trees. The verdant roofs have many advantages like the fact that they help stabilize homes, provide good insulation and are long-lasting.

The tradition began when Norwegians used sod to build roofs. Though not as popular today, this green trend could be one post I could hitch my horse to!  It could be a great boost to improving our climate if we all did it. Hey… let’s build some fresh vegetable gardens up there as well.

Having the courage to buy a fixer-upper on the cheap with the confidence that you can make the repairs and remodeling – and then resell for a profit – is a brave face.  If you decide to take on buying a house to flip, do so with your eyes wide open.  You must do a market analysis first and then get a solid estimate on what the repairs will cost (including the time investment).

American Health Advisors offers a reality check on what it’s really like to flip a house,

… you need to set aside at least twice as much money (preferably three times as much) as you think you will need for the work on the property in order to cover the actual costs that will be needed. There are inevitably tools, permits, supplies, and labor that wasn’t counted on in the initial budget figures as well as the tendency to seriously underestimate the cost of the materials that will be needed in order to get the job done. If you don’t have that much or can’t spend that much and walk away without a loss then the property you are considering might not be the best property for your first flip.

Excellent advice. Read the whole article and give it serious consideration before jumping in.

Photo by nolaclutterbusters via flickr creative commons.

New tiny houses – the two bedroom models – can be built for just over $50,000.  Or if you’re talking a 30-year mortgage at today’s rates … $250 p/month for a house payment. Sounds tempting, doesn’t it?  Here’s a house that was built for about $10,000!

“I sold my big house and got rid of most of my stuff, limiting myself to about 300 things — that was everything from heels and a toothbrush, to a couple of dinner plates and a two-ton jack. I then bought a set of plans from Tumbleweed. Four months later I had my tiny dream house.”

Some caveats.

1.  It’s hard to limit yourself to just 300 items when you’re used to living in a McMansion.
2.  Many lenders won’t bend over backwards on loans for $10,000 to $60,000.  They make more money on the $120,000 and up loans so will do just what they need to do. Don’t expect any concessions on closing costs.

But for $250 p/month (or less!) – and if you’re not claustrophobic – this could be ideal in today’s economic climate.

Photo by Tumbleweed Tiny House Company.

I’m just as guilty as anyone else.  I keep saying the housing market is getting better. Maybe it’s just me getting better at what I do, thereby attracting more clients.  Either way, I already have three closings already under my belt this year (one less than the entire year of 2009).

But what is wonky about today’s market?  From Out of Your Rut.com, we are told 2010 was the worst year ever – is now the time to buy?

…there are nagging problems with housing that can’t be ignored. Consider the following…

Price/interest rate relationship. House prices have fallen significantly in an environment of record low interest rates—below 5% for a 30 year fixed rate loan for much of the past two years. At any other time in history, significant drops in mortgage rates would resuscitate housing in a matter of months. Something’s different this time.

This begs an obvious question: if low rates failed to lift the market, what affect will rising rates have? If we’re betting that rates remain low for the next couple of years, we’re also betting that the economy will remain weak. How will that support housing? This is an apparent conundrum and we’ll have to wait to see how it plays out.

It is a weird weird market we have today.  I now predict that it will take years to work itself out (no longer am I saying we’re at the bottom because while we are, the bottom of this bathtub is deep).

As Out of Your Rut says, if you’re going to buy – buy low, buy less than you can afford, and try to pay off the mortgage early.  You’ll be better for it in the long run.

Rut photo by ted and jen via flickr creative commons.

Real estate owned (aka REO’d or bank-owned properties) are more and more commonplace in today’s housing market.  Some banks are willing to work with you, others are not.  The only true rule is that it’s like the wild west out there… everyone has their own set of rules and state laws can be ignored!

For example, “time is of the essence” in a real estate transaction.  By my state law, notification from the buyer to the buyer’s agent to the seller’s agent can stand when it comes to a full-binding contract.  Unfortunately the same is not true of bank-owned property.  Even when a bank agrees to a sale, sends final paperwork to the buyer, the buyer signs and sends back – until the bank ALSO signs, another buyer can snatch it out from under first buyer.

Other banks refuse to sell their foreclosed properties unless THEY approve the loans.  From Sonoma Couny, California, Cynthia Larsen of Safe Haven Realty reports on her experience,

Here is an example of the agent remarks in the MLS, not viewable by the public. These remarks are instructions for the agents as to when a home can be viewed and where to submit an offer.

“Bank of America REO. Pre-Approval with BofA required. Offers w/out PreApp letter will NOT be reviewed“

So this is us, Bank of America, myself and my pre-approved buyer walking away.

These are the days when rapport is absent from transactions between buyers and sellers – especially when the sellers are corporations.  I am finding buyers less likely these days to waste their time waiting for banks to try to dictate the rules everyone has to follow.  Instead, they are seeking to buy property owned by an actual homeowner.

I have a love:hate relationship with voice mail.  I love the ability to screen calls from telemarketers, but I hate when I’m the caller and get long voice mail messages.  For example, “Thank you for calling [insert name]. I am currently away from my desk or meeting with a client.  If you’re calling about employment, we will be hiring in August.  If you’re calling to verify employment, please leave a message with the social security number, blah blah blah.  If you would like to leave a message, please leave your name, number, and a detailed reason why you called.”  Two minutes later, I finally get to leave a message.

DavisW also doesn’t like voice mail, but perhaps worse are the twists and turns needed in order to speak to a real person,

None of the six choices seemed quite right for what I wanted to do, so I tried pressing zero. Sometimes this gets you directly to a live customer service representative.

“We’re sorry but your menu selection is not available,” the fake woman said patiently. “For more information, you can visit our website at [insert name].”

Yeah, well I already tried that and it didn’t work. Why do you think I’m calling you?

For the record, mortgage companies are no better than health care companies!  Wise up, folks. Hire some real people!  Improve the economy!

Photo by christyxcore via flickr creative commons.