It’s the Best Time to Sell in a Decade

Prices are rising and homeowners are staying put longer, and that means more homeowners can cash in when they go to sell. Home seller profits surged to a 10-year high in the fourth quarter of 2017. Sellers saw an average home price gain since purchase of $54,000, up from $47,133 a year ago.

That $54,000 average seller profit represents an average 29.7 percent return on investment compared to the original purchase price. That is the highest average home seller return on investment since the third quarter of 2007, according to ATTOM Data Solutions’ Q4 2017 Home Sales Report, released this week.

“It’s the most profitable time to sell a home in more than 10 years, yet homeowners are staying put longer than we’ve ever seen,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “While home sellers on the West Coast are realizing the biggest profits, rapid home price appreciation in red state markets is rivaling that of the high-flying coastal markets and producing sizable profits for home sellers in those middle-American markets as well.”

Among the 155 metro areas that ATTOM Data Solutions’ tracked, the locales with the highest average home seller ROI were: San Jose, Calif. (90.9%); San Francisco (73.3%); Merced, Calif. (64.6%); Seattle (64.4%); and Santa Cruz, Calif. (59.8%).

Meanwhile, homeownership tenure set a new record high in the fourth quarter of 2017. Homeowners who sold in the quarter had owned their homes on average 8.18 years, up from 7.78 years in the fourth quarter of 2016. It is the longest average home seller tenure since ATTOM Data Solutions has tracked it starting in the first quarter of 2000.

National Association of Realtors

2018's Housing Market Looks Good Unless You're A First-Time Buyer

The nation’s housing market for 2018 continues to look good, according to two recently released reports. But first-time millennial buyers will continue to struggle with affordability, especially in high-priced areas like Los Angeles, San Francisco, Boston, New York and Washington DC.

Listen to Ralph G. DeFranco, Ph.D, global chief economist, Mortgage Services, Arch Capital Services Inc.: “With interest rates and home prices both on the rise, first-time homebuyers – largely millennials – may want to consider making the jump from renting to owning sooner rather than late.”

Median price for homes currently listed in Boston is $735,000, according to Zillow.com.

DeFranco further said: “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”

Arch Mortgage Insurance Co. (Arch MI) recently released its winter 2018 edition of The Housing and Mortgage Market Review® (HaMMRSM), authored by DeFranco. [The data shows] a 6.2% increase in home prices in 2017 compared with the year before.

The HaMMRSM also makes market predictions to 2020. Among them: Home prices will continue to increase around the country in most markets. Look to annual increases of 2-6%, with most housing markets currently at low risk for a downturn.

Mortgage rates will rise, causing people to move less often. According to the report, “rising rates give existing borrowers with fixed-rate mortgages a financial incentive to stay put.” In addition, “homeowners will have more incentive to seek second liens or home improvement loans rather than move to a new home or refinance.” Makes sense since a new mortgage would likely be a higher rate cutting into the key affordability factor.

Realtor.com also released its “State of the Housing Union," "which shows the strong U.S. economy and unprecedented housing shortage pressuring potential home buyers striving to attain the American Dream.” Realtor.com’s analysis pointed to the fundamentals. “Strong buyer demand, constrained inventory, and ready-to-buy first timers are the key underlying dynamics driving today’s housing market. The macro-factors that have defined real estate in recent years – strong demand and weak supply – continue to set the tone for the industry,” said Joe Kirchner, senior economist for realtor.com.

Boston, a city millennials love continues to have inventory and affordability issues. According to Zillow, the median price for homes currently listed in Boston is $735,000.

“I pay attention to numbers and we don’t have enough good property on the market. There is big demand in Boston with companies moving to here either from outside of the city or from other states,” observes David Bates, broker associate at William Ravis Real Estate.

“I would be surprised to see a slowdown. I see increasing demand and very good appreciation,” adds Bates who is also known for writing about the Greater Boston real estate market for Banker and Tradesman, Boston Magazine, The Boston Globe, Boston Herald and Boston.Curbed.com.

Clearly, getting your foot in the proverbial front door of your first house remains the key to achieving the American dream.

Ellen Paris - Contributor, Forbes

Loan-To-Value (LTV) Ratio: What it means for you!

Many terms and acronyms may be thrown around during the loan approval process, especially when refinancing. Unless you’re well-versed in personal finance and banking, you may not fully understand the information you receive. In order to be a more informed and conscious consumer, it’s important to know what some of those terms mean. One of the most commonly question acronyms is “LTV”, or loan-to-value ratio.

LTV is a number that compares the value of the asset to the loan that it secures. Put another way, when you purchase a car, your lender issues a loan plus interest to help you make the deal. Technically, because your lender issued the funds to purchase the car, that car is collateral in the event that you default on your payments. So, LTV is the ratio that determines the level to which the asset will pay off the loan.

A more common phrase associated with LTV is being “upside down.” When a borrower is “upside down,” it means that they owe more than what the car is worth. People who are “upside down” have a high LTV.

So, why is LTV important?
LTV is an assessment of risk. Lenders are notorious for favoring less “risky” applicants for loans. They assess a number of criteria (credit score, LTV, DTI, and others) to determine the likelihood that each person will make their payments, on time, for the duration of the loan. After all, lenders want to get not just their money back, but also the interest rate on top of that.

LTV determines risk because in the event that the borrower defaults, it determines the return on the loan that the collateral’s value would provide. A higher LTV means that the asset is less likely to pay off the loan, and that’s why higher LTVs are less likely to be approved for refinancing.

I might have a high LTV. Am I doomed?
You’re not doomed. A high LTV will make your loan application less appealing for lenders, but isn’t guaranteed that you’ll be denied. Instead, your lender may give you a higher interest rate or add certain stipulations onto your loan in order to mitigate risk.

There’s more to the story...
Though LTV ratios are an important component in lender decisioning, it’s not the only piece to the puzzle. Offers are typically based on the combination of several factors, so even if you have a high LTV you could still be eligible for refinancing.

We always advise customers that the earlier you refinance your current loan, the better. Because cars lose value relatively quickly, the sooner you refinance, the less likely you are to have a higher LTV ratio.

By Julia Guardione @ RateGenius.com

The #1 Reason To List Your House Today!

Many people believe that selling their house during “the spring buyers’ market” is the best thing to do. Their reasoning is that there will be more buyers than there are during the winter months and, therefore, their house will sell quicker and for a higher price.

Historically, this made sense. However, today’s real estate market is not following the rules of the past.

The National Association of Realtors (NAR) measures buyer “foot traffic” each month. It receives data on the number of properties shown to a prospective purchaser by a Realtor® (based on the number of lockboxes used). The data reveals the number of buyers out actively looking for a home, not just window shopping on the internet. NAR explains:

"Foot traffic has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future."

According to the latest Foot Traffic Report, buyer traffic is greater now than it was during this year’s spring market and there are more buyers out now than at any other time in the last five years (March of 2012).

The chart below shows that buyer activity over the last three months (blue bars) was greater than it was during this past spring market (green bars).

Bottom Line: If you are waiting for next spring to list your home because you think that’s when the buyers will be out in force, perhaps you should reconsider. Buyers are out right now!

Keeping Current Matters

Bitcoin is finally buying into US real estate

Buy a home with bitcoin? Here's how one buyer did it...

Bitcoin is already in retail and restaurants — so it was only a matter of time before the cryptocurrency took on real estate. That time is now. Bitcoin is slowly making its way into closings on everything from Lake Tahoe land in California to Manhattan condos to single-family homes in the heart of Texas.

"Our buyer has evolved, they've moved from mom and pops to young people who want to pay with various forms of payment," said Ben Shaoul, president of Magnum Real Estate Group. "Cryptocurrency is something that has been asked of us — 'Can you take cryptocurrency? Can we pay that way?' — and of course when somebody wants to pay you with a different form of payment, you're going to try to work with them and give them what they want, especially in a very busy real estate market."

Shaoul is redeveloping a building on Manhattan's Lower East Side, turning it into condominiums priced between $700,000 and $1.5 million. He admits that there is currently a lot of inventory in the market, and therefore having an edge over his competitors is especially key. Bitcoin, he hopes, will be that edge.

"I think the demographic of the crypto user is a younger millennial, but, that being said, you have a lot of people come over from other countries, who are buyers from different places, who like to trade in different types of currency. Not everyone wants to trade in dollars or yen or euros," Shaoul said.

He intends to hold the bitcoins, rather than convert them to dollars. As an investor in the art market, where bitcoin is also increasingly present, he sees an opportunity to make even more money. Bitcoin has also been appreciating at lightning speed lately.

Others, however, are not as comfortable with the relatively new currency. The first ever single-family home sale in Texas involving bitcoin was announced last month. The buyer, who works in the tech industry, purchased the newly built home in Austin using bitcoin, but the seller, a custom homebuilder, wanted the currency converted to dollars during the transaction.

"Austin is a really technologically advanced city, I'd say, so I was surprised we hadn't heard anybody wanting to do this before," said J Kuper at Sotheby's International Realty, which brokered the deal. "But, candidly, we didn't know how to do it. It was a quick challenge and scramble to figure out all the moving parts, but we were instantly excited about the opportunity to figure that out."

They used BitPay, a global bitcoin payment service provider headquartered in Atlanta. It converted the bitcoins into dollars for the buyer. Given that bitcoin's value is a moving target day to day, the risk was all on the buyer side. The seller agreed to a fixed price in dollars.

"We found that on the day of the closing, we were kind of watching it [bitcoin's value] through the day," said Kuper. "The timing actually ended up perfect for the exchange, very well for our client, so there was really no hesitation, no need to postpone."

Kuper said the client got a "very fair" exchange rate, though he could imagine how it could've been more volatile. He says bitcoin has proven to be a bit more stable in the past six months.

There is, however, still a lot of nervousness for newcomers to the currency. Neither the buyer nor the seller in the Austin deal would talk about the transaction. Much of the concern may be around the lack of regulation so far in cryptocurrency and the lack of understanding as to how gains in bitcoin are taxed. The Internal Revenue Service issued some guidance on bitcoin and cryptocurrencies in 2014.

"What they said in that guidance is if you hold bitcoin or ethereum or one of these other convertible digital currencies as a capital asset, when you use that bitcoin to purchase goods or services — so for example, if I were to take $1 million in bitcoin to buy an apartment building or something — to the extent that bitcoin has appreciated since I acquired it, any of that gain, that built-in gain, would be taxed when I used the bitcoin to buy the building," said Jeremy Naylor, a tax attorney and partner at the firm Cooley.

He added that whether people are voluntarily paying that tax might be a separate question, but from a technical, legal perspective, it would be similar to selling stock to generate the cash to buy an apartment. In a direct transaction, buyers simply skip the part where they convert the bitcoin into dollars. Using BitPay, the buyers are 'selling' the bitcoin, and therefore any appreciation is taxable.

The complicated nature of real estate may be why bitcoin has been slow to move into the market. One of the first deals in the U.S. involved a $1.6 million sale of land — a home site — in Lake Tahoe in 2014. Martis Camp Realty President Brian Hull, who brokered that deal, said his firm has not received any other inquiries from buyers interested in using bitcoin.

International buyers seem more comfortable with the currency. Last month British entrepreneurs Michelle Mone and Doug Barrowman launched a bitcoin-priced real estate development in Dubai.

The U.S. market has been slower to buy into bitcoin for real estate. All of the deals so far have been done without a mortgage, and Shaoul said the bulk of those inquiring about his Manhattan condos are foreign buyers.

"This industry of real estate is notorious for lagging behind in technology, and innovation," he said. "Now we are starting to innovate, so we're very far behind. Bitcoin and payments with bitcoin have been around for years. Why it hasn't touched down in real estate in the sale of an apartment is odd, quite frankly."

— CNBC, Diana Olick

5 Mistakes That Make House Flipping a Flop

House flipping has become the day trading of the first decades of the 2000s. But in the rush to make a profit, far too many would-be real estate moguls overlook the basics and end up failing. In this article, we'll look at the five biggest mistakes investors make in this market and how to avoid them.

1. Not Enough Money

Dabbling in real estate is an expensive proposition. The first expense is the property acquisition cost. While low/no money down financing claims abound, finding these deals from a legitimate vendor is easier said than done. Also, if you're financing the acquisition, that means you're paying interest. Although the interest on borrowed money is tax-deductible, it is not a 100% deduction. Every dollar spent on interest adds to the amount you will need to earn on the sale just to break even. Research your financing options extensively to determine which mortgage type best suits your needs and find a lender that offers low interest rates. An easy way to research a prospective property's total cost is by using a mortgage calculator. This tool will also allow you to compare the interest rates offered by various lenders.

Paying cash eliminates the interest, but even then there are property holding costs, such as taxes and utilities. Renovation costs must also be factored in. If you plan to fix the house up and sell it for a profit, the sale price must exceed the combined cost of acquisition, the cost of holding the property and the cost of renovations. Even if you manage to overcome these hurdles, don't forget about capital gains taxes, which will chip away at your profit.

2. Not Enough Time

Renovating and flipping houses is a time-consuming business venture. It can take months to find and buy the right property. Once you own the house, you'll need to invest time to fix it up. Before you can sell it, you'll need to schedule inspections to make sure the property complies with applicable building codes. If it doesn't, you need to spend more time and money to bring it up to par. Next, you'll need to invest time to sell the property.

If you show it to prospective buyers yourself, you'll spend plenty of time commuting to and from the property and meeting with potential buyers. If you can make a 10% profit on a house that cost $50,000, you'll make a $5,000 profit. For many people, it might make more sense to get a good job, where they can earn that kind of money in a few weeks or months via a steady paycheck – with no risk and a very consistent time commitment.

3. Not Enough Skills

Professional builders and skilled professionals, such as carpenters and plumbers, often flip houses as a sideline to their regular jobs. They have the knowledge, skills, and experience to find and fix a house. Some of them also have union jobs that provide unemployment checks all winter long while they work on their side projects.

The real money in house flipping comes from sweat equity. If you're handy with a hammer, enjoy laying carpet, can hang drywall, roof a house and install a kitchen sink, you've got the skills to flip a house. On the other hand, if you've got to pay a professional to do all of this work, the odds of making a profit on your investment will be dramatically reduced.

4. Not Enough Knowledge

To be successful, you need to be able to pick the right property, in the right location, at the right price. In a neighborhood of $100,000 homes, do you really expect to buy at $60,000 and sell at $200,000? The market is far too efficient for that to occur on a frequent basis.

Even if you get the deal of a lifetime, you need to know which renovations to make and which to skip. You also need to understand the applicable tax laws and know when to cut your losses and get out before your project becomes a money pit.

5. Not Enough Patience

Professionals take their time and wait for the right property. Novices rush out and hire the first contractor that makes a bid to address work they can't do themselves. Professionals either do the work themselves or rely on a network of pre-arranged, reliable contractors.

Novices hire a realtor to help sell the house. Professionals rely on "for sale by owner" efforts to minimize their costs and maximize profits. Novices expect to rush through the process, slap on a coat of paint and earn a fortune. Professionals understand that buying and selling houses takes time and that the profit margins are sometimes slim.

The Bottom Line:

Before you get involved in flipping houses, do your research. Like any other business venture, flipping requires time, money, patience, skill, and it will likely wind up being harder than you imagined.

Lisa Smith - Investopedia

Baldwin Park Beauty for Rent!

Immaculate home in prestigious Baldwin Park, available for rent!  3 Bedroom / 2.5 Bath / 2,628 Sq. Ft.  No carpet, all hardwood floors and ceramic tile!

Will not be available long.  $3,000 per month - Available early December!  Call or text 614-937-4801 for a showing or email jwallaceproperties@gmail.com

7 Tips for Improving Your Credit Score

An important step to finding a home, whether you’re renting or buying, is ensuring that you have a good credit history. The American Bankers Association suggests the following tips to improve your credit score.

Request a copy of your credit score report – and make sure it is correct
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com​, or call 1-877-322-8228. Note that you may have to pay for the numerical credit score itself.​

Set up automatic bill pay
Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.

Build credit through renting
VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.

Keep balances low on credit cards and revolving credit 
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.

Apply for and open new credit accounts only as needed
Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.

Don’t close old, paid off accounts
According to FICO, closing accounts can never help your score and can in fact damage it.

Talk to credit counselors if you’re in trouble
Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score. For more information on debt management, contact the National Foundation for Consumer Credit (www.nfcc.org).

American Bankers Association

What happens at a real estate closing?

Closing is the final step of purchasing a home. You meet with various legal representatives to sign your mortgage and other documents and receive the keys to your new property. It’s a good idea to review what happens ahead of time so you know what to expect.

Who attends? 
The number of people at your closing depends on many factors, including the property’s location, the property type and the nature of the sale, such as an all-cash purchase versus a traditional mortgage. Here’s who might be present:

• Your attorney (if you have one) 
• The seller’s attorney (if they have one) 
• A lender’s representative 
• The seller’s representative 
• Your real estate professional 
• The seller’s real estate professional 
• The closing agent (usually a title company representative) 
• A notary public 

What you do at closing: 
Usually, closings are held at the offices of one of the representatives involved: the title company’s, an attorney’s or the lender’s.

Here’s what happens: 
You review and sign all your loan documents. Make sure you understand the terms of each document. If something is different from what you expected or agreed to, don’t sign until you resolve the issue. You provide documentation of homeowners insurance and inspections (if applicable). You give a certified or cashier’s check to cover the down payment (if applicable), closing costs, prepaid interest, taxes and insurance. You could also send these funds in advance via wire transfer. Your lender distributes the funds covering your home loan amount to the closing agent. Depending on your loan terms, you may also be required to set up an escrow (or impound) account to cover property taxes and homeowners insurance in addition to your monthly mortgage payment.

A note about closing costs: 
Closing costs are costs associated with your loan, and it’s important to budget for them. Closing costs may include discount points, recording fees, loan origination fees, appraisal charges, notary fees, attorney fees, title insurance and more. They usually total between 2 and 5 percent of your home’s purchase price. You can use Bank of America’s Closing Costs Calculator to estimate what your costs might be.

You should get a sense of how much your closing costs will be when your lender provides you with an initial Loan Estimate. You receive this estimate within three days of submitting your mortgage application. When your loan is approved, you receive a Closing Disclosure, which lists your finalized closing costs.

You may pay some fees noted in your Loan Estimate and Closing Disclosure before closing, such as those associated with credit reports. For the rest, ask your closing agent what payment methods are acceptable.

What you sign at closing: 
A deed of trust or mortgage is a document that puts a lien on your property as collateral for your loan. The promissory note is a legal agreement to pay the lender, including when you will make your payments and where you will send them. A Closing Disclosure (CD) is an itemized list of your final credits and charges, based on the terms of the contract. You should receive a copy of the CD for your review at least three days prior to the closing.

Homeowner tip: 
Don’t sign your Closing Disclosure if it’s significantly higher than your Loan Estimate or if you see a different rate on your loan than you agreed to. In many cases it’s easy to resolve such discrepancies, but be sure you’re satisfied and understand your loan terms before signing.

How long does a closing take? 
Closing on a home can be time-consuming, so be sure to set aside several hours for it. Knowing what’s expected of you can make the process go faster and make you more confident during this final step in the journey to homeownership.

Bank of America

Orlando airport's land sale sets stage for thousands of new homes!

Airport Authority to sell land to Tavistock Development Company Orlando International Airport plans to sell 782 acres to Tavistock Development Company for real estate development. Orlando International Airport’s long-anticipated sale of vacant land could lead to thousands of new homes in southeast Orlando.

Among provisions, the monumental deal turns over about 780 acres to Tavistock Development Company LLC, creator of nearby Lake Nona real estate. In return, the Greater Orlando Aviation Authority is pocketing at least $60.8 million and a Tavistock agreement that nobody will make a stink about jets roaring over backyard pools.

We also want a clear acknowledgement that there is an airport next door — Airport director Phil Brown. “We want something compatible,” airport director Phil Brown said of a lucrative sale structured for what had become surplus land. “We also want a clear acknowledgment that there is an airport next door.”

The authority’s unprecedented transaction may provide significant lift for the city’s growth around the airport and beyond; that southeast sector of Orlando is expected to swell by mid-century to nearly 50,000 residents, or as many as now in Orange County’s second biggest city, Apopka.

The Greater Orlando Aviation Authority approved the sale last month without comment.

That was nearly a technicality as momentum for a transaction had been emerging publicly in various stages for years. There are still hundreds of acres of additional surplus property to be sold or undertaken as a commercial venture by the aviation authority.

The sale to Tavistock involves land bought nearly three decades ago for airport growth. In 1989, the aviation authority acquired 2,098 acres for $12.4 million from the Poitras family. The acreage borders Osceola County a few miles south of the airport’s campus.

The aviation authority had two needs for the Poitras property. It would mine thousands of tons of dirt and sand there to build the airport’s fourth runway.

The authority also would designate some of the Poitras acreage for permanent environmental protection as compensation for hundreds of acres of wetlands destroyed by runway construction.

Even then, however, some environmentalists were dubious about the conservation value of Poitras property; it appeared increasingly as a remnant of nature amid urban encroachment.

They were really limited on what they could do as a developer themselves — Orlando chief planner Elisaeth Dang on GOAA's development attempt. In the late 1990s, the city annexed the tract, nearly 15 miles southeast of downtown, labeling it for urban use.

The land has never been given a zoning designation but was marked by the city as within a noisy route of aircraft. About a decade ago, the aviation authority went to city officials, with plans to pursue Poitras acreage for residential and commercial enterprises.

But the authority found progress would be difficult because of federal rules for airport property. “They were really limited on what they could do as a developer themselves,” the city of Orlando’s chief planner Elisabeth Dang said.

The authority dropped its efforts as the recession took hold, Deng said.

Last year, the authority signaled that it would resume its quest for Poitras property by selling it, but rather than setting a price, the authority first went in search of a buyer.

Two suitors responded to a request for qualifications, Tavistock and Crescent Communities LLC of Charlotte, N.C. The aviation authority chose Tavistock because of its previous enterprises in the area and “their development of the Lake Nona Medical Center.”

Tavistock Development intends to combine the Lake Nona and Poitras Property. Orlando’s VA Medical Center and the UCF College of Medicine are about a mile from the land being bought by Tavistock.

The pricing ultimately was based on appraisals.

Documents filed by the company with the city and aviation authority give some sign of what’s to come: 3,196 homes, with many gated and styled after Lake Nona housing. “Tavistock Development intends to combine the Lake Nona and Poitras Property,” states a Tavistock letter, “to further maximizes synergies between the properties.”

Many regulatory steps are ahead for Tavistock and GOAA, the aviation authority. Among them, environmental protections for part of the Poitras parcel remain in place, prohibiting development and enforced by state authorities.

An aerial photo taken June 16, 2009 shows the UCF Medical School Campus and the infant stages of Medical City. Poitras property is in upper left.  Some restrictions previously were lifted, a result of the aviation authority paying millions of dollars for environment enhancements and protections elsewhere.

But there are development prohibitions on approximately 380 acres that Tavistock is buying in addition to the 780 acres for nearly $61 million. If those restrictions are lifted, Tavistock will pay $85,000 per acre, or nearly as much as for the 780 acres. If they aren’t, the price could be $3,500.

Tavistock appears before the city’s Municipal Planning Board next month as part of seeking zoning and project approvals.

“If Tavistock and GOAA are ready to move, we could do all of this in six months,” said Dang, the city’s chief planner. “A lot of this depends on their timing, more so than ours.”

Kevin Spear - Orlando Sentinel