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RISMEDIA, March 12, 2010—As spring approaches, many homeowners grow eager to start remodeling projects to update and refresh their surroundings. Before getting started, it’s a good idea to hire a professional remodeler for a workable plan and better results, according to the National Association of Home Builders (NAHB).

“A professional remodeler knows how to translate a homeowner’s dreams and budget into a beautiful reality,” said Donna Shirey, CGR, CAPS, CGP, president of Shirey Contracting in Issaquah, Wash. and 2010 chairman of NAHB Remodelers. “They have the expertise and skills to satisfy a customer while keeping the budget in check.”

Here are five tips for planning a successful home remodel that you can enjoy for many years to come.

1. Compile a list of home remodeling ideas and draft a budget for the work.
You likely have some projects in mind, such as modernizing the bathroom, renovating the kitchen, replacing windows or repairing the roof. Prioritize your wish list: Maybe you don’t have the budget for your dream remodel, but professional remodelers can maximize your dollars by doing the work in phases, suggesting budget-friendly products and materials and implementing creative design solutions.

2. Look for a professional remodeler to help plan the project.
Start by searching NAHB’s Directory of Professional Remodelers at www.nahb.org/remodel. You’ll get a list of nearby remodelers to contact. Asking friends and neighbors for names of qualified remodelers will also help you find a match for your project.

3. Check the references and background of the remodeler.
After you start speaking with remodelers and find one or two who match your project’s needs, be sure to conduct some background research by checking with the Better Business Bureau, talking to their references and asking if they are a trade association member (such as NAHB Remodelers). Remodelers with these qualities tend to be more reliable, better educated and more likely to stay on top of construction and design trends.

4. Agree on a contract.
Talk over the details of the home remodeling project and begin reviewing the contract. You’ll want to check the remodelers’ insurance coverage, ask about any warranties on their work, know who is responsible for obtaining any building permits and understand the process for making any change orders after the contract is signed. Make sure that you and your remodeler see eye to eye before you sign on the dotted line.

5. Take advantage of the energy efficiency tax credits.
If your remodel includes replacing windows or doors, adding insulation, installing new roofing, upgrading heating or air-conditioning units, updating the water heater or installing energy generating products (such as solar panels, heat pumps or wind turbines) then you can take advantage of federal energy efficiency tax credits through 2010 that will help defray costs and maximize your remodeling budget while reducing home energy bills.

For more information, visit www.nahb.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, March 12, 2010—(MCT)—With the highly touted federal mortgage-modification program falling short of its target numbers, the government has looked into alternatives to foreclosure and come up with a possible, though not original, solution: the short sale, a transaction in which the lender accepts less than the balance owed on the mortgage.

Beginning April 5, 2010, under new Treasury Department rules, short sales will be presented as the potential next step for homeowners who are rejected by or fail to make the grade for the federal Home Affordable Modification Program (HAMP).

RealtyTrac chief economist Rick Sharga suggested that offering the short sale program is the administration’s acknowledgment that its current mortgage-modification effort “can’t solve the foreclosure problem by itself.”

Kevin Gillen, vice president of Econsult of Philadelphia, said there was both statistical and anecdotal evidence that lenders have been holding off on foreclosure proceedings. “No doubt that part of this is due to staff shortages relative to the volume of delinquencies, but it’s also due to uncertainty over near-term government policy,” he said.

Sharga sees positive elements in the new guidelines: Both homeowners and mortgage servicers will have financial incentive to participate in short sales; there are limited payouts for second lienholders and paperwork is standardized, which makes it easier for everyone to comply.

The new Home Affordable Foreclosure Alternative program will run until Dec. 31, 2012. Among its provisions:

-The lender must offer a short sale in writing to the borrower within 30 days after the borrower either is ruled ineligible for mortgage modification under the HAMP program or has been ruled unable to sustain payments under a trial plan.

-A borrower may receive up to $1,500 to assist with relocation expenses.

-Incentives of $1,000 will be offered to lenders for each completed short sale. For each deed in lieu of foreclosure, in which the borrower voluntarily transfers the property to the lender, $1,000 will be paid to the lender.

-A lender with a second lien on the property will get up to $3,000 of the short sale proceeds, or can pursue a short sale outside the program if it doesn’t agree to share.

-The lender will not be permitted to reduce the real estate agent’s commission after an offer on a property has been received.

Currently, short sales don’t make up a big piece of the real estate market, either regionally or nationwide, for a variety of reasons. One is they tend to be difficult and time-consuming. “I handled a short sale of a condo in Bensalem PA that took a year,” said real estate broker Christopher J. Artur. Typically, there is “so much aggravation and red tape involved that some buyers get so fed up they walk away.”

Nationally, just 14% of all existing-home transactions in January 2010 were short sales, the National Association of Realtors says. In the Philadelphia region, they made up 6.9% of total homes for sale at the end of January, said Art Herling, regional vice president at Long & Foster Real Estate.

“I call short sales ‘organized chaos,’” said Noelle Barbone, office manager of Weichert Realtors’ Media office. Each lender works short sales differently, “at their own pace, and it depends on how behind the homeowners are on mortgage payments, if the house is worth less than they owe and whether or not foreclosure paperwork has been filed.”

The new program is unlikely to make short sales easier, even as an alternative to foreclosure. “What one needs in a short sale is time,” Barbone said. But these days, as buyers race to meet the April 30 agreement-of-sale deadline for the federal tax credit, time is money. “I had first-time buyers recently with 20% down, and we found two houses they liked,” said Cheryl Miller of Long & Foster’s Blue Bell office. Both were short sales, however, and neither the seller nor the agent could give a definite timeline for even seeing an executed agreement of sale, she said. “Timing is pretty critical for the first-time buyer and viable houses that are short sales are remaining unsold” as a result, Miller said.

Sharga doesn’t think the new short sale program will be the answer the government seeks. “While we’ll likely see an increase in the number of short sales, I doubt that the reality will live up to the hype.”

(c) 2010, The Philadelphia Inquirer.

Distributed by McClatchy-Tribune Information Services.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, March 12, 2010—Close to a year after the launch of the Home Valuation Code of Conduct (HVCC), more agents are seeing value in increased appraisal transparency and consistent processes for ordering, tracking, delivery and quality-monitoring. But some appraisal-industry misperceptions persist—including in the area of pricing.

A typical story an agent might hear goes like this: “The HUD-1 said the appraiser was paid $450, but the appraiser only received $325. So where did the rest of the money go?”

While this pricing structure has been in place in the industry for 20+ years, it has only recently been identified as a source of confusion and frustration. The $325 paid to the appraiser (i.e., employee, either staff or contractor) is only a component of the total cost of creating the appraisal.

As with all products, the full cost includes the expenses of licensing, training, compliance, technology, customer service, quality assurance and legal liabilities.

There are parallels between the appraisal industry and the book-publishing business that can help clarify pricing misperceptions. For example, the price you pay for a book is not typically what the author receives. (Appraisers generally receive 60% to 75% of the fee appraisal management companies bill to lenders). A book purchase price incorporates all the expenses of bringing that particular title to the marketplace: author advance, editing, design, legal, print supplies and production, and marketing and distribution. It also reflects bookseller expenses and profit margin.

Profit margins for online booksellers are relatively small, but they win on the volume front—high volume, low margin. In comparison, independent bookstores typically have lower volume and more expenses, so they require a higher profit margin. Some authors, though, choose to self-publish, which requires them to cover all costs associated with the book—in addition to writing it!

In this book-publishing example, appraisers are the authors. The payment appraisers receive for their work depends on whether they are completely self-employed contractors, work as contractors for an appraisal firm or are employees of appraisal firms.

Deconstructing appraisal pricing is further complicated by these factors:
-Some companies are both appraisal management companies and appraisal firms. This means they have staff appraisers, and also contract work to outside appraisers.
-Some independent appraisers produce their own work and bring it directly to market, but they also accept contract assignments from appraisal management companies and appraisal firms.

While these variables make it difficult to uniformly deconstruct the price of an appraisal, it’s important that the work of the appraiser and the work of the “support system” be considered as two parts of a whole. If not for the appraiser, there would be no “book.” The same holds true for the production and delivery aspects.

Appreciating the impacts of evolving regulatory change in a challenging environment, the Title Appraisal Vendor Management Association (TAVMA) remains committed to helping educate real estate professionals about settlement services. A key part of this effort has been the creation of the Standards of Good Practice in Appraisal Management.

We welcome your review of these “rules of the road” for appraisal, as well as your feedback.

Jeff Schurman is executive director of TAVMA. For the complete text of the Standards of Good Practice in Appraisal Management, please visit www.tavma.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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RISMEDIA, March 12, 2010—Located in the Gulf Shores North area of Florida, this home is the ultimate ‘his and her’ property– she gets her beach and he gets his dockage. This well-maintained home sits on over an acre of land with 300+/- feet of pristine waterfront and Gasparilla Pass front beach.

The home features 4,000+/- square feet of living area along with 3,000+/- square feet of outdoor decking and includes 4 bedrooms and 3 baths. The raised backyard pool faces the water and a lush lawn out to the dock and beach.

Soaring oak ceilings welcome you inside to additional oak flooring, fireplace, a recent kitchen renovation along with a newer cedar shake roof. A formal dining room and family room sit just off the sunken living room. A welcoming landscape and brick paver entrance perfectly compliment this ‘on the point’ treasure.

To view a virtual tour, click here.

To submit your Featured Listing, send 300-500 words on the property, surrounding area, and how you’re marketing it to Paige@RISMedia.com. Don’t forget to submit photos and an accompanying URL!

To see last week’s Featured Listing, click here.

RISMEDIA, March 12, 2010—Pat Giles, vice president of John L. Scott Real Estate’s marketing, interactive marketing and IS departments recently received the Microsoft Innovation Award for her leadership in driving John L. Scott’s Internet strategies and award-winning website.

According to Microsoft, the Innovation Award is given to customers who leverage new and innovative technologies from Microsoft to advance their business in creative, emergent and innovative ways. The description goes on to say that while this process is a ‘group’ effort, the award is meant to recognize one’s strategic thought, decision making and execution of specific ideas and initiatives.

“Pat is an impactful leader who has the unique ability to identify and apply influential and emergent technology to the business in a very relevant way,” said J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “Through her guidance and the expertise of her team, JohnLScott.com continues to push the technology envelope in an effort to provide consumers with the ultimate online real estate experience.”

John L. Scott Real Estate began partnering with Microsoft in 2006 when it became the first residential real estate company in the nation to feature Virtual Earth interactive mapping (now Bing Maps). This was followed by John L. Scott’s Neighborhood Wizard which uses Microsoft’s polygon drawing technology. The most recent product of John L. Scott’s relationship with Microsoft saw the launch of JLSconnect which utilizes Microsoft’s emerging technology Silverlight and Live Services as a gateway to the growing ecosystem of social networking services.

For more information, visit www.johnlscott.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

RISMEDIA, March 12, 2010—The Mortgage Bankers Association (MBA) recently reported that serious mortgage delinquencies- those at least 90 days past due or in foreclosure- remained at record levels in the fourth quarter of 2009. These latest statistics show that one in 10 borrowers is seriously delinquent on their mortgage, up from one in 16 borrowers a year ago and one in 33 two years ago.

The Treasury Department recently issued figures showing that under the Home Affordable Modification Program (HAMP) the number of permanent loan modifications has increased to 116,000 total. Every additional homeowner who is saved from foreclosure is a step forward, but this number represents only a small fraction of the families who need and are eligible for help. The White House plan recently announced to provide $1.5 billion to the five states hardest hit by foreclosures is also welcome. But it too fails to provide the comprehensive solution that’s been lacking. Unless we address the foreclosure epidemic on a larger scale with mandatory modifications designed to be sustainable, millions of foreclosures ahead will continue to be a drag on the economy.

“The industry’s own figures attest to the fact that the damage from the bad lending that’s brought down the economy continues virtually unchecked,” said Michael Calhoun, president of CRL. “We hope Congress will keep these figures in mind and agree that American families deserve a fair shake on their finances, including more aggressive foreclosure prevention and a strong watchdog to prevent another lending debacle in the future.”

For more information, visit www.responsiblelending.org.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

RISMEDIA, March 11, 2010—RealtyTrac, a leading online marketplace for foreclosure properties, released its February 2010 U.S. Foreclosure Market Report, which shows foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 308,524 U.S. properties during the month, a decrease of 2% from the previous month but still 6% above the level reported in February 2009. The report also shows one in every 418 U.S. housing units received a foreclosure filing in February.

“The 6% year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity,” said James J. Saccacio, chief executive officer of RealtyTrac. “This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity—albeit at a historically high level that will likely continue for an extended period.

“In addition, severe winter weather appears to have temporarily slowed the processing of foreclosure records in some Northeastern and Mid-Atlantic states.”

Foreclosure activity by type
Default notices (Notices of Default and Lis Pendens) were reported on a total of 106,208 U.S. properties during the month, an increase of 3% from the previous month but down 3% from February 2009. Default notices were down 25% from their peak of more than 142,000 in April 2009 but were still more than three times the number they were four years ago in February 2006.

Foreclosure auctions (Notices of Trustee’s Sale and Notices of Sheriff’s Sales) were scheduled for the first time on a total of 123,633 U.S. properties, a decrease of 1% from the previous month but still 16% higher than the level reported in February 2009. Scheduled auctions were down 14% from their peak of more than 144,000 in August 2009 but were also about three times higher than the number reported in February 2006.

Bank repossessions (REOs) were reported on a total of 78,683 U.S. properties during the month, a 10% decrease from the previous month but an increase of 6% from February 2009. Bank repossessions were down nearly 15% from their peak of more than 92,000 in December 2009 but were at nearly twice the level reported in February 2006.

Nevada, Arizona, Florida post top state foreclosure rates
Nevada foreclosure activity decreased nearly 7% from the previous month and was down 30% from February 2009, but the state’s foreclosure rate continued to rank highest in the nation for the 38th month in a row. One in every 102 Nevada housing units received a foreclosure filing during the month—more than four times the national average.

Arizona and Florida documented nearly identical foreclosure rates, with one in every 163 housing units receiving a foreclosure filing in both states. Despite a nearly 21% decrease in foreclosure activity from the previous month, Arizona’s rate was statistically slightly higher than Florida’s rate and ranked second highest among the states.

California’s foreclosure rate ranked fourth highest among the states, with one in every 195 housing units receiving a foreclosure filing during the month, and Michigan’s foreclosure rate ranked fifth highest among the states, with one in every 226 housing units receiving a foreclosure filing.

Other states with foreclosure rates among the nation’s 10 highest were Utah (one in every 275 housing units), Idaho (one in 296), Illinois (one in 305), Georgia (one in 331) and Maryland (one in 407).

Six states account for more than 60% of national total
The six states with the most foreclosure activity accounted for 61% of the national total in February. California led the way, with 68,562 properties receiving a foreclosure filing during the month—down nearly 5% from the previous month and down 15% from February 2009.

Foreclosure activity in Florida increased nearly 15% from the previous month and was up more than 16% from February 2009. The state continued to post the nation’s second highest total, with 54,032 properties received a foreclosure filing during the month.

Increasing foreclosure activity boosted Michigan’s total to third highest among the states. A total of 20,028 Michigan properties received a foreclosure filing during the month—up nearly 14% from the previous month and up 59% from February 2009.

With 17,312 properties receiving a foreclosure filing, Illinois posted the fourth highest total, followed by Arizona, with 16,718 properties receiving a foreclosure filing, and Texas, with 12,638 properties receiving a foreclosure filing in February.

Other states with totals among the 10 highest in the country were Georgia (12,177), Ohio (11,286), Nevada (11,035), and Maryland (5,732).

Divergent trends in metro areas with top 10 foreclosure rates
Metro areas in the Sun Belt states of Nevada, Florida, California and Arizona continued to dominate the top 10 highest foreclosure rates among metropolitan areas with a population of 200,000 or more, but activity trends in these areas varied considerably.

The Las Vegas metro area documented the highest metro foreclosure rate, with one in every 90 housing units receiving a foreclosure filing during the month, despite a 9% decrease in foreclosure activity from the previous month.

Six of the other metro areas in the top 10—all in California or Arizona—also reported decreasing foreclosure activity from the previous month. The biggest monthly decrease among the top 10 was in the Phoenix metro area, where foreclosure activity dropped nearly 18%.

In contrast, the two Florida metro areas in the top 10 both posted substantial monthly increases in foreclosure activity. The Cape Coral-Fort Myers metro area saw a 31% increase in foreclosure activity from the previous month, giving it the second highest metro foreclosure rate—one in every 92 housing units receiving a foreclosure filing. An increase of nearly 66% in foreclosure activity from the previous month helped boost the foreclosure rate in Port St. Lucie to sixth highest.

For more information, visit www.realtytrac.com.

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On March 15, 2010, the Connecticut Real Estate Investors Association, or CT REIA, will be hosting its monthly meeting with Nyrik and Linda Huuskonen. They will teach how to buy houses for less than the price of a car at tax auctions.

IDX Broker uses its custom IDX solution to create a sense of ease and efficiency for consumers executing their real estate search online.

RISMEDIA, March 11, 2010—It’s not likely anything could surprise us as much as the sheer magnitude of the slowdown we’re experiencing. Just be prepared for anything going forward.

If you made adjustments and found some stability in 2009, then you’re probably seeing—and can expect—more of the same this year. If you struggled last year, it will likely get harder unless you’re able to adapt to the market as it is. As you continue to power through and find new ways to work in a changed economy, stay aware of these challenges at the forefront and seek out resources that could positively affect your ability to serve your clients.

Short Sales
The U.S. Treasury Department’s new guidelines on short sales, announced in November, include better protection for you and the consumers involved. The policies represent a good step forward, and they’ll prove to be even more so in April when banks are required to have a compliant short sale plan in place to participate in the Home Affordable Foreclosure Alternatives (HAFA) program. The rules for participating banks include a 10-day window to accept or reject offers and a $1,000 incentive for each closed short sale. However, the most valuable currency for negotiating short sales will remain a competitive offer and a complete, well-organized short sale document packet for the servicer.

Loan Modifications
Unfortunately, loan modifications are being implemented at an extremely slow pace. The Obama Administration reports that in 2009 only 66,000 loans were permanently modified, a tiny portion of the more than 900,000 submitted for consideration. With 350,000 properties defaulting each month in the U.S., it’s in everyone’s best interest to keep people in their homes and their properties off the already flooded market. And if job growth occurs as promised in 2010, loan modifications may be viewed as a good fit for people who are getting back to work and have enough income to keep current on their mortgage.

Jumbo Loans
In recent months, the nearly dry jumbo loan faucet has been turned on—but only to a slow drip. Until banks open it wider, there’s little chance of making a dent in the roughly 40-month supply of inventory above $729,500. Qualified buyers capable of making a 20% down payment but unable to secure financing are sitting on the sidelines eager to join the game.

Don’t let the hard facts deter you. If anything, they should motivate you to push harder on behalf of your clients and yourself. As the industry continues to tackle these challenges throughout the year, move forward with your eyes wide open. Then you’re more likely to see a full recovery in your business long before the downturn is deemed officially behind us.

Margaret Kelly, CRB, is chief executive officer of RE/MAX International, Inc.

For more information, visit www.remax.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

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