Sometimes Additions Can Be Subtractions

Not all remodeling  projects add
value come selling time

The Salt Lake Tribune -  Lesley Mitchell
Remodeling your home is kind of like buying a new car. Over time, it will be worth a lot less than you paid for it.

That sun room addition? Expect to recoup only about 40 percent of your investment — if you’re lucky. In fact, real estate agents say many home buyers don’t even like these costly additions. What about the time you remodeled and created a home office with all those built-in book shelves? For all your trouble, you would end up getting only about a third of that investment when it came time to sell.

Even among remodeling projects with the highest return on investment, you can expect to recoup only about 83 percent of what you spend on vinyl replacement siding in Salt Lake City, 74 percent on a minor kitchen remodel and about 70 percent on new windows, according to the annual Cost vs. Value report 2010-2011 by Remodeling magazine.

Perplexed? Real estate agents and others in the housing industry aren’t.

"A lot of homeowners are really surprised at how little they can get back on the money they spent on remodeling projects," said Kim Boekholder with Results Real Estate in Sandy. "It can create some hurt feelings when they want to sell and we have to break the news to them that although what they did is beautiful, buyers aren’t willing to pay extra for it."

One of the biggest mistakes homeowners make, Boekholder said, is making changes that don’t have broad appeal. You may like bright yellow walls, but some buyers don’t.

One of Boekholder’s recent listings was a home with purple carpet. Even though it was in great condition, "every single buyer commented on it," she said. "It was a huge negative and cost some offers." Another Realtor had to break the news to sellers who had remodeled their home with an outdoorsy flair that potential buyers were being turned off by wallpaper, bathroom tiles and kitchen back-splash tiles adorned with hunting scenes.

Another myth is that all remodeling projects are created equally — or that the biggest, most expensive projects have the biggest return on investment.

The report in Remodeling magazine, updated annually, shows that simply isn’t the case. Homeowners can expect to see an average return of 64 percent on the investment in a major kitchen remodel, 62 percent return on a two-story addition, 57 percent on a new master suite and only 44 percent on a bathroom addition.


Why such low returns? Many home-improvement projects appeal to only some buyers — some don’t want a fancy kitchen for example, or don’t like the cabinetry and decor that the seller selected. Buyers who have no intention of working at home will find little or no value in a home office addition, and many buyers prefer a deck to a sunroom.

How much a homeowner reaps from an investment varies, based on the overall condition of the property, the neighborhood and many other factors.

Not all projects are done with an eventual sale in mind. Terry Moore of West Valley knows that home values are down in her area, as well as along virtually the entire Wasatch Front. But after living in her home for two decades, she and her husband do not want to move away from neighbors and two adult children who live nearby, including one only five minutes away.

Two years ago, she had her kitchen remodeled and square footage added. Next up is replacing more windows and her home’s vinyl siding.

"We are doing these projects with the intention to stay," she said. "This is the house we’ll die in."

Although how much value any remodeling project will add is uncertain, one thing is for sure. It’s not always the priciest changes that benefit homeowners most when it comes time to sell. A new steel front door or new garage door aren’t the most expensive additions — but they can deliver big results. According to the report, homeowners could recoup 95 percent of the cost of a new steel entry door and 93 percent on a new garage door. Those aren’t the only practical home improvements that seem to score high — expect about 83 percent on vinyl siding and nearly 70 percent for new windows.

Real estate agents say the return on these types of projects is so high because they are maintenance items that are going to have to be done at some point. Buyers place a premium on properties that already have such projects completed.

Hidden Potential- Highest and Best Use

Million Dollar Homes are Selling!

SANDY -- The real estate industry has seen some rough times the last couple of years. Buying and selling has certainly been a challenge.

Just this week, we learned that Utah is 4th in the nation when it comes to the number of foreclosures. But there is a sector of the housing market that's still strong -- and the price tags are big.

"There is a segment of the market that hasn't been affected by the economy, and they are just taking advantage of the pricing right now," said Deanna Dipo, president of the Salt Lake Board of Realtors.

She's talking about big homes, custom-built with all the bells and whistles, sitting on a couple of acres: Million-dollar homes.

The highest priced home sold along the Wasatch Front in 2010 went for just over $6 million. In 2009, $3.5 million was the highest price.Believe it or not, homes in this price range are selling well in Utah, and have been for the last couple of years.

According to the Salt Lake Board of Realtors, 91 million-dollar-plus homes sold along the Wasatch Front last year, up 12 percent from 2009. So far this year, 15 have sold.

"The price per square foot has dropped," Dipo explained. "Our pricing has stabilized here in Utah, so the high-end properties are definitely of value."

That's encouraging for someone like Sandy resident Jesse Riddle.

"We built this home about 14 years ago as our dream home," he said. "We have a beautiful home, custom design."

But his four children are grown now, and the Riddles are ready to downsize. With their home, there's plenty to downsize from -- the pool, sport court and lighted football field notwithstanding.

The activity in high-end homes is not just a Wasatch Front phenomenon. Seven-figure priced homes are up 4 percent nationally as well, an indication that properties like Riddle's are somewhat insulated from the economic downtown.

"I just think there are a lot of people in a position financially that are really taking advantage of our market, just buying properties that they couldn't have otherwise in the past," Dipo said.

By Keith McCord - KLS News

Gophers... don't let them ruin your property

NEW — March Home Sales Down From Last Year, Up From March 2009

Sales of existing homes in Salt Lake County in March totaled 940 units (all housing types), down 8 percent compared to 1,020 units sold in March 2010, but up 25 percent compared to sales in March 2009, according to the Salt Lake Board of REALTORS®.

Home sales in March were up 44 percent compared to February 2010 (non-seasonally adjusted).

“Home sales are down compared to last year at this time because of the federal home buyer tax credit,” said DeAnna Dipo, president of the Salt Lake Board of REALTORS®. “However, home sales in March of this year are up 25 percent compared to March 2009, when the recession was in full force.”

The median home price in March was $185,250, down 7 percent compared to a median price of $200,000 in March 2010, but up 3 percent compared to February’s median price of $179,990.

Based on sales trends over the past 12 months, Salt Lake County has a nine-month supply of housing inventory. There are 6,520 active listings of homes for sale in Salt Lake County.

Cash-Wielding Investors Snap Up Resold Homes

Investors lifted U.S. home sales last month, plunking down cash to grab cheap homes at risk of foreclosure. But purchases made by first-time homebuyers fell, a troubling sign for the weak housing market. Sales of previously occupied homes rose in March to a seasonally adjusted annual rate of 5.1 million, the National Association of Realtors said Wednesday. That’s a 3.7 percent increase from the February pace, but far below the 6 million homes a year that economists say represents a healthy market.

Foreclosures or short sales — when the lender agrees to accept less than what is owed on the mortgage — rose to make up 40 percent of all purchases. And deals paid for entirely in cash accounted for 35 percent of all resold homes. The Realtors group says that’s the biggest percentage since it has been tracking all-cash sales. Many of those purchases are being made by investors, who are targeting cheap properties in areas hit hardest by foreclosures. The trade group’s data takes into account only individual investors. It does not include homes sold in bulk at auction or on courthouse steps. Many of the foreclosure sales probably are being picked up en masse by private equity firms.

Another sign of investor activity is that sales of homes priced under $100,000 have risen 10 percent from a year ago. In that same period, sales of mid-priced homes, from $100,000 to $500,000, have fallen more than 14 percent. Fewer first-time homebuyers are entering the market. Sales among these buyers, who typically set down roots and raise families, fell to 33 percent in March. The trade group and economists say a healthier makeup is40 percent.

The median sales price rose slightly in March, to $159,600, but it is still down 5.9 percent from a year ago. Foreclosures are dragging down home prices. A record 1 million homes were lost to foreclosure last year and foreclosure tracker RealtyTrac Inc. said it expects 1.2 million more will be lost this year. Homes at risk of foreclosure usually sell at 20 percent discounts.

Joshua Shapiro, chief U.S. economist with MFR Inc., said that “part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good.”

Many would-be buyers are holding off, worried that home prices haven’t bottomed out. Others are having trouble getting mortgages because banks have tightened lending requirements. The average credit score for Freddie Mac and Fannie Mae-backed mortgages is 760, up from 720 in 2007. A major obstacle to a housing recovery is the glut of unsold homes. There were 3.55 million unsold homes on the market in March. It would take 8.4 months to clear them at today’s sales pace. Analysts say a healthy supply can be cleared in six months.

The situation is much worse when taking into account the “shadow inventory” of homes, economists say. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.“It is unlikely that home prices can recover on a sustained basis until the inventory-to-sales balance improves further and the number of distressed properties is significantly reduced,” said Steven A. Wood, chief economist at Insight Economics

Salt Lake Tribune

Deal of The Day!

Be Smart Before Taking Flight From Your Mortgage

I just want out... what are my options... 

Short Sale
In this process the borrower asks the lender for permission to sell the house for less than what is owed on the mortgage. For example, the market value of a property is $250,000, but $300,000 is owed and the lender is asked to take a $50,000 hit. short Sales hurt credit scores, but not as much as a foreclosure.
Foreclosure
Walking away from your property letting a lender foreclose has the greatest effect on your credit, remaining on your report as a negative item for 7 years.

More than three years after Utah's real estate bubble popped, tens of thousands of homeowners have some tough decisions to make.  Am estimated 8 percent of Utah households with a mortgage are behind on their payments. About one in five homeowners in Salt Lake City are "under water" meaning they owe more than their homes are worth.  another 6% are close to that point according to housing data from Corelogic.

Should they try to get their lender to modify their mortgage? Should they hold on and wait for better times? Is trying to get a lender to agree to short sale a better option? Or should they just give up and walk away?

Each situation is different of course, but the solutions are often universally complicated and can be painful. "A lot of people believe, or hope there's a government program that can fix everything for them," said Ryan Carver, director of housing counseling of AAA Fair Credit Foundation  "But there just isn't one."

I am in mortgage trouble, but want to keep my home - so what now?  Here is what to do if you are having trouble making your  mortgage payment and can't sell your house because yu owe more than it's worth:

• Start with your lender or HUD approved counselor- call 211 to find a counselor in yuor area.
• Your lender's offer is likely to dissapoint- the lender will do what is best for them.
• You must prove hardship in order to get help
• Be persistent, and keep track of your conversations.
• Help is not guaranteed- Your lender doesn't ahve to help you.
• You may want to change your spending habits - the bank will see what you spend your money on.
• think twice before you stop making your mortgage payment - you may think that is the only way toget help, this really may not be the best decsion
• Denied modification? Try, try again.

For more of this article please go to: http://www.sltrib.com/sltrib/money/51583950-79/mortgage-loan-lender-payments.html.csp

Salt Lake Tribune  - Lesley Mitchell

Property Alert - Deal of the Day

This week I posted a property on our 'Deal of the Day' on my website/blog. It was a property for $265k in the Avenues. Well, one of my clients called after seeing it, we looked at it (I also brought a contractor to give us estimates on fix up), and we made an offer. It truly must have been a deal! After we made the offer I begged the agent to present it before other offers rolled in. By the time we were supposed to get a response, he already had 3. By the end of the next day there were 6 offers total, 2 were cash and the final counter offer my client received was for $308,350! We did not accept it.


This is really exciting to see how many people that are looking at properties on the market that are a good deal and making offers. As many know, there is roughly a 9 month inventory of properties along the Wasatch Front. Many sellers feel like buyers are on the fence and not pulling the trigger. I am seeing different. If the property is priced right, has value, and is marketed correctly I am seeing homes go same day! This property was a perfect example of that.

click here to see the property I am talking about.
http://www.screencast.com/users/Justinudy/folders/Jing/media/34d6b404-b113-43bc-8036-8a1aa04b03c9

How Are We Seeing Properties?

How are we seeing properties? Check out how a few quick alterations can change your persepective on a home. From no appeal to Curb appeal. I always trust one guy to help our properties go from ordinary to extraordinary- Kendal Wardle (Builder)- Thanks my friend!

Property Alert! Deal of the Day

Please click on this link for Justin's Deal of the Day Webcast
http://www.screencast.com/users/Justinudy/folders/Jing/media/34d6b404-b113-43bc-8036-8a1aa04b03c9

Utah Law Gives Owners Some Protection in Forclosure

Gov. Gary Herbert has signed into law the only bill to emerge from the Legislature that attempts to deal with the thousands of home foreclosures expected in Utah this year.  

One in every 273 homes in Utah had a foreclosure filling in February, the fourth highest in the nation, according to RealtyTrac, a California company that collects Real Estate data.  It said that 3,488 properties had some kind of foreclosure notice filled last month. 

SB261 allows homeowners who were illegally foreclosed on to seek damages. It also requires that homeowners be given written notification that a foreclosure sale is proceeding despite any reduced payment agreement and are liable for damages if they do not. 

The Legislation was pushed by the Utah Attorney Generals office, which is in a legal fight with ReconTrust, the foreclosure arm of Bank of America that had thousands of foreclosures pending  in Utah at the end of 2010.  The G.A's office filed a brief recently in a foreclosure case pending before the 10th circuit court of appeals in which it argued that ReconTrust could not legally foreclose on properties in Utah. 

The new law allows some homeowners to try and recover attorney fees and damages of at least $2,000 for illegal foreclosures or failure to properly notify homeowners of a sale.

"These are important steps but they're small; steps in attacking what we perceive to be the problems that are being caused by out-of-state foreclosing companies that are not following Utah laws and not providing notice of what their intentions are" said John Swallow, chief deputy in the Attorney Generals Office.

Marco Fields, founder of Teems Utah, a group that advocates for homeowners facing foreclosure, said that although the legislation does provide for financial penalties for banks and others who conduct foreclosures illegally, last minute changes blunted it's effectiveness.

"The unfortunate compromise is that bill created a scenario that while there is a penalty imposed on illegal behavior, it does not invalidate the sale of the home", Fields said. 

"We have to go back to the stakeholders  , the title companies in particular and find a different solution.  If the foreclosure sale was illegally done not only should there be a penalty but the foreclosure sale should have been be invalid.  If it's an illegal foreclosure, it's an illegal foreclosure."

But Swallows said the bill included monetary penalties because title companies were concerned that anything more could cloud titles and endanger insurance on subsequent transactions.

Fields is among homeowner advocates, mediators, attorneys and others who are forming a coalition with which they hope to formulate new legislation that could be considered at a special session of the Utah Legislature.

Salt lake Tribune
Tom Harvey

This Just In

Energy Tax Credits

Homeowners may qualify for a federal tax credit for making improvements or installing appliances designed to boost the energy-efficiency of a home. Basic Requirements: You purchase and install qualifying energy-efficient in your main home in the years 2006,2007,2009, 2010, or 2011. You must purchase new energy - efficient equipment, and the equipment must be expected to remain installed for at least five years. Examples of home improvements that could qualify as tax credits:

• Exterior doors and windows


• Storm windows


• Skylights


• Metal roofs


• Insulation


• Central air conditioning and heating


• Geothermal heat pumps


• Hot water boilers


• Advanced main air circulation fans


• Biomass fuel stoves with thermal efficiency of 75% or more


• Water heaters


• Kitchen appliances


• Washer and dryers


• Asphalt roofs with cooling granules


• Small wind turbines


• Solar panels

For a complete list of qualifying improvements go to www.energystar.gov

You can receive up to 30% of the purchase price for energy efficient products. Take advantage of the rebates out there!

Market Update

KSTU-FOX news reported on March 1, that home sales in Salt Lake County were up by 7% compared to January last year.

January's sales were significant because this year there was no $8,000 federal home buyer tax credit.

St. Patricks Day

St. Patrick's Day Facts

• St. Patricks Day first came to America in 1737. The very first St. Patrick's Day parade was not in Ireland. It was in Boston in 1737.
• In Chicago, on St. Patrick's day the rivers are dyed green.
• Nine of the people who signed the Declaration Of Independence were of Irish origin, and nineteen Presidents of the United States proudly claim, Irish heritage---including our first president, George Washington.
• In Seattle, there is a ceremony where a green stripe is painted down the roads.
• Most people attend mass in the morning and then attend the St. Patrick's day parade.
• Shamrocks are worn on the lapel.
• Young boys and girls wear shamrocks and harp badges.
• The phrase "Drowning The Shamrock" is from the custom of floating the shamrock on the top of whiskey before drinking it. the Irish believe that if you keep the custom, then you will have a prosperous year.
• Many people dye their hair green for the special day.
• Stay lcuky by waering a 4 leaf clover, wearing green, kissing a barley stone, or finding a lephrecaun.
• According the the Guiness Book of World records, the most leaves found on clover was 14.
• The work lephrecan means "shoemaker"
• St. Patrick himself was bord in 385 AD.
• St. Patrick is credited for the leap year tradition of women proposing to men.

I look forward to the Good Luck this St. Patricks day will being this year. I am already seeing a lot of movement and activity in the Market around me. with the economic outlook we recieved earlier this year, I beleive it! Watch this vidoe from the Board of Realtors.

www.slrealtors.com/flash/index.php?m=marketedge

Gas Prices - Biggest Hike in 2 Years. No End in Sight.

Utahns who enjoyed the lowest gasoline prices in the country in January are now paying more than many other states and will see prices continue to rise. Rolayne Fairclough of AAA Utah says Utah drivers as of Tuesday were paying $3.15 per gallon, up $.33 cents from a month ago, It's the highest jump in two years. Fairclough says gasoline prices in the state typically begin to rise in March as the seasons change. Prices typically peak during the summer.

Though Utah's supplies come from Canada and western states, she said international crude oil prices still affect local rates. As of Tuesday, Fairclough says 24 states had lower prices than Utah - a sharp contrast from January when the states average was $2.80 per gallon.

In California many stations are reporting gas prices hoovering $4.00 per gallon.

Many Utah drivers say they are starting to alter how much they drive and how much they spend. Economic experts are worried that cutbacks on consumer spending Will hurt what was already a slow economic recovery.

Salt Lake Tribune Randall Jeppesen

Market Update

In bust's aftermath.... $200,000 is a home sweet home

At the height of the Wastch Front's real estate market, finding a home in great condition for around $200,000 wan't all that easy. In fact, depending on the neighborhood, it could be difficult - even possible.

But after three years of post-bubble price declines, something in that price range in move-in condition is vastly easier to come by.

Today, the median sellign price in Salt Lake City is around $200,000, meaning half the homes sell for more, half or less. And as Salt Lake Board of Realtors President DeAnna Dipo demonstrated on a recent tour of homes for sale, you can get a nice hosue and neighborhood for that amount of money.

Desitnation Sugar House > At the market's zenith. those who wanted to buy in popular areas such as Sugar House in Salt Lake City faced slim pickings in the low $200,000 range. The patch of neighborhoods, roughly bordered by 900 East and 1700 East, 1700 South and 2700 South, has always been sought after, with homes typically selling at a premium.

Dipo remembers well the frustration of buyers in 2006 and 2007. "It was hard to find anythign nice, updated and clean in sugar house even for $285,000," she said.

But on a recent weekday, Dipo showed a home around 900 East and 2700 S that was all that- in fact the interior looked much liek a model home. It was bright, airy, clean and tidy, and the asking price was $219,000.

Before the downturn, "this could have sold for as much as $300,000," Dipo said. Although the homes was bult in 1915, it's been remodeled and updated, with features such as granite countertops. It has 2160 sqaure feet, a large lot, a two car detached garage, an outdoor patio with fireplace and a seperate mother-in-law apartment with small kitchen.

Even though it's in great condition, Dipo said the homes seller probably will still have to come down on the price a little, probably to about $200,000 bacuase of it's location on a busier street. Many potential buyers are fearful prices will continue to deteriorate and are trying to get the best deal possible to hedge against further declines.

Resistance is futile > Despite the realities, Dipo said, there are soem sellers still trying to find someone willing to pay what their home might have been worth a year ago or even three. that's why she can't help swinging by a Sandy home that has languished on the market at $300,000.

"They'll never get that much," she said during a walk-through. In fact, she believes the home sill end up selling in the low to mid $200,000's.

There's nothing wrong with the property, she explained. It has a nice roomy backyard with a deck, waterfall and gazebo. But it's just priced much too high, especially for its average interior condition and ameneties, she said. there are too many other competing properties with similar ameneties that are in top condition and priced more realistically.

"It needs to be cleaned up and they need to drop the price. It's a price war and a bauty contest right now, and if you want to sell, you have to be priced right and look good."

Salt Lake Tribune by Lesley Mitchell

Benefits of Home Ownership

Being a home owner is more than just having a roof over your head. Home ownership instills feelings of comfort, security, stability and pride. In addition there are substantial social benefits for families, communities and the country as a whole.

1. Higher Academic Achievement
One of the most important social benefits of home ownership is how it affects children and their academic achievement. Howe owners tend to be more involved in their children's lives and schooling, and homeowners also tend to move less than renters, this adds stability in a child success in school.

Homeowners are:

• Reading is up 7%
• Math Scores are up 9%
• High School graduation is up 25%
• College graduation is up %116

2. More Cohesive Communities

Home owners tend to stay in their homes longer than renters. They also spend more money to improve their home and are more engaged in enhancing their community. Simply put, home owners care more and take more action. Which leads to nicer neighborhoods, stronger communities and more overall involvement in civic duties.

Homeowners are:

• 28 % more likely to repair or improve their home
• 28 % more likely to vote
• 11 % more likely to know who represents them in congress
• 12 % more likely ti maintain a garden outside their home
• 10 % more likely to report they have worked to solve local problems
• Live 4 times longer in a community
• 9 % more likely ti know who their school-board representative is

3. Better Connected Families

Along with being more involved in their communities, home owners are more active and connected to their own families.

Home Owners are:

• Less likely to have alcohol and substance abuse problems
• 16 % more likely to belong to parent-teacher organizations, book clubs, etc.
• 1.3 times more likely to read newspapers
• 10 % more likely to attend church
• 59 % more likely to own a home within 10 years of moving from parents household

4. Improved Health and Safety

Home owners are happier and healthier than non-owners. In fact, one study found that people who recently became home owners reported higher life satisfaction, higher self esteem and higher perceived control over their lives. Home owners also enjoy better physical and psychological health.

Home owners are:

• Children of home owners are 20 % less likely to become teenage mothers
• Proven to reduce Crime

5. Stronger Economy

Being a home owner also has a positive economic impact in your neighborhood, your town, your city and even on a national level. That is because it creates jobs. Each home purchase generates as much as $60,000 of economic activity in the local and surrounding area.

• A home owners net worth is 45.9 times that of a renters.

Market Update

Taylorsville/Kearns Top Area for Wasatch Front Home Sales

SALT LAKE CITY- A new report released Wednesday showed more people purchased homes in the Taylorsville/Kearns area during the fourth quarter of 2010 than any other city along the Wasatch Front.

Data from the Salt Lake Board of Realtors indicated that there were 151 existing single-family homes sold in zip code 84118. More affordable home prices were a driving factor the report stated, with the median price of a home in Taylorsville/Kearns at $138,000 compared to the Wasatch Front's median home price of $199,900.

Of the top 10 areas for home sales, only one had a median price above $300,000 - Zip code 84020 in Draper at $349,000, which ranked sixth in sales for the period.

Half of the top 10 cities ranked had sales prices above the Wasatch Front median fourth quarter sales price, the report stated. Single-Family home prices along the Wasatch Front have fallen 16 percent from their high point in the summer of 2007, said DeAnna Dipo, president of the Salt Lake Board of Realtors.

More than 4,000 homes were sold along the Wasatch Front during the last three months of 2010.

Top 10 Cities for home sales in fourth quarter of 2010 - with median sales price:

1. Taylorsville/Kearns (84118) 151 sales - $138,000.
2. Lehi (84043) 144 sales - $210,000.
3. Farr West (84404) 128 sales - $133,225.
4. South Jordan (84095) 127 sales - $272,000.
5. Clearfield (84015) 117 sales - $160,000.
6. Draper (84020) 111 sales - $349,000.
7. Tooele (84074) 104 sales - $160,450.
8. Riverton (84065) 100 sales - $259,950.
9. Herriman (84096) 93 sales - $295,000.
10. Roy (84067) 90 sales - $ 145,655.

Article from the Deseret News

1st Quarter Newsletter.

Click for a larger image.

Ten Secrets To Wealth And Life

1. Reinvest Your Profits: "Even a small sum can turn into great wealth," Schroeder writes, "If you're disciplined to not touch your profits." Let the power of compounded interest work for you.
2. Be Willing To Be Different: Don't follow the herd. Do what is best for you and your situation.
3. Never Suck Your Thumb: Ah, how I could learn from this one. Buffett makes decisions quickly based on the available information. I tend to sit and stew about things. Acting decisively can give you an advantage and prevent procrastination.
4. Spell Out The Deal Before You Start: I stress this all the time: Don't sign a contract unless you've read it (especially not a mortgage). Read the fine print. Understand what you're getting yourself into.
5. Watch Small Expenses: While it is true that the big things matter, the little things do too. Frugality is an important part of personal finance. But this principle also applies when investing, which is one reason I'm not a fan of low-cost index funds.
6. Limit What You Borrow: "Living on credit cards and loans won't make you you rich" writes Schroeder. Sure, leverage can get you into a home or a new car, but too much debt is one of the biggest drags on on your financial well-being.
7. Be Persistent: If you know what you're doing is important and right, stick to it. Doggedly pursue your goals. Learn to "fail forward."
8. Know When to Quit: The other day, I wrote about the danger of sunk cost fallacy. Just because you've already paid $10 to see Indiana Jones and the Kingdom of the Crystal skull, doesn't mean you should sit through to the end. Be willing to cut your losses and walk away.
9. Assess the Risks: "Asking yourself 'and then what?' can help you see all of the possible consequences when your struggling to make a decision - and can guide you to the smartest choice."
10. Know What Success Really Means: Success is different for each of us. Find what it is that brings meaning in your life, what makes each day important. Make this your focus. Buffett says "When you get my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life."

- Warren Buffett September 8, 2008

10 Commandments For Owning Rental Property

1. Choose your own charities; don't let renter's make themselves your charities. There are no acceptable excuses for late rent. Require your renter's to pay rent on your schedule, not theirs.
2. Always get cash, or equivalents, such as money orders or credit cards.
3. Always check credit references. Don't act desperate. Having no tenants is better than having a bad tenant.
4. Be aware of who actually lives in and who comes and goes from your property. Don't allow individuals you do not approve as renters to live in your property, conduct shady activity, or alienate your other renters or neighbors.
5. Deny applicants for legitimate risk factors. Including credit, income, pets, criminal, rental history, employment, maximum occupancy. Don't insist that your tenants follow your lifestyle or family rules.
6. Begin evictions IMMEDIATELY if necessary. the only thing worse than a tenant who doesn't pay and moves is a tenant who doesn't pay and stays.
7. A clean and attractive rental helps attract better tenants. Most important are the entry, curb appeal, the smell, kitchens and bathrooms.
8. The best way to to avoid evicting a bad tenant id not to rent to that person in the first place. Remember that 90% of a landlords' problem is self inflicted.
9. Never buy rental property more than an hour away from your your home or in an area where you would be afraid to go and collect rents.
10. Get everything in writing. Don't trust your memory. No one else will.

From the Utah Apartment Association - Good Landlord program

Quick Facts

Facts from the latest 2010 survey of buyers and sellers from the National Association of Realtors.

What Sells?

• The typical home purchased was 1,780 sq. ft., was built in 1990, and had 3 bedrooms, 2 bathrooms.

Appealing To Buyers

• 44% of sellers offered incentives, like home warranties and help with closing costs, to attract buyers.

The Price Is Right

• Recent sellers typically sold their homes for 96% of the listing price; 57% reduced the asking price at least once.

Gender Gap

• There are more single female buyers than single males. But single male buyers grew by 2% between 2009-2010, and single female buyers dropped by 1%.

Cost of Living

• The median price buyers paid for homes was $179,000.

Why Does Home Ownership Matter?

• Historically, home owners' net worth has ranged from 31-46 times that of renters.
• A fixed-rate mortgage might not change for 15-30 years; rent typically increases 3% per year.
• Every home purchased pumps $60,000 into the economy.

9 Ways Utah Will Have a Better Year in 2011

A Better year in 2011

• Utah's unemployment rate will drop from 7.6% in 2010 to 7.1% in 2011.
• New residential construction will register again for the first time since 2005.
• Home builders' unsold inventory is at a very low level, improving prospects for upturn in residential construction.
• Total wages paid will increase by 4%, adding nearly a billion dollars in wages to the Utah economy.
• Net in-migration continues. In 2011 the state is expected to have net in-migration of 10,000.
• Retail sales improve. In 2011 sales are expected to be up 3.9% and increase nearly $1 billion in sales.
• Auto and truck sales will help boost retail sales in 2011. the number of new vehicle sales is expected to grow from 70,000 to 80,000 units in 2011, an increase of 14%.
• Tax revenues for state and local governments improve in FY 2011. State tax revenues are up 9.6% through the first four months of FY 2011.
• Utah exports will grow to $13.5 billion in 2011, up 7.3%.

Jim Woods forecast/Salt Lake Board of Realtors

Tax Tips - Home Ownership

Buying a home is a great way to reduce your income tax. The qualified mortgage interest you pay and your real estate taxes are both tax deductible.

Claim the Mortgage Interest Tax Deduction
Mortgage interest you pay on loans up to $1 million ($500,000 Married Filling Separately) is tax deductible, provided you use the money to buy, build or improve your home and the loan is secured by your home.

Plus, interest you pay on loans secured by your home and used for a purpose other than to buy, build or improve your home is tax deductible for loans up to $100,000 ($50,000 Married Filling Separately). The limit may be reduced depending on the market value of the home at the time you take out the loan. Use equity lines of credit wisely. If you fail to make the payment, you put your home at risk.

If your income meets the requirements and your state and local government issues you a mortgage certificate credit, you may be eligible to claim a tax credit (the mortgage interest tax credit) based on the amount of interest you paid. If you claim the tax credit, you must reduce your interest deduction by the amount of the credit.

Deduct Loan Origination Fees
Finally, don't forget about points, also called loan originating fees. One point equals 1% of your loan. Points you pay (and even points the seller pays) when you purchase your home are generally tax deductible in full the year you pay them.

Alternatively, you may choose to amortize the points over the term of your mortgage. This choice is usually made only when you itemized deductions are less than the standard deduction for the year you bought the home.

Points paid to refinance your loan must be deducted over the term of the loan. If you deduct points over the term of the loan and sell the home or refinance it gain before the loan expires, you can deduct in the year of the sale or refinancing any points that you didn't previously deduct.

Mortgage Insurance Premiums
If you took out a first mortgage in 2007, 2008 or 2009, you may be able to deduct qualified mortgage insurance premiums you pay in connection with the loan. Qualified mortgage insurance is a mortgage insurance provided by the Veterans Administration, and Federal Housing Administration, or the Rural Housing Administration, and private mortgage insurance (as defined in section 2 of the Home Protection Act of 1998 as in effect Dec. 20, 2006). Prepaid mortgage insurance premiums generally must be deducted over the period to which they apply.

Gain On The Sale Of Your Home
When you sell your home, the IRS allows you to exclude gain on the sale from taxable income, up to $250,000 ($500,000 Married Filling Jointly and you both meet the use requirement.)

You can claim the exclusion if you own and use the home as your main home for the last 2 years during the 5-year period ending on the date of the sale. You may claim this exclusion only once in any 2-year period.

If you don't meet the 2-year requirement, you may be eligible to claim a reduced exclusion if you sell your home because of "unforeseen circumstances", such as a change in employment or a divorce. A loss on the sale of your home, however, isn't tax deductible.

If you used the home other than as your residence after 2008 (for example, as rental property), gain allocable to that use (nonqualified use) generally can't be excluded. The rule does not apply to:
Any nonqualified use before 2009
Any Period during the 5 year period that is after the last period of use as a principal residence.
A period of temporary absence of up to 2 years for reasons of health, employment and unforeseen circumstances.
Any period (not to exceed 10 years) during which the tax payer or spouse was serving on qualified official extended duty.

9 Unexpected Energy (and Money) Savers

Here are a few surprising and simple ways to cut your energy bill this season.

Put Lamps in The Corners:
Did you know you can switch to a lower wattage bulb in a lamp or lower it's dimmer switch and not loose a noticeable amount of light? It's all about placement. When a lamp is placed in a corner, the light reflects off the adjoining walls, which makes the room lighter and brighter.

Switch to a laptop:
If you're reading this article on a laptop, you're using a 1/3 less energy than if you're reading this on a desktop computer.

Choose an LCD TV:
If you're among those considering a flat-screen upgrade from your old TV, choose an LCD screen for the biggest energy save.

Give Your Water Heater a Blanket:
Just like you pile on extra layers in the winter, your hot water heater can use some extra insulation too. A Fiberglas insulation blanket is a simple addition that can cut heat loss and save 4% to 9% on the average water-heating bill.

Turn Off The Burner Before You're Done Cooking:
When you turn off an electric burner, it doesn't cool off immediately. Use that to your advantage by turning it off early and using residual heat to finish up cooking.

Add Motion Sensor:
You might be diligent about shutting off unnecessary lights, but your kids? Not so much. Adding motion sensors to playrooms and bedrooms only costs $15 to $50 per light, and ensures you don't pay for energy you're not using.

Spin Laundry Faster:
The faster your washing machine can spin excess water out of your laundry, the less you'll need to use your dryer. Many newer washers spin clothes so effectively, they cut drying time and energy consumption in half- which results in an equal drop in your dryer's energy bill.

Use an Ice Tray:
Stop using your automatic ice maker. It increases your fridge's consumption by 14% to 20% . Ice trays, on other hand, don't increase your energy costs one iota.

Use The Dishwasher:
If you think doing your dishes by hand is greener than powering up the dishwasher, you're wrong. Dishwashers use about 1/3 as much hot water and relieve that much strain from your energy- taxing water heater. Added bonus: you don't have to wash any dishes.

copyright National Association of Realtors 2010

Will We Remember the Effects of the Recession?

Is the end of the economic recession in Utah just down the road? Here are some positive "green shoots" that suggest we may be bouncing off the bottom.

Forbes Magazine, in an October article titled "The Best States For Business and Careers" , reported, :"Who's doing the best job when it comes to fostering growth?" Utah, according to our fifth-annual look at the Best States for Business. the Beehive State captured the top spot in our rankings for the first time. Utah's economy has expanded 3.5% annually over the past five years, faster than any other state except North Dakota. this is three-and-half times faster than the U.S as a whole. Total employment in the U.S has shrunk over the past five years, but in Utah it increased 1.5% annually (fourth-best in the nation.) Household incomes have surged 5% annually, which is tops in the country and twice as fast as the national average.

The November 15 issue of Newsweek had a piece headlined, "How Utah Became the New Economic Zion," in which the reporter wrote, "it set its own records for new companies (more than 40) and capital investment (nearly $2 billion)." The article provided these specifics: "Greater Salt Lake City...has absorbed massive new data centers for eBay, Twitter, and Oracle; splashy new offices for Disney Interactive and EA sports; and just last month, a commitment from Adobe... to build a 1,000 person software-development campus, where the minimum average salary will be $60,000.

At the end of September, the U.S. Army Corps of Engineers announced a contract award for a National Security Agency Building at Camp Williams that will cost approximately $1.5 billion, have one million square feet and will employ 7,000 people during it's construction. It will also create several hundred permanent jobs. The winning bidder was Big-D Construction of Salt Lake City, who will have two other partners on the project from California and Texas.

The National Bureau of Economics Research declared that the Great Recession, which started in December 2007, ended in June of 2009. This may be technically correct, but some economists believe that it will be a long, slow recovery and it will be difficult to have sustained economic growth when so many people are out of work. However, history has shown that the economy is cyclical and eventually conditions will improve. Hopefully Utah is at the beginning of a recovery.

When times get better will we return to traditional spending and borrowing patterns? Will we have learned from our current experiences? My hope is we will continue our thrifty behaviors of saving, paying down debt, and not purchasing things we don't need and can't afford. I hope these lessons will be ingrained in our children and grandchildren.

Article by Rick Craig, President of America First Credit Union

Make Your Home FHA Friendly

Know the basics for FHA loan rules and you stand a better chance of selling your home.

Make your house FHA-Friendly, and it will appeal to more home buyers. Why? Because the Federal Housing Administration is insuring the mortgage loans used by 30% of today's' home buyers. If your house passes the FHA rules, it will appeal to buyers who plan to use an FHA-insured mortgage. If your house doesn't qualify for an FHA loan, you're cutting out 30% of potential buyers. FHA is especially important for first time home buyers and those with small down payments because it allows borrowers with good credit to make down payments as low as 3.5% of the purchase price.

Here is how to make your home appealing to FHA borrowers:

Know The FHA Limits in Your Area
Start by checking to see if your homes list price falls within the FHA lending limits for your area (www.fha.com/lending_limits_state.cfm?state=utah) FHA Mortgage limits vary alot.

Home Inspections
Most buyers will ask for a home inspection, whether or not they're using an FHA loan to buy a home. You must give FHA buyers a form explaining what home inspections can reveal, and how inspections differ from appraisals.

How Much Do You Have To Repair?
If their inspection reveals problems, FHA will not give the okay to buy the home until you repair serious defects like roof leaks, mold, structural damage, and pre-1978 interior or exterior paint that could contain lead.

Dealing With FHA Appraisals
Help the lender's appraiser by providing easy access to attics and crawl spaces, which usually must be photographed.

Your buyer can hire their own appraiser to evaluate your home. But FHA only relies on reports by it's approved appraisers. If the two appraisals conflict, the FHA appraisal preempts the buyers appraisal.

Help With FHA Closing Costs
Most FHA buyers need help with closing costs. so a prime way to make your home FHA-Friendly is to help with those costs.

FHA currently allows sellers to pay up to 6% of the sales price to help cover closing costs, but is considering lowering that limit to 3%.

If You're Selling A Condo
FHA also has to approve your condo before a buyers uses and FHA loan to purchase your unit. Be sure your condo is FHA-approved for mortgages the lists has been updated, so if your association was approved a year ago, check again to make sure it's still n the approved list. (https://entp.hud.gov/idapp/html/condlook.cfm)

FHA generally won't insure loans in condo associations if more than 15% of the unit owners are late on association fees. Ask your property manager or board of directors for your associations delinquency rate.

Other rules cover insurance, cash reserves and how many units are owned-occupied and the types of condos that can be purchased with an FHA mortgage.

FHA sometimes issues waivers for healthy condominiums that don't' meet regular rules. If your condo isn't FHA-approved, it doesn't necessarily have to meet every single rule to gain approval. Ask your REALTOR to consult with local lenders about getting an FHA waiver for your condo if it doesn't meet all the requirements.

FHA also limits its mortgage exposure in homeowners associations. With some limited exceptions, no more than 50% of the units in an association can be FHA-insured.

FHA Loans For Planned Unit Developments
FHA no longer requires lenders t review budgets and legal documents for planned-unit-developments.

Houselogic.com by Terry Sheridan

6 Tips for Buying a Home in a Short Sale

When Sellers need to sell their home for less than they owe on their mortgage they're shooting for a short Sale. Short Sale homes can sometimes be bargains, but only if you do your homework, stay patient, and remain unemotional during the sometimes lengthy and difficult short sale process.

Here are 6 steps for protecting yourself emotionally and financially when bidding on a short sale.

1. Get Help From a Short Sale Expert.
A real estate agent experienced in short sales can identify which homes are being offered as a short sale, help you determine a purchase price, and advise you on what to include in your offer to make the lender view it favorably. Ask your agents how many buyers they've prospected in a short sale and of those, how many successfully closed the transaction.

2. Build a Team
Ask agents to recommend a real estate attorneys knowledgeable in short sales and title experts. A title officer can do a little title research to identify all the liens attached to a property you're interested in. Because each lien holder must consent to a short sale, a property with multiple liens, like first and second mortgages, mechanics and condominium liens, or homeowners association liens, will be harder to purchase.

A title search may cost up to $250 to $300 up front, but it can help weed out less desirable properties requiring multiple approvals.

3. Know the Home's Market Value
By agreeing to a short sale, lenders are consenting to lose money on the loan they made to the sellers to purchase the home. Their goal is to keep those losses as low as possible. If your offer is dramatically less than the home's fair market value, it may be rejected. Your agent can help you identify the price that's good for you. the lender will determine whether to approval is in it's best interest.

4. Expect Delays
There are two stages to a short sale. First, the sellers must consent to your purchase offer. Then they must submit the offer to their lender, along with documentation to convince the lender to agree to a short sale.

The lender approval process can take a few weeks or months, even longer if the lender counteroffers. Expect big delays if several lien holders are involved; each can make a counteroffer or reject the offer.

5. Firm Up Your Financing
Lenders will weigh your ability to close the transaction. If you're pre-approved for a mortgage, have a large down payment, and can close at any time, they'll consider your offer stronger than that of a buyer whose financing is less secure.

6. Avoid Contingencies
If you must sell your current home before toy can close on the short sale property, or you need to close at a form deadline, your offer may present too many moving parts for a lender to approve it.

Also, consider ordering inspections so you're fully informed about the home. Keep in mind that lenders are unlikely to approve an offer seeking repairs or credits for such work. you'll probably have to purchase the home "as is" which means in its present condition.

Houselogic.com by G.M Filisko.

6 Reasons to Reduce Your Home Price

While you'd like to get the best price for your home, consider our six reasons to reduce your home price.

Home not selling? That could happen for a number of reasons you can't control, like a unique home layout or having one of the few homes in the neighborhood without a garage. There is one factor you can control, your home price.

These six signs may be telling you it's time to lower your price.

1. You're Drawing Few Lookers
You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling and asking about your home than there have been for homes in your area, that may be a sign buyers think it is overprices and are waiting for the price to fall before viewing it.

2. You're Drawing Lots of Lookers But Have No Offers
If you've had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

3. Your Home's Been On the Market Longer Than Similar Homes
Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you're pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there's something wrong with it, which can delay sale even further. At least consider lowering your asking price.

4. You Have A Deadline
If you've got to sell soon because of a job transfer or you've a;ready purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in the area. Remember, it's not how much money you need that determines the sale price of your home, it's how much money a buyer is willing to spend.

5. You Can't Make Upgrades
Maybe you're plum out of cash and don't have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from your buyers is that your home isn't well -appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it's time to accept that buyers expect to pay less for a home that doesn't show as well as others.

6. The Competition Has Changed
If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what's still on the market? what new listings have been added since you listed your home for sale? If comparable home sales are new listings show your price too steep, consider a price reduction.

houselogic.com by G.M Fjiisko

How To Asses The Real Costs Of A Fixer Upper

When you buy a fixer-upper house, you can save a ton of money, or get yourself into a financial fix. Trying to decide whether to buy a fixer upper house? Follow these seven steps, and you'll know how much you can afford, how much to offer, and whether a fixer upper house is right for you.


1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don't know how to do will take longer than you think and can lead to less-than-professional results that won't increase the value of your fixer upper house.

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
• Do you really have the time and desire to do it? Can you take time off of work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the costs of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk through, so he can give you a written cost estimate on the tasks he is going to do.
• If you are doing the work yourself, price out supplies.
• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer upper house.

3. Check permit costs

• Ask local officials if the work you're going to do requires a permit and how much that permit costs. doing work without a permit may save money but it'll cause problems when you resell your home.
• Decide if you want to get the permits yourself or have your contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you you to do additional work, or change the way you want to do a project, before they give you a permit.
• Factor in the time and aggravation of permits and plans.

4. Double check pricing on structural work

If your fixer upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you've uncovered and conservatively budgeted for the full extent of the problems. Get written estimates for repairs before you commit to buying a home with structural issues.

Don't purchase a home that needs major structural work unless:

• You're getting it at a steep discount.
• You're sure you've uncovered the extent of the problems.
• You know the problem can be fixed.
• You have a binding written estimate.

5. Check the cost of financing

Be sure you have enough money for a down payment, closing costs, and repair without draining your savings.

If you're planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.
• Make the deal contingent on getting both the purchase money loan and the renovation money loan , so you're not forced to close the sale when you have no loan to fix the house.
• Consider the Federal Housing Administration's Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.

6. Calculate your fair purchase offer

Take Fair market value of the property (what it would be worth if it were in good condition and remodeled to current taste) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960's kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison House, in the same subdivision sold for $200,000 last month. That house had a newer kitchen, no wallpaper, was recently re-carpeted, and has a radon mitigation system in the basement. The costs to remodel the kitchen, remove wallpaper and replace carpet and put in a radon mitigation system is $40,000. Your bid for the House should be $160,000.

Ask your Real Estate Agent if it is a good idea to share your cost estimates with the seller, to prove your offer is fair.

7. Include inspection contingencies in your offer

Don't rely on your friends or contractors to eyeball your fixer-upper house. Hire pros to do common inspections like:

• Home inspections, this is key for a fixer-upper. the home inspector will uncover hidden issues in a need of replacement or repair. you may know you want to replace those 1970's kitchen cabinets, but the home inspector has a meter that can detect water leaks behind them.
• Radon, Mold, lead based paint.
• Septic and well.
• Pest.

Most home inspection contingencies let you go back to the seller s and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don't want to deal with.

If it happens, this isn't the right fixer-upper House for you. go back to the top of the list and start again.

From Houselogic.com by G.M Fjiisko

Newsletter

Here is this quarters newsletter. Click on the images for a larger view. If you want to be on our mailing list, please send your address to: justinudy@rciut.com

A Note From Justin

There are always ups and downs, but the key is to find a way to succeed!

One thing is guaranteed, when you're on the river of life you are bound to hit a few rocks. That's not being negative, that's being realistic. Rather than focus on failures, focus on results.

Real Estate is cyclical and we are seeing results. Sellers are still selling and buyers are still buying. The Facts: we have lower interest rates, low prices, and a huge inventory. While some areas continue to go down value the Board of Real Estate reports that a handful of properties went up in the 3rd quarter- West Jordan up 10.7% and Canyon Rim (84109) up 4.7%. We are seeing things happen and I am seeing movement. Yet, I know that I have to be creative, persistent and put in the time to find buyers for my properties and great properties for my buyers.

"We will either find a way, or make one". - Hannibal

Whatever economic times, industry or circumstances, I know we can see success. consider these examples:

• Dr. Seuss's first children's book was rejected by 23 publishers.
• Henry Ford failed and went broke five times before he succeeded.
• Franklin D Roosevelt was struck down by polio, but never quit.
• Helen Keller, deaf and blind, graduated cum laude from Radcliffe College and went on to be a famous author and lecturer.
• It took Noah Webster 36 years to compile Websters Dictionary.
• Babe Ruth struck out 1,330 times.
• Michael Jordan was cut from his high school basketball team.

"The difference between winning and loosing is most often...not quitting". - Walt Disney

Let's keep pushing forward. there are opportunities. Be creative, be persistent and keep moving forward. I look forward to working with you and appreciate your trust in me.

- Justin Udy

4 Tips to Determine How Much Mortgage You Can Afford

1. The General Rule of Mortgage Affordability
As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of home ownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in Your Down Payment
How much money do you have for a down payment? The higher your down payment, the lower your monthly payment will be. If you out down at least 20% of the homes cost, you may not have to get private mortgage insurance, which costs hundreds of dollars each month. That leaves you with more money for your mortgage payment.

The lower your down payment, the higher the loan amount you'll need to qualify for and the higher your monthly mortgage payment .

3. Consider Your Overall Debt
Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan Principal, interest, taxes and insurance shouldn't total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all of your other bills like car loans, utilities, and credit cards shouldn't exceed 41% of your gross annual income.

Here's how that works. If your gross income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don't top 41%, or $3,416 in our example.

4. Use Your Rent as a Mortgage Guide
the tax benefits of home ownership generally allow you to afford a mortgage payment- including taxes and insurance-of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here is an example. If you currently pay $1500 per month in rent, you should be able to comfortably afford $2000 monthly mortgage payment after factoring in the tax benefits of home owner ship.

However, if you are still struggling to keep up with your rent, consider what amount would be comfortable and use that for the calculation instead.

Also consider whether or not you'll itemize your deductions. If you take the standard deduction you can't also deduct interest payments, Talking to a tax advisor, or using a tax software program to do a "what if" tax return, can help you see your tax situation more clearly.

Article from houselogic.com
by G.M Fjiisko

How To Use Comparables To Price Your Home

Before you put your home up for sale, use the right

comparable sales to find the perfect price.

How much can your home go for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.

Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps) sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?
Your best comparable sale is the same model as your house in the same subdivision- that closed in escrow last week. If you cant find that, here are the other factors that count.

Location: The closer you are to your House is better, but don't just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and your school district.

Home Type: Try to find comparable sales that are like your home in style, construction, material, square footage, number of bedrooms and baths, basement(having one and whether it is finished), finishes, and yard size.

Amenities and Upgrades: Is the kitchen new? does the comparable sale house have full A/C? Is there crown moulding, a deck, or a pool? Does your community have the same amenities(pool, workout room, walking trails, etc.) and homeowners association fees?

Date of Sale: You may want to use a comparable sale from two years ago when the market was high, but that won't fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sale Sweeteners: Did the comparable sale sellers give the buyers down payment assistance, closing costs, or a free television? You may have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents Can Help Adjust Price Based on Insider Insights:
Even if you live in a subdivision, your home will always be different from your neighbors. Evaluating those differences - like the fact that your home has one more bedroom than the comparable, or a basement office- is one of the ways real estate agents add value.
An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. They will have read comments the selling agent put into the MLS, seen the ugly wallpaper and heard what other REALTORS, lenders, closing agents and appraisers said about the comparable sales. Ask your real estate agent to be honest about your home and the other homes on the market, and then listen without taking the criticism personally.


Are Foreclosures and Short Sales Comparable?
If one or more of your comparable sales was a foreclosed home or a short sale (a home sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.

A foreclosed home is usually in poor condition because owners who can't pay their mortgage can't afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although hey are still distressed sales. The owners usually have to sell because they are divorcing, or their employer is moving them to Kansas.

How much a short sale is discounted from the market value varies among local markets. So you have to rely on your real estate agents knowledge of the local market to use a short sale as part of your comparable sale.

houselogic.com
Article by: Carl Vogel

Coming Up With a Down Payment

Coming up with a down payment can certainly be the hardest part about being able to afford a new house, especially if this is your first home. However, there are more than just a couple of was you can do this. We'll take you through the top 10 ways according to MSN. com that will enable you to come up with that down payment.

1. Ask for help. Parents, friends and relatives may be willing to give you a loan with favorable rates- with parents, that often means no interest rate, and no strict time frame. If a loan (or gift) doesn't seem feasible maybe the would be willing to co-sign the loan.

2. Use your other assets- either by selling them, or by borrowing against them. This can include things like cars, boats, bicycles, as well as stocks, or trinkets, such as heirlooms, or vintage trading cards.

3. If you have life insurance with any built up value, you could cash in that value, or possibly borrow against it.

4. If you are a first-time home buyer, you can take up to $10,000 from your IRA, penalty free, to put toward your home purchase.

5. You can also borrow against your retirement funds.

6. Sometimes, you can get help from a non-profit organization, such as a church. There are loans out there that will let you put a lower down payment down if a non-profit organization puts in part.

7. Increase your income - you can do this by getting a second job, or doing some freelance work.

8. If you can make it work, change your withholding taxes in anticipation of being able to deduct the interest. This will give you more take-home pay, which you can start saving!

9. Offer to give something other than cash for a down-payment. This could include offering the seller something like a car or a boat in lieu of the down payment, or it could be services; for example, you could offer to do some landscaping in the person's new home, or give them automobile services, or do their taxes!

10. Finally, you can look for options that don't require a large down payment. such options include loan programs such as VA or FHA. Another option is to purchase a foreclosure property, which can often be had with little or no down payment. You can also consider getting an 80:20 loan, where you essentially have two loans; one is the regular mortgage on the property and the other is a loan for the down payment- even though these are separate loans, they often come from the same lender.

Article from househunt.com

Increase Home Values : Easy & Cheap Improvements

10 Residential Renovations that Reap Rewards

Whether you are selling or dwelling, home improvements can add a pretty penny to the bottom line or can help you fall back in love with your abode. There are plenty of inexpensive tricks that can provide some incentive to perk up your investment, without a complete overhaul. We have compiled a list of the top 10 boosters to get the beautification process rolling.

1. Modernize the Mess Hall
As the hub of the family interaction, the kitchen is the heart of the home. Brighten the cabinets with a fresh coat of paint or some updated hardware. Add a new faucet or light fixtures to rejuvenate the space or change the window coverings for a more modern feel. Buyers are always interested in the kitchen, so try a quick face lift that will turn up the heat on your bottom line.

2. Spa Sparkle
Shine up the bathroom to offer a clean and calming spa-like refuge from the daily hustle. A quick fixture change, a new toilet seat and fresh accessories can be all you need to brighten up the bathroom. the bathroom is the second in line tot he kitchen to potential buyers, so use a discerning eye. A fresh coat of grout in the shower or maybe even a new prefabricated tub can do wonders. Open up the space with a pedestal sink and lay new vinyl sheeting or individual tiles right over your existing floor to inexpensively revive the floor.

3. Ardent Appliances
Hopefully the avocado green electric stove is long gone, but if your appliances come in a variety of colors, it may look just as unsavory. Experts agree that a mismatched kitchen may leave a bad taste with buyers. If new appliances aren't in the budget look to re-facing. Some appliances doors can be flipped inside out for the opposite color. so all you need is a screwdriver to update. you can also request new fronts and tops from the manufacturers to create a more seam lined look.

4. Room Conversion
If you have an extra playroom or den, consider yourself in line for a windfall. When selling your home, increasing numbers of bedrooms can significantly increase your profits. the only difference is between a den and a bedroom is a closet; so invest in the storehouse to up the ante.

5. Machine Clean
Spruce up neutral carpets with a professional cleaning, brightening the room and clearing any unwanted odors or stains. If your carpet is blemished, try placing area rugs over the worn spots. It may seem like you are hiding the problem, but most experts agree that replacing the carpet for a House on the market isn't worth the investment unless it is in really bad shape.

6. Lighten up Your Life
Lighting can dramatically affect your mood, so brighten things up! Breezy window coverings allow you to control how much natural lighting you'd like to let in. a strategically placed table lamp or a dramatic chandelier can add character while making your rooms appear larger and more open.

7. Straighten Out Your Storage
Older homes present the ever present storage problem. Crate space by utilizing closet organizers or wire and laminate shelving in the pantry, closet and garage. Purging some old junk in the yard sale or through donations can remove clutter, while making the space look bigger.

8. Nut and Bolts
Potential buyers sometimes take a look under the hood o assess there amount of wear and tear a house had endured. Hiring a professional to check, fix and update electrical wiring and plumbing can confirm to the purchaser that your house is healthy inside and out.

9. Opportunity Knocks
Still opening the front door with a flimsy standard issue door know? Choose a hearty piece of hardware that emphasizes sturdiness, while a bold color says "look at me!" Refinish the front door with a bright hue or faux finish a steel door to look like wood for a refreshing first impression.

10. Groundwork
The front yard is the first thing that potential buyers see, so don;t miss out on your chance to pique their interest. focus on a clean cut, straighten up the lawn edges, freshen the landscaping and add some color spots or striking shrubs for impact.

Article from www.househunt.com

5 Tips for Choosing a Neighborhood

You're not just buying a house, you're also buying a neighborhood. Sometimes, though, one resident's "neighborhood glories" are another resident's "neighborhood warts".

There is more to weigh than just crime, prices and commute.

1. The time of day when you first lay eyes on a prospective house can affect your impression of the neighborhood. Make sure to visit at various hours. A property can be totally different at night. The same can be said for neighborhood traffic, which can change dramatically at rush hour, or traffic ona Saturday can be completely different than on a Tuesday.

2. Neighborhood choice can be a pocketbook issue, and not just because of house prices and property taxes. Commuting costs, of both time and money are critical.

3. Ask questions of people who already live there. The locals usually freely offer their opinions of neighborhood safety, noise, school performance, commuting times, etc.
4. The Internet can be a boon for researching the nitty-gritty. Neighborhoodscout.com, for example is a subscription service that offers in depth look at such considerations as crime statistics (for 17,000 law-enforcement jurisdictions), school performance data, and quarterly price-appreciation records of area homes. The service costs $ 29.99 a month or $14.99 for a six month subscription.
5. Some neighborhood characteristics can be hard to cram into numerical categories or scores. Nabewise.com has taken 65 "quality of life" characteristics and set them up as criteria for neighborhood-hunters. You can actually search for "trendy" or "clean" neighborhoods. Perhaps you want to live around liberals, or conservatives. Maybe you want to be near a farmers market, public transit, night life. Currently this company only does this for New York, Chicago, Boston and Los Angeles. More Cities are coming soon the company says.

Article from inmannews.com By Mary Umberg.

1% Flip Tax

http://money.cnn.com/2010/08/23/real_estate/home_resale_fee/
This resale fee is pretty interesting. I understand a fee for service or transfer fee from work performed. Banks charge an origination fee every time they do a loan. then again they assume the risk and have to process the entire loan every time they do it. Whatever you do, read the fine print, review the title report, and be sure to look at all informaton on the CC and R's.

Foreclosures Still on the Rise:

Utah's foreclosure rate continue to climb in the first quarter to 3.43% , up from 2.36% a year ago during the same periods, according to the Mortgage Bankers Association. 19 other states posted higher foreclosure rates in teh fristy quarter compared to Utah, Nationally, the foreclosure rate rose to 4.63%, up from 3.85% a year earlier.

How Overpricing Kills Home Sales.

If there is one thing that will kill a sale- it is overpricing! Everyone know the logic, we think, "lets start high and then we can negotiate". Wrong! How can you negotiate when people are not willing to look at something that is overpriced?

Reasons overpricing will kill your home sale:
You WILL have fewer showings.
Less internet activity, fewer property tours, less activity.
It helps sell your competition.
Rather than having a bidding war, there are no offers to negotiate.
You are not creating VALUE in the eyes of a buyer.

Therefore, let's get serious and price it right. You will find that you are not following the market down. You save money in monthly payments. You take advantage of the low interest rates.

Like my Grandpa used to say, "Pigs get fed, Hogs get slaughtered." Don't be greedy but get what you can.

Salt Lake 2010 Market Forecast

Between 2007 and 2008 home sales dropped 42 percent, falling from 15,300 homes sales to 8,800 home sales.

However, in 2009 home sales increased 9,100 sales, a 3 percent increase compared to 2008. The increase in home sales in 2009 suggests that 2008 was the bottom of the downturn. In 2010, as many as 10,000 homes could be sold in Salt Lake County, a nearly 10% increase compared to sales in 2009. Since the peak, single-family home prices have retreated 13%.

Local housing prices will continue their drift downward in 2010, falling another 3% to 5%, the report noted.

At the end of the fourth quarter, the median price of a single-family home in SL County was $222,000, down 13% compared to $255,000 at the peak of the market (third quarter 2007).