Real Estate Investing Coaching - Brian Gibbons

Real Estate Investors - Need Private Funds? If you can find the motivated sellers.....

If you as a real estate investor need Private Funds for new first mortgages, look at this article below.

You may or may not know, I train Real Estate Investors to get Private Money Marketing.

The steps to getting millions in loans are:

• Learn IRAs and Self Directed IRAs
• Learn CDs
• Learn how to get lists of people that have IRAs and CDs
• Set up a Seminar Free to All from those qualified lists
• See them 1 on 1 and offer 10% with security of being a Private 1st Mortgage Lender no riskier than 80% LTV.
• Do the paperwork and have the right clauses and CYAs.
• Close at an attorney's office.

That's it!

And keep in good communication with your private lender.

And GET THEIR FRIENDS AND RELATIVES as referrals!

For more info on getting your private lenders for all your deals, email me at team@REISkills.com

Ask for MENTORING FOR PRIVATE MONEY!

All the best in 2009,

Brian Gibbons, REI Coach

---

Real Estate Resurrection Begins
Hugh Bromma, Entrust Group 01.08.09, 3:45 PM ET

Sales of new and existing homes continue to decline in the U.S., as assets of all stripes are re-priced lower and consumers become more risk averse. But the news in real estate is not all bad, and in some of the hardest-hit areas, like California, Florida and Nevada, sales in some areas have been rising in recent months.

While the national real estate figures show the country continues to be mired in a downturn that started more than two years ago, there are increasingly pockets of hope out there. It's true that much of the recent uptick in real estate activity reflects distressed sales, such as foreclosures. But the fact is that drastically lower home prices and more attractive mortgage rates--rates are down almost a full percentage point on a 30-year loan--are creating more buying interest, especially in the areas that have been hurt the most.

In fact, October existing-home sales surged more than 37% in the West, primarily because of the rise in sales in California and Nevada. And in Florida, existing-home sales jumped 15%, the second straight month of rising sales in the Sunshine State. Meanwhile, mortgage applications more than doubled during the week of Thanksgiving because of the rapid decline in rates.

Adding to the budding sense of optimism are reports that the U.S. Treasury will look to take mortgage rates all the way down to 4.5%, which would provide a huge boost to would-be home buyers across the country. Of course, real estate, even more than politics, is all about understanding the local area, which is precisely where astute investors are finding extraordinary opportunities.

Experienced real estate investors who have been able to keep some powder dry and understand their local markets are now able to buy properties for 50 cents on the dollar, or even less than just a year ago. In many cases, these are the kind of prices that represent once-in-a-lifetime opportunities, where the downside is now very limited and the upside is incredibly compelling.

One of the keys to finding a great real estate investment is understanding the importance of cash flow. We recently had a client utilize his self-directed IRA to purchase a brand new property just outside of Los Angeles. The property, a three-bedroom, two-bath single family home, was purchased for about $150,000, half what the exact same home would have cost a year earlier.

The purchaser had about $60,000 in the IRA and put down about 30% of the purchase price, making his monthly mortgage payment approximately $1,100 per month. In this area, similar properties rent for at least $1,400, so the property should have no problem showing positive cash flow right from the start. In addition, if there is a pick-up in the real estate market, the purchaser should be able to sell it outright for a handsome profit.

This is the kind of activity we are seeing more of in what were the hardest-hit areas. The key, of course, is having available cash--if you're buying real estate in a self-directed retirement account, you will need to put down 30% of the purchase price--and understanding the unique dynamics of the market you are buying in.

As a large administrator of self-directed IRAs, we've witnessed thousands of investors use their self-directed retirement plans to buy properties and realize excellent returns by selling them at a later date or renting them and allowing them to cash flow, as discussed earlier.

If you do decide to explore some of the more downtrodden areas, do your due diligence and understand the market in which you plan to invest. How is the local job market there? How has the area done in previous economic downturns? There's no substitute for knowing your market and doing your homework.

Hubert Bromma is CEO of the Entrust Group and author of How to Invest in Real Estate with Your IRA & 401(k) and Pay Little or No Taxes, published by McGraw-Hill.

---

What do I say to home sellers when I first meet them? THIS...

The 30 Second Commercial

from http://MustKnowInvesting.com

Seller: “So, tell me about your company.”

Investor: “Well, I work for a real estate investing company that help homeowners who need to sell fast. Typically we work with homeowners who . . .

• Are tired of dealing with Realtors that consistently over promise and under deliver. . .
• Can’t afford to have another contract fall through on them . . .
• Are frustrated because their house will never sell in today’s market . . .
• Don’t have the luxury of waiting around forever to maybe sell their house one day. . .

Our service is really speed to take care of a problem property and the ease of working with a professional home buyer. Now, we are a company so we would have to make a profit on the property, if you are OK with that, then we can at least look into it for you.

Does that make sense?”

Putting it into Action

I’m giving you word for word what has worked for me year after year, deal after deal. Put this to memory so that it’s automatic when you get the question. As soon as you finish your 30 second commercial, get right back to what’s important . . . finding out the seller’s situation. That’s how you will know whether or not you can help them. Remember, if you’re talking, you’re not learning anything about the seller’s situation . . . so SHUT UP and listen!

For this to work, or anything else that we teach for that matter, you’ve got to put it to work.

All the best,

Brian Gibbons
http://REISkills.TypePad.com

Email me at Team@REISkills.com

Think before buying home in today's market | Inman News - Inman.com

We mean picking through the rat's nest of
tax-favored savings accounts created by Congress.

Think before buying home in today's market | Inman News

Benny Kass is a terrific RE attorney.

Read the article above.

Steps Before Home Selling -Understanding How Real Estate Commissions Work Before You List Can Lead To Substantial Savings

Courant.com

                                                                 

By ROBIN STANSBURY

                            

The Hartford Courant

                          

February 17, 2008

                   

       

       

       

It's cold outside, and the housing market is in a decline, but the spring selling season, whatever it brings, will soon kick into full gear. For

most home

sellers, that means one thing — paying a lot of money to a real estate agent.

But there are ways to save.

Who might buy your home?

Who might buy your home?
By Dana Dratch • Bankrate.com

Who buys homes these days? The same people who bought last year -- there are just not as many of them.

The mix of homebuyers -- singles, families, couples, first-time buyers and repeat buyers -- has remained roughly the same over the past few years, according to the most recent study from the National Association of Realtors.

While the number of buyers has dropped in many areas, "I think the ratio has not changed," says C.D. "Chip" Boring, broker/owner of Re/Max Realty Plus in Sebring, Fla.

But some agents say the changing market has affected who is shopping for a home.

"I'm seeing a lot more younger people, a lot of first-time homebuyers," says Bunny Stuart, associate broker with Weichert Realtors in Kingston, N.Y.

And buyers are becoming more selective, according to agents, raising their standards and touring more homes before making a decision.

"It's upped the ante a little bit," says Stuart. "They have more desires because they have more out there to choose from."

Who's buying homes
Plant a "for sale" sign in the lawn and who's most likely to knock on your door? The typical buyer is a young, white, married couple with no kids, according to the Realtor's study.

While singles and ethnic groups have made strides in home buying, they are still in the minority, according to the NAR. Single women make up 20 percent of all homebuyers, a number that has stayed relatively constant for the past few years. Likewise, single men comprise a constant 9 percent of buyers. African-Americans make up 7 percent of the home-buying populace; Hispanics and Latinos are 6 percent, and Asians and Pacific Islanders are 5 percent, according to the study.

Buyer incomes are moving up. At least half of last year's buyers had a household income that topped $74,000, according to the group's numbers.

The average cost of what they're buying falls somewhere in the $200,000-plus range. Last year, the median home price was $215,000 (meaning half of buyers paid more and half paid less), according to the Realtors.

First time buyers take out mortgages for $202,265 on average, according to numbers from the Mortgage Bankers Association, or MBA. Repeat buyers sign on for an average of $233,433.

Who's not buying
The decline in homebuyers is nothing new. The number of homebuyers has been dropping steadily over the past three years. From 2005 through 2007, home sales dropped 22.7 percent, according to statistics from the MBA.

Today's home market has "definitely slowed down," says Glen Lazovick, director of mortgage lending at Mid-Atlantic Federal Credit Union.

"I wouldn't say the buyers are different, so much as the qualifications for loans are different," he says. The most affected: younger and first-time buyers, he says.

The three kinds of buyers whose numbers have definitely dropped in the past six months?

Investors, low down payment loans and "jumbo" mortgages -- mortgages of more than $417,000, says Don Vecchiarello, communications manager for Wachovia.

"As the secondary market has died, there is less appetite for people who are purchasing investor properties," says Vecchiarello. Likewise, banks, which often resell their mortgage loans, are finding fewer takers for jumbo loans.

"A few years ago, people were buying things to flip and sell," says Barbara Alexander, broker/owner of Howard Hanna Premier Properties in Morgantown, W.Va. "In that, I've seen a slowdown."

And with tightening lending standards, many banks want to see higher down payments.

"We're typically looking" at 20 percent, says Vecchiarello.

Whether it's those more stringent standards or the tightening market or both, lenders are seeing a drop in mortgage applications. "What we're seeing is that there hasn't been as much volume, and I think it's an industry-wide trend," Vecchiarello says.

He doesn't believe that first-timer homebuyers are being impacted disproportionately.

While the mix of buyers is similar, the number of actual buyers is lower, he says.

"There has been a lower volume across the marketplace," says Vecchiarello. But "I think we're seeing a similar percentage of what we always see."

How homebuyers have changed
With more selection and better prices in many areas, sellers and agents have noticed that buyers are getting much more discerning.

"There's more selection now than ever before," says Pat V. Combs, vice president of Coldwell Banker AJS Schmidt and immediate past president of the National Association of Realtors.

Working with one couple recently, she pulled up 200 listings in their price range and areas of choice -- double what might normally be available.

As a result, "we're very selective now in what we're pulling out," she says. "You can't see 200 houses."

One the buyers quickly eliminated: a beautiful home that happened to be pink. With so many other options on the market, the buyers didn't want to bother with paint.

"The seller today has to really be cognizant of the fact that people are eliminating them," and, in many cases, before they even see the home, Combs says.

Kelli Myers, who bought her first home with her husband in January, agrees.

"There's no reason to settle," she says. "It's such a huge investment, you should really try to get what you're looking for."

Some of the major filters for buyers: condition and location.

Two years ago, with a shortage of new homes in the Morgantown, W.Va. area, "everything was selling," says Alexander.

Now, with more properties on the market and more new homes in the area, buyers are demanding homes in top shape. "When the market starts turning, they'll choose condition first," she says.

Buyers are also passing up "almost perfect" or "I could live with this" in favor of searching longer to find the home that will really match their wish list.

"There's so much to choose from, they can afford to say, 'I think there's something better out there,'" says Stuart. "They are sitting on the fence longer and waiting."

The Rev. Dr. William H. Hill and his wife searched for their upstate New York home for more than a year before closing in August. "There's a difference between trying to make a place right and having it be right for you," says Hill.

But today's homebuyers, he says, need patience. "You not only have to have some idea of what you do want, you have to see a lot of homes to determine what you don't want," he says.

The wide array of choices "made it a little tougher," says Myers. "But having that selection also made it easier because we weren't stuck."

Many buyers, recognizing that they won't be selling in the near future, are being more careful in choosing a home.

That was the case with the Myers, who expanded their price range from between $150,000 and $200,000 to $200,000-plus, once they saw that spending that extra money in the current market would buy a lot more home.

"We decided we might as well step up and look at something we'll be in a long time, rather than a short time," she says.

Why buy?
Some buyers credit current market conditions -- the buyer's market in many areas -- with kick-starting their home search.

Bass-fishing enthusiast Geoffrey Balog had been eyeing a home in Sebring, Fla., for the last four years. But when his wife did an online search last October, the couple noticed a "dramatic difference" in what they could get for their money, he says.

"Things that were $225,000 in that area were $150,000 to $175,000," he says. Suddenly, he says, there were "18 properties we wanted to look at."

"I said, 'Make a reservation. We're going up for two days, and I'm bringing my checkbook because we're buying a house,'" Balog says.

They settled on an 11-year-old, three-bedroom, two-bath "in beautiful condition," he says.

"It was exactly what I wanted to spend, and it was everything I wanted and more," Balog says.

Like Balog, some homebuyers are finding the current market offer great deals. Hill and his wife negotiated to buy for 25 percent below the initial asking price.

But when Edward Seiler and his wife were shopping select neighborhoods on the Maryland side of Washington, D.C., they found out that the term "buyer's market" was relative. Seiler recalls losing one home when they showed up early for an open house, only to learn that there were already two offers. Another house on the same street sold for $42,000 above the asking price.

"The market may be dead, but this one specific neighborhood was not," says Seiler, himself a housing economist.

But a few months later, the couple closed on their own home in the same neighborhood for 10 percent less than the initial listing price.

-- Posted: Feb 14, 2008

Foreclosurees Up - In upscale as well as downtrodden neighborhoods around Marlborough and Hudson, foreclosures have been on the rise, causing anguish for the neighbors as well as the homeowners and stressing community services.

Foreclosures rise in area
By Catherine Buday
Wed Feb 06, 2008, 06:13 PM EST
Marlborough , Massachusetts USA
http://www.wickedlocal.com/hudson/news/business/x142945507#

Marlborough -  During one frigid day last month, Code Enforcement Officer Pam Wilderman took a call from an anxious Milham Street resident, who reported that an uncontrolled flow of water was pouring out from a neighbor’s home. - Wilderman, police and firefighters rushed to the scene, and the Water Department shut off the home’s water supply.   Later, Wilderman found out that the home – purchased seven years ago for $438,000 – had been foreclosed. Its former residents had left town without shutting off the water.  Today neighbors are facing the prospect of the home being abandoned and unkempt for a long time.

“Now there’s a potential mold problem,” Wilderman said. “Nobody can live in it until it’s been properly inspected and mitigated.”

In upscale as well as downtrodden neighborhoods around Marlborough and Hudson, foreclosures have been on the rise, causing anguish for the neighbors as well as the homeowners and stressing community services. Wilderman said she and other city services visited nine foreclosed properties in November alone.

“The problem is not just in French Hill,” she said. “It’s hitting all over the city. More and more people are just walking away from their homes when they’re foreclosed.” And until a new owner takes possession, she added, “nobody pays attention to the house.”

ForeclosuresMass, a web site that tracks foreclosures by community, reports that 111 Marlborough properties started the foreclosure process over the last six months. They include properties on Lincoln Street, Boston Post Road, Leoleis Drive, Priscilla Drive, McGee Avenue, Conrad Road and many other locations. ForeclosuresMass says that only 27 Massachusetts communities have more foreclosures than Marlborough.

In Hudson, ForeclosuresMass reports 28 properties have started the foreclosure process in the last six months, ranking it 65th in the state in the number of foreclosures. The properties are on Manning Street, Richard Road, Stow Court, Davis Road and other locations.

Banker and Tradesman, a publication that tracks real estate sales and foreclosures, reports that foreclosures nearly quadrupled in Marlborough between 2005 and 2007, to 59 last year. In Hudson, the number of foreclosures went from 1 in 2005 to 23 last year.

People who are watching the process blame financial institutions who misled unsophisticated buyers, and starry-eyed homeowners who bought more than they could afford with no money down.

Marlborough Savings Bank Vice President Jeff Dale said some recent immigrants have sought refinancing help from his bank after they secured risky mortgages from other sources. The bank has a loan officer, Paula DiGregorio, dedicated to helping Spanish-speaking people who are burdened with now-unmanageable mortgages.

“A lot of people got into sub-prime mortgage situations where they financed 95 or 100 percent of their properties,” Dale said. “Now, what they owe is equivalent to 105 or 120 percent of what their property is worth, and there’s very little we can do in cases like that.”

“We help as much as we can,” said Dale. “But if people are ‘upside down’ in a loan – owing more than a home is worth – we can’t do very much.”

Dale blames unscrupulous lenders who prey on lower-income people. “You can’t sell a $300,000 loan to someone who’s making $15,000 a year,” he said.

Vince Valvo of The Warren Group, which publishes Banker and Tradesman, said that foreclosure trends in Marlborough and Hudson mirror that around the state and the country. While all types of neighborhoods are hit, Valvo said that poorer neighborhoods tend to suffer the most.

“In communities with lower income residents and neighborhoods with older homes, we tend to see more of these foreclosures,” Valvo said. “Lower income residents have tended to take out riskier loans, that later reset at rates that they can no longer afford.”

But he added that people of all income levels have lost homes that they could not afford in the first place.

“People who decided to really stretch and buy the biggest house they could afford with as little down as possible are also in trouble,” Valvo said. “It could be the guy down the street driving the Lexus. He’s got a pool and a car but he’s in debt up to his ears.”

“It’s all part of the culture we have…that it’s our right to be living not just in a home, but a home with granite countertops, three bathrooms and tons of garage space,” Valvo said.

City Councilor Peter Juaire, whose ward includes some of Marlborough’s less wealthy neighborhoods, also agrees that the problem cuts across economic lines.

“Marlborough is a combination of white collar and blue collar, and we all know that the economy is not in the best condition,” said Juaire. “People are losing their jobs, after they bit off more than they could chew when they bought their homes. Some who bought an adjustable rate are now getting hit with a $300 a month increase. Their costs for gas and fuel are also going up. Everything’s going up except salaries.”

And both Wilderman and Juaire agree that foreclosures have led to more troubled properties and, in turn, troubled neighborhoods.

“Some people just walk away after their homes are foreclosed,” said Juaire. “If they don’t winterize, the pipes can break. Sometimes the home gets vandalized.”

Wilderman said she has seen first-hand how neighbors suffer from a neglected, foreclosed home. She took a complaint a year ago about a crowded home on Ridge Road, which she described as a “solid, middle class Cape Cod type neighborhood where everybody keeps up their yard.”

After the home changed hands, “there was suddenly a lot of traffic going in and out of it,” Wilderman said.

“I found out that the owner of the home had been able to purchase a $340,000 home with no money down,” she said. “The very next day he closed on another house on Barnard Road for $500,000, again with no money down.

“Now tell me that person didn’t know what he was doing. Both of those homes ended up in foreclosure within 18 months.”

A home buyer's market? Hardly - Buyers have a tougher time getting loans these days, but there are several ways to improve your chances.

By Liz Pulliam Weston

A home buyer today needs to have nerves of steel.

Tumbling home prices, stiff credit standards, gun-shy lenders and spooked appraisers have combined to make even routine transactions treacherous. It's not that deals aren't getting done -- they are -- but buyers face conditions that have changed dramatically in less than a year.

If you're going to wade into this maelstrom, you should know what you're up against and how to increase the odds of getting the home you want.

The housing market today is afflicted by two interrelated factors:

• A credit crunch resulting from the bust of the subprime lending boom.
• Falling home prices.

 

Not every area has seen prices decline, of course. The Seattle, Portland, Ore., and Charlotte, N.C., markets have remained resilient, and even in stricken cities, home values are still rising in some neighborhoods.

Average numbers don't quite tell the whole story, cautioned John Karevoll of DataQuick Information Systems, which tracks real-estate data.

Home sales have slowed overall, but sales of more-expensive homes are down dramatically, Karevoll said. Deals involving homes worth $500,000 or more in California, for example, are "at about half the level they were in August," he said. Without those higher-end sales to buoy the numbers, the median prices in many areas have fallen more dramatically than they would have otherwise. It's a kind of statistical glitch, if you will.

The jumbo question

Of course, the reason high-end home sales have slowed so much is important to potential buyers and sellers of these homes. Let's explore that.

Mortgages fall into two broad categories, conforming and jumbo:

• Conforming loans are mortgages of a certain size (currently $417,000 or less), most of which are purchased and resold to investors by Fannie Mae and Freddie Mac, the two big home loan agencies that also offer a guarantee if borrowers default.

• Jumbo loans are those exceeding that conforming loan cap. They're not purchased by Fannie and Freddie, but until the recent past they were bundled and sold to other investors.

 

For months, though, the jumbo-loan market has been all but frozen. Investors who were once eager for these loans have been scared off by the rising delinquency rates of subprime loans (those made to folks with troubled credit), said Michael Moskowitz, the president of Equity Now, a New York mortgage lender. The investors worry that borrowers of bigger loans soon will default in droves.

So, fewer lenders are making these loans. Most now are made by Bank of America, Chase, Wachovia and Wells Fargo, said Jim Svinth, the chief economist for LendingTree.com, and they're charging higher interest rates. Instead of jumbo loans being one-eighth to one-quarter of a percentage point more expensive than conforming loans, lately they've been 1 to 1.5 percentage points higher. On a million-dollar loan, that gap could boost the payment by $800 a month or more.

• MSN Real Estate: How the slump limits home buyers' options

Rather than pay those high rates or meet the stiff criteria for getting the loans, because lenders now often require a fat down payment and high credit scores, many potential buyers are simply sitting on the sidelines, waiting for the jumbo-loan market to loosen up.

The situation is likely to improve if Congress temporarily raises the caps on conforming loans. The proposal that's part of the economic stimulus package would allow Fannie and Freddie to buy loans worth up to 125% of an area's median home price, subject to a $729,750 cap. That could lower rates on affected loans by a percentage point and stimulate sales.

But buyers still are likely to face other hurdles. Let's look at those.

Factors you control

Lenders assess you in three primary ways:

• Your credit scores.

• Your down payment.

• Your income and your ability to document it with tax returns and other proof.

At the height of the lending boom, you could be zero for three -- lousy credit scores, little or no down payment and unable to prove your income -- and still get a loan. Today, "you better be two for three," LendingTree.com's Svinth said. Good scores, a down payment of 10% or more and a steady, provable income put you in the best position to get a loan.

The requirements for credit scores have changed the most significantly.

FICO credit scores range from 300 to 850. Mortgage lenders typically pull borrowers' scores from each of the three major credit bureaus -- Equifax, Experian and TransUnion -- and base their rates and terms on the middle of the three scores.

In the past, FICO credit scores of 620 and below were considered subprime, which meant getting a loan would be more difficult and expensive. At the height of the boom, some lenders lowered that bar to 580.

Today, 660 is often considered subprime, and any score below 680 is likely to result in higher rates and tougher terms.

"If you have mediocre credit, you better have a 10% down payment," said Dick LePre, a senior loan consultant for Residential Pacific Mortgage, who writes a weekly newsletter on the mortgage business. LePre defined "mediocre" as scores between 640 and 680.

A year ago, you didn't need any down payment to swing a home purchase. Today, only a few lenders offer 100% financing, and you need sterling scores and solid income to get those deals. Otherwise, 5% down payments are typically the minimum required.

Factors you don't control

The final piece of the puzzle is the appraisal. Once accused of inflating valuations to appease buyers and lenders, appraisers are now under pressure to be conservative when assessing a home's potential value.

Matt Hackett, Equity Now's underwriting manager, said many deals are threatened and some fall through when the appraisals come in too low or an investor rejects the appraisal because the "comps" -- sales of comparable properties used to evaluate the home -- are more than 3 months old.

"In a lot of these areas, homes are sitting on the market for six months at least," Hackett said. "There are no comparable sales within three or four months."

There's also the issue of the "haircut."

In certain declining markets, mortgage experts said, Fannie and Freddie chop 5% off the amount they will lend on a house.

If the appraisal on the home you want to buy is $300,000 and you have a 10% down payment, for example, you'd normally get a loan for 90%, or $270,000. In declining counties, though, Fannie and Freddie instead will lend you 85% of the appraised price, or $255,000.

You either have to come up with extra cash, Svinth said, or arrange a secondary loan in these areas (mostly in California, Arizona, Nevada and Florida).

Before you make the leap

Given the state home markets are in and based on input from these experts, here's my best advice for potential home buyers today:

• Consider waiting. I'm not a fan of trying to time any market, but buying as real-estate prices are still falling takes a special kind of guts. If you're prepared for your home to continue losing value, your finances are in great shape and you plan to stay put for several years, you can go ahead and buy. In most markets, though, there's little penalty for waiting until prices start to recover, especially if you use the time to build your down payment and improve your credit scores. If you could benefit from the higher caps on home loans, that's an extra reason to put off buying until Congress acts.

• Whip those credit scores into shape. Read "7 fast fixes for your credit score" for techniques to boost lagging numbers. If your scores are good but could be better, consider paying down credit card debt and not using more than 10% of your cards' limits at any given time. It's particularly important not to open or close accounts when you're trying to improve your scores.

• Build your down payment. The more cash you can bring to the table, the better the loan you'll secure. Shoot for 5% as your minimum, but 10% is even better, and 20% is great if you can swing it.

• Identify your reserves. Lenders like to see that you'll still have money left over after making your down payment; that gives them a comfort level that you'll be able to cover your mortgage payments even if you suffer a temporary setback. Cash in a savings or money market account is good, but so is cash value in a life insurance policy or investments in a nonretirement account you could easily sell. You don't necessarily need to turn these resources into cash by borrowing or selling, but you should include them among your assets when filling out mortgage applications.

• Work with an experienced loan officer or broker. The mortgage lending situation right now is changeable and sometimes chaotic, so you'd be smart to have an experienced hand guide you through the process. Ask for referrals from friends and others you trust.

Liz Pulliam Weston's new book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Published Jan. 31, 2008

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America's Most Overpriced Suburbs - California, New Jersey

Matt Woolsey, 01.31.08, 2:00 PM ET

While many of the nation's homeowners are worried about falling home prices, others would argue they're not falling fast enough.

You might find them in  Santa Monica, Calif. There, it takes just over 17 years of total earned salary for the median-income household to afford the median-priced home. In Berkeley, Calif., it takes almost 15 years and for  Passaic, N.J. households, it's a more reasonable 13 years.

To find the rest of the spots on our list, we used data from Demographia, a St. Louis-based demographic research firm that draws on U.S. Census data for areas considered suburbs in the nation's 50 largest metros. Based on these numbers, we calculated how many years of total salary it would take the median household to afford the median house to find the country's most overpriced areas.

Based on our numbers, California suburbs are the most difficult to afford. In addition to Santa Monica and Berkeley, where the median home costs $1.05 million and $752,500, respectively, they include Hawthorne, where it takes buyers 14.6 years to afford the $585,700 median-priced home.

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Such prices make other areas on our list seem like a bargain. In  Skokie, Ill., the median-priced home rings in at $396,300, and it takes the median-earning household 6.1 years to afford it. In  Alexandria, Va., the median-earning household must wait 6.7 years to buy a $539,200 home.

How do these suburbs reach such price heights? Much of it has to do with how homeowners, especially wealthier ones, cluster within cities.

Behind The Numbers
When people move to an area, they often do so because of a job. That's why migration figures and job growth are invariably intertwined. As an expanding local economy lifts salaries, housing prices grow because buyers have the money to pay for better properties. Salt Lake City is a perfect example. The metro's high job-growth rate has resulted in huge in-migration and a housing market where prices grew by double-digit percentages last year.

But the richest residents often head to the market's prime suburbs, which feature perks like pretty views, bodies of water and parks that are in short supply elsewhere.

Those suburbs often begin as small residential centers, and are designed to be low density and non-commercial. But as they grow in population, they turn into economic centers of their own, acting as satellites to the principle city instead of escapes from it. When a suburb adds stores, restaurants, factories, malls, office buildings and other commerce centers, it requires a wider range of people, with a wider range of financial characteristics to keep it viable.

In a large suburb like Santa Monica, for example, where the majority of houses are out of reach to the median earner, there are a million-plus beachfront condos and homes that are occupied by the Hollywood set; nearby are a high inventory of small apartments rented to 70% of the local population.

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While California suburbs in particular have always been expensive, the spreads between median income and median price have never been this exaggerated. That's because the housing boom pushed prices up far faster than incomes rose. With every dollar prices rise above what incomes can cover, it becomes more difficult for renters to move into buying.

Another obvious place effected by this trend was South Florida, where prices spiked during the boom, but incomes and economic activity didn't rise accordingly. West Palm Beach, Fla., and Pompano Beach, Fla., both on our list, are good examples of inflated income-to-price spreads, at $318,300 to $45,250 and $279,500 to $42,409, respectively.

The economic effect?

"This is brand new," says Wendell Cox, president of Demographia. "It's all happened in the last six years and we're not sure what it means yet."

One thing it does mean is heavy out-migration. Cox points out that many of the areas with the highest spreads--in and around San Francisco and Los Angeles, most notably--are rapidly losing population to places in the South and Southwest, locations where affordable housing and business costs have drawn people and jobs from coastal population centers.

But incomes don't necessarily need to fall in line with housing prices for values to trend upward; just take a look at the extreme counterexample in New York City.

Now, no suburb is likely to ever achieve the density and economy of New York City, but what has made the city's legendary lack of affordability sustainable is the balance between the prices of homes and what different market segments can pay for them. People don't often move from renting to buying there, but so long as there are enough people earning enough to sustain the price increases, it's not critically important what the median income is.

"The average wage in the financial district is $330,000, but the overall census numbers are around $40,000," says Jonathan Miller, director of research at Radar Logic, a New York real estate firm, of the city's median income level. So long as the number of pricey homes available doesn't outpace the number of people able to buy them, he says, a market can be in balance, despite an apparent imbalance in income-to-home-price ratio.

Complete List: America's Most Overpriced Suburbs

Lease-Option Should Specify Terms of the Sale - Can create legal trouble if not spelled out

by Bob Hunt, http://www.realtytimes.com

Lease-options are back in vogue. And that is just fine as long as the optionor (owner) and the optionee (tenant) take care to be clear about exactly what they intend with the option. "I'll rent your house now, and I get a chance to buy it later on," isn't quite enough.

This subject has been addressed here before, but it is important enough to warrant further attention. Anyone who doesn't think so should pay attention to a recent case from California's Fourth Appellate District (Sunil Patel v. Morris Liebermensch et al.).

In July of 2003, Sunil Patel and his wife rented a condominium from Morris Liebermensch. The parties also agreed that Patel would have an option to buy the unit. Liebermensch drew up a document that said, "Through the end of the year 2003, the selling price is $290,000. The selling price increases by 3 percent through the end of the year 2004 and cancels with expiration of your occupancy. Should the option to buy be exercised, $1,200.00 the amount of the security deposit shall be refunded to you."

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How to tell if a listing is overpriced -New technology creates data that are tough to refute

	How to tell if a listing is  overpriced -New technology creates data  that are tough to refute Friday, February 01, 2008 By Bernice Ross Inman News

Persuading sellers to be realistic is a consistent challenge for any real estate agent, especially in a slowing or a declining market. Recent technological innovations make this much easier than ever before.

In previous columns, I have discussed how to use rate-of-absorption numbers to help sellers be more realistic about the probability of selling their home. For example, if there are eight months of inventory on the market, the probability that a seller will sell in any given month is 12.5 percent. The probability that the seller will not sell is 87.5 percent. Consequently, sellers who want to place their properties under contract must position their property in the marketplace where they will be in the best 12.5 percent in terms of value, which is a combination of condition and price. If not, their listing will sit on the market until it expires or until they lower their price sufficiently to motivate a buyer to purchase it.

One of the tried and true strategies from the past was created by the late Lee Coats who wrote much of the training for Coldwell Banker. Lee invented the "pricing line." If you haven't worked with this approach, it's extremely effective. The system is fairly simple. Imagine a page with three different charts that resemble rulers marked in 1/4-inch segments. The top chart has the "recently sold" properties. Record each property that has sold on this pricing line. On the second chart, record the properties that are currently for sale. Finally, on the third chart you record the properties that did not sell. The sellers can quickly see the range of the most recent sales, what the current competition is, as well as how much higher priced the expired listings were as compared to those listings that sold. When you show the seller the listings that are currently available, the closing question is, "Where do you want to be in line?" When properties have comparable amenities, it's easy to demonstrate that the lower-priced listings usually sell more quickly.

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