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Thursday, February 22, 2007

Home Values Falling, Consumers Going Online for Property Appraisals

As home values continue to fall, homeowners are turning to Electronic Appraiser to get accurate home valuation information.

Boca Raton, FL February 21, 2007 -- Electronic Appraiser (EA), the most accurate source* of property valuation information available to consumers online, reported today that traffic to its website is surging as reports proliferate that property values across the country are continuing to fall. EA is the industry's leading provider of automated valuation model (AVM) reports to consumers each month through its website.

Electronic Appraiser is a Florida-based technology and data reporting company with a primary focus on the valuation of residential property. Since 1999, Electronic Appraiser has provided property valuations for both consumers and institutional clients. Its reports are based on the nation's largest property databases and include monthly sales information on millions of properties throughout the nation. MSN Money called the service the most accurate of its kind in a 2006 report.

"For the past five years, real estate values in the United States have been growing at better than 9% per year, according to the Office of Federal Housing Enterprise Oversight (OFHEO), but that's not what people are hearing out there," said Greg Sullivan, president and CEO for Electronic Appraiser. "While the rate of appreciation has slowed, we haven't seen a geographically broad drop in home values in this country, but people hear the news and they worry. Then they go online to find out what their homes are worth."

Sullivan pointed out that people are generally more concerned with the value of their real estate in a market that is trending downward. That translates into increased use of valuation analytics, which is exactly what his firm has witnessed over the past 12 months. Electronic Appraiser has seen a marked increase in business in 2006 -- on the order of 20% -- over previous years.

Despite the fact that consumers are seeing troubling reports in the media on a daily basis, most experts say the real estate industry is not in trouble. In its 2007 Residential Mortgage Market and Its Economic Context research monograph, Mortgage Bankers Association, Washington, said it expected to see a "soft landing" in the market by mid-year. In his January monthly commentary, Fannie Mae Chief Economist David Berson said he expected to see only a modest negative home price appreciation in the nation by year's end. However, there is a rising uneasiness in the market and it's evidenced by increasing traffic to online home valuation websites like Electronic Appraiser.

"Consumers are looking for some economical method to gauge the values of their real estate investments," said Sullivan. "For most Americans, their home is their biggest investment and they are more eager than ever before to track its value."

Please visit Electronic Appraiser - - for more information.

Monday, February 19, 2007

Homeowners - Understanding Your Credit

Many homebuyers put off meeting with a mortgage broker until the last possible minute. After all, nobody likes having the intimate details of their credit reviewed. The images in our heads are of pompous bankers making arrogant judgments about our worth as human beings. But the good news is that it's never been easier to find financing for your home, and most mortgage lenders are friendly and courteous. Keep in mind, they want your business - that's how they get paid. And besides, in today's economy, the likelihood is that your banker's credit isn't without a blemish either.

Still, you'll feel much better about approaching a lender when you know what's on your credit report. Viewing your credit report allows you to prepare explanations for any past transgressions, and also to dispute the veracity of any incorrect information. While accessing your credit report isn't always free like it used to be, it is easy and relatively inexpensive. There's no reason for you to put it off for even one more day.

What Are Credit Reports?

There are three major credit reporting agencies in the United States, Equifax, Experian, and TransUnion. Each of these private companies compete with one another in the free market, selling your information to potential creditors, employers, landlords, and insurers. This means that you don't have just one credit report, but three.

Since the three major credit bureaus are business adversaries, they don't make a practice of sharing information. As a result, each of your three credit reports (and resulting credit scores) could be vastly different. Perhaps Experian has an old delinquent account that you actually paid, or maybe TransUnion doesn't have one of your credit cards on file. Including incorrect negative information or omitting correct positive information can lower your credit scores, so it's important that you know what's on your credit reports before applying for a mortgage.

What Are Credit Scores?

You probably haven't heard of the Fair Isaac Company, but I bet you've heard of its nickname, FICO. Fair Isaac is the company that developed the credit scoring software that each of the three major bureaus use to calculate your credit score.

FICO scores range from 300 to 850, and you're likely to have a different, possibly very different, score with each of the three agencies. This is because not only might they have different information, but Equifax, Experian, and TransUnion each use a different formula to determine your score. Some lenders subscribe to all three agencies, others just one or two. If you're lucky, your lender will only check the credit bureau with which you have the highest score, but it's a crap shoot.

How Can I View My Credit Reports and Credit Scores?

In the past, you were legally entitled to receive one free credit report from each of the three major bureaus each year. Congress took away that right in 1997, so be skeptical of any online ad you see promising a free credit report - there are always strings attached.You can legitimately request a free credit report if you are denied credit, employment, or insurance. The company that declines you must supply written notice explaining, in brief, why you weren't approved. Photocopy this information and send it to the three credit agencies with a requests for free credit reports.

Knowing what's on your credit report can be a big relief, and also save you a lot of money. If there are any errors on your report, you need to have them removed. Otherwise, you could end up paying a higher interest rate. Understanding your credit report should be the first step for any intelligent person in the market for a new home.

Please visit Electronic Appraiser - - for more information.

Monday, February 5, 2007

How to avoid paying PMI on your mortgage.

What PMI is

PMI is an insurance policy required by most lenders when you are putting less than 20% down on a home purchase. Some loans programs even require more than 20% equity before waving the requirement for mortgage insurance. This insurance pays out to a lender in case you default on your mortgage loan payments and the lender has to foreclose. The policy does NOT protect you if you lose your job or can not make payments on your mortgage for some reason. However, even though you are not protected by the policy you are the one paying for it; and unlike mortgage interest expense it is not tax deductible.

What PMI will really costs you as a borrower

On average, mortgage insurance costs about $60 per month per $100,000 of loan amount. It is very expensive. On a $200,000 mortgage that equals $1,440 per year and you get NO tax deduction for it. More importantly, you also have lost the opportunity to use this money somewhere else. If you structure your mortgage so that you do not have to pay PMI and instead invest just the first 5 years worth of monthly payment savings into your retirement account, over the course of 30 years this money would grow to over $160,000. And this lost opportunity cost of $160,000 plus dollars is the real cost and tragedy of paying mortgage insurance.

How to avoid paying PMI on your mortgage

The following methods for avoiding having to pay mortgage insurance can be used whether you are buying a new property or refinancing an existing property. The two most popular methods are:

  • The 80/10/10 or 80/15/5 approach, which stands for an 80% First mortgage, a 10% 2nd mortgage, and 10% or 5% down payment or equity in the property. This is the best method in our opinion and the one we use most often. Since PMI only applies to first trusts or primary mortgages, we structure a first trust to be no greater than 80% of the value of the property, and we then couple that with a second trust for the remaining moneys that are needed. Thereby achieving the total dollar amount needed to make the loan but also waving the need for PMI by keeping the first trust at 80% Loan To Value.
  • Finding a lender that will allow you to finance the PMI into your mortgage interest rate. Some lenders will do this and others will not. The idea is simple though. You agree to accept a slightly increased interest rate typically a �% increase in your rate and the lender then pays the PMI for you. The advantage of this method is that the money you would have paid in Private Mortgage Insurance is now a part of your interest payment against your loan and is now tax deductible.

Finally, there are many different ways of saving money on our monthly mortgage obligations as well as our other liabilities. This concept of viewing liabilities as part of our overall financial plan is important not only to help us save money but critical for us to be able to achieve financial security.


Private Mortgage Insurance is carried on your mortgage loan a number of different ways, it may be listed as PMI or MIP or simply as mortgage insurance. You can also call your lender to find out and once your Equity in your property equals or exceeds 25% of the value of the property the mortgage insurance can be dropped. But you must ask your lender to drop it--this won't happen automatically.

Please visit Electronic Appraiser - - for more information.

What is PMI? Can I get rid of the PMI on my loan?

PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of cancelling the PMI on your loan is to refinance and to get a new loan without PMI.

Please visit Electronic Appraiser - - for more information.

Friday, February 2, 2007

Home Value By Square Footage

There's Square Footage and There's Square Footage

A square foot is defined as a two-dimensional square measuring one foot on each side. If you are looking at a home that seems a little smaller than the stated square footage, it might not be your eyes. Real estate brokers tend to measure square footage by inside room dimensions. Developers like to measure the exterior of the building. This can add considerable square footage to the home.

You also need to find out exactly what has been factored into the equation. Does the total measurement include basement space? Garage space? Deck space? Space on staircases? There’s no standard way to measure square footage. Sellers will include every nook and cranny and buyers won’t.

Do not solely compare the size of the land the property sits on and the price of the property. Lots sell for different prices than homes and the cost varies greatly from neighborhood to neighborhood. For example, if the house is in terrible shape, or is considered a “tear-down,” a developer may only want to pay for the price of the lot, since tearing down and hauling away the existing structure is an added expense.

Side-by-Side Comparison

In some areas of the country, agents do not want to be liable for representing a total square footage of the property. Total square footage is not indicated on the listing sheet, but room dimensions are shown. The room count may not include bathrooms, hallways, closets, and other spaces. You might have to compare every room side by side and guesstimate total size.

In this instance, estimate the total square footage by multiplying the dimensions of each room. For example, if the bedroom is 10 feet by 12 feet, then the area, or square footage, is 120 square feet. Add up all of the room dimensions for a total square foot measurement. You may still have to estimate hallways and other spaces, but it gives you a good estimate.

After determining the size of the home you desire, the equation is simple. Just divide the listing price by the number of square feet and you will get the price per square foot. For example, a 1,000-square-foot condo priced at $300,000 costs $300 per square foot.

It’s always to your advantage to buy a home with a reasonable cost per square foot. A home with a square footage cost lower than other homes in the neighborhood might be a great deal. On the other hand, the home may have a lot of other things wrong with it that need renovation, and unless you had remodeling in the budget, it might not be worth it to you.

Thursday, February 1, 2007

5 Great Interior Design Tips to Sell Your Home Fast

Selling a home can be a daunting experience, to say the least. Putting your house on the market and trying to get what you believe it's worth can be difficult for the most skilled sellers. The good news is that there are simple ways to make it easier.The following easy design tips will increase your home's selling power without making a big impact on your pocketbook. Whether you're having trouble getting the price you want, or you're having trouble getting any offers at all, these tips should speed things up and reduce the stress factor.

1: Get out the paintbrush

A paint job is one of the quickest (and cheapest) ways to increase the appeal of your home. If possible, do the painting yourself and have friends help; spending the money on a professional is not recommended unless you absolutely can't do the work. A fresh coat of paint can brighten any room and give the entire house a cleaner look that will entice buyers in an instant.

Tip 2: Focus on color

Some people believe that all interior walls should be painted white in order to sell the home, since your paint colors might not be to someone else's taste. This is true to some extent, but the truth is that choosing universally appealing colors is an even better way to lure buyers. Some simple color rules:

  • Tie the interior to the exterior. If your home has a foyer, paint it the same color as the outside of the house. This creates a flowing feeling and makes people feel welcome.
  • Choose "food colors" in the kitchen. Shades of beige and coffee imply a homey area where people are inclined to eat. Reds and oranges increase hunger and are great in dining rooms.
  • Save dark colors for private, intimate rooms like master bedrooms and bathrooms.
  • Keep your main areas light- but not white. Colored walls make people feel happier, but stick to the light end of the spectrum to make the area feel roomy. Try a butter-yellow or a pale sage green.

Tip 3: Increase curb appeal

You'll never sell your home if nobody ever goes inside it. Make the outside of your home as appealing as the inside. If necessary, paint the exterior (this can be a big investment, but it's worth it). Color psychology also applies to the outside of the home. In general, buyers with more cash to spend are attracted to complex colors and a combination of shades. Try painting your trim with an attractive contrasting color, but keep the main shade muted and sophisticated. If possible, do some minor landscaping. Window boxes painted in a contrasting color are a great way to brighten up your home's exterior without spending a lot of cash.

Tip 4: Invest where necessary

Some home improvement projects, while slightly expensive, are worth the return you'll get when it comes time to sell.If you're not sure where to start, check out your bathroom and kitchen. Updating those rooms is a great way to increase your sales price. Other things to consider are new light fixtures, new carpet, and refinished hardwood floors.On the other hand, don't waste your time worrying about things like home additions, new porches or decks, or expanding closet spaces. These projects are simply too large to be worth the investment, and potential buyers are just going to have to live without them.

Tip 5: Practice home staging

Home staging is a huge trend in interior design at the moment. You might have seen the television shows where experts move furniture and adjust rooms to maximize appeal to buyers. You don't need an expert to stage your home for sale- just use a little common sense.

De-clutter your rooms to make them seem larger, and remove personal items like photographs and artwork. You might think the house seems bare without them, but actually it makes it easier for buyers to imagine themselves living there. If you have rooms in your home that have no real purpose, like an extra bedroom that you use for storage, consider cleaning it out and staging it as a bedroom or office. This will show buyers what the room can be used for, and keep them from being confused about the space.

How you present your home to potential purchasers is extremely important. You might be frustrated by the idea of putting time and energy into the home you're trying to sell. But a few essential improvements can go a long way- and it'll be more than worth the effort when the offers start coming in.

Please visit Electronic Appraiser - - for more information.

The Seven Key Points you Should Know about Home Appraisals

One of the most common mistakes many home sellers make, especially those who are attempting to sell on their own, is to price their home either above or below it's fair market value. This can be an extremely costly mistake either way. If you happen to price your home below its market value you run the risk of either selling it quickly for less than you could have gotten for it or having buyers ignore it because they believe the low price is an indication there's something wrong with it. On the other hand, if you happen to price your home too high it could sit on the market for months before it ever sells.

To avoid this problem many homeowners are opting to pay for a home appraisal before they ever put their home on the market. Traditionally, home appraisals have not occurred until a contract has already been made on the home and the sale has been about to take place. In this way, lenders and buyers could be assured they weren't paying too much for a home. Post contract home appraisals are typically paid for by the buyer in their closing costs. Today; however, sellers are more than willing to shell out the $300 or so to ensure they price their homes accurately. In many cases this has been due to a cooling down of the real estate market and a large influx of inventory. Sellers who want to make sure their homes do not sit on the market for longer than necessary see the cost as more than worth it if they can sell their homes quicker and for more money.

Pre-contract Home Appraisals

In the past sellers have commonly relied on the advice of their real estate agents regarding the price at which they should set their property. The rising trend in pre-contract home appraisals does not necessarily indicate a flaw in the advice of professional real estate agents; however, independent unbiased appraisers are often able to arrive at a price that is more in line with what the home buying public is willing to pay for a particular property. In some cases, when a home has been sitting on the market with no serious interest from buyers, agents are even beginning to recommend their sellers invest in an appraisal to find out whether the price is really right or not. These home appraisals are helping home sellers be more competitive in a market that is rapidly flooding with competition.

When an appraiser takes a look at a home he or she often notes items the sellers and even the agent may be prone to overlook. Such items include the visual location, proximity to important education, employment and entertainment centers and even flaws in the structure itself. Ideally, the appraiser looks at the home just as an interested buyer would and appraises the home accordingly. The final appraisal report will also take into consideration factors of the current local real estate market that could affect the value of the home.

Beyond the fact that home appraisals can help home owners to set the right price for their properties, they can also point out problems that could be easily cured before the home is ever placed on the market. When considering obtaining a pre-contract home appraisal there are seven important facts you should know and be aware of. Taking the time to educate yourself regarding home appraisals will help you to obtain a better, more accurate appraisal and respond to it in such a way as to gain the most from it.

1. Always find out exactly what the appraisal report will include
Remember, detail is important. The scope of the appraisal should include specific details about the house as well as the neighborhood in which it is located. In addition, comparisons should be made between your home and similar homes that have sold within a close proximity recently. The appraisal should also include information regarding the current local real estate market as well as any problems that were noted in regards to the home and how they might affect both the value of the home and how long it will take to sell the property.

2. Find out how the appraiser intends to approach the appraisal
To some degree, home appraisals are always going to be subjective. That said; however, a professional appraisal will also have enough information, education, experience and research at their fingertips to develop an accurate and sound appraisal.

3. Always make sure you know how to obtain a copy of your appraisal
Traditionally, home appraisals were paid for by the buyer and were only available to the buyer and the lender because they were funded by the buyer. If you're paying for a pre-contract appraisal; however, the completed report should be made available to you immediately.

4. When you receive the copy of the appraisal, take the time to really review
Avoid the temptation to skip to the bottom line and find out how much the appraiser thinks your house is worth. While that is important information it is also valuable to find out why the appraiser arrived at that decision. It could well be that some minor imperfections and flaws could be corrected before you ever place your home on the market that would not only increase the value but decrease the amount of time the home is on the market as well.

5. Find out the certifications and education of your appraiser
In some states there are few requirements for an individual to become a home appraiser. Don't just hire anyone. Remember the value of your home is riding on the experience of your appraiser.

6. Find out how many home appraisals the appraiser has performed
It won't matter in the least if the appraiser has been in the business for twenty years if they have performed less appraisals than someone who has only been in the business for two years.

7. Don't put off getting an appraisal
You can typically expect a professional appraisal to cost around $300 or $400 and while that may seem like a large chunk of change to lay out at the moment, in reality it could put several thousand dollars back into your pocket when you do sell your home.

Please visit Electronic Appraiser - - for more information.

Home Selling Tips for 'For Sale By Owner' (FSBO) Sellers

So you've decided to sell your home on your own. For Sale By Owner (FSBO) is becoming an increasingly popular way of getting the business of selling a house done - without paying hefty commission fees to a real estate agent.

First, let's be clear here. You're not going to hear any disparagement of all the work a real estate agent puts into selling your house from me. Realtors and real estate agents work hard to sell your house. They put in time and know-how, expertise that they've spent years acquiring. If you've decided to put your house on the market without a real estate agent in your corner, you WILL have to put some time into learning the basics of real estate law in your state, as well as the particulars of your real estate market. Here are seven must-know tips to help you be a successful For Sale By Owner seller.

Tip 1: Know the real estate law in your state
You don't need to know every in and out of real estate law. You do need to understand what your obligations as a seller of real estate property are. Check with your state realty officiating office to find out about:

  • mandatory disclosures
  • fair housing practices
  • necessary inspections
  • any documents that you must have handy (lead paint certificates, for instance)

Tip 2: Take advantage of the multiple listing service
The Multiple Listing Service (MLS) is a service open to licensed real estate agents. Its purpose is to allow realtors to share information about listings with each other. When your house is listed with the MLS, it'll get exposure to the people who get buyers out to see your house - other realtors. You can't list your house with the Multiple Listing Service on your own, but many real estate agents are willing to work out a flat fee listing price, or a special contract with an FSBO owner that only pays them commission if they find the buyer for you.

Tip 3: Get a realistic market appraisal of your house
One of the places where a real estate agent is invaluable is in helping their clients set the right price for their house. If you're selling your house on your own, you'll need to do a little digging to find out what the market in your community is like. The single biggest mistake that FSBO sellers make is pricing their home too high. By getting an appraisal that takes the neighborhood values into account, you can avoid that trap and price your home to sell while still making as much profit as possible in the sale.

Tip 4: Do some research to see what's selling in your community
This is probably one of the most overlooked bits of research you can do. Look beyond selling price when you check into recent sales and study what those homes have in common. Then take a look at homes that have been on the market for a while. You may be surprised to find what seems like a silly detail - for instance, that white houses nearly always sell faster than any others. Knowing what features attract buyers can help you plan any renovations with an eye to improving the chances of selling your home quickly.

Tip 5: Take some time to learn how to show a house
Showing a house isn't quite as easy as it sounds. One of the hardest things to learn is how to open the door to buyers - and walk away. They're not here to take the grand tour - they're here to explore. Introduce yourself, show your buyers in - and let them know where they can find you if they have questions. Then step away and let them wander through the rooms on their own. Few buyers are comfortable opening closets or examining features if the current owner is hovering over their shoulder

Tip 6: Know your community
Be prepared with ready answers to questions about your neighborhood and the larger community. You should know the answers to questions like, "Do you know which school my children would attend?" and "Where is the nearest grocery store?" You should also take the time to prepare positive answers to questions like, "What are the neighbors like?"

Tip 7: Get a lawyer familiar with real estate law to oversee the closing and finalize the paperwork
Once you have an offer, you don't want to risk losing the sale because you missed some important detail. Have an experienced lawyer draw up the contracts and make sure that every "T" is crossed properly. Just keep in mind that knowledge is king. The more you know about the home selling process, the real estate market and your community, the better you'll do in a For Sale By Owner sale.

Please visit Electronic Appraiser - - for more information.

Home Values Falling, Consumers Going Online for Property AppraisalsHomeowners - Understanding Your CreditHow to avoid paying PMI on your mortgage.What is PMI? Can I get rid of the PMI on my loan?Home Value By Square Footage5 Great Interior Design Tips to Sell Your Home FastThe Seven Key Points you Should Know about Home AppraisalsHome Selling Tips for 'For Sale By Owner' (FSBO) Sellers ~ - Instant Accurate Home Valuations - Blog