Ready to Buy? What Should I Do?

Getting preapproved for a home loan is the first step you should take before searching for a new home. If you haven’t already been pre-approved for a home loan, make sure you get pre-approved before searching for a home or contacting a real estate agent so you have an idea of what you can afford and what you should (or should not) be looking for.

Around 80% of all home searches begin on the Internet. Through all the resources available, homebuyers can conveniently search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and street views of neighborhoods and homes. You've probably defined your goals and have a pretty good idea of the type of home you want. By the time you reach your real estate agent's office, you are halfway to home ownership.

Good real estate agents will listen to your wants and needs and arrange to show you only those homes that fit your particular parameters. Your agent should preview homes before showing them to you as well. If you are a motivated buyer, it shouldn’t take too long for you to find your new home.

When rating the inventory of homes you are shown:

• Bring a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.




• Your agent can provide you with a print out of the listing for you to make notes on. Ask for a listing print out for every home you view to help you stay organized.




• Take notes of unusual features, colors, and design elements.




• Pay attention to the home's surroundings. What is next door? Do larger homes tower over your single story? What is the parking situation like if you want to have guests over? Does the neighborhood seem well kept?




• Do you like the location? Is it near a park or a power plant?




• Immediately after leaving, rate each home on a scale of 1 to 10, with 10 being the highest.

When you know how to start your search for a new home and you have a good agent to assist you, the home buying process should be enjoyable, and you can feel confident in your decision.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

New FHA Loan Forbearance Program

The Obama administration recently announced that loan servicers who are collecting payments on FHA loans will be required to allow qualified borrowers who lose their jobs to miss up to 12 months of mortgage payments before initiating foreclosure proceedings against them. See the press release here.

The new forbearance program allows unemployed borrowers to stay in their homes while seeking new employment.

Currently, the FHA’s policy is four months of required unemployment forbearance. Housing Secretary Shaun Donovan claimed the current time period is “inadequate for the majority of unemployed borrowers.”

Donovan also stated, "Today, 60 percent of the unemployed have been out of work for more than three months and 45 percent have been out of work for more than six. Providing the option for a year of forbearance will give struggling homeowners a substantially greater chance of finding employment before they lose their home."

Not all borrowers will qualify for the new forbearance program, but the Obama administration said it is removing the “upfront hurdles” for qualification. Servicers are required to provide any borrowers who are denied forbearance with the reason for denial and allow the borrower at least seven days to submit additional information that may impact the evaluation.

All FHA-approved servicers must participate in the new forbearance program.

The administration said it hopes that the changes will "set a standard for the mortgage industry to provide more robust assistance to unemployed homeowners in the economic downturn."

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Mortgage Standards Rising

The National Association of Realtors (NAR) recently reported that existing home sales increased in March, which is good news. However, while homes might be more affordable right now, qualifying for a mortgage loan requires higher standards than it did 5 years ago.

Because Fannie Mae, Freddie Mac, and the FHA cannot guarantee mortgages over the conforming loan limit, mortgages over the limit will face higher interest rates and tighter restrictions. Fannie Mae increased costs for borrowers with lower credit scores, less home equity, and second mortgages when it changed what it calls its loan-level price adjustments.

Many consumers today are facing credit problems due to unemployment, under-employment and lower home values, but credit score requirements remain high. While a 580 credit score was acceptable a few years ago, Fannie Mae and Freddie Mac require at least a 620 score for all programs except the Home Affordable Refinance Program (HARP). FHA home loans require a minimum credit score of 640.

Debt-to-income (DTI) ratios, which entail your monthly debt payments relative to your income, are still required to be high as well. Fannie Mae used to allow DTIs up to 55 percent but now typically requires at least 45 percent. Freddie Mac wants at least 50 percent DTI. To compute your DTI, divide your monthly debt payments, such as credit card, car loan, and other loan payments, by your gross monthly income.

Home loans with no down payment have all but disappeared. The minimum required down payment when buying a primary home is typically 3.5 percent of the sales price, which will allow you to get an FHA loan. Conventional loans typically require 5 percent to 10 percent down.

Home loan qualification standards will likely remain high for now, so plan carefully if you’re considering a new home purchase. Focus on improving your credit score, saving up for a down payment, and lowering your debt-to-income ratio, and you can be on your way to owning a new home. Contact us to discuss your options.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Buying a Foreclosed Home

While the market seems to be slightly improving, there doesn’t seem to be a shortage of foreclosed homes. Purchasing a foreclosed home can save you money and even possibly prove a lucrative investment, but it’s important to be educated on what to look for when buying a foreclosed home.

• Budget carefully. The “total price” of a foreclosed home is not necessarily the agreed upon price or the bid made at auction. The total price takes into account all back taxes, liens, and any other financial responsibilities the purchaser inherits from the purchase of the property, which takes us to our next point:
  


• Do your research. Once you have found a foreclosed home you are considering buying, go to the County Recorder's Office. The County Recorder's Office can provide you with the amount in back taxes owed, which generally isn’t included in the sales price. They can also provide you with the Trust Deed, the Notice of Foreclosure Sale, and the Notice of Default on the property. These documents are public record and reflect how much was originally loaned to the homeowner, when the loan was issued, how much was owed at the time the Notice of Default was filed, and how much the bank paid for the property.
  


• Schedule an inspection. Before making any offer, have the foreclosed home thoroughly inspected by a professional. Make sure the electricity is turned on when you go to inspect the property. Check the roof, all electrical appliances, the air conditioner, and load bearing beams. Check for termites, mold, structural damage, and bad grout. Once the home is inspected, have the inspector give you an estimate for any costs and add it to your budget. Foreclosed homes are usually sold “as is” and once the contract is signed, any repairs are your responsibility.
  


• Consider the selling process. Is the sale an auction or is the property Real Estate Owned (REO)? Auctions can be a good option in market liquidation; however, purchasers at auction do not often have time to make necessary inquiries. Auctions can also cause a competitive and emotional environment, so be very cautious not to overbid. You are not in competition with the other bidders. You are in competition with the market value of the foreclosed home. Also, back taxes or liens are usually not included in the bid price, so keep that in mind. REO properties are those that fail to sell at auction and are being sold by the bank. This process tends to offer the purchaser more time to discover any drawbacks and react accordingly.
  


• Choose the right lender. Good financing options are still available to many qualified homebuyers. A good, reputable lender will take the time to review your financial long- and short-term goals. They will explain the process of buying a foreclosed home to you clearly and help you find the best solution for you.

We keep your goals in mind and want you to get into a home that is right for you. If you are interested in purchasing a new home, or want to learn more about what to look for when buying a foreclosed home, contact us to discuss your options.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Hardest Hit Fund Available in Oregon

A number of states are currently utilizing the Hardest Hit Fund, which was established in February 2010 to provide aid to families who were most affected by the economic and housing market downturn.

The U.S. Department of the Treasury has allocated $7.6 billion to 18 states so far and the District of Columbia. Each state housing agency has implemented the program to meet the distinct challenges of struggling homeowners in each individual state. The states that received this fund were chosen either because of low unemployment rates or steep home price declines greater than 20% since the housing market decline.

The program is designed to help families avoid foreclosure. The Hardest Hit Fund programs complement the Making Home Affordable Program, but they aren’t limited to homeowners eligible for Making Home Affordable.

Hardest Hit Fund programs will vary state to state, so go here to see if your state was chosen for the program and if you may qualify. Oregon is a state chosen for the program.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

2011 Home Buyers Resolutions

Happy New Year! It's time to get out your pen, paper, and nearest napkin to write down your resolutions for 2011. Some of the most popular resolutions include: losing weight, eating healthy, drinking less, managing debt, managing stress, saving money, and resolving to stop making resolutions.

If one of your goals for 2011 is to become a homebuyer, here are 5 tips that will help you actually achieve your New Year's resolution to buy a home this year.

1. Determine exactly what you will be able to afford before even starting the buying process, and set a budget.

Utilize a mortgage calculator to help you determine what you can afford. The amount you're preapproved for isn't necessarily the amount you can afford. When you've analyzed your income and savings, stick to your budget. Don't even look at homes that are out of your price range. Resolve to live within your means so you're not in jeopardy down the road of losing a home you couldn't afford in the first place.

2. Save for a significant down payment.

No-money down loans are hard to obtain and extremely risky. With an FHA loan, you'll need at least a 3.5% down payment. However, a 5%-10% down payment for a conventional mortgage is a smart goal to set.

3. Clean up your credit before applying for a mortgage.

Ideally, to get the best interest rate, you want your FICO credit score to be 700 or higher. If you haven't pulled your credit report in the last 6 months, plan on going to annualcreditreport.com to pull your free credit report. You will not receive a free credit score from this report, but you can purchase your credit score here. By reviewing your credit report prior to applying for a home loan, you can determine what shape your credit is in, start working to improve your score, and dispute any errors that may be erroneously listed on your credit report.

4. Shop around for the best home loan.

Make sure you talk to at least three or four lenders before you sign your application. Try to include a "big box" lender, a small local lender, a credit union, and a mortgage broker. Use the information you collect from each lender to negotiate the best loan for you.

5. Hire a professional real estate agent.

As a first-time homebuyer, the best resolution you can make when deciding to buy a home is to consult a trusted, professional real estate agent to assist you with the process. Professional agents have access to properties in your desired area, market comparisons for homes available for sale, and the expertise to draw up an offer to present to a home seller. Find an agent that you connect with and trust to have your best interest in mind.

If you're currently renting but want to become a homeowner by the end of 2011, following these tips will help you succeed in achieving your New Year's resolution to buy a home.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

NAR's Positive Outlook for 2011

The National Association of Realtors (NAR) is optimistic about home sales in 2011. Pending homes sales in November increased 3.5 percent, which indicates a gradual recovery for this upcoming year.

NAR chief economist Laurence Yun said, "All the indicator trends are pointing to a gradual housing recovery. Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers."

Low mortgage rates, high housing affordability, and a little economic growth are pushing the housing market toward a slight recovery. The high number of foreclosures is still keeping the market from recovering more quickly, however.

Other NAR projections for 2011 include:

- New home sales are estimated to rise 24 percent;
- Existing-home sales are projected to rise about 8 percent;
- Housing starts are expected to rise 21 percent;
- The unemployment rate is expected to drop in 2011.

We should expect some peaks and valleys, but it's important not to panic. In general, the trend is expected to be an increase over the next few years.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Cash, Conventional or FHA?

Some people want to know whether they should apply for an FHA loan or Conventional loan. Some people ask if cash buyers have more power.

Well to put it simply, without really having to say it, CASH WINS!...most of the time. Obviously if the FHA or Conventional buyer has a much higher offer, that bank or homeowner is more likely to entertain it. But not always.

When a buyer comes in with cash it shows that they have the funds to close and will not have many condititions to meet before they can close.

A Conventional loan buyer has more power than an FHA buyer because he/she is putting down 20% of the sales price. So a seller knows that the buyer has more interest in the property and is perhaps a more solid buyer. They are less likely to fall out of escrow.

FHA is the hardest due to the fact that FHA buyers have to go through a rigorous, and I mean rigorous, process to get qualified. Sometimes a buyer is not always honest about their financial situation when qualifying for a loan. So when they receive their prequalification it may be on false terms, the loan will not be approved and the buyer will lose that property. Unfortunately this costs everyone time and money, including the buyer.

So if you are going to apply for a loan always be completely honest to the loan officer because they will find out everything about your financial situation.

Conventional is stronger and remember, CASH WINS.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Remodeling doesn't always add up

According to Remodeling magazine's 2010 Remodeling Cost vs. Value Survey, done in partnership with the National Association of Realtors (NAR), most people planning a home remodeling project will pay a lot more for the job than they will get back in return when they sell. The report claims that on average, only 60% of remodeling costs in 2010 would be recouped by homeowners.

The report acknowledges that curb appeal continues to "play a strong role in a home's resale value." Because of this, the most lucrative of the remodeling projects was replacing the garage door. The report claims this is because garage doors "improve curb appeal in a way that can affect a potential buyer's first impression and, consequently, a home's resale value." According to Lawrence Yun, chief economist for NAR, curb appeal is essential if you want to sell your home. He stated, "In today's buyers market, given the large inventory, where people have so much selection, it's important to have the exterior catch the eye so they're willing to step inside."

Aside from replacing the garage door and a few other exterior projects, most remodel jobs returned a lower percentage of their costs in added home value than they did in 2009.

According to the survey, these remodeling projects will get you the most bang for your buck:

Project	Cost	Resale Value	Cost Recouped
Steel Entry Door Replacement	$1,218	$1,243	102.1%
Garage Door Replacement	$1,291	$1,083	83.9%
Fiber Cement Siding Replacement	$13,382	$10,707	80.0%

All other remodeling projects in 2010 recouped national averages below 80%, with home office remodeling and sunroom additions offering the lowest returns.

Two jobs tied for the best return on a midrange remodeling investment costing more than $10,000. Adding a wood deck or doing a minor kitchen remodel (which involves replacing cabinet doors and counters, buying new appliances, sinks and faucets and repainting walls and trim) each recouped 72.8% of their costs. Remodeling your basement or adding an attic bedroom can get you a higher return (approximately 70%) than adding a wing to your house.

Despite the falling percentages of returns on remodeling projects in 2010, it's important to remember that renovations can also improve the livability and enjoyment of your home. If you love your neighborhood and community, but your home is older or needs minor improvements, it's likely to cost you much less to remodel your current home rather than buying a new one. Replacing old, inefficient products and appliances with highly efficient ones may get you a decent return when you sell and, in the meantime, save you money on your utility bills.

If you chose to remodel, find ways to reduce the cost of your remodeling projects. Otherwise, getting a significant return will be much harder.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Winter is a great time for Bend, Oregon Real Estate deals!

Temperatures are dropping and so is the number of homes that are currently selling. The majority of homes are usually sold during warmer months, particularly April through September. However, cold weather seems to offer homebuyers a better bargain.

Often, people who list their homes during the winter are moving out of necessity. Many people don't want to move their families during the middle of a school year, and most homes have more curb appeal to sell faster during warmer months. If a job transfer, school, or financial hardship is dictating a timeline for the seller, it can often lead to a better bargain for the buyer.

There are fewer buyers in the market from November through March, which you can use to your advantage as a homebuyer. It's inconvenient to go house shopping when it's cold outside, and most people don't want to move during the winter. With fewer buyers, there's less competition. If you decide to buy a home this winter, don't be afraid to negotiate the price. You may want to ask for more inclusions. However, make sure you are reasonable. The seller can always wait for the next buyer if your demands are too high.

Because of the slower market, industry professionals have more time to devote to your real estate search. Lenders are usually able to process your paperwork quickly and get you approved.

Now is your chance to get into the Bend Real Estate Market, don't let this opportunity pass you by. .

Troy Batson ~ Broker

Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

10 Reasons to buy a Home in Bend Oregon

Enough with the doom and gloom about homeownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

After all, at the peak of the bubble five years ago, Time had a different take. "Home Sweet Home," declared its cover then, as it celebrated the boom and asked: "Will your house make you rich?"

But it's not enough just to be contrarian. So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way- about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains-if any-when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension-zoning permitted-or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.

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5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities-for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy-if it happens-and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed-either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

Written by: Brett Arends

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

What is a Comparative Market Analysis or CMA?

If you're thinking about selling your home or property, a comparative market analysis or CMA is a great way to help you determine the actual value of your home.

You could conduct your own comparative market analysis, but it's best to seek the assistance of a trained real estate professional. Real estate professionals have access to up-to-date geographic-related information about:

- Active, pending and expired real estate listings
- Comparable home sales
- Market trends including the average number of days area homes remain on the market before they are sold
- An area's recent highest, lowest and average home sales prices

When you enlist a real estate agent to provide you with a CMA, you are likely to get more complete information faster. An agent will also help you to analyze the information in a comparative market analysis. A CMA is in no way a price guarantee. There are many factors that go into pricing a home and some of them are very personal including a seller's motivation. Some sellers are financially distressed, or are under pressure to relocate for employment purposes and are willing to drop the price of a home for a quick sale. Other sellers are willing to wait for the right buyer to purchase his or her home at a premium price.

The depth of comparative market analysis reports varies. Ask your real estate agent to explain what you can expect to learn from the CMA he or she provides. At the very least, a standard CMA will include:

Active listings or homes currently for sale. This will give you a snapshot of homes your potential buyers will be viewing and comparing to yours. A seller can list a home at any sales price, so be careful not to read too much into active listings. In the end, a home is worth what a buyer is willing to pay.

Pending listings. A pending listing is a home under contract. This means the sale has not yet closed. Like sold listings, pending listings can help you determine what buyers are willing to pay for property comparable to yours. Because pending sales are still in the legal negotiation process, this information is often kept private.

Sold listings. Appraisers are strongly influenced by the price at which comparable homes have sold in the same geographic area as your home. An estimated market value will be largely based on sold listings.

Withdrawn or canceled listings. Sellers sometimes withdraw their homes from the market and the reasons vary. A change in life circumstances, low offers, and repairs required for buyer financing are just a few. This information can, however, be very helpful in determining how high is too high.

Expired listings. An expired listing is one that has been on the market beyond the length of a realtor contract. Sometimes these properties are overpriced. Sometimes they are not marketed aggressively. Occasionally a seller will change agents in the middle of the sales process.

It is very important to only compare properties that are similar to yours in a comparative market analysis. In some locations, this will be hard to do. Important comparables include:

• Square footage


• Location


• Type and age of construction


• Amenities and upgrades


• Condition

Of all of these factors, you have the most influence over condition and amenities and upgrades. A thorough comparative market analysis or CMA will help you determine whether or not repairs and upgrades will significantly increase the value of your home. It's best to seek a CMA before spending too much money on repairs and remodeling.

Call us today for your comparative market analysis or CMA. We're here to help you price your home right.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Don't Make These Mistakes When Buying Your Next Home

You've determined that you're ready to buy a home. You've saved enough for a down payment, you've been searching for properties, and you're ready to make your dream a reality. Buying a home is an exciting process; however, if you're not careful, it can turn into a nightmare. Here are 6 common home buyer mistakes to avoid.

1. Not Budgeting Properly

It's easy to overestimate what you can afford. Although owning a home may be a better investment than renting, it's not necessarily going to be cheaper. Take a good look at your income and expenses for a few months before determining what you can comfortably afford. Make a budget sheet using Microsoft Excel or any other budgeting software. List all your income as well as every single expense, including food, gifts, and even haircuts. Keep in mind any emergency expenses as well.

When budgeting, don't forget about hidden costs including closing costs, homeowner's insurance, property taxes, HOA fees, and décor and furniture to fill your new home.

2. Neglecting your Credit Report Prior to Getting Approved

Your credit score can be either helpful or detrimental to your loan process. Getting a full credit report from all three credit reporting agencies - Experian, Equifax, and TransUnion - before applying for your home loan will not only let you know how credit-worthy you are, it can lead you to possible reporting errors. One study found that as many as 25 percent of credit reports have damaging errors.

3. Not Getting Pre-approved for a Home Loan before Searching

Most sellers prefer bids from prospective buyers who are already pre-approved for a home loan. Being pre-qualified and pre-approved are different. Pre-qualification is usually the unofficial process of informing a lender of your credit status, income, and debt. The lender can usually give you a ballpark figure of what type of loan they may offer. Pre-qualification is based on your word alone and doesn't hold much weight with sellers.

Pre-approval is the verification of the information you provided to the lender. This process will give you a better idea of how much the bank will loan you. Getting pre-approved can get you a step ahead other potential bidders that have no pre-approval.

4. Skipping the Home Inspection

You love that old fixer-upper, but skipping the home inspection can cost you as much in repairs as the cost of the home itself. The home inspection should include the overall foundation and structural features of the house, the roof, walls, plumbing, the presence of mold, pest infestations, heating, air conditioning, appliances, and the electrical system. Also, ensure that your inspector is certified with the American Society of Home Inspectors.

5. Picking the wrong neighborhood

You've found a home you love, but do you know what happens in the neighborhood after dark? Do you know the crime rate? What is the traffic like during rush hour? How is the school district?

Knock on your potential neighbors' doors, and don't be afraid to ask questions. Call the school principal, or talk to parents who are waiting to pick up their kids after school. Read the local newspaper to learn more about the community. There are many real estate blogs and community websites on the internet so before buying the home, check out the neighborhood.

6. Using a Bad Real Estate Agent or No Agent

You want a real estate agent who understands your needs and limitations and will work for you and look out for your interests. Get references from friends, family, co-workers, and neighbors. Consider interviewing a few different agents to find out about their activity and experience in your area.

It's definitely possible to buy a home without the help of a professional real estate agent, but realtors have access to all the homes on the market through the multiple listing service (MLS). Unless you are in the real estate business yourself, you'll likely not have any access to the MLS in your area. Real estate agents spend their time sifting through listings, making appointments to show homes, meeting with inspectors, and helping you create a comparative market analysis to determine proper pricing.

The real estate agent you choose could be the greatest asset or biggest obstacle to finding your dream home.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Third Quarter National Statistics Show Promising Sales Increase

Third quarter 2009 existing home sales figures are in. The National Association of REALTORS® is reporting a rebound in the existing home market. The association credits the recent increase to first-time home buyers hoping to take advantage of an $8,000 federal tax credit targeting them. In fact, gains in the housing market over the last six months appear to be related to the credit, according to an Oct. 23 report released by NAR.

The term, "existing home sales" refers to:

• Single-family homes


• Townhomes


• Condominiums


• Co-ops

Sales increased 9.4 percent to a seasonally adjusted rate of 5.57 million units in September compared to 5.09 million in August. The sales rate is 9.2 percent higher than that of September 2008 when 5.10 million units sold.

"Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007," according to NAR an association that represents 1.2 million members involved in all aspects of the residential and commercial real estate industries.

The association's chief economist, Lawrence Yun, attributes the sales increase to the Federal Stimulus Package's First-Time Home Buyer Tax Credit of $8,000 made available to a specific socioeconomic group of Americans. Yun said the tax credit is working, but sites a desperate need for the tax credit to be extended. The tax credit is set to expire Nov. 30. All qualifying home sales must be completed by that date in order for home buyers to be eligible for the stimulus windfall. NAR is pushing for the credit to be expanded to more buyers through the middle of 2010 in order to maintain sales momentum and secure the housing industry's recovery.

While there's talk on Capitol Hill of extending the tax credit, fraudulent claims for the first-time home buyer tax credit have some legislators raising eyebrows. In an Oct. 23 Los Angeles Times business article reporter Tiffany Hsu drew attention to the fact that 90,000 ineligible claimants have applied for the credit including one 4-year-old child.

According to Hsu's article, more than 1.4 million claims have been made for the home buyer's credit. Hundreds of thousands more claims are expected when tax returns are filed in 2010. Feds expect to pay about $18 billion in tax credits. There's talk on the hill of creating better checks and balances and more regulations that specify a minimum home buyer age of 18.

In the NAR report, Yun praised the market's improvement, but said it still has a long way to go. "Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet," he said. "We're getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history."

On Nov. 13, 2009, NAR will release the 2009 National Association of Realtors® Profile of Home Buyers and Sellers. The report is expected to demonstrate that more than 45 percent of homes sold in the last year were purchased by first-time home buyers. A separate practitioner survey shows distressed homes accounted for 29 percent of transactions in September.

Prices are still low and lenders are willing to finance homes for qualified buyers. Contact us today to begin the search for your quality, affordable home.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Managing Your Investment Property

Real estate can be one of the best investments you can make. If you plan on investing in and managing rental property, organizational and management skills are a necessity, along with a working knowledge about real estate matters. Here are 5 tips for managing investment property.

Screen Tenants Well

Evaluate prospective tenants by utilizing background checks, credit histories, personal references and employment histories. Require every applicant to provide credit and employment references. Don't be influenced by personal references. Contact previous real estate agents, landlords, employers, accountants, and/or bankers. Ask the question:

Do you believe the applicant(s) would be able to pay $x per month for y months and keep the property clean and in good condition?

Set Expectations for Tenants

Talk with your tenants and set expectations. Ensure that payment arrangements are clear verbally and in the lease. Be consistent. Make late fee assessments clear in the lease agreement and collect late fees when necessary.

Let all tenants know upfront they need to get any changes to the property approved by you. Let them know that any unauthorized changes can result in a loss of the security deposit. When managing investment properties, you want them to appeal to a broad population. Keep carpets and walls relatively neutral and avoid any exotic colors. Ensure that your tenants know they are free to make cosmetic upgrades as long as they are approved by you first.

Take pictures of the inside and outside of the house before a tenant moves in and/or out. Be sure the pictures are dated.

Consider Using a Professional Managing Agent

Utilizing the services of an experienced, professional managing agent can save you time and hassle. Professional Managing Agents have detailed up-to-date knowledge of the residential tenancy legislation, an understanding of local vacancy and rental movements, a background in repairs and maintenance, a reliable network, an awareness of housing price movements, and knowledge of insurance and property taxation.

A Professional Managing Agent can help you manage inspections, property showings, tenant issues, and hiring an agent allows you to remain somewhat anonymous acting as the buffer between you and the tenant.

Consider the cost carefully as hiring a Professional Managing Agent will reduce your income. Across the country, property management fees normally run from 7% to 10% of income on averag

Cover Your Assets

Obtain liability, fire, theft, and other insurance on rental property. As a landlord, you should have commercial insurance, not a typical homeowner's policy. In addition to insurance, you need to have at least one Limited Liability Company (LLC) to protect your assets rather than owning the property personally.

Be Realistic

Have reasonable expectations as an investor. Don't expect to buy an investment property and immediately enjoy a positive cash flow, meaning the rent you collect exceeds all of your out-of-pocket expenses. Many investment property owners go 3 to 5 years before cash flow turns positive. Immediate positive cash flow usually happens when the investor makes a large down payment and has relatively low mortgage costs.

Have an idea of how much rent you can charge. Research how much comparable properties rent for. A good rule of thumb is to set the rent at 95% of the current market value. Rental properties which are listed just below market value attract the best referenced tenants and maintain minimum levels of vacancy and repair/maintenance.

Owning investment property can be very rewarding, but you can't expect to sit back and collect income year after year without doing any work on your property. Investment real estate can be a worthwhile investment if you are well prepared to face any challenges that may come along.

Troy Batson ~ Broker
Duke Warner Realty
1033 NW Newport Ave
Bend, Oregon 97701
541.678.3725 or 541.382.8262
troybatson@dukewarner.com
troybatson.com

Considering a Short Sale?

A short sale is when a Lender agrees to accept a mortgage payoff amount for less than what is owed. In a short sale, the homeowner generally cannot continue to make their mortgage payment.

Although short sales can be appealing because they are usually priced below market value, there could be some drawbacks. Consider the following when deciding whether or not to put an offer on a short sale.

Does Your Agent Have Short Sale Experience?

If your agent has no experience with short sales, hire a new agent that does. Agents with short sale experience know how to expedite the transaction while protecting your interests. Agents with short sale experience also know how to deal with the Lender once an offer has been made. The Agent should send your loan preapproval letter, a copy of your earnest money deposit, and a list of comparable sales that support your offer on the home to the Lender.

Do You Have Time?

Short sale transactions aren't speedy and require time for the Lender's approval. Some short sales can take a year or longer to close. Some Lenders submit short sales to a committee, but most can make a decision within two to three months. Get a name and phone number for the appropriate contact at the Lender. Don't send an offer blindly to a department. Consider giving the Lender a timeline to respond.Even once an agreement is struck, there is still no guarantee the short sale will go through.

Are You Willing to Negotiate?

In many cases, the Lender will reject your initial offer and come back with a counteroffer. Determine beforehand what your absolute highest limit is, and don't be afraid to walk away if the Lender won't meet your figure. Homes that are priced below market value will receive multiple offers. You want to make an offer that will beat the competition yet still be below market.

Did You Check the Public Records?

Make sure the Lender has already approved the short sale. If the seller has not actually gone into default yet, the bank may not be interested in a short sale. The bank may also not be interested in a short sale if it can get more money by foreclosing. Also, ask the seller or his agent what liens are on the property and which Lender is the primary lien holder. Your agent can also find out who is on title, whether a foreclosure notice has been filed, and how much the Lender is owed. This is important because it will help you to determine how much to offer. If there is more than one mortgage loan on the property, it could be problematic, and at the least, much more time consuming.

Have you Weighed the Pros and Cons?

If you are considering putting an offer on a short-sale, proceed with both caution and patience. Some short sales are priced below market value, creating a great opportunity for buyers to purchase a home when they otherwise might not be able to afford one. On the other hand, many banks have little interest in selling homes below market value. The listing price could merely be the amount the listing agent thinks the bank might accept, rather than what the bank has agreed to. If the home is priced far below market value, the seller may be trying to generate a bidding war, which could just be a waste of time.

Because it can take the Lender so long to reply to your offer, it's in your best interest to keep looking at other houses while you wait. Don't be afraid to proceed with purchasing another home if it's in your price range and is a simpler purchase. Make sure your agent writes a short sale purchase agreement to allow you to retain flexibility. However, short sales can be a great deal for some buyers and do occasionally close successfully.

Troy Batson ~ Broker

Duke Warner Realty

1033 NW Newport Ave

Bend, Oregon 97701

541.678.3725 or 541.382.8262

troybatson@dukewarner.com

troybatson.com

Bend, Oregon Foreclosure and Short Sale Report ~ September '10

Active Residential Listing Report ~ September 7, 2010

City:	Bend	Redmond	Sisters	Prineville
Active Res. Listings:	1469	670	245	311
Active Short Sales:	414 (28%)	200 (30%)	23 (9%)	56 (18%)
Bank Owned Listings:	173 (12%)	114 (17%)	16 (7%)	51 (16%)

I will be compiling this list of foreclosures and short sales in hopes of determining the bottom of our Central Oregon real estate market. With Bend and Redmond dropping to 40% and 47% combined distressed listings I would say we have leveled off and are starting to decrease. Combine this with the number of homes being sold and the decreasing supply things are starting to change for the positive. Distressed listings are making up 50% of all home sales in the past several months.

For a list of Bend Oregon Foreclosures or Bend Oregon Short Sales follow the links. You can also request other Central Oregon cities by following the above links as well.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Bend Oregon Foreclosures and Short Sales Report ~ August '10

Active Residential Listing Report ~ August 2, 2010

City:	Bend	Redmond	Sisters	Prineville
Active Res. Listings:	1493	654	238	298
Active Short Sales:	442 (30%)	203 (31%)	18 (7%)	58 (19%)
Bank Owned Listings:	164 (11%)	92 (14%)	17 (7%)	46 (15%)

I will be compiling this list of foreclosures and short sales in hopes of determining the bottom of our Central Oregon real estate market. With Bend and Redmond dropping to 41% and 45% combined distressed listings I would say we have leveled off and are starting to decrease. Combine this with the number of homes being sold and the decreasing supply things are starting to change for the positive. Distressed listings are making up 50% of all home sales in the past several months.

For a list of Bend Oregon Foreclosures or Bend Oregon Short Sales follow the links. You can also request other Central Oregon cities by following the above links as well.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Bend, Oregon Foreclosure and Short Sale Report ~ June '10

Active Residential Listing Report ~ June 2, 2010

City:	Bend	Redmond	Sisters	Prineville
Active Res. Listings:	1441	660	223	291
Active Short Sales:	473 (33%)	216 (33%)	21 (9%)	69 (24%)
Bank Owned Listings:	132 (9%)	74 (11%)	11 (5%)	39 (13%)

I will be compiling this list of foreclosures and short sales in hopes of determining the bottom of our Central Oregon real estate market. With Bend and Redmond dropping to 42% and 44% combined distressed listings I would say we have leveled off and are starting to decrease. Combine this with the number of homes being sold and the decreasing supply things are starting to change for the positive. Distressed listings are making up 50% of all home sales in the past several months.

For a list of Bend Oregon Foreclosures or Bend Oregon Short Sales follow the links. You can also request other Central Oregon cities by following the above links as well.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262

Bend, Oregon Foreclosure and Short Sale Report ~ May '10

Active Residential Listing Report ~ May 5, 2010

City:	Bend	Redmond	Sisters	Prineville
Active Res. Listings:	1465	676	202	301
Active Short Sales:	468 (32%)	227 (34%)	21 (10%)	72 (24%)
Bank Owned Listings:	155 (11%)	88 (13%)	9 (4%)	46 (15%)

I will be compiling this list of foreclosures and short sales in hopes of determining the bottom of our Central Oregon real estate market. With Bend and Redmond dropping to 43% and 47% combined distressed listings I would say we have leveled off and are starting to decrease. Combine this with the number of homes being sold and the decreasing supply things are starting to change for the positive. Distressed listings are making up 50% of all home sales in the past several months.

For a list of Bend Oregon Foreclosures or Bend Oregon Short Sales follow the links. You can also request other Central Oregon cities by following the above links as well.

Troy Batson is a licensed broker in the State of Oregon ~ troybatson.com ~ Duke Warner Realty ~ 1033 NW Newport Ave. Bend, OR 97701 ~ (541)382-8262