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Something I Learned

Daniel Matta 1995
ENC1101



Something I Learned.


A Good Salesman


I was twenty years old when I started working at the car lot. I was going to become a salesman. This seemed perfect for me at the time, using my mouth more than my hands. I could sell ice to an Eskimo said a friend once. I would say that I was just a good communicator. I liked the competition; I also liked the rush. This seemed perfectly normal at the time, this is what everyone else did, manipulate the customers or scam them in to buying a car. Some salesman had kids and needed to pay bills or that’s what they said. I believed them at the time. I felt some sympathy for them. After all they were my friends’ right? Everything was lovely as we would say or copasetic when things were going in our favor. It seemed as if we all felt like we were on top of the world after manipulating someone in to purchasing a car. The owners loved it and so did we. The owners would give us bonus checks for a job well done. It all seemed harmless, selling a couple of cars here and there.
I was number one on the “board”; I was the one usually selling the most. It felt good, being the youngest salesman and all. It seemed like I was gaining some respect with the higher level owners. I was getting VIP treatment; at least I thought I was. I was becoming a real salesman. That’s what the owners said when they introduced me to there partners, “Would you like to meet a real salesman? “They said this jokingly. At the time I thought nothing of it. So I laughed as well. Things were going good and I was getting better at being number one. I got a desk in the front of the office, and I was always introduced first if a customer needed to speak with a salesman even if I was busy. I started getting use to living like I thought I wanted to live.
This was a way of life I had never experienced before. A way of life I soon realized I wanted no part of. This way of living was going against everything I was taught at home. I was using peoples trust and manipulating their minds with bogus information. I was becoming a selfish, crook, thief, con-artist, and a liar. If this was what a good salesman was, I wanted out. I couldn’t do it anymore, you know, the looking in to their eyes and robbing them with a smile. The set ups that we practiced in the back office so many times that it was starting to become second nature. All these things I learned were ways to hurt people and take what they have worked so many years for from them in a minute or two. Well they have just trained the perfect solider for their business. If I owned a car lot, I was the perfect rookie/puppet for the job. The blind young kid who was one day going to see but was being blind folded as long as I would let myself. I was just a number to the owners a young “rook” that was open for the taking. I was the one being manipulated. I was the one who was getting taken advantage of also. I didn’t know I was hurting people or giving people a lot of financial problems. I was just on the frontlines. It was then when I realized the big picture. This would soon change my life.
When I started to look around at to what was really going on, is when I was not welcome anymore. I had to make an appointment to talk to the owners. I couldn’t be late anymore. I was not being invited to lunch anymore for some reason. It seemed as if I was being pushed out because I was starting to learn to much or I had to much information on how things were going. It was time for me to go and I didn’t even know it yet. The owners started interviewing other salesman, it seemed as if I couldn’t sell anymore knowing what I was really doing, making people see something that is not even there and will never be. And if you got mad and wanted your money back, SORRY you have signed a receipt that says no refund. The people probably would have noticed it but I had my hand over it, I was covering it on purpose. I was shown this tactic by one of the owners. In stead of telling the people exactly what’s going on, they scammed them then acted like it was the customers fault for not reading the agreement. The owner probably forgot we were rushing the customers to sign and they were so happy for nothing they signed in a rush. This was starting to bother me. People started coming back and ask me why I didn’t tell them all these things. They were mad at me, no wonder why the owners would never want to see any of the customers. They put me to do there dirty work.
One Sunday afternoon, would change things forever. This was a big day for me, not financially, but personally. A man with his young son walked in and asked me to see a Cadillac. He said he wanted the one we had parked in the front. He had been looking at it for months, he said. Right away I new that car was not running properly. The owners put it in the front only because it moves, they don’t care if the person brings the car back. They sign a non refundable receipt remember. Well I was not going to have this nice man who just got out of church get in financial stress or hurt him in a way only he knows. So I decided to tell him that the car wasn’t working right and I suggest he look at another one. He said that he appreciates the honesty but he really likes it. He wanted to drive the car for himself. So I did. Driving the car did nothing but make him want it more even though that noise that was so loud to me seemed as if nothing to him. I informed him that the car probably won’t last to long. He said “I know about used cars”. I said “ok, why don’t you come back tomorrow because we don’t sell cars on Sunday we just take appointments.” We do take deposits but I didn’t want to tell him. Sure enough he asks me. He was determined to leave a thousand dollars as a deposit to let me know he means business. What he didn’t know is that It didn’t matter to me if he bought the car or not. Well he left the deposit and went home. I was off Monday; he came in and took the car, when I came to work on Tuesday he pulled in with a taxi. He was saying his car broke down, yelling at me. This man left himself open for destruction and didn’t listen when I warned him clearly about the car. He wanted his money back; no one would talk to him anymore. The owners went in to hiding, I was left to fend for myself. I couldn’t take it anymore and I quit. I had left the place that I wanted to be at. Something’s may seem clear when they are really distorted. Be careful when buying and signing things. Take your time and don’t rush. Read everything you sign, and ask questions. These are just some pointers that can make or break you.
As for me, I will not to lie to people. I will not to hide things from people, I rather just tell them straight out. If they make the wrong decision then at least I warned them. I will never want to manipulate people for the wrong reasons. I will never take advantage of people. I will not rush in to anything without some kind of history first. I will not use the kind hearted. That in it self should be a crime. What I learned here is that I never want to be a bad person. I want to give instead of take. I want to make a change for the better. I want to keep the good, good. I want to become someone useful. This experience has taught me what I want to do and be in life, GOOD. -I wrote this in College in 1995- Daniel Matta.

FHA

The FHA plans to make it tougher for borrowers to refinance a loan and take out cash as the agency tries to "limit its exposure to undue risk," according to a letter that recently went out to lenders. Starting with loan applications that lenders receive April 1, the FHA's new policy limits cash-out refis to borrowers with at least 15 percent equity in their homes.

MORTGAGE MODIFICATIONS

Disagreement among Senate Democrats over how many struggling homeowners should qualify for court-ordered mortgage relief has stalled a key part of President Barack Obama's foreclosure prevention plan on Capitol Hill. Proponents are trying to work with lenders and other key players to reach a deal to move the legislation forward.

HOMEOWNERS

The nonprofit Neighborhood Assistance Corp. of America is taking its "Save the Dream Tour" across the U.S. to help at-risk homeowners find ways to lower their mortgage payments. The free counseling service has plans to visit Florida.

FLORIDA ECONOMY

State economists are predicting Florida will fall another $2.4 billion short in tax revenues for the coming fiscal year, which means the federal stimulus package will likely fix only part of the problem. Compounding the problem: Legislators also will have to once again reduce the spending plan for the current fiscal year, which ends June 30.

SMALL BUSINESS AID

President Obama and Treasury Secretary Timothy Geithner will announce a broad plan to help struggling small businesses, a sector that employs about 70 percent of American workers. The package includes $730 million from the stimulus plan, with reduced small business lending fees and an increase on the guarantee for some Small Business Administration loans to 90 percent.

Realtors® Recommend Responsible Lending Principles

WASHINGTON, March 12, 2009

Realtors® care about protecting consumers from unfair lending practices and are important allies in those efforts. That is the message National Association of Realtors® President Charles McMillan delivered to the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit in testimony today.

“As we have seen recently, abusive lending erodes confidence in the nation’s housing system, strips equity from homeowners and damages local and national economies,” said McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

In 2005 NAR adopted a set of Responsible Lending Principles to encourage lending practices that ensure consumers have affordable mortgage choices and are protected in the real estate transaction. The principles also call for ensuring strong underwriting, eliminating prepayment penalties, eliminating mortgage flipping, strengthening enforcement against predatory and abusive lending practices, and maintaining the independence of appraisers and the appraisal process.

While NAR’s written testimony further detailed the responsible lending practices that NAR has advocated for many years, the focus of McMillan’s testimony was appraisal independence. “Realtors® believe that a strong and independent appraisal industry is vital to restoring faith in the mortgage origination process,” said McMillan.

With a record of supporting legislation that strikes the proper balance of oversight and consumer protection, NAR has endorsed legislation that would strengthen the independence of the appraisal process by ensuring appraisers serve as an unbiased arbiter of a property’s value.

To protect consumers, NAR recommended that lenders be required to inform each borrower of how property value was determined and provide them with a copy of each appraisal at no additional cost. NAR also called for stronger penalties against anyone who improperly influences the appraisal process, federal support for better state enforcement, and enhanced education and qualifications for appraisers.

“The irresponsible and abusive lending that occurred during the past few years has taken a toll on our communities and our nation. Now is the time to correct these problems to ensure we do not face the same circumstances in the future,” McMillan said. “Realtors® are proud to encourage responsible lending and we stand ready to work with Congress to ensure that the nightmare of foreclosures does not overshadow the American Dream of homeownership. As the leading advocate for homeownership and the real estate industry, NAR will continue to address issues facing Americans who are trying to purchase a home, protect their current home or preserve investment opportunities in residential and commercial properties.”

Accolades Grow for NAR's Green Designation

WASHINGTON, March 12, 2009

The National Association of Realtors® has received an Award of Excellence for its Green Designation, a program designed to equip Realtors® with advanced knowledge on green building practices and green property features.

The recognition was granted through the Associations Advance America program from the American Society of Association Executives and The Center for Association Leadership. The Green Designation is now eligible to be considered for a Summit Award – the top recognition for association programs from ASAE and CAL. NAR is one of only 21 organizations nationally to receive the AAA award for 2009.

“Realtors® are industry innovators who consistently find ways to provide their clients with cutting edge service,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “As green building issues become more important to buyers, sellers and businesses, more and more Realtors® are adding value to the real estate transaction by developing green business practices. The Green Designation is an excellent example of innovation in this area.”

NAR’s Green Resource Council confers the Green Designation, which was launched in November 2008 at the REALTORS® Annual Conference and Expo. The Green Designation program includes 18 hours of coursework, and Realtors® who have earned the designation are prepared to help consumers and clients in their search for environmentally friendly properties and work to incorporate green principles into their own practice.

“NAR’s program truly embodies the spirit of the Associations Advance America campaign. It is an honor and an inspiration to showcase this activity as an example of the many contributions associations are making to advance American society,” said 2008-2009 AAA Committee Chair Janet C. Gibbs, chief financial officer for Feeding America.

The AAA program is a national competition which recognizes associations that propel America forward – with innovative projects in education, skills training, standards-setting, business and social innovation, knowledge creation, citizenship, and community service

VIDEO:Termites: Protect Your Home

VIDEO:President's Podcast: Real Estate Today...

VIDEO:Pending sales march 9,2009

VIDEO: Economic Stimulus: Impact on Housing

http://link.brightcove.com/services/link/bcpid1785312249/bclid1740033302/bctid14100116001

VIDEO: What is FHA financing?

Attention potential homebuyers! Take advantage of an $8,000 tax credit

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale.

For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

Tax Credits -- The Basics

1. What’s this new homebuyer tax incentive for 2009?
The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

2. Who is eligible?
Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. How does a tax credit work?
Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual’s income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 - $8000 = $1500)

4. So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?
This tax credit is what’s called “refundable” credit. Thus, if the eligible purchaser’s total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference
FIRST-TIME HOMEBUYER TAX CREDIT
between $8000 credit amount and the amount of tax liability. ($8000 - $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?
A few examples are provided at the end of this document. There are several steps in this calculation, but most income tax software programs are equipped to make that determination.

6. Is there an income restriction?
Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

7. How is my “income” determined?
For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

8. What if I worked abroad for part of the year?
Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

9. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?
Not always. The credit phases-out between $75,000 - $95,000 for singles and $150,000 - $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual’s income reaches $95,000 (single return) or $170,000 (joint return). For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown: Couple’s income $165,000 Income limit 150,000 Excess income $15,000 The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).
In this example, the disallowed portion of the credit is 75% of $8000, or $6000 ($15,000/$20,000 = 75% x $8000 = $6000) Stated another way, only 25% of the credit amount would be allowed. In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

10. What’s the definition of “principal residence?”
Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as “owner-occupied” housing. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

11. Are there restrictions on the location of the property?
Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

12. Are there restrictions related to the financing for the mortgage on the property?
In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

13. Do I have to repay the 2009 tax credit?
NO. There is no repayment for 2009 tax credits.

14. Do 2008 purchasers still have to repay their tax credit?
YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return. Some Practical Questions

15. How do I apply for the credit?
There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040.

55+ in Hallandale, Florida

FIRST GULFSTREAM CONDO
2 BEDS 1 BATH WITH SCREENED BALCONY
1014 SQ FT.

$79,999.00

BANK OWNED FORECLOSURE! 55+ community. 20% down required. Closing w/seller's title company. 2nd floor corner unit w/screened balcony. Community pool. Easy to show(click request a showing). All terms must be emailed first w/pre-approval (see attached and link requested by seller), if accepted, offer is to be emailed w/all necessary & required documents in PDF format. See seller's addendum(s) attached. Seller's closing agent will hold Earnest Money Deposit. See BRK RMKS. SUBMIT ALL OFFERS!

MORTGAGE RATES

Rates on 30-year-fixed mortgages climbed to 5.25 percent this week after recent economic reports were better than expected, according to Freddie Mac's weekly nationwide survey.

HOMEBUYER TAX CREDIT

A $15,000 homebuyer tax credit (or 10 percent of a home's selling price, whichever is less) in a stimulus bill passed by the U.S. Senate would apply to all homebuyers of a principle residence. Better yet: The homebuyer would not have to pay it back. The tax credit and its rules could change, however, before final passage in the House.

FLORIDA BUDGET

Uncertainty over the final scope of the $800 billion-plus economic stimulus plan in Congress has delayed budget action in some states while officials wait to see how much federal relief they can expect. "I don't think we're relying on (federal money), necessarily," says Florida Gov. Charlie Crist. "(But) certainly it could be an enormous benefit as it relates to our budget."

MORTGAGES

Buying a house doesn't necessarily require getting a 30-year, fixed-rate mortgage. More people are exploring alternative financing plans as it gets harder to secure a conventional bank loan

REAL ESTATE INVESTMENT

Fannie Mae modified a policy that allowed real estate investors to have only four financed properties. The number can now be up to 10, depending on whether certain eligibility, underwriting and delivery requirements are met.

Want to buy an REO/Bank Owned Property?

Post a comment to receive a list of REO/Bank Owned Properties immediately. Also, you will be provided with your very own web page absolutely FREE. BUY with me and not only will I work for you FREE of charge, I will give you the buyer a portion of my commission paid by the seller at time of closing as an extra incentive. Best of all it's 100% Legal.

Homeowners! FREE CMA

Hello,
Are you a homeowner? Receive a FREE Comparative Market Analysis. Would you like a complete and professional market analysis of your property sent to you via email? If so, post a comment. Thank you -Daniel Matta

FAR releases latest report on Florida home buyers and sellers

ORLANDO, Fla. – Jan. 6, 2009 – What did the typical Florida homebuyer look like in 2008? The answer lies within the pages of the 2008 Profile of Home Buyers and Sellers Florida Report released by FAR and compiled by NAR, which is now available at floridarealtors.org.

Because the real estate market evolves, it’s important for real estate professionals to have a clear picture of today’s home buyers and sellers. The 2008 Profile of Home Buyers and Sellers describes the characteristics and motivations of recent home buyers and sellers in Florida to help real estate professionals track the changing demands of consumers in a dynamic market.

Characteristics of home buyers

• The median age of home buyers was 43 years old. Among first-time buyers, the median age was 32.
• The median 2007 household income of home buyers in Florida was $68,500 compared to $74,900 among home buyers nationally.
• Sixty-seven percent of home buyers had no children under age 18 residing in the home.
• Fifty-eight percent of home buyers were married couples, 18 percent single females, 13 percent single males, and 9 percent were unmarried couples.
• Seventeen percent of home buyers reported they were born outside the United States, compared to 9 percent nationally.
• First-time home buyers accounted for 43 percent of recent home purchases.
• Forty-eight percent of first-time home buyers were between 25 and 34 years old.
• The median income of first-time home buyers was $58,400 compared to $60,600 among all first-time buyers nationally.
• Thirty percent of first-time buyers identified their race or ethnicity as non-white.
• The primary reason for the recent home purchase was a desire to own a home for 60 percent of first-time buyers.
• For the timing of the home purchase, 34 percent reported it was just the right time for them, 19 percent noted they had to purchase when they did, and 29 percent reported it was either due to improved affordability of homes or availability of homes for sale. Only 7 percent stated they wished they had waited to buy.
• Forty-six percent of home buyers reported using social networking Web sites, such as MySpace, Facebook, LinkedIn, and Friendster. Among home buyers aged 18 to 24, 85 percent reported using social networking sites, and 50 percent reported using them every day or nearly every day.

Characteristics of homes purchased

• New home purchases were 25 percent of recent home purchases.
• Seventy percent of homes purchased were detached single family homes.
• The typical home buyer purchased a home 15 miles from their previous residence.
• The median price of homes purchased was $207,000 compared to $204,000 in the U.S.
• The typical buyer purchased a home that was 1,760 square feet in size. The median size of home purchased by first-time buyers was 1,570 square feet
• Commuting costs were considered as very or somewhat important by 79 percent of buyers when considering which home to purchase.
• Recent home buyers plan to live in their home a median of 10 years.

The home search process

• Twenty-nine percent of recent buyers reported that their first step in the home-buying process was looking online for properties for sale. Thirteen percent of first-time buyers and 19 percent of repeat buyers reported their first step was to contact a real estate agent.
• Eighty-four percent of home buyers used a real estate professional during their home search.
• Among home buyers, the typical Internet searcher was 41 years old and visited a median 12 homes. The typical home buyer who did not use the Internet to search for homes was 54 years old and saw a median 7 homes.
• Forty percent of home buyers first learned about the home they purchased from a real estate professional; 24 percent first learned about the home they purchased through the Internet.
• Real estate agents were viewed as a very useful information source by 79 percent of buyers, and as a somewhat useful information source by an additional 19 percent of buyers searching for a home.
• Six percent of buyers purchased a foreclosed home. 48 percent considered buying a home in foreclosure, but either could not find the right home, or found the purchase process to be too difficult or complex.

Home buying and real estate professionals

• Seventy-eight percent of home buyers purchased their home through a real estate agent or broker.
• Thirty-seven percent of first-time buyers were referred to their agent by a friend, family member, neighbor or relative.
• Ninety-seven percent of buyers ranked honesty and integrity as a “very important” factor when choosing a real estate professional to assist with a home purchase.
• When asked about their agent’s performance on those qualities considered important, 84 percent reported they were “very satisfied” with the honesty and integrity of their agent.
• Seventy-two percent of recent buyers will definitely use their agent again and 16 percent will probably use the agent again or recommend to others.

Financing the home purchase

• Eighty-eight percent of home buyers financed their home purchase; 95 percent of first-time home buyers financed the purchase of their home compared to 82 percent of repeat buyers.
• Savings was the chief source of the downpayment for 65 percent of first-time buyers.
• Forty-two percent of repeat buyers used proceeds from the sale of their primary residence toward the downpayment; 44 percent relied on savings for a portion of the downpayment.
• 48 percent of home buyers reported they have made some sacrifices to be able to make their home purchase, such as reducing spending on luxury items, entertainment or clothing.
• Forty-seven percent of all buyers believe that their home purchase was a better financial investment than stocks, and an additional 30 percent of buyers feel their home purchase was at least as good an investment as stocks.

Home sellers and their selling experience

• The median age of home sellers was 52 years; they had a median income of $80,600.
• Sixty-nine percent of home sellers were married and 72 percent had no children under 18 years old living at home.
• Thirty-eight percent of sellers traded up to a larger home when purchasing their next home.
• The typical home seller owned their home for 6 years.
• The typical home was on the market for 12 weeks. Thirty-one percent of home sellers did not reduce their asking price before their home sold.
• Recent sellers typically sold their homes for 92 percent of the listing price.
• Forty-four percent of sellers offered incentives to attract buyers, most often assistance with closing costs and home warranty policies.
• Eighty-five percent of sellers used an agent or broker to sell their home.
• Forty-nine percent of all sellers were very satisfied with the selling process.

Home sellers and real estate professional

• Fifty-seven percent of sellers contacted only one agent before selecting one to help assist in the sale of their home.
• When selecting a real estate professional, 38 percent of sellers received a recommendation from a friend, neighbor or relative.
• The reputation of the agent was the most important factor when choosing a real estate professional for 34 percent of recent sellers.
• Nineteen percent of sellers used the same agent for their home purchase.
• For 23 percent of sellers, their most important expectation was that the real estate agent would help price home competitively; 24 percent reported that their most important expectation was that the agent help sell the home within a specific timeframe.
• Ninety percent of sellers reported their home was listed or advertised on the Internet.
• Seventy-nine percent of sellers used an agent that provided a broad range of services and managed most aspects of the sales transaction.
• Sixty-four percent of sellers reported they would definitely use the same real estate agent again.

For sale by owner sellers (FSBO)

• Twelve percent of sellers sold their home without the assistance of an agent compared with 13 percent of sellers nationally. Among all sellers, 5 percent were FSBO sellers who knew the buyer.
• Fifty-nine percent of FSBO sellers reported that they had some difficulty in selling their home themselves, in performing tasks such as understanding and performing the necessary paperwork to complete the transaction, preparing the home for sale, and getting the price right.

FLORIDA LEGISLATURE

The Florida Legislature meets this week in a special session to tinker with the state's budget. Tax increases won't be considered, so the Legislature is looking at a combination of other options, including spending cuts, tapping reserves, higher court fees and fines. FAR continues to monitor recommendations that could harm the state's housing industry and slow a recovery.

BANKRUPTCIES

It is increasingly likely that judges will get the power to rewrite mortgages for homeowners facing bankruptcy, some analysts say. The banking industry has fought these mortgage "cram-downs," but voluntary foreclosure-prevention programs aren't working so far, and judges may be given the power to step in.

NAR: Media shouldn’t say buyers need 20 percent downpayments

WASHINGTON – Jan. 6, 2009 – Don’t believe everything you read, says NAR.

There is some misinformation in the media lately about the required size of a downpayment for a mortgage in today’s market, and the blog world is abuzz with misperceptions. Not all so-called experts are knowledgeable in this area, and some experts are being misunderstood.

The facts:

1. An individual may be required to put down 20 percent based on that person’s financial situation – but that is not an across-the-board requirement for all borrowers.

2. A borrower who puts down less than 20 percent is required to obtain mortgage insurance.

3. Even in a declining market, a borrower is required to make at least a 5 or 10 percent downpayment.

4. FHA requires a 3.5 percent downpayment by borrowers, so long as they meet a 31 percent housing cost-to-income ratio. In other words, anyone who stays within their budget and who can afford a 3.5 percent downpayment (even with family help) can become a homeowner.

FHA market share has grown roughly tenfold in the past year to an estimated 30 percent of new mortgage originations.

Merry Christmas, Happy Holidays and Happy New Year!!

Happy Holidays to all. -Daniel Matta

2/2 CONDO: PRICED TO SELL FAST!!

410 NW 214TH ST #202. MIAMI, FL 33169

Misty Lakes North

$99,000 asking price. 2/2 -1134 sq ft. Insurance & water included in association fee. Gated community.

FEDERAL BAILOUT

NAR hailed a move announced by the Fed, one of the four changes advocated by the national association in a recent Call-to-Action. Under the plan, the U.S. will buy housing-related debts, which NAR says will stabilize mortgage lending and bring rates down perhaps as much as 1 percent.

REAL ESTATE INVESTMENT

In today's housing market, some people are finding a real estate investment niche by purchasing low-cost homes, then offering them to buyers with owner financing. "Depending on the area, it can be critical and the difference between making a sale and not," says Dawn Rickabough, a California broker and mortgage consultant.

FORECLOSURES

Homeowners facing foreclosure could find help in an unlikely place - the company that insures their mortgage. Some PMI companies, like Genworth Financial, are helping to keep loans from failing and Florida is one of the states where the company has been most successful. In the past year, Genworth has mediated 901 workouts in the Sunshine State, second only to Texas.

FLORIDA CONSUMER CONFIDENCE

Consumer confidence among Floridians rose one point to 62 in November from numbers reported by the University of Florida at the end of October. While four of the five components fell, the component measuring consumer attitudes about buying a big-ticket item rose eight points.

HOME SALES

The U.S. Commerce Department says new home sales decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991.

Happy Thanksgiving!

Hello Everyone,
Happy Thanksgiving! Hope you enjoy the day and best wishes to all.

I NEED AN ANSWER NOW!

Hello,
Do you have a question? Where do you find answers to your Real Estate questions? Do you use the internet or call a friend? Do you call a Realtor? Post your comment. Your feebback will be appreciated. - Daniel Matta

SHORT SALE Q&A

News
Short Sale Q&A
The increase in the number of short sales throughout the state prompted two legal questions from Mike Richardson, Association Executive of the Naples Area Board of Realtors. FAR’s General Counsel Randy Schwartz responds:

Q: If a real estate licensee lists a property at a below market price he knows the seller probably won’t accept, is the licensee in violation of Florida real estate license law?

A: Randy Schwartz: While a violation of the Florida real estate license law is a matter to be determined by the Florida Real Estate Commission, in my opinion, if a licensee lists a property for a price the licensee and the seller know is not acceptable, a case of misrepresentation and false advertisement can be made under Chapter 475.25(1)(c) Florida Statutes. It would not make any difference if the listing indicated that the selling price was subject to a third party lender or not; it is more a matter of advertising something that is known to not be acceptable.

Q: Is the seller in violation of any law if he states he would sell a property at a certain price even though he knew it would not actually sell at that price?

A: Randy Schwartz: I do not believe the seller would be violating any license law because Chapter 475, Florida Statutes, does not regulate the public. However, Chapter 817, Florida Statutes, might come into play for the licensee and a member of the public. Whether the seller could be held accountable for civil damages, due to his or her misrepresentation, would be completely determined by the individual facts of the case.

Short sales and the Foreclosure Rescue Fraud Prevention Act
Does Florida's new Foreclosure Rescue Fraud Prevention Act (F.S. 501.1377) prohibit real estate licensees from being involved in short sales? According to Florida Attorney General Bill McCollum in a letter to FAR President Chuck Bonfiglio, the answer is no, provided the only compensation sought by the licensees is the commission on the sale. The new law, which took effect Oct. 1, 2008, seeks to protect homeowners who face the threat of foreclosure from individuals who would prey on them.

McCollum's interpretation is based on the following scenario: A licensee secures a listing agreement on a home for sale, ascertains that the fair market value of the home is less than the loan amount, and lists the property at the lower amount. If a buyer agrees to pay less than the loan amount, the licensee then asks the lender to accept the lesser amount in order to avoid foreclosure.

"As long as there is no upfront or other fee for the negotiating service other than the normal real estate fee charged for the sale of the property, that activity [participating in a short sale] would not appear to fall under the provisions of F.S. 501.1377," according to McCollum.


Florida issues ruling on doc stamp taxes for short sales
The Florida Department of Revenue (DOR) issued its ruling stating that doc stamp taxes owed on a deed should be based on the sale price paid by the purchaser. The DOR ruling is effective immediately.





Best Practices

Protect your brand

Registration of your mark is not required, but it’s a good idea if you want to protect it. On the USPTO registration application, you must concisely list your trademark’s goods and services. You may use the federal registration symbol “®” only after the USPTO has actually registered the mark, not while the application is pending, and you may use it only for the goods and services listed in your federal trademark registration.



FREC Final Order

This Florida Real Estate Commission Final Order allows a sales associate to be paid a commission directly if the sales associate’s broker provides the closing agent with written authorization identifying the specific transaction, the sales associate to be paid and the specific amount to be disbursed.

FLORIDA LEGISLATURE

Brace yourself: Newly elected Florida legislators face one of the toughest budget challenges in the state's history amid national economic turmoil and steadily declining revenues, House Speaker Ray Sansom told fellow Republicans Wednesday.

MARKET WATCH: SOUTH FLORIDA

Homebuyers are again shopping in South Florida - mainly first-time buyers overjoyed to find a place they can afford, retirees paying cash, and investors looking for long-term equity rather than a quick flip.

HUD FORECLOSURE PROGRAMS

HUD is revamping two programs intended to help at-risk homeowners avoid foreclosure. Rules changed yesterday for the HOPE for Homeowners program, which only attracted 111 applications since its Oct. 1 debut. Changes to FHASecure will follow, HUD officials say. That program has helped only 4,000 homeowners in 15 months.

INTERNET

Some people go to real estate Web sites because they want to buy a home, but 62 percent of visitors are just checking out local home values, according to a study conduct by Move Inc.

HOMEBUYER HELP

Organizations representing the rental side of the real estate market oppose homebuyer assistance. The National Multi Housing Council (NMHC) and the National Apartment Association (NAA) oppose a federally financed interest rate buy down on mortgages and support the existing ban on seller-financed downpayment programs

30-year mortgage rates drop to five-week low

WASHINGTON (AP) – Oct. 24, 2008 – Rates on 30-year U.S. mortgages dropped sharply this week, falling to the lowest level in five weeks.

Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.04 percent this week, down from 6.46 percent last week. The sharp decline pushed 30-year rates down to the lowest level since they stood at 5.78 percent the week of Sept. 18.

Analysts attributed the decrease to an easing of inflation concerns, which now have been replaced with rising worries that the country could be headed for a prolonged recession. Interest rates generally fall in periods of economic weakness.

Rates on 30-year mortgages hit a high for the year of 6.63 percent in late July and then dropped below to a seven-month low of 5.78 percent the week of Sept. 18.

According to the Freddie Mac survey, rates on other types of mortgages were mixed this week.

Rates on 15-year fixed-rate mortgages, which are popular with people who are refinancing, fell to 5.72 percent, compared to 6.14 percent last week.

Rates on five-year adjustable-rate mortgages fell to 6.06 percent, down from 6.14 percent last week. However, rates on one-year adjustable-rate mortgages rose to 5.23 percent, up from 5.16 percent last week.

The mortgage rates do not include add-on fees known as points. The nationwide fee for 30-year, 15-year and five-year mortgages averaged 0.6 point. One-year mortgages averaged 0.5 point.

A year ago, the nationwide average rate on 30-year mortgages stood at 6.33 percent, 15-year mortgage rates averaged 5.99 percent, five-year adjustable-rate mortgages were at 6.03 percent and one-year adjustable-rate mortgages stood at 5.66 percent

DAILY BRIEFING: Thursday, October 9, 2008

DAILY BRIEFING
Thursday, October 9, 2008


PROPERTY TAXES

Real estate ads include listing after listing of bargain-basement prices, but those who buy a home in foreclosure should know that the property bills may not be such a bargain. Florida regulations bar counties from factoring in foreclosures when they draw up tax rolls.

INTERNATIONAL

Increasingly, foreign investors find Florida an attractive bargain, and local real estate professionals are working to establish more international relationships. "The past couple of years with the declining dollar, Florida has become a magnet to international investors," says Ivo Travnicek, of Sarasota-based Florida Venture Partners LLC.

MORTGAGE RESCUE

Republican presidential candidate John McCain on Wednesday touted his new mortgage rescue plan, which would buy bad mortgages directly using funds from the $700 billion financial bailout approved by Congress last week. Meanwhile, Democratic candidate Barack Obama says McCain's approach helps bad lenders and hurts taxpayers.

INTEREST RATES

In a coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday. The move should make ATMs and home equity lines of credit more affordable.

HOMEOWNERSHIP

After a housing slump that has pushed home values down in most areas, roughly 12 million households, or 16 percent, now owe more than their homes are worth

Buy a home in this troubled market and the property tax may shock you

TALLAHASSEE, Fla. – Oct. 9, 2008 – Real estate ads these days include listing after listing of bargain-basement prices. But those who buy a home in a foreclosure or a pre-foreclosure sale should know that future property bills may be no bargain.

Just because someone snags a home at a low price doesn’t mean the tax bill will tumble. Property taxes could be as high as ever.

Foreclosures and short sales – in which lenders take less than what is owed on the mortgage and forgive part or all of the remaining debt to avoid foreclosure – represent a large share of the real estate market in Broward and Palm Beach counties as more owners are unable to keep up with mortgage payments. But that doesn’t matter when local property appraiser offices draw up the tax rolls.

In fact, state regulations bar counties from factoring in foreclosures and other distressed sales in which the seller is forced to accept less money than the market price. Appraisers and some real estate agents worry unsuspecting buyers will expect a tax windfall.

“If you buy a home for $250,000, then you should pay taxes on $250,000,” Fort Lauderdale-based real estate agent Steve Cook said. “That’s what the buyer expects is going to happen. The average person is working so hard to get by, and they don’t understand the legalities of something like this.”

Buyers traditionally can expect their new home will be assessed at roughly 85 percent of the purchase price for property taxes, the difference being closing fees and other transaction expenses. When a home is purchased as a distressed sale, the property is assessed based on regular sales of similar homes in the area.

The tax ramifications of distressed sales were once an arcane corner of the law that interested few homeowners. Not any more.

The most recent data shows Broward County has the third-highest foreclosure rate in the state. There were 7,104 homeowners in some stage of foreclosure in August, up 5 percent from 6,782 a year earlier. Foreclosure filings in Palm Beach County have declined to 1,976 from 2,499 a year ago. Short sales are harder to track. However, a recent study by the Sun Sentinel showed 23 percent of sellers in Broward and 27 percent of sellers in Palm Beach unloaded their homes at a loss during the first half of the year.

The tax difference can add up.

Say someone pays $200,000 for a home. The home likely would be assessed at $170,000 so the property taxes would be about $2,700 after homestead exemptions are deducted.

Then assume this wasn’t a standard transaction, but rather a foreclosure or short sale. Similar homes in the neighborhood are valued at $300,000. That tax bill could top $5,400.

State law is specific that foreclosures can’t be used in setting property values. Short sales aren’t mentioned by name, but property appraisers consider them financially distressed sales and do not use them to set tax values. Assessors across Florida have asked the state Department of Revenue for a clear ruling on how to handle short sales.

Broward County Property Appraiser Lori Parrish has received so many questions that she’s posted a warning about taxes and short sales on her Web site. She said she should be allowed to consider short sales.

“In a down market, I should have discretion,” she said. “When these sales make up half the sales of a neighborhood, how do you not factor it in when they have become the market?”

Palm Beach County officials also do not consider short sales in setting a home’s value. However, the head of residential appraisals in Palm Beach County notes that a short sale can have an indirect effect.

In neighborhoods where there are numerous short sales, all property values can end up being driven down. With homes available at discounted prices in short sales, buyers are not willing to pay as much for other property. The lower prices fetched in standard sales then lowers the taxable value of the neighborhood when the appraiser’s office sets the next tax roll.

“It’s a tricky widget,” said John Thomas, assistant director for residential appraisal services in Palm Beach County. “If the home is in neighborhood that is so soft, the short sales will impact the market.”

Realtors pursue international investors

BRADENTON, Fla. – Oct. 9, 2008 – Florida is becoming a hot spot in the global real estate market.

Declining property prices coupled with a desirable climate is making the state an attractive investment and bargain for foreign buyers.

And local real estate professionals are taking advantage of that appeal and doing more to establish international relationships.

“The past couple of years with the declining dollar, Florida has become a magnet to international investors,” said Ivo Travnicek, of Florida Venture Partners LLC, a Sarasota firm that serves as a managing partner for foreign investors.

While property transactions in Florida have declined over the past three years, the number of international buyers in the state has grown, according to a joint survey by the National Association of Realtors and Florida Association of Realtors.

Florida Venture Partners are among several local companies to extensively network overseas in an attempt to profit from the increasing number of international buyers.

On Friday, the group leaves for Europe to begin a week-long trip aimed to attract buyers from Prague and Slovakia.

Sarasota lawyer Alan Tannenbaum, who formed the group with Travnicek and Realtor Ian Black, said this will be the group’s fourth trip in a year to Central and Eastern Europe in which they’ve showcased a portfolio of property ranging between $22 million to $100 million to the area’s top investors.

“The trips have built on each other,” Tannenbaum said. “I think you’re going to see over the next six months a real substantial amount of transactions that are going to occur.”

The number of international buyers of Florida property from 2005 to 2008 has doubled.

According to about 5,000 Florida Realtors who participated in a survey by the National Association of Realtors, international purchases made up 30 percent of Florida property sales reported between August 2007 and August 2008.

In 2008, the Sarasota-Bradenton-Venice area ranked third on the top destinations for international property purchases as reported by Realtors in the survey.

Luxury real estate companies that are well established internationally, too, are taking an aggressive approach to establishing global relationships.

Today, Michael Saunders, president of Michael Saunders & Co., is speaking in London to the National Association of Estate Agents about the importance of networking.

Tom Heatherman, corporate communications director for Michael Saunders, said Saunders’ speech will be the key note address at a meeting. She will discuss the value of effective international networking.

Saunders’ trip to London follows networking conferences she attended in Rome and Madrid, and precedes a global conference she will attend in Bermuda later this year.

“Michael more than anyone else is a proponent of networking at all times,” Heatherman said. “It’s the networking you do in the bad times that set you up for the good times.”

Terry Hayes, an agent with SKY Sotheby’s International Realty, said Anna Maria Island has a strong reputation for attracting European buyers.

Hayes said SKY Sotheby’s had the opportunity to further showcase Anna Maria property to international investors at conference held in Boca Raton in May.

“We were able to go over there and really feature our properties on the West Coast with a lot of international agents visiting,” Hayes said of the conference that was attended by 1,500 agents representing 23 countries.

“I certainly haven’t stopped advertising in the international market,” Hayes said. “The international market has always been attracted to this part of the market. They still think it’s a beautiful place to own a home.”

Candidates continue debate on relief for mortgage holders

WASHINGTON – Oct. 9, 2008 – Republican John McCain on Wednesday touted his plan to have government buy up bad mortgages, while Democrat Barack Obama said his rival’s approach would hurt taxpayers and help bad lenders.

A day after the second presidential debate was dominated by exchanges on the sagging economy, McCain told supporters in Pennsylvania his $300 billion plan would help struggling homeowners obtain “manageable mortgages.”

His plan would direct the Treasury secretary to buy the mortgages directly and use funds from the $700 billion financial bailout approved by Congress last week. The bailout package currently calls for the government to buy mortgage-backed securities and allow – but not require – direct purchases of mortgages.

“We must go to the heart of the problem, and right now that problem is a housing crisis,” McCain said.

Obama has said he wants the government to consider such a move, but he has not called for a mandate. His campaign said a key difference between McCain’s proposal and the new government bailout program is that lenders would absorb losses that would otherwise go to taxpayers.

“The biggest beneficiaries of this (McCain) plan will be the same financial institutions that got us into this mess,” Obama economic policy director Jason Furman said.

McCain policy adviser Douglas Holtz-Eakin said the Republican wants direct action so homeowners get relief quicker. He said the McCain plan could affect as many as 10 million mortgage holders.

In Indiana, Obama again sought to link McCain to President Bush. “It is time to turn the page on eight years of economic policies that put Wall Street before Main Street.”

The campaigns also followed up the debate with new television advertisements. Obama’s spot criticizes McCain’s plan for health care tax credits, saying it would lead to taxes on employer-based benefits.

McCain’s ad, meanwhile, questions Obama’s qu

The Fed and other central banks cut interest rates

WASHINGTON – Oct. 9, 2008 – In an unusual coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates Wednesday to keep an escalating financial crisis from becoming a global economic meltdown.

The Fed cut its key rate from 2 percent to 1.5 percent. In Europe, which also has been hard hit by the financial crisis, the Bank of England reduced its rate by half a point to 4.5 percent, and the European Central Bank sliced its rate by half a point to 3.75 percent.

The central banks of China, Canada, Sweden, and Switzerland also cut rates. The Bank of Japan said it strongly supported the actions.

“The recent intensification of the financial crisis has augmented the downside risks to growth,” the Fed said in explaining the coordinated action, the latest in a series of bold moves intended to spur lending and revive the global economy.

The Fed’s action will reduce borrowing costs almost immediately for U.S. bank customers whose home equity and other floating-rate loans are tied to the prime interest rate. Bank of America, Wells Fargo, and other banks cut their prime rate by half a point to 4.5 percent after the Fed announcement.

White House spokesman Tony Fratto welcomed the cooperation between the Fed and other countries’ central banks to battle the crisis. “It’s important and helpful that central banks are working in a coordinated way to deal with stress in the financial system,” Fratto said.

Nearly 1 in 6 homeowners ‘under water’

NEW YORK – Oct. 9, 2008 – The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults – the very misfortune that touched off the credit crisis last year.

The result of homeowners being “under water” is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall.

And having more homeowners under water is likely to mean more eventual foreclosures, because it is hard for borrowers in financial trouble to refinance or sell their homes and pay off their mortgage if their debt exceeds the home’s value. A foreclosed home, in turn, tends to lower the value of other homes in its neighborhood.

About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30 percent in some areas, roughly 12 million households, or 16 percent, owe more than their homes are worth, according to Moody’s Economy.com.

The comparable figures were roughly 4 percent under water in 2006 and 6 percent last year, says the firm’s chief economist, Mark Zandi, who adds that “it is very possible that there will ultimately be more homeowners under water in this period than any time in our history.”

Among people who bought within the past five years, it’s worse: 29 percent are under water on their mortgages, according to an estimate by real-estate Web site Zillow.com.

The majority of homeowners still have equity, and even among those who don’t, many continue to make their mortgage payments on time. The financial-bailout legislation could at least “keep things from getting much worse” by helping banks avoid the need to tighten credit further, says Celia Chen, director of housing economics at Economy.com. Still, she expects housing credit to remain tight and home prices to decline in much of the country for another year or so.

Prices are back to 2003 levels in the San Diego and Boston metropolitan areas, and back to 2004 levels in Las Vegas, Los Angeles, San Francisco, Fort Lauderdale, Fla., and Minneapolis, according to First American CoreLogic, a data firm in Santa Ana, Calif.

Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20 percent down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.

At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman. “We were quite shocked,” she says.

The Kirschenmans, who both work for a company that makes trailer hitches, thought about sending the keys to the lender. But their financial planner, Christopher Olsen, helped persuade them to stick with the house, noting that they could still afford the payments.

Others aren’t so lucky. Among mortgages on one- to four-family homes, 9.16 percent were a month or more overdue or were in foreclosure in the second quarter, according to the Mortgage Bankers Association. That compared with 6.52 percent a year before and was the highest level since the association began such surveys 39 years ago.

Falling values have contributed to a sharp pullback in mortgage lending. In the third quarter, mortgage lending fell to the lowest level in eight years – down 44 percent in a year – says the publication Inside Mortgage Finance.

One reason is that as home values slip, growing numbers of would-be borrowers lack sufficient equity to refinance. The falling values also make mortgage lending look riskier to banks, spurring them to tighten credit standards.

Most mortgages in default were issued in 2006 and 2007, when lending standards were loosest and the housing market was peaking. Many who bought then made small down payments or none, so they had little equity in their homes from the start.

The performance of loans made earlier is getting worse, too, as price declines deplete the equity people built up. In Las Vegas, 6 percent of home loans made in 2004 are now 30 days or more overdue, up from 3.7 percent a year earlier, according to research firm LPS Applied Analytics.

In July, Congress enacted legislation designed to help borrowers who owe more than their homes are worth by allowing them to refinance into a government-backed loan, provided their mortgage company forgives part of their principal. It’s not clear how many borrowers the program will help, because before reducing the principal, lenders would almost always try first to freeze or reduce borrowers’ interest rate to make payments more affordable, says Tom Deutsch, deputy executive director of the American Securitization Forum, an industry group.

In contrast with the 12 million home borrowers estimated to be under water, 64 million have equity in their homes. These include 24 million households who own their homes free and clear, and 40 million whose homes remain worth more than is owed on them.

Even so, some borrowers fret that declining prices and tighter lending standards could make it hard for them to tap their equity.

Steven Schneider, a mortgage broker in Miami, bought his home at the end of 1992. When he refinanced about four years ago, he pulled out $150,000 in cash that he intended to use to build an addition. The transaction raised his total debt to about $350,000, at a time when his home had a value of about $650,000.

Recently, Mr. Schneider pulled out roughly $90,000 by tapping a home-equity line of credit. He says he put the funds in a money-market account that yields less than the 5 percent interest rate on the loan. “I was afraid they were going to shut down” access to the credit line, says Mr. Schneider. He figures his home, once valued at $750,000, now is worth about $600,000.

How much pain homeowners feel varies greatly from place to place. The most severe drops in home values are in parts of California, Florida, Nevada, Arizona and other areas where speculation pushed prices up and builders far overestimated demand.

Within metro areas, neighborhoods with short commutes are holding up better than others. And in many parts of Texas and North Carolina, home prices have continued to rise slowly, have leveled off or have declined only modestly.

On a national basis, home prices peaked in mid-2006 after rising 86 percent since January 2000, according to the First American index. Since peaking, that index has fallen 13 percent.

The declines have made homes more affordable, bringing prices in many areas closer to their long-term relationship to incomes. In the second quarter, the median home price of about $203,000 was 1.9 times average pretax household income, according to Economy.com. That was close to 1.87 times income for 1985 through 2000, prior to the housing boom.

Housing markets don’t tend to turn around quickly. The price slump in California in the early 1990s, for instance, was a long grind. According to the S&P/Case-Shiller home-price indexes, Los Angeles prices peaked in June 1990 and didn’t bottom until March 1996. They didn’t get back to their 1990 peak until 2000.

DAILY BRIEFING: Wednesday, October 8, 2008

DAILY BRIEFING
Wednesday, October 8, 2008


PENDING HOME SALES

Pending home sales surged 7.4 percent, according to NAR's latest Pending Home Sales Index, and the number is 8.8 percent higher year-over-year. Lawrence Yun, NAR chief economist, says homebuyers were responding to improved affordability, especially in states such as Florida, California, Nevada, Arizona and Rhode Island.

CITIZENS PROPERTY INSURANCE

The state's insurer of last resort still has almost 2,000 unresolved homeowner-damage claims from the 2004 and 2005 storm seasons, and several Volusia County beachfront condominiums are now taking Citizens to court. According to public adjusters, attorneys and former Citizens employees, the insurer often delays paying claims and lowballs storm damage.

TAXES

Several popular tax breaks were renewed or extended under the just-passed federal bailout package, including a three-year extension for the home seller protection law that forbids the IRS from taxing a mortgage debt forgiven by a lender as part of a short sale.

HOUSING COSTS

The financial squeeze on Americans got tighter over the last decade as housing expenses - everything from mortgage payments and rent, to utilities and insurance - far outpaced the growth in incomes, according to a new study by the Center for Housing Policy.

FORECLOSURES

During yesterday's presidential debate, Republican candidate John McCain proposed a $300 billion federal program to buy up bad home mortgages and allow homeowners to keep their house.