FHA Raises Funding Fees

FHA is increasing the insurance premium charged on all their FHA-insured mortgages. The increase is going from 1 percent to 1.75 percent, effective April 9th. The annual FHA mortgage insurance premiums have also risen by one-tenth of a percent.

Your payments will increase by about $24 a month if you take out a $200,000 mortgage -- assuming you include the upfront charge in the financed amount. A fee increase for jumbo loans and some 15-year loans is coming in June.

This is the fourth fee increase in the last three years. HUD says it should increase FHA's reserves by more than $1 billion through the year 2013.

You can find the original article here.

Return On Your Home Improvements

We all want to make improvements to our house and we often know we will improve the value of our home. But just how much will improvements to the kitchen, bathroom or siding give us? While you will never recover the entire cost of your renovations, you can at least improve your home's value. And that can make the difference between a good sale and a poor one.

Remodeling magazine printed up this year's list of return on investment for various home improvement projects.

Improvement	Cost	Resale Value	% Recouped
Siding Replacement	$13,461	$10,493	78.0%
Entry Door Replacement	$1,238	$903	73.0%
Attic Bedroom Addition	$50,148	$36,346	72.5%
Kitchen, Minor Remodel	$19,588	$14,120	72.1%
Garage Door Replacement	$1,512	$1,087	71.9%

At best, you can get a 78% return on your investment if you replace the siding.   You can see the entire list here.

Renting Your Home

Renting Out Your Home

Homeowners sometimes figure if they can't sell their house they will rent it out. They think all they need is to cover the payment and they are good to go. Allstate came out with an article this week where the author described her experience renting her house and gave some advice on renting out your own.

While the article has some general points and some good information, don't make the mistake of thinking this is all you need when renting your home. There are many fine points about being a landlord and treating the house like a rental property which, if not taken into account, could cause a lot of trouble or land you in trouble. Here are some pointers:

Make Sure You Can Cover Expenses

Covering your rent is not enough. You need to put some aside to cover the payment when the current renters move out. You also need to have money set aside to repaint, repair and clean carpets. Don't think the security deposit will cover all of it. You also need to have some money set aside to cover repairs while they are in there. A broken pipe, busted air conditioner or any one of many problems can derail your finances.
You will probably need property insurance for the house and that will be different from homeowner's insurance. Talk to your insurance agent. Will you be keeping any personal property on the premises while you are away? Be sure to mention that to your agent as well.

Taking Care of the Place

Will you be in town and on call the whole time the house is rented? If you're going to be out of town and have to have a property management company take care of the place, just be careful to take their fees into account. They will take some off the top of the rent, and usually charge extra for any time they have to do anything besides collect the rent. Interview property managers and ask plenty of questions.
And don't forget about utilities. You will want to talk to the utility companies about moving the bills back to you when the renters move out. You don't want the heat shut off in the winter and stopping by to see busted pipes and a flooded home.
In the same vein, keep tabs on the place. Drive by once in a while to make sure the tenants haven't moved out in the middle of the night, haven't brought extra people to the house to live, and to make sure the place hasn't burned down.

Keep a Paper Trail

When interviewing tenants, keep a standard checklist for things like credit, payment history, employment history, etc. Treat everyone the same and document it. Keep a set of policies for late rents, damages, new people added to the lease and so forth. If a person is late on the rent, send a letter certified and keep the stub for your records. Do this for everyone and charge a late fee no matter what story you hear. As soon as you treat someone different or can't prove you treated someone the same, you could be in trouble. CYA.

Know the Law

Every state's laws vary on landlords and tenants. You need to talk to a lawyer or someone involved with landlord/tenant laws. Do this before you begin interviewing tenants so you know you're compliant from the start.

Summary

Renting a home is not difficult but it does come with its own unique rules. Do plenty of research and be diligent in your record keeping. You could be entering a profitable business but only if you know the pitfalls.

Understanding Agency

When discussing real estate, you sometimes hear discussions about agency. An agent can be a buyer's agent, a seller's agent or a dual agent. Basically, agency means whose best interests the agent has. The agent has a fiduciary responsibility to the principal.

Seller Agency

Agents who represent a seller should have the seller's best interests at heart. These agents have an obligation to get the best price for the house and while they have to disclose material facts, they don't have to disclose personal information. Reasons for moving, waht the seller's bottom line is, etc., stay in confidence unless the agent has written permission to release it.

You might hear something about seller sub-agency. It used to be that all agents were sub-agents of the seller's agent and all had a duty to get the best price for the seller. No one represented the buyer. That has changed in Nebraska and now the default agency is buyer agency.

Buyer Agency

Agents who represent the buyer should have the buyer's best interests at heart. The agent can give advice on making offers and has to receive the best possible deal for the buyer. A buyer's agent is the friend of the buyer only, not the seller. Like a seller agent, the buyer agent has to keep confidential information private unless told he can release it.

There is a term thrown about sometimes and that is exclusive buyer agent. That means the agent is a buyer's agent only and does not accept listings.

Dual Agency

As you can imagine, if a seller agent has to do the best possible job for the seller and a buyer agent has to do the same for the buyer, dual agency is like walking a tightrope. This isn't a comfortable situation for an agent and some refuse to do it. If an agent is a dual agent, both the buyer and seller need to sign an agreement acknowledging the agent is diong his best for both. Confidential information about the buyer and seller remains confidential and the agent has to be careful about negotiating advice.

Summary

Any real estate agent you talk to can explain agency to you. If you list a house or talk to an agent about buying a house, one of the first things explained is that of agency. Who has your best interests at heart? Give us a call and we can help you sell a house, buy a house or just explain things for you.

Quarterly Maintenance

Doing maintenance on your house helps keep it in good shape and helps to reduce the surprises when things go wrong. Taking a few minutes to do this every month will make you feel better about the future.

Drains

Clean these with baking soda.
Pour water down any unused or rarely used drains.

Faucets and shower heads

Check interior and exterior faucets for leaks.
Clean aerators. They unscrew easily. Once it's off, just turn the aerator over and run water through it.
Replace washers if necessary. You will know if you need to replace washers if you have a slow leak through the faucet.

Kitchen and bathroom cabinets

Check under and around them for leaks.

Toilets

Check for stability and leaks.
Tighten the bolts holding the seat if they are loose.

Water heater

Check area around water heater for leaks.
If you have hard water, drain 1 - 2 gallons of water from it.

Omaha Market Stats for November 2011

From Campbell Team Real Estate

Curious about how the market is doing over last year?   Here are the stats for November 2011 vs. November 2010

	2010	2011
Active Current Listings	5,355	4,641
Avg List Price	$180,700	$180,471
Days on the Market	73	68
List to Sales Price Ratio	97%	95%
Number of Sales YTD	8,694	8,698

As you can see, the number of houses on the market has gone down. The asking price is slightly lower, the time on the market is five days longer and the actual price received as a percent of the list price is lower. The market has slowed down some over this time last year.

Compared to last month, we have more houses on the market and they are listing for more money, though they stayed on the market the same amount of time and still sold for 95% of the asking price.

If you would like to see a graph covering a longer time frame of the market, check out my website to see the last year.   If you have any questions or would like a market analysis of your home, please feel free to contact us.

Market Stats for October 2011

From Campbell Team Real Estate

Curious about how the market is doing over last year?   Here are the stats for October 2011 vs. October 2010

	2010	2011
Active Current Listings	5,665	5,254
Avg List Price	$180,731	$180,987
Days on the Market	73	74
List to Sales Price Ratio	97%	95%
Number of Sales YTD	8,106	7,999

As you can see, the number of houses on the market has gone down. The asking price is slightly higher, the time on the market is a day longer and the actual price received as a percent of the list price is lower. The market has slowed down some over this time last year.

Compared to last month, we have fewer houses on the market and they are listing for more money, though they stayed on the market the same amount of time and still sold for 95% of the asking price.

If you would like to see a graph covering a longer time frame of the market, check out my website to see the last year.   If you have any questions or would like a market analysis of your home, please feel free to contact us.