Omaha Ranks Again

Best Places to Live, Number Seven

Forbes recently ranked cities for the best place to raise a family and Omaha came in 7th. They ranked cities according to seven categories: median income, overall cost of living, housing affordability, commuting delays, percentage of families owning homes, crime rate and education quality.

The Top 10

1. Grand Rapids, Michigan
2. Boise, Idaho
3. Provo, Utah
4. Youngstown, Ohio
5. Raleigh, North Carolina
6. Poughkeepsie, New York
7. Omaha, Nebraska
8. Ogden, Utah
9. Cincinnati, Ohio
10. Worcester, Massachusetts

This is a great list, but then we already know Omaha is one of the best places in America. The original article can be found here.

Not Closing On a Property

Not Closing Escrow

You've found the perfect house and put in an offer. Now is not the time to hope everything goes well. You and your real estate agent should have everything lined up by now. Make sure you've been preapproved, not prequalified, before you put in the offer. And then don't do anything to endanger your eligibility. The following are some reasons people fail to close on their dream homes:

They Weren't Really Approved After All

The people were so excited to look at homes they forgot to talk to a loan officer. A prequalification goes quickly, with some questions over the phone. The loan officer makes a best guess given the information. But that's not the same thing as a preapproval. That is where the lender pulls a credit report and verifies the information. Things to look out for are previous bankruptcies, late payments, wage garnishments and so forth.

Now is Not the Time To Use the Credit Cards

Assuming you have been prequalified, don't rock the boat. Now is not the time to buy a new car, new furniture or new boat. Now is not the time to run up your credit cards or apply for new ones, either. Don't even pay off a bill early without talking to your lender. The lender will pull another credit report before closing and if your credit score has changed, you could be out of a loan.

The House Just Isn't Worth It

Eager buyers, especially those in a bidding war, may win to find the house doesn't appraise for the price they agreed to pay. In this case, if the contract has the right wording in it, the buyers can get out of it. If not, they will have to come up with the difference.

In the case of a flipped house, where the owner bought it and rehabbed it, some banks won't finance without two independent appraisals. And if the appraisals don't agree, the bank will refuse to make a loan.

If the buyer is going after a condo, there are strict guidelines on the building itself before a loan is issued. The building has to be FHA approved if you are trying out for an FHA loan. Half of the units must be occupied by owners and not rentals. No litigation can be in process against the HOA and less than 15% of the units can be late on their payments.

Do It Right and There Will Be No Surprises

Take your time and don't just jump in. Talk to a loan officer. If you don't have one in mind, talk to your Realtor. Get preapproved and then watch your step. When you find a home, ask the Realtor to do a CMA on it to make sure it's worth what is being asked. Then you can close in peace and enjoy your new home.

When Your House Sits on the Market

Some houses get on the market and are snapped up in a day or two, while others sit for months or never sell. We have all seen houses like that. If yours is one of them, you need to consider having a heart-to-heart with your agent. You have a stale listing and some things need to change if you want some action.

Houses fail to sell for one of three reasons: price, condition and location. Let's take a look at each of these so you can address them.

Price

Price is probably the biggest problem to overcome. Even the junkiest houses will sell to investors because the price is right. Look at the comparables with your real estate agent and ask for a competitive market analysis. This will give you a price range where your home should be priced. Also, pick up a list of the houses currently on the market in your subdivision or MLS area. This is your competition.

Has your agent been talking to you about price? It's time to listen.

Condition

Condition is how the house looks, from the outside to the details inside. It says a house has been taken care of.

Curb appeal is incredibly important. Make sure leaves are raked, grass is mowed, bare spots are covered with new grass. If a house looks haunted at dusk the buyers won't even want to look at the rest. The curb appeal is what homeowners present as a public face. If this is dirty, what will it look like inside where no one is looking?

Is the carpet stained, worn or torn? Is the caulking done around the faucets? Is there any broken tile? You don't have to recarpet and repaint, unless the place needs it. If you do paint and recarpet, do it in neutral colors. Reduce the clutter on the walls, the floors and the kitchen. You want the buyers to focus on the house, not the belongings.

A home stager can be invaluable for this. They are experts at moving things around, reducing the clutter and making the most of what you have. Stagers can be fantastic for empty houses, too. They can put in just enough furniture to help buyers envision themselves in the house, but not enough to get in the way.

Location

This is the one thing you can't change now. It was set when you bought the house. You have to make the best of where the house is located. Stress the benefits, like easy access to major roads or close to shopping.

Final Words

You want to sell the house and your agent wants to sell it. Sit down and have a calm and rational discussion about the house's attributes and its pricing. The longer you wait until it's sold, the more you are paying in payments, insurance and taxes. Look at it from a numbers perspective and treat it like the investment it is.

Market Report for March 2012

Market Report for Omaha for March 2012

The numbers are in for March and things are looking up over the three months previous. The total number of homes listed for sale in March was 4,331. 1,193 of those were placed under contract. 847 of the homes that had been under contract before closed.

As you can see, the number of houses on the market are up over last month, the number of houses placed under contract are up over last month and the number of houses closed are up. The absorption rate for last month was 5.1, which means it would take 5.1 months to sell all the houses available at the current rate. That's tighter than in February, where it was 7 months.

Overall, the market is neutral right now. It's not an advantage to either the buyer or the seller.

Competitive Market Analysis (CMA)

The Competitive Market Analysis

The Competitive Market Analysis is sometimes caled the Comparative Market Analysis. For commercial properties, it's called the Broker Price Opinion (BPO). This is a tool that real estate agents use to determine the market value of a property. The CMA is done differently from the BPO so we are only going to concentrate on the CMA.

The Setup

Let's say your house is a 1,600 square foot ranch house in the Wow Factor subdivision. It has a two-car garage, three bedrooms and two full baths upstairs. It has a partial walk-out basement with a half bath and all the space there is finished. The finished square footage downstairs adds another 800 square feet.

How It's Done

Let's say you call Sally Sellum to ask about your home's value. She pulls a list of similar houses that have sold in the last 90 days in your subdivision or MLS area and finds three other ranch homes. They are all a little different in square footage, amenities, age, etc. Sally uses only houses that have closed and not those that are currently on the market or are pending. She doesn't use the houses that are on the market now because they probably won't sell for the asking price. Using these numbers will inflate the estimate. She can't use pending houses because the final price is confidential until closing.

Using numbers from the real estate industry and the National Association of Homebuilders, Sally puts together a side-by-side comparison of the homes and makes adjustments for the differences. Sally is looking at items like finished square footage, type of siding, fireplaces, fencing, decks, updated kitchens and baths, etc. These adjustments are added to or subtracted from the final sales price. Averaging the sales prices will give you an idea of the approximate market value of your home.

Why the Numbers May Be Different From Your Tax Valuation

Appraisers don't look in houses so they sometimes don't know about additional square footage from newly finished basements, additional baths, etc. They each have a different way of figuring value. Around here, they see how sale prices are trending and adjust last year's estimate. If house prices are trending up, your valuation might go up.

Numbers will vary from agent to agent, as well. They can use different houses, different time frames (say, 6 months out), or different adjustments. A CMA is an estimate, after all.

Why Would You Do a CMA

Even if you are not looking to sell your house, there are a couple of legitimate reasons to do a CMA. You will want to know the approximate market value of your home so you know if you have enough insurance on it. You can also use a CMA to protest property valuations. And last, you can use a CMA to calculate your net worth.

Give Us a Call

We can do a CMA, no charge. We can tell you what the market value of your house is. If you're looking to sell or refinance, this will give you an idea of what your house is worth.

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.