The Home Blog

A brand new Mansion can be yours for just $100

In the market for a new home in the Orlando, FL area? Have $100 to spare? Then you may be able to win a brand new Mansion for just $100. The mansion has a fair-market value of around $1 million, so you'd probably have to sell the house to pay the taxes, but wait. The reason the home is being raffled, is because there were no buyers. So how low would you have to drop the price to flip it? 600,000? 500,000? at what point does it become too much of a pain?

If you still want to enter visit 2008 Dream Home and if you win, make sure you invite me up for a tour before you flip it, or move in.

(via the Orlando Sentinel)

Renters suffering as owners fail to meet Mortgage Payments

What's happening in Las Vegas is only a slightly exaggerated picture of the nationwide housing market.

About half of the 22,000 homes for sale in Las Vegas are sitting empty, most of them purchased by investors during the boom years of 2004 and 2005. Now that home values have dropped and adjustable-rate mortgages have reset, the owners can’t afford the mortgage, can’t sell the house and can’t refinance.

Of course, if there is a renter of that property they're often the ones have to get out with little or no notice.

An increasing number of renters in Las Vegas (are) caught up in the foreclosure mess. They’re losing security deposits and rent money because, unbeknownst to them, landlords failed to make mortgage payments and the homes have entered foreclosure.

I'd love to see a law passed that required 30 days notice to all tenants before eviction proceedings can begin. That would allow negotiation with the bank and allow for the renters to make suitable arrangements as well. (Link)

Thinking of selling your house? This is what you're up against.

Thinking of selling your house? This is what you're up against.

About one-third of Southern California homes sold in February had been foreclosed since January 2007, according to DataQuick. In the last real estate bust, Southern California home prices dropped 19% between 1991 and 1997, according to DataQuick.

Those foreclosures are your competition. The banks won't sell for pennies these days, but they will do what they can in terms of price reduction to offload the property as fast as they can. How can you compete against that? Price competitively. Offer something those foreclosed homes don't (great landscaping and fresh exterior paint for instance).

Also, if there are few or no foreclosures in your neighborhood, advertise that. People don't want to buy into an area that is on the downward path. The fears of the suburbs becoming the next slums are very real. Located in an area with urban planning? Use that to your advantage.

(Link)

Now even traditional mortgages are hard to get

In the market for a new home? Do you have a good credit rating? Even if you do you may find it hard to get a mortgage loan at rates anywhere near the current average (5.96% today). The credit crunch has come home to roost and Mortgage originators are now finding it hard to sell even the best rated loans as securities.

Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart. Some fear this development will make it harder for people, even those with strong credit histories, to get a home loan.

Be prepared to pay more upfront as well. Most borrowers must now but 5% or more down on the cost of their house.

My question is, if even these traditional mortgages are going away? What is going to replace them in order to get the housing market moving again? Until something does, the market will not equalize and home prices will continue to drop. (Read)

Are Home Improvements at Good Bet in a Down Market?

CNNMoney has some interesting numbers that point to the fact that home improvements, usually known as a good investment in a higher selling price, just aren't pulling their weight in today's down housing market.

"Pay-back for high-end projects has declined over the past few years," said Kermit Baker, chief economist for the American Institute of Architects (AIA). "People planning to sell shouldn't over-improve," he said. "They won't get the money out if they sell in the next two or three years."

NAR's survey revealed that returns on investment for a wide range of high-end interior redecorations dropped in 2007. An upscale bathroom renovation cost an average of $50,590, nationally, but only added $34,588 to house value - a 68.4% return. In 2006, a high-end bath renovation returned 77.4% of its cost.

Adding a brand new bath didn't pay off as well either, earning just a 69% return in 2007, compared with 72.8% in 2006. High-end kitchen remodels held up better, adding value equal to 74.1% of the cost, compared with 75.9% in 2006.

I know we were bit in our housing purchase by not negotiating enough over certain home improvements that were necessary. And when we sold our house the one thing we thought was our largest asset (the acreage) turned out to be its biggest liability (everybody added the cost to landscape it on top of the sale price). (Read)