Real Estate is Local - Always

As always, real estate is local. Freshman lawmakers are not having an easy time locating affordable housing on Capitol Hill. CNN's Samantha Hayes gives an inside look at what it's been like for some of them.

While the housing market has deteriorated tremendously for the nation as a whole, there are specific areas where unique local market conditions continue to provide upward pressure on housing prices. The situation in D.C. is a good example of this. The continued demand for housing close to federal government offices has caused housing prices to remain high there.

If you are relocating to a new city, don't forget to take local conditions into account as you set expectations for what you are able to get for your money.

What Can You Buy for $200,500?

The median home price, as of 3rd qtr 2008, is now $200,500. This is a 9% drop from the same period last year. Foreclosures are mostly to blame, but of course, the bad state of the economy, stricter lending standards, and the high number of unsold homes have also contributed to the price decline. So, what can you buy for $200,500? Sushil Cheema at the Wall Street Journal took a look to find out. I thought you'd be interested to see how far the money goes and what people are saying about it. Check it out here. See how the homes compare to what's in your city or town.

A Call From John

Just recently, I received a call from John, a prospective homebuyer, who found a few homes on my website that interested him. Wanting to learn more about these homes, he gave me a call to discuss them and his plans to buy. This call was unlike most I receive. Instead of focusing all attention on the homes themselves, his first questions centered on how I give representation and how I would work with him. Since questions like these don't come along often, I took extra pleasure in answering them all.

Whenever I receive a call or an email inquiry from serious prospects about a home for sale, I raise the subject of buyer agency as part of my "orientation" process with them. Hoping not to overwhelm or confuse, I always take care to invite questions and I take advantage of subsequent opportunities to revisit and further clarify specific points we've discussed. There are many times, unfortunately, where prospective buyers would unwittingly share sensitive information with me in an initial email inquiry regarding a home that interests them. It is the kind of information they certainly wouldn't want the seller to be privy to if they ever wished to enter into purchase negotiations. Luckily I don't represent the sellers, but what if I did?

Thinking about my conversation with John, I thought I would highlight it as a good example for homebuyers to follow. So, whenever you are ready to contact a real estate agent and before you engage him/her in a discussion about your real estate needs, do what John did. Ask about representation and what it means for you first. Ask follow-up questions if you have any and don't hesitate to ask for clarification if there is something you don't quite understand. Finally, if that agent does not welcome your questions, find one that will!

The Beautiful Thing About Built-Ins

Perhaps the most popular item on the wish-list of any homebuyer today is "character". This wish-list item is often difficult to describe except to say "I'll know it when I see it"! There really is no one specific thing that a home must have in order to have character, but among the homebuyers I've worked with, all agree that the home should have that je nais se quoi - that thing that pulls them in and says "this is home".

My favorite item that can give any home a little bit of personality is the built-in. I've found them to consistently grab the attention of my homebuyers whenever we've come across them. A few have even had built-ins added after their home purchase. Built-ins are quite versatile in nature. Here is an extremely small sampling of what they have to offer.

Built-ins surrounding the fireplace are by far the most common option I come across regardless of the age or price range of the home.

Another popular trend, especially among homes less than 20 years old, is the tv nook above the fireplace. This particular one was made for the wide flat-screen, but I still see way too many (even in new construction) that only fit the 25-27" tube sets. Consider this built-in carefully if you EVER plan on upgrading your tv.

For larger homes, a butler's pantry gives both style and function to the transition area between the kitchen and formal dining room.

This is a great example of one of my favorite built-in options. Bonus rooms can sometimes be a bit awkard to furnish because of the sloping ceilings. But with built-ins you can adapt to the shape of the room with no problem.

Here is another wonderful example of how versatile built-ins can be. You can create a special place for your library just about anywhere - even underneath the stairs!

Benches - whether in a sunroom, a breakfast nook, or made as a window seat - can add a bit of charm to any home. The addition of drawers underneath for extra storage just can't be beat.

One thing I think everyone would enjoy is the built-in work area. I see versions of this option both in high-end homes with spacious, exquisite offices as well as in smaller homes with little nooks that can be found just about everywhere - hallways, bedrooms, closets, underneath the stairs - you name it!

I absolutely love built-ins. They are functional, space-saving, and eye-catching. Best of all, the options in design are endless. They can be fancy and expansive or they can be simple and abbreviated. It really doesn't matter if you are in the market for an 800 sq.ft. condo or an 8,000 sq.ft. mansion. Built-ins are wonderful in any home.

President-Elect Obama's Interview on 60 Minutes

President-Elect Obama sat down with Steve Kroft for his first interview since November 4th. The interview covered a wide range of topics - from politics to family, and of course the transition to life in the White House. Michelle Obama joined her husband for the latter part of the conversation and the playful banter between the two made for quite a charming interview.

When asked about where his focus rests as he prepares to take office, Obama raised the issue of the foreclosure crisis and how it was being managed. He stated that "if we don't have a clear focused program for homeowners by the time I take office, we will after I take office". While housing (and the economy) has always been at the top of his executive to-do list, I was reassured that this issue remains at the forefront.

The way I see it, addressing the foreclosure crisis in a prompt and meaningful way is necessary for both homeowners and homebuyer's alike. We must stabilize neighborhoods as quickly as possible. Homebuyers need to have confidence in knowledge that their investment will not be adversely affected by an over-abundance of foreclosure and for rent signs sprouting up on lawns across the neighborhood. In case you missed it, go to CBS News-60 Minutes to see video and transcripts from the interview.

- Amenities -

Amenities - The qualities or state of being attractive and comfortable.

When applied to real estate, this term refers to the benefits that are attached to a property. For example, a home may have state-of-the-art appliances in the kitchen or a well-appointed home office with its own private entrance. Others may have a neighborhood pool & tennis club or have proximity to city parks and entertainment venues. Amenities are simply things that add value and make a house a pleasant place to live and call home.

Cash Found in Ohio's House Wall (AP)

Associated Press writer, Joe Milicia, submitted a rather interesting story over the weekend. A contractor discovered $182k cash in the bathroom wall of his friend's home. That's a nice chunk of money to come into - talk about hidden value!

Too bad the story doesn't have a happy ending, though. Greed, as always, has a way of complicating things. Read the full story.

A (HOME) Score

If you knew that you could not - in fact - afford the home loan you were pre-approved for, would you convince yourself otherwise? Would you go for it anyway? Of course not!

No well-meaning person would accept a mortgage that would guarantee a path to foreclosure. Unfortunately, there are many homeowners out there who have found themselves completely blindsided by the true costs of their home loan. This problem is just one of many at the center of the current housing crisis. Many homeowners just did not have the means to properly interpret their mortgage options and compare them to one another.

Recognizing its importance, the National Association of Realtors has provided homebuyers with buyer agency. But here's the problem; there is no clear mechanism within the mortgage industry to extend the same agency relationship to borrowers. Unless a lot of time is invested in "reading up" on mortgage options, how is a borrower able to make a good decision? And is that really enough? Where's the expert advice needed to arrive at a truly informed decision?

Now that the election is over, prospective homebuyers are wondering what they can expect from the new Obama Administration. Barack Obama has followed the subprime mortgage industry for years and has already taken steps to create protections for homebuyers. One of his plans will create a mandate for clear, complete, and honest information about home loans. It will take the form of a (HOME) score.

This mandate will give you the means to not only understand all of the costs entailed in your home loan, but it will make it easier for you to compare them too. One thing is certain. This mandate must be written effectively so as to accomplish what it intends to. Borrowers can't be helped by a mandated accurate loan disclosure that is not accurate.

__________

Mandate Accurate Loan Disclosure: Today's subprime mortgage problem stems in large part from the lack of easy-to-understand information that borrowers receive from mortgage brokers. As president, Barack Obama will enact laws to ensure that all prospective homebuyers have access to accurate and complete information about their mortgage options. Obama and Biden will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan. The HOME score would also help borrowers understand their long-term obligations and would be required to include mandatory taxes and insurance.
www.BarackObama.com

We Believed!

America has undergone a remarkable sea change and will soon embark on a different journey, one that faces a brighter future, with President-elect Barack Obama at her helm.
Phenomenal! Phenomenal.

It's Almost Time

Before too long, voting lines will draw down and polling will come to a close. Soon, I will take my favorite spot on the sofa, turn on my television, and begin some serious deep breathing exercises.

What an incredible experience it has been to both witness and participate in this election season. It was historic on many fronts. One being the enormous role technology and, more specifically, the Internet played in it. YouTube, Twitter, Facebook, and the blogosphere in general really made it possible for Barack to maximize the potential of his grassroots ideals. Who could forget Obama Girl or Will.i.am's tribute to those three famous words? The Internet gave his base a different kind of voice and a phenomenal way to move the campaign forward. It was one of his not-so-secret ingredients for success.

Speaking of technology, BarackObama.com has got to be the next great case-study in campaign-strategy innovation. From as early on in the campaign as I can remember, my husband signed us up to receive email updates on all the latest campaign happenings. From those updates and from checking into the website, we've enjoyed easy access to pertinent campaign information, attended rallies, volunteered our time, donated money, and even bought ourselves some Obama gear...I mean, really! Although I'm an active voter, I've never participated this much in one election campaign before! It was a great adventure and we met some really cool people along the way.

It was good that Barack understood the important issues and communicated his vision with eloquence and conviction. And it was great that he promoted a culture of teamwork among his base. But I believe his strongest asset and the key to his success was his ability to surround himself with really smart people. He had a winning combination of advisers, strategists, IT people, and staff. My favorite among them is Michelle. Barack's greatest ambassador and the brightest spot in his campaign. I have tremendous admiration for her. With this kind of support in his corner, I have no reservations about Barack's ability to fill the role of Commander-in-Chief.

My first introduction to Barack Obama was while watching the 2004 Democratic National Convention. He was described as the party's rising star and it was easy to see why. His keynote address opened my mind to new possibilities which, at the time, was a tremendous feat. Back in 2002, I was growing fearful of the post-9/11 feeding frenzy on civil liberties and the blood lust for anyone remotely resembling Osama bin Laden. I was very angry about the rush into Iraq and disturbed at the thought of what it would mean for us in the long run. When I learned of the timing of Sen. Obama's stand against the war in Iraq, wow, I just knew...I don't know, if you are a Matrix fan, perhaps you'd understand.


Barack Obama fought hard to transcend the divisive issues that continually holds this country back. He proved himself a man for all American people. He eloquently and passionately reminded us that we share a common dream for a more perfect union.


I truly hope that enough Americans choose to believe in Barack's message of change. He is not a messiah, he's not perfect, but he is the best man to lead us through the tough times times ahead. I hope to see him emerge as President-elect. This is what I want to see recorded in the pages of history. It's time.

Today is Election Day!

by Bruce Beattie via SLATE

Remembering Madelyn "Toot" Dunham

Just hours shy of the election season's biggest day, Barack Obama's grandmother lost her battle with cancer. She was 86 years old. Through his profound words and dignified character, Barack Obama has helped us become just a little better acquainted with who Madelyn Dunham was. We appreciate the invaluable role she has played in his life. Barack Obama is a great inspiration and source of hope to so many. At this time of great loss, our thoughts are with his family. Madelyn Dunham will not be forgotten.

How Big Will Your Downpayment Be?

Last Tuesday (Oct 28th), President Bush's first Treasury Secretary Paul O'Neill put forth the proposal that Congress forget about the new economic stimulus package idea and instead concentrate their efforts to push through a law that will mandate a minimum downpayment threshold for prospective homebuyers. In other words, if a homebuyer does not have downpayment funds at least equal to 20% of the anticipated purchase price, they should not even think about applying for a home loan.

So, are you in the market to buy a home? How big will your downpayment be?

O'Neill believes that we wouldn't be in this credit/economic mess if home lenders stuck with the old tried-and-true 20% downpayment rule. He said that in 2006, 30% of all mortgages were zero-down and among those buyers, an even larger amount defaulted on their very first mortgage payment. It should have been obvious long before now that too many buyers could not afford the loans they were approved for. As such, homes loans should be reserved for only those buyers that can afford to put down 20% towards a home purchase. O'Neill is certain that while this may not be good for some businesses in the short term, it will be good for the overall economy in the long run.

The number 20 has long been the "magic" number in the banking industry because the research showed this to be the threshold where the lending risks most favored the bank. If, for whatever reason, the home did wind up in foreclosure, the bank could price the home at a deep enough discount to attract a quick sale. (This is why foreclosures continue to be perceived as great deals - even this market.) It was, therefore, in the bank's best interest to have as much of a buffer as possible in the event of a foreclosure.

For a some time, if you wanted to buy a home, you were going to have to save up and/or borrow the money to make it happen. This was impossible for some and difficult for most. However, as home values started to increase, so too did the home loan options available to homebuyers. Buying a home with 20% down was no longer the rule. Instead, a buyer could use private mortgage insurance or piggy-back loans to make the deal happen. With these options, buyers were even able to finance 100% (or as high as 125%) of the purchase price. Banks were now able to make much more money from home loans than before. Loan requirements that were once strict and available to just a few buyers became too lenient and available to too many of the wrong ones.

O'Neill contends that enacting this 20% downpayment law will be the quickest way to shore up the nation's economy. He is critical of the presidential campaigns of both Sen. Obama and Sen. McCain, neither of whom has endorsed this idea. O'Neill is not surprised by this. And I say, he shouldn't be. It is a terrible idea.

Homeownership is a highly-regarded financial planning tool and has long been recognized as the best way for the vast majority of people to build personal wealth. By leveraging a loan, a person is able to earn all of the appreciation and enjoy all of the financial benefits homeownership provides. More importantly, because homeownership is best as a long-term investment, if a person can afford to own a home now, it would behoove him/her to buy as early on in their lives as personal circumstance would allow.

The type of legislation that O'Neill is proposing may look good on paper, but one can not legislate a one-size-fits-all mortgage product and expect good things to happen. I'm willing to bet that it will hurt homebuyers - the middle class and working poor in particular - far more than it will hurt any business. O'Neill should give more consideration to the many buyers who are, in fact, a good credit risk even without having saved 20% to put towards a downpayment.

This is a complicated problem that will require careful consideration of many factors in order to find a workable solution. If homeownership is really part of the American Dream, Congress should work to give everyone a fair opportunity to achieve it. How big will your downpayment be? No law should ever affect the answer to that question.