Goodbye to The American Musical Theatre of San Jose

It is very sad for me to see a theatre close, especially when it's one that has been a part of my life. In the case of The American Musical Theatre of San Jose, we're losing a landmark that has been a part of San Jose life since 1935. The theatre has been a cultural icon of Silicon Valley since before the tech boom--it started way back when Silicon Valley was little more than a collection of orchards with a struggling community in the middle. What does it mean when a city lets go of something this defining? Something so integral to its identity?

AMT started as CLO (Civic Light Opera), and then it evolved into the San Jose Musical Theatre. It wasn't known as the American Musical theatre until 1995, when the theatre celebrated its 60th anniversary. Originally it was a strictly local company, but began hiring big stars to bring in a wider audience during the 80's. In the early 90's I saw Sally Struthers play Miss Hannigan in a wonderful production of "Annie", which also starred a bevy of local children (many of whom were friends with my sons) playing the adorable orphans. This theatre was the area's major employer of the abundant local musical theatre talent.

In 2002, AMT changed from a local theatre company to a national tour company. Instead of mounting local productions, must of the musicals were national tours of Broadway shows. Many local theatre people and audience members (myself included), were angry, but the theare felt it could get a wider audience by changing the model.

Unfortunately they were wrong, and when they faced a financial disaster in trying to mount a tour of Disney's Tarzan, AMT had to close. I am very sorry for the theatre and the community. I can only hope that maybe this will leave an opening for another local, professional musical theatre company to emerge again. 

Palo Alto Market Update!

There are currently 88 single family homes for sale in the Palo Alto area and 21 home sales still pending (pending homes are homes that have sales contracts but have not yet closed escrow). 

6 single family homes closed escrow in the last week, and of those 6, 5 closed OVER asking price. The price range varied greatly--the lowest price was $905,000, and the highest price was $1,400,000.

These numbers say a lot about current market conditions in Palo Alto. The first thing I notice is that the volume of sales in Palo Alto is low. Last year there were fewer homes for sale and pending sales equalled active listings--the gap between the 88 single family homes for sale and the 21 pending definitely signifies a slower market pace. 

The prices of homes that are selling is very low for this area--even as early as last year the medium home price in Palo Alto was over $2,000,000. Last week the highest sale was $1,400,000. It doesn't take a rocket scientist to see that the higher ending is hurting. 

If you have any questions about Palo Alto market conditions, please email me! 

CAR Market Matters Advisory, Nov 20

Nov. 20, 2008

 C.A.R. Resource Guide

REALTORS(R) throughout the state have a long-standing tradition of community involvement and making a difference in the neighborhoods they serve. The recent wildfires throughout Southern California have devastated many families and caused a great deal of property damage in many Southern California communities. C.A.R. has compiled information in the REALTORS(R) Care section of car.org. There, REALTORS(R) and consumers will find a list of resources, including what to do and who to contact after a fire or other natural disaster, as well as insurance-related information.

 For a complete list of fire-related resources, please visit: http://takeaction.realtoractioncenter.com/ct/OpS3IDd1kSU1/

 C.A.R. Mortgage Update

 The CALIFORNIA ASSOCIATION OF REALTORS(R) (C.A.R.) has created consumer information sheets detailing the various mortgage modification programs available through the larger lenders and government entities, and also has created an easy-to-use reference chart about available programs.

 . The consumer sheets contain information such as eligibility requirements; who to contact to apply; costs associated with the program; and other vital data. In general, the loan modification programs on the chart and consumer information sheets are intended for primary residences only.

. Mortgage loan modifications typically are handled on a case-by-case basis. Homeowners having difficulty meeting their mortgage obligation or interested in finding out more about a loan modification program should start by contacting their lender. Prior to calling a lender or loan servicer, homeowners should have the following information available: loan number; income information and documentation; most recent mortgage statement; bank statements; and a letter demonstrating financial hardship.

To download the mortgage modification sheets, please visit: http://takeaction.realtoractioncenter.com/ct/W1S3IDd1kSUq/

 

 Wall Street Journal

What if you don't qualify?

The majority of the mortgage modification programs from the larger lenders only are available to homeowners who either already are in default or are at risk of defaulting on their primary residences. However, some homeowners, in particular those who may default on a vacation home or an investment property, have some options available.

MAKING SENSE OF THE STORY FOR CONSUMERS

 . Homeowners who are in default or at-risk of defaulting should contact a reputable credit counseling agency to discuss possible options other than foreclosure. When calling a credit counseling agency, the homeowner should have their loan number, most recent mortgage statement, bank statements and a letter demonstrating financial hardship. To find a credit counselor, visit the U.S. Dept. of Housing and Urban Development's (HUD) Web site at http://takeaction.realtoractioncenter.com/ct/I1S3IDd1kSUL/ or the non-profit organization National Foundation for Credit Counseling at http://takeaction.realtoractioncenter.com/ct/IpS3IDd1kSUM/.

. Homeowners should contact their loan servicer as soon as possible to try to work out potential solutions. According to the Federal Housing Finance Agency (FHFA), some borrowers who do not meet the requirements for an existing mortgage modification program may still be considered for a loan adjustment based on personal circumstances.

. If a mortgage modification is not possible, homeowners may want to consider a short sale-- sell the home for less than the amount of the mortgage. Although a short sale enables a homeowner to avoid foreclosure and often causes less damage to the homeowner's credit score than a foreclosure, the lender must agree to accept the loss and in some cases the homeowner may have to pay taxes on the difference. Also, many lenders are overwhelmed by the large number of short sales being submitted by homeowners, so it could take longer than usual to receive a short-sale acceptance from the lender.

. If a homeowner cannot qualify for a mortgage modification or a short sale, some lenders will consider a deed in lieu of foreclosure, where the homeowner transfers the title to the lender in exchange for debt forgiveness. Properties that have additional debt, such as home equity lines of credit or additional mortgages, may not qualify for a deed in lieu of foreclosure. Homeowners who have additional debt tied to the property must share this information with their lender for consideration when applying for a short sale.

To read the full story, please click here: http://takeaction.realtoractioncenter.com/ct/6dS3IDd1kSEJ/

 Wall Street Journal

 HUD Issues New Consumer Protection Rules on Mortgages

The U.S. Dept. of Housing and Urban Development (HUD) has announced updates to the Real Estate Settlement Procedures Act (RESPA), including the requirement of a three-page good-faith estimate that provides borrowers with rates, fees, prepayment penalties, and possible increases in monthly payments for every mortgage transaction.

MAKING SENSE OF THE STORY FOR CONSUMERS

. The Real Estate Settlement Procedures Act (RESPA) is a 1974 law that sets standards for home-purchase transactions. The purpose of RESPA is to provide consumers with information about the real estate mortgage transaction and the costs associated with it and to prohibit certain practices, such as referral fees between settlement service providers, that often result in higher costs and reduced quality to consumers

. A key change to RESPA is the creation of a standardized good-faith estimate (GFE) -- an itemized list of fees and costs associated with a mortgage loan. Currently, there are several good-faith closing estimate forms available, which can make it difficult for borrowers to compare rates and offers. Beginning in 2010, the U.S. Dept. of Housing and Urban Development (HUD) will require all lenders and mortgage brokers to use the standardized form. HUD officials estimate that the change will save home buyers as much as $700 at closing, due in part to a requirement limiting the increase between the good-faith closing cost estimate and actual fees to 10 percent. The new three-page good faith estimate also will outline rates, fees, any prepayment penalties, and the possibility of later increases in monthly payments.

. HUD also has created a new page on the HUD-1 Settlement Statement to help homebuyers better understand what they are being charged at closing and how these charges compare to the GFE issued by their lender. The new GFE is designed to help mitigate future foreclosures by ensuring home buyers thoroughly understand their loan terms. Many housing analysts believe the current number of foreclosures is due to many borrowers making "uninformed decisions" during the homebuying process. The new, standardized GFE and revised HUD-1 will not be required until Jan. 1, 2010.

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/67S3IDd1kSED/

In Other News

 Press Enterprise

 Fewer Inland default filings from September to October

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/7dS3IDd1kSU2/

 

Washington Post

Beyond White Walls and Empty Rooms

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/u1S3IDd1kSUx/

 

Bloomberg

Credit Score More Important Than Ever for Best U.S. Loan Rates

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/OdS3IDd1kSEV/

 

 San Francisco Chronicle

Bay Area homeowners owe more than home's worth

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/7pS3IDd1kSUs/

 

 Los Angeles Times

Credit card holders squeezed as issuers cut credit limits

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/I7S3IDd1kSUA/

 CNBC

Median home prices fall around US in Q3

To read the full story, please click here:

http://takeaction.realtoractioncenter.com/ct/WpS3IDd1kSUS/

Talking Points

Here's what to tell consumers

 . When searching for a home inspector, consumers should seek recommendations and referrals from their REALTOR(R), as well as other recent home buyers. It is recommended that consumers interview at least three potential candidates during this process. Home inspectors are not regulated as closely as other industries; so home buyers should consider choosing one that belongs to the American Society of Home Inspectors. The American Society of Home Inspectors requires its members to complete at least 250 inspections. Consumers also should inquire about fees, and whether the inspector is bonded and insured.

 . As credit underwriting guidelines tighten and down payment requirements increase, some home buyers, especially first-time home buyers, are finding it more difficult to qualify for a mortgage loan offered by a traditional financial institution. One viable option for some first-time home buyers, or those with challenged credit, is to apply for a home loan with the Federal Housing Administration (FHA). These loans are mortgages issued by a private lender but insured by the FHA. They often require smaller down payments and offer fixed-rate or adjustable-rate loans. However, not all home buyers will qualify. The FHA requires verification of income and assets along with a full home appraisal. While consumers with credit scores a low as 580 may qualify, home buyers should contact an FHA lender for an accurate assessment of their situation and ability to qualify.

C.A.R Market Matters, November 6

Thursday November 06, 2008

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS

C.A.R's Mortgage Update

This week C.A.R is introducing an occasional new feature in Market Matters entitled Mortgage Update. Mortgage Update will update REALTORS and consumers on recent news about the mortgage market. 

This issue of Mortgage Update contains news and updates on the "Hope for Homeowners" program, and foreclosure assistance programs for borrowers with mortgages issued through Indymac, JP Morgan Chase and Co, and Countrywide.

MAKING SENSE OF THE STORY FOR CONSUMERS

Early projections indicate that only 20,000 troubled homeowners will apply for the "Hope for Homeowners" program, a considerable reduction from the previously estimated 400,000 homeowners who were expected to apply. The $300 billion program was launched Oct. 1 and is designed to help troubled homeowners rewrite a "risky" mortgage loan into a 30-yr, fixed-rate loan with a lower interest rate. During the first two weeks of the program, the Federal Housing Administration, which oversees Hope for Homeowners, reported receiving only 42 applications. Some housing experts believe the low application rate is due to the program being voluntary for lenders and provisions requiring homeowners to agree to an equity share with the government. 

Full Story

Less than half of homeowners with mortgage loans through IndyMac have responded to offers from the Federal Deposit Insurance Corporation (FDIC) to lower loan payments and interest rates. The FDIC, which is running IndyMac, mailed 35,000 letters offering homeowners an opportunity to rework the terms of their mortgages. The goal is to reduce the monthly payment on a loan, including taxes and insurance, to no more than 38% of the borrower's pretax income. The FDIC is prepared to implement the following: reduce the interest rate to as low as 3%; extend a loan's terms to 40 years; and waive interest on a portion of the mortgage balance.

Full Story

JPMorgan Chase % Co has reported that it is instituting a 90-day foreclosure freeze while it searches for ways to make payments easier for consumers. The program may enable up to 400,000 borrowers to reduce their interest rates or principal amounts. The bank will also open 24 mortgage counseling centers in areas with the highest delinquency rates. JPMorgan also is planning to hire 300 loan counselors to work with delinquent borrowers and employ approximately 150 additional staffers to review each mortgage prior to sending it through the foreclosure process. The program offer is extended to borrowers who have loans through Washington Mutual Inc., and clients of EMC, a mortgage unit of Bear Sterns Companies. Both companies were acquired by JPMorgan in recent buyouts and takeovers.

Full Story

Bank of America, which acquired Countrywide in July, said that nearly 400,000 troubled homeowners who have subprime mortgages and option adjustable-rate loans through Countrywide may be eligible for loan modifications. To be eligible for the Bank of America plan, homeowners must occupy the home as their primary residence, the mortgage must be seriously delinquent---or likely to become so; and the loan must have been serviced by Countrywide and originated prior to December 31, 2007. Bank of America will help borrowers by restructuring first-year payments of principal, interest, taxes and insurance to no more than 34% of the borrower's income; halting foreclosure sales against borrowers who are likely to qualify for a loan modification; and waiving restructuring fees and prepayment penalties. 

Full Story

 Chicago Tribune

Finding an area with appreciation potential

Some real estate experts believe that home buyers who purchase a house during the current market will gain equity if they stay in the house for at least five years and purchase in a desirable neighborhood.

MAKING SENSE OF THE STORY FOR CONSUMERS

Neighborhoods with strong employment bases, such as hospitals, universities, and government, tend to be recession-proof. People desire to live near their jobs, so housing that is in close proximity to these types of industries are generally higher in demand than those in other areas.

High gas prices and roadway congestion have led many people to see "walkable" communities--nieghborhoods that offer both daily needs such as grocery stores and coffee shops to more speciality items like hair salons, all within walking distance. Walkable communities also provide public transportation, which is becoming more desirable to many home buyers and is increasing demand for housing in these areas.  One web site, walkscore.com, calculates teh walkability of a community by locating stores, restaurants, schools, parks, and other attractions that are within walking distance. The scores are based on a 100-point scale with 100 points being a walker's paradise.

Home buyers who seek a new or nearly-new home should search in areas where the homebuilder is known for honoring warranties and building high-quality homes that are structurally sound. Homes in these areas are more likely to weather well and gain value in the future than homes in areas where the home builder is unknown.

Homes in neighborhoods with sales momentum generally appreciate at a faster pace than areas where sales are flat. Some real estate industry consultants advise clients to pay close attention to the "list to sale" numbers, which reflect the difference between the asking price and the final closing price. Usually if the gap in list-to-sale numbers is narrow, then the real estate market in that area is improving.

Full Story

CNN MONEY

7.5 million homeowners "underwater" 

Approximately 7.5 million U.S homeowners owe more on their mortgages than their homes are currently worth, and an additional 2.1 million Americans own homes valued at only 5% more than their loan.

MAKING SENSE OF THE STORY FOR CONSUMERS

According to some estimates as many as 12 million borrowers may have negative equity in their home, meaning that they owe more on their mortgage loans than their homes are currently worth. However, according to statistics gathered by C.A.R over the last 40 years, homeowners who purchase a house and keep it for at least five years have an average annual rate of return at nearly 12%. 

Although California's inventory of homes with high negative equity is higher compared with other states, lower home prices have increased affordability, making it easier for first-time home buyers to enter the market and other buyers to move up to larger houses or more desirable neighborhoods.

Borrowers who are facing foreclosure should work with their lender and apply for a loan modification program. Many financial institution are offering homeowners the opportunity to rewrite an adjustable-rate mortgage into one that is fixed for 30 years. Some banks are also offering existing customers zero interest for a short period of time and lowering the principle balance on the loan to make payments more affordable.

Full Story

Washington Post

Meltdown 101: How we'll know we're in a recession

Recent economic reports and many news stories have led some Americans to believe the country is in a recession. Although unemployment is high and incomes have failed to keep pace with inflation, the country is not yet in a recession, which must be declared by the National Bureau of Economic Research (NBER)

MAKING SENSE OF THE STORY FOR CONSUMERS

The National Bureau of Economic Research (NBER) is the entity that officially declares the country is in a recession. Founded in 1920, NBER consists of more than 1,000 university professors and researchers who study the economy. The Business Cycle Dating Committee within the NBER makes the call on recessions. Often times NBER doesn't declare a recession until after it's over.

Contrary to popular belief, a recession is not defined as two consecutive quarters of negative gross domestic product growth. NBER defines a recession as a significant decline in an economic activity spread across the economy, lasting more than a few months. This is usually based on reports such as the gross domestic product--a measure of the value of all goods and services produced within the United States; real income, employment, industrial protection, and wholesale and retail trade.

A recession's start and end dates are based on the high and low points within the nation's "business cycle" --periods of economic growth and contraction. A recession begins when the economy peaks at the top of an expansion period. It continues as the economy contracts until it hits the "trough", the lowest point on the downward cycle. After that, the economy begins to recover. The "peak" date is the beginning of the recession and the "trough" date is its end. The last official recession began in March 2001 and lasted eight months before ending in November 2001.

Full Story

LA Times

'Green' improvements can add to a home's appeal

Many home buyers are seeking "green" homes to offset their carbon footprints and pocketbooks. Although most green homes are new houses, owners of existing homes for sale can make "green adjustments" to be more competitive in the market.

MAKING SENSE OF THE STORY FOR CONSUMERS

C.A.R recently launched a new Green website--"At Home with Green", which provides information to consumers and REALTORS about how to find and sell green homes; how to make green home improvements; and other tactics for greening their homes, offices, and lives. To visit, "At Home with Green" CLICK HERE

Consumers can work with their local utility company to conduct an energy audit to determine how green a home is and to get pointers on how to further green the home. Although the changes could be costly and the homeowner likely will not recoup all the money spent making the green upgrades, the home could sell faster with the improvements. Some home buyers may make an offer on the home as is, but might request a credit towards making the green improvements. Often times the credit will be nearly twice the amount that it would have cost had the homeowner made the improvements prior to listing the home.

Homeowners can make green improvements in their homes by making simple changes, such as replacing regular light bulbs with compact fluorescent bulbs (CFLS) which use only one-fifth the energy of regular bulbs and last almost 12 times longer, or more substantial improvements like replacing appliances with ENERGY STAR-rated ones, which can use as little as one-quarter the energy of older models.

Full Story

In Other News...

CNBC

What Does 'Good' Credit Really Mean?

Wall Street Journal

The Stampede of White Elephants

Mercury News

Freddie Mac says fewer homeowners are borrowing from equity

Washington Post

A crackdown on credit fixes

LA Times

Banks, consumer advocates urge U.S to allow credit card debt forgiveness

Talking Points

Here's what to tell consumers

The U.S Dept. of Housing and Urban Development (HUD) offers an online guide to preventing foreclosure. The guide provides consumers with information such as how to contact a housing counselor; when and how to talk to their lender, how to find foreclosure resources, tips on avoiding foreclosure and foreclosure scams, as well as information for consumers who cannot keep their home. The guide to preventing foreclosure can be accessed here. 

New Proposal Attempts to Stave Off Future Foreclosures

On Wednesday, Gov. Schwarzenegger made a proposal that will instate a 90-day freeze period for homeowners on the brink of foreclosure--basically, once a notice of default has been posted against them, their mortgages companies have to halt proceedings until they can prove that they have modified their loan processes to make it easier for people to stay in their homes. The goal is to inspire "aggressive modification programs" that will hopefully benefit both homeowners and lenders. The proposal still has to be passed by legislature.

Click here for the full story, published in Mercury News and written by Sue McAllister.

Steve Papapietro's Weekly Mortgage Bulletin: Fed Cuts Again

For the week of Nov 03, 2008 --- Vol. 6, Issue 45

        Last Week in Review

        "TAKE TIME TO DELIBERATE; BUT WHEN THE TIME FOR ACTION ARRIVES...STOP THINKING AND GO IN." Napoleon Bonaparte. And taking action after deliberating was exactly what the Fed did last week, when they cut the Fed Funds Rate by .50%, lowering it to 1.00%.

Why did the Fed take action last week, after it had already lowered the Fed Funds Rate by .50% on October 8 in a coordinated effort with other central banks? To continue to help ease the credit crisis, and prevent a long and severe global recession. In fact, several foreign central banks followed the Fed's lead again last week, with Hong Kong cutting their lending rate by .50%, Taiwan cutting by .25%, and Japan cutting by .20%. This is important because cuts by other nations help stabilize the US Dollar, which typically loses ground after our Fed cuts rates, because of the lower yield offered comparatively offered in the US. Another interesting point to note: since oil is Dollar denominated, the price per barrel typically jumps after our Fed cuts rates, because of the decline in the value of the Dollar. The cuts by other central banks should keep oil...and gas prices, in turn...from skyrocketing again.

Another reason the Fed took action: The Fed's statement discounted threats of inflation, saying that slowing economic growth should lower inflation pressures over time, but added that downside risks to economic growth remain. And last week's negative Gross Domestic Product reading is confirmation that things have slowed quite a bit. Although experts have speculated that the US may already be in a recession, the first hardcore signs appeared when the Third Quarter Advance GDP report showed that consumer spending declined at the fastest pace in 28 years. The report also reflected the largest quarterly decline since the end of the last recession in 2001.

So what did all of this mean for Bonds and home loan rates last week? After worsening early in the week, Bonds and home loan rates attempted to stabilize by week end. And while it was a treat that Bonds did bounce off an important level of technical support, home loan rates still ended the week nearly .125-.25% worse than where they began.

SPECIAL NOTE: BRAND NEW VIDEO FEATURE IN THIS WEEK'S MORTGAGE MARKET VIEW! CHECK IT OUT TO LEARN SOME HOT TIPS TO CONSIDER WHEN BUYING OR LEASING YOUR NEXT VEHICLE.

        Forecast for the Week

        The excitement continues, as the heavyweight Jobs Report is scheduled for release this Friday, which will show the number of jobs lost or gained in October. Remember that the Department of Labor averages their numbers, and part of each month's report includes "revisions" to the several prior months' numbers. Last month, the Labor Department reported that 159,000 jobs were lost in September, which was worse than the 105,000 lost jobs that economists were expecting. As of last month's report, the US has lost 760,000 jobs so far in 2008. And the news for October is not expected to be any better.

A negative report could be bad news for Stocks and good news for Bonds and Home loan rates, as bad economic news typically causes money to flow from Stocks and into Bonds. But as has been noted in recent weeks, things are anything but typical at the moment. Bottom line: count on me to be watching closely to see how the markets react to this report and all the other news of the week...and feel free to call me anytime, even if you'd just like to do a quick review of your own current financial and credit situation.

As you can see in the chart below, Bonds did bounce off a key technical support level late in the week. I will let you know if Bonds can remain above this important support during the week ahead.

Chart: Fannie Mae 6.0%% Mortgage Bond (Friday Oct 31, 2008)

 Japanese Candlestick

Chart<http://www.mmgweekly.com/templates/mmgweekly/reg_chart/166/images/

fnma11308.gif>

        The Mortgage Market View...

        Click Here to view the latest Video.

<http://www.mmgweekly.com/w/index.html?SID=978362ce7b096266e2cefb878aa32

50b#view>

Should You Buy or Lease?

By Mark K. Solheim

To hear the critics wail, you'd think leasing a car is as bad for your finances as smoking cigarettes is for your health. Does that mean you're a closet wastrel if you've ever been tempted by ads that trumpet affordable monthly payments for a new car? Or, worse, that you are hurtling down the highway to financial ruin if you've already given in?

Relax. Leasing is not a mortal sin of money management. For some drivers, in fact, it makes sound fiscal sense. Leasing's not for everyone, but there's no reason to scorn the 15% of our fellow travelers who choose leasing over buying.

A Closer Look

Leasing often gets a bum rap because the lingo can make your head spin. It's difficult to compare one lease with another, not to mention to compare leasing with buying. And it can be tough to get a handle on leasing because the decision to lease or buy often depends on your mindset. "A lot of people are freaked out by having to turn in their car at the end of the lease," says Phil Reed, author of Edmunds.com's Strategies for Smart Car Buyers. "What they fail to realize is that they got the first years of a brand-new car's life."

One of the biggest criticisms of leasing is that in a buck-for-buck comparison of leasing and buying, leasers usually shell out more money. That's because, after the loan payments are done, buyers get to keep the vehicle (pay cash and you come out further ahead). If your modus operandi is to buy a car and run it till it sputters and dies, leasing isn't right for you. But you're a good candidate, Reed says, if you've decided that you're always going to have a car payment - as many drivers do, now that six- and even seven-year loans are gaining popularity. It's a good bet that you can drive more car for less money if you lease. You'll never actually own the car, but who really owns a car when the bank holds the title until the loan is paid off?

A few other advantages: A lease usually ends about the same time as the warranty, so you probably won't pay for any repairs. You won't have to worry about whether you'll get a fair deal on a trade-in. In most states, you pay sales tax only on the monthly payments rather than on the full value of the car. Plus, many of today's leases include gap insurance to cover the difference between the lease payoff and an insurance settlement if the car is totaled or stolen.

Yes, there are early-termination fees if you change your mind. But if you finance a car and bail out before the loan is paid off, you could easily owe more on the loan than the car is worth. And it's true that you pay extra for exceeding the 10,000- to 15,000-mile yearly limit typically written into a contract. But buyers who rack up high mileage also pay a penalty: lower trade-in value.

Design Your Own Lease

If you choose a manufacturer-subsidized lease, you'll probably be locked in to the terms. But if the car you want isn't being pushed by the carmaker, there's plenty of room for bargaining. Either way, contact several dealers to see who's willing to cut you the best deal. Reed of Edmunds.com recommends a term of three years because that's often the turning point in a car's life (when the warranty expires, for instance, o r you may need new tires).

Ask the dealer to compare leasing offers on the car from the manufacturer's financing arm as well as a few banks. That may produce a lower "money factor" (basically the interest rate) or higher residual, either of which translates into lower payments.

  Next, target the capitalized cost - leasing lingo for the price of the car written into the lease. Gross cap cost includes the price of the vehicle, fees, extended service plans, gap-insurance premiums and any other add-ons. Adjusted cap cost is the gross cap cost minus reductions for trade-in, down payment, and rebates. That adjusted cost is the amount you actually finance. Don't pay sticker unless you have to. Both Kelley Blue Book (www.kbb.com) and www.Edmunds.com list actual transaction prices to give you an idea of what others are paying.

If you expect to drive more than the number of miles included in the standard contract, try to negotiate a higher limit. Or you may be able to buy extra miles up front for an extra 10 or 15 cents per mile, versus the usual 15- to 30-cent-per-mile penalty charged at the end of the lease.

You usually have the option of buying the car at the end of the lease instead of turning it in. The purchase amount, typically the residual value, is written into the lease. Buying may not be a good idea, though, if the residual was set artificially high.

Not up for haggling? Kiplinger's has teamed with CarBargains, a buying service from the nonprofit Consumers' Checkbook organization. Its LeaseWise service will negotiate with five local dealers for you. The cost is $335. Visit www.kiplinger.com/links/carbargains or call 800-475-7283.

Reprinted with permission. All contents (c) 2007 The Kiplinger Washington Editors, Inc.

Steve Papapietro

4300 El Camino Real

Suite 100

Los Altos, CA 94022

Metlife Loans is a division of MetLife Bank, N.A.

C.A.R Update on Economic Situation

Tuesday, Oct 28, 2008

Brought to you by the California Association of Realtors

Oct. 28, 2008

Dear C.A.R Member:

Much has happened since passage of the Emergency Economic Stabilization Act earlier this month. 

N.A.R has urged U.S Treasury Secretary Paulson to take advantage of the extensive experience of local commercial and residential real state professionals in the management and disposition of real property as the U.S Treasury Dept. implements the Troubled Asset Relief Program (TARP) as part of the Emergency Economic Stabilization Act.

Congress has held a number of hearings over the past few weeks looking into multiple factors that contributed to the current financial situation. Last week, Congress heard testimony from Securities and Exchange Commission Chairman Christopher Cox, Federal Reserve Board Greenspan, former U.S Treasury Secretary John Snow, and other leading players. The hearings are laying the groundwork to inform legislation expected to address regulatory reform of the finance and lending industries as well as safeguards to prevent a recurrence of the current financial crisis. It is our expectation that the legislation will be introduced early next year. 

Additional hearings are covering the implementation of a second stimulus package. As the U.S economy continues to struggle, politicians on both sides of the aisle are feeling pressure from their constituents, creating a strong incentive for Congress to pass meaningful legislation as the national elections near and the country heads into the holiday season. The Senate, House of Representatives, and the White House have stated their willingness to work through a lame-duck session to pass a second economic stimulus package prior to the end of the year.

While many ideas have been circulated, few, if any, appear certain to be included in a second stimulus package, according to C.A.R policy analysts.  Some of the ideas under discussion include: An additional round of stimulus checks; extending the temporary loan limit of $729,750 for Government Sponsored Enterprises (GSE) and Federal Housing Administration (FHA); infrastructure spending; financial aid for states; a temporary increase in block grants; and an extension of unemployment and welfare benefits. 

One important factor determining what, if anything, will be done during a lame-duck session is the outcome of the upcoming presidential election. Should the Democrats take the White House and secure a filibuster-proof majority in the Senate, they may choose to wait till after Jan. 20 before proposing or enacting legislation. Should the Republican nominee take the White House, Democrats may feel the Bush administration will be more willing to compromise in order to pass last-minute initiatives prior to leaving office. C.A.R and NAR will continue to strongly advocate for making permanent the $729,750 loan limit as part of any investigation that is forthcoming.

The Hope for Homeowners (H4H) initiative that was part of the July stimulus package began to be implemented Oct 1. The H4H program allows troubled homeowners to keep their home, while enabling lenders to receive a Federal Housing Administration (FHA) guarantee on the loans. Under terms of the voluntary program, lenders agree to refinance the existing mortgage at 90% of the current appraised value and assume the loss on the remaining balance; the new loan is an FHA guaranteed 30-yr, fixed-rate, fully amortized, fully documented loan; and the homeowner must forego a portion of the home's future appreciation to the FHA when it is sold. 

The FHA has posted a list of lenders participating in the HOPE for Homeowners program. When contacting the lenders, the FHA is strongly encouraging consumers to also contact their servicing lender and any subordinate lien holders as their participation is vital in order to refinance into a H4H mortgage. The program is voluntary and servicing lenders may offer different solutions for avoiding foreclosure. The FHA plans to update the list weekly on Fridays. The list is available HERE. 

C.A.R will continue to report additional news, useful information and analysis to you as the evolving situation warrants.

Sincerely,

William E. Brown

2008 President 

CALIFORNIA ASSOCIATION OF REALTORS

Home Modifications

Modifying your home to suit your changing needs can often be done quite cheaply--and the benefits to making sure your home fits your lifestyle can't be underestimated. For seniors and people with special needs, sometimes a few adjustments are all it takes to ensure a home's safety and to allow seniors to stay in their homes as long as they'd like.  A recent article in the Palo Alto Weekly says modified homes allow seniors to "age in place." For those of you worried about your parents or noticing a change in your health that is affecting your comfort at home, consider consulting with someone about the options you can take to design your house for safety and ease. Studies from the Palo Alto Weekly article (called Designed for Safety and written by Susan Golovin), reveal alarmingly high statistics for the number of people over 65 who suffer from falls in their homes; over 1/3 of them will fall, and those falls could have been easily prevented with some simple remolding action. Sometimes all it takes is removing some rugs! If you're worried about the safety of your home, get a safety assessment. Nothing is more important than your health! 

Bay Area Highlights, Oct 21-Nov 5

The Peninsula and South Bay Edition

Music and Comedy:

Jimmy Buffett and the Coral Reefer Band, 8:00PM-10/21

Rock/Pop Shoreline Ampitheatre, Mountain View

Disney on Ice: 100 Years of Magic, 8:00PM-10/23

HP Pavilion, San Jose

Craig Shoemaker, 8:00PM-10/23

Comedy Improv Comedy Club, San Jose

Palo Alto Philharmonic Orchestra, 8:00PM-10/25

Cubberley Community Center Theater, Palo Alto

Neil Young, Norah Jones, Wilco, ZZ Top, Death Cab for Cutie, Cat Power, Pegi Young, 9:00PM-10/25

Rock/Pop Shoreline Ampitheatre, Mountain View

San Jose Chamber Ochestra, 7:00PM-10/26

World premiere of Mimi Dye's One Beautiful Light. 

Le Petite Trianon Theatre, San Jose

The Assads, 6:00PM-10/28

Brothers Sergio & Odair amaze on Brazilian guitar. 

Community School of Music and Arts at Finn Center, Mountain View

English Beat, 7:00PM-11/1

Dave Wakeling tours across the States, Canada, & the UK.

Paris Piano Trio

Former Prize-winning students at Paris Conservatoire, 7:00PM-11/2

Classical Kohl Mansion, Burlingame

Phil Markowitz Trio, 4:40PM-11/12

Jazz Piano Bach Dancing and Dynamite Society, Half Moon Bay

More Things To Do:

Zappe Family Circus

An Italian Theatrical Circus since 1842

10/24-10/26, 4:00PM-6:00PM

Circus Tent, Redwood City

Haunted Hostel Halloween Festival

The 6th annual Haunted Halloween Festival at the Point Montara Lighthouse is a once-a-year spooktacular for kids of all ages! 

10/25, 2:00PM--Point Mantara Lighthouse Hostel, Montara

Book Group Expo

Meet authors, eat chocolate, attend lively discussions, taste wine, have books signed, and savor fine tea.

10/25, 10:00AM--McEnery Convention Center, San Jose

Trick or Treat on Twin Pines Lane

Trick or treat room, carnival games, crafts, snacks.

10/31, 6:00PM-9:00PM, Twin Pines Community Center, Belmont

Halloween Bash!

Biggest Bash in San Jose. Listen to the sounds of Latin Affect, Jammin, Tortilla Soup, & special guest GQ

10/31, 6:30-12:00AM. Mexican Heritage Plaza, San Jose

Bail us out! How we can tell if the bailout's working

Congress has started tossing buckets of water overboard, but we still seem to be sinking. In the wake of the newly passed bailout bill, many people are left wondering if the bill really will help revitalize the economy. But before we get that far, it's important to know the answer to the question of what exactly the bailout is trying to achieve.

In last Sunday's San Francisco Chronicle, Kathleen Pender says of the bailout, "Although lawmakers tried to rebrand it an 'economic rescue bill,' experts say its real purpose is to create a more active and transparent market for mortgage-related securities and thereby help restore confidence in the financial system. It won't restore the balance in your 401k plan in short order or guarantee you won't get laid off." 

Using clear, easily digestible language, Pender deconstructs the bailout plan and helps us understand why it happened, what the plan's intention is, and how we can tell if it's working. 

This article is the best one I've read on the bailout, and it's a must-read for everyone worried about their finances in this difficult economic moment. 

CLICK HERE FOR THE FULL ARTICLE 

C.A.R Market Matters, October 16

Thursday, October 16, 2008

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS

Wall Street Journal

Mortgage Lending for Sellers

Due to stricter loan underwriting standards and increased difficulty for some borrowers to qualify for a loan, even for those who are well-qualified, more sellers are offering financing to potential home buyers, which some believe can be mutually beneficial to both buyers and sellers, and can give sellers a competitive edge.

MAKING SENSE OF THE STORY FOR CONSUMERS

In addition to sellers receiving a steady flow of income by providing financing to home buyers, sellers also can profit from the interest payments. Sellers also may be able to sell the mortgage on the secondary market, thus reducing their risk. However, seller-financing is not always the best option. Sellers who need the equity from their current home to purchase their next one are advised to not offer seller financing. 

Buyers, especially those who are self employed, work on commission, or have lower credit scores, but can explain the circumstances that led to it, also may benefit from seller financing. often times, these buyers do not qualify for traditional, conforming loans, reducing their ability to become homeowners. 

To reduce the risk of possible loan default, most real estate professionals recommend that sellers request a down payment of at least 10%, especially if the buyer does not have an ideal credit score. Buyers who do not have a large financial stake in the home may be more likely to default than those with a more substantial down payment. It is also recommended that sellers work with a real estate attorney to draft a contract that includes possible implications if the buyer issues a late payment, defaults on the loan or neglects to adequately insure the property. Sellers also should work with an experienced loan servicer who can collect payments and keep records.

FULL STORY

Los Angeles Times

California REALTORS forecast lower home prices, rising sales in 2009

The California Association of Realtors on WEdnesday presented its "2009 Housing Market Forecast," at California Realtor Expo 2008 in Long Beach, Calif. The annual forecast drew a crowd of more than 1,200 real estate industry professionals who learned what consumers and the real estate industry can expect for California's housing market next year. 

MAKING SENSE OF THE STORY FOR CONSUMERS

Sales of existing family homes are expected to increase in 2009 by 12.5 percent, to 445,000 units. In August, sales were 85% above the monthly for the current cycle and for the first time this year were ahead of 2007 in year-to-date terms.

Although the median home price is expected to decline by 6% in 2009, to $358,000, the lower home price likely will increase the state's affordability rate, currently at 48%, enabling more first-time home buyers to enter the market. C.A.R anticipates home prices will stabilize once inventory thins out. In August, the Unsold Inventory Index stood at 6.7 months, down from 16.9 months in January 2008, meaning that it would take approximately 6.7 months to deplete the market at the current sales rate. 

The ability of consumers to obtain financing continues to play a vital role in stabilizing home prices. Currently, buyers with at least 10% available for a down payment, proof of income and excellent credit scores may qualify for conforming loans--mortgage loans that are $729,750 or less.

FULL STORY

Wall Street Journal

No quick fix for Housing Prices

The recently enacted government rescue plan, which includes the U.S government taking stakes in major financial institutions and temporarily guaranteeing new bank debt, is expected to stabilize the economy. However, some economists believe that additional measures are needed to help stimulate the demand for housing and reduce mortgage delinquencies and foreclosures. 

MAKING SENSE OF THE STORY FOR CONSUMERS

In July, the government approved a permanent loan limit increase--from $417,00 to $625,000--on mortgages backed by the Federal Housing Administration (FHA), which some analysts believe is helping more homeowners obtain mortgages, especially in high-cost areas like California.  In September, 28% of home purchases were financed with FHA mortgages, an increase from 19% in August. This year, more than twice as many home buyers sought government-backed mortgages than did those who did so last year.

Although the government program, Hope for Homeowners, aims to assist homeowners by helping them refinance their current mortgage loans into more affordable ones in exchange for the homeowners sharing price appreciation with the government, some experts believe that the program will not assist enough homeowners. Hope for Homeowners will help 400,000 homeowners who are in default or foreclosure; however, some estimates show that there are nearly 12 million Americans who owe more on their mortgages than their homes are currently worth. Homeowners at risk of defaulting on their mortgage should contact their mortgage company as soon as possible to explore options including loan modification.

Some economists believe that mortgage rates, although still at historic lows, need to decline to 5.25 percent in order to attract more home buyers and deplete the current supply of homes on the market.

FULL STORY

In Other News...

San Francisco Chronicle

Mortgage last loan people pay, study finds

Sacramento Bee

Local builders find few looking to buy new homes

CNN 

Credit tight, but key lending rate eases

Los Angeles Times

Errors in loan documents can save strapped homeowners

Wall Street Journal

California officials try to avoid second housing hit

C.A.R Market Matters, October 09, 2008

Thursday, October 09, 2008

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS

New York Times

Central Banks Coordinate Global Cut in Interest Rates

Hoping to thaw the current credit freeze, the Federal Reserve, the European Central Bank, the Bank of England, and the central banks of Canada and Sweden reduced their primary lending rates by a half percentage point on Wednesday. The Chinese central bank also reduced its key interest rate and lowered bank reserve requirements, while the Bank of Japan's rates remained unchanged.

MAKING SENSE OF THE STORY FOR CONSUMERS

The purpose of the rate cut is to increase consumer confidence, which in turn should help stimulate the economy. When consumers and businesses have more confidence in the economy, they usually spend more money, which bolsters the economy by enabling retailers to increase sales and prevent future layoffs.

The Federal Reserve controls the interest rate that banks charge each other for short-term loans. Usually this leads to banks lowering the rates they charge consumers and businesses. The short-term loan-rate reduction, from 2 percent to 1.5 percent, should have an almost immediate effect on credit card rates, according to financial analysts. Interest rates on automobile and business loans also should decline. Generally, the short-term loan-rate reduction also leads to reduction in mortgage rates; however, it is too soon to predict if that will happen in this case given the way the market has reacted to recent economic news.

Some credit card companies already have reduced their credit card rates. Although there may be room for further reductions for some consumers, many experts believe that only consumers with the best credit scores and payment history will benefit from the rate reduction.  Most credit card companies deem consumers with high credit scores as providing the least amount of risk.

Consumers with fixed-rate mortgages will not benefit from the rate cut; however, those with adjustable-rate mortgages (ARMs) may. When banks receive an interest rate cut, they may pass along the savings to consumers. Homeowners with ARMs could receive a payment reduction.

Click here for the full story

MSN

Sell your home fast in any market

Due to the large number of available homes on the market, and the fact that the traditional home-buying season is coming to a close, sellers need to be aware of key factors that can determine whether their home sells quickly or lingers on the market.

MAKING SENSE OF THE STORY FOR CONSUMERS

Accurately pricing a home continues to be the number one factor to conclude a successful sale. Most REATLORS guide sellers in determining an accurate listing price for their home by tracking comparable properties in their neighborhood that have sold within the previous three to four months. Since the market can greatly fluctuate from one neighborhood to another, some REALTORS believe that setting a price based on comps older than three to four months will not accurately reflect the current market and could result in pricing a home at odds with current market conditions.

Even in today's market, sellers do have some control over many contingencies. Some buyers may request that their contracts include contingencies based on their ability to obtain financing. To avoid risks associated with this contingency, some REALTORS advise their clients to request buyers to provide a pre-approval letter from a well-established lender; a financial information sheet outlining the buyer's employment history, income, assets and liabilities; and a recent bank statement showing that the buyer has enough funding reserves for the required down payment. This ensures that the buyer is likely to be approved for a mortgage loan, and reduces the risk to the seller.

Some buyers may use a home's inspection report as a bargaining chip to negotiate a lower price. When this occurs, some sellers offer buyers a lump sum of money so the buyer can make the repairs, rather than the seller repairing each item listed on the report. Sellers may be able to avoid paying a lump sum to the buyer by having the home pre-inspected prior to listing. This enables the seller to obtain accurate estimates for the cost of repairs ahead of time and provides the seller with the option of making the repairs before listing the home.

Click here for full story

CNBC

Brokerage Asks Sellers to Cut 10% off Home Prices

In an attempt to lure potential buyers off the sidelines, a nationwide real estate brokerage is asking its approximately 25,000 sellers who have homes listed with its brokers to reduce their listing prices by as much as 10% for its first national, 10-day sales event. 

MAKING SENSE OF THE STORY FOR CONSUMERS

According to a recent Coldwell Banker survey, more than half of its real estate agents said listing prices in their market are still too high to attract qualified buyers. The brokerage is hoping that the 10-day price reduction will entice home buyers to venture back into the market and help reduce the current supply of unsold homes. In California, C.A.R's Unsold Inventory Index for existing single-family detached homes in August 2008 was 6.7 months. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

Buyers who are uncertain if now is the right time for them to purchase a home should consider the price of the home, along with the recent reduction in mortgage rates, which could reflect a sizable savings. According to the primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.94% with an average .6 points for the week ending Oct.9. This is a decline from the previous week when fixed-rate mortgages averaged 6.10%. Last year at this time, the 30-yr fixed-rate mortgage averaged 6.4%.

Click here for full story

In Other News...

Los Angeles Times: Countrywide mortgage pact may be worth $3.5 billion to California loan holders? 

Los Angeles Times: How much foreclosure relief will homeowners get from bailout plan?

Sacramento Bee: Rescue bill won't curb region's foreclosures, experts say 

Mercury News: Forecast calls for continued drop in home prices

Mercury News: Freddie, Fannie cut back mortgage fees

Wall Street Journal: California Officials Try to Avoid Second Housing Hit

CNN Money: Consumers rein in borrowing 

C.A.R e-Blasts are published by the California Association of Realtors

C.A.R Market Matters, August 28th

Thursday, August 28th, 2008

Welcome to the Market Matters Advisory, your weekly guide to responding to the market. 

Barron's

The Endgame Nears for Fannie and Freddie

Shares of Fannie Mae and Freddie Mac have declined by approximately 90% from the previous year and both companies are reporting quarter-over-quarter losses, leading some to believe that a government takeover or complete privatization is imminent.

MAKING SENSE OF THE STORY FOR CONSUMERS

According to the Barron's article, which states "should the agencies fail to raise fresh capital, the administration is likely to mount its own recapitalization, with Treasury infusing taxpayer money into the enterprises," consumers would be led to believe that a government bail out is the only option. Although a cash infusion may be needed, it is not likely that the Treasury would purchase an equity stake in either Fannie or Freddie. Additionally, the Treasury Dept. must negotiate an agreement with the GSEs. Fannie and Freddie continue to raise capital own their own and some reports show that the GSEs are looking for private-equity firms or outside investors to provide the financing, which would help raise capital and reassure Wall Street.

The article also states, "In the early 1980s Fannie was effectively insolvent, but the government allowed it to continue operating." Many consumers are not aware of how the GSEs serve the market or what their roles are. Unlike banks, which lend directly to consumers, Fannie Mae and Freddie Mac operate in what is known as the "secondary mortgage market." They purchase or guarantee loans from direct lenders in the "primary mortgage market" and either hold onto them until they mature, or sell the loans in the form of mortgage backed securities. By the GSEs guaranteeing or purchasing the loans from banks, Fannie and Freddie are able to fulfill their congressional mission and supply an affordable and stable source of capital to lenders, allowing them to offer more home loans.

Due to tighter lending standards, it is becoming increasingly more difficult for borrowers to secure home loans. If Fannie Mae and Freddie Mac did not guarantee or purchase primary lenders' loans, the cost of homeownership would dramatically increase as lenders would experience an even greater capital shortage.

Many financial institutions in the mortgage business are experiencing losses, and while the GSEs are no exception, their portfolios continue to outperform the majority of lenders in the market. Additionally, unlike private investors which seem to have abandoned the mortgage market, Fannie Mae and Freddie Mac are fulfilling their congressional mission to provide an affordable and stable flow of capital to home-loan lenders.

FULL STORY

Yahoo News

Consumer Outlook Up, Worst May Be Over for Housing

Primarily as a result of lower gas prices, consumer confidence increased in August, with The Conference Board's consumer conference index rising to 56.9, up from the revised 51.9 reading in July. Following a six month decline, August was the second consecutive month that the index increased. A reading of 100 is considered the highest rating possible. In a separate report, new home sales posted an unexpected increase in July, while the Standard & Poor's/Case-Shiller U.S National Home Price Index showed prices declined at a slower rate in the second quarter, indicating that some areas may have reached the trough in home price declines.

MAKING SENSE OF THE STORY FOR CONSUMERS

The conference Board's consumer conference index measures how consumers perceive the current conditions and future expectations of the US economy. The index is based on a survey of 5,000 U.S households.

The monthly survey details consumer attitudes and buying intentions. Increased consumer confidence generally indicates that consumers are more willing to make purchases. Decreased confidence indicates that consumers are likely to slow their spending.

Although the Conference Board's Present Situation Index declined to 63.2 in August, compared with 65.8 in July, consumers expect the economy to improve over the next six months, as indicated by The Conference Board's Expectations Index. The Expectations Index increased by 10 points, the largest increase since November 2005.

FULL STORY

USA Today

Home Prices in Record Tumble, but some find Hints of Recovery

Although home prices decreased 15.4% during the second quarter compared with the same period a year ago, in month-over-month comparisons, home sales are increasing, according to the Standard & Poor's/Case Shiller U.S National Home Price Index. According to the Office of Federal Housing Enterprise Oversight's home price index, states with the largest annual declines include CA at 16%, FL at 12%, AZ at 9%, and RI at 5%. Existing home sales increased in July and exceeded many economist's expectations, while new home sales also increased 2.4% for the same time period.

MAKING SENSE OF THE STORY FOR CONSUMERS

Although home prices are decreasing, existing home sales are increasing nationwide and in CA. In CA, single-family, existing home sales increased 43.4% in July compared with the same period a year ago. Sales in July remained above the 400,000 level for the third consecutive month, with deeply discounted, distressed sales continuing to drive volume in many regions of the state.

The state's unsold inventory index (UII) for existing, single-family detached homes decreased to 6.7 months in July 2008, compared with 10 months (revised) for the same period a year ago. The UII indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

FULL STORY

In Other News...

San Jose Mercury News

Lenders Remain Wary of Real Estate Investors 

Reuters

More Owners Say Their Homes Depreciated: Survey

Home Buyers Hold Fate of U.S Economy

Forbes

America's Most Distressed Housing Markets

CNN Money

Paulson's Fannie Freddie Fix

San Francisco Chronicle 

Home Sales in State Soar as Prices Plunge

TALKING POINTS

What to tell consumers--

Despite the high inventory of homes on the market, sales of deeply discounted, distressed properties are increasing and the Unsold Inventory Index (UII))--which indicates the number of months needed to deplete the supply of homes on the market at the current sales rate--is declining. With sellers often in competition with banks when selling their home, it is important for sellers to be aware of some best practices to help them sell their home. With guidance from their REALTOR, consumers need to carefully consider the importance of realistically pricing a home, properly staging their house prior to putting it on the market, and playing up the home's strengths.

While it may be common knowledge to REALTORS that the first offer is often the best, some sellers may not feel the same way. Many believe that if the first potential buyer makes an offer close to the asking price, future offers may exceed it. In many instances, this is not the case, and subsequent offers often are for less, especially in a declining market.

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS