Ah, spring is in the air and that means a lot of people will start their spring cleaning routines. That couldn't be more important than for those who are selling their homes.

There's nothing quite like walking into a home for sale that's fresh, bright, clean, and sparkling. Of course, the opposite is true too. It's highly discouraging to walk through the house and not be able to study it because it's cluttered, dirty, and you can hardly see out the windows. With this in mind, here are a few areas to be sure you focus on before you have buyers coming through your home.

Window cleaning. If you have a lot of windows that are high, hiring a window cleaner might be needed. But if you think you can manage, then try some insider tricks. Mix one-quarter vinegar with cool water in a spray bottle. Instead of using paper towels, roll up newspapers and wipe the windows with them. The newsprint won't rub off on the window and it will save you the extra expense. Window washers recommend using a strategic wiping pattern. Starting at the top, so you don't have to be concerned with drips, wipe top to bottom. Then on the inside rub right to left. This way you'll see where there are streaks. Keeping the windows crystal clear allows buyers to see the natural light coming into your home and any beautiful landscaping.

If your screens are damaged with small tears or sagging it's worth repairing or rescreening them. Just make sure you have a good spline roller. A rundown house will attract low offers. HVAC Systems. Air condition and heating ventilation systems should be checked, cleaned, and in good working condition. Something as simple as a dirty filter can produce a thick layer of dust in your home when the HVAC system is used. Even though dust isn't a permanent problem (like a structural issue), it's not appealing to buyers and can leave an overall bad impression about the home. On top of that, dirty filters can cause everything from very poor air quality to poorly running systems that will drain your wallet.

Get rid of Insect nests. Bees, wasps, hornets love your home. Make sure you eliminate them by getting professional help if necessary. Insects buzzing around can be quite a scare for some buyers. Again, this problem isn't about the house, necessarily, however, it could make buyers uncomfortable. The same goes for pets. Don't have them in the house when it's being shown or even in the backyard—not everyone is a pet lover.

Clear soil buildup. You may not live at the bottom of the hill, but homeowner, Mary Kelley says, "You don't have to have had a mud slide from the hill behind you. Heavy rain can cause soil buildup and then the water may seep under the foundation of the house."

The rain can cause the soil to move, even on the slightest slope (not even visible to the eye), and settle against the house foundation, causing dampness which may be harmful to the foundation…not to mention it's unsightly. Weed out driveway and exterior areas. Maybe you have an asphalt driveway. If the asphalt has even a hairline crack you could be headed for trouble. One homeowner had a tiny hairline crack between her house foundation and the concrete pool deck.

"I didn't even realize there was a gap there, then I saw this little green blade thing coming up. I thought it was grass. It was such a tiny little blade. I just ignored it. In a few weeks, with our continuing rain, I could see that it was going to be a palm tree. A palm tree has a very large, rigid trunk and it could actually damage the foundation of the house, pool, and deck," says Kelley.

Kelley says she has snipped the pesky baby palm tree off three times already and it keeps coming back. "I may have to try pouring 'RoundUp' on it and hope it kills it," she says.

Post check. While we're on the subject of slipping foundation and water, how's your wooden fence doing? It's not a good sign when buyers get to your home and suddenly the fence collapses due to age or wobbly posts from soil saturation. If they're loose, secure them.

Check to see if the wooden posts are rotting in the ground and, maybe weeds are growing around them trapping moisture and causing it to penetrate the wood. If that's the case, solving the problem before a buyer discovers it is best. Taking care of these not-so-common spring cleaning items before you put your home on the market is a matter of making a good first impression with buyers, and that may be the only impression…so make it count.

by Phoebe Chongchua

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The winter months, traditionally a slow time for the real estate market, can be even more frustrating for home sellers who can’t wait for the spring thaw to put their home on the market. But even in a slow market, some homes sell. The National Association of Realtors reported that 5.77 million single-family homes were sold in November 2009 across the country.

Experienced real estate agents tell their customers that while condition and appearance are important to a home’s marketability, nothing matters as much as setting the price appropriately from the moment the property is listed for sale.

“Home sellers will see the most traffic when the property first goes on the market,” says Lillian Montalto, a broker with Lillian Montalto Signature Properties in Andover, Mass. “If your home isn’t priced right from the beginning, then you will miss your entire audience. Buyers know pricing even better than some real estate brokers. They won’t pull out their checkbook until they see a house which is properly priced.”

To reach the perfect price, sellers should work closely with an experienced real estate agent with plenty of local market knowledge.

“While agents have always needed to do a careful market analysis, now they need to focus less on comparable neighborhood homes and more on the competition on the market right now,” says Sharyn Goldman, a Realtor with Long & Foster Real Estate’s Bethesda Gateway office in Bethesda, Md. “When doing a market analysis, you can’t go back more than six months for comparable sales. I take sellers to see the competition in their vicinity so they understand what they are up against.”

Sellers should ask their agents to prepare a market analysis based on current listings, sales within the past few months and even homes that were taken off the market. Realtors can look at the prices under which homes have gone under contract rather than waiting for the recorded homes sold, which are sometimes several months old. Agents can evaluate how long homes have been on the market in a particular price range to see which ones have sold quickly and which are unsold long after comparable homes have gone under contract.

Montalto suggests that sellers “step out of their seller shoes and into buyer shoes, to become extremely objective and critical about their property.”

“Sellers need to understand that price has nothing to do with their need and everything to do with what buyers are willing to pay,” says Montalto.

Regulatory changes that have tightened the appraisal process are also affecting home prices.

“Appraisers are making it harder for all buyers and sellers right now, so sellers need to know that even if they find a buyer at the price they want, the property may not appraise at that price,” says Goldman.

Montalto suggests that sellers pay for an appraisal before they list their home to have an accurate idea of what the market will bear.

“Price and value depend completely on how the buyer perceives the house, so sellers need to be presenting their home in the best possible condition at the best possible price,” says Goldman.

The winter months, traditionally a slow time for the real estate market, can be even more frustrating for home sellers who can’t wait for the spring thaw to put their home on the market. But even in a slow market, some homes sell. The National Association of Realtors reported that 5.77 million single-family homes were sold in November 2009 across the country.

Experienced real estate agents tell their customers that while condition and appearance are important to a home’s marketability, nothing matters as much as setting the price appropriately from the moment the property is listed for sale.

“Home sellers will see the most traffic when the property first goes on the market,” says Lillian Montalto, a broker with Lillian Montalto Signature Properties in Andover, Mass. “If your home isn’t priced right from the beginning, then you will miss your entire audience. Buyers know pricing even better than some real estate brokers. They won’t pull out their checkbook until they see a house which is properly priced.”

To reach the perfect price, sellers should work closely with an experienced real estate agent with plenty of local market knowledge.

“While agents have always needed to do a careful market analysis, now they need to focus less on comparable neighborhood homes and more on the competition on the market right now,” says Sharyn Goldman, a Realtor with Long & Foster Real Estate’s Bethesda Gateway office in Bethesda, Md. “When doing a market analysis, you can’t go back more than six months for comparable sales. I take sellers to see the competition in their vicinity so they understand what they are up against.”

Sellers should ask their agents to prepare a market analysis based on current listings, sales within the past few months and even homes that were taken off the market. Realtors can look at the prices under which homes have gone under contract rather than waiting for the recorded homes sold, which are sometimes several months old. Agents can evaluate how long homes have been on the market in a particular price range to see which ones have sold quickly and which are unsold long after comparable homes have gone under contract.

Montalto suggests that sellers “step out of their seller shoes and into buyer shoes, to become extremely objective and critical about their property.”

“Sellers need to understand that price has nothing to do with their need and everything to do with what buyers are willing to pay,” says Montalto.

Regulatory changes that have tightened the appraisal process are also affecting home prices.

“Appraisers are making it harder for all buyers and sellers right now, so sellers need to know that even if they find a buyer at the price they want, the property may not appraise at that price,” says Goldman.

Montalto suggests that sellers pay for an appraisal before they list their home to have an accurate idea of what the market will bear.

“Price and value depend completely on how the buyer perceives the house, so sellers need to be presenting their home in the best possible condition at the best possible price,” says Goldman.
The winter months, traditionally a slow time for the real estate market, can be even more frustrating for home sellers who can’t wait for the spring thaw to put their home on the market. But even in a slow market, some homes sell. The National Association of Realtors reported that 5.77 million single-family homes were sold in November 2009 across the country.

Experienced real estate agents tell their customers that while condition and appearance are important to a home’s marketability, nothing matters as much as setting the price appropriately from the moment the property is listed for sale.

“Home sellers will see the most traffic when the property first goes on the market,” says Lillian Montalto, a broker with Lillian Montalto Signature Properties in Andover, Mass. “If your home isn’t priced right from the beginning, then you will miss your entire audience. Buyers know pricing even better than some real estate brokers. They won’t pull out their checkbook until they see a house which is properly priced.”

To reach the perfect price, sellers should work closely with an experienced real estate agent with plenty of local market knowledge.

“While agents have always needed to do a careful market analysis, now they need to focus less on comparable neighborhood homes and more on the competition on the market right now,” says Sharyn Goldman, a Realtor with Long & Foster Real Estate’s Bethesda Gateway office in Bethesda, Md. “When doing a market analysis, you can’t go back more than six months for comparable sales. I take sellers to see the competition in their vicinity so they understand what they are up against.”

Sellers should ask their agents to prepare a market analysis based on current listings, sales within the past few months and even homes that were taken off the market. Realtors can look at the prices under which homes have gone under contract rather than waiting for the recorded homes sold, which are sometimes several months old. Agents can evaluate how long homes have been on the market in a particular price range to see which ones have sold quickly and which are unsold long after comparable homes have gone under contract.

Montalto suggests that sellers “step out of their seller shoes and into buyer shoes, to become extremely objective and critical about their property.”

“Sellers need to understand that price has nothing to do with their need and everything to do with what buyers are willing to pay,” says Montalto.

Regulatory changes that have tightened the appraisal process are also affecting home prices.

“Appraisers are making it harder for all buyers and sellers right now, so sellers need to know that even if they find a buyer at the price they want, the property may not appraise at that price,” says Goldman.

Montalto suggests that sellers pay for an appraisal before they list their home to have an accurate idea of what the market will bear.

“Price and value depend completely on how the buyer perceives the house, so sellers need to be presenting their home in the best possible condition at the best possible price,” says Goldman.

By Michele Lerner

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Is 2010 the year to buy a house? It certainly looks that way: After a steep run-up in prices during the first half of the decade, home values have plummeted back to 2003 levels. Fixed mortgage rates are sitting near record lows. And the foreclosure epidemic—while painful for many home owners—has created some wonderful opportunities for bargain hunters. If that's not enough, Uncle Sam is handing out thousands of dollars in tax credits to nearly all first-time buyers and the bulk of existing home owners who close a purchase by June.


[Slide Show: 10 Things to Know About Real Estate in 2010.]

But while the 2010 outlook appears inviting, there's one key catch. "You need to have a stable job," says Mark Zandi, the chief economist of Moody's Economy.com. The economy is showing signs of life, but the unemployment rate is already at 10 percent and expected to go higher. And while those mortgage rates are attractive, buying a house makes sense only if you can bank on your income stream. So before you consider purchasing a home, take a hard look at your job, your company, and your industry.

That said, here are 10 things to know about real estate in 2010:

1. Prices to bottom: After more than three years of falling, real estate values have shown signs of stabilization in recent months. At the national level, home prices slid nearly 9 percent between the third quarter of 2008 and the same period this year, according to the S&P/Case-Shiller home price report. That's a notable improvement from the second quarter's nearly 15 percent annual drop and the first quarter's 19 percent decline. This improvement will give way to a bottom in home prices—finally!—in 2010, but not before additional declines, Zandi says. Zandi projects home prices will hit bottom in the third quarter of 2010 after logging a peak-to-trough decline of roughly 37 percent, based on the S&P/Case-Shiller national home price index. "That means we've got another roughly 10 percent [decline] to go," Zandi says.

2. Mortgage delinquencies up: Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter—the highest delinquency rate in the 37-year history of the Mortgage Bankers Association's National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate—which already stands at 10 percent—will peak at about 10.5 percent in the first quarter of 2010, says Patrick Newport, an economist at IHS Global Insight. Additional job losses mean more borrowers won't be able to pay their mortgage bills. "The [delinquency] rate is going to stay up there for quite a while because the job market is going to be really weak for a while," Newport says.

3. Foreclosures move upstream: The number of foreclosure sales will increase to about 1.9 million in 2010, according to Moody's Economy.com. And while we've already seen a growing number of more expensive homes heading into foreclosure, Heather Fernandez, vice president of marketing at the real estate search engine Trulia, expects the trend to pick up steam next year. (Trulia is a U.S. News partner.) "We are poised in 2010 to see a surge of foreclosures from prime borrowers. Hundreds of billions of dollars in option [adjustable rate] mortgages are set to be recast" next year, Fernandez says. Option adjustable rate mortgages allow borrowers to make lower monthly payments for an initial period, after which the payments adjust—or "recast"—higher. For some borrowers, the new payments can be more than twice their initial payments. Combined with other factors, like the loss of a job, a recasting option adjustable rate mortgage can make borrowers more likely to default. "These are [properties] at higher price points [and] potentially in more desirable neighborhoods," Fernandez says.

4. Mortgage rates to rise: Anyone who purchased a home in 2009 was presented with some extremely attractive mortgage rates. Rates on 30-year, fixed mortgages fell to an average of 4.88 percent in November, down sharply from 6.09 a year earlier. A key factor behind the plunge was a Federal Reserve program, first announced in November of 2008, that purchased debt and mortgage-backed securities from Fannie Mae and Freddie Mac. But the program is slated to expire at the end of the first quarter, and if private investors don't step up, fixed mortgage rates could jump. (The Fed, of course, could always decide to extend the program.) The unwinding of this Fed program, the improving economy, and mounting concern over government deficits could push rates on 30-year, fixed mortgages to roughly 5.5 percent by mid-2010 and close to 6 percent by the end of the year, says Mike Larson of Weiss Research. "Almost all signs to me point higher," Larson says.

5. Buyer's market remains: With prices still falling, mortgage rates remaining historically attractive, and additional homes hitting the market in the form of foreclosures, the dynamics of the real estate market will continue to favor buyers over sellers in 2010. That means those looking to buy a home next year should not feel pressured to act impulsively. "You don't need to have a sense of urgency, but understand that as time progresses the balance of power as we get into 2010 is going to slowly but surely shift away from [buyers]," Larson says. "It is not going to be a strong seller's market, but it will be more evenly distributed as the year goes on." Data from the real estate firm Zillow show that home buyers are already losing the leverage they once enjoyed. While home buyers landed a median discount of 4.6 percent off listing prices in January, the size of the gap fell to 2.7 percent by October. Expect this gap to close further as 2010 marches on.

6. Modification plan could be modified: While the Obama administration has put nearly 700,000 borrowers into temporarily restructured mortgages, it had found permanent fixes for just 31,382 struggling homeowners through November. What's more, critics have identified two key shortcomings of the government's $75 billion antiforeclosure plan. First, the program isn't much help for borrowers struggling to stay in their homes as the result of a job loss. And the rickety labor market is a key factor behind rising delinquencies. At the same time, the plan does not sufficiently address the issue of negative equity—owing more on your home loan than the property is worth—which also works to increase foreclosures. "The current modification program does not address negative equity and is therefore destined to fail," Laurie Goodman, a senior managing director at Amherst Securities Group, told a congressional committee in written testimony on December 8. "It must be amended to explicitly address this problem." Zandi says the government may move next year to overhaul the modification program in two ways: improving troubled borrowers' negative equity positions by writing down some of the mortgage principal, and helping to turn troubled homeowners into renters.

7. FHA lending standards may increase: While banks have jacked up lending standards in the face of mounting delinquencies, mortgages backed by the Federal Housing Administration—which come with a minimum down payment of just 3.5 percent—have remained accessible to a wide swath of borrowers. The FHA guarantees nearly 30 percent of new-home purchase mortgages today, up sharply from just 3 percent in 2006. But the rapid growth has occurred alongside an increase in mortgage delinquencies. As a result, the FHA's reserves have dipped below congressionally mandated levels. The development has put pressure on the Obama administration to beef up its requirements for agency-backed home loans. In early December, the Department of Housing and Urban Development announced that it would make several changes to FHA mortgage requirements: raising up-front cash requirements, boosting minimum credit scores, and perhaps charging more for insurance premiums. Additional new restrictions may be in store. Taken together, the developments could work to choke off the supply of mortgage credit to borrowers who can't get financing elsewhere.

8. Tax credit available through June: On top of lower prices and cheap mortgage rates, Uncle Sam is offering an additional incentive to get buyers into the market next year. In early November, President Obama signed a bill extending and expanding a popular tax perk for home buyers. The legislation gives qualified first-time home buyers a tax credit of up to $8,000 if they close the purchase of a primary residence by the end of June. Meanwhile, qualified current home owners are eligible for a credit of up to $6,500 when they buy their next principal residence. But while the tax perk may make a home purchase more tempting, would-be buyers should make sure they have the job security and financial wherewithal to handle the transaction before going ahead. "Don't let [the home buyer tax credit] be the thing that drives you to act," Larson says.

9. Markets will vary a great deal by region: The performance of the national housing market is much less important that the dynamics of your local market, and sales and pricing trends will vary a great deal from one area to the next in 2010. "There will be geographic pockets where the values will still continue to decline, and there will be geographic pockets where they increase," said Dale Siegel, a mortgage broker and the author of The New Rules for Mortgages. That means anyone interested in buying real estate next year can't just read the national headlines. Instead, find a good blog that covers the local housing market and consider speaking with a real estate agent with experience in the area. Check out online listings—pay close attention to pricing and inventory trends. And make sure to head out to open houses to get a firsthand feel for the market.

10. Mobile maps can help: Advances in technology
have enabled would-be home buyers to increase the efficiency of their searches. For example, Zillow's iPhone app allows home buyers to see the estimated values and listed prices of the properties they pass on the street. The app, which is free, has been downloaded more than 830,000 times. Trulia has unveiled a similar product that allows users to find nearby open houses as well. "If you are sitting in a neighborhood having brunch on a Sunday, you can very easily pull up your phone [and] walk into open houses," says Trulia's Fernandez.

By Luke Mullins

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If you look at the latest housing numbers released last week by the Commerce Department and the National Association of Realtors, you'd have to say, "Wow! We are on track for an amazing year in sales -- and maybe even prices."

Resales of houses and condos in April were up by almost 8 percent - and now are 23 percent higher than they were the year before.

Sales of newly-constructed homes also soared in April, up 15 percent. They're 48 percent higher than April 2009.

Single family median home prices are even up by 4.5 percent for the year. In the Midwestern states, where the recession has been a lead weight on real estate longer than elsewhere , prices have jumped by 6 percent.

So what in these numbers is there not to like? Aren't they proof positive that the gloom-and-doom crowd had it wrong - that housing and real estate are NOT doing a "double dip," not taking a dive simply because foreclosures and unemployment are high?

Absolutely. No question the latest numbers are solid, even verging on extraordinary.

But here's some perspective we need: They are a little extraordinary -- for a reason.

Most economists agree that April sales totals, maybe even March, are distorted upwards because of the expiring federal tax credits.

Thousands of buyers rushed to complete their contracts in the past two months -- we know that.

But to what extent are the latest sales being "borrowed" from the months ahead? How many people who were going to buy later in 2010 moved up their deals so they could qualify for an $8,000 or $6,500 tax credit?

There's little question that some purchases were accelerated. Lawrence Yun, chief economist for the National Association of Realtors, says "the upswing in April sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback" ahead.

Mark Vitner, senior economist for Wells Fargo, predicts that "we may see sales fall to a record low" for a month or two following the end of the credit program."

But what about the longer term outlook? Won't a recovering national economy keep home sales positive?

Both Vitner and Yun, along with the majority of corporate and government economists polled in May by the National Association for Business Economics, say the answer is a strong yes!

Not only do consumers have growing confidence in the economy and their own incomes, but Yun points out that home buyers no longer fear further price declines -- and that's a crucial turning point in the cycle.

by Kenneth R. Harney

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Negotiation -- that give-and-take act of horse-trading. The idea is that you have something I want, I have something you want, and through an iterative process of offers and counteroffers, we arrive at a mutually acceptable agreement.

In real estate, the seller has a house, the buyer (presumably) has money or the ability to borrow some of that stuff, and each wants to swap. Let the games begin!

Now, during much of the past decade, agents didn't have to think too hard about the nuances of the negotiation process, thanks to "stated income" loans and a demand for housing that was, shall we say, a bit off-kilter.

LENDER: So, I see you babysit the Patterson twins on alternating Sundays?

BUYER: Yep! But only until I get my real estate license.

LENDER: And would you "state" that you make, oh, $72,000 an hour?

BUYER: Uh, OK.

LENDER: Congratulations! You are approved for the gross domestic product of Western Europe, expressed in rupees. Now get along and go buy yourself that pretty two-bedroom townhome!

In short, a buyer paid what the seller asked. The only real "negotiations" that took place involved who got to keep the window coverings, the ornamental fountain and buyer's minivan (the seller).

Times have changed, of course. Today, negotiations are alive and well. Sellers still believe their homes are special, while buyers expect the Blue Light Special.

And the many newer agents who cut their teeth in 2003, who never had to really fill the role of negotiator, are finding they have to learn a new skill.

Now, while I am no Donald Trump, I have learned a thing or two over the years about negotiating. I'm a mom, after all.

And there are two rules of constructive negotiating I have seen bludgeoned repeated lately: Never reopen old issues, and never offend the other party. While these concepts may seem obvious enough, they are lost on too many agents and their clients these days.

Rule No. 1: Don't reopen old issues

This is a mistake my daughter used to make. My daughter, however, was 5 at the time.

"I will give you $5 if you let your sister out of the closet." I would open.

"Six," she would authoritatively counter.

So far, so good. But then all rational thought would quickly take leave.

ME: "Five."

DAUGHTER: "Seven."

ME: "Five."

DAUGHTER: "Eight and a new Beanie Baby."

ME: "Five."

This would continue, with my formidable opponent pausing periodically only to reload her random number generator, until we reached agreement. Agreement in our case was always $5. Go figure.

My daughter was playing the role of the seller, and it's a seller I saw this week. When you say you are willing to sell for seven, then seven or something less is the direction in which we should logically be heading.

Raising the price is counterintuitive, and throwing in a late-game demand for a plush collectable (or a ceiling fan) is counterproductive. The result is that your sister will stay in the closet -- and your home will stay on the market.

This week, I also saw the roles reversed: twice. Buyer makes offer, seller counters offer, and buyer responds with an offer lower than his original price and asks for a couple of appliances to be named later.

Excuse me? Of course this accomplished two things. It made the seller question the buyer's veracity and general trustworthiness, and it violated rule No. 2.

Rule No. 2: Don't make the other guy angry

"Corian counters are cheap, the road noise is unbearable, your house is ugly, and so is your dog, by the way," said the would-be buyer. OK, I'm paraphrasing here, but this was the general message delivered by the man who was considering an offer and felt the need to justify his price.

The seller does not need to feel a kinship with your client, but it's always helpful if he doesn't want him dead.

Dealing in good faith requires respect (at least feigned) for the other party and the other party's position, and you'll never find common ground by throwing trust under the bus early in the process.

As crazy as it sounds, I have seen sellers accept a lower offer because they liked the buyers more. This goes double, by the way, for the agents representing them.

Rule No. 3: Don't bother if you don't mean it

This is a bonus rule, and it relates more to the rampant fear of commitment among today's buyers. Sure, they were beat bloody during the boom years, having been forced to play hands dealt from the seller's stacked deck. Payback is, well, you know.

But when my client gets an offer, it is logical to believe that the buyer is sincere in his desire to purchase the home and is not simply writing offers for sport. Again, twice this week I have seen buyers proffer offers only to have them say "never mind" when the seller accepted.

Like a game of thumb wars, winning wasn't in reaching the goal of a consummated purchase agreement but in demonstrating the most muscle in the negotiating game. Having "won," they took their ball and moved on to the next playground.

I suspect that agents are partly, even largely, to blame for this. So anxious to make the deal are we that we neglect to first gauge our clients' commitment and comfort levels.

We forget that our clients aren't buying a pair of shoes, and that it is necessarily a weighty emotional and financial decision, yet we treat the process as a triviality in our eagerness to get our hands on the paycheck at the end of the stick.

Sometimes, I think we should be a little less busy selling and a lot more attentive to the part about counsel and representation. And sometimes, the best representation means that the offer doesn't get written.

If the client isn't all in, if he doesn't really know what he is willing to pay before opening discussions, or if the result of our efforts is a failed offer and a couple of emotionally charged and frustrated parties with nothing to show for it, there will be no paycheck -- which, if you think about it, is appropriate.

Because, as agents, we really haven't done our job at all.

By: Kris Berg, Wednesday, June 16, 2010.

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The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010" -- which primarily extends unemployment insurance benefits -- was approved in a 60-37 vote Wednesday. The vote was mostly along party lines, with only four Republicans in favor and one Democrat opposed.

"While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law," Reid said in a statement.

The House passed an earlier version of the bill in December, and the Senate approved its own version in March. The Senate is currently working on resolving differences between the two bills.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

"Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs," NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

By Inman News, Wednesday, June 16, 2010.

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Mortgage giant Fannie Mae rolled out its Loan Quality Initiative (LQI) June 1, thereby forcing homebuyers to obtain mortgages based on "refreshed" credit reports or risk their closing being canceled and, in some states, their deposits forfeited.

In other words, the buyer is not officially approved for the mortgage until the results of second credit report are approved. There may be other last-minute verifications of undisclosed liabilities, such as job status, that may be "refreshed" as well.

Example:

Buyer A listed his three credit cards on his loan application. The lender approved Buyer A's credit and approves the mortgage loan request, partially based on this information. Buyer A goes to Home Depot, applies for yet a fourth credit card.

The day before the closing, while Buyer A's excitement is peaking, the lender refreshes his credit to make sure his credit score is still as good as it was when it was pulled the first time.

The lender discovers that Buyer A's credit score has been lowered because Buyer A applied for a fourth credit card. It's called finding an "undisclosed liability," and it is not going to end well for the buyer.

Under the LQI, the lender could delay the closing, increase the interest rate, ask for a larger downpayment, or cancel the closing. In some states, Buyer A could lose his deposit.

"The impact on closings is too early to measure," according to Gail Stanley, an Orlando mortgage lender, "but my guess is that homebuyers will be well coached.

"What lender, mortgage broker or real estate broker isn't going to use every communications tool available to make sure the buyer does not even think about using available credit, much less apply for more during the 'refreshing' period?" Stanley asked.

"The mortgage lending business as we have known it is over," according to Boston's MetLife Home Loans' senior mortgage consultant, Brian Cavanaugh. "Quality loan service and counseling will replace rate shopping because mortgage pricing is so competitive.

"Homebuyers need to work with loan officers who clearly understand the new guidelines and can help the buyer understand the importance of complying with them. Mortgage financing is incredibly important in personal financing now and it needs to be understood and protected," Cavanaugh said.

Stanley said that pulling the second credit report is not new, and that the LQI will be a welcome new tool for lenders who practice responsible lending.

"We all realize that buyer qualifications need to be tightened and that the lender needs to be protected. Consumer education is the challenge," Stanley said. "Realtors need to encourage their buyers to be as complete as possible in the original application and to be careful not to do anything that will negatively impact their credit score before the escrow closes."

Depending on the state and the standard purchase and sale agreement used, borrowers could lose their deposits, according to Boston attorney Richard D. Vetstein. He recommends that real estate attorneys review standard purchase agreements.

Vetstein posted some advice about Fannie Mae's LQI on his Massachusetts Law Blog. "If you've taken out new loans that are sizable enough to affect the debt-to-income-ratio calculations used in your original mortgage approval, the deal could fall through. The added debt load could render you ineligible for the mortgage because you suddenly appear unable to handle the payments without a strain on your household budget," he notes.

Also, "Many lenders already pull second credit reports right before the closing, but the Fannie Mae mandate will likely result in a markedly increased number of lenders pulling second credit reports and performing other last-minute verifications." And Vetstein states that a surge in new use of existing credit sources could also impact consumers' ability to secure a home loan.

But holding the buyer accountable pales in comparison to the stringent accountability now in place to prevent lenders from submitting contract products for sale to Fannie Mae with "undisclosed" liabilities. (See www.efanniemae.com, keyword: Loan Quality.)

Just as lenders are calling for refreshed truth from buyers, Fannie Mae is not asking -- it is forcing lenders to upgrade the quality of their underwriting and to get used to the new system and embedded, stringent accountability tools for meeting clear, detailed and tougher underwriting standards.

Fannie Mae's ultimate goal is not to punish the lender or homebuyer. It is to be repaid. Not only will profits start flowing again, but investors will return. And when that happens, loans will become easier to obtain.

There will no doubt be faults found with Fannie Mae's Loan Quality Initiative, but "lack of accountability" will not be one of them.

It is a welcomed and refreshing thought.

By DAVID FLETCHER, June 23, 2010.

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