Now that the real estate market is showing signs of upward movement, some people will be thinking about upgrading. A lot of folks sucked it up during the downturn and now they want a bigger home for their kids, a better location for a shorter commute, or a smaller property to keep maintenance down.

Before you sell, your home probably could use some improvements to garner as much buying interest. The dilemma is: How much more cash are you willing to tie up in your home? Imagine plopping down $10,000 to remodel a bathroom and nobody ends up buying the place for your asking price? You don’t want to be house rich but cash poor.

With this in mind, you might consider taking out a HELOC or doing a cash out refinance instead to release some equity in order to make home improvements or fix necessary things such as a leaky roof.

Whilst this in itself is not a bad idea, it pays to consider all options and consider if releasing equity will damage the prospects of re-mortgaging for your new property.

Is equity finance your only option? Read More

It’s still difficult to afford a home despite low interest rates and a recovering economic environment due stiff lending standards by banks. Add on the fact that many home values have still not fully recovered from pre-crisis levels, and it’s easy to see why help is needed. Owners of these homes usually cannot qualify for traditional refinancing. The HARP ( Home Affordable Refinance Program) was introduced to allow these owners to refinance their homes after the housing market collapsed in 2006-2007.

HARP Qualifications

1) The mortgage firstly must be owned by Freddie Mac or Fannie Mae. If the mortgage was not sold to either Freddie Mac or Fannie Mae before 31st May 2009, it won’t qualify for refinancing.

2) The loan to value ratio at the time of refinancing must be above eighty percent.

3) The homeowner must show him or herself to be a responsible homeowner by making timely payments at least in the past twelve months prior to refinancing.

4) The mortgage cannot be refinanced under HARP twice unless the first refinancing came between March 2009 and May 2009 under Fannie Mae. Read More

According to real estate agents, it’s always a good time to buy or sell!  I’m relieved to say that after putting my house on the Multiple Listing Service (MLS) for 3.5 weeks at the urging of my Realtor, I withdrew the listing and decided to stay!

My Realtor is a friend who kept pushing me for at least a year to list my house with him.  Even though I just refinanced my 5/1 ARM from 3.125% to 2.625%, he convinced me to give it a go given the lack of inventory and pent up demand.  Besides, with Facebook’s IPO this past May, there will be an eventual surge of liquidity once the first lock up tranche expires at the end of August.

I told them that I wasn’t interested in selling, but if he thought I could get a price 5%+ higher than current comparables due to this mini-frenzy we have, then I wouldn’t mind at least trying.  And so, I went on vacation for 10 days while he put my house on the market.  Over 50 Realtors came to visit and we had at least 15 private showings with clients.  Five offers were forthcoming, but I told them that if it wasn’t for at least full asking price, I wasn’t interested.

Given I was very steadfast in my desire for a 5%+ higher price than comparables, I think I scared buyers away through my Realtor.   One couple came three times and needed to move out of their rented apartment by August 1 due to the start of the school year for their two kids.  They were willing to bid a reasonable price in the current environment, but I really just couldn’t be bothered if it was under asking.  If they were desperate to move and loved the house, then what’s an extra $50,000-$100,000 right?

WHY DEEP DOWN I DIDN’T WANT TO SELL MY HOUSE Read More

One of the discussions that came up with my real estate agent and I is the commission rate.  At first, he wanted 6% until I told him point blankly, “No way in hell you silly goose!”  We ultimately agreed on 5%, which is split 2.5% to him and 2.5% to the agent who represents the buyers.

5% is still a ridiculous commission rate to charge for selling something so expensive in my opinion.  A $2 million dollar house does not require $90,000 more effort to sell than a $200,000 house.  In fact, selling a $200,000 house might require more effort given the demographic of the buyer!

Instead, there should be a flat fee based on several tiers.  Perhaps $5,000 for houses up to $300,000, and $1,000 more for every $100,000 in house value i.e. $1,000,000 house costs $12,000 to sell, and not $50,000!  Sounds pretty logical and fair don’t you think?

At any rate, I begrudgingly signed the selling agreement with my real estate agent for 5%.  He said his company isn’t allowed to go less than 5%, but he agrees to refund me back X amount of his commissions if sold.  The effective commission cost to me will be closer to 4%, a more digestible amount.

STILL NOT TOO HAPPY ABOUT HIS LACK OF VISION Read More