Home Owners Associations have a special place in my heart.  They help maintain a nice standard of living in many areas – they make sure there are no junk cars, no unmowed lawns, and no trash to embarrass neighborhoods.

On the flip side, they tend to nag over even minor infractions.  For example, a Realtor in my office was complaining last week that a condominium he had listed would not sell because he is not even allowed to put a sign in the window.  (My thoughts are it probably won’t sell because nothing is selling in that specific condo complex given the recent crime and gunshot activity, but that’s another story!)

HOA’s can also be a ginormous pain in the wallet.  Dues from $50 (if you can get off cheaply) to $400 – depending on where you live, of course – will cover things like outside maintenance, insurance on the outside of structures (roofing, brick, vinyl), and management fees.

But what happens when there are a large number of vacancies due to foreclosure, abandonment, or home owners refusal to pay (the subsequent foreclosure won’t help in the short-run).  Some HOA’s are increasing their fees – forcing paying residents to make up the difference.  That doesn’t sit well with The Market Ticker,

Here’s what’s being claimed:

As a result, the remaining homeowners have become secondhand sufferers in the foreclosure crisis, experts said.

No, their foolishness was buying into such a community in the first place.  HOA’s have their place where the essence of the development is shared resource that has to be apportioned among the homeowners.  For instance, townhomes or condos where the roofs (and sometimes entryways, driveways and parking facilities) are shared, and therefore shared responsibility is mandatory for those items.

Genesis goes on to explain that home owners can vote to kill the HOA and it does NOT prevent people from being able to obtain title insurance when they sell.  Go read the whole op ed (caution: some strong language).   If I had to pay up to $200 per month on an HOA fee, I’d be the one carrying the petition around to eliminate the HOA.

Federal officials are very concerned about the July numbers for people purchasing real estate.  The drop could be an indicator that the housing market is teetering on the edge of another massive drop in the real estate market.

As a result, there is again discussion on reviving the home buyer tax credit, but the Obama Administration has not yet moved forward on that plan. Instead, relief is being given in the form of refinancing programs along with an emergency loan program for the unemployed, according to MSNBC.com.

“It’s too early to say whether the tax credit will be revived,” [Housing and Urban Development Secretary Shaun] Donovan said in an interview on CNN’s “State of the Union” program. He said the administration would “do everything we can” to stabilize the shaky U.S. housing market.

Relief at this point would be welcomed by possibly one out of ten home owners, real estate agents included!

While I have walked into thousands of houses during my seven years as a Realtor and only three things make me want to immediately turn around and leave a property.

1. A scary looking dog in the front yard.
2. A house with no air conditioning on a 100 degree day.
3. A bad smell inside.

Typically there are two smells easily recognizable:  smoke and pets.  If you list your house, go outside to smoke.  Make an effort to get rid of the existing smell as well.  Paint, wash the curtains, shampoo the carpet, mop floors, wash blankets and bedspreads.  And – again – go outside to smoke.  Also remember to empty the outdoor ashtrays before showings because… gross!

Pet smells are a little more difficult to deal with, but thoroughly cleaning the house – and we’re talking DEEP CLEANING – is a good first step.  Like cigarette smoke, you may need to wash curtains, bedspreads, and other fabrics or surfaces that hold smell.  Once the house has been deep cleaned, vacuum every night AND be sure to give your dogs regular baths so if they have to be inside, their odor won’t be as strong.

Change the kitty litter often.  And by often, do it EVERY DAY… we’re talking the scooping kind of litter.  The odor of what cats leave behind in their sandboxes is just disgusting.

Walking into a house with a bad smell is a huge turn off for buyers.  Don’t fool yourself into thinking that it’s not that bad because if YOU smell it, it will be ten times worse for the buyer.

If you’re earnest about buying a home, you submit a “down payment” with your offer to the seller – or pay earnest money.  The amount buyers put down is essentially up to the buyer and the amount recommended varies across the country.

Where I live, we like to see between $500 and $1000 (at least), though three to four short years ago people were getting away with just $200.

Today a $200 earnest money check would signal the buyer is unable to come up with more money, so may be unable to gain financing.  When I work with a seller and a buyer tries to put down a minimal amount, I encourage the seller to counter the offer and ask for a more realistic earnest money amount.

Earnest money checks may be made payable to the listing broker, although it can also go to the title company or the selling broker. It is reimbursable to the buyer under several circumstances, but specifically if contingencies are not met.  For example, if a buyer is unable to get loan approval, if the house does not appraise, or if a major find is discovered during the inspection the buyer can cancel the contract and have their money refunded.

When can a buyer “lose” the earnest money?  If they get cold feet and walk away from a contract for a reason other than a contingency written in the contract.  In this event, not only can a seller keep the earnest money but they can also seek legal advice to sue for breach of contract.

When the contract goes through to closing, what happens to the earnest money in the transaction?  Many contracts are written so that the money is applied to the purchase price on behalf of the buyer (it is their money after all).  The money could also be applied to the closing costs or the down payment.  Finally, the earnest money could be refunded to the buyer at the closing – depending on how the mortgage lender structured the loan.

The earnest money can be just as important to the buyer in the end as it is to the seller in the beginning.

Photo by Jennifer Dickert via flickr creative commons.

Home sales plunged in July, according to the National Association of Realtors.  The loss in sales was somewhat expected as the federal tax credit finally ended (under contract by the end of April) and given the job losses of recent months.  However, the degree that sales fell was unexpected – to its lowest level in 15 years. MSNBC.com reports,

July’s sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

The question is, how long until a steady housing recovery?  While not an economist, I’d argue that the housing recovery will solely depend upon recovery of the job market.  With first-time unemployment filings hitting 500,000 last week – the worst report for the year – there’s still a lot farther to go for a full recovery.  Until people feel confident in their jobs being secure, the likelihood of major purchases like real estate and cars will be low.

While there is some housing activity, I expect the recovery to stall for another six months as we get through the dark winter months.

When a price point for real estate is fairly low, choices in what to purchase may become fairly limited.  For the last two days, I’ve been touring homes with buyers who are relocating from out-of-state and we are very careful to keep a low price point in mind so that monthly payments will remain low.

This has resulted in two distinct kinds of houses:  the handyman special or mobile homes.

The plus of the handyman special is they have been site-built so living in tornado alley, they should be a little safer.  In addition, they’ll likely be sturdier in the long-term when faced with weathering the elements.  The downside?  Oh my… the bad smells, the foundation issues, close neighbors, overgrown yards (one where we actually saw a mouse run from one side of the yard, across the driveway, and into the tall grass on the other side of the yard), the holes in the wall, the additions clearly built without permits and codes inspectors, the missing appliances, adn the list goes on.

The plus of mobile homes?  They have in general been in excellent condition.  They typically come with several acres of land.  And they’re usually thousands of dollars less than the site-built homes.  The downside is even with a permanent foundation, a strong wind could tear them apart.  Insurance will be higher – especially because the acreage is located outside of city limits, therefore farther from fire stations.

What would you pick?  Me?  I’d be all about the mobile homes with lots of land and trees for added privacy.

This youtube video is labeled as an “actual” virtual tour and demonstrates what *not* to do when setting up an online tour of a home.

I actually take a multitude of photos of my listings, then set up a nice tour on Animoto.com.  If you haven’t found that site yet, don’t walk but RUN to use it.  Amazing, it is!

Until now, I did not know that prolific E-Street drummer Max Weinberg and his wife were property experts.  They buy, they fix, they sell.  Now a beautiful home in Los Angeles is for sale by the Weinbergs for $3.39 million.

According to the Real Estalker,

Your Mama spent a few minutes flicking and clicking the beads on our bejeweled abacus and figured out that the current asking price is a smidgen over 17% what the Weinbergs paid for the property just 18 months ago. We expect that some of the children–not to mention all the Chicken Littles looking for a double dip in an already sagging economy–will surely have something to say about that desired double digit increase in value during the rough real estate patch of the last few years.

Max and his Missus may make a pretty penny, but the house is truly beautiful.

For about a year, houses sold in local markets across the nation were running into appraisal issues.  Real estate agents often comped (or priced) the property at one amount, but when the appraiser came in they thought it should be valued at significantly less amount.

We’re starting to see fewer lost transactions due to appraisal issues as real estate agents and appraisers are coming closer to their price opinions.

In addition, other parties to transactions outside of the appraisers duties are stepping up to reevaluate the value of real estate.  If the home is a VA sale, the agents have the right to send supporting documentation to demonstrate why the price can be comped higher.  The documents may include recently sold real estate outside the immediate area of the home listed, thanks to the 2003 Tidewater Initiative.

The Tidewater Initiative gives a point of contact the opportunity to challenge an appraisal if the appraiser notifies them that the appraisal will come in under the sales price.  The appraiser can not disclose that appraised amount and the contact person has two business days to provide additional sales information to support the sales price.

However, this initiative doesn’t always kick in as real estate agents face the new reality of home values just not being as high as they were two and three years ago.

That said, it’s still shocking ot hear about a two thousand square foot house selling for $140,000 when just months ago it could have sold for $180,000 and up.