The program, established in 1944 as part of the Servicemen’s Readjustment Act, is available for any individual who has served in active duty in any branch of the U.S. military for a minimum of 90 days.

“The beauty of this loan is that it allows financing without requiring a down payment,” said Eric Kandell, founder of lowvarates.com. “It also doesn’t allow the mortgage lender to charge the veteran private mortgage insurance.”

A VA loan does require the borrower to pay a one-time funding fee on their purchase, which can be paid up front or financed into the total cost of the loan. The funding fee for regular military members is 2.15% of the loan. Reservists pay a fee of 2.40%.

Non-active duty personnel, such as individuals in the Army Reserves or National Guard, may apply for a VA-backed mortgage provided they have completed six years of service. Spouses of deceased or missing military members are also eligible if they have not remarried. Those who were dishonorably discharged from any military branch are not eligible.

“I’ve closed more VA loans in the past two years than in the past decade,” said Steve Thorne, area manager for First Financial Services, Inc. in Raleigh, N.C. “It really is a great benefit to the veteran in the ‘New Mortgage World.’ The key to getting more veterans to take advantage of this benefit is simply an awareness of the benefit.”

Statistics provided by the Department of Veteran’s Affairs show that roughly 25 million people are eligible for a VA loan yet only 10-15 percent of those have taken advantage of it when buying or refinancing.

One reason is that for many years leading up to the mortgage crisis, there were many conventional mortgage products that were easier or more economical to the veteran than the VA loan.

“In the wild, wild west of mortgage lending from the early 2000s to 2008, 100% financing was common,” Thorne said. “So why pay the VA funding fee just to have 100 percent financing? Not to mention the VA control of the appraisal process, understanding residual income and all the additional disclosures. It was just a more cumbersome process then the ‘come on down, everybody gets a loan’ of the conventional arena.”

Many veterans, especially those not so recently discharged, aren’t sure of VA loan benefits or that the program even exists. With the VA loan the veteran can buy a home with little to no money out of pocket.

“In the past, veterans were told about other financing on the market and people were more inclined out of ignorance to use non-VA loan financing,” Kandell said. “[The VA loan] is a great loan and you are going to see a massive shift in numbers going forward.”

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“We put out a homebuyer and seller survey annually and studies show people are more interested in buying green improved homes,” said Michelle Wardlaw, Public Affairs Associate for the National Association of Realtors. “NAR research has consistently shown that there is a considerable growing market for green homes. Many of the consumers today, we find, want homes that are sensitive to the environment.”

Many who think about going green in a home envision solar panels, but those aren’t the best investment for everyone. With solar panels, a home must be in an area with sufficient sunshine and it must be in a location that is eco-friendly minded.

“Solar Panels require an up-front investment but because they are clearly visible from the street they are likely to command a price premium,” said Matthew E. Kahn, Professor at UCLA Institute of the Environment in the Department of Economics. “In preliminary work using data on home sales in Sacramento County [California] I have found that with all else being equal, that homes with solar panels sell for a 6% higher price.”

If you were selling a home in the Midwest, that probably wouldn’t be the case.

While solar panels are clearly seen by a potential homebuyer, this can be the tip of the iceberg in determining whether a home can offer energy efficient savings.

“While a potential buyer will notice whether the home has a swimming pool or a great kitchen, the home’s energy efficiency and ‘greenness’ is harder to see,” said Kahn. “The seller who owns such a home should recognize this point and make his home’s green features well known.”

There are more inexpensive things a seller can do to make their home green prior to putting a house on the market.

Justin Barnes, a policy analyst for the Database of State Incentives for Renewables & Efficiency, funded by the U.S. Department of Energy, said the easiest green fixes deal with appliance replacements.

“There are all kinds of incentives for these and that makes a home attractive,” he said. “Other measures are cost effective and advisable as well, such as replacing windows and doors and finding ways to insulate the home more effectively.”

Some upgrades have more appeal and return on investment than others. Energy-efficient appliances can reduce monthly utility bills, tankless water heaters mean less time and water wasted waiting for water to warm up, and replacing old furnaces can lower a heating bill.

These eco-friendly upgrades may not be a top priority for most buyers, but when pointing it out, you can pique their interest.

“In terms of resale price maximization, the best green initiatives to help sell hinges on whether potential buyers value energy efficiency and are aware of the home’s energy efficiency,” Kahn said. “If the seller believes that his home is highly energy efficient due to his past investments and the architecture of the home, then the seller should produce 12 months of past electricity bills to signal to potential buyers that the home has this added bonus.”

Remember, anytime you need to replace something in your home, it’s an opportunity to make an eco-friendly choice, which can help in the resale value later on.

ChipPlumley.com

ALL REAL ESTATE MARKETS ARE LOCALIZED!

• Chester County 

  Settled UnitsYear over Year was down 3.5%, a difference of 12 homes, but only down 1.9% for the entire year!

  That’s only 79 less homes sold the entire year and remember the tax credit boosted sales in the beginning of 2010. So being down only 1.9% is actually not bad at all!

  Total Settled Volume

  Year over Year is down 10%, a difference of $12M, and only down 4.55% in 2011. $1,457,716,000 in total sales for 2011, which is down $69,418,000.

  7 months showed an increase in prices but because of that tax credit, April, May and June hurt the overall yearly amounts. September and December were the only other 2 months that had declines which has been the case since 2006.

• New Castle CountySettled Units

  Year over Year is up 19.8%, an increase of 67 more homes, and up 4.25% for the entire year. 174 more homes sold in 2011 than 2010.

  Total Settled Volume

  Year over Year is up 8.7% but down 6.84% over 2010. $928,952,000 worth of homes sold in 2010 compared to $997,137,000 in 2010. $681,850,000 difference over 2010 but the 2010 tax credit had a lot to do with the decrease in sales volume. There was a decrease in sales volume for the first 6 months of the year and again April, May and June were the biggest sales dollar losers. Just the opposite of 2010 where the last 6 months of the years were all down.

I strongly urge you to take a look at the reports straight from TrendMLS (the area’s Multiple Listing Service) and determine your own opinion of what the market is truly like. The numbers speak for themselves!

Please click on your County below for the detailed PDF of your market area. REMEMBER that some of the numbers before June are skewed because of the Federal Tax Credit offered in the first 6 months of 2010.

Interest rates are starting to climb a little. A 30 year fixed rate is about 3.875% and a 15 year fixed rate is around 3.375%. There is a possibility of getting a lower rate with points too. Great time to buy and sell!

Chester County

Delaware County

New Castle County

Tri-State Area Year-To-Date Market Snapshot

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

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A recent survey by the Consumer Electronics Association of real estate agents showed that home-theater systems, home security systems, home automation management systems and energy management systems are selling faster than they ever have.

“There is a strong relationship between home technologies and the real estate market,” said CEA’s Rhonda Daniel in a recent press release. “While the market needs to recover before home technologies play a more important role in home sales, the industry can help prepare real estate agents to be comfortable in discussing these types of systems with their clients.”

According to the survey, the number of real estate agents who have been involved in buying, selling or showing a plugged-in home equipped with technology has risen greatly during the last two years. Those showing established systems such as monitored security were calculated at 93%; home theater or home theater-wired systems were 89%; home automation and management systems were 54%; and energy-management systems were 51%.

The survey also shows that 68% of REALTORS® believe home technologies will play a more important role in the success of home sales within five years. “Manufacturers and electronic systems contractors should be laying the ground work now to take advantage of the eventual upswing in the real estate market,” Daniel said. “Educating rREALTORS® on the benefits, value and functionalities of installed technologies now will demonstrate that the CE industry can be a trusted partner to equip them with knowledge.”

Nearly two-thirds of real estate agents surveyed offered that their clients are excited to see technologies in homes. That means current homeowners looking to sell should consider upgrading their home with some sort of home technology system.

“The ideal goal for the consumer electronics industry is to have knowledgeable real estate agents who are excited and open to promoting technology as a selling feature of homes,” Daniel said.

A less expensive way to appeal to technology enthusiasts is to simply make sure there are enough outlets, cable lines and phone jacks at the ready so that someone coming with their own equipment will have an easy time installing them. A home with only one outlet in the family room or media room and no place for a fiberoptic line to be added can be a turnoff.

Thinking of the future may help you sell your home faster in the present.

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The National Association of REALTORS® recently conducted a survey that found nearly two-thirds of homebuyers had a fireplace on their wish list. The fireplace has become a coveted amenity and homes boasting this feature see its benefits during resale.

“The fireplace is a focal point when people come to see your home,” said Hillary Staats, an interior designer for Sanctuary on Church in Vienna, Va.
That’s why it’s important to make sure that the look of your fireplace has been updated and is working properly. An older looking fireplace that seems an eye-sore can be easily updated.

“There is a lot you can do to enhance the fireplace before a sale. A lot of times, if it has older brick, I will re-stone a fireplace. Other times it could be as simple as changing mantels, adding a fancier screen or placing a beautiful piece of art above it.”

Transformation materials that are inexpensive and easy to work with are tile, manufactured stone, granite, marble and wood. Sometimes even painting over old, ugly brick will make a huge improvement.

“A masonry fireplace can really set a home apart from the rest and significantly improve resale value,” said Larry Kett, owner of Kett’s Hearth and Home in Grand Rapids, Mich. “Adding a mantel also helps. An engaging fireplace and mantel can provide grandeur for an otherwise ho-hum room.”

Keeping the mantel clean and uncluttered is also a must. “You want the fireplace to look inviting but not cluttered, so keep the mantel clear of all photos and knickknacks,” Staats said. “It’s fine to decorate with accessories, but they shouldn’t distract from the fireplace itself.”

If you want to add a fireplace to improve your home’s resale value, consider an electric fireplace as it’s often the least expensive option and reasonably easy to install.

Gas fireplaces are more common today and easy to use, plus they can be installed just about anywhere. There is no need for a chimney, wood or even matches with this type of fireplace and there is no mess to clean up either. Ceramic log kits are efficient and look like the real deal, without ashes to clean up.

Finally, regardless of the season, a fireplace should be kept clean and in working order. “You want your buyer to go home feeling really great about that room and knowing they can move in and sit in front of that wonderful fireplace and hearth,” Staats said. “There are few things as warm and inviting as a burning fire on a wintry day.”

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A downside for the seller is that the hectic time of year makes it harder to get your home ready at the drop of a hat if a call comes in. People are busy making food, wrapping presents and preparing for a house-full of guests.

However, your house will also be decorated with beautiful lights and decorations and will create a festive elegance to a home that will attract buyers.

Some agents believe that keeping your house on the market will have you appealing to a much smaller inventory of buyers who have very specific needs that your home might not match. Others counter that less inventory over the holidays means less competition and since more people have vacations this time of year, they actually have more time to search for their ideal home.

The holidays can provide a breather for homes that have been on the market awhile, as some use the time to remove property from the market in favor of a fresh start in January. However, you risk losing the buyer who may have been looking in December to capture tax benefits that many consider with their need to buy a home.

What’s the best solution? Of course it’s up to individual homeowners and their respective circumstances. Prospective sellers should discuss their holiday prospects in detail with their Prudential Real Estate agent. Working together, they can make holiday wishes come true.

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“Great decorations really set the tone for the holidays, a time when you can showcase your house in a different way to highlight areas that normally may not stand out,” said Amy Cornwell, President/ Lead Designer for Creative Impressions, which specializes in seasonal decorating.

By creating a festive atmosphere, a home seller allows perspective buyers to envision what their holidays will be like in the property—complete with a beautiful tree, stockings hung from the fireplace mantels and the smell of Christmas cookies in the air.

“Buyers associate a sense of ‘home’ through the traditions and memories of holiday décor,” Cornwell said. “It’s a great way to attract buyers.”

Nighttime is when many perspective buyers are driving around looking at houses, and nothing will slow them down more than a great Christmas light display. “A well-designed display adds festive elegance to a home, and highlights the already-present features of the property,” said Brandon Stephens, vice president of Marketing at The Decor Group, Inc., specializing in interior and exterior holiday decorating.

In fact, consider holding an open house at night, when you can serve hot chocolate and better show off the Christmas lights, holiday decorations and all that the house has to offer.

Here are some simple suggestions to ensure your home captures the holiday spirit without interfering in the real estate process:

• Keep decorations to a minimum so you don’t block views, make rooms feel smaller and disrupt the natural flow of the home. Consider a smaller tree and store gifts in another room.

• Incorporate fresh evergreen or rosemary into your decorating for a classic look and to promote “the Christmas tree smell.”

• Make sure light strings and extension cords are tucked away for everyone’s safety.

• Eschew religious or cultural decorations to not alienate prospective buyers who don’t share your beliefs.

• Leave a plate of holiday cookies and warm cider or cocoa for prospective buyers.

The holidays are emotional times for most people, including home shoppers. Holiday decorations, presented tastefully and sensibly, can help you wrap a bow on your home for just the right buyer.

ChipPlumley.com

After a week of football, scrambling for deals at the mall, and finishing up Thanksgiving leftovers, you might have missed the stories impacting home owners. Strong numbers from Black Friday — especially an increase in sales at home improvement stores — might be an early indicator of a housing market return.

Bloomberg Businessweek: Stable Housing Seen as Home Depot-Lowe’s Lead Market: Retail

Shares of Home Depot Inc. and Lowe’s Cos. — the two largest U.S. home improvement retailers — are outperforming other consumer discretionary stocks as the worst of the declines in the housing market may be over.

New York Times: A New Shot at Mortgage Relief

Like millions of other home owners, William D. Compton would like to refinance his mortgage so that he pays less each month for his three-bedroom house. Although he would appear to be a good candidate, Compton has been turned down twice for a federal refinancing program aimed at home owners like him. Still, he has renewed hope. That’s because the government is expanding the Home Affordable Refinance Program, which was meant to help home owners whose mortgages are backed by the government and whose home values have declined sharply — even below what they owehttp://www.blogger.com/img/blank.gif.

Newsday: Should Vets Get a Credit to Buy Foreclosures?

Veterans from Afghanistan and Iraq could in a way serve the country once again — this time stateside for the economy. An official with Federal Reserve Bank of New York thinks there should be incentives for the veterans to buy government-held foreclosures.

HouseLogic: Will Housing Market Benefit from Good News Out of Black Friday Chaos?

While shoppers were trampling each other to get the season’s hottest stuff, a glimmer of hope emerged for the economy. Does this mean a Christmas miracle for the housing market? 


Huffington Post: Renting out Government-Owned Homes is Right Move — But Probably Wouldn’t Make Any Difference to You

The Federal Housing Finance Agency (FHFA) is considering proposals for selling government-owned homes to investors, who would then sell or rent them. It’s hoped this move would help government agencies earn some revenue, boost neighborhood home values by getting buyers or renters into vacant homes, and ease tight rental markets by expanding the supply of rental housing.Will it?

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There are several online tools to calculate a monthly mortgage you can afford using factors such as your current monthly expenses, down payment and the interest rate. You can also work with a lender to get pre-approved for a loan. This estimate will help you gauge how much money you may be able to borrow and the monthly mortgage payments.

However, the amount you are able to afford for a home loan should not be your only consideration for determining your price range. With homeownership come other housing expenses.

Utilities

The most obvious of additional housing expenses are utilities—gas, electricity and water. But don’t forget about telephone, trash collection, and cable or satellite bills.

Taxes

As a property owner, you are responsible for property taxes. To get a general idea on how much the tax bill will be for a property, ask the seller for a copy of the previous year’s tax assessment. Your real estate professional can help you refine these figures.

Association Dues

Another cost you may incur is homeowner association (HOA) dues. Most condominiums and some residential developments/subdivisions/neighborhoods have HOAs, which are legal entities, created to maintain common areas and enforce deed restrictions. As a property owner, you are required to pay the established monthly or annual homeowner association dues. Be sure you factor this cost into your budget.

Maintenance

You also need to consider the upkeep of your home. You should budget for seasonal maintenance such as lawn care, pest inspections and carpet cleaning, as well as unexpected repairs. The amount you budget will depend on the age of the home, as older homes tend to require more repairs such as installing a new roof, painting and replacing older appliances.

Insurance

Depending on the type of coverage and your area, the costs for homeowners insurance each year can be anywhere from a few hundred to thousands of dollars. And, if you live in an area that has high risks for flooding, earthquakes, hurricanes, etc., you may need supplemental insurance.

Remodeling/Upgrades

Unless the home you purchase is picture perfect, you’ll more than likely be adding your personal touch. Therefore, you need add to your housing budget the costs for remodeling and upgrades.

Even minor cosmetic fix-ups such as light fixtures, window treatments, carpeting and decorative cabinet knobs can begin to add up.

By determining all the costs associated with homeownership, you can go into your home search with a reasonable price range that will allow you stay within your budget.

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In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country.

For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.

While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.

• Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.

• Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants and maintenance costs.

• Start small. Look into buying a single-family home or a multi-unit up to 4 units. Leave large apartment buildings and commercial properties to the pros.

• Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.

• Find a property that will be in demand. Look for a moderately priced home with 2 or more bedrooms, storage space and one that sits on a quiet street.

• Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.

• Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.

• Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?

• Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.

• See your tax advisor for related planning and laws that can affect your investment decisions.

Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

ChipPlumley.com