The Federal Housing Authority has just announced that the up front funding fee on all FHA loans will be increasing in April to 2.25% from the current up front fee of 1.75%. This will impact your monthly payment.

Also announced the government will no longer be subsidizing mortgage backed securities beginning in March which will drive up interest rates.

If you are a first time home buyer you must act now! Your tax credit opportunity ends at the end of April. You must be under contract by April and close by the end of June to be eligible for this once in a lifetime tax credit. When shopping consider that short sales might not be the answer as you could wait well beyond April to get a reply. Talk to your Realtor about your options!

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

Incentive Part of Ongoing Effort to Stabilize Neighborhoods WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. “Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help,” said Terry Edwards, Executive Vice President of Credit Portfolio Management. “Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home.”

Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

For more Boise Idaho real estate information or to search for Boise Idaho homes for sale visit www.VermilyeaProperties.com

Ready to make big improvements in your business in 2010? Most of us make a list of things we currently aren’t doing – and probably still won’t in the New Year. So rather than work against ourselves – a formula for failure and disappointment – why not resolve to keep doing what you are already doing. Perhaps just a little differently!

Focusing on your strengths lets each of us create business resolutions that best suit us – and therefore have the greatest chance of success. Rather than adopt someone else’s “must do” lists that we’ll never even try, we’ll be more successful if we take our “already doing” list and fine-tune it. Here are ten ways to do just that.

1. Know your strengths: The first thing you need to do is identify what you already have some talent for doing. Very few of us have talent for everything in business. So we need to figure out where our talents lie and organize our strategy around them. So sit down and make a list of what you are already doing that you do fairly well every time. Every other resolution you’ll make must focus on taking those talents and turning up the “volume” on their effectiveness.

2. Accept your strengths: If you list the things you have talents for, you’ll also bring to mind everything you’re not so good at doing. Make a side list of those things. Review the list and label each one “QP” or “NC” – Quick Possibility of mastering and improving or No Chance of being really good at soon. There are some things you might be able to improve – if they already relate to your existing strengths. Maybe you’re a strong prospector, but you are fairly week at generating new contacts. That is probably a QP with a little technology and technique. On the other hand, if you are really bad at paperwork and numbers, then list if NC and put it aside. You will deal with it – but not personally – later.

3. Outsource everything that’s a NC or clear waste of time. Look at your No Chance list from #2 above. Decide whether you can simply stop doing it (and nobody will notice) or if it’s a vital activity required for your success. If it’s vital, determine how you will outsource it. Remember, you’re already not doing it – or not doing it so well you should stop doing it harmfully – so someone else is going to have to do it for you. Find an office staff, another agent or third party business who can do it for you – at peak quality and performance – and resolve to stop wasting time trying to fix things you’re never ever going to actually do well.

4. Set goals, not to-do lists for your business. Rather than make a list of lots of things you’ll buy, try or do, focus your mind on the most important outcomes you wish to achieve in your business this year. Stress and chaos are created by task-oriented planning. You can easily create a list of things you can never get done in the time you have each day. If you want to succeed differently this year, stop worrying about tasks and keep your mind on the goals. Whether it’s financial, professional or personal, three clear and measurable goals which you review and keep in mind every day will more effectively guide you to what needs to get done than a “master list” of intimidating to-do’s and tasks.

5. Organize your time. Most business professionals make the mistake of trying to organize their tasks, rather than their time. They erroneously think the goal is to find the magic combination of scheduling tricks to get the most things done in the least amount of time. That works if you’re a machine on an assembly line. However, most real estate sales is knowledge work, and your brain cannot work “on command” in an unbroken stream of activities. Deal with your time differently this year, by organizing it into periods of most useful outcomes. Determine what is most useful to your business – prospecting, training, presentation skills, negotiating – and then organize your time around getting those things done consistently. Look at the week and ask yourself how to best use the time you have to work towards your goals. Then schedule the right amounts of time to using your best talents to achieve those goals. Eliminate, delegate or forget about everything else.

6. Get effective before you get efficient. We sometimes mistake efficiency for effectiveness. This often leads us to mis-use our talents and time, and especially technology. For example, using technology to organize our databases and create labels for mass mailings may be highly “efficient” compared to the days when we tried to remember everyone’s name and send handwritten notes.  When you look at turning up the volume on your talents, don’t just take for granted that improvements come from simple efficiencies. You could outsource your prospecting calls to a call center, who could call 1,000 people a week for you; but that might not be nearly as effective as making friends with your past ten clients on Facebook, and writing a personal note on their Wall each week. Both are prospecting. One is efficient by volume. The other is effective by goal.

7. Fire things. Just like you clean out the drawers of your desk at the end of the year, simply throwing away paper and items you packed away rather than dealt with all last year, start your new year by firing everything that no longer works toward your goals. Your problem solving must be different this year. If avoid-and-forget didn’t work for you last year, fire-fast-now might be the different approach you need.

8. Stop copying others. Too many of us think that if we just copy someone else’s activities, we’ll reach the same success they have achieved. This is a bad strategy for two reasons: We only see the outward side of others’ success, without the back-story of challenges they handle, but some of which might sink us. We are simply not the same people; problems they can handle with their talents could overcome us if we have different strengths. Secondly, copying others activities means implicitly accepting their goals. Our goals should direct our own activities; There are many paths to success, and it’s important for each of us to follow their own. Some achieve high performance with lots of technology; others are masters of the telephone and handshake. Both can achieve measurable successful outcomes – based upon different strengths. But adopting the techo-approach for a techno-phobe could be the wrong strategy, and vice-versa.

9. Listen to customers. Lots of consultants, planners, leaders and technologists in the industry claim special access to the future. They have systems, tools, programs you can purchase to get there. Some work; some don’t. But what always works – every year, boom or bust – is talking to customers. They will tell you exactly what they wante, how they want it and how they would like to pay for it. And since they pay the bills – not create them, like everyone else – they should be your most important source of information. Then you can go back to the others and ask how their products and services jibe with what consumers are saying, and incorporate the best of these into your optimal use of time and talents.

10. Get to work. While this sounds obvious, it is most certainly not. Most people go to the office but never go to work. They hang out, chat, catch up, eat lunch, run errands, do paperwork, upload a file, check their email, and lots of other activities. But they never actually get to work. If your job is to make sales, then going to work only happens when you make sales. At the very least, you’re only working when you’re doing activities that directly correspond to the next sale you will make. The sales will not make themselves.  If you want to really do something differently in the next twelve months, then go to work and get to work for every minute you’re there.

So there’s a quick list of ten things to do differently in 2010. Note that none of them are silver bullets, get-rich-quick schemes. There’s not a single specific techno-gadget or snappy-comeback to use for or against consumers. The list requires each of us to assess, evaluate, plan, organize, delegate, focus and do that which is necessary to reach our goals in 2010. It’s time to do the right things – and differently – to make next year your best in the business.

Source:  Matthew Ferrara

For more Boise Idaho real estate information or to search for Boise Idaho homes for sale visit www.VermilyeaProperties.com

During the housing boom, remodeling expenditures — including maintenance, repairs, and improvements to rental and owner-occupied homes — more than doubled to an estimated $326 billion between 1995 and 2007.

In recent years, remodels were financed with home equity loans and cash-out refinances. Owners extracted an average of $450 billion a year in home equity between 1999 and 2008 and reinvested more than 25% of extracted equity into home improvements. Because of the recent economic downturn, remodeling activity has shifted from high-end discretionary improvements to those that maintain structural integrity as well as generate cost savings.

Although residential remodeling remained relatively weak during the third quarter of 2009, remodelers are starting to report that conditions in their markets are stabilizing, according to the latest National Association of Home Builders’ Remodeling Market Index.

In the most recent report, the current market conditions index rose to 39.8 from 38.1. The index of future indicators jumped to 38.7 from 34.2. An index reading below 50 indicates negative sentiment about the remodeling market. The RMI has been running below 50 since the final quarter of 2005.

As the home-remodeling market improves, the Joint Center for Housing Studies of Harvard University has identified three areas of growth:

1. The increasing need to upgrade the rental housing stock — almost 10% of rental inventory in the U.S. was considered structurally inadequate in 2007 and in need of remodeling.
    
2. Higher energy prices and greater environmental awareness, which will increase the demand for green remodeling projects.
    
3. Continued growth in improvements spending by foreign-born homeowners — their spending levels have grown almost 13% per year since 2000, well in excess of the 7% growth by native-born households.

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

Jay Story of Story Commercial, a commercial real estate brokerage in Boise, was asked a series of questions relating to the office-and-commercial market in the area.

He answered the questions via e-mail, and here are his responses:

Q. What is the current condition of the Boise-area office/commercial market?

A. The current commercial market is soft, where most investment deals require lots of motivation and owner/user transactions typically require lots of concessions.

All sectors (office, retail, industrial and multifamily) continue to have increased vacancy and declining rents. This is trending with national statistics where CCIM (Certified Commercial Investment Member Institute) is reporting vacancies near or above historic highs for all sectors.

Q. What is the best thing about the market, and what is the biggest challenge?

A. The best thing with the current market are the current opportunities for those investors with cash. If you have cash and the fortitude to work your way through some problems, the opportunities are amazing.

The biggest challenge in today’s market is setting realistic expectations for owners and sellers. Most haven’t realized, or don’t want to realize, the rents and prices it will take to move their property.

Q. How does a softer housing market impact the office/commercial market?

A. The commercial market typically follows the housing market by about 15 months, according to statistics presented by Case-Shiller/S&P as well as MIT/Moody’s real estate value reports.

During this cycle we’ve seen commercial values drop even more than residential values, and they’ll continue to drop at least through the tail end of this year.

Q. How do you feel about current office vacancy and rent averages, and capitalization rates?

A. As office vacancies continue to climb into the high teens, we’ve seen lots of asking rents drop below $10/SF/year, even in nice complexes. Capitalization rates have climbed substantially, but it’s hard to tell by how much since most deals getting done are owner/user deals with very few pure investment deals.

Q. How do today’s numbers compare to those of, say, five or more years ago?

A. I’m witnessing “A” locations holding fairly steady on rents and values, while B and C locations are taking the brunt of deterioration.

Having said that, if your property is not in an A location, your property value and market rent are most likely less than they were five years ago.

Q. How does this area stack up against other markets in the U.S., or other markets in the state?

A. Boise is not faring very well compared to most other markets (the exception being the “sand states”).

This is something we’re not accustomed to, as in the past, Boise has weathered the storms better than most.

As the market was going up, we overbuilt not only in the residential market but also in the commercial market. This run-up led to lots of “artificial” equity, employment and incomes, which went away as the fundamentals started to deteriorate.

Q. What are you seeing more of in your business lately?

A. We’re seeing a lot more rent concessions, foreclosures and note sales. Many tenants are approaching their landlord and asking for lower rents even when they have a lease in place. These landlords are then put in the position to grant rent reductions or lose a tenant with no good way to replace them.

I also track commercial foreclosures, and these are finally starting to come onto the market, much like the residential market a year and a half ago. Another active part of the market are banks looking to sell underperforming or nonperforming notes.

They’ve found it a great way to raise capital while not taking on the risks and uncertainty of bringing a property all the way through foreclosure.

Q. How do you foresee the future of your industry, either short- or long-term?

A. The short term of our industry will continue to be problem solving, setting realistic expectations and working our way through high vacancies and low rents. I’m also focusing on helping investors with cash seize opportunities that we’ve never seen in our market.

In the long term, I’m convinced our market will return to being very strong as people migrate towards our quality of life and job creation gets back on track.

Source:  IBRealEstate

For more information about Boise Idaho real estate or to search for Boise Idaho homes visit www.VermilyeaProperties.com

New federal regulations designed to protect homebuyers from nasty surprises at loan closing time could slow the recovery of the real estate market, some industry insiders say.

The regulations require early disclosure of expected loan costs for residential mortgages, with potential penalties if the actual costs exceed the early estimates.

One real estate attorney said the new rules can hamstring lawyers by forcing them to accept only their basic fee, even if they have to spend extra hours on a real estate deal. Another industry lawyer said the rules will discourage use of local professionals in favor of big national banks and their affiliates.

The new rules are revisions to regulations under RESPA, the 1974 Real Estate Settlement Procedures Act. The law is aimed at exposing hidden kickbacks and referral fees to consumers.

“Everybody has been going to school for the last three months trying to figure out what to do, and they will continue to try to figure it out,” said one title insurance executive.

New rules approved in November went into effect Jan. 1. They require new forms to give homebuyers advance notice of the costs involved in loan settlement and an easy way to compare actual costs with the estimated costs. If the actual costs are significantly higher than the estimated costs, the lender has to pay the difference.

The minutiae of the new rules are available through a FAQ page maintained by the Department of Housing and Urban Development.

With new forms to learn and looming penalties for mistakes, real estate professionals have been studying for several months to get ready for the changes, said Lisa K. Tully of Richmond, vice president-underwriting counsel with Lawyers Title Insurance Corp.

“There is a significant impact on the settlement industry, especially residential real estate attorneys,” Tully said.

Lenders are required to be extremely accurate in their early estimates of closing costs, Tully explained. If the actual costs exceed the estimate by a certain tolerance amount, the lender has to pay the difference.

“The lenders and the settlement agents have to be in really close contact throughout the settlement process, so there’s going to be a lot of up-front discussion,” she said.

Tully described a situation where a lender estimates the recordation tax based on the sale price – only to learn later that, due to the depressed real estate market, the assessed value of the home is higher than the sale price. Since the tax is based on the higher of the two figures, the lender is out the extra tax the borrower has to pay. “It’s very tricky,” Tully said.

As of last week, we couldn’t find anyone who had actually closed on a loan under the new regulations. Settlements still were being done on loans originated before the new year.

“Just judging by the workload this week, I’m thinking lenders are delaying some loan closings,” Tully said. “I think they are being very, very careful”

At a recent gathering of Charlottesville-area real estate lawyers, no one reported any closings yet with the new rules were in effect. Larry J. McElwain said about 15 lawyers met for a brown bag lunch on Jan. 11, but no one had any experience yet with a settlement under the revised RESPA.

“At this point, we’re still going – such as it is – business as usual,” McElwain said. He said it will be interesting to hear reports at this week’s winter meeting of the Virginia Bar Association, where McElwain is vice chair of the real estate section council.

In Virginia Beach, the story was the same, according to Howard R. Sykes Jr., whose practice focuses on residential real estate closings. “At this time, we haven’t seen any effect, positive or negative.”

Sykes expects a slowdown, at least at first. “It adds another page to the settlement statement,” he said. “There’s a whole lot more numbers.”

Sykes said there are other new regulations coming into play, including new rules under the Truth in Lending Act.

Sykes said lawyers can get in a bind with the new RESPA regulations if a complication arises between the early estimate of costs and the actual closing. If there’s a dispute over the contract, a title question pops up or repairs are required, the lawyer might spend two to three extra hours on the file.

Under the new regulations, the attorney would be hard pressed to charge for that time at closing without the lender paying a penalty.

Sykes said there is no way to increase fees to account for the unexpected complicated case. “It’s just a cost of doing business, I’m afraid,” Sykes said.

Tully acknowledges concern that the new rules could clog the real estate recovery. She said there are three potential problems. First, lenders will be going slow to make sure they don’t end up paying substantial penalties for unforeseen cost increases. Second, the new forms allow lenders to lump fees together for title services, making it easy to hide excessive charges.

Third, Tully said RESPA allows lenders to direct borrowers to affiliates through required lists of settlement service providers. Although the rules are designed to avoid insider deals such as kickbacks, Tully said the requirement to provide the consumer with names of professionals creates an opportunity for favoritism.

“They are really allowing the lenders to direct settlement business,” Tully said.

Tully said the long range effect may be to take business away from local “Main Street” providers and send it to national banks and their controlled entities. “I truly do not believe HUD saw this. They should have, but I don’t believe they did,” she said.

Those affected by the new rules have a four-month reprieve if they goof up while trying to comply with the new rules. HUD officials made it clear, however, that the 120-day restraint in enforcement is not a delay in the effective date of the regulations. The grace period is only a period of forgiveness for those who unintentionally run afoul of the rules while trying to comply. Failure to use the new forms is not excused.

Source:  IBREALTESTATE

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

The year-end totals are in, and Idaho ranks No. 6 for most per-property foreclosures in the nation.

A grand total of 17,161 properties were foreclosed on in 2009, or one in every 37 houses. That number is double what it was in 2008 and almost four times what it was in 2007, according to RealtyTrac.com.

Nevada fared the worst in the country, with one in every 10 properties entering foreclosure. Only 0.05 properties in Vermont, on the other end of the spectrum, went through foreclosure in 2009.

The national average was one in every 45 properties.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” RealtyTrac CEO James Saccacio said in a press release. “After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.

“Despite all the delays, foreclosure activity still hit a record high for our report in 2009, capped off by a substantial increase in December. In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

Source:  IBREALESTATE

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

FHA loans with a case number assigned on or after April 5, 2010, will have a 2.25% upfront mortgage insurance premium. This is a .5% increase. Case numbers are generally assigned when there is a contract with a property address, and a closing date AND the borrower has committed to go forward with the loan.

Annual premiums (remitted on a monthly basis) will not change at this time.

Other changes include:  New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 FICO score will be required to put at least 10% down.
NOTE: Most lenders will not make loans to borrowers with FICO scores lower than 620.  Seller concessions will be reduced from 6% to 3%. HUD has not yet released an effective date for this change.

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

FHA recently announced a temporary (1 yr) relaxation of its “90-day” anti-flipping rule, which prohibits the use of FHA insured financing if the contract for sale was executed within 90 days of the seller’s acquisition of the property.  What this rule said is that if an investor purchased a rehab home, remodeled it and wanted to resell it, they could not use FHA funds until a 90 day period had expired from the time the investor took title.

This waiver, which takes effect on February 1, 2010 and is for one year is limited to those sales meeting the following criteria:

1. All transactions must be arms-length, with no identity of interest between the buyer and the seller or other parties participating in the sales transaction. Some ways that the lender can insure that there is no inappropriate collusion or agreements between the parties is to assess and determine the following:

• The seller holds title to the property;
• LLC’s, corporations, or trusts that are serving as sellers were established and are operated in accordance with applicable state and federal laws;
• No pattern of previous flipping activity exists for the subject property, as evidenced by multiple title transfers within a 12-month time frame (chain of title information for the subject property can be found in the appraisal report.
• The property was marketed openly and fairly, via MLS, auction, For Sale by Owner offering, or developer marketing (any sales contracts that refer to an “assignment of contact of sale,” which represents a special arrangement between seller and buyer may be a red flag).

2. In cases in which the sales price of the property is 20 percent or more over and above the seller’s acquisition cost, the waiver will only apply if the lender:

• Justifies the increase in value by retaining in the loan file supporting documentation and/or a second appraisal which verifies that the seller has completed sufficient legitimate renovation, repair, and rehabilitation work on the subject property to substantiate the increase in value or, in cases where no such work is performed, the appraiser provides appropriate explanation of the increase in property value since the prior title transfer; and
• Orders a property inspection and provides the inspection report to the purchaser before closing. FHA-approved inspectors or 203(k) consultants is not required. The inspector must have no interest in the property or relationship with the seller, and must not receive compensation for the inspection from any party other than the lender. Also, the inspector may not compensate anyone for the referral of the inspection. Additionally, the inspector may not receive any compensation for referring or recommending contractors to perform any repairs recommended by the inspection, and may not be involved with performing any repairs recommended by the inspection.

FHA finds that by eliminating the 90 day resale restriction for buyers it will give FHA a greater opportunity to dispose of it’s single family REO properties in a way that maximizes return to the FHA’s mortgage insurance fund; also, permitting buyers to use FHA-insured financing to purchase other bank-owned properties, or properties sold through private sales for resale, will help create market conditions that will allow homes to resell as quickly as possible, thus helping to stabilize real estate prices as well as helping to stabilize neighborhoods and communities where foreclosure activity has been high.  

Source:  George Tallabas

For more Boise Idaho real estate information or to search for Boise Idaho homes visit www.VermilyeaProperties.com

To paraphrase Mark Twain…“December. This is one of the peculiarly dangerous months to speculate in housing in. The others are July, January, September, April, November, May, March, June, October, August, and February.”

Last week we read from NAR that pending homes sales were slowing. It was with some trepidation that I opened the IMLS Stats page this morning…boy was I relieved.

December sales were up 24% compared to December ’08. Total sales for 2009 were 5,558 compared to 5,144 in ’08. Overall we increased sales by 8% year-over-year.

Total homes sold in December were 378; compared to 277 in December ‘08. What a difference 12 months and a Home Buyer Tax Credit makes!

Typically sales in December lessen as the year nears end. The volatility in the housing market for the last four years makes it hard to “average the change from November to December. In December ’08, we exceeded November (but November was our worst ever month). In ’07 the December sales were off 23% from November. In ’06 the change was -10%.

December ‘09 sales were 32% down from October.

Pending sales in December were off only 7% from November. Not the big dip experienced nationally.

First time home buyers continue to drive our market. The announcement of the Tax Credit extension and its expansion to include current homeowners should enable us to continue to move in the positive direction. 48% of homes sold in November were <$160,000. At the same time, inventory in this price range is the lowest it’s been all year.

Median home price jumped up 4% from November to $165,000. For all of 2008, median dropped 9% (comparing January to December).

Inventory fell 6% from November to 3,428 units.

On the less positive side… distressed properties continue to hurt our friends and family. Among all active listings, 49% are either short sales, in foreclosure or REO’s. 54% of all November sales were also distressed. As of today, 63% of all pending sales are also distressed.

It wouldn’t be an overstatement to say that without the Home Buyer Tax credit, we wouldn’t be where we are today. And, where we are is in a “very fragile” recovery. This morning’s business report said that our unemployment went up slightly in December; and that thousands more Idahoans had stopped looking for work.

We continue to see “suggestions” that employment in the Valley might be getting incrementally better. Small to medium size employers are making the news for their successes. Our own Micron appears to have reversed the slide they’ve endured over the last 20 months.

No matter the anecdotes, we need our elected officials to work more closely with our Boise Valley Economic Partnership to find creative incentives to bring more jobs to our Valley.

Source:  ACAR

For more Boise Idaho real estate information or to search for Boise homes for sale visit www.VermilyeaProperties.com