ABSOLUTELY you can over improve.  I’m so scared of over improving, I almost don’t do anything!  But I may just be neurotic because I see so many people over improve their homes and then expect to make every penny back out of the house.  I’m kidding of course, but it brings up a valid point.  You CAN over improve.

First things first: Improvements are not equal to Maintenance.  Many people get these things confused.  They think that they spent 10,000 on a new roof 2 years ago that their home is now worth 10,000 more.  WRONG.  This is called maintaining your property.  If a new roof is needed, its your obligation to put one on; if the outside needs painting, you’ve got to paint it.  Improvements are upgrades to kitchens or baths, adding a deck or an addition, etc…

When it comes to improvements lets get one thing straight; We fix our homes up the way we want to because we want to make our living spaces more enjoyable.  If you want to deck out your kitchen in the latest and greatest, you do it because you want to.  Not because you think, I’ll make ALL of this back when I go to sell.  Will you make some of it back? Most likely yes, but it depends on when you go to sell.  If you spend 20k on a new kitchen and then try to sell a year later, you probably won’t get it all back.  I sold a home last year where the seller put almost 10,000 into their only full bathroom.  Mind you this was a modest 2 bed home where none of the competition had baths like this.  It truly was spectacular.  Almost home-a-rama like.  Did it allow me to command a bit of a higher asking price.  You bet.  Did the seller reclaim all that was put into the bath originally? No.  My question to them when we went to price the house was; Would you have put the bath in last year knowing you were going to sell this year?  They said yes, they enjoyed every minute of the bath.  Then I said “you got your money out of it.”  You did it because you enjoyed it, not because you thought it would increase your home value by 10K.  Of course you always hope, but the reality isn’t always so.

When it comes to your home and recouping money out of it, you never want to be the biggest and best on the block.

Today in our sales meeting a large chunk of our time was spent talking about the housing relief bill that is on the presidents desk waiting to be signed. Our loan officer Kathy Kappes put together a wonderful presentation for us so that we could update all of our current clients on the situation and let future clients know how this may effect them and their future purchases.

Here is a bit of a review as far as the financing aspect is concerned:

The FHA section below lists changes included in the Omnibus Housing Bill passed last Saturday by the U.S. Senate.  President Bush has indicated he will sign the bill this week.  The conventional financing section lists changes impacting current FannieMae and FreddieMac underwriting guidelines.

FHA Financing

• No longer need to wait 90 days to sell a bank-owned property.  Bush administration has announced a “temporary” policy that allows for the immediate sale of vacant foreclosed properties.
• Down payment requirement will increase from 3% to 3.5%.
• Down payment assistance programs (DAP) will be terminated 10/1/08 (i.e, no more AmeriDream or Neimiah).
• Risk-based mortgage insurance moratorium effective 10/1/08 (i.e., everyone will pay same PMI rates regardless of credit score).
• New loan programs to assist distressed homeowners with up to 90% LTV refinance.  Limits will be placed on income and debt to income ratio.
• Nationwide mortgage licensing system established for loan originators.
• Lesser of $7,500 or 10% of purchase price tax credit available to first-time buyers.  Income limits will apply.  Tax credit will be in the form of a 15-year interest only loan.

Conventional Financing

• Chapter 7 bankruptcy–time period to reestablish credit is four years.
• Chapter 13 bankruptcy–time period to reestablish credit is two years if successfully completed.
• For borrowers with more than one bankruptcy filing in the past seven-year period, a five-year elapsed time period is now required.
• Due to the increased incidence of preforeclosure sales, time period to reestablish credit is two years.
• If current residence is pending sale but will not close prior to new transaction, both the current and proposed mortgage payments must be used to qualify the borrower for the new transaction. 
• If current residence is being converted to an investment property, the lender will count 75% of the rental income if there is documented equity of at least 30% in the existing property.  The lender will also require six months reserves for both properties.

What if you’re already facing foreclosure?  How does the bill help you?

The Federal Housing Administration will be authorized to insure up to $300 billion in refinanced mortgages to help borrowers at risk of losing their homes trade unaffordable loans for fixed-rate mortgages backed by the government.  To participate, lenders must agreeto accept roughly 85% of each home’s current value as payment.  Borrowers could then apply for a new loan for up to 90% of the homes value, but must prove their ability to pay the new loan, and py the government a 1.5 % annual insurance fee, as well as a portion of any profits from resale.  When I was listening to talk radio discuss this topic last week, they were saying that roughly 300 thousand homeowners would be helped and people were skeptical because the lenders must agree to do this.

TAX BENEFITS for first time home buyers?  At first I liked the sound of this, then I read a little bit further. On the surface it looks like first time home buyers who purchase a home from April 9, 2008 to July 1, 2009 will be eligible for a tax credit of up to $7,500!  That sounds great right!  Tax credit = free money?? WRONG - read further and its a credit thats to be repaid over 15 years!  YIkes, what kind of great credit is that?  I’m skeptical….

DISCLOSURES - the good news is that this bill is calling for more disclosure and more explination of the terms in mortgage contracts, particularly with the variable-rate mortgages.  This is good news, but will the average consumer really listen??

What are your thoughts?  Do you approve or disapprove of the policy?

Yes there really was such a thing!  I’m so happy to have been in attendance for this event, which was held last Thursday.  If you’re a blogger and you weren’t able to attend this first one, don’t worry there will be a 2nd.  Look for it bigger and better next year.

It was fun to meet the writers and put faces to the words I read on an almost daily basis.  Having been blogging for less than a year, I feel recharged to continue my quest of blogging my random real estate musings.

Thanks to our gracious hosts at The Mercantile Library (located at 414 Walnut Street). This place is absolutely amazing! If you haven’t been yet, you need to go.  Its a real hidden gem of our great city.

We were just sent out a list of all those bloggers who were in attendance.  Enjoy!

5CHW4R7Z (http://www.5chw4r7z.blogspot.com/)

Bad Pitch Blog (http://badpitch.blogspot.com/)

Building Cincinnati (http://www.building-cincinnati.com/)

Buy Cincy (http://buycincy.com/)

CETconnect (http://cetconnect.blogspot.com/)

Cincinnati Area Commercial Real Estate Trends (http://cincicommercialrealestate.blogspot.com/)

Cincinnati Blog (http://www.cincinnati.blogspot.com/)

Cincinnati Dealer (http://www.cincinnatidealer.com/)

Cincinnati Locavore (http://cincinnatilocavore.blogspot.com/)

Clark Street Blog (http://clarkstreetblog.blogspot.com/)

Die Fladermaus (http://mattvant.blogspot.com/)

ENCORE (http://encorecincinnati.wordpress.com/)

Girlfriendology (http://girlfriendology.com/)

Gonz O’Lager (http://gonzolager.blogspot.com/)

Hello, Gerard (http://hellogerard.blogspot.com/)

Joe Wessels (http://joewessels.net/)

Juliet & Juliette (http://julietandjulietteblog.com/)

Kate’s Random Musings (http://www.katesrandommusings.com/)

Keeping it REAL Estate (http://livingcincinnati.com/)

Kelly the the Max! (http://kellyhudson.blogspot.com/)

Live Green Cincinnati (http://www.livegreencincinnati.com/)

Liz Wu Music (http://www.cincychic.com/component/option,com_mamblog/task,show/action,user/id,808)

Make Cincinnati Weird (http://www.makecincinnatiweird.com/)

Mommy Bits (http://www.MommyBits.blogspot.com)

Cincinnati Women Bloggers (http://www.CincinnatiWomenBloggers.blogspot.com)

My Wine Education (http://www.wine-girl.net/)

Not Really a Book Blog Blog (http://nrabb2.blogspot.com/)

Permasmirk (http://permasmirk.com/)

Prospective (http://prosepective.blogspot.com/)

Queen City Survey (http://queencitysurvey.blogspot.com/)

Queer Cincinnati (http://cincywestsidequeer.blogspot.com/)

Soapbox (http://www.soapboxmedia.com/)

Strategic Public Relations (http://prblog.typepad.com/strategic_public_relation/)

The Journey is the Reward (http://blog.morristsai.com/)

Turning the Page (http://www2.cincinnatilibrary.org/blog/)

Urbanophile (http://theurbanophile.blogspot.com/)

Wine Me Dine Me (in Cincinnati) (http://winemedinemecinci.blogspot.com/)

I read an interesting article in a back issue of the New York Times.  Its about buyers and sellers writing each other letters to try and justify why their making the offer they’re making.  I have often seen & heard of buyers writing letters to sellers letting them know how much they love the sellers house in hopes of getting an accepted offer.  I’ve even had a few of my buyers do this in the case of multiple offers where we know we are coming in lower than the other (using this to maybe tip the scales in our favor).  Does it work?  Maybe.  I’m a sucker for emotion so if it came to a letter vs. no letter then I’d probably choose the letter.  My husband just laughs, that stuff would never work on him.

The NY Times article mentions a “new” kind of buyer/seller letter.  This one justifying why the offer is so low and even a sellers rebuttal.  Yes, even though the majority of Cincinnati real estate has adjusted their prices for today’s market, there are some sellers who still haven’t come to terms with where the market is and therefore there are some offers that buyers make that are much lower than the asking price.  I’ve actually had buyers do this as well.  We’ve put in letters indicating all of the work that needs to be done and therefore we couldn’t possibly pay the asking price.  However, I’ve never have I had a seller respond to my letters sent.

So, I’m curious, would an “emotionally charged” letter work for you?  Or would you just scoff at it?

Picture yourself as a home seller. You’ve endured the first stages of preparing your home for market, you’ve scrubbed, decluttered, painted, staged, etc.  Next you’ve put up with the showings, the agony of packing up the pets, kids and enduring countless hours away from your house while total strangers opened your cabinets, critiqued your furniture and ultimately decided that they don’t like your house as much as you do.  It can be a very stressful time for sellers.

THEN, you get that much anticipated “second showing.”  You get excited, but try not to be too excited about the possibility that this buyer could be the one!  Then waiting with baited breath, you get that phone call from your agent “I’ve got an offer coming in!”  Your heart skips a beat, maybe you can buy that house you just saw online after all.  You start planing your move, where your kids will go to school, what color to paint the family room, what flowers you’re going to plant in the back yard and then your jerked back to reality when you realize that you don’t even know the details about the offer coming in.  What if its not enough money to get you where you’re going?  What if they can’t close until 60 or even 90 days later?  What if the house doesn’t appraise?  What if their financing falls through?  What if they change their minds? 

This is just a little bit of what goes through sellers minds when they get an offer to purchase their home.  Unless you’ve bought and sold real estate multiple times, it can be a very nerve racking experience.  Most people will be involved with only a handful of real estate transactions in a life time.  While professional real estate agents will be involved with hundreds of transactions in their life time. 

Here are a few helpful hints I can give to sellers faced with a purchase contract:

1. Don’t expect too much.  After all, when you go to purchase are you going to make it as easy as you can on the sellers?  Of course not!  You’re going to try to get the house as cheaply as you can and negotiate the best terms you can.  You’ve got to realize that that’s what buyers are doing to you!

2. ALWAYS COUNTER OFFER.  In this market many sellers are faced with “low ball” offers.  Some buyers out there still think that every seller is 20% over priced and they are all desperate to sell.  This is not the case in the Cincinnati Real Estate Market.  Sure buyers have more bargaining power because there are more of them out there.  Its a buyers market.  But most of the real estate in my area has already adjusted their prices for current market conditions. 

3.  Have your agent run comparables of recent solds in the area.  If there are recent comps that show the buyers offer is good, work with it.  Know that even if you think you’re taking a hit on the selling side, if you’re buying you’ll make it back (especially if you’re buying up).  You also need to realize that your house will need to appraise.  Appraisers look at the same thing we do when it comes to pricing your house.  If your agent can’t find a recent sold to justify the price you want, then chances are the appraiser won’t either.

4.  Don’t count your blessings until you get through the inspection contingency.  This is where many deals are lost.  Its amazing to me how many people are willing to let deals fall through over small things in inspections.

5. Take the emotion out of it.  A lot of times when sellers are faced with an offer lower than they expected, they get offended and start taking things personally.  Remember when you put your house up on the market, it is no longer your home.  It is something that is going to be sold to someone else.  Its essentially not yours anymore.

Of course you can’t prepare for every home selling situation.  There are so many variables that it would be impossible.  But if you take some of this to heart and really listen to the agent that you have, chances are you’ll move into that new house before you know it!

16. Cincinnati, Ohio (tie)

Forbes.com had an interesting article out today about the best and worst cities to rent a home.  Cincinnati was ranked #16 out of 40 and it was a tie (both worst and best).  This being because the average rent is only a bit cheaper than the average mortgage ($668 and $712 a month, respectively).  The annual change in rent from 2007 is at 2.7% and there is 100% increase in new construction, which they say means more apartments are set to open up.

So what are the advantages/disadvantages of renting and not buying?  Obviously, if you don’t know how long you’re going to stay put in Cincinnati, renting is your best option.  Real estate is a long term investment and you should be ready for it. Renting also means that when something breaks in the house, you don’t have to fix it.  Your landlord does. Therefore, in theory, you should be saving more money. Reversly, that means if you own your home you’re the only one responsible for maintaining the property and you should be saving up for those “rainy day surprises.” 

One big disadvantage to renting is that you’re not investing your monthly payments into something that will most likely bring you a return.  When I go to sell my house and move, I will most likely be getting some cash back at closing so I can put more money down on my next property.  If you’re renting, all of your money goes into your landlords investment.  He reaps the benefits, you don’t. 

Another thing that Forbes mentioned that I thought was interesting was that children of the baby boomers “Millenials,” aren’t earning enough to buy up existing inventory and that they’re still being paid entry-level salaries.  With wages remaining low, it could be very difficult for first time home buyers to save up enough to purchase.  However, I’m seeing the opposite happen in my business.  It is the first time home buyers who are realizing that now is the time to purchase their first home.  The best thing I ever did was buy my first home years ago and have roommates pay my mortgage for me!  This is something that I often encourage people just out of college to do.  If you can save up 3% for a down payment, find a nice inexpensive home and get some roommates, you’ve got it made!  You can live virtually for “free” and save up for if/when things go wrong with the home.

Like all real estate it is very local.  What is happening in one area of town, may not necessarily be happening in another.  You need someone out there to really help you make a wise decision regarding your purchase.  Even with an expert you’re never guaranteed to make money, but you’ve got a better chance of it!

Happy shopping and if I can be of some assistance, let me know!

There always seems to be a place where first time home buyers flock.  Typically first time buyers want to be where the action is, but they also want to live affordably.   They want to be close to dining and shopping, but also be close to work.  They want the charm and character of an older home, because most of them grew up in the suburban cookie cutter neighborhoods.  A couple of years ago the place they flocked to was Oakley, today’s first-time home buyer is looking towards Norwood.  Oakley doesn’t have the updated affordability it once had, but Norwood does.  Located only across the 71 Interstate, Norwood has basically everything that Oakley can offer except its home prices.  There is a reason some people call it “Hyde Park Near.”

Norwood is a great place to check out if you’re looking for convenience and great home prices.  Norwood has really done a lot the past few years to change its image.  It has booming businesses and office spaces available, it is currently updating its Surrey Square complete with a new Kroger and a Chipotle and Xavier Square is heading up the south side renovations.   The stage has been set to have a Norwood revitalization and you should be a part of it.  There are beautiful traditional American Four-Square homes, bungalows and fantastic Tudors.  If you’re looking to jump in and see whats happening in Norwood then look no further.  I recently listed a great home for first time home buyers - its updated and affordable!  There are so may people who have figured this Norwood secret out.   Citizens in Norwood have even started it’s own Young Professionals Organization (open to all ages and professions). 

If you’re curious about what this city has to offer, give me a call.  I’d love to show you around.

With the debut of our LEED Gold Homes in Northside a few weeks ago. The action hasn’t stopped. These homes are unique to Northside and some of Cincinnati’s first.

Not only are they energy efficient, but they are extremely affordable as well. Nestled in one of Cincinnati’s growing communities, these homes have really made some “buzz” around town. Everyone who sees them are impressed by their simple, yet sleek design and when they realize how good they are for you and your pocket book they just can’t get over it.

As a matter of fact, on one particular showing, the buyers agent adamantly insisted that we not attend the showing to demonstrate the uniqueness of these properties, almost to a point of being rude. We were kind and reminded them that these properties are unique and that buyers need to be guided through to really understand how great these homes are. They arrived, we gave our tour and both the client and the other agent were raving fans by the end.

What’s so great about these homes? There really are too many details to list. So I’ll give you an over view:

1. They’re affordable.
2. They save on energy usage (40-60%) - thus saving your pocket book
3. They’re healthy - low VOC paints, no carpeting, filtration systems, etc… Possibly saving you on doctor bills
4. They have a 15yr tax abatement - estimating your taxes at ~$25/mo
5. They look cool.
6. They’re in Northside - a great growing community.
7. They’re brought to you by a LOCAL NON PROFIT - CNCURC

We and those who see them really can’t say enough great things about these houses. With all of this activity, I’m afraid they won’t last long. If you’d like to schedule a showing just give us a call!

I know that this is something that I’ve been saying over and over again “Cincinnati is a GREAT place to buy a home.”  The statistics are telling us, major news publications are telling us and now even our local news is telling us.  Well, I’m not sure if this actually made it to print form, but at least it was on the website! 

Sure its from our Cincinnati Area Board of Realtors, but its nice to have some good press these days.  Home sales are up and so is our affordability.  At least in the areas I mainly work in.  Norwood, it rockin’ pretty solid along with Hyde Park, Oakley, Pleasant Ridge and Downtown.  Our home prices are extremely affordable and our first time home buyers have money to spend.  We are lucky here in Cincinnati to have major business who recruit and keep good talent from all over the world.  This helps strengthen our urban/suburban areas.  As we see energy costs go up and the allure of downtown getting stronger, we will continue to see a strong resurgence of downtown near living.  The areas which were once considered suburbs (60-80 years ago) are going to continue to grow.

This is evident in today’s market.  Buyers are buying and it seems to be in the 100-250 range.  They’ve got the money and they know the prices are right!  From the looks of things, prices don’t seem to be going down like they were last year.  If you’ve been on the fence about purchasing a home, get off and do it.  You’ll regret it later if you don’t.