Wouldn’t it be nice if you had more than a guesstimate to guide your as you make one of the most expensive decisions in your life?

Probably the most important aspect of buying or selling a home is anticipating the market.  Ironically, the local information you need is the most difficult aspect.  Almost all housing forecasts and data focus on national averages and metro real estate markets, not the hyper local market you care about. Of course, there is no such thing as a “national” real estate market and using national price averages to figure out local price trends makes about as much a sense as using a national weather forecast to make plans for a picnic in the park.

You don’t need a crystal ball or a lucky rabbit’s foot to foresee what your local market will look like in three to six months.  All you need is a good understanding of the dynamics that shape supply and demand and hyper local housing information.  Top economists and real estate professionals issue remarkably accurate short term forecasts by applying a few principles to good data.  You can do the same.

Supply and Demand. Housing economics, like most economics, is essentially a matter of supply and demand.  If demand is greater than supply, prices rise.  If supply exceeds demand, prices fall.

Prices will rise or fall to achieve a balance between supply and demand.  Sellers set prices based on what their best estimates and their own needs, but the list prices you see on Web sites tell only half the story.  In fact, the list price is the ceiling price, especially in buyers’ markets like those of recent years.  When inventory outpaces demand, the difference between list prices grows and the average time it takes to sell a home increases.  When demand is greater than supply, the difference between sales prices and list prices shrinks, or sales prices exceed list as often happened during the 2002-2006 boom when demand was white hot, and houses take less time to sell.

A number of factors affect inventory.  Obviously, changes in demand increase or decrease supply temporarily and affect prices.  But as prices rise, sellers seek to benefit and they list their homes, increasing supply.  Conversely, price declines discourage sellers from listing their homes but they encourage bargain-hunting buyers.  Inventory shrinks.

Why Employment is Important. The single most important local factor driving housing demand is jobs.  Buyers can’t get loans if they are not employed.   Jobs also impact supply.  When people get laid off, they often sell to lower living expenses or lose their home to foreclosure.

Communities with low unemployment are adding jobs that create strong demand for both home purchases and rentals.  Local workers can afford to switch fromn renting to homeownership.  Newcomers are attracted by employment opportunities, and they need housing, which strengthens demand and improves prices.  Better prices encourage Local residents to sell their homes and buy new ones, which creates even more demand.

In communities with high unemployment demand withers.  Workers can’t afford to buy homes and they become very conservative in their develop housing Mass layoffs will hurt a housing market for months to come as workers lose their homes to foreclosure and leave the area to look for work. Communities with high unemployment develop housing markets full or foreclosures and rock bottom values.

Every month the Bureau of Labor Statistics issues unemployment rates for every metropolitan area in the nation.  Unfortunately, these rates are issued about a month after the fact.  Go to the BLS main page and enter the name of the city in the search box.  From the search list, click on “Economy at a Glance” and you’ll be taken to a page with a wealth of local economic data, including several months’ worth of unemployment rates.  Note the recent trend.  Compare your local rate with the state and national average to get a feel for how your community stacks up competitively.  Remember, today’s employment situation will shape housing prices for months to come.

Sources for Local Data To understand the current and future picture for housing prices in your market, you need a sense of what inventory, employment and the current price picture looks like.  Here are some good sources.

Altos Research. This research firm provides very current local data to real estate professionals, but anyone can subscribe.  Plus you can find out a lot about your market by browsing their site.  Each week Altos published reports on metro housing market analytics, including market forecasting indicators, and provides local market forecasts using its AVM, AltosEvaluate.  You can also zero in on Altos’s interactive map to get hyper local price data and an index that tells you if the local market is a buyers’ or sellers’  market.

BlockShopper. This site is redefining hyper local real estate in 21 metro markets.  You can find a list of recent sales and listings at the neighborhood level.  With some surfing around, you can find sales data by neighborhood and you can locate the most recent sales of local properties comparable in size and quality to the house you are looking at.  These prices will give you a good idea of what sales prices and appraisals will look like in the next three to six months.

Movoto.com. Movoto is a multi-state brokerage with a huge database of information garnered from local multiple listing services where it as a presence.  It’s in 29 states and several hundred communities.  Click on “Neighborhoods” on right hand side of the home page and scroll down to “Real Estate Market Stats.”  There you can find an amazing assortment of current hyper local data by community, including inventory, prices and days on market.  Like Realtor.com, Moto gives you the percentage change year to year and month to month, so you can easly see trends in price, demand and inventory.  If you click on “Demographics” under “Real Estate Market Stats,” you can see current unemployment information and population growth or decline, which are indicators of future demand.   Movoto covers communities that no one else does.

Realtor.com. The largest real estate site is now publishing its monthly sales, price and inventory data.  To find it, go to the Realtor.com home page.  On the left hand rail, go to “News and Trends,” and click on Real Estate Data.”  You’ll see a spread sheet listing 146 markets with data on median prices and inventory.  Though not hyper local, this may be the best data you can get on your market.  It’s remarkably current and complete; the data you are looking at comes from 2.2 million listings in the previous month.  Pay particular attention to month-over-month changes in price and inventory count.  Compare the time in inventory in your market to the national median to get a sense of local demand; low is good, high is bad.  Around 30-60 days shows the market is in balance.

Your Realtor.  Last but certainly not leas is your Realtor.  One of the advantages of working with a Realtor is their access to excellent information on the local marketplace, especially market data, and a Realtor’s expertise interpreting the data.  Increasingly multiple listing services are providing excellent hyper local data services to Realtor members, like RBI in the Washington, DC and Baltimore markets. Also, the National Association of Realtors issues local market reports that your Realtor can access online and share with you.  Ask your Realtor for a forward-looking competitive market analysis (CMA) for any property that you are interested in buying or selling.

A Word about AVMs.  A number of national listing sites offer calculators, called automated valuation models or AVMs, that value properties on line.  These use recent sales of comparable properties, known as “comps,” to arrive at a value.  If you sign up for an AVM, it will regularly send you updates on individual properties or values for a zip code.  AVMs vary greatly depending upon the quality of their data.  Sign up for several and note the wide disparity in values for the same home.  AVMs are a useful beginning point towards understanding the current and prospective value of a home, not the last word.

Mortgage Rates. Want to know which way mortgage rates will be headed in the future?  Rates have an impact on demand.  A great source is the folks who actually compile the weekly average of mortgage rates, Freddie Mac’s economists.  From Freddie Mac’s home page go to the top and click on “Media Room”.  Look on the left hand rail for “Economic and Housing Research” and click on it.  Read the latest monthly outlook commentary or simply read the chart for their predictions on mortgage rates in the months to come.

Accounting for Seasonality. Housing is a seasonal business.  Families planning to move will buy during the spring and early summer so that they can move in time for the kids to enter school in the fall.  College towns shrink during the summer months and fill up during the school year.  Housing demand in resort communities reflects the seasonality of the resort, whether it is summer or winter.  Because of the Internet and the ability to shop for properties year round on a computer, seasonality is less of a factor than it once was.  Get a feeling for the seasonal swings in home prices in your market by reviewing month-to-month price changes that have not been seasonally adjusted.   Factor up to a five to ten percent swing in demand due to seasonality.

As you become familiar with data on your market, you’ll gain a unique perspective that will help you become a more successful buyer or seller.  Remember, the name of the game in real estate is timing.  Bargains exist today in every community, but a property is no bargain if it doesn’t appreciate within your timeframe.

Chances are that raising the cash for your down payment and closing cost has tapped you out.  Finding thousands more to make up the difference between  the appraised value and the contracted amount is out of the question.

You’re not the only buyer who has hit the low appraisal snag.  This past June and July, 16 percent of real estate pros reported a cancelation in a sale, mostly due to a large number of low appraisals.

However, you don’t have to walk away.  In fact, some real estate professionals and economists say that low-ball appraisals are pushing values down home values and undermining the housing recovery.

You can fight back.  You have options and chances are you can find a way to make the deal work without increasing your down payment.

Appraisals are largely based on prices recently paid for comparable local properties.  Over the past decade, finding “comps” that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust  Discounts paid for foreclosures and short sales have created a dual price structure between “normal” and distress sales.  .

Finally, when pricing offers today many buyers rely popular online valuation tools, called AVMs or automated valuation models, instead of a comparable market analysis from a real estate professional.  AVMs give fast property value estimates but they often differ greatly from appraised values because they are determined by algorithms using available local price data, not actual inspections of the property.  During this time of record low home values, it’s no wonder that more and more appraisals are coming in below prices that buyers and sellers have agreed on.

It may seem ironic that buyers would want the homes they want to buy to appraise for as much or more than they are willing to pay.  Remember, the purpose of the appraisal is not to help you get a better price, but to protect your lender should, heaven forbid, you default.  The lender wants assurance that your home will be worth enough to recoup their investment.

Even if you have a great job, sterling credit, an adequate down payment and money in the bank, you lender will still want a conservative appraisal.  In light of losses they have taken on the millions of foreclosures in recent years and the tough times many banks have had on Wall Street, lenders are taking no chances these days.  They are more interested in protecting themselves from a loss than they are in making you a loan.

Here are five steps you can take to save your dream home.

1.    Get the seller to lower the price.  By far, this is the easiest solution, especially if your appraisal comes in less than 10 percent of the contract price.  Obviously, a lower price is a great idea for the buyer, but why would a seller go along?  In July, 2011 the average home in America took about 88 days to sell.  Demand is soft and time is money.  Your seller, particularly if they are selling to buy another home, could be in a real bind if you are forced to back out and they have to put the house on the market again.  After all, there is no guarantee that if you walk away, the seller won’t receive a low or even lower appraisal from the next buyer’s lender. Today, many buyers are offering incentives to sellers, such as payment of some or all closing costs.  Lowering the price might be a cheaper option for the seller in order to get the deal done on time. Sometimes a bird in the hand is best.

2.    Ask the seller to offer to carry a second mortgage for the difference.  This solution doesn’t cost the seller anything but the buyer incurs greater debt. If the buyer really wants the home but cannot come up with the difference in cash, making payments or a lump sum payment at a later date to the seller is an option.  After the escrow closes, sellers often retain the right to discount the second mortgage, sell it for less than face value to an investor.

3.    Do your research and dispute the appraisal.  Is the contract sales price a fair assessment of the property value based on a well-prepared comparable market analysis (CMA) from your real estate agent as opposed to an online AVM? Was the appraisal done by an appraisal management company that may have used a less than expert or out-of-town appraiser?

Disputing the appraisal may sound a little aggressive but you might be the victim of a poorly prepared appraisal.   Do some research first and go to war if you have the ammunition.

You have the right to get a copy of the appraisal from your lender and to find out who did it.  What is the appraiser’s reputation?  Have any complaints been filed with your state appraisal licensing agency?  Where is the appraiser based? Did they perform an appraisal in a housing market that they may not know well? Did the appraiser have adequate information about the subject property.  If your appraisal was conducted by an out-of-town appraiser unfamiliar with your market, you have every right to demand an new appraisal.

What comparables did they use?  Ask your agent and the seller’s agent to put together a list of recent comparable sales that justify the agreed-to sales price. Submit that list to the underwriter and ask for a review of the appraisal. Also, ask the agents to call the listing agents of pending sales to try to find out the actual sales price of those properties. Listing agents do not have to disclose the sales price, but many are happy to help out because they could find themselves in the same situation.  Pending sales are more current and are not closed, so the original appraiser would not have access to them.

The key to a successful dispute is data. You will need as much data you can get to back up your dispute.

4.    Ask the lender for a new appraisal.  Should you find that you have a good case that the appraisal wasn’t fair or accurate, ask your lender for a new appraisal, which you may be charged for.

Another strategy is to get two additional, unbiased appraisals and use the average of all three to arrive at a fair price. This is a risky strategy, in light of the fact that another appraisal might not come in higher than your first; it might even be lower if values have fallen.

Depending on how convincing your argument is, your lender has the ability to override the appraisal estimate, which is unlikely, or to order a new appraisal, which is more likely. If a new appraisal is ordered, talk with your agent about somehow splitting the cost with the seller. Perhaps the listing agent and selling agent will split the fee so the buyer does not have to incur additional costs associated with the transaction.  Appraisals cost around $400 or so.

5.    Get your own, independent appraisal.  If you order your own appraisal and your loan is an FHA loan, ask the lender for a list of approved appraisers. Usually the bank will review your appraisal and ask the previous appraiser if they agree or disagree with the newly submitted one.

If the first appraiser disputes your appraisal, the bank may request a third appraisal done by another appraiser, or they may just reject your appraisal.

However, if the first appraiser agrees with the disputes you present, they may adjust their original appraisal and you may get a better price.

If these tactics fail and you cannot make up the shortfall in the appraised value, you may find yourself moving on.  If so, be sure that you were protected by a contingency clause in the sales contract, stating that the transaction can be terminated if the home doesn’t appraise at, or above, the sales price.

“The results demonstrate emphatically that risky financial products, not risky people, are to blame for the foreclosure crisis,” said Andrea Levere, president of Corporation for Enterprise Development (CFED), a nonprofit organization that advocates for expanding economic opportunity. “When given the right financial incentives, good advice and fair treatment from lenders, low-income homebuyers are just as likely as their more affluent peers to succeed in their pursuit of the American dream.”

CFED researchers tracked 831 homebuyers who participated in programs that used Individual Development Accounts, or IDAs, to purchase homes between 1999 and 2008. For every dollar that a working family saved, a government or nonprofit agency matched it, sometimes on a 2:1, or even 4:1 basis.

Researchers compared the IDA homebuyers’ experiences to those of others in the same communities with similar incomes, loan amounts and credit scores:

• The IDA savers had a foreclosure rate of 3.1 percent as of April 2009, compared to 6.5 to 6.7 percent for other homebuyers with loans lower than $390,000 and 9 percent for those with loans lower than $130,000.
• About 1.5 percent of IDA savers had loans with high-interest rates compared to nearly 20 percent of the broader sample of homeowners.
• About 0.2 percent of IDA savers had subprime loans compared to 9.3 percent of the broader sample.

“This study provides the first evidence available on loan terms and foreclosure outcomes of IDA homebuyers,” said Ida Rademacher, CFED’s research director. “The findings show that the overwhelming majority of homebuyers in the sample accessed prime-rate mortgage products, and they’ve successfully retained their homes amid the foreclosure crisis.”

Utah Scores Win with Statewide IDA Network

Utah launched the Utah Individual Development Account Network (UIDAN) in 2004 under the direction of Martha Wunderli, state director. The program boasts a 96% savings rate.

“We feel strongly IDA is a financial product, not a social services product,” said Wunderli. She hires case workers with degrees and background experience in personal finance versus employees with skill sets  grounded solely in social work.

“Our emphasis is on personal and financial responsibility,” she said. “We have a continuum of services. We accept people who are ready to save. If they are not ready to save, we refer them to counseling until they are ready to save.

“We do not hold their hands,” she said. “We ask them to create new household budgets and we look at their credit report.” Credit reports are used for counseling, not scoring. A low credit score does not impact eligibility for the program, according to Wunderli.  Counselors work with participants to increase their scores and prepare them for mortgage readiness if a home is the participant’s “asset of choice.” IDA participants can use their savings and matched funds for education, small business, or home purchase.

“Housing is affordable now,” she said. “People are buying homes, paying less or the same as fair market rent.”

Wunderli credits a 96% savings rate to helping families creating a savings habit, providing thorough follow-up, and excellent contact management.  UIDAN matches participant savings 3:1.

Kate Hoffman, executive director of Live the Solution (Tucson), is creating a similar program in Arizona, using UIDAN as a model.

“Utah  takes a strategic approach to saving,” said Hoffman. “Participants in the program need to be ready to save and they need to be successful. They attend rigorous financial education upfront. Case managers have degrees in various levels of financial planning. Martha Wunderli has a high expectation in what case management produces.”

Hoffman said she will draw case management talent from the lending industry and a pool of Neighborworks certified foreclosure counselors and homeownership counselors.

Live the Solution IDA program expands upon the Utah model with a employer partnership program. Participating Arizona employers make the IDA program part of an Employee Assistance Benefits (EAP) package. Employer dollars are matched in Hoffman’s program.

(Read the full CFED report here: Weathering the Storm.)

Terms differ state-by-state, but most require borrowers to finance their home through a state mortgage finance program, which provides financing through approved lenders and generally features below market rates.  However, to be eligible, borrowers have to meet limits on income and on the cost of the property or size of the loan.  These limits can vary by locale, and will be higher in urban and suburban areas than in rural communities.

Most state down payment assistance programs are also restricted to first-time buyers despite the recent inclusion of existing buyers in the Federal legislation.  Some are reviewing their programs and including existing buyers, like Kentucky, which included existing buyers in its program as of December 1.

 Colorado offers homebuyers a 30 year competitive fixed interest rate first mortgage and a second mortgage for $6,000 or 3.5 percent of the home, whichever is less, to be used for down payment and closing costs. The second mortgage will be offered with a zero percent interest rate. For more information on the Colorado Housing and Finance Authority: www.chfainfo.com.

 In Delaware, the Delaware State Housing Authority (www.destatehousing.com) provides 8 percent second mortgage loans up to $10,000 to help pay down payment and settlement costs.  Borrowers must meet income and purchase size requirements. The program is open to existing as well as new buyers, but they must participate in homeownership education and the property must be inspected, 

Idaho’s Housing and Finance Association (www.ihfa.org) provides down payment assistance at zero percent interest, due on sale. Assistance, based on need, can range from $1,000 to $20,000 but it is limited to borrowers who earn less than 80 percent of the Area Median Income.  It is also limited to first-time homebuyer, displaced homemakers or single parents with custody of children. Borrowers must take homebuyer education.

The Illinois Housing Development Authority (http://www.ihda.org/) offers a second loan for down payment assistance through its Home Start program for first-time homebuyers.  The DPA Loan is a 10-year, zero percent, non-amortizing, forgivable loan in the amount of 3 percent of the purchase price up to $6,000.  Income and purchase price guidelines must be met and Homeownership counseling is required.

Kentucky provides first and existing home buyers six percent loans for down payments and closing costs that are not due until July 1, 2010.   Home buyers must obtain a Kentucky Housing Corporation KHC) first mortgage through an approved KHC lender, and they must meet KHC income and purchase price guidelines. Find out more here: www.kyhousing.org.

In Massachusetts, to qualify for the state-backed second mortgage the buyer must first receive a MassHousing loan through the state housing finance agency.  These mortgages have loan limits and income limits ranging from $119,000 to $80,300.and are limited to first-time buyers (www.masshousing.com).  Illinois also restricts participations to borrowers using state housing loans, which are available through approved lenders and have income limits. The Illinois Housing Development Authority is at: (www.ihda.org).

Maine gives a $2500 cash grant and a $500 coupon for an energy audit to buyers using state loans, pay at least 1 percent of the down payment from personal resources, take a homeownership education class. (www.mainehousing.org)

Missouri gives qualified, eligible first-time homebuyers a second mortgage of 3% of the loan amount to be used for down payment and closing costs.  The second mortgage is forgiven after five years of ownership. Buyers who don’t need down payment cash can use the second mortgage to reduce their primary loan.  Missouri also offers a advance in the form of a second mortgage at the time of closing worth up to 6 percent of the home purchase price or a maximum of $6,750, which is used to cover down payment and closing costs. The homebuyer then files for the federal tax credit and uses the credit refund to pay off the MHDC tax credit advance loan. The Missouri Housing Development Commission is at (www.mhdc.com).

For first-time buyers who are using state financing, Nebraska offers a second mortgage loan that advances up to 85 percent of the borrower’s tax credit at the time the regular first mortgage is closed. The loan bears interest at rates set periodically, with a maximum term of 10 years. If the homebuyer uses the tax credit refund from the IRS to repay the ABC-2 mortgage loan within 180 days of loan closing, the state will send a $500 “incentive” check to the homebuyer within 60 days of loan repayment. (www.nifa.org)

New Jersey’s “Prefund” program provides a loan to pay your down payment and/or closing costs.  It is limited to first-time home buyers who meet all of the requirements of the state financing, including income limits, and who are eligible for the Federal The loan is limited to $5,000 and secured by a second mortgage. Find out more at the New Jersey Housing and Mortgage Finance Agency (www.nj-hmfa.com)

New Mexico (www.housingnm.org) limits its tax credit down payment loans by the size of the property purchase price, ranging from $343,799 in Santa Fee to $237,031 elsewhere, and by income. Income limits range from $46,600 to $65,550.  The Tax Credit Loan Program provides a first-time homebuyer with a loan of 8 percent of the sales price or $6,500, whichever is less, to cover the down payment and closing costs associated with purchasing a home. After loan closing, the homebuyer may file for the federal first-time homebuyer tax credit and use the tax refund to pay off the Tax Credit Loan.

As of January 1, New York State (www.nyhomes.org) will offer cash advances of up to $8,000 on the Federal homebuyer tax credit for borrowers using a State of New York Mortgage Agency (SONYMA) mortgage to purchase a home. The advance can be repaid without interest when homeowners receive their Federal homebuyer tax credit after filing their annual tax return

The Ohio Housing Finance Agency (www.ohiohome.org) offers second mortgages to first-time buyers for up to 3 percent of the purchase price of the home.  Funds can be used for down payment, closing costs, or other prepaid expenses incurred prior to closing. Borrowers must already be participating in the state-s first time buyers program, which has loan and purchase limits. If a borrower takes advantage of the loan, t  he second mortgage interest rate will be fixed at 1 percent higher than OHFA’s current mortgage rates and payments will begin August 1, 2010.

Oklahoma (http://ohfa.org) also offers a homebuyer tax featuring no interest and no loan payments until August 2010. Eligible borrowers participating in the state financing program can get a second mortgage up to 3 percent fixed at 1percent higher than OHFA’s current mortgage rates and you will begin paying August 1, 2010.

Pennsylvania (http://www.phfa.org/) is one of the few states that includes existing home buyers in its tax credit program.  It allows borrowers participating in its first mortgage program to apply a portion of their 2009 or 2010 first-time homebuyer tax credit towards the purchase of their home by providing an advance in the form of a zero-interest loan.  First-time homebuyers are eligible for the lesser of 10 percent of the purchase price OR $6,000 for newly constructed homes, $5,000 for existing homes.  Non first-time homebuyers are eligible for the lesser of 10 percent of the purchase price OR $4,000 for newly constructed homes, $3,000 for existing homes.  Borrowers must invest a minimum of $1,000 of their own funds towards the purchase of their first home and the TCA can not be used to fund a down payment of over five percent. Due to limited funding, the program will be available to homebuyers on a first-come, first-served basis.  Loans closed in 2010 are due to be paid back to PHFA by June 30, 2011.

The South Dakota Housing Development Agency (http://www.sdhda.org) allows first-time buyers to use a portion of their First-time Homebuyer Tax Credit for down payment and closing costs in conjunction with a South Dakota Housing Development Administration First-time Homebuyer loan.  SDHDA loans have income and purchase size limits.  If the loan is not paid prior to June 1, 2011, interest of 6 percent will begin to accrue and monthly payments, for 5 years, will begin on July 1, 2011.  The maturity date of the ATC Loan is June 1, 2016.   Eligible properties include properties that were not acquired from a related person, which includes a corporation or partnership, or by a gift of inheritance. 

The Tennessee Housing Development Agency’s  (www.thda.org) Great Advantage Program offers a slightly higher interest rate loan secured by a first mortgage for down payment and closing costs.  The program, limited to low- and moderate-income borrowers, provides down payment and closing cost assistance of 2 percent. The Great Start program offers a loan at a slightly higher interest rate, secured by a first mortgage, but offers assistance with down payment and closing costs of 4%. The Stimulus second mortgage program — available only in conjunction with Great Rate and Great Advantage — offers assistance with down payment and closing costs of up to 3.5% of the property’s purchase price.

The Texas Department of Housing and Community Affairs (www.tdhca.state.tx.us) recently released a new First Time Homebuyer Program that offers a 10-year deferred forgivable 2nd lien for down payment and closing cost assistance. The amount of assistance is up to 4 percent of the 1st lien mortgage amount. The 30-year first lien fixed interest rate is a competitive 6.25%. The program is limited to first-time buyers, and has limits on income and purchase price.  Pre-purchase homebuyer education course required.

In Virginia, the Virginia Housing Development Authority (http://www.vhda.com) offers a First-time Homebuyer Tax Credit Plus loan that allows borrowers to use the federal First-time Homebuyer Tax Credit for a down payment on a VHDA mortgage up to 5 percent of the sales price. The loan has a built-in second mortgage to help cover the down payment and closing costs, with zero interest and no payments for the first 12 months.  It has income and purchase price limits, and is available only to first-time buyers.

Here’s another site to check for updated information on state housing programs. http://www.ncsha.org/resource-center.

The effective date is the date of enactment, presumably today November 6,*  for the enhanced first-time buyer credit and for the new credit.  It is not retroactive.  However, first-time buyers who have been rushing the meet the November 30 deadline for the existing program need not worry.  They can qualify under the new one.  Existing homeowners who are also in the process of buying a home should consider delaying closing until December 1 or later to qualify for the credit.

Both credits expire next spring.  Buyers must have a contract on a home before May 1, 2010 and they have until June 30, 2010 to close in order to qualify.

Key Provisions

Amounts: 

• The first-buyer credit remains 10 percent of the cost of the home or $8ooo, whichever is less.
• The credit for existing homeowners is 10 percent of the value of the new home or $6500, whichever is less.

Definitions:

• A first-time homebuyer cannot have owned a home during the past three years.
• Existing homeowners must have owned and lived in their current home five out of the preceding eight years.
• Only principal residences qualify. No second homes or investment properties.

Income limits:

• The measure raises the income limits for those claiming the credit to $125,000 a year for individuals and $225,000 for couples, up from $75,000 and $150,000 in the previous first-time buyer credit. After that, the value of the credit phases out.
• The cost of the new home cannot exceed $800,000.

 Cost:

•  Expanding the home buyers’ credit will cost about $11 billion.  The total cost of extending the first-time buyer credit and adding the existing owners’ credit is $16.7 billion.

 How to Apply::

•  Use IRS form 5405, which you file with an amended tax return.
• For more information on applying, go to http://www.irs.gov/newsroom/article/0,,id=204671,00.html

CORRECTION:  The effective date is the day the legisolation is signed into law, not December 1 as previously reported.

To decide which mortgage is right for you, consider which circumstance each is designed for.

30-Year Fixed Rate This is the most comment type of mortgage.  It calls for exactly the same payments over a thirty year period. With the passage of time, you will pay more and more on the principal and less interest, which will increase your equity , or ownership, of your home but reduce the amount you can deduct on your taxes under the mortgage interest deduction.  The burden of this loan will ease in time as inflation–and your potential wage growth–makes the payments seem smaller. The only relative disadvantage is that the payments will be higher than those initial low teaser rates of an ARM, so you won’t be able to afford as much of a house.

15-Year Fixed Rate If you can afford it, a 15-year mortgage offers quicker repayment and faster growth of your equity. You save a great deal in interest over the life of the loan, because the rate is usually lower than a 30-year loan.

5/1 Adjustable Rate Mortgage An adjustable rate mortgage allows you to start off with low payments and afford more house now. Two numbers identify these loans: the first is the number of years until the rate resets and the second is how often it will reset. A 5/1 ARM will reset after five years and never again.  ARMs are for people who expect to move before the rate jumps or people who expect their income to rise significantly.  Be careful.  Thousands of people took out ARMs during the housing boom expecting to me able to sell or refinance at a profit.  When prices fell, they found themselves “under water”?owing more on their home that it was worth.  If you expect your income to rise or to pay off a big expense (such as school loans) they might be right for you, too. 

The lender sets the interest rate by adding a margin to an index rate. Common indexes include:

 Cost of Funds Index. The Eleventh District of the Federal Home Loan Bank Board, which covers California, Nevada and Arizona, publishes the Cost of Funds Index. For more information on the index, visit the Web site of the Federal Home Loan Bank of San Francisco.

 Treasury bill yields. The yied on the 1-year T-bill, adjusted for a constant-maturity security, is widely used.

 Most ARM loans have a periodic rate cap and lifetime cap to limit the amount the interest rate can increase each adjustment period and over the term of the loan, respectively. If you have a payment cap in your loan agreement, you may face negative amortization of your loan. This has the effect of increasing the amount you owe.

 Convertible Mortgage Loans. These are ARM loans that allow you to convert to a fixed-rate loan at or before a specified time. The conversion privilege lets you start off with a low variable rate, then lock in when fixed rates drop low enough.

Balloon Mortgage Loans. These loans often have interest-only payments. In this case, you don’t amortized any loan principal and the entire loan amount is due at the end of the loan term. A balloon mortgage allows you to minimize your monthly payments until you refinance the loan. Another advantage is that a larger share of your payment may be eligible for the mortgage interest tax deduction.

1/1 Interest Only Loans.  An interest only mortgage allows buyers to pay just the interest on a mortgage initially. Then, payments rise. People who take out these loans are typically counting on their house value to rise, a strategy that got a lot of people in trouble.

Option Loans You can decide each month whether you’ll just pay the interest or work off some principal. This mortgage is designed for those with an erratic income, say, someone who gets a big bonus. The minimum payments are so low that you may actually sink deeper into debt with each minimum payment.

40-Year or 50-Year Mortgages. You can get slightly lower monthly payments by stretching out the loan for a decade or two, but at a high cost. Someone with a 30-year $300,000 mortgage would pay $1,837 a month, for a total interest cost of $361,466. By stretching the loan out for 50 years, they would only save $213 a month and end up paying about $300,000 more in interest

Reverse mortgages, the kind of loans marketed by aging celebrities to seniors interested in converting the equity in their homes into cash, aren’t the safe haven they are portrayed by marketers, according to a General Accounting Office report released in July.

In fact, there is growing evidence that reverse mortgages, also known as Home Equity Conversion Mortgages, offer a ripe field for mortgage fraud.  Reverse-mortgage schemes have the potential to increase substantially,” according to the Federal Bureau of Investigation and the Office of Inspector General at the U.S. Department of Housing and Urban Development which oversees the federally insured loans that account for some 99% of the reverse-mortgage market. The FBI is investigating 13 times as many cases of fraud this year as last, involving hundreds of properties.

Various types of fraud have been popping up across the country, including organized schemes of systematically inflating house appraisals to increase the lender’s profit off the senior and the federal government.  With the government’s role backing these loans, the lenders have very little to lose. One scheme, prevalent in the Upper Midwest and Southeast, involves the use of “straw buyers” and flipping properties. Speculators purchase distressed properties and, with the aid of cosmetic repairs and inflated appraisals, deed them to senior straw buyers at above-market prices. Seniors—some of whom may be part of the scheme—typically are promised homes for no money down. In return, they secure a reverse mortgage and divert some, if not all, of the proceeds to the scheme’s promoters. Regulators say promoters have even recruited seniors from homeless shelters.

The Office of the Comptroller of the Currency recently issued a consumer advisory designed to help you better understand reverse mortgages and decide whether they are right for you.  Below are the key points to remember.

What Are Reverse Mortgages?

A reverse mortgage is a loan secured by your home that lets you receive payments from the lender—either over time or all at once—based on the value of your home at the time of the loan. As you receive payments, these amounts are added to your loan balance. Interest is charged on the outstanding balance, so even if you do not receive any further payments from your lender, the loan balance continues to increase.

Who Can Obtain a Reverse Mortgage?

Generally, to obtain a reverse mortgage, you must be a homeowner at least 62 years old, must use the home as your primary residence, and must have either no current mortgage or a mortgage balance low enough that you can pay it off with funds from the reverse mortgage.

Are There Different Types of Reverse Mortgages?

Yes. And the differences can be important. For example, most reverse mortgages are made under a Federal Housing Administration (FHA) program. These loans (called Home Equity Conversion Mortgages or HECMs) have government insurance that protects not just the lender, but also the borrower. If the lender becomes unwilling or unable to make payments due to the borrower, the government steps in to make them. Other reverse mortgages do not have this guarantee.

.How Much Can I Borrow?

That depends on many factors, including your age, the value of your home, and applicable interest rates at the time you obtain the loan and over the course of the loan. Generally, the amount of your loan will be larger the older you are, the more valuable your home is, and the

lower that applicable interest rates are. How do I get my payments? Reverse mortgages can be very flexible about this. Depending on the type of loan you get, you can take out the funds in fixed monthly payments that last either for a set period of time or for as long as you stay in the home, as a line of credit that permits you to take out funds as you see fit, in a single lump sum (or a single draw on a line of credit), or in some combination of these options.

How Do I Get My Payments?

Reverse mortgages can be very flexible about this.  Depending on the type of loan you get, you can take out the funds in fixed monthly payments that last either for a set period of time or for as long as you stay in the home, as a line of credit that permits you to take out funds as you see fit, in a single lump sum (or a single draw on a line of credit), or in some combination of these options

How Much Will it Cost?

Like many home loans, reverse mortgages have both interest and fees charged over the life of the loan and upfront costs due at closing. These up-front costs generally can be “financed”—not paid out-of-pocket at closing but added to your loan balance instead. Reverse mortgages may have relatively low interest rates, but they can still be expensive compared with other home loans in other respects, primarily because of mortgage insurance premiums and other up-front costs. The interest rate on a reverse mortgage may be variable, increasing or decreasing with the “prime rate” or some other measure of market rates.

How do I repay the loan?

In a reverse mortgage, you do not make monthly payments of principal and interest to the  ender. Instead, interest and fees are added to your loan balance. Unless you make “escrow” payments to your lender, however, you are still responsible for paying property taxes and insurance when they are due.

When do I have to repay the loan?

Generally, you do not need to make any payments until you stop using the home as your primary residence—for example, when you sell the home, no longer live in the home, or pass away. The loan then becomes due. Your obligation to the lender will be limited to the lesser  of the amount due or the value of the home at the time, unless you or your heirs want to keep the home. To keep the home, you or your heirs would need to pay the full amount you have received, plus all accumulated interest and fees.

Can I lose my home before I’m ready to move?

Yes, under limited circumstances. With a reverse mortgage, you keep title to your home, but you remain responsible for property taxes, insurance, and home repairs. If you fail to pay  taxes and insurance or fail to maintain the home, the mortgage may become due and payable, and you could lose your home through foreclosure. Of course, if your lender requires a

monthly “escrow” payment for property taxes and insurance, that risk can be reduced.

Is a Reverse Mortgage my Only Option?

Keep other options in mind. Other loan products, such as standard mortgages and home equity lines of credit, may make more sense for you, depending on your financial situation and needs. Other financial options—from drawing on retirement plans to selling the home—should also be considered. In addition, your community may offer home repair or other services to assist you, and you may be eligible for public benefits.

What About Annuities that are Offered With a Reverse Mortgage?

Be wary of anyone trying to sell you other products along with a reverse mortgage. Because a reverse mortgage can give you access to a large amount of funds, it can make you a target for aggressive sales pitches for expensive and

inappropriate products or services. You should generally steer clear of anyone trying to sell you other products—such as annuities, long-term care insurance, investment programs, or home repair services—along with a reverse mortgage.

Should I Get a Second Opinion?

Get a housing counselor.  A reverse mortgage is a complex loan secured by your

home. Whether such mortgages make sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified, independent housing counselor in a face-to-face counseling session before making this decision. Housing counselors can help you learn about reverse mortgages, identify and evaluate the available alternatives, and understand the potential consequences of reverse mortgages, including the impact on your taxes, benefits, and heirs.

Financial advisors or housing counselors can help you find other financial options or community or government programs that may meet your needs. A reverse mortgage usually makes more sense the longer you are planning to stay in the home. This is because the high up-front costs make the first years of the loan relatively expensive. For example, a borrower who uses a reverse mortgage for only a couple years can have an annual loan cost several times greater than a similar borrower using the reverse mortgage for a decade or more. For this reason, it is very important to have a realistic understanding of not just your life expectancy but also how long you can afford the expenses related to your home—including utilities, property taxes, insurance, maintenance and repairs, and condo fees—and how long you are physically able to keep living there. In considering these factors, you should bear in mind that the average HECM borrower remains in the home for only six years after obtaining the reverse mortgage.

·         Find housing counselors at the U.S. Department of Housing and Urban DevelopmentWeb site at www.hud.gov/offices/hsg/sfh/hecm/hecmlist.cfm. Or call 1-800-569-4287 or1-877-483-1515.

·         Visit NeighborWorks America’s Web site at www.nw.org/network/home.asp.

For More Information

·         •AARP Foundation, Reverse Mortgage Education Project www.aarp.org/revmort

1-800-209-8085

·         • U.S. Department of Housing and Urban Development www.hud.gov/offices/hsg/sfh/hecm/hecmhome.cfm

1-800-CALL-FHA (1-800-225-5342)

·         National Association of Reverse Mortgage Lenders

www.reversemortgage.org/Home/tabid/63/Default.aspx

·         National Council on Aging (information about government assistance programs and other alternatives to reverse mortgages)

www.benefitscheckup.org

The FBI reports that the number of mortgage fraud reports last year increased more than 36 percent to 63,173.  In five years, the Bureau’s caseload of mortgage fraud cases has tripled.  Though no records are kept of total losses, they are measured in billions of dollars. The FBI defines mortgage fraud as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.”

Rescue scams and mortgage modification schemes are only the latest in a variety of swindles designed to defraud homeowners.  These include misrepresenting the terms of loans, falsifying documents, paying fees up front for services that are unnecessary or never materialize, “builder-bailout” schemes where developers unload excess inventory through financial trickery, seller-assistance scams that use false appraisals to sell homes, and identity theft that leads to home equity credit lines being opened and drained.

Here are some other common examples of mortgage fraud from the National Consumers League.

•  Upfront Fee Scam. A fraudster promises, for an upfront fee, to negotiate with homeowner’s bank to pay down back-payments, but he ultimately takes the money and disappears.
• Lease-back or repurchase scams. Con artists promise to pay a mortgage and lease it back to their victims if the consumer signs over the deed. The scammer then raises the rent, sells the house, steals equity, or even evicts the tenant.
• Refinance fraud. Victim signs over ownership of the house, thinking that they are signing documents for a new loan at a lower payment level.
• Bankruptcy schemes. The scammer encourages the victim to stop paying their mortgage and offers to file bankruptcy for the consumer, for a fee.
• Appraisal fraud. An appraiser - in cahoots with a lender - overvalues the home, and then secures an unnecessarily large loan at high interest rates for the homebuyer. Another scenario is that the appraiser undervalues the home in order to justify a short sale and subsequent re-sale at market value for profit.

The FBI, the Treasury Department and state attorneys general across the nation are working together to crack down on mortgage fraud.  New resources are paying off as indictments and convictions increase.

The best defense, however, is education.  Here are some tips and advice from the FBI’s Mortgage Fraud Website that will help you identify potentially fraudulent practices and avoid becoming a victim.

• Get referrals for real estate and mortgage professionals when you want to buy or sell a home. And once you do, check out their licenses with state, county, or city regulatory agencies. If they are a Realtor, check with your local board of Realtors. Most of these people are exceedingly honest and above-board-it’s just a small percentage who has given the overall profession a black eye.
• Do your own research into what other homes in the neighborhood have sold for to get an idea of what your house is worth. Also, look into recent tax assessments of neighborhood homes. Don’t let anyone talk you into selling your house for less than it is worth.
•  Beware of “no money down” loans. These have been used to talk people to buy a home they really can’t afford.
• Don’t let anyone talk you into making a false statement on your loan application, like overstating your income or lying about where your down payment is coming from.
•  Never sign a blank document or a document containing blank lines. You will be bound by whatever you sign. Don’t let someone tell you, “We’ll fill that in later.” Be sure to read and review all loan documents signed at closing. If you don’t understand, don’t sign. Don’t be afraid to ask questions or take the unsigned document to someone you trust to help you understand it better. If you don’t understand what you’re signing, get an attorney who can review the documents for you.
• Understand the costs of the loan and what is covered. Your loan can include the actual amount you’re borrowing, Private Mortgage Insurance, and closing costs. Make sure your loan is not “packed” with premium credit insurance add-ons that you don’t understand or want.
• Financial difficulties? If you’re a homeowner who’s having a tough time making your mortgage payments, be wary of e-mails, TV ads or web-based ads from companies who claim they can help you eliminate your mortgage debtwhile all you have to do is pay an up-front fee for them to do the paperwork-it’s a scam. Never pay an up-front fee for a loan modification.
• If you’ve been told by your lender that you are facing foreclosure, don’t fall for any of the fraud schemes out there, including the one where a perpetrator convinces a homeowner to sign over the house deed “temporarily”-for a fee, of course. The homeowner not only loses the up-front fees, but the perpetratoroften turns around and sells the house out from under the owner.
• Contact your lender beforeyour situationgets too bad. Most will work with you to help you keep your home.
•  If you think you’ve been victimized, contact your local FBI field office.

There are literally thousands of mortgage products available today.  Some are highly risky and many buyers have gotten themselves into serious financial trouble because they did not take the time to understand their obligations.  Find the one that fits your particular financial situation.

Prepare your documentation and credit.

To prepare a mortgage application you will need detailed information about yourself, your employment record, and the house you want to purchase. You will need to document your personal finances–your earnings, your monthly expenses, and your debts.

Check your credit record on all of the three major credit rating bureaus: Experian, Equifax and Transunion.  Take steps to make sure each is accurate by carefully reviewing them.  You have a right to know what information is contained in your credit report and to have someone from the credit bureau help you understand what the report says.  Lenders will examine your credit record to learn if you pay your bills on time and decide how much of a credit risk you pose. You may not qualify for certain loans, pay a higher rate of interest or have your application for a mortgage rejected altogether if the report shows that you have a poor credit history.

Determine how much house you can afford.

Assess your financial ability to handle a mortgage by preparing an estimate of your monthly income and loan payments.  Total your before-tax income including salary, commissions, investment income and interest.  Then calculate your monthly loan payments including all outstanding obligations, credit cards, student loan, alimony, etc that won’t be paid off within ten months.  The balance is the absolute maximum you will have available for a monthly homeownership costs: insurance, property taxes, and mortgage payment.

Apply for pre-approval.

It’s far better to be preapproved for a loan than to be prequalified. If you have good credit you can become pre-approved for a loan before you start looking for a house. 

Shop around for a lender before you shop for a home.  Shopping takes time and energy, but not shopping around can cost you thousands of dollars. You can get a mortgage loan from mortgage lenders or mortgage brokers. Brokers arrange mortgage loans with a lender rather than lend money directly; in other words, brokers sell you a loan from a lender. Neither lenders nor brokers have to find the best loan for you–to find the best loan, you have to do the shopping.

Many consumers accept the first loan offered and don’t realize that they may be able to get a better loan. On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate. Shopping around is your best way to avoid more expensive loans.

Ask your lender to pre-approve you based on what your finances indicate you can afford and the down payment you intend to make. Armed with a preapproval letter, you can focus on homes you can actually afford to buy.  Sellers will be more likely to immediately accept your offer, even if that offer is for less than list price, because you are giving the seller peace of mind that their home is sold.

When reviewing your projected mortgage payment and existing debt, some lenders might use ratios such as “28 and 36″ to determine whether you qualify for the loan. These are commonly used ratios.

In the case of “28 and 36,” the 28 refers to the percentage of your gross income (before taxes) that may be spent on housing expenses, including principal and interest on the mortgage, real estate taxes, and insurance. The 36 refers to the income that may be spent for payments on all your debts (including the mortgage): the monthly payments on your outstanding debts, when added to the monthly housing expenses, may not exceed 36 percent of your gross income. When you talk to a lender, find out what ratios will be used to evaluate your application.

Be prepared to document your income (W2 forms) for past years and year-to-date (pay stubs), current debts (account number, outstanding balance, and creditor’s address for each), and the purchase contract for the home you want to buy. When you file your application, ask the lender how long the approval process will take. The time may vary depending on the complexity of your mortgage, current market conditions, and whether you have to provide additional information. It’s common for a decision to be made within 30 days after the lender receives all the necessary information. Applications for FHA or VA loans may take longer.

Apply for a mortgage. 

When you have negotiated a contract on a property, the lender will hire a real estate appraiser to give an opinion about its value based on the condition of the property and the recent selling prices of comparable properties nearby. Lenders usually will lend the borrower up to a certain percentage of the appraised value of the property, such as 80 or 90 percent, and will expect a down payment making up the difference. If the appraisal comes in less than the asking price of the home, the down payment you planned to make and the amount the lender is willing to lend you may not be enough to cover the purchase price. In that case, the lender may suggest a larger down payment to make up the difference between the price of the house and its appraised value.

If your application is turned down, Federal law requires the lender to tell you, in writing, the specific reasons for the denial. Make sure you understand the reasons given–you may be able to find answers or alternatives that will satisfy the institution’s lending standards. Even if that doesn’t happen, understanding fully why the loan was denied may improve your chances with the next lender you visit. Factors that may affect the loan decision include:

Searching on line make sense.  Buyers who use the Internet spend 2.2 weeks on average looking for a home with an agent whereas traditional buyers spend an average of 7.1 weeks?[1]   Typical buyers search a total of ten weeks and physically visit ten homes before buying. [2]

 When you look at listings on a Web site, can you be confident about the information you are reading?  Are you sure that the data is current and complete?  Are the pictures a fair representation of what the property really looks like?  How can you find out about the neighborhood?  Are you taking advantage of the latest tools the better sites have developed to help you find your dream home?

About Search Sites

At any given time, you can find between four to six million US residential properties for sale on the Internet. However, you only want to find one-the perfect home for you and your family.

 When it comes to search sites, though, most people use more than one-three in fact or as many as seven, according to a recent study.[3]  Different sites serve different purposes.  The large, national sites are great for relocators and for people who want to get a feel for what’s available.  You can add local MLS and brokerage sites for an additional look at local properties when you have a good sense of the community where you plan to buy.

 There are several kinds of search sites:

Third Party Aggregators.  These sites often offer valuable services in addition to listings, such as home valuation, neighborhood search, mortgages, and help finding a real estate agent.  Examples are Realtor.com, Yahoo Real Estate, Zillow, Cyberhomes and Trulia.   National listing sites operated by the large franchises like ReMax and Coldwell Banker operate in much the same way.

 MLS Sites  Multiple listing services (there are about 900 in the US) are organized and owned by local Realtor organizations, in most cases.  They pre-date the Internet and were created to help real estate brokers, not consumers, buy and sell property for their clients and customers. Today MLSs remain the primary local databases of homes for sale, except that most do not carry homes being sold by directly by owners without the help of a professional. They are the source of information for local brokers who carry information about all the homes for sale on their sites and they are they primary source for national third party sites.  Brokers who are members of the MLS are required to list properties they represent on the MLS within seven days of signing up the seller.  Though their first responsibility is to the brokers who own them, more and more MLSs are creating consumer-facing Web sites.  These are one layer closer to the properties for sale than the national sites or local brokers’ sites, except for properties the local broker represents.  Here’s a directory of consumer-facing MLS sites http://mlscloud.com/

Virtual Office Web Sites.  As the name implies, these sites act as “virtual” real estate brokerages and to access their listings, you must register.  They get their listings from MLSs. Examples of VOWs are ZipRealty, Redfin and Sawbuck.

 Local Brokers.  Brokers who are members of multiple listing services can operate sites that list all properties for sale in the MLS, including those listed by competitors.  The information comes from a feed from the local MLS, updated at least.  Homes represented by the broker hosting the site are usually highlighted.  Information about those properties is fresher on the host broker’s site than anywhere else on the Internet.  Sometimes it can take national aggregator sites days to receive and post data originating from a local broker.

 Local Newspapers.  Newspaper sites may contain MLS listings as well as listings from classified ads.  Newspaper classifieds are a rapidly declining option for home sellers, and even the largest carry only a fraction of the local homes for sale.

 Tips on Using Search Sites

Privacy.  Some sites, such as virtual office Web sites, require you to fill out a registration form to access listings.  These are known as Virtual Office Websites and the information may be distributed to real estate agents who will contact you if you give permission.  Check out their privacy policies before proceeding. To register for search agents that automatically email you with updated information on homes you are interested it, all sites will ask for your name and email address.  Again, check to see that they have a policy protecting your privacy.

Search Agents.  One of the most useful features of search sites is search agents.  Once you enter a zip code, house type, size and price range for your search, the site has enough information to email you updated information on new listings that fit your profile and changes in existing listings, such as sales and price reductions.  You can activate search agents on several kinds of sites to ne sure that you don’t miss important information.  Once you have found your home, be sure to cancel you’re agents or you will receive updates forever.

 Neighborhood Information and Local Market Data.  National aggregator sites like Realtor.com, Zillow, and Trulia have introduced features that help you understand local real estate market trends and give you a wealth of information about local neighborhoods ranging from school ratings to heat maps showing home values and recent sale prices.

 Financing. The trend today among real estate sites is “one-stop shopping.”  That means they want to provide you services in addition to the search, especially a mortgage.  Some sites provide sophisticated wizards and widgets that help you accurately estimate mortgage and closing costs involved in the sale even as you are browsing the listing.  They help you understand how changes in property prices, mortgage rates, loan terms, closing costs and your credit directly affect the range of houses you can afford.  However, you are under no obligation to obtain a mortgage from the site where you found your home. 

Accuracy.  The listing information and photos you see on a search site were entered by a real estate professional (unless you are looking at a “for sale by owner” site) is generally reliable, accurate, and current-but not always.  A recent study found that accuracy improves with proximity to the source of the data. MLS sites were most accurate.  Sites fed by MLSs such as brokers sites and national aggregators were only slightly less accurate-98 to 96 percent.  The small percentages of differences occur because IDX data is typically refreshed once a day. Any home that gets sold, newly listed, expired, or has had a price change gets updated within 24 hours.

 Q&A

I am trying to sell my house.  Can I put it on a search web site myself? 

In order to get your house on the most popular web sites, you must list it with a broker who is a member of the multiple listing service.  Once it is on the MLS, it will automatically appear on other sites, including the sites of other brokers in your region, VOWs and national sites that have agreements with your MLS.  However, some national sites like Zillow will also take listings directly brokers or owners.  If you have no agent, you can also list on “for sale by owner” sites.

 I found a home online I really liked and I sent an email to the listing agent, but have yet to hear back.  What should I do?

Find the home page of his or her agency and send another to the owner or top broker.  Sometimes busy people miss an email now and then, so don’t assume it’s for lack of interest.

The blurb describing the property tells me more about the agent who wrote it than it does the home itself.  Is that typical?

Agents are expert at writing descriptions that sell, and they realize how hard it is to sell you on a home via an Internet listing.  They do their best to pique your interest in the next step, a walk-through.

 What can you really tell from the photos on a listing?

Listings feature photos because they know that’s what attracts buyers.  Some listings have as many as 25 large color photos to show all the home’s selling features.  They are usually taken by professionals to show off a home at its best, just like a portrait shows off a person at his or her best.  You won’t see trash on the drive or weeds in the lawn or the house across the street.  Always visit the property yourself before you put a contract on it.

 How will a listing differ from one site to another?

In most cases, it won’t Only if you are looking at the listing on the site of the listing broker who actually represents the property, you might see more photos or narrative-and you can be sure that the information is as up to date as it is anywhere else on the Internet.

There is an error in the listing for my home.  What should I do?

Contact your real estate agent immediately.  Only he or she can correct the mistake on the MLS, which is the source of information accessed by other Web sites.  If you don’t have an agent and placed the listing yourself on a For Sale By Owners site, you must contact the site directly. 

[2] NAR 2006 Profile of Home Buyers and Sellers http://www.realtor.org/Research.nsf/Pages/reportsbuysell?OpenDocument

[3] To Buy or Not To Buy -Finding Your Dream Home Online. eVOC Insights LLC

http://www.evocinsights.com/reports.html