Important Tips To Know About Cincinnati MLS Listings

Wouldn’t it be great if high schools started a Driver’s Education kind of class for real estate? At some point—I think it was in the 1930s—Americans realized that it would be a good idea for the public schools to offer Driver’s Ed, just as a matter of public safety. If you’ve ever tried to deal with a clutch and stick shift built before the mid-50s, you’ll understand the need. Too bad the damage that can result from lack of real estate knowledge isn’t as obvious as a dented garage door.

The first Realty Ed class session could deal with the history of MLS listings. Even given the void in the school system, a teenager wouldn’t need much real estate exposure to have at least heard of “the listings.” “The Multiples” is more obscure, as is “MLS” (when you Google that, you get a lot of major league soccer sites).

They are all jargon that refer to the information published by “the” Multiple Listing Service. “The” is in quotes because there isn’t just one Multiple Listing Service in the United States; there are many different ones, run by different companies. Our Cincinnati MLS Listings are produced by our MLS Listing publisher, who cooperates with others across the country to come up with the not-quite-exactly-uniform format you see when you go searching online for greater Cincinnati homes for sale.

If the high school kids’ first homework assignment is to go online to check out the local MLS listings (like the ones I provide), what they find looks quite straightforward and self-explanatory. They see pictures and descriptions of each property for sale, an asking price, and details that a future owner would want to know. Square footage, lot size, the year built, number and types of rooms are all there, making it easy to compare properties. There may be more details in some of the listings than in others, but the real estate agent who prepares the MLS listing makes sure the most important elements are covered.

What will not be obvious to the students (but what will make excellent Friday quiz material) is how the Cincinnati MLS listings embody other elements that are commercial and legal. Behind each of the listings (under the hood, in Driver’s Ed terms) is the fact that an MLS listing ordinarily represents a contractual offer by the listing brokerage to compensate other real estate professionals who represent potential buyers…which means it also is ordinarily evidences that the owner of the listed property has made a separate “listing agreement” with the listing broker.

Later on in the semester, there will need to be a discussion of FSBOs and the whole “For Sale by Owner” situation. It’s likely that one of the more troublesome ‘A’ students will then certainly raise her hand to ask something like, “Well then what happens when there is a Cincinnati MLS listing for a FSBO property? Doesn’t that mean there isn’t a listing broker to make the offer to compensate other real estate professionals who represent potential buyers?”

That will be the moment when it is again demonstrated why teachers need three months off every year.

Our Cincinnati MLS listings are a superb way to organize today’s active real estate offerings—but they are only one of many elements. Call me for expert assistance in getting all those elements fall into place!  

Homeowners Cheer U.S. Return to Housing Value Highs

For homeowners, the news was a long time coming. The bounce back from last decade’s dizzying plummet in the nation’s residential housing values has been underway for quite a while now—but those values hadn’t quite returned to their former heights.

Until last month!

The Wall Street Journal was early to break the long-awaited headline, “Existing-Home Prices Hit Record: $236,400.” Using just-released June sales numbers, the Journal reported that the nation’s average housing prices now topped the previous high water mark set in 2006. It meant that a lot of paper losses have been obliterated—and the return of full nights’ sleep for many U.S. homeowners who have long been underwater.

Another aspect of June’s housing report card could also ease nerves on a wider scale. USA Today led with it: “Existing homes were sold at the fastest pace in eight years…” It quoted the NAR’s Lawrence Yun as pronouncing this year’s spring buying season “the strongest since the economic turndown.”

That’s where the current housing market profile seems to differ in kind from the previous peak of $230,400, registered in July 2006. That mark was reached after sales volume had started to fall. Prices then followed, starting with a slow decline that continued until the spring of 2008, when the slump became a nosedive—unleashing the subprime mortgage crisis. The “bubble” of unsupported high prices had burst.

There was more glad tidings in last week’s news, as well. U.S. home builder confidence levels hit its highest mark in “nearly a decade” (WSJ). A rise in demand for apartment housing caused a jump of 9.8% in housing starts.

But the biggest news was the existing-home price rise, reported as having “rocketed” 35% since 2011, “benefiting current homeowners by giving them an opportunity to trade up to better homes or sell and cash out.” That’s the kind of spur that can stimulate the entire housing market.

With one economist (Andrew Hunter of Capital Economics) quoted as saying “the housing recovery has shifted into a higher gear,” it wasn’t surprising that other analysts were in agreement. “Don’t Laugh” read one headline from international observer Quartz.com; “the U.S. housing market is the best story in the global economy right now.” Reuters agreed about the implications. Their headline: “Strong U.S. housing data boosts dollar.”

Greater Cincinnati residents don’t have to be global investors to take advantage of this summer’s home values. A simple call to my office is all it takes to get things started!

Mortgage Rates Projected to Rise Sooner Rather than Later  

Now that we are deep into July, with summer in full swing, there might be vague thoughts running through your mind about some potential real estate moves—but certainly not until the fall. Right now all most of us are thinking about is whether another chilled glass of summer-something-or-other is in order. Mortgage rates and what the folks in Washington might be doing to affect them are not exactly what occupies an idyllic July afternoon.
         But if you’ve been paying attention to any newscasts long enough to reach the dull-as-dishwater economic stories they throw in toward the end of the broadcasts, you may also have an inkling that conditions are about to change. And the evidence does suggest that mortgage rates face a likely increase come fall. If your vague suspicion does come to pass, and if you’re among those considering buying or selling a home this year, now should be the time to stop “thinking” and start “doing”.
          Exhibit A for that proposition comes from one Michael C. Fratantoni, who happens to be the Chief Economist of the Mortgage Bankers Association (MBA). When he recently spoke at the National Association of REALTORS^® office in Washington, he made no bones about it: mortgage rates will continue upwards, with a first significant Fed hike likely in September. September! The 30-year fixed mortgage, which we all know has lingered at historic lows—below 4%—for several years, is likely to hit 4.4% by the end of 2015 , then move beyond 5% next year.
         It’s enough to stifle any thoughts about that frosty beverage.
         The good news for homeowners planning to list is that Fratantoni doesn’t believe any of these factors will keep the nations’ buyers away. After a pretty lackluster 2014 performance, the MBA forecasts a 14% year-over-year increase in purchase-money mortgage originations in 2015—and nearly 9% in 2016.   Nationwide, incomes are also expected to rise, and with new household formations on the rise, the national real estate market looks to remain in fairly good balance.
         While it seems there’s no instantaneous need to drop all your summertime activities to rush your home onto the market, with mortgage rates expected to rise sooner rather than later, it’s certainly worth making it a priority to give me a call this week.  After that, there will definitely be ample time to finish enjoying that delightful chilled summer beverage.

4 Foolproof Steps to Increasing the Value of Your Home

 As soon as you decide that you will be putting your home up for sale—whether soon or at some point in the foreseeable future—it’s also time to get strategic about growing your property's value—starting with a generous dollop of objectivity.

The difficulty stems from a truth about how everybody perceives much of their property’s value. We escape from hurly-burly of daily living by retreating to the comfortable confines of our home—our place. A good part of its value to us and to our family is its sheer familiarity—the “hominess” that makes it our personal haven. But some of the very things that make it so comfortable to us will be off-putting to outsiders—and they are the prospective buyers.

Our great leather easy chair (the dark brown one that’s gotten a few shades lighter where we sit, and a little off-color where the spills happened) may look a bit peaked to the untrained eye, but it’s been that way for years: who cares? The back door needs to be bolted to stay shut…we do that without even thinking about it—hardly an issue! The sofa may sag, but it sags exactly right (for us)! The bathroom window that’s sort of stuck (okay, maybe it’s painted shut)…etc. etc. etc.

Professionals are of one voice about the real value you add to a property when you go to the trouble of systematically depersonalizing it. It helps to approach doing that seriously and deliberately—to tackle it in an organized manner. There are any number of ways to go about that, but here is one way that will pay off:

Step 1

      Make a list... Review your home from top to bottom. Identify every nit-picky detail in your home that requires repair or renovation. Prioritize your list of repairs or renovations from the easiest (defined as least expensive/time consuming) to the most difficult (defined as most expensive/time consuming). Memorialize the list of repairs/renovations in writing and assign realistic completion dates for each item on the list. For "big ticket" repairs or renovations, get an opinion from a full-time real estate professional on whether the repair/renovation will, in fact, improve the market value of your home before you incur any expense.

Step 2

After a decent interval, sit down with the list and re-classify each item into an Easy Self-Fix List and a Professional-Attention-Needed List.

Step 3
      Get bids from the appropriate professional tradespeople, calculate which fit your budget, then schedule the work.

Step 4
      Get started on your own endeavors to address the Easy Self-Fix List. You’ll be able to organize your own efforts to finish up about two weeks after the last of the tradespeople are scheduled to finish their projects (a two week grace period is realistic: you are aiming to finish everything about the same time).

Following these four steps will put you well on your way to increasing the value of your home. And at any point in the process—from before Step 1 to the satisfying moment that closes Step 4—give me a call to discuss how to convert all that increased value into a profitable home sale!

 “Credit Score Whack-a-Mole” for Mortgage Applicants

You may have wondered why there are credit repair companies out there, since the credit reporting agencies have to allow any consumer to dispute incorrect line items on their own. The big Credit Reporting Agencies (“CRAs”) even have online systems for challenging erroneous information. The Agency must act speedily to investigate and correct any false information. Soooo, why pay someone else to just fill out their form?

The answer seems to be the same one that makes practitioners in the legal profession permanently in demand: it’s in the fine print. And in this case, it could be that some of that fine print is written in invisible ink.

As you can well imagine, speed is vital when a would-be mortgage applicant finds a credit score that’s lower than expected. The mortgage companies will decide whether you qualify (and how much interest to charge) based largely on that credit score. The actual details about how speedily the CRA must act are all contained in the fine print located in the FDIC’s Consumer Protection regulations, “Procedure in case of disputed accuracy” (6500, § 611). Once you notify the CRA, they have to investigate the validity of your claim and (without charging you a dime) determine within 30 days whether the item is accurate. More fine print describe further protections you have—

PARAGRAPH 2:  The CRA has but 5 days to notify the company or person who provided the information about your challenge.

PARAGRAPH 6: The CRA has to provide you the results of their investigation in writing, and, if you’ve asked for it, describe the steps they took to arrive at their decision.

PARAGRAPH 7: If you didn’t know that you had the right to receive the above description, they must furnish it within 15 days after you later request it.

Those sound like pretty solid protections—vitally important, since the CRA can’t just sweep your dispute under the rug, stall, or ignore you altogether. After all, they have to detail in writing how strenuously they worked to protect you! Right?

Except for one problem, which is in PARAGRAPH 8. If the CRA simply drops the disputed item from your current report within the first 3 days, that’s officially considered an expedited dispute resolution. Since the item has been dropped, that might seem to be a solid win. But PARAGRAPH 8 says that if the CRA does that, it no longer has to do anything demanded in Paragraphs 2,6, and 7! It’s as if those protections were written in invisible ink…so that next month, if the company or person just reports the same thing, voila! your credit report might once again go back to Square One. The CRA is supposed to notify you 5 days in advance; but let’s face it, the phrase ‘Catch-22’ comes to mind…or ‘Credit Score Whack-a-Mole’…

What can you do, short of hiring repair agency experts to fix your credit score? Most commentators are in agreement: just stay away from the online dispute forms. Send a registered letter with your dispute, because it usually takes the CRA longer than three days to act on it, so they can’t skip the protections.

And while you’re waiting, why not give me a call? We can start scouting for your new  home!

Mortgage Payoff Loses Luster

Last week, The Wall Street Journal ran an article about personal finances that greater Cincinnati mortgage payers who are at or near retirement age should find thought-provoking. It centered on the idea that today’s retirees are often making a decision that differs from what past generations have chosen.

The basis is twofold. First, it’s undeniable that the 60- or 65-year-olds of today rightly expect a future that’s likely to stretch one or more decades longer than was the case for their grandparents. Improved health care and health awareness have combined to extend life expectancies considerably. The WSJ didn’t mention it, but some quick research reveals that while a baby boomer’s parents (assuming they were born in the 1920s) had a longevity expectation at birth of only about 55 years, the CDC says that today’s average 65-year-old male can expect to live another 18 years—with ladies even out-surviving them by another 2½ years.

Such a radical advance combines with a second development—today’s low mortgage interest rates—to create a shift in thinking by many as they hit retirement age. Experts believe that previous generations tended to feel “they were in the last inning” of life, and thus needed to pick a safe path regarding their residences. Paying off their home’s mortgage was given very high priority—one that was almost universally unquestioned. Home ownership unencumbered by a mortgage was taken to be a sound part of a worry-free old age.

But today’s local retirees are significantly less defensive in their thinking. According to The Journal, “Maybe their parents paid off the house before retiring, but many baby boomers say it makes more sense to carry a mortgage.” Instead of surrendering their cash or investments, the 21^st Century trend is for mature Americans to take advantage of today’s low interest rates. The long time run-up in the stock market has also made the choice that much more appealing.

Local retirees may also be departing from the way previous generations behaved. A Merrill Lynch/Age Wave study found that 30% of relocating retirees were moving to larger homes! And let’s face it: the whole notion of retiring is undergoing a transformation as more and more of the 60+ set realize they don’t want (or can’t afford) to quit working altogether. With so many good years before them, many are embarking on new careers—often elatedly following pursuits they’d “never had time for.”

With mortgage rates continuing to roost down in the bargain basement, today’s seniors aren’t alone in recognizing that 2015 represents a rare home buying opportunity. If you are coming to the same conclusion, I hope you will give me a call to chat about buying or selling a home.   

Buying a Home in the Right Homeowners Association

     It does seem that whenever a story about some faraway homeowners association finds its way into greater Cincinnati newspapers, nearly always it’s because something has gone awry. Either there’s an ongoing dispute about a flag display (“Indiana Couple Violate Rules for Flying U.S. Flag”), a fencing disagreement (“Border Feud is Childish and Dangerous”), or something else to catch readers’ eyes. The pettier, the better (“North Carolina Man in Dispute over Pansies Planted in Common Area”). Why does this hit the local news? Let’s face it: it is sort of fun to read about!

     The downside is that when those instances are all we hear about, it can lead local buyers to believe they should stay away from properties with HOAs when they are buying a home. But the fact is, town homeowners associations exist to protect the common interests of owners and residents. Homeowners associations can and do offer many benefits. The key is understanding what they are, what the costs are—then choosing the right association.

Know the Rules

     The first step in evaluating any local homeowners association is to thoroughly examine a current copy of its rules. When you realize that it’s natural to focus on the individual property instead of the community, it’s more understandable why many prospective buyers pay too little attention to this step. Later, they may find themselves in violation of rules they should have noted before. Those stories about flags are typical: usually the problem was not with the flag, but with rules about flagpoles. Small details can become big problems when the homeowners association ‘covenants, conditions and restrictions’ remain unread in a kitchen drawer.

Comparing Costs and Amenities

     In addition to the rules of a contending local homeowners association, there is the matter of its fee structure. Older homeowners associations are often (not always) less expensive than newer HOAs. Yet price is not the whole picture. Especially when evaluating two or more associations, it’s time to sharpen a pencil and compare what the fees cover. One association may include lawn maintenance, while another leaves that as your responsibility…and there may be value for the community (and your property’s resale value) in guaranteeing proper maintenance by everyone. One HOA may have a pool, tennis courts and other amenities, while another may only offer a community room. Newer greater Cincinnati homeowner associations are tending to offer more features, but not always.   
    Homeowners associations offer a sense of community along with amenities and other benefits…but for some, the cost in individuality weighs against it. When I’m invited to be your real estate representative, I help you ask the right questions—the ones that will guide you to a new home that’s the right fit for your family. I hope you’ll give me a call!