Realty Times

Last October, a friend of mine refinanced his home that he has lived in for the past 5 years. He went from a 30-year fixed to a 15-year fixed mortgage. Now, he wants to sell the home this summer. Is there a penalty? If so, what is it?

-Naomi

Whether or not there is a pre-payment penalty depends on the Note between your friend (the Mortgagor) and the lender (the Mortgagee). When a mortgage is given on a property, the Note is the actual contract to pay back the loan. In the note (and other closing documents), it should specifically state whether or not there is a pre-payment penalty. I believe that some states actually restrict or even prohibit mortgage pre-payment penalties as they are specifically designed to prevent refinancing, but I am not certain.

In any event, if your friend checks the Note and other closing documents, it should clearly state whether or not there is a pre-payment penalty, and if so, what the penalty is. If he cannot find it, advise him to ask his lender or the settlement agent for a copy.

David Kres is a REALTOR® for Buyers Brokers Only LLC in NE Massachusetts/Southern NH.

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Charging up the car in the garage might seem like something from the Jetsons cartoon, but builder KB Home is making that a reality Tuesday.

The company now offers the option to pre-wire homes to accommodate electric-vehicle charging stations, the latest option from a builder known for plenty of choices.

This isn’t exactly a granite countertop, but, in a release, Chief Executive Jeffrey Mezger says the company is thinking about how home owners will live “in the future.”

KB Home says it’s leading the way with this offering: The National Association of Home Builders reports it appears to be the first builder to add such a standard option. Of course, should this prove popular, it is likely other builders will quickly follow.

Trucks at Work calls the move “another step in a broader – albeit piecemeal – effort to create ‘recharging infrastructure’ in major cities across the U.S. to make [electric vehicles] and plug-in hybrids more practical for daily use.”

The price of KB Home’s option is $250.

Follow Dawn on Twitter @dwotapka

The news today that the estate of real-estate baroness Leona Helmsley has signed a deal to sell a deal to sell one of its trophy properties–the Helmsley Carlton House on Manhattan’s East Side-raises many interesting issues about the commercial real estate market.

The $170 million sale marks the first deal the estate—whose mandate is to liquidate all the holdings—has brought to the market. It also shows that demand for stabilized and quality properties is increasing, as the WSJ’s Lingling Wei writes.

But perhaps the most interesting question: What happened to that dog? The canine in question is Trouble Helmsley, the beloved Maltese poodle left behind by the late Leona Helmsley who died in 2007.

Trouble initially inherited a $12 million trust fund, which was later reduced to $2 million by a Manhattan judge in 2008, at the request of Trouble’s trustees. (The remainder went to charity.)

That’s “enough money to pay for Trouble’s maintenance and welfare at the highest standards of care for more than 10 years, which is more that twice her reasonably anticipated life expectancy,” said the general manager of the Helmsley Sandcastle Hotel, where the dog now resides, in an affidavit.

Life is good for Trouble, infamously dubbed “rich bitch,” by the NY Post: “Trouble is no trouble. She is alive and well and thriving,” says Howard Rubenstein, the spokesman for the Helmsley estate.

The dog’s security costs the Helmsley estate $100,000 a year.

Is the government’s massive support of homeownership nothing more than a “sacred cow in American society?” asks Robert Shiller in the New York Times this weekend.

The Yale University housing economist explored America’s long-standing relationship with, and affinity for, homeownership by asking readers to consider the long-term justification for the government’s support of the housing market.

Government support for the housing market, of course, is not unique to this downturn and began during the Great Depression in an effort to jumpstart the building trades, Mr. Shiller points out. Since then, real estate has been firmly rooted in the political firmament.

But housing has become about more than economic health. Mr. Shiller notes the psychological and cultural importance that the country has long placed on owning homes and land: “Historically, homeownership has been associated with freedom, while renting — often in tenements or mill villages — has been linked to the oppression of a landlord,” he writes.

The irony of course is that owning a home, especially in recent years, has become oppressive in its own right. The impulse to become a homeowner encourages people to put lots of their net worth into one asset that can be difficult to sell when demand dries up—ask anyone who’s wanted to relocate for work over the past two years, and who bought a house between 2004 and 2006 with less than 20% down. And some would argue, these supports also prop up home prices forcing people to spend more on housing.

How to reconcile this conflicting strands? Mr. Shiller doesn’t offer up any silver bullet. He points out that our national identity needn’t depend on homeownership. Homeownership in Switzerland, a country with similar identity characteristics as the United States, notes Mr. Shiller, has a homeownership rate that is half of what it is in the U.S. (So too does Manhattan, where the easy availability of attractive rental housing makes renting far more economic than in, say, Buffalo).

He then suggests charting a path to “new kinds of financial institutions— entities that may lead us to a different kind of housing, yet preserve our core values. Although such innovation isn’t likely to end subsidies, it should refocus them on enhancing the qualities of life that we really value.”

Readers, should these institutions exist, and what should they look like?

Efforts to modify loans and delay foreclosures may have helped hold down the stock of foreclosures for sale in the second half of 2009, fostering home-price stabilization. But that cure could require different medicine: an elevated level of foreclosures for sale over the next three years.

Analysts from J.P. Morgan Chase & Co. are forecasting that bank-owned sales as a share of total home sales will remain at current or even higher levels three years from now in more than half of the nation’s 10 largest housing markets, according to a recent investor presentation. (The slides for the presentation are available as a PDF.)

Bank-owned sales–or “REO,” real-estate owned, in industry parlance—are expected to account for between 39% and 50% of home sales in Phoenix in the fourth quarter of 2012, up from 37% at the end of last year. The REO share of sales in San Diego, where one-quarter of sales at the end of last year were REO, is projected between 24% and 31% three years out.

New York City could also see a slight increase in the REO share of sales, with a projection that 12% -16% of sales coming from foreclosures at the end of 2012, compared to a 12% REO share at the end of last year. Foreclosures could stay the same or rise in Santa Ana, Calif.; San Francisco and Oakland, while they’re projected to be lower in three years in Los Angeles, Chicago, Long Island, N.Y., and San Jose, Calif.

With the exception of New York, foreclosures began to heavily flood housing markets in the first and second quarters of 2009. Because foreclosures sell at a discount, that generated big price declines that have since moderated as the REO share of the market has eased.

J.P. Morgan says that spring 2009 will likely mark the peak of foreclosure sales as a share of total home sales, but that REO sales will grow and remain high in most markets through 2012. Even if REO sales account for 50% of all home sales three years from now in Phoenix, for example, that will still be below the 57% foreclosure share from last spring.

Follow me for more housing and mortgage news on Twitter at: @NickTimiraos

Frank comments from Vornado Realty Trust Chairman Steven Roth have sparked a political uproar in Boston over the stalled redevelopment of the Filene’s Basement site.

In an unscripted lecture at Columbia University last week, Mr. Roth implied that allowing a construction site to become an eyesore can be a successful business strategy because the government is likely to offer more generous incentives.

Boston Mayor Thomas Menino read the comments and fired off a letter to Mr. Roth blasting his “outrageous” remarks. “Admitting that you embraced a deliberate policy of long-term blight, at a major commercial location in New York City, exhibits a callous disregard for the well-being of the city and its people.”

Mr. Menino continued: “Inflicting pain on people, business, and communities to inflate the return to your enormously profitable company is reprehensible.”

Last week, Mr. Roth recounted how in the mid-90s he deliberately let the hulking Alexander’s department store sit vacant for more than three years. “Why did I do nothing?” Mr. Roth said, according to an article on the lecture in The New York Observer.  “Because I was thinking in my own awkward way, that the more the building was a blight, the more the governments would want this to be redeveloped; the more help they would give us when the time came.

Vornado didn’t respond to a request for comment.

REALTOR.com® took the top spot again as the most visited real estate website during the month of February according to the February 2010 comScore Media Matrix report.

Last Month, Realtor.com attracted more than 6 million unique visitors, followed by its closest competitor Yahoo! Real Estate with 4.6 million unique visitors.

Other sites in the top 10 included MSN Real Estate with 3.6 million unique visitors in February, AOL Real Estate with 3.2 million unique visitors and Rent.com with 2.7 million unique visitors.

When searching for a REALTOR®, what do I look for?

-Donald

If I could nail it down to just a couple of key aspects, I would say integrity and feeling comfortable with them. You really need to feel that you can trust them, and that you will be able to communicate with them effectively.

I sat down with a seller, and he had a book on his dining room table titled “1001 Questions to Ask Your Real Estate Agent.” I looked at him and said, there is no way, I am going to sit here and answer 1001 questions.

I do recommend speaking with two or three agents. That way you can ask them about their experience and how they work. Whether you are a buyer or a seller, it is important to know if they are active in your market. Ask them about the local market, about their company and about them. It is a tough market in a lot of places right now, so don’t be surprised if they have not sold a lot of houses. Find out if they work alone or as part of a team. Find out if they use e-mail, text or a smart phone. If you prefer text, and they “don’t do that” you are going to have difficulty communicating.

As far as finding the three to speak with in the first place, personal referral is best. If you don’t know anyone that has bought or sold recently, try the old stand by– Google. Websites are a great resource. Read their blog. When was the last time they updated their website? Do they have any listings on their site? Where does their site come up in searches? Take a look at their listings on Realtor.com. Best of luck in search for a great Realtor.

David Welch specializes in residential re-sales and new home construction at RE/MAX 2000 Realty in and around Orlando, FL.

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With so much movement in the real estate market in the past few years, how can a buyer determine whether they are getting the best price for the home of their choice?

Austin REALTOR®, Joe Cline, blogs that there is a tried and true system for determining the value of a property, including estimating the price per square foot, but it all boils down to location, location, location.

“When shopping for a deal, you will want to break down the purchase price and apply it to a smaller denominator to best compare one property to another. The way to calculate the highest and lowest housing units is to divide the total sale price by the structure’s square footage, thus you will get a price per square foot.

Urban areas in a major metropolis will yield a higher market price per square foot than those urban dwellings in a less densely populated area. New York City, Los Angeles and similar districts have the highest square footage price on their condominiums and single family homes. However, if you wish to have easy access to a major metropolitan area, yet keep your home purchase within budget, the solution is to find a property that is located near the county rail or subway system.

The general rule is that the further the property is located from the city’s financial center, the better the property price will be. In the case of New York residents, its not uncommon for city workers to commute one hour or more on the railway system. This enables the consumer to own a piece of property of a greater size than what would be available at the same price closer to the city, and affords the home buyer more property choices.”

Basing your purchase on not only price, but on individual needs, will result in a satisfied buyer who really gets the best ‘bang for his buck’.

Click through now to read Joe Cline’s blog.

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In the current real estate climate, a seller does not have to pay for closing costs, usually because there are multiple offers. But what if the buyer needs help with their closing costs? Does that make the buyer less qualified to buy a home?

Carolyn Herrera blogs that many times cash offers or 20-25 percent down- conventional buyers are not always the best buyers for your home.

“Many buyers in this market are first time home buyers just starting out maybe with an FHA loan or VA/CalVet loan. These buyers are also very good and qualified buyers. Many of these buyers are coming in with just enough money for the down payment and need a little help with the closing costs, so they are usually willing to increase the sales price to allow for the help.

If you are the seller, debating whether to take the FHA, VA/Cal Vet over the conventional or cash buyer, ask your agent to have the buyer’s agent personally present the offer. This gives you the opportunity to learn a little more about the buyer you may be selecting to purchase your home. In a multiple offer situation, many buyers’ agents write up cover letters about their buyer; sometimes the buyers themselves write a letter to try and paint a picture of whom they are and why they want to buy your home.

Now I am going to play devil’s advocate: buyers need to be aware that the seller doesn’t have to pay for your closing costs; so if you only have the down payment, you should have a plan B. Know what your options are and have them lined up before you begin writing offers…

Having an honest, open level of communication with your REALTOR® is crucial. Your agent will fight for you and go the extra mile for you if they know exactly where you stand. Listen to your agent, be more aggressive about your offering price, write a letter to the seller to be attached to the offer, ask your agent if they can present the offer personally to the seller on your behalf.

I always ask if I can present my offer directly. Many times I am not given the opportunity, but on the occasions that I am it has always been a win-win situation for all. I am given an opportunity to sell my buyers and their offer to the seller. This could be the deal breaker on whether they might pay the closing costs or not.”

The bottom line is buyers, don’t give up and sellers, have an empathetic ear; after all, we were all first-time home buyers at some point.

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