Butler County Blog -News you can Use!

By Marylyn B. Schwartz

RISMEDIA, March 31, 2008-If you were Rick Sharga, VP of Marketing, RealtyTrac, Inc. you would find yourself smack in the middle of the foreclosure toxic soup. You'd be working to help sort out the truth from the hyperbole, the factual data from the "sell-papers" exaggerations and working diligently to find the most effective ways to assist real estate sales professionals and consumers navigate the market. Here, Sharga gives us an insightful view from the inside.

Marylyn B. Schwartz: As one of the most visited Internet sites dedicated to foreclosure data, how has your focus evolved over the past two years?

Rick Sharga: As we are all aware, we are embroiled in the most challenging real estate market in decades; perhaps since the Great Depression. Foreclosures and mortgage delinquencies are at an all-time high. This down cycle differs from others in that there was no one specific base cause for the crisis. We did not experience an S&L meltdown, nor soaring interest rates or high unemployment rates. What we did find was variable toxic loans and lending practices. Our company has had to respond to the issues by staying current on the trends, data and education needed for all interested parties. In so doing, we see ourselves as being part of the solution rather than the growing problem.

MBS: You say, ‘growing problem.' Am I to infer from that your sense that we have not hit bottom?

RS: That is correct. We have not hit the peak of foreclosures to date. 53% of homes that end up in foreclosure are homes mortgaged by sub-prime loans. That's twice the normal rate. With vast numbers of sub-prime adjustable rate loans up for rate adjustments this spring, we have a long way to go before we see the bottom. Bank-owned properties (REOs) typically represent about 20% of sales inventory. Currently that number is 40%. Relative to the number of short-sales (sales of properties where the outstanding mortgage balance is greater than the sales price accepted by the bank in satisfaction of the loan,) accurate data is difficult to acquire. A detailed study of the balances due on all mortgages versus the actual sales prices would be needed to determine accurate figures. We are working on that data.

MBS: There is much being said in the press about the banks' willingness or unwillingness to negotiate short sales to avoid ultimate foreclosures. What is your take on that topic?

RS: Banks are overwhelmed by the volume of delinquencies, foreclosures and proffered short-sales. A large bank that we work closely with provides some anecdotal evidence as to the gravity of the problem. In 2006 they had 2,000 foreclosures. In 2007 they had 21,000. According to the Mortgage Banker's Association, loans are going delinquent faster than they are going to foreclosure. The banks are just not equipped to handle this volume of problems. We are seeing three to eight weeks for even getting a response for consideration of a short sale, and longer to process it if approved. Part of the challenge is that there is little faith in the valuations being done by the appraisers.

MBS: I am aware of that challenge, and it is not the fault of the appraiser in most cases. Yes, two to three years ago there was a great deal of pressure placed on appraisers to ‘pad' his/her valuations in order to justify the mortgage amounts desired by the sub-prime applicant. However, right now we seem to see that the market volatility creates its own set of problems relative to accurately predicting pricing trends.

RS: Yes, there was quite a bit of ‘ARM-twisting' going around. High valuations were aided by lots of ‘free' money. Wall Street was ready, willing and able to reap the rewards of the real estate boom. Historians will find the fingerprints of those big wigs (of that aforementioned address) upon the victims. That is not to say that there was not a sufficient amount of greed on the part of buyers. Everyone was ready for the big-money kill. And, the fact that the lenders loosened their qualification criteria and lending-practices oversight just made the road to riches seem all the more attainable. We help the appraisers and banks through our site's mapping tool. They can search to see how much foreclosure activity there is around a particular property. As we all know, when there is a lot of foreclosure activity, values are adversely affected. When you couple this information with MLS comps, evaluations are bound to be more accurate.

MBS: Who are the most frequent visitors/subscribers to the site?

RS: Investors and first-time buyers by far. It used to be people who owned a first home and wanted to purchase a second. Due to market conditions, there are far fewer subscribers in that arena. Now, subscribers need guidance and assistance in making wise purchase decisions, and the flipper craze is all but gone. Investors know that if they do not buy wisely, they may be facing future foreclosures themselves. The most frequent question we get from our subscribers is, ‘We found three properties we like. Now what do we do?' We soon realized that those subscribers needed to be referred to a real estate professional who understood foreclosures. We have referred 6-7,000 buyer leads to real estate sales professionals. However, the truth is that many agents still think an REO is something you dunk into your milk after dinner.

MBS: That's good! So, what do you do about that? How are you educating the ‘cookie dunkers'?

RS: Our site is set up to be an educational resource. There are many FAQ's, state laws for each state (they differ greatly from state to state,) there is a foreclosure library of resource material and we do two monthly webinars: ‘Foreclosures 101′ to promote greater understanding.

MBS: Are there any other resources you would recommend?

RS: "REOMAC.com and FiveStarInstitute.com offer classes, certifications and other educational opportunities to those who wish to enhance their skills and develop greater opportunities in the foreclosure arena. In addition, USFN.org (Mortgage Banking Attorneys) is a terrific resource for attorneys who are expert in helping sellers to negotiate short-sales and foreclosures. DSNews.com provides default news and articles of interest.

We believe that even if an agent is experienced in the foreclosure arena, they need to encourage their sellers to seek legal assistance to work in tandem with the real estate expertise. There is much opportunity for liability when an agent is placed in the position of advising someone in such a dire circumstance. Misspeaking could be the difference between helping a seller navigate a workable solution and causing them to have ruined credit for many years to come. We are piloting a new subscriber advantage that is showing amazing promise for both sales professionals and consumers. We call it: Hyper-efficient Transaction Opportunity. A consumer must complete a form with personal as well as qualification information and then is able to make an offer on a property from the site. The offer goes directly to the real estate agent or service provider (REO consolidator) who is listing the home on behalf of the bank that owns it.

MBS: Rick, it is clear that there is much to be learned in this quickly changing segment of today's real estate reality. Your insight, firsthand knowledge and ever-evolving site helps us all to better understand the foreclosure conundrum.

Marylyn B. Schwartz, CSP, is an expert in real estate and corporate sales training/management and team development. She is president of Teamweavers and a trainer for Leader's Choice.

Home Trends by Melissa Birdsong

RISMEDIA, Jan. 1, 2009-Staging has been the buzzword in real estate for the past several years. But taking the next step to refreshing can really set one home apart from the rest.

Buyers look at a lot of homes. So how do you make sure a home is memorable to a buyer? Having a well-staged home is now the rule rather than the exception for a faster sell and a better price. Try to think beyond the obvious for ways to make the entire home feel updated and inspired.

A fresh coat of paint on worn walls provides a "wow" factor without excessive cost or effort. While this isn't new news, something that tends to get overlooked (and can have just as much impact) is painting the trim and other accents that may have gotten scuffed or dingy over the years. Freshly painted trim work is cleaner and a healthy home environment is very appealing to buyers.

Hardware is a quick fix as well. Switching out knobs and pulls in the kitchen or bath will catch the eye and revive an entire room. Taking it a step further to update faucets, light fixtures and even switch plates can take a space from ordinary to inspiring. Area rugs, lamps and plants are also quick ways to add life and warmth to a room with the convenience of portability. Because they are easily changeable, updating "unattached" items can instantly modernize a space with a fresh style.

And don't forget first impressions-exactly how fast are prospective buyers driving past the home? No brake lights? A quick tap and then accelerate? Or do they come to a full stop to get a better look? That fresh, new interior will never be revealed if the curb appeal of the exterior is blasé. Everything from container gardening and clean welcome mats to new storm doors and shutters can pull that buyer into your drive.

Artistic staging can showcase the best features in a home. But in today's market, take a refreshing approach-go that extra mile and look for ways to make the home memorable to a potential buyer.

Melissa Birdsong is vice president for Trend, Design & Brand, Lowe's Companies, Inc.

For more information, please visit www.lowes.com.

By Melissa Birdsong

RISMEDIA, Nov. 17, 2008-As the weather turns cooler, creating a warm and inviting kitchen can make a big difference in a home's overall appeal. With a few well-chosen finish updates, you can shift tone and mood and purchase interest.

Fifty years ago, the American kitchen was pretty predictable-a sink, a refrigerator and a range, and for a lucky few, a dishwasher-connected by simple cabinets and countertop. As long as basic conveniences and functionality were covered, there was little need-or demand-for more. The house I grew up in was designed by my dad, who integrated new ideas and features into our compact kitchen-a "breakfast bar" for casual dining and a stainless steel cook top and wall oven. The lively yellow, brown and knotty pine scheme was warm and welcoming and it was our favorite hang-out space for cooking and conversation.

Today, the kitchen has migrated to one of the most experiential rooms in the house, where gourmet cooking rides along with bill paying, crafting and homework. And as the social hub for family and friends, it's more important than ever to buyers and sellers alike that this key room be fresh and inviting. If the kitchen is outdated and tired, the whole house can feel that way, so a few simple updates can make all the difference in getting the green light on the buying decision.

Fit and finish in a room convey quality-or lack of-so it's important to look around and pay attention to details. Color and light are the easiest, most cost-efficient elements to add warmth to the kitchen, and you need go no further than the vegetable bin or spice cabinet for inspiration. A scheme of natural greens, yellows, mustards and russets washed with dimmable overhead and under-cabinet lighting can add energy as well as create a level of calm-a kitchen for any mood. If the existing cabinets are sturdy but the finish is sending out a distress signal, a well-executed paint job can turn it around. Mismatched appliances and worn flooring are other leading visual cues, so if the budget permits, replace them.

Last but not least, add sparkle and a new point of view to the kitchen by replacing the metals palette-cabinet hardware, faucet, lighting and outlet covers. A few thoughtfully chosen, simple finish updates can seal the deal.

Melissa Birdsong is vice president for Trend, Design & Brand, Lowe's Companies, Inc.

RISMEDIA, Nov. 17, 2008-You know the saying, "There's no place like home for the holidays"? Well, this year, it's about to take on a whole new meaning. A whopping 63% of newlyweds on TheNest.com have to change their holiday travel plans because of the economy, meaning that they may not be able to celebrate with family and close friends. But before the "bah humbug" kicks in, The Nest suggests these tips for making this holiday season one to remember-even if you can't be with all of your loved ones.

1. Over-Decorate & Start Your Own Traditions. Ditch the attitude that "no one will see it anyway." Whether you're decorating for two, or your family of six, this is the perfect time to go over the top with your holiday decor, from Thanksgiving through the New Year. Take it one step further and make decorating a full-day event-something that you'll really look forward to. So start your own traditions and incorporate some favorites from your childhood.

2. Host a Party. It's a safe bet that you're not the only one skipping the holiday travel this year. See which friends will be in town, or even work colleagues, and invite them over for a potluck dinner to celebrate the holidays. Along with being budget-friendly, a potluck dinner also allows for everyone to bring their own special dish, perhaps one that they enjoyed while growing up, thus avoiding the feeling of missing Mom's famous holiday specialty.

3. Volunteer. Since you won't be wasting time sitting in an airport or stuck in a car, use those extra hours to help someone in need. The holidays are the ideal time to make life easier for those who are less fortunate by volunteering at a local charity. Not only will you be helping your community, it's also a great way to bond with your partner and meet others. Volunteering is such a meaningful thing to do with your family, you'll want to make it a holiday tradition; after all, it's what this time of year is about.

4. Play Tourist in Your Own Town. Instead of looking at staying home as a punishment, look at it as a mini vacation! Enjoy all of the perks of a vacation, from acting like a tourist (remember that museum you've been meaning to visit for the past year?) to unplugging the TV and computer and pretending you're at an exotic locale (feel free to turn up the heat and break out the Pina Coladas) to the best part of a vacation: sleeping in!

5. Dress the Part. You might be tempted to throw on your college sweatshirt and sweatpants with those fuzzy slippers you wear every night in front of the TV, but a dress code is required. This is a special occasion! Dress up as though you were going out to a swanky holiday party, even if it's only a party of two!

Zoning

 Procedure that classifies real property for a number of different uses: residential, commercial, industrial, etc. in accordance with a land-use plan.

 Yield

 What an investment or property will return; the profit or income.

 Write-off

 Depreciation or amortization an owner takes on a commercial property.

 Warranty deed

 A deed in which the grantor guarantees that he or she is giving the grantee good title free of encumbrances. Considered to be the best deed a grantee can receive.

 VA loan

 Veterans Administration-backed mortgage. The VA, a federal agency, operates a loan guarantee program for honorably discharged veterans and widows of veterans who died of a service-related injury. Mortgages call for low or no down payment. Sometimes referred to as GI loan.

 Variance

 A permit granted as an exception to a zoning ordinance that allows a property owner to meet certain specified needs.

 Variable rate mortgage

 See adjustable rate mortgage.

 Value

 Market value or present worth. To have value, a property must have utility, scarcity, effective demand, and transferability.

 Valuation

 Estimated or determined value; synonymous with appraising.

 Valid contract

 One that meets all requirements of law, is binding upon its parties, and is enforceable in a court of law.

 Usury

 Charging a higher rate of interest on a loan than is legally allowed.

 Useful life

 The period of time over which a commercial property can be depreciated for federal income-tax purposes. Also known as economic life.

 Urban renewal

 The acquisition of run-down city areas for purposes of redevelopment.

 Undivided interest

 Ownership by two or more persons that gives each the right to use the entire property.

 Trustee

 One who as agent for others handles money or holds title to their land.

 Trust deed

 A document used in place of a mortgage in certain states; a third-party trustee, not the lender, holds the title to the property until the loan is paid out or defaulted. Also called a deed of trust.

 Townhouse

 Usually a two- or three-story dwelling with shared walls, or a living unit operating under the condominium or townhouse form of ownership.

 Title search

 A professional examination of public records to determine the chain of ownership of a particular piece of property and to note any liens, encumbrances, easements, restrictions, or other factors that might affect the title.

 Title report

 A statement of the current condition of title for a parcel of land.

 Title insurance

 An insurance policy that protects against any losses incurred because of defects in the title not listed in the title report or abstract.

 Title

 Actual ownership; the right of possession; also the evidence of ownership such as a deed or bill of sale.

 Time-sharing

 Part ownership of a property coupled with a right to exclusive use of it for a specified number of days per year.

 Tenants in common

 Style of ownership in which two or more persons purchase a property jointly, but with no right of survivorship and separate undivided interests. They are free to will their share to anyone they choose, a principal difference between this form of ownership and joint tenancy.

 Tenancy by the entirety

 A form of joint ownership reserved for married persons; right of survivorship exists and neither spouse has a disposable interest during the lifetime of the other.

 Tax shelter

 A realty investment that produces income-tax deductions for its owner.

 Tax sale

 A court-ordered sale of real property to raise money to cover delinquent taxes.

 Tax rate

 The rate at which real property is taxed in a tax district or county. For example, in a certain county, real property may be taxed at a rate of 55 mills (or 0.055) per dollar of assessed valuation.

 Tax basis

 The price paid for a property plus certain costs and expenses, such as closing costs, legal counsel, and a commission paid to help find the property.

 Tax credit

 An allowed deduction that can be subtracted from your income tax. If you are entitled to a $1,500 credit, and your income tax would otherwise be $10,000, the credit would reduce the tax due to $8,500.

  Survey

 An exact measurement of the size and boundaries of a piece of land by civil engineers or surveyors.

 Subletting

 The leasing of premises by a lessee to a third party for part of the lessee's remaining term.

 Subdivision

 A tract of land divided by the owner into smaller lots for homesites or other use.

 Steering

 The illegal practice of directing potential home buyers to or away from certain neighborhoods either to maintain or to change the character of an area, or to create a speculative situation.

 Special assessment

 A special tax imposed on specific parcels of real estate that will benefit from a proposed public improvement, such as a street or sewer.

 Settlement costs

 See closing costs.

 Settlement

 The day on which title is conveyed.

 Semidetached

 One structure containing two dwelling units separated vertically by a common wall.

 Seller's market

 One with few sellers and many buyers.

 Secondary mortgage market

 Market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; plays an important role in getting money from those who want to lend to those who want to borrow.

 Second mortgage

 Lien on property that is subordinate to a first mortgage. In the event of default, the second mortgage is repaid after the first. Also called a junior mortgage, and in some circumstances a home equity loan.

 Sales contract

 Contract that contains the terms of the agreement between the buyer and seller for the sale of a particular parcel or parcels of real estate.

 Right of survivorship

 A feature of joint tenancy giving the surviving joint tenants the rights, title and interests of the deceased joint tenant. Right of survivorship is the basic difference between buying property as joint tenants and as tenants in common.

 Right of first refusal

 A person's right to have the first opportunity to either lease or purchase real property.

 Restrictive covenants

 Clauses placed in a deed to restrict the full use of the property by controlling how future landowners may or may not use the property; also used in leases.

 Reserve account

 An account for money collected each month by a lender to pay for property taxes and property insurance as they come due.

 Report of title

 Document required before title insurance can be issued. It states the name of the owner, a legal description of the property, and the status of taxes, liens, and anything else that might affect the marketability of the title.

 Replacement cost

 The cost at today's prices and using today's construction methods, of building an improvement having the same usefulness as the one being appraised.

 Rent control

 Government-imposed restrictions on the amount of rent a property owner can charge.

  Release of mortgage

 Certificate from the lender stating that the loan has been repaid.

 Refinance

 To pay off one loan by taking out another on the same property.

 Redlining

 Practice of refusing to make loans in certain neighborhoods. Also applies to insurance companies that refuse to offer policies in certain neighborhoods.

 Recording

 Entering or recording documents affecting or conveying interests in real estate in the recorder's office; until recorded a deed or mortgage generally is not effective against subsequent purchases or mortgage liens.

 Realtor

 A real estate broker or agent who is a member of the National Association of Realtors, a professional real estate group that subscribes to a Code of Ethics. Not every broker or agent is a Realtor, a word that is a registered trademark and always capitalized.

 Real property

 Land and buildings and anything permanently attached to them.

 Real estate tax

 See property tax.

 Real estate salesperson

 Person who has passed a state examination for that position, and must work under the supervision of a broker.

 Real estate investment trust (REIT)

 Entity that allows a very large number of investors to pool their money in the purchase of real estate, but as passive investors. The investors do not buy directly. Instead, they purchase shares in the REIT that owns the real estate investment.

  Real estate broker

 Individual who has passed a state broker's test and represents others in realty transactions. Anyone having his or her own office must be a broker.

 Real estate

 The land itself and everything extending below and above it, including all things permanently attached, whether by nature or by man.

 Quit-claim deed

 A conveyance by which the grantor transfers whatever interest he or she has in the real estate without warranties or obligations.

 Qualification

 Act of determining a potential buyer's needs, abilities, and urgency to buy and matching these with available properties.

 Property tax

 Assessment levied by city and county governments on real and personal property to generate the bulk of their operating revenues to pay for such public services as schools, libraries, and roads.

 Property tax deductions

 The Internal Revenue Service allows homeowners to claim as itemized personal deductions money paid for state and local realty taxes, as well as interest on debt secured by their homes. It also allows for the deduction of loan prepayment penalties, and the deduction of points on new loans.

 Promissory note

 A written promise to repay a debt on demand or at a stated time in the future.

 Private mortgage insurance (PMI)

 Required by most lenders for conventional loans with a down payment of less than 20 percent. Insurance is paid by the borrower and guarantees the lender will not lose money if the borrower defaults.

  Principal

 The amount of money borrowed; the amount of money still owed.

 Prepayment penalty

 Fee charged by the lender when a borrower repays the loan early.

 Point

 Fee charged by a lender to get additional revenue over the interest rate. A point is equal to one percent of the loan amount.

 Plat

 Map or survey showing the location and boundaries of individual properties and how they have been subdivided into lots and blocks.

  Planned Unit Development (PUD)

 Individually owned houses with community ownership of common areas, such as swimming pools and tennis courts.

 PITI

 Acronym for "principal, interest, taxes, and insurance." Frequently used to describe a loan payment that combines all four items.

 Origination fee

 A charge by the lender for granting and processing a new mortgage loan.

 Option

 The exclusive right to purchase or lease a property at a predetermined price or rent at some future time.

 Open listing

 Listing that gives a broker a nonexclusive right to find a buyer; the owner can still find a buyer himself and avoid a commission.

 Offer

 Oral or written proposal to buy a piece of property at a specified price.

 Nonconforming use

 Use of property that is permitted to continue after a zoning ordinance prohibiting it has been passed.

 Net lease

 Lease requiring the tenant to pay all the costs incurred in maintaining a property, including taxes, insurance, repairs, and other expenses normally required of the owner.

 Multiple listing

 Agreement that allows real estate brokers to distribute information on the properties they have listed for sale to other members of a local real estate organization. Allows the widest possible marketing of those properties. Commissions are split by mutual agreement between the listing broker and the selling broker.

 Mortgagor

 Party or person that borrows money, giving a lien on the property as security for the loan; the borrower.

 Mortgagee

 Party or institution that lends money; the creditor.

 Mortgage company or mortgage banker

 Financial intermediary that offers mortgages to borrowers, and then resells them to various lending institutions, government agencies, or private investors.

 Mortgage broker

 Individual or company that brings borrowers and lenders together; a loan broker.

 Mortgage

 Legal document that creates a lien on property; it secures the repayment of a loan.

  Maturity date

 Date on which principal and interest on a mortgage or other loan must be paid in full.

  Master plan

 Long-range, comprehensive guide for the physical growth or development of a community.

  Master deed

 Document that converts a parcel of land into a condominium subdivision.

  Marketable title

 Good and clear title that is free from reasonable doubt as to who the owner is.

  Market value

 Generally accepted as the highest price that a ready, willing, and able buyer will pay and the lowest price a ready, willing, and able seller will accept for a property.

  Market price

 Actual selling price of a property.

  Maintenance fees

 Paid by a condominium unit owner to the owners' association for upkeep of the common areas.

  Loan-to-value ratio

 Relationship of a mortgage loan to the appraised value of a piece of property. Usually expressed to the buyer in terms of how much the lender will lend, i.e. - 75 percent financing.

  Loan servicing

 Task of collecting monthly payments, handling insurance and tax impounds, delinquencies, early payoffs, and mortgage releases.

  Loan origination fee

 Paid by the borrower to get a loan; it covers expenses incurred by the lender, such as the cost of the appraisal, credit report, title search, etc.

  Listing

 Contract used for hiring a real estate agent to sell a piece of property. Also a piece of property that is for sale.

Lien

 A debt on a property which encumbers it until the obligation is paid; a mortgage, back taxes, or other claim.

  License

 A privilege or right granted to a person by a state to operate as a real estate broker or salesperson.

  Lessor

 Someone who rents to another party through a lease; the landlord.

  Lessee

 Someone who rents under a lease; the tenant.

 Lease-purchase option

Opportunity to purchase a piece of property by renting for a specified period, with the provision that the lessee may choose to buy after or during the leasing period at a predetermined sale price.

 Lease

Contract that conveys the right to use property for a period of time in return for a consideration, usually rent, paid to the property owner.

Junior mortgage

 Any mortgage, such a second or third mortgage on a property, which is subordinate to the first one in priority.

 Judgment

 Court decree stating that one person is indebted to another. Also specifies the amount of the debt.

 Interim financing

 Short-term loan usually made during the construction phase of a building project or until a permanent, long-term loan can be obtained. Also called a construction loan.

 Interest

 A fee paid for the use of money; also a share or right in something.

 Installment payment

 Periodic payment, usually monthly, of interest and principal on a mortgage or other loan.

 Inspection

 The act of physically examining and testing a piece of property to ascertain certain information.

 Improvement

 Any form of land development or man-made addition, such as the erection of a building or fence, to enhance the value of private property; also an improvement to publicly owned structures, such as a sewer or road.

 HUD

 Acronym for the Department of Housing and Urban Development, an agency from which almost all of the federal government's housing programs flow.

 Housing codes

 Local regulations that set minimum conditions under which dwellings are considered fit for human habitation. It guards against unsanitary or unsafe conditions and overcrowding.

 Homestead protection

 State and federal laws that protect against the forced sale of a person's home by creditors. Also, upon the death of one spouse, provides the other with a home for life.

 Homeowner's insurance policy

 Packaged insurance policy for homeowners and tenants that cover property damage and public liability, such as fire, theft, and personal liability.

 Historic structures

 Buildings of historical or architectural significance, perhaps landmarks, that are designated by federal, state, or local historical commissions.

 Highest and best use

 Use of land that is most logical and productive. Refers to the greatest income it can bring the owner, as well as factors such as aesthetics and benefits to the surrounding community.

 Grantor

 Person named in a deed who conveys ownership of real estate; the seller.

 Grantee

 Person named in a deed who acquires ownership of real estate; the buyer.

 Graduated payment mortgage

 Mortgage loan for which the initial payments are low but increase over the life of the loan.

 Grace period

 Specified period of time to meet a commitment after it becomes due, without penalty or default. For example, most lenders allow a two-week grace period after the due date of the mortgage payment before a late fee is imposed.

 Gentrification

 Process whereby private or government-sponsored development of certain aging neighborhoods results in the displacement of low- or moderate-income families by the more affluent and leads to an increase in property values.

 Freddie Mac

 Common name for the Federal Home Loan Mortgage Corporation, which buys and sells loans in the secondary mortgage market.

 Foreclosure

 Legal action instigated by a lender to end all ownership rights when mortgage payments have not been kept up.

 Fixtures

 Any personal property that has been permanently attached to real property and therefore included in the transfer of real estate. The kitchen sink is a fixture.

 First mortgage

 Mortgage on a property that is superior to any other. It is the first to be paid in the event of foreclosure.

 Fiduciary

 Person acting in a position of trust, responsibility and confidence for another, such a broker for his client.

 FHA

 Acronym for Federal Housing Authority, an agency created within the Department of Housing and Urban Development (HUD) that insures mortgages on residential property, with downpayment requirements usually lower than prevailing ones.

 Fee simple

 Ownership of real property that is to be used and/or sold at the owner's discretion.

 Fannie Mae

 Common name for the Federal National Mortgage Association, which buys and sells loans in the secondary mortgage market.

 Fair market value

 See market value.

 Exclusive-right-to-sell listing

 Listing that gives the broker the right to collect a commission no matter who sells the property during the listing period.

 Exclusive agency listing

 Listing where the owner reserves the right to sell his property himself, but also agrees to list with no other broker during the listing period besides the appointed real estate broker.

 Escrow company

 A firm that specializes in handling the closing of a transaction.

 Escrow account

 Special bank account into which escrow monies are deposited and from which they are disbursed. Lawyers and real estate brokers maintain escrow accounts to hold money in trust for others.

 Escrow

 Money or documents held by a third party until specific conditions of an agreement or contract are fulfilled.

 Escheat

 Reversion of property to the state when the owner dies without leaving a will and has no heirs to whom the property may pass.

 Equity build-up

 Term used to refer to the increase of one's equity in a property due to mortgage balance reduction and price appreciation.

 Equity

 Value an owner has in a piece of property less the debt against it. For example, if the market value of a house is $150,000 and the owner has paid off $10,000 of a $75,000 mortgage, the owner has $85,000 equity.

 Encumbrance

 Any impediment to a clear title. It can be a claim, lien, zoning restriction, or other legal right or interest in land that diminishes its value. The report of the title search usually shows all encumbrances.

 Encroachment

 A building or other improvement that extends beyond its boundary and intrudes upon the property of another.

 Eminent domain

 The right or power of government to acquire private property for public use without the consent of the owner, provided fair compensation is provided.

 Easement

 Limited right to cross or use for some specified purpose the property of another. It may be permanent or temporary. Water, sewage, and utility suppliers frequently hold an easement across private property.

 Earnest money deposit

 Money that accompanies an offer to purchase as evidence of good faith. It is almost always a personal check, certified check, or money order rather than cash

 Due-on-sale

 Clause in a note or mortgage giving the lender the right to call the entire loan balance due if the property is sold or otherwise conveyed.

 Downpayment

 Initial cash investment made as evidence of good faith when purchasing real estate. It is usually a percentage of the sale price.

 Discount points

 Added loan fee charged by a lender to make the yield on a lower-than-market-value loan competitive with higher-interest loans.

 Discount broker

 Full-service broker who charges less than the prevailing commission rates in his or her community.

 Depreciation

 Gradual decline on paper in market value of real estate, especially because of age, obsolescence, wear and tear, or economic conditions.

 Delinquent loan

 One where the borrower is behind, or late, in payments.

 Deficiency judgment

 Judgment issued against a borrower when the sale of foreclosed property does not bring in enough to pay the balance owed on the mortgage.

 Default

 Breach of a contract or failure to meet a legal obligation. Nonpayment of a mortgage beyond a certain number of payments is considered a default.

 Deed restrictions

 Provisions placed in deeds to control how future landowners may or may not use the property. Also called deed covenants.

 Deed of trust

 Document resembling a mortgage that conveys legal title to a neutral third party as security for a debt. Also called a trust deed or deed in trust.

 Deed

 Written document that when executed and delivered conveys title to real property.

 Credit report

 A past history of debt repayment used by creditors as an indicator of future readiness to responsibly repay debt.

 Counteroffer

 An offer made in response to an earlier, unacceptable one; it terminates the original offer.

 Cooperative

 Land and building owned or leased by a corporation which in turn leases space to its shareholders, who are also part owners of the building and have a proprietary lease. In lieu of rent, they each pay a proportionate monthly or quarterly fixed rate to cover operating costs, mortgage payments, taxes, etc.

 Conveyance

 Document used to transfer title. A deed is a conveyance.

 Convey

 To transfer property from one person to another.

 Conventional loan

 Real estate loan that is not insured by the FHA or guaranteed by the VA.

 Contractor

 One who contracts to do something for another. For example, in construction, a specialist who enters into a formal construction contract to build a real estate structure or handle renovations, improvements, and additions to an existing structure.

 Contract

  A legally enforceable agreement between two or more parties. To be valid, a real estate contract must be dated, in writing, include a consideration, have a description of the property, the place and date of delivery of the deed, and spell out all terms and conditions that were mutually agreed upon. It also must be [...]

 Contingency

 A provision in a contract that keeps it from becoming binding until a certain event happens. A satisfactory inspection report might be a contingency.

 Construction loan

 Type of loan where money is doled out as construction takes place; borrower must obtain a permanent long-term mortgage from another source to repay the construction loan. Also called an interim loan.

 Consideration

 Something of value, usually money, given to induce another to enter into a contract.

 Condominium

 Type of housing where buyers own their units outright, plus an undivided share, or joint ownership, in the common elements of the building or community.

 Competitive market analysis

 A method of determining home value that looks at recent home sales, homes presently on the market, and homes that were listed but did not sell.

 Comparables

 Properties similar to a specific piece of property that are used to help estimate the value of that property.

 Common elements

 Parts of a condominium, cooperative, or private home association shared by all residents, so that each unit owner holds an undivided interest in, for example, the hallways, parking facilities, or swimming pool.

 Commission

 Payment, or brokerage fees, given by the seller of a property to a real estate agent for services rendered. Usually paid at the closing.

 Commingle funds

 Mixing of a clients' funds, or escrow, with an agent's personal funds in an account; considered to be grounds for the suspension or revocation of the broker's real estate license.

 Collateral

 Something of value given or pledged to a lender as security for the repayment of a loan.

 Cloud on title

 Defect in the title that impairs the owner's ability to market the property. This might be a lien, claim, judgment, or encumbrance.

 Closing statement

 Written account of all expenses, adjustments, and disbursements received by the buyer and seller when completing a real estate transaction.

 Closing costs

 Expenses over and above the price of property that must be paid by buyers and sellers before title is transferred. Also known as settlement costs.

 Close

 Act of finalizing a transaction in which all the concerned parties meet to transfer title to a property. Also, when real estate formally changes ownership.

 CC&Rs

 Stands for covenants, conditions and restrictions. They are the rules by which a property owner in a condominium agrees to abide.

 Caveat emptor

 Latin for "Let the buyer beware." Under this legal phrase, the buyer is expected to judge and evaluate property carefully before buying, or purchase at their own risk.

 Capital gain

 Profit earned from the sale of an asset.

 Cancellation clause

 Stipulation in a contract that allows a buyer or seller to cancel the contract in the event of a certain specified occurrence.

 Bylaws

 Rules and regulations that govern how a homeowners' association will be run.

 Buyer's market

 Describes an excess supply of homes for sale, in which there are few buyers and many sellers. In such a market, the buyer can typically negotiate more favorable prices and terms.

 Buy-down

 Cash payment to a lender to reduce the interest rate a borrower must pay on a new mortgage loan. Commonly used by builders to sell new homes.

 Building codes

 Minimum construction standards set by state or local laws for public safety and health. Includes the design, construction, repair, and quality of building materials, as well as the use and occupancy of structures.

 Builder's warranty

 Written statement by a builder assuring that a dwelling was completed according to a stipulated set of standards. It protects the buyer from any latent defects.

 Brokerage

 Business of a broker. Also, the amount charged for a broker's service.

 Broker

 Licensed individual who acts independently in conducting a real estate brokerage business; also a person who buys and sells for another for a commission.

 Breach of contract

 When one party fails to live up to the terms and conditions of a contract, without a valid, legal excuse.

 Blockbusting

 Illegal practice of creating panic selling in a neighborhood for financial gain. Typically exploits racial and religious bias to get homeowners to sell low so the properties can be resold at a mark up.

 Blanket mortgage

 Single mortgage that covers more than one real property, i.e. - a house plus the vacant lot next door.

 Binder

 Short purchase contract used in some areas to secure a real estate transaction until a more formal contract can be signed at a later date; usually accompanied by an earnest money deposit.

 Balloon loan

 Mortgage loan in which a larger final payment becomes due because the loan amount was not fully amortized.

 Assumption of mortgage

 Taking title to property that has an existing mortgage, and being personally liable for its payment as a condition of the sale.

 Assessment

 Tax or charge levied on property by a taxing authority to pay for local improvements such as sidewalks, streets, and sewers.

 Assessed value

 A value placed on a property by an agency of the government for taxation and other purposes.

 As is

 Said of property offered for sale in its present condition with no guarantees as to quality and no promise of repair or fix-up by the seller; property is purchased in exactly the condition in which it is found.

 Appurtenance

 Whatever is annexed to land or used with it that will pass to the buyer with conveyance of title, such as a garage or fence.

 Appreciation

 Increase in property value or worth due to economic or related factors; the opposite of depreciation.

 Appraisal

 A formal estimate of property value conducted by a professional qualified to make such an opinion.

 Annual percentage rate (APR)

 Combines the interest rate with other loan costs, such as points and loan fees, into a single figure that shows the true annual cost of borrowing.

 Amortize

 Pay a debt in monthly or other periodic installments until the total amount, along with the interest, if any, is paid.

 Air rights

 Right to occupy and use the open space above a parcel of land or property, such as in the leasing of air space over existing buildings or highways.

 Agent

 Person authorized to act by and on behalf of another.

Adjustable rate mortgage (ARM)

 Mortgage loan on which the interest rate falls and rises with changes in prevailing rates. The mortgage rate is tied to a selected index and may be adjusted annually. Also called a variable rate mortgage.

 Acceleration clause

 Stipulation in a mortgage agreement that allows the lender to demand immediate payment of the entire loan balance if any scheduled payment is missed.

 Z

 Zone - The area set off by the proper authorities for a specific use or in an area subject to certain restrictions or restraints.
Zoning - The regulation of land by local government under its police powers in controlling things such as height, size and use of buildings and the use of land.
Zoning map - A [...]

 Y

 Yard - A unit of measurement that is 3 feet long.
Yield capitalization - An income approach method, that would not be the only method, of estimating value used for commercial property in which the appraiser uses several years' of income and the reversion from the sale that is discounted to present value. See Direct capitalization [...]

 X

 X - An individual who cannot write may execute a legal document by affixing an "X" - his or her mark - where the signature normally goes and a witness would write the person's name beneath the mark and then sign his or her own name.
X-bracing - The cross-bracing of a partition or floor joist.

 W

 Wainscoting - The wooden lining of an interior wall and also the lower part of a wall when it is finished different than the upper wall.
Waive - To voluntarily and intentionally relinquish, abandon or forego a known right, claim or privilege to enforce or require something.
Waiver - An intentional voluntary act to give up a [...]

 V

 VA - See Veterans' Administration.
VA loan - A loan made to qualified veterans to purchase real property where in the event of default the Department of Veteran's Affairs guarantees the lender repayment.
Vacancy factor - The percentage of a building's space that is not rented compared to its whole over a stated period of time.
Vacancy rate [...]

 U

 Ultra vires activities - The actions of a corporation done beyond the powers granted in its charter that could lead to a lawsuit by its shareholders.
Unbalanced improvement - An improvement which does not serve the highest and best use for the site on which it is placed.
Underimprovement - An building which suffers from a deficiency [...]

 T

 Tacking - The adding together of successive periods of adverse possession of parties in privity with each other in order to create one continuous adverse possession to meet the legal time requirement to establish title.
Take-out loan - A loan typically arranged by a builder or developer for a buyer from which the proceeds of this [...]

 S

 Safe rate - The rate of interest paid on government bonds, utility bonds or bank savings which holds mimimal chance of loss.
Sale and leaseback - A transaction method used to free up cash whereby an investor becomes the actual owner of a property by purchasing it from the original owner-occupant who subsequently continues to occupy [...]

 R

 Race notice - The concept used in recordation of a property wherein the first party to register the property becomes the recognized owner.
Racial steering - The unlawful practice of influencing a minority person's housing choice. See Steering.
Radiant heating - A method of heating that usually consists of coils or pipes placed in the floor, wall [...]

 Q

 Quadrangle - A square-shaped land area used in the government survey system method of land description that is 24 miles on each side and contains 16 townships. See United States Government Survey System.
Quadrilateral - A plane figure with four sides and four angles that is not square or rectangle.
Qualified fee - See Defeasible fee.
Qualified [...]

 P

 Package loan - A type of mortgage used in home financing that is inclusive and covers the real property and the improvements as well as any movable mechanical or electrical equipment.
Panel heating - A means of giving off radiant heat using pipes or ducts built into the walls, floor or ceiling.
Panic peddling - See Panic [...]

 O

 Objective value - The value used in the income and market data approaches of appraisal that can be easily determined using data directly from the market.
Obligatory advances - The disbursements of money over the period of a construction loan which the lender is bound to make under the terms of the loan.
Obligee - The one [...]

 N

 NAR - See National Association of REALTORS®
Narrative appraisal report - brief form - A summary of all factual materials, techniques and appraisal methods used by an appraiser in setting forth his or her conclusion of value.
Narrative appraisal report - full form - A self contained in-depth report of all factual materials, techniques and appraisal methods [...]

 M

 MAI - See Member Appraisal Institute
Maintenance - The process of keeping up or making the expenditures necessary to keep a property in a condition to perform the services for which it was designed.
Maintenance fee - An assessment by a homeowners' association or a condominium owners' association used to pay the expenses for operating the common [...]

 L

 Laches - An established legal doctrine under which, apart from any question of statutory limitation, courts discourage laziness and delay in the enforcements of rights and due to the delay or negligence in asserting one's legal rights, will refuse to try suits not brought within a set reasonable time period.
Land - The material of the [...]

 K

 Key lot - A lot in such a position that one side is adjacent to the back of other lots which in a subdivision is considered to be a least desirable lot.
Kiln-dried lumber - Lumber that was dried to reduce its moisture content in a large oven-like chamber called a liln for varying periods of [...]

 J

 Jalousie - An exterior slotted blind or shutter window like a Venetian blind used to permit ventilation while avoiding rain penetration and also to control sunlight.
Jamb - The side post or lining of a doorway, window or other similar type opening.
Joint - The space between the two adjacent components surfaces that are connected by nails, [...]

 I

 Identity of interest - The system whereby the builder and sponsor of a housing project subsidized by the government have ownership interests in each other.
Illegal - An act contrary to and in violation of the law.
Illegality of purpose - The actual purpose of the contract is illegal and this is a reason for having a [...]

  H

 Habendum clause - The to have and to hold clause in a deed that describes the extent of the interest conveyed, such as fee or life estate and which is no longer an essential part of a deed.
Habitability - The ability to live in according to the interpretations of the courts which is broader than [...]

 G

 Gable roof - A steeply pitched roof with sloping sides.
Gain - A profit, benefit or an increase in value.
Gambrel roof - A curb type roof having a steep lower slope with a less steep upper slope.
Gap - A defect, such as a missing document or conveyance that raises doubt as to the present ownership of [...]

 F

 Facade - The real front or face of a building but often also used to refer to a false front.
Facade easement - An historic preservation area arrangement whereby an owner agrees to retain the original facade or face of a building in exchange for the right to alter the interior and other exterior walls.
Face value [...]

 E

 Earnest money - A sum of money or other consideration given by a prospective purchaser as a deposit or partial payment as evidence of good faith in conjunction with an offer to purchase real property rights which if accepted will become part of the down payment.
Easement - A limited right, privilege or interest to a [...]

  D

 Damages - The payment to a party who has suffered a loss or has been harmed by a sustained injury either to his or her person, property or relative rights through an act or default of another which is used to make up for the wrong.
Data assembly - A process of gathering analyzing and classifying [...]

 C

 CAI - See Community Associations Institute.
Calendar year - A 12-month period starting on January l and continuing through December 31 of a specific year.
California bungalow - An early twentieth-century small, compact, one-story house.
California ranch house - A sprawling one-story house that is easily adapted to floor plan variations.
Call provision - A loan clause that gives [...]

  B

 Backfill - The replacement of excavated earth back into a hole or against a structure.
Backup offer - A real estate purchase contract that only becomes effective if the current contract cannot close.
Bailiff - A official of a court who is usually a sheriff's officer or deputy.
Bailment - The delivery of personal property to be held [...]

  A

 1031 Exchange - An exchange which is officially called an Internal Revenue Code 1031 Exchange which allows an owner to trade one like property for another under very specific guidelines and defer paying income tax.
Abandonment - The voluntary surrender, relinquishment, disclaimer or cession of property ownership claims or rights done with an intention to abandon [...]

By Heather Dorsey

RISMEDIA, Nov. 10, 2008-(MCT)-The mercury is beginning to dip along with the falling leaves. Soon the same children who are anticipating snowflakes will begin complaining about frozen fingers and toes. As the cold weather in places like southeastern Wisconsin chases kids inside, parents may feel their walls shrinking and decibel levels increasing.

Creating a basement play area for children not only restores a little peace but also encourages kids to stay active and burn calories during winter.

Whitewater, Wis., mother Nancy Lynd O'Hara created an area for her daughter, Kelly, 10, to have fun when she designed an exercise area for herself and her husband, Bob, in their basement years ago. A little planning and a simple trip to the hardware store was all it took.

"Kelly loves to dance and, because of my own background in gymnastics, I could see early on that she was following in my footsteps," O'Hara says.

O'Hara hung an inexpensive ballet bar, similar to handrail on a stairway. The O'Haras bought three large mirrors for $100 to line the walls of the room.

"Kelly loves to put on music and dance like they do on ‘Dancing With the Stars.' She likes to pretend she is being judged. ... She puts on costumes."

O'Hara also has a mini-trampoline that she says was purchased years ago at a garage sale for $30.

She says Kelly is testing her gymnastics skills.

"She puts the tramp in back of the couch, and she'll try and do a back handstand, putting her hands on the couch; or she'll do a forward roll," says O'Hara.

Dodging Snowy Weather

Paul Shebesta of Germantown, Wis., enjoys the creative games his grandchildren drum up in his unfinished basement. He and his wife, Luciana, especially appreciate the area when it's cold out.

"During the winter when it is difficult to get dressed and play in the snow, the kids are the ones that will suggest playing in the basement. They do all sorts of games ... dodge ball, kickball, baseball, soccer.

"We have a net that we set up, with thick plastic sheets on the side, and we have a pad on the ground that they dive on or use for home base, depending on the game," says Shebesta.

He says the L-shaped area is roughly 30 feet by 30 feet at its widest point, with the smaller end of the L-shape about 15 feet by 15 feet.

The Shebestas have nine grandchildren, ranging in age from 5 months to 12 years old, and six of them use their basement on a regular basis.

"Maybe we will use it in another way when the kids are older; but for now it's an extended family situation. We're a second home for our grandkids," Shebesta says.

John Moynihan, owner of Keeper Goals, a sporting goods manufacturer in Butler, Wis., says there are many options for parents who want to create an exercise area for their children.

"We custom make netting _ that we normally manufacture for gymnasiums _ that can protect windows, the furnace, hot water heaters and those sort of things," he says.

Depending on the size and basement room configuration, netting typically costs between 30 cents and 90 cents per square foot. The business also sells stock netting that could block off an area for $98.

Padding for corners and basement walls is also a good idea to help keep kids safe, Moynihan says. Corner pads run between $80 and $120 depending on the size; 5 feet by 2 feet wall pads run about $70.

"Basically there are lots of options, depending on your price range. Good options for flooring are rubber floors or turf floors, or just leave the concrete basement floor," Moynihan says.

"When we were kids we just had a piece of carpet down. We used miniature Nerf balls; we would just make something up for a goal, use buckets as baskets. We didn't have anything down in the basement that was breakable."

Mini Golf Range

Moynihan says another popular idea is putting in a mini golf range in the basement. And as more and more kids learn to play golf, it's something they can do with their parents.

"We typically install 8-by-12 or 8-by-24-foot netting. We tell people to go to driving ranges at the end of the year and ask for their old used mats," he says.

Ranges usually replace their mats each year. New mats typically sell for between $250 and $500.

And something else to keep in mind, Moynihan says, regardless of the type of area you put in: "The kids will enjoy it even more if you are down there playing with them."

Getting Started

Here are a few more ideas to keep kids moving this winter:

- If you have an open area on concrete basement floor:
Bring down the kids' bikes and scooters. For little ones, get a jump start on spring and take the training wheels off their bikes now so they can practice in a controlled environment. Be sure to supervise.

Bring in the sidewalk chalk, jump ropes and balls, and visit www.gameskidsplay.net for many games for the kids to play. They also have instructions on how to draw a hopscotch pattern or a four square, among other ideas, on the floor.

Bring in the kiddie pool and fill it up with sand and beach toys.

Use chalkboard paint to paint a chalkboard on the basement wall.

- If you have an open area with carpeting or flooring:
Make an inexpensive stage in the corner, hang curtains and bring down play clothes and puppets. Visit www.ehow.com for instructions on how to build your own stage. Suggest play themes with active plots to keep them moving.

- Set up a child-size basketball hoop or invest in an electronic game such as ESPN's game station, which features football, hockey, baseball, soccer, basketball and golf. New games cost about $200; but used systems can often be found online at Craigslist.org and eBay for less.

By David Fialk

RISMEDIA, Nov. 10, 2008-What is a potential home buyer to do? There is widespread negative publicity about the future of real estate values. There is negative publicity regarding the difficulty in obtaining mortgage financing, the problems with sub prime mortgages, home foreclosures and the collapse of financial institutions. They are experiencing an astronomical drop in the value of their stock portfolios. They have concern with job security. Can you blame buyers for slowing down and not rushing into a long term financial commitment, such as purchasing a home?

With that said, there are buyers setting appointments daily to see homes. There are buyers who are in situations where buying a home is a necessity, or is more preferred than continuing to rent. While total sale transactions may be down in many real estate markets, home purchases and real estate closings continue.

The mindset of buyers has changed. There is no reason to rush to purchase a home immediately because of rising real estate values. There is no reason for a buyer to rush into making an offer on a home they just looked at and seemed to like. There are just too many other homes on the market they haven't seen yet. Maybe mortgage rates will drop? Maybe real estate values will drop further?

So why isn't there more enthusiasm, more excitement and more publicity in the Realtor community with the $7,500 First-Time Buyer IRS Tax Credit included in the Housing and Recovery Act of 2008?

Throughout 2008, Realtors have tirelessly promoted the benefits of purchasing a home in the current real estate market (favorable mortgage interest rates, lower real estate values, available listing inventory, etc). Where is the effort in promoting the benefits a tax credit like this can be to first-time buyers? Combined with favorable interest rates, a wide selection of homes for sale and more affordable home prices, this tax credit may be just the stimulus and financial assistance many first time buyers need to move forward and make a commitment to purchase a home now, rather than just look at homes and wait for a better time to buy.

The $7,500 First-Time Buyer IRS Tax Credit applies to first-time buyer home purchases of a principle residence between April 9, 2008 and July 1, 2009. It is a tax credit and not a tax deduction. A tax credit is a reduction in income taxes owed! In other words, when a buyer files their income taxes for the year the home was purchased (2008 or 2009), they may be able to subtract $7,500 from the amount of federal income tax liability, which will either increase their tax refund or reduce the amount of tax still owed.

However, this tax credit is not free. It has to be paid back. Repayment begins two years after the credit is claimed, and must be repaid within 15 years. That's $500 per year. Yes, it would have been much better if there was no repayment provision, but an interest-free loan for 15 years is not such a bad thing, is it? That's right; there is no interest on the tax credit received.

To help clients understand the tax credit and how it may help them, Realtors need to promote it and know the details. They need to be able to provide buyers with information that is easy to understand. I have provided links to various articles with more detailed information below, including income limits, definition of first-time buyer and more.

While many have questioned the benefit of this type of tax credit, which requires repayment, take a look at the benefits a $7,500 income tax credit provides. More first-time buyers than not leave the closing table and have little left in savings after the purchase of their home. As new homeowners, they are now confronted with a mortgage payment that exceeds what they were accustomed to paying in rent. They have a home to furnish, with more rooms to fill with furniture than their apartment in most cases. They may also need to spend money on painting, some redecorating, carpeting and window coverings. In addition, there are other home ownership necessities such as a lawn mower, ladder, garden tools and the like that must be purchased, not to mention the expense of making any costly repairs or improvements the home may require.

More often than not these purchases are made with a charge card, with interest rates that are upward of 17%. These additional monthly expenses for home-related purchases are in addition to the large monthly mortgage payment they now have. So why wouldn't a buyer be excited about obtaining the $7,500 tax credit, and having the benefit of repaying it over 15 years without interest?

What if a first-time buyer really liked a home they saw that needed some major repairs or renovation, a home that represented a great buying opportunity? But after much consideration, they decided against buying it. They just didn't have the financial resources after the closing to accomplish the type of repairs required, such as a new furnace or new roof or new siding or new windows. Wouldn't the opportunity to obtain $7,500 in an income tax refund possibly be the answer to this type of concern?

Talk about savings. Let's assume a first-time buyer will have cash reserves after closing and is financially prepared for the purchase of the various items mentioned above. Why would a $7,500 tax credit, which has to be repaid, be beneficial to them?

Let's assume a $300,000 mortgage was needed in the home purchase at 6.5% interest for 30 years. What if the $7,500 tax credit refund was used to pre-pay the mortgage? Using simple math that would be an annual interest savings of $487.50, just about equal to the $500 per year repayment obligation.

The truth in the matter is that the savings is much greater than the simple math calculation. Pre-paying the mortgage by $7,500 will not reduce the monthly mortgage payment of a fixed rate mortgage. That remains the same. The real benefit is this: The outstanding mortgage balance is reduced by $7,500 and each future mortgage payment results in savings in mortgage interest and increased principal mortgage reduction. With each monthly mortgage payment more money goes to reducing the mortgage balance and less is applied to interest. Together these savings will exceed the $500 cost of repayment of the tax credit. The benefit over the term of the mortgage in interest savings and mortgage reduction will be quite surprising.

What if the buyer prefers obtaining an adjustable rate mortgage or some type of a step down mortgage loan where the mortgage interest rate is lower in the first year and increases in the second or third year? If the $7,500 tax credit is used to pre-pay the mortgage, the new monthly mortgage payment in the rate adjustment year will be lower than it would have originally been as the outstanding mortgage balance has now been reduced by the $7,500 pre-payment.

What if the home is sold prior to repayment of the tax credit? Another provision requires repayment of the balance of the tax credit owed in the event of a sale of the home prior to full repayment. However, special provisions do provide for circumstances where the balance owed is greater than the gain in value or when there is a loss in value. If the gain on the sale is less than the amount owed, part of the balance owed will be forgiven. If there was no gain, or even a loss, then the remaining balance would not need to be repaid.

As a Realtor, I am excited for buyers who are eligible for this IRS $7,500 First-Time Buyer Tax Credit. Qualified first-time buyers should be excited too!

This represents another valid reason why "Now is a Great Time to Buy a Home." Don't forget to reach out to past sale clients who may be eligible and closed on their purchase after April 9, 2008. I am sure they would appreciate obtaining information and the opportunity of receiving a $7,500 income tax credit.

Hello,

Well I am afraid I am going to have to eat my words!  Everyone thought I would do good on the contest in our office and this is the last week and I am not doing so great!  Everyone is ahead of me!  Come on!  If you are thinking of selling your home, give me a call!  If you are thinking of buying a home, give me a call!  I have a special gift for who ever gives me a call and lists their home with me.  If you buy a home with me as your realtor and it closes then you recieve the gift.  So who ever gets to me first either listing or buying will receive a gift!!  I am not going to tell you what it is because it is a surprise!!  So help me out and I will help you!!!  This is the last week for the contest so hurry!!!

Here is a virtual tour of home that is for sale within my company.  If you would like to take a look please contact me and we will arrange a showing.  Click on the link below and take a look!!  Let me know what you think.  We are holding a broker's open on this home on Tuesday.

http://v2.sharperagent.com/Boomerang/WebPost.flx?userID=F63E2488-BB97-487A-BB05-D68F3A2F7279&flashxml=8440318&flashfile=8440317&domainID=137&w=800&h=600

Goodmorning Everyone!  Okay the office is still doing the contest and there are 3 people ahead of me!  I need everyones help and participation in this please!  I said I was going to stomp them and I haven't done it yet!  I only have a couple of more weeks!  If you have a home that needs to be listed, You need to give me a call TODAY!!!  Have a great day!!