Wednesday, June 24, 2009
Good News for Baton Rouge Real Estate
As we have continually tried to let everyone know, the economy in the Greater Baton Rouge area is doing just fine. We were listed as the #8 city to best weather the recession. Then today, the news had an article showing that we are on a list of markets with the best expected performance in home prices over the next 12 months, among area with populations greater than 600,000. This is something I have been saying for months. Although the number of sales is off about 20% overall, the prices for our homes remain steady. It's true if you purchased a home at the height of the Katrina days and want to sell it now, you will probably lose money. But for most of our clients, this is a great time to buy or sell real estate. The Baton Rouge Real Estate market is doing just fine!!
Sunday, April 05, 2009
Get Ready for the Spring Market and Spruce Up the House
Curb appeal is the first thing the buyers see when they are driving in the neighborhood. Whether they will choose yours depends on whether the outside is appealing. In the Greater Baton Rouge Real Estate Market the buyers have a lot a homes to choose from. Let's make sure yours is one that they put on their list to visit! First, now that spring is here and the weather is really so beautiful, I think it's safe to go ahead and put in some pretty, colorful flowers! You need to have enough that attract attention but aren't too overwhelming where the buyer thinks taking care of them will be too much trouble! If you don't have a green thumb, just ask your local garden center what flowers are easy to grow and that don't require a lot of maintenance!!
After viewing your home one of the last places the buyer checks out is your backyard, so don't skimp on landscaping in this area. Many times the front of the house will be loaded with beautiful landscaping, then there is nothing in the backyard!!! At the very least, get some inexpensive plastic pots (large ones - the ones that look like clay) and fill them with beautiful flowers - and if they die, just replace them with some more!!!!
So, spend a little time outdoors - enjoy the beautiful weather AND get your home ready for the spring market. Before you know it, the buyers will be making appointments to see YOUR home!!
After viewing your home one of the last places the buyer checks out is your backyard, so don't skimp on landscaping in this area. Many times the front of the house will be loaded with beautiful landscaping, then there is nothing in the backyard!!! At the very least, get some inexpensive plastic pots (large ones - the ones that look like clay) and fill them with beautiful flowers - and if they die, just replace them with some more!!!!
So, spend a little time outdoors - enjoy the beautiful weather AND get your home ready for the spring market. Before you know it, the buyers will be making appointments to see YOUR home!!
Monday, February 23, 2009
How the Economic Stimulus Package will Move the Real Estate Maraket
We all know something must happen throughout the country to get the economy going again. I never realized how important the real estate industry, as a whole, affected the whole world. If people can't buy houses, then the paint, flooring, appliance, and home decorating businesses are hurt as well as the people who clean those buildings, do their taxes, and so on. So, even though the Stimulus package didn't have everything the National Association of Realtors was hoping for, it's a start.
For the greater Baton Rouge Real Estate Market, it will just help get us back on track once the first time home buyers are able to buy, then our move up buyers will get to take the next step, and on and on!!! With rates at a historical low again, what a great time to buy any house!!!
Below is the basic information on the Stimulus Package:
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Higher Loan Amounts
More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.
As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.
For the greater Baton Rouge Real Estate Market, it will just help get us back on track once the first time home buyers are able to buy, then our move up buyers will get to take the next step, and on and on!!! With rates at a historical low again, what a great time to buy any house!!!
Below is the basic information on the Stimulus Package:
Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.
The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.
Tax Credit Versus Tax Deduction
It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.
Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!
Phaseout Examples
According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:
Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.
Homes that Qualify
The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Higher Loan Amounts
More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.
Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.
The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.
As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.
Saturday, September 20, 2008
An Exciting Time to Buy a Home
With the roller coaster ride Wall Street is experiencing, again, many people are reconsidering the stability of real estate as an investment. You know, even in the markets that are suffering, it is a great time to buy because of the ability to buy a GREAT house for a low price. I would be all over that if I were in that market!!! I mean, people can actually buy the dream home that could not have began to afford several years ago. Even if they lose money if they have a house to sell, they will more than make up for it on the home they are buying.
If you aren't in a depressed market, the fact that interest rates dropped below 6% (we were getting 5.5% one day last week!) allows anyone to take advantage of their market! Here in the Greater Baton Rouge Area not only do we have low interest rates and good loan products if you have a decent credit score (560-580) we can find a loan product that meets your needs. We also have the First Time Home Buyer Bond Money that is now available, Rural Development Loans with 100% financing (and you don't have to be in a rural area to take advantage of this program), plus FHA loans with only 3% down!!!
This is a very exciting time to be in the real estate market!!
If you aren't in a depressed market, the fact that interest rates dropped below 6% (we were getting 5.5% one day last week!) allows anyone to take advantage of their market! Here in the Greater Baton Rouge Area not only do we have low interest rates and good loan products if you have a decent credit score (560-580) we can find a loan product that meets your needs. We also have the First Time Home Buyer Bond Money that is now available, Rural Development Loans with 100% financing (and you don't have to be in a rural area to take advantage of this program), plus FHA loans with only 3% down!!!
This is a very exciting time to be in the real estate market!!
Wednesday, September 26, 2007
Redefining Retirment and Housing Options
As many boomers, such as my husband, are approaching retirement, so many choices need to be made! How many of us really prepare for retirement? How many husbands and wives have had the discussion about what they expect in retirement? I think you would find that husbands and wives, (or life partners) have totally different expectations of what they want retirment to look like! I know that my husband and I haven't talked a lot about it. I think guys just don't talk a lot to start with because it is their nature to do something where it's a woman's nature to talk about it, a lot, make plans, etc!
A few things we have discovered over the past two years, in preparing for this day: 1. You really need to have your financial plan in order. We have worked very hard to put as much in our retirement funds as possible, have sought professional advice on the decision to take early retirement and what we will do to make up for the loss of income. 2. We have a plan, although pretty sketchy, on what his new role will be (yes, he is very brave as he is joining my team!) 3. We have bought two retirement properties that are also income producing - so we have fun places to go that aren't too far away and yet because we are both still working, they are in areas that rent well.
As a REALTOR, I know that listening to my client as they approach home buying and retirement at the same time is crucial. Helping guide them on buying the home of their dreams, or downsizing here in our area so that they have adequate funds to buy a retirement property in a different area.
AND speaking of buying in a different area - if you are thinking of buying retirement property in a different area here are some more suggestions: 1. Rent a property there during the worst time of the year - how about Florida in July and August, or Canada in January and February!!! 2. If you are considering purchasing real estate in a foreign country, you need to truly understand the laws on home ownership and your money. In some countries the only way to purchase is to give your money to an attorney who then purchases the property for you....and you had better know this person VERY well and have total TRUST!! 3. Is the community an open one who will welcome newcomers - or is it a place where people have lived all their lives and you will be an outsider 4. Will your friends and family want to visit you in this new location or will you have to travel to see them. 5. Will this new property appreciate in value so that when it's time for a move to a retirement facility you will have the money you need.
Retirement can be exciting! As much as I first rejected the idea of my husband taking early retirement, now I can see the benefits! Life is too short! If we like to go hiking and traveling, then we need to do that now while we are physically able to do so! If you like spending time with the grandchildren as an active adult and bond with them while they are small, then now is the time!
Make your plans and live your dreams today!
A few things we have discovered over the past two years, in preparing for this day: 1. You really need to have your financial plan in order. We have worked very hard to put as much in our retirement funds as possible, have sought professional advice on the decision to take early retirement and what we will do to make up for the loss of income. 2. We have a plan, although pretty sketchy, on what his new role will be (yes, he is very brave as he is joining my team!) 3. We have bought two retirement properties that are also income producing - so we have fun places to go that aren't too far away and yet because we are both still working, they are in areas that rent well.
As a REALTOR, I know that listening to my client as they approach home buying and retirement at the same time is crucial. Helping guide them on buying the home of their dreams, or downsizing here in our area so that they have adequate funds to buy a retirement property in a different area.
AND speaking of buying in a different area - if you are thinking of buying retirement property in a different area here are some more suggestions: 1. Rent a property there during the worst time of the year - how about Florida in July and August, or Canada in January and February!!! 2. If you are considering purchasing real estate in a foreign country, you need to truly understand the laws on home ownership and your money. In some countries the only way to purchase is to give your money to an attorney who then purchases the property for you....and you had better know this person VERY well and have total TRUST!! 3. Is the community an open one who will welcome newcomers - or is it a place where people have lived all their lives and you will be an outsider 4. Will your friends and family want to visit you in this new location or will you have to travel to see them. 5. Will this new property appreciate in value so that when it's time for a move to a retirement facility you will have the money you need.
Retirement can be exciting! As much as I first rejected the idea of my husband taking early retirement, now I can see the benefits! Life is too short! If we like to go hiking and traveling, then we need to do that now while we are physically able to do so! If you like spending time with the grandchildren as an active adult and bond with them while they are small, then now is the time!
Make your plans and live your dreams today!
Wednesday, January 17, 2007
Great Real Estate Market? Time to Buy a Vacation Home!!
While the rest of the country is confused about where the real estate market is headed, here in Louisiana we are still forging ahead. It's interesting that historically when the rest of the country was experiencing unprecedented appreciation, our market would be just the opposite. It's nice to be the opposite of rest of the country now as our average sales price continues to increase. Of course, with that we are also experiencing a shortage of inventory in different segments of our market. Gone are the days when you can find a $100,000 home in many areas of Baton Rouge.
With interest rates continuing to remain around 6%, it is still such an excellent time to purchase. With that in mind, maybe it's time to think about buying that vacation home! We were fortunate enough to purchase a condo on the Diversion Canal two years ago and although it's only 40 minutes from our home, it feels like we have really gone on vacation - and yet it is close enough that we can run down anytime.
A vacation home doesn't have to be an expensive condo in Gulf Shores (although that is a GREAT idea!) but someplace you can get away and relax. St Francisville, any waterfront area from the Tickfaw to False River to the Diversion Canal - we have plenty of choices. Think about how you would enjoy a lazy weekend and seek out those places. You know you can always count on us to help you shop!
With interest rates continuing to remain around 6%, it is still such an excellent time to purchase. With that in mind, maybe it's time to think about buying that vacation home! We were fortunate enough to purchase a condo on the Diversion Canal two years ago and although it's only 40 minutes from our home, it feels like we have really gone on vacation - and yet it is close enough that we can run down anytime.
A vacation home doesn't have to be an expensive condo in Gulf Shores (although that is a GREAT idea!) but someplace you can get away and relax. St Francisville, any waterfront area from the Tickfaw to False River to the Diversion Canal - we have plenty of choices. Think about how you would enjoy a lazy weekend and seek out those places. You know you can always count on us to help you shop!
Wednesday, April 05, 2006
Updated Market Statistics
It is so interesting to keep up with the market changes in the Greater Baton Rouge Area. We are still feeling the effects of Hurricane Katrina but in a good way! Our market has shown some fluctuation over the past 4 months but it is easy to spot the trend that is happening. I want to share some numbers with you.
Number of Closed Properties Average Sold Price Average Days on Market %SP/LP
Dec: 808 $162,312 71 98.08%
Jan: 734 $175,366 78 97.69%
Feb: 726 $169,438 77 97.84%
Mar: 922 $178,078 79 97.70%
You can see that our spring market has kicked in. I can personally tell you that homes priced under $200,000 that are NOT overpriced, and in good condition, sell very quickly. Homes that are not in top shape, and over priced (think Katrina pricing!) are still sitting there.
The jump in homes sold I feel is due to our regular buyers, not the people displaced from the hurricane, getting back into our market. Interest rates are creeping up but are still just a little over 6% on a 30 fixed, conventional loan.
Number of Closed Properties Average Sold Price Average Days on Market %SP/LP
Dec: 808 $162,312 71 98.08%
Jan: 734 $175,366 78 97.69%
Feb: 726 $169,438 77 97.84%
Mar: 922 $178,078 79 97.70%
You can see that our spring market has kicked in. I can personally tell you that homes priced under $200,000 that are NOT overpriced, and in good condition, sell very quickly. Homes that are not in top shape, and over priced (think Katrina pricing!) are still sitting there.
The jump in homes sold I feel is due to our regular buyers, not the people displaced from the hurricane, getting back into our market. Interest rates are creeping up but are still just a little over 6% on a 30 fixed, conventional loan.
Monday, March 27, 2006
Homeowners Insurance Concerns
It has been noted by serveral insurance agents in the Greater Baton Rouge area that our homeowner insurance rates will go up in many instances to 40% more than we are currently paying. Part of this will be a tax to help pay for hurricane Katrina rebuilding and part of it will be rate increases for the individual insurance companies to recover some of the costs from this event. I have also been advised that wind damage may not be covered by our homeowners insurance and that coverage would have to come from the FAIR plan - which is pretty expensive. When questioned about what we can do about these rates, I was told the best thing is to raise your deductibe. I personally told my homeowner insurance agent several years ago to flag my file anytime a rate increase occurs. That way I can see how much I have to raise my deductible to keep my premiums reasonable. I suggest that everyone contact their insurance agents to check this out and to stay on top of this so you are not blind sided with a huge new premium.
Thursday, March 09, 2006
Spring Market is Here for Housing!
Yes, we can tell spring is here due to the number of calls we are receiving. People are enjoying the beautiful weather and looking for homes. We have had some great financing news for our area. Since the Greater Baton Rouge Area is in the hurricane disaster area, the Bond Authority is waiving the rule that you must be a first time home buyer to qualify for bond money. That means, if you fit the other criteria of income, credit score, etc., then you may be able to get bond money with a rate between 4.8-5.6%.
A quick update on new construction. We had 183 new homes come on the market in February in the SE Baton Rouge, Ascension, and Livingston areas - bringing to a total of 509 new construction homes on the market. During that same period, 169 new homes went under contract. The average sales price for new construction for the past 4 months was $215,000 for those areas. However, with the cost of materials due to the hurricanes, the new homes are averaging an asking price of $236,000.
A snapshot of the past 4 months home sales, including all ages, all of East Baton Rouge Parish, Livingston, and Ascension shows an average list price of $184,000 with an average sales price of $180,000. We are seeing the average sale price steadily increase, probably due to the number of new construction homes that are finally closing that were sold during Katrina.
We expect the housing market to remain strong with good inventory to choose from.
A quick update on new construction. We had 183 new homes come on the market in February in the SE Baton Rouge, Ascension, and Livingston areas - bringing to a total of 509 new construction homes on the market. During that same period, 169 new homes went under contract. The average sales price for new construction for the past 4 months was $215,000 for those areas. However, with the cost of materials due to the hurricanes, the new homes are averaging an asking price of $236,000.
A snapshot of the past 4 months home sales, including all ages, all of East Baton Rouge Parish, Livingston, and Ascension shows an average list price of $184,000 with an average sales price of $180,000. We are seeing the average sale price steadily increase, probably due to the number of new construction homes that are finally closing that were sold during Katrina.
We expect the housing market to remain strong with good inventory to choose from.
Thursday, March 02, 2006
Market Statistics Shows Market Stable
In researching the continuing concern the public has with the effect hurricane Katrina had on our real estate market I found some interesting numbers. We currently have a 4.26 month supply of homes on the market for Ascension Parish, E Baton Rouge Parish, and Livingston Parish. That is almost the same as March of 2005 as well as July 2005.
I also checked the average sales price, which is $168, 153 for the month of February 2006. That compares with $168,864 for August 2005, prior to Katrina. Now, it is difficult to just look at a one month average, and if you compare that to last January, we are $15,000 ahead. If we do a 6 month snapshot, then the average sales price is $176, 403 with an average days on market of 70. So it appears that our market is holding on to the gains it experienced after hurricane Katrina sales settled down.
Interest rates are still hovering around 6% and with the bond money no longer being tied to first time home buyers, this will be another great year for buying and selling in the Greater Baton Rouge market!
I also checked the average sales price, which is $168, 153 for the month of February 2006. That compares with $168,864 for August 2005, prior to Katrina. Now, it is difficult to just look at a one month average, and if you compare that to last January, we are $15,000 ahead. If we do a 6 month snapshot, then the average sales price is $176, 403 with an average days on market of 70. So it appears that our market is holding on to the gains it experienced after hurricane Katrina sales settled down.
Interest rates are still hovering around 6% and with the bond money no longer being tied to first time home buyers, this will be another great year for buying and selling in the Greater Baton Rouge market!
Monday, February 13, 2006
Greater Baton Rouge Real Estate Update January 06
As expected, the Greater Baton Rouge real estate market remains strong. Plenty of homes for sale, good new construction starts, and interest rates remaining low continue to fuel this market.
Here is a comparison of homes for sale in January and how many of those were new construction:
E Baton Rouge Parish 1727 on Market of which 397 were new construction
Ascension Parish 520 on Market of which 177 were new construction
Livingston Parish 434 on Market of which 90 were new construction
Comparing January 2005 to January 2006:
Number of homes put on market in January 2006: 1047 January 2005: 1149
Number of homes closed in January 2006: 716 January 2005: 491
Breakdown of sold properties in January 2006 by area:
E Baton Rouge Parish: 413
Ascension Parish: 149
Livingston Parish: 147
Additional sales were balance of MLS area
Average sales price in EBR, Ascension, and Livingston Parishes combined:
January 2005: $152,718
January 2006: $176,948
Number of homes currently on the market: 2696 in these 3 Parishes
It's time to buy a house!
Here is a comparison of homes for sale in January and how many of those were new construction:
E Baton Rouge Parish 1727 on Market of which 397 were new construction
Ascension Parish 520 on Market of which 177 were new construction
Livingston Parish 434 on Market of which 90 were new construction
Comparing January 2005 to January 2006:
Number of homes put on market in January 2006: 1047 January 2005: 1149
Number of homes closed in January 2006: 716 January 2005: 491
Breakdown of sold properties in January 2006 by area:
E Baton Rouge Parish: 413
Ascension Parish: 149
Livingston Parish: 147
Additional sales were balance of MLS area
Average sales price in EBR, Ascension, and Livingston Parishes combined:
January 2005: $152,718
January 2006: $176,948
Number of homes currently on the market: 2696 in these 3 Parishes
It's time to buy a house!
Tuesday, January 31, 2006
Raising Credit Score Helps Local Home Buyers
Raising your credit score can greatly affect the interest rate or documentation required to secure a mortgage for you new home. The types of loan available in the Greater Baton Rouge Area are tied into the credit score of the borrower. Buyers with a very high score can get 100% financing at a good interest rate as well as doing loans that require little documentation.
Andy Aucoin of Resource One Mortgage offers these tips to raise your score in 45 days.
1. PAY YOUR PAST DUE ACCOUNTS.
Yes, this sounds obvious, but understand that credit scoring software severely penalizes you for having accounts with a past due balance. Making sure all of your accounts are current, and paying the amount that shows as being past due on the credit report can increase your credit score by a significant amount.
2. TRY TO GET RID OF YOUR LATE PAYMENTS.
Contact all creditors that have reported late payments on your credit and request a good faith adjustment that actually removes the record of late payments reported on your account. Be persistent, if they refuse to remove the late payments at first, remind them that you have been a good customer that would deeply appreciate their help. Call several times if you need to and ask for supervisors. All persistence and politeness pay off in this scenario.
3. REQUEST TO HAVE YOUR CREDIT LIMITS INCREASED.
Contrary to popular belief, having low credit limits on a credit card can actually hurt your credit score. Having low available credit limits affects your actual debt to available credit ratio. For example, if you owe a total card debt of $10,000 and your total credit available is $20,000, you are only using 50% of your total credit available. But if you have card debt of $10,000 and your total credit available is $15,000, you change your ratio to 66% of your available credit being used. The lower the percentage of debt to available credit the better, as it shows you are able to handle having credit available without running it up to the max.
4. DO NOT CLOSE YOUR OLD CREDIT CARDS, KEEP THEM ACTIVE.
15% of your credit score is determined by the age of the credit file. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time yoy have had credit, as well as increase your debt to available credit ratio as discussed in point 3. Use the old card at least once every six months to avoid the account rating to change to Inactive. Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down. An inactive account is ignored by Fair Isaacs credit scoring software, so you will not get the benefit of the positive payment history and low balance that card may have had in the past.
Call your lender and see if raising your credit score can affect the amount of home you will be able to purchase. Give yourself time to raise the score before you start your house hunting search, then enjoy the benefits every month of that low interest rate!
Andy Aucoin of Resource One Mortgage offers these tips to raise your score in 45 days.
1. PAY YOUR PAST DUE ACCOUNTS.
Yes, this sounds obvious, but understand that credit scoring software severely penalizes you for having accounts with a past due balance. Making sure all of your accounts are current, and paying the amount that shows as being past due on the credit report can increase your credit score by a significant amount.
2. TRY TO GET RID OF YOUR LATE PAYMENTS.
Contact all creditors that have reported late payments on your credit and request a good faith adjustment that actually removes the record of late payments reported on your account. Be persistent, if they refuse to remove the late payments at first, remind them that you have been a good customer that would deeply appreciate their help. Call several times if you need to and ask for supervisors. All persistence and politeness pay off in this scenario.
3. REQUEST TO HAVE YOUR CREDIT LIMITS INCREASED.
Contrary to popular belief, having low credit limits on a credit card can actually hurt your credit score. Having low available credit limits affects your actual debt to available credit ratio. For example, if you owe a total card debt of $10,000 and your total credit available is $20,000, you are only using 50% of your total credit available. But if you have card debt of $10,000 and your total credit available is $15,000, you change your ratio to 66% of your available credit being used. The lower the percentage of debt to available credit the better, as it shows you are able to handle having credit available without running it up to the max.
4. DO NOT CLOSE YOUR OLD CREDIT CARDS, KEEP THEM ACTIVE.
15% of your credit score is determined by the age of the credit file. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time yoy have had credit, as well as increase your debt to available credit ratio as discussed in point 3. Use the old card at least once every six months to avoid the account rating to change to Inactive. Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down. An inactive account is ignored by Fair Isaacs credit scoring software, so you will not get the benefit of the positive payment history and low balance that card may have had in the past.
Call your lender and see if raising your credit score can affect the amount of home you will be able to purchase. Give yourself time to raise the score before you start your house hunting search, then enjoy the benefits every month of that low interest rate!
Tuesday, January 24, 2006
ADVANCE NOTICE OF 2006 'SEER' FEDERAL REGULATIONS
A new regulation (mandated by the EPA [Environmental Protection Agency] and regulated by the DOE [Department of Energy]) will greatly affect the heating and air industry, the home warranty industry and the real estate industry beginning January of 2006. It is often referred to as “13-Seer.”
Increased SEER Rating Standards
Central air conditioners are rated according to their Seasonal Energy Efficiency Ratio (SEER): the higher the SEER, the more efficient the air conditioner. The current national efficiency standard for air conditioning systems took effect in 1992, requiring a minimum SEER of 10. New standards, set to take effect on January 23, 2006, will raise the SEER requirement to 13, an efficiency improvement of 30%. Overall the changes are good for the environment and increase consumer’s piece of mind by improving comfort and indoor air quality. However implementation of the new regulations may be a bit painful for everyone involved.
How These New Standards Affect Consumers
Beginning in January when a condenser or evaporative coil fails and must be replaced, the new unit must be at least 13 SEER and will have to be compatible with all the other components in the system. Here are some of the potential challenges:
ü If a condenser is replaced, the evaporative coil and air handler must be upgraded to 13 SEER.
ü If the Freon lines are too small to handle a 13 SEER system, they must be replaced /upgraded.
ü The 13 SEER evaporative coils can be up to 3-4 inches taller, requiring sheet metal modifications to fit the new system in the old space. Should the space be too small, the cost to rebuild the area or relocated the system could be even more costly.
ü The system as a whole can be large and heavier, which may require additional labor expenses for a second technician to complete the installation.
ü The system requires about 40% more Freon to operate.
ü The system may requires a larger cement pad or larger roof stands which may requires modifications.
Increased SEER Rating Standards
Central air conditioners are rated according to their Seasonal Energy Efficiency Ratio (SEER): the higher the SEER, the more efficient the air conditioner. The current national efficiency standard for air conditioning systems took effect in 1992, requiring a minimum SEER of 10. New standards, set to take effect on January 23, 2006, will raise the SEER requirement to 13, an efficiency improvement of 30%. Overall the changes are good for the environment and increase consumer’s piece of mind by improving comfort and indoor air quality. However implementation of the new regulations may be a bit painful for everyone involved.
How These New Standards Affect Consumers
Beginning in January when a condenser or evaporative coil fails and must be replaced, the new unit must be at least 13 SEER and will have to be compatible with all the other components in the system. Here are some of the potential challenges:
ü If a condenser is replaced, the evaporative coil and air handler must be upgraded to 13 SEER.
ü If the Freon lines are too small to handle a 13 SEER system, they must be replaced /upgraded.
ü The 13 SEER evaporative coils can be up to 3-4 inches taller, requiring sheet metal modifications to fit the new system in the old space. Should the space be too small, the cost to rebuild the area or relocated the system could be even more costly.
ü The system as a whole can be large and heavier, which may require additional labor expenses for a second technician to complete the installation.
ü The system requires about 40% more Freon to operate.
ü The system may requires a larger cement pad or larger roof stands which may requires modifications.
Katrina Causes Home Owners to Rethink Coverage
We expect our homeowners insurance policy to help us recover from a catastrophe by providing us with enough cash to replace anything damaged or destroyed in such an event. As we found after hurricane Katrina, all was not as people expect. You need to read your policy very carefully and fully understand what you have paid for. You may not have the protection you think. It is standard for most homeowner policies to cover the structure of the house for replacement-cost value. But what coverage do you have on your contents? Are you covered only for actual cash value or the replacement cost? What's the difference? If you are only covered for actual cash value then the company will deduct for depreciation on those items. That could be significantly less than the cost for you to restore, repair or replace the item. Check your policy to see if you chose the option of replacement cost coverage. You may save money on the front end by having actual cash value coverage but it could cost you dearly in the long run. The longer you own your house or personal property, the more depreciation becomes an issue and replacement cost coverage becomes more critical.
Replacement-cost coverage varies. Different insurers offer varying levels of replacement-cost coverage, so you need to check your policy or with your insurer to see what is covered in your area and what the limits are. Some companies add maximums to replacement-cost coverage policies, to protect themselves from overexposure in the case of loss. For example, some insurers limit the amount payable on replacing a roof, especially when it is over a certain age.
Remember, you are insuring your home and your possessions -- not your land. Think about what it would cost to rebuild your house and replace its contents, not what the market value of the house is.
Next, you need to see if you are adequately insured. We personally buy flood insurance for our home in Baton Rouge, even though we are not in a flood hazard area. That decision was based on a flood that occurred in New Orleans about 10 years ago- homes that were over 40 years old and not in a flood hazard area were flooded. Now I think that it is even more important to consider purchasing flood insurance even for areas that do not require it. Of course, you need to know what you are getting coverage for, since it seems even flood insurance doesn't cover what we expected! Remember, your basic homeowners insurance will not cover you or your contents for flood. And a flood isn't always a river or body of water overflowing. Several years ago a tornado came through Baton Rouge and debris stopped up a drainage ditch, causing a house to flood during the storm. The house was not in an area that required flood insurance, and therefore, the damage was not covered by their insurance company.
Replacement-cost coverage varies. Different insurers offer varying levels of replacement-cost coverage, so you need to check your policy or with your insurer to see what is covered in your area and what the limits are. Some companies add maximums to replacement-cost coverage policies, to protect themselves from overexposure in the case of loss. For example, some insurers limit the amount payable on replacing a roof, especially when it is over a certain age.
Remember, you are insuring your home and your possessions -- not your land. Think about what it would cost to rebuild your house and replace its contents, not what the market value of the house is.
Next, you need to see if you are adequately insured. We personally buy flood insurance for our home in Baton Rouge, even though we are not in a flood hazard area. That decision was based on a flood that occurred in New Orleans about 10 years ago- homes that were over 40 years old and not in a flood hazard area were flooded. Now I think that it is even more important to consider purchasing flood insurance even for areas that do not require it. Of course, you need to know what you are getting coverage for, since it seems even flood insurance doesn't cover what we expected! Remember, your basic homeowners insurance will not cover you or your contents for flood. And a flood isn't always a river or body of water overflowing. Several years ago a tornado came through Baton Rouge and debris stopped up a drainage ditch, causing a house to flood during the storm. The house was not in an area that required flood insurance, and therefore, the damage was not covered by their insurance company.
Saturday, January 21, 2006
Downtown Baton Rouge Continues To Grow
I am continually amazed at the amount of development happening in downtown Baton Rouge. We have seen the downtown area try to come to life over the past 25 years, first with the 1984 Catfish Town development of restaurants and shops - which is now one of our Casinos - and now, with the Shaw Entertainment Center bringing in wonderful entertainment as well as sporting a fabulous restaurant, downtown is coming back to life.
Some of the plans for downtown include the building of a high rise condominum overlooking the Mississippi River. I have looked at the plans for this building and it looks like an amazing project. Several more condominium projects are in the works - some include multi-use developments and others are strictly residential. The new Red Stick Lofts off Nicholson are designed after a development in Houston and are a design we have not seen here before.
Baton Rouge is in a growth phase - as it was pre-Katrina - and hopefully we will see downtown reviatlized with these new projects! It certainly is an exciting time to be involved in real estate!
Some of the plans for downtown include the building of a high rise condominum overlooking the Mississippi River. I have looked at the plans for this building and it looks like an amazing project. Several more condominium projects are in the works - some include multi-use developments and others are strictly residential. The new Red Stick Lofts off Nicholson are designed after a development in Houston and are a design we have not seen here before.
Baton Rouge is in a growth phase - as it was pre-Katrina - and hopefully we will see downtown reviatlized with these new projects! It certainly is an exciting time to be involved in real estate!
Thursday, January 12, 2006
Baton Rouge Real Estate Post Hurricane Katrina
What REALLY happed to real estate in the Baton Rouge area due to hurricane Katrina? As you have heard, there was an initial buying frenzy as people in affected areas scrambled to find a place to live. Some houses did sell for inflated prices - usually those that included all the furnishings. There were also a lot of what I loosely term 'urban real estate legends' that we all heard about but were not true. Many homes that sold fell through as buyers realized that things weren't as bad as reported and they would be able to return to their homes.
Pre Katrina Homes for sale: 3400 Homes sold during Sept 2005: 1713
Homes available after Sept 3100 Homes sold during Sept 2004: 1112
Homes that fell thru: 580
Average Sales Price Pre Katrina: $159289
Average Sales Price Oct 2005: $188,861
Average Sales Price year ending 2005 $168,519
The market has ended the year with a higher average sales price than pre-Katrina, but not as it was at the height of the aftermath of the storm. It is good to see our area see some appreciation for a change! There are plenty of homes available, interest rates remain low, and the prices of the homes have stabilized.
The information provided above is deemed reliable and is based on information gathered from select areas of the MLS.
Pre Katrina Homes for sale: 3400 Homes sold during Sept 2005: 1713
Homes available after Sept 3100 Homes sold during Sept 2004: 1112
Homes that fell thru: 580
Average Sales Price Pre Katrina: $159289
Average Sales Price Oct 2005: $188,861
Average Sales Price year ending 2005 $168,519
The market has ended the year with a higher average sales price than pre-Katrina, but not as it was at the height of the aftermath of the storm. It is good to see our area see some appreciation for a change! There are plenty of homes available, interest rates remain low, and the prices of the homes have stabilized.
The information provided above is deemed reliable and is based on information gathered from select areas of the MLS.
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