Blog survey: Holidays are ‘good time to sell’

Most real estate professionals always advise sellers to list their homes during the holiday season rather than waiting, citing more serious buyers and less competition among properties, according to a recent survey from

The property search site’s Holiday Home Selling Survey gathered responses from 429 real estate professionals surveyed online between Oct. 26, 2011, and Nov. 8, 2011. The “holiday season” was defined as Nov. 23, 2011, to Jan. 2, 2012.

Among respondents, 60 percent said they would always advise a seller to list a home during the holiday season and agreed that “it’s a good time to sell,” while 30 percent said they would sometimes advise it if the seller were motivated. Only 1 percent said they would never advise it because “selling during the holiday season is always a bad idea.”

The vast majority of respondents, 79 percent, said more serious buyers were one of the biggest benefits of listing during the holidays, while 61 percent said less competition among homes was a plus. Only 17 percent said cold weather making homes look cozy was an advantage.

Indeed, 39 percent of respondents cited winter weather as one of the biggest challenges to putting a home on the market during the holidays. An equal share said buyer vacation and celebration schedules were a problem.

But the biggest challenge, noted by 63 percent of respondents, was keeping a home “open house ready,” meaning clean and staged, during this time of year.

Selling a home during the holidays requires employing different strategies from selling a home during other times of the year, according to the survey.

More than eight out of 10 respondents said online listing photos were particularly crucial for homes listed during the holiday season. The main reasons cited were that buyers attend fewer open houses because of busy schedules or winter weather, while sellers also host fewer open houses during this time.

The majority of respondents, 74 percent, said pricing a home to sell was even more important during the holiday season, and 40 percent said staging a home was more important at this time of year. Nearly a third said being flexible with contract terms such as move-in dates and when closing costs were paid was more essential during the holidays.

The way a home is staged during this time of year is also significant, according to the survey. Almost all respondents said they advised sellers to put up some seasonal decorations, though there were differing opinions on the types of decorations.

A 37 percent plurality said homeowners should put up some nonreligious holiday decorations to make a home feel inviting, while 28 percent said sellers should put up all of their holiday decorations, including religious ones, to make their home feel festive, the survey said.

A similar share, 27 percent, said sellers should put up seasonal decor that is not suggestive of specific holidays, while 8 percent of respondents advised sellers to stage their home without any decorations at all.

Eighty percent of respondents said they encourage sellers to light their fireplace when staging a home during the holiday season, while 62 percent said they suggested sellers update outdoor lighting because the buyer is more likely to see the home at night due to shorter days.

Other popular staging advice for sellers included using winter-scented home fragrances before an open house, making the home feel more cozy through reading nooks and blankets on couches and beds, setting the table to showcase holiday entertaining, and playing seasonal music that is not specific to a particular holiday, the survey said.

5 keys to buying a home in today’s market

Interest rates dropped to new lows at the end of the first week in October. Thirty-year fixed-rate conforming loans were available in some areas with an interest rate of less than 4 percent. However, during the same week, mortgage applications dropped 4.3 percent, according to the Mortgage Bankers Association.

In past markets, low interest rates ignited the home-sale market. Not so today.

One reason homebuyers are holding back is that current economic news is anything but comforting. The Conference Board Consumer Confidence Index plummeted to 45.2 in August. It was 100 in 1985, which was not a particularly robust housing market. The Confidence Index improved marginally in September to 45.4.

Economists who previously said we’d avoid a double-dip recession are now not so sure. Economic growth has been slowing nationally and internationally. Even if we don’t slip back into a recession, most real estate analysts predict little improvement in the home-sale market for another five years.

Last year, home prices stabilized briefly; then the market softened again. The best homes in the most desirable locations and offered at the most competitive prices sold. The rest sat.

It was thought by many analysts that we were bouncing along the bottom price-wise and would be for some time. Now there’s concern about further price declines, although most economists think the biggest price drops are behind us.

In these uncertain times, should you buy a home? Before you can answer that question, you need to find out if you can afford to buy. Many buyers can’t qualify for the mortgage they need to buy given today’s stringent qualification criteria.

Other prospective buyers are stuck in homes that no longer work for them because they can’t be sold for enough to pay off the mortgage. Many owners can’t make up the difference and come up with enough cash for a down payment on a new house.

HOUSE HUNTING TIP: Some buyers who can afford to buy today and would like to take advantage of low interest rates are holding back due to fear. There is risk involved in buying a home in today’s market; prices could move lower before they improve. There is also risk if you want and need to buy and you postpone it.

We are living in unprecedented times. Home prices have dropped more during the recent recession than they did during the Great Depression. Even though another recession might be in the near future, at some point the housing market will improve.

New-home construction has been virtually nonexistent for years. When the foreclosure inventory that has overshadowed the home-sale market diminishes and the job market improves, the housing market will pick up. In areas with a shortage of inventory, home prices are likely to move upward. This is already happening in areas with significant job growth.

For some buyers, it’s a good time to buy. Let’s say you’ve outgrown your current home and need a better school district. If you can sell or rent your small home and qualify to buy a bigger house in a better location that will last you for decades, you could buy at a discount.

The key is to buy for the long term and be certain of your job security before you make a move. You should have cash reserves for emergencies. Partners who are both employed can hedge their risk if they can qualify on one income. That way, if one party is laid off, they don’t have to sell their home.

You also need to be able to live with a turbulent market without losing sleep. Home values fluctuate over time, but they won’t go down indefinitely.

11 must-knows about early mortgage payoff

Q: Will I save money if I make my regular monthly payment early?

A: No, paying early merely allows the firm servicing your loan to earn interest on your money until the payment due date. This is not the case, however, if you have a simple interest mortgage (SIM). Because it accrues interest daily, the earlier you pay a SIM, the more interest you save.

Q: How do I know if my mortgage is “simple interest”?

A: Your note will say that interest accrues daily. Also, the monthly payment on a SIM varies month to month, so if your payment is always the same, you do not have a SIM.

Q: What is the best time of the month to make an extra payment?

A: If you include it with your regular payment and pay before the grace period, the extra payment will be applied to the current balance. If you make the extra payment after the grace period, it might be applied to the current balance, or it might not be credited until the following month, depending on the systems/policies of the servicer. You should find out where the servicer’s cutoff is for receiving credit in the current month.

Q: If I make a large extra payment, will my future scheduled payments be lower?

A: On a fixed-rate mortgage, the scheduled payment is not affected by the extra payment. You just pay down the balance faster. On an adjustable-rate mortgage, the scheduled payment remains the same until the next rate adjustment. At that point, the payment is recalculated based on the reduced balance, the new rate and the original term. So unless it is offset by a rate increase, the payment will drop.

Q: Would I be better off investing excess funds rather than paying down the loan balance?

A: Not very likely. Paying down the loan balance is an investment carrying a yield equal to the mortgage rate, with no default risk. There are no riskless investments today that pay a yield that even comes close.

Q: Would this apply to a high-tax-bracket borrower who deducts mortgage interest payments?

A: Yes, what matters is the after-tax yield on the mortgage repayment relative to other investments, and the tax-rate adjustment affects them equally.

Q: Isn’t it better to make extra payments in the early years of a mortgage when the regular payment goes largely to interest than in later years when most of it goes to principal?

A: No, the return on investment is not affected by where the mortgage is in its life cycle. While the allocation of scheduled payments between principal and interest changes over the life of the mortgage, extra payments go entirely to principal, no matter what stage of its life cycle the mortgage is in.

Q: Is there a way to escape a prepayment penalty clause?

A: No, the clause is there to protect the lender, or the ultimate investor if the loan was sold, which it probably was. Investors pay extra for the protection. I have never heard of a case where a prepayment penalty clause was voluntarily waived.

Q: Should seniors close to retirement pay off their mortgage?

A: It is a prudent move if they have the assets to do it, because the rate they are paying on their mortgage is higher than the return they can earn on assets having a high degree of safety. Paying off their mortgage also clears the way for a reverse mortgage in the future, should the need for additional income arise.

Q: If I have two mortgages, which do I pay down first?

A: In general, pay down the mortgage carrying the higher rate. However, if that mortgage is fixed-rate while the lower-rate mortgage is adjustable-rate, the decision must consider the possibility that the rate on the adjustable will increase in the future.

Q: Is a biweekly payment mortgage a painless way to pay it off sooner?

A: Making half the monthly payment every two weeks is not painless, because it requires an extra monthly payment every year, and the lender will charge you for the privilege. An alternative approach that is equally effective, and which is entirely within your control, is to increase your scheduled monthly payment by 1/12 of the payment.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at

Contact Jack Guttentag:

14 tips for furnace and fireplace safety

Q: Our house was built around 1940; the fireplace is original; and we installed forced-air gas heating about 10 years ago. We haven’t had the fireplace or furnace inspected. What do you guys recommend to get the fireplace and the furnace ready for winter?

A: Regular inspection and servicing of fireplaces and furnaces adds to comfort, makes them more economical, and most important, keeps them safe. Regular inspections can prevent a deadly house fire or the introduction of a silent killer: carbon monoxide.

Here’s our checklist to keep you cozy and safe during the winter months:

Wood-burning fireplaces

1. Inspection by a certified chimney sweep is a must. For heavy use, the chimney should be inspected and cleaned annually. Go up to five years if the fireplace is used only occasionally. The sweep should inspect for proper operation of the damper and for cracks in the flue liner, as well as sweeping the flue to remove creosote and other combustion byproducts.

2. Close the damper when the fireplace isn’t in use.

3. Install a chimney cap if you don’t already have one. You don’t want creatures building their nest in your flue.

4. When starting a fire, “prime” the flue by holding lighted newspaper at the back wall of the firebox to start the warm air rising.

5. Burn aged, dry hardwood if possible. Fir or pine burns hot and deposits creosote in the chimney. Don’t burn construction debris. It may contain toxic chemicals that will vaporize in the fire and could enter the living space.

6. Do not clean out the fireplace when the ashes are still hot. And dispose of the ashes in a place where wayward embers won’t start a fire.

Fireplace with gas starter

1. If the flame goes out, wait at least five minutes before attempting to relight the fireplace. This allows time to clear the fireplace of gas.

2. Be alert for unusual odors or odd-colored flames, which are often a sign that the fireplace is not operating properly. In such cases, contact your dealer or licensed technician for servicing. Contact the gas company if you smell gas when the unit is off.

Gas furnace maintenance

1. An annual maintenance check of a gas furnace extends the life of the appliance and ferrets out any hidden problems. A qualified heating contractor should vacuum out the unit, inspect the blower motor, inspect the heat exchanger for cracks, check the electronics and perform a multipoint checklist to make sure the furnace is operating properly.

2. Clean or replace the furnace filter frequently during the heating season. This ensures that air returning from the inside of the house is unobstructed and clean when entering the combustion chamber.

3. Keep vents, space heaters and baseboards clear of furniture, rugs and drapes to allow free air movement.

4. Ensure there is free airflow around your furnace and make sure there are no storage items obstructing airflow.

5. Do not store or use combustible materials, such as chemicals, paint, rags, clothing, draperies, paper, cleaning products, gasoline, or flammable vapors and liquids in the vicinity of the furnace.

6. Carbon monoxide is a colorless, odorless and lethal gas that can occur any time there is incomplete combustion or poor venting. Any home that contains fuel-burning appliances, such as a fireplace or furnace, should have a carbon monoxide alarm installed according to the manufacturer’s instructions.

By Bill and Kevin Burnett


9 ways to keep lid on energy bills

No one likes wasting money, especially in these tough economic times. So it certainly makes sense — dollars and cents — to make a small investment of time and supplies to close up those heat-wasting air leaks around your home. It’ll pay back big dividends in reduced energy bills and a warmer, more comfortable house this winter. So let’s look at some of the areas where those drafts may be lurking, and see how to take care of them.

1. Doors and windows: This should be an obvious one. If you can see gaps between your siding and your windows or exterior doors, close them up with a bead of clear or paintable acrylic latex caulk. Larger gaps can be filled with foam backer rod before applying the caulking.

2. Exterior penetrations: Some of these areas are going to be obvious, while some may take a little bit of searching. Some examples of exterior penetrations where air can leak into the house include exterior faucets, dryer vents, exterior electrical outlets, exterior light fixtures, holes that have been drilled for phone and TV cables, conduit penetrations, exit points for plumbing drains, and penetrations for air conditioning lines. Closing these penetrations may require a variety of different techniques, including caulk, expanding spray foam, or, in the case of electrical boxes and fixtures, specific gaskets that are designed to fit the boxes.

3. Exhaust-vent covers: Dryer vents, range hood vents, bath fan vents, and other interior ventilation equipment typically terminate outside the house in a plastic or metal cover that has one or more louvers on it. The louvers are designed to be in the closed position whenever the fan is not in use, so that outside air doesn’t leak in. Check all of these louvers to be sure they’re closing completely, with no air leaks. If they aren’t, you can adjust the spring tension to hold them closed more tightly; add foam weatherstripping tape for a more air-tight seal; or replace the entire vent cap with a new one.

4. Gaps around interior vents and recessed lights: Inside your home, heated air can be leaking out around that same ventilation equipment, where vent pipes pass through the walls or ceiling, or where vent covers meet wall and ceiling surfaces. Recessed light fixtures can also be real air-leakers. Around the vent pipes and recessed light cans, seal any gaps with caulking. For the vent covers and recessed light covers, remove the covers, then adjust the springs and/or add foam weatherstripping tape to create a tight seal between the cover and the ceiling.

5. Heat-duct penetrations: Gaps around heating-duct cans where they pass through the floor or wall allow cold air to enter from the crawl space, while gaps around ceiling-duct cans allow heated air to escape into the attic. To close those drafts, first remove the register, then use a combination of caulking and/or metallic duct sealant tape to close any gaps between the sheet metal cans and the floor, wall or ceiling surface.

6. Fireplaces and woodstoves: Lots of gaps can occur around these appliances. With a conventional fireplace, keep the damper closed except when burning a fire to prevent heated air from escaping up the chimney. Consider investing in a set of air-tight doors, which close off the air leaks and also make your fires more efficient. Look for gaps around woodstove and gas fireplace flue pipes, and air leaks around masonry chimneys. Use a metal collar if necessary around flue pipe penetrations, and seal gaps with heat-resistant sealant specially formulated for this application.

7. Attic and crawl space hatches: These can be real air losers if they’re not weatherstripped, so take care of that with some foam tape. Make sure the hatches are insulated as well.

8. Interior doors to unheated spaces: If you have any interior doors that lead to unheated spaces, including basements, garages or attics, be sure the doors are weatherstripped to prevent air leakage. If possible, replace older, hollow-core doors with solid-core or, better yet, insulated metal doors.

9. Sill plates and penetrations: This one’s not as easy to deal with, but it’s well worth the effort to try to do whatever you can with it. Air can leak both into and out of the house through gaps where the sill plate meets the foundation or the siding, and around plumbing and wiring penetrations drilled through wall plates in various areas. If you have a gap between your siding and the bottom of your exterior wall, especially in older homes where the use of sill sealers was not a common practice, consider closing up this big air gap with a bead of caulking or expanding foam. In the basement, crawl space and attic, if you can access any of the pipes and wires that pass through the wall plates, seal the penetrations with expanding foam.

Median home prices fall in 74% of metro areas (CHARTS)

NAR: Real estate sales rise in all 50 states in Q3

Home sales rose in all 50 states and Washington, D.C., in the third quarter, though median prices fell in the vast majority of metropolitan areas covered by the National Association of REALTORS® in its latest quarterly report.

Of 150 metro areas, 111 (74 percent) saw the median sales price of existing single-family homes decline in third-quarter 2011 compared to third-quarter 2010. The remaining 39 metros saw price gains.

Nationally, the median sales price fell 4.7 percent year over year, to $169,500 — a steeper annual decline than that seen in the second quarter (down 2.8 percent). In its latest forecast, NAR expects median existing-home prices to decline 4 percent this year compared to 2010.

The trade group also expects existing-home sales to increase by 1 percent this year to a seasonally adjusted annual rate of 4.955 million.

Total U.S. existing-home sales — which include single-family homes, condominiums and co-ops — rose to a seasonally adjusted annual rate of 4.88 million in the third quarter.

That’s a 17 percent jump compared to third-quarter 2010, when sales tumbled following the expiration of a federal homebuyer tax credit program. Sales remained essentially flat compared to the second quarter.

Distressed homes, typically sold at a discount compared to traditional homes, accounted for 30 percent of sales in the third quarter, down from 34 percent in third-quarter 2010, the report said. First-timers made up 32 percent of buyers, down from 34 percent at the same time a year ago.

Cash buyers and investors accounted for about the same share of purchases as in third-quarter 2010: 29 percent and 19 percent, respectively.

Regionally, the Midwest saw the biggest annual jump in sales, up 25.1 percent to an annual level of 1.08 million. Of the 10 states with the largest year-over-year increases in sales in the third quarter, half are in the Midwest.

State Q3 2010 Q3 2011 % Chg.
NORTH DAKOTA 9,200 12,800 39.1%
UTAH 22,000 30,400 38.2%
NEBRASKA 24,400 33,200 36.1%
IDAHO 28,400 38,000 33.8%
IOWA 40,000 53,200 33.0%
WISCONSIN 59,600 77,200 29.5%
DELAWARE 8,400 10,800 28.6%
VERMONT 8,400 10,800 28.6%
OKLAHOMA 58,800 74,800 27.2%
SOUTH DAKOTA 12,000 15,200 26.7%

Source: National Association of Realtors.

The region’s median sales price fell 2.2 percent year over year to $142,300 — tied with the South for the smallest regional decrease. Of the 10 metro areas with the highest price increases, six are in the Midwest.

Metro area Q3 2010 Q3 2011 % Chg.
Grand Rapids, Mich. $89,900 $111,200 23.7%
South Bend-Mishawaka, Ind. $79,100 $94,800 19.8%
Palm Bay-Melbourne-Titusville, Fla. $93,100 $109,600 17.7%
Youngstown-Warren-Boardman, Ohio-Pa. $60,400 $68,300 13.1%
Green Bay, Wis. $120,500 $135,700 12.6%
Canton-Massillon, Ohio $79,500 $88,700 11.6%
Peoria, Ill. $119,400 $132,600 11.1%
Binghamton, N.Y. $109,000 $120,500 10.6%
Jackson, Miss. $129,500 $139,400 7.6%
Spartanburg, S.C. $115,500 $124,100 7.4%

Note: Data for third-quarter 2011 is preliminary.

Source: National Association of Realtors.

In the South, sales rose 15.5 percent to 1.89 million. Of the 10 areas to see the smallest increases in sales, half are in the South, including Washington, D.C.

State Q3 2010 Q3 2011 % Chg.
VIRGINIA 102,400 106,000 3.5%
Washington, D.C. 8,000 8,400 5.0%
HAWAII 18,800 20,000 6.4%
CALIFORNIA 442,800 475,600 7.4%
CONNECTICUT 38,000 40,800 7.4%
WEST VIRGINIA 24,800 27,200 9.7%
MARYLAND 64,000 70,400 10.0%
FLORIDA 348,800 385,600 10.6%
WYOMING 7,200 8,000 11.1%
MASSACHUSETTS 86,000 96,400 12.1%

Source: National Association of Realtors.

The South’s median sales price declined by 2.2 percent to $153,200.

Sales in the West increased 16.7 percent to 1.14 million. The region saw the biggest median price drop, 9 percent.

Of the 14 metro areas to see double-digit price declines, six are in the South and five are in the West.

Metro area Q3 2010 Q3 2011 % Chg.
Mobile, Ala. $120,000 $98,800 -17.7%
Phoenix-Mesa-Scottsdale, Ariz. $138,000 $113,700 -17.6%
Allentown-Bethlehem-Easton, Pa.-N.J. $234,900 $193,800 -17.5%
Salt Lake City $215,600 $182,600 -15.3%
Gulfport-Biloxi, Miss. $118,100 $103,100 -12.7%
Miami-Fort Lauderdale-Miami Beach, Fla. $214,800 $187,600 -12.7%
Rockford, Ill. $110,700 $96,900 -12.5%
Virginia Beach-Norfolk-Newport News, Va.-N.C. $215,000 $190,000 -11.6%
Tucson, Ariz. $148,100 $131,100 -11.5%
Akron, Ohio $105,700 $93,600 -11.4%
Hagerstown-Martinsburg, Md.-W.Va. $143,800 $127,700 -11.2%
Las Vegas-Paradise, Nev. $138,100 $122,700 -11.2%
Atlanta-Sandy Springs-Marietta, Ga. $113,500 $101,900 -10.2%
San Francisco-Oakland-Fremont, Calif. $547,500 $491,900 -10.2%

Note: Data for third-quarter 2011 is preliminary.

Source: National Association of Realtors

User-friendly neighborhood research

Startup Scene:

By Natalie Fonseca
Inman News™

I’m a relocation junkie — so much so that even when I’m not actually planning a move, which is something I tend to do every couple of years, I enjoy researching neighborhoods that I might want to live in someday.

Thanks to a startup,, there’s now a new way for homebuyers (and moving hobbyists like me) to learn about a local area long before they ever visit it in person.

Founded by Bryan Kunka, Brian Bandemer and Patrick Misch,’s mission is to make it easier for consumers to find the perfect neighborhood. founders (from left to right) Patrick Misch, Bryan Kunka and Brian Bandemer.

Since everyone has different interests and budgets, and no two neighborhoods are alike, relies on multiple data sources to provide home shoppers with a better sense of what it might be like in a particular area.

Users search a map by address, city or ZIP code to get detailed information on school test scores, neighborhood walkability, local businesses and crime reports. There’s also a lifestyle feature that uses demographic data to describe neighborhoods according to categories like “promising families” or “thriving boomers.”

Kunka, whose own neighborhood lifestyle is described as “blue-collar comfort,” was working as a relocation consultant at In-House Realty — a Detroit-based real estate brokerage affiliate of Quicken Loans — when he received an email about a nonprofit entrepreneurial incubator program in Detroit called Bizdom U.

Both In-House Realty and Bizdom are part of the Quicken Loans Family of companies, and Kunka jumped at the opportunity to become an entrepreneur.

While at Bizdom, Kunka met co-founder Bandemer and — after ruling out a few other possibilities — they came up with the idea for in October 2010. A few months later, they teamed up with co-founder and chief technology officer Misch and the company was funded by Bizdom in April 2011.

Still a small team of four, has launched the beta version of its service and is busy working on a number of new features and products. screenshot. will be participating in Startup Alley at Inman News’ upcoming Real Estate Connect conference in New York City, and I asked Kunka about neighborhood search and what the team has planned in the coming months.

Q: is based in Detroit. What’s it like to start a company there?
A: Detroit is an awesome place to start a business. The startup scene here is really taking off. Office space is inexpensive, we have access to amazing talent through the state’s universities (the University of Michigan, Michigan State University and Wayne State University), and we have fantastic food!

Downtown Detroit is loaded with culture, history and people who are proud to be Detroiters. The city is rebounding and we are so pumped to be a part of it!

Q: Given that there are other resources to help people find neighborhood information, what’s your key value proposition?
A: Our goal is to be visual and memorable. To tell stories about the type of person that you should expect to live in a particular area. We provide a map-based solution with lots of graphics and visuals.

We use terms like “power elite” to help people remember what lifestyle group they are in. We use crime report cards to easily identify if an area is low crime, or an “A” grade; average crime (“C” grade); or high crime (“F” grade).

Until now, you had to drive around to see if the area is kid-friendly. Now all you have to do is go to and we tell you, without stepping foot in your car and wasting your time and gas.

We also help with relocation. Relocations happen really fast and one of the top reasons why relocations fail is that the family doesn’t get acclimated to the area. With, we help people who are relocating understand all about the community before they even agree to move.

Q: Since is free to users, how do you plan to make money?
A: This was a big decision because our original revenue model was to charge a monthly subscription fee for real estate agents and relocation companies to use our product.

But about six months ago we were able to negotiate our data costs down enough to handle incredibly large amounts of traffic, which allowed us to go with a free model.

We got a ton of feedback saying that the information is great, but our clients want it on their own websites. So now we sell a widget with our information that is available for real estate, relocation and mortgage companies, and any other websites that might need it.

We also have a branded page that we sell to relocation and corporate housing companies that caters specifically to their clients. And lastly, and most excitingly, we have something big brewing for the mortgage industry.

Q: What vendors do you work with to get your data?
A: We work with for school information, and the FBI for crime information, data-mining companies for our lifestyle information, and WalkScore and SimpleGeo for our neighborhood information.

Q: What would you say to critics who think could hurt homeowners or real estate agents who are trying to sell properties in neighborhoods that don’t have the best schools or the lowest crime rates?
A: The information we provide is designed to be accurate, above all else. We aren’t in the business of painting a pretty picture of neighborhoods that aren’t actually pretty. We are here to show you exactly what is there. We realize that the crime data can be eye-opening at times.

Our goal is not to deter people from buying or renting in certain neighborhoods, but to give you the best information about the area before you check it out for yourself! Our lifestyle information, however, does a really great job of shining a positive light in areas that some may view as not so great.

Q: How do you hope real estate professionals will use
A: We want real estate agents to use our website or widget as a way to make them more efficient. We want them to send their clients to our website, have their clients do a bunch of research on their own, and then get back with the real estate agent with a focused search area. This way, real estate agents aren’t driving around showing clients cities and neighborhoods that they’re not interested in — wasting time and gas.

Q: Are there any new products or features you’re working on that you can tell us about?
A: We have a few major rollouts coming up in the next six months. The biggest upgrade to the site itself will be our reverse search. Users will be able to enter information about the lifestyle they are looking for and we will be able to identify which area would be the best fit for that lifestyle.

We plan to release a mobile app sometime in the next six months. Our mortgage product is what I am most excited about. We anticipate it will be up and running by February or March. It is designed to help mortgage companies convert better on all of their home purchase leads. screenshot. screenshot.

Want to recommend a RE tech startup for an upcoming Startup Scene? Send your ideas to Natalie Fonseca at

Natalie Fonseca is the co-founder and executive producer of Tech Policy Summit and the Privacy Identity Innovation (pii) conference, and the content producer for Inman News’ Data Summit and Real Estate Connect. You can follow her at @TechPolicy.

True costs of a monthly mortgage

The whole idea of an infographic is to take a topic that is complex or difficult to understand via text, and to display it, with graphics and visuals, in a way that makes it simple to understand at a glance.

Given that overarching aim of the entire genre, it makes sense that many an infographic has been designed in an effort to demystify that indispensable phenomenon which holds the power to empower and imperil, while causing great obfuscation among homebuyers and homeowners alike: the home mortgage.

Unfortunately, many of the mortgage infographics are stunningly complex or utterly unhelpful in themselves. Some try to illustrate every evil of the subprime mortgage calamity and depict the sequence by which America’s housing market fell.

Others they try to use tricky icons to make vivid the impacts of the recession on housing markets nationwide, which vary across cities and are so subject to the perspective of the beholder (i.e., what ails sellers exhilarates buyers) that they aren’t easily boiled down to happy and sad faces (except at the extreme ends of the spectrum.

But I recently saw a very basic, educational mortgage infographic that took me back to the days when I first started selling real estate. I worked up a very basic flowchart of the homebuying process on my laptop that I used at my very first meeting with a client, to demystify the process, tackle some common misconceptions head on, and empower them to know what to expect.

People loved it so much that I would get calls from them, later in the process, saying that they would have been nervous but for the fact that they knew what was coming; even experienced buyers told me they learned things during that session that they had never known before, despite having bought several homes over several decades.

The infographic that put me in mind of those days — and of the perennial cravings of smart real estate and mortgage consumers for clarity — is a simple breakdown of the elements of a monthly mortgage payment.

Principal, interest, taxes and insurance — stack up in blocks of color to comprise the total payment a borrower is required to make, and the graphic also provides a sample set of numbers for each element pegged to the purchase of a $269,000 home with a 20 percent down payment.

(The $269,000 amount seems random, compared to the current median existing-home sales price of $165,400 nationwide — that median price statistic is according to the National Association of REALTORS®.)

On the other hand, the 4.54 percent interest rate upon which the graphic is based is quite close to today’s prevailing 4.33 percent rate on a 30-year fixed-rate loan.

The graphic includes one additional module, providing a reality check for today’s homebuyers and refiers who are low on cash or simply want to keep some in their pockets.

Down payments less than 20 percent flick on the PMI switch, meaning that lenders charge an extra, substantial monthly fee for private mortgage insurance. The aim? To both (a) incent borrowers to put more down, and (b) cover the cost of insurance against the additional risk of default that low-down loans present.

This graphic doesn’t contain uber-sophisticated analysis, fancy clickable maps or interactive doodads, but it does offer mortgage consumers a simple breakdown of their mortgage payments. Its simplicity does bely the new clarity it might provide to some borrowers, whether novice or repeat.

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Ask her a real estate question online or visit her website,

6 must-haves for mortgage approval

Interest rates fell to new lows in September. Low interest rates increase affordability and should make it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender’s strict underwriting are all too common.

Some buyers are turned down for illogical reasons. For instance, if you have investments — even if they’re performing well — an underwriter might deny the mortgage because your portfolio doesn’t fall into the underwriter’s risk assessment model.

One couple was turned down because the husband had worked at his current job for less than a year — even though he was making more money at the new job than he was before.

These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.

Generally, it’s more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.

You could run into underwriting problems if you’re self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won’t lend to buyers who have more than three or four residential properties.

If you’re buying a new home before selling your current home, you’ll need to have 30 percent equity in your current home. This needs to be verified by the lender’s appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month’s rent to verify rental income if needed to qualify.

HOUSE HUNTING TIP: As soon as you’re serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don’t make your selection based on interest rates alone. A good track record counts for a lot.

Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you’re not turned down at the last minute, it’s worth it.

Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you’ll need to do to satisfy the underwriter.

Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won’t be included as livable square feet.

If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.

As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today’s lower interest rates will help boost affordability.

There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.

THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Home Ownership Matters

In the past 12 years, the net worth of the typical home owner has ranged between 31 and 46 times that of the net worth of the typical renter.Home owner equity is a substantial component of home owner wealth. The Federal Reserve’s Survey of Consumer Finances, conducted once every three years, provides a snapshot of family income and net worth along with basic demographic details and more detailed information on where families keep the wealth they have accumulated.The most recent survey, concluded in 2007, offers a picture of the situation before home price declines and the tumbling equities market hit household balance sheets. At that time, median home owners had well over $200,000 in net worth or 46 times that of the median renter who had just over $5,000. Furthermore, $200,000 was the median value of owners’ homes.Looking at aggregate data, the National Association of Realtors® estimated the impact for renter and home owner households through mid-2010 taking home price and stock market performance into account. The result suggests that despite declines in equity and housing markets, homeowners have a net worth orders of magnitude greater than renters.How has the recovery of the stock market and a sluggish housing market affected owners and renters? For the first time ever, the Federal Reserve resurveyed the 2007 participants in 2009 to directly measure how the crisis and recession affected their finances. These results are expected later this year.