Housing Market Recovery - 3 People to Ignore

There sure are a lot of people talking about the housing market lately, particularly on the subject of housing market recovery and economic rebound. When you look at recent trends in the real estate industry, it's easy to understand why there is so much buzz.

But it's also important to understand the difference between information and misinformation when it comes to housing market recovery -- or any other economic topic, for that matter. A home buyer in today's economy will be bombarded with conflicting information from all sides. The housing market is good. The housing market is bad. We are in a recovery period. We are still plummeting. Prices are climbing. Prices are dropping. It's enough to make you crazy.

But you can keep yourself sane by knowing which information sources to take with a grain of salt. To that end, here are some people worthy of skepticism when it comes to the housing market recovery and similar topics.

1. President George W. Bush

The president likes to say that we are going through a "rough patch." A bit of a hiccup, eh George? Now, I understand the need for positive thinking at such high levels. But a president who doesn't recognize and/or admit a full-on recession ... well, that's just scary.

There are other reasons George W. Bush cannot be trusted on the subject of housing market recovery and similar topics. For one thing, the subprime mortgage lenders helped pay for his presidential campaign. Yes, the same lenders who helped drive the country into a foreclosure crisis.

For example, it is a matter of public record that Roland Arnall (a billionaire executive from the Ameriquest subprime lending company) was one of Bush's top fundraisers. So any proposed legislation that would have curtailed the days of "subprime lending gone wild" met with stiff resistance from the then-Republican-controlled Congress and White House.

Ameriquest has also settled a lawsuit that accused them of deceptive lending practices. What does GW do? He appoints Ameriquest founder Roland Arnall to be ambassador to the Netherlands. Seriously, George? Are you sure you didn't mean to say the "nether regions"?

So when you see President Bush or one of his mouthpieces talking about the economy as a whole, or housing market recovery in particular ... take it with a grain of salt.

2. Anyone From Fox News

Sorry, right-wingers, but Fox is the most biased, one-sided news program on television in the United States. Come on now, admit it. When is the last time you heard them say anything good about a democrat, or bad about a republican? Fox News also loves to crank up the shock value, and they are widely known for shaping the "facts" to suit their transparent agendas.

So when you see anyone from Fox News talking about the housing market in any way, shape or form ... take it with a grain of salt.

3. The National Association of Realtors(r)

It always amazes me to see most news outlets in the country citing a nationwide drop in home sales, while at the same time the NAR proclaims a national rise in home sales. Now, I'm not accusing them of lying, but there is something to keep in mind here. Most of the data they use for their national "analysis" of the housing market is proprietary data from within their own organization. In fact, the NAR just went through a prolonged lawsuit with the Department of Justice over the management of their data, and whether it violates antitrust laws.

So when you see this organization (who has a vested interest in home sales) talking about housing market recovery ... take it with a grain of salt.

A Final Word of Advice

In closing, I would also warn you against giving too much credence to the real estate commentary of your neighbors, your coworkers, your hairdresser, the checkout guy at the grocery store, or your sister's husband's former college roommate who knows a guy who knows a girl who once worked for a real estate company.

In real estate, as with everything else in life, there are many people who mistake their opinions for fact. There are also many people who skew the facts to serve some kind of personal agenda. And with the speed and reach of the Internet, it doesn't take much to create full-fledged hysteria about the housing market or any other topic.

Dig deeper for the truth. Be a smart and skeptical consumer. Take what other people say with a grain of salt. Do your own research and form your own opinions. When somebody makes a statement about the housing market, ask yourself where their interests lie. Be a rational, free-thinking, intelligent individual. The economy can only benefit from having more people like that.

Brandon Cornett is the publisher of the Home Buying Institute, which educates consumers on how to buy a home, how to choose a mortgage, how to stop foreclosure and related topics. Learn more about this topic at http://www.homebuyinginstitute.com

Home Buying Tips for the Internet Age

The Internet has made the house-hunting process faster and easier by putting a wealth of information at your fingertips. Literally. But many home buyers don't realize the many ways that web technology can help them. So let's take a look at some of the ways you can use the Internet to simplify your home search process.

1. Hire a Modern, Web-Savvy Agent

As far as Internet technology goes, there are two types of real estate agents. The first type view the Internet as a "gadget" that's not worth their time to learn. They use the Multiple Listing Service (MLS), and only that service. They are not web-savvy and therefore have a limited view of the real estate world around them.

The second type of agent is often part of the new generation of web-savvy real estate professionals. This agent knows the value of the Internet, and is "wired" into all of the major home-search websites, among other things. This agent can help you find and research properties more quickly by using the power of Internet technology. He or she is probably pretty handy with digital cameras, virtual tour technology, and other useful tools as well.

2. Use the Big Home-Search Websites

Over the years, real estate search engines have exploded both in quantity and complexity. These days, you can visit one of these websites and gain instant access to local property listings, recent sales data in your area, and more. This is an excellent way to screen houses before you visit them, which can save you a lot of time and energy.

For example, if you only saw a black-and-white photo of a home in the newspaper, you wouldn't know what the inside rooms looked like. You would have to visit the property to find out. These days, however, you can use virtual tours and photo galleries to preview nearly every corner of a house. If it doesn't match your needs, you don't waste your time with a visit. Now that's using technology to your advantage!

3. Use Your Local Newspaper's Website

Most city newspapers have an online version of their news as well. For example, here in Austin, Texas, I can visit the Austin-American Statesman website to get information about the local real estate market, homes for sale, new subdivisions being built and more. Sure, the Sunday paper has a lot of this information. But why wait until Sunday?

4. Read Local Real Estate Blogs

Many real estate agents and companies have begun to use blogs as a way of publishing information online. A blog is like a website, only the information is presented in chronological format like a journal. Many agents use their real estate blogs to publish updates about the local market, new homes they have listed and more. An agent's blog is almost always more up-to-date than the main website. So they can be a good source for timely real estate info in your area. You can find them by doing a Google search for your city name plus "real estate blogs."

5. Use Your Email Network

Do you know a lot of people who live in the area where you want to buy? Friends, family and coworkers perhaps? If so, send them an email to let them know you're looking for a home in the area. If they see homes for sale in that area, they can email you about them. Essentially, you are creating your own house-hunting "army" to help you stay on top of things.

This can be especially useful in a hot market where homes sell fast. For example, imagine the following scenario:

Jane knows that her friend Sally is looking for a nice one-story home in the Shady Lane area. On her way to work one morning, Jane passes a "for sale" sign in front of a nice one-story home in that area. She pulls over to the curb, snaps a picture with her camera phone, and sends it to Sally. In turn, Sally emails it to her real estate agent who meets her there at lunchtime to view the home. This is a prime example of how technology can help you stay ahead of the curve when shopping for a home.

Brandon Cornett is an Austin real estate writer who publishes information on Austin, Texas homes and similar topics.

Getting Mortgage Quotes Online - The Safe and Smart Way

For better or worse, the Internet has altered everything about the real estate process. And that includes the way we shop for loans. These days, you can use the Internet to save time and energy by shopping for mortgage quotes online and comparing lenders. But there's a right way and a wrong way to go about it.

The Benefits of Online Quotes

Why should you bother obtaining mortgage quotes online in the first place? There are many reasons, actually. But let's focus on the primary advantages of the online quoting process.

The most obvious benefit is the convenience factor. Before mortgage lenders embraced the Internet as a business tool, you had to spend a lot of time on the phone if you wanted quotes from multiple lenders at once. Or even worse, you had to drive all over town.

By using the Web, however, you can complete an online form at one of the big mortgage websites and get quotes / offers from several lenders in response. Clearly, this saves you a lot of time and energy.

For example: Click on the "Find a Mortgage Loan" link in the upper-right corner of the blog, and you'll see firsthand how simple the process can be.

But there are other advantages to using the Internet for mortgage quotes. You also gain access to a broader range of mortgage products when you go online to obtain quotes. Different lenders offer different mortgage packages and terms. So by using the Internet, you can gather information on a wider variety of options. As a result, you'll probably have a better chance of finding a mortgage product that matches your financial needs.

Being Smart About the Process

Anytime you reveal personal information via the Web, you have to be smart about protecting your identity from theft and fraud. Obviously, this applies to mortgage quotes online as well. So let's talk about the ways you can be a smart consumer when shopping for offers via the Web.

1. Use Trusted Websites -- The big mortgage names you see on TV all the time are usually your best option, in terms of safety and security. These companies have a lot at stake, so they take things like Internet security very seriously. In other words, stay away from "Al's Mortgage Warehouse" and other shady websites.

2. Learn Your Credit Score -- You should go into this process knowing what your credit score is. When you request mortgage quotes online from multiple lenders, they will present you with some basic information. But they can't qualify you for a loan, or determine the interest rate they'll offer you, until they have conducted a more formal review of your credit and financial history. So if you know your credit score in advance (and whether you are at, below or above the average), you'll be able to determine how realistic those quotes are.

3. Determine Your Own Budget -- Don't let a lending institution tell you what you can or cannot afford, in terms of a monthly mortgage payment. You have to determine that for yourself. A lender can only tell you how much of a loan they'll offer you -- not how much you can realistically afford. So use mortgage calculators (you can find them all over the Web) and other budgeting tools to find out what your limits are with monthly payments.

Online Mortgage Quote Conclusion

The Internet can certainly save you a lot of time when shopping for a home loan. It can also open up a wider range of mortgage products and terms. But like any other financial process, you have to be smart about getting quotes online. Stick with reputable companies and websites. Conduct a financial self-assessment of your own. Read all the fine print. A little homework goes a long way in this department.

The Process of Buying a House - 12 Steps to Success

by Brandon Cornett

In recent years, the process of buying a house has been affected by the so-called mortgage crisis and the continued evolution of the Internet as a real estate tool. Because of these changes and advancements, many of the home buying tutorials you find online are stale and outdated. So in this tutorial, we will take a more modern look at the process of buying a house.

More specifically, I will outline the basic home buying process in twelve clear steps. Please keep in mind, however, that the process varies slightly from one buyer to the next. This article is not meant to be the only path to ownership, but merely to educate you on what to expect in today's real estate market.

1. Check Your Credit

Credit scores have always been important for house buyers, but these days they are more important than ever. This comes as a result of the subprime mortgage "meltdown" that came to a head in 2007 - 2008. Here's an example of what I mean. Borrowers in 2006 needed a credit score of at least 620 to qualify for the best interest rates on a loan. Two years later, in 2008, those borrowers would need a score of 760 or higher to get the best rates.

So your first step in the house buying process should be a thorough review of your financial situation. Order your credit reports from all three reporting agencies (Experian, Equifax and TransUnion) and check them for errors. Order your credit score -- which is different from your reports -- and see how you stack up against the national average. If necessary, work on improving your score by paying down credit card balances, making all payments on time, etc. This is critical to the process of buying a house in today's economy.

2. Determine Your Budget

Some people make the mistake of letting the mortgage lender tell them what they can and cannot afford, in terms of a monthly mortgage payment. In reality, the only thing a lender can tell you is the amount you qualify for -- not the amount you can realistically afford. So you need to determine your house buying budget for yourself.

There are a lot of free mortgage calculators online that can make this process easier for you. Be sure to account for other expenses each month, such as food, gas, car payment, credit card payments, lifestyle items and savings.

3. Research and Choose a Type of Mortgage

Do you know the difference between a fixed-rate mortgage and an ARM loan? This is just one of the things you need to understand before entering the house buying process and applying for a mortgage. Due to of increased competition in the lending industry, there are more types of home loans today than ten years ago. The key to success when choosing a mortgage is to consider your long-term plans and find a loan that best suits those plans. To do this, you need to study the pros and cons of the primary loan types.

4. Get Pre-Approved for a Loan

Pre-approval is a process in which the mortgage lender reviews your financial and credit history in order to determine your "creditworthiness" ... an industry term that means: "How much of a risk is this person, and how much are we comfortable lending?" When you get pre-approved for a certain loan amount, there's a good chance that you'll receive final approval for that amount as well, when the time comes.

Having a pre-approval letter in hand also shows sellers that you are serious about (and capable of) purchasing their home. This can make a big difference in hotter real estate markets, where the seller may receive multiple offers from competing buyers.

5. Find a Real Estate Agent

People often argue about whether or not you need a real estate agent when buying a house. So here's the bottom line. If it's your first time going through the process, or you're buying in a new and unfamiliar city, it's a good idea to hire a real estate agent to help you. When you compare the cost of a home to the size of the agent's commission, you'll see that it's worthwhile to hire an agent.

6. Narrow Your Search

This step will make the process of buying a home much simpler and more efficient. The neighborhood you choose is nearly as important as the house you choose, because both will affect your quality of life -- not to mention the property's resale value. For this reason, it's wise to live in a city for a while before buying a house there, even if it means renting an apartment for a few months. That way, you can learn about the desirable and not-so-desirable areas.

7. Begin House Hunting

Ah, now we get to the fun part. House hunting! This is where you visit properties that are for sale in order to find one that matches your needs. Here are some helpful tips to make this part of the house buying process more successful. Take a digital camera along to get photos of each home. Bring a notepad as well. While you're at it, you might want to bring a friend along for an unbiased opinion of each property ... you know, the kind of person who's never afraid to call it like it is.

8. Evaluate the Asking Price

It's called the "asking price" for a very good reason. It's what the seller is asking for the house, but it may or may not be what they actually receive. Just because a property is listed at $235,000 doesn't necessarily mean that it's worth $235,000. This is another area where your real estate agent will prove his or her value. Most agents are expert at validating a property's sale price against recent sales in the area (known as comparables or "comps"). This will help you determine if the asking price is realistic or inflated.

9. Make an Offer

Moving along in the process of buying a house let's talk about your offer. Once you have determined that the seller's asking price is fair and reasonable, you are ready to make an offer on the house. It's a good idea to make your offer contingent upon the home inspection (see next item). That way, if the inspector uncovers some kind of issue that you consider a deal breaker, you have a way out of the contract. Ask your agent about this.

10. Get a Home Inspection

Most home inspections cost between $500 and $700 (the last time I checked.) That's a small price to pay for the peace of mind you get in exchange. A home inspector will check out the structure and mechanical systems of the property, including (but not limited to) the roof, foundation, electrical system, and heating and cooling system. In my opinion, the process of buying a house is only complete when a proper inspection has been performed.

11. Attend the Closing / Settlement Process

So, you've made it through all of the inspections and the process is still on track. Great! The next step will be the closing / settlement process (it goes by different names in different areas of the country). Actually, you can prepare for this process at the very start of things by putting extra money aside. The closing is the process through which the title to the property is transferred from the seller to the buyer. You'll also be signing a lot of paperwork and paying any other fees that are due.

12. Tie Up Loose Ends

After your move, you'll have a few more items on your task list. Transfer your utilities, if you haven't done so already. Complete a change of address form with the post office. Get a safe deposit box for your home insurance policy and other important documents. Set up a payment schedule or online auto-pay for your mortgage payments. And go meet your new neighbors!

Credit Repair Services - Models Only Please

I thought this was amusing. Today, while doing research into the so-called credit repair services industry, I stumbled across a website called Doctor Credit. On their website, the company boasts a lot of credit repair case studies where they have helped regular folks like you and me.

As it turns out, however, their past clients are all models from stock photo websites ... or at least their pictures are. Is this deceitful behavior on the part of the credit repair company? You tell me. Look at the first photo below. Note how it is clearly labeled as being a picture of "Kevin R." It goes on to tell the credit repair story of Kevin R. (never a last name, of course), and how he got his life back thanks to this credit repair services provided by this company.



Now look at the second picture below. It turns out that Kevin R. is a stock photo model. In fact, all of the past clients of this credit repair service are models (at least, according to the client photos that go along with the stories).




Does this company only serve the modeling industry? Is it a case of "creative license" on the part of the webmaster? Or is it just plain deceitful? You be the judge.

Here's my take on this. Maybe it's an innocent case of using stock images and passing them off as real people -- even going so far as labeling them with client names. But I look and this and think, "How could I trust a company like this to help with my credit issues?"

Maybe it's just me.

In other credit repair services news:

• 5 Credit Fix Scams to Avoid
• Avoiding Credit Repair Scams