Obama Mortgage Plan

The Obama administration is rolling out new efforts to keep borrowers in their homes. Although this plan will likely take a few months to be fully implemented, it may help those of you who have previously been left out in the cold.

Unlike many other refinancing plans, this plan rewards payment and high credit scores. People availing themselves of this plan will need to be current on their loans and have credit scores of over 500. You will also need to owe more on your home than it is currently worth. The plan is to write down the principal of the loan by at least 10%. (Source: WSJ pg. A5 3/27/10)

Homeowners who do not qualify but are staying in their homes should see a benefit once they decide to sell their homes. The intended effect is to stave off foreclosures. Foreclosures decimate values of comparable homes by reducing appraised values and comparative market analyses (CMAs). If appraisers and real estate agents remain with their current formulas, principal write-downs should have no impact on neighboring homes, as both appraisals and CMAs are based largely on sold comparables. (A foreclosure would be included, yet there is no sale with a principal write-down, so these homes would be excluded entirely.)

My suggestion is that anyone who thinks they may qualify for this program should contact their lenders, accountants, financial planners and/or attorneys to further vet the details and timing of this plan.

Open House Preparation

As discussed in my last entry, your first course of action when marketing a property is to determine who your target market will be and to make the property most appealing to that audience. Regardless of whether you are selling a fixer-upper, a pristine property, or something in the middle, open house preparation is not to be overlooked. There are dual objectives when preparing for an open house: maximizing the attractiveness of the property while minimizing safety concerns.

The exterior grounds should be well maintained. Remove any snow and debris from walkways and driveways. Spread sand and/or salt where appropriate. Make sure the lawn is well manicured.

As for the interior, you want to keep paths of traffic free of any clutter. Clean thoroughly, including: dishes, sinks, counters, tubs, showers, mirrors, walls, floors and fixtures. These steps will make the property more attractive, while minimizing the likelihood of injury to invitees.

Equally as important as aesthetics is aroma. To the extent possible, pet and smoke odors should be eliminated. If you like to bake, do so just prior to the open house to make the home smell inviting. In the alternative (or in conjunction), air fresheners and candles make a property smell fresher and create a nice ambiance. (Lit candles should be kept high and out of the reach of children.)

Remember, even the most qualified real estate professional needs a fighting chance when trying to sell your property. Anything that draws attention away from the selling features of the home does you and your agent a disservice.

While open houses can be an effective marketing tool, they, like anything else, have their downside:

Theft can be an issue, so remove valuables, or store them in secure locations. In addition, check to make sure that doors and windows are secure after an open house. Although I have never had a related issue arise (knock on wood), we have all heard stories of items being stolen and/or doors and windows being unlocked for later access. At a successful open house, there will be numerous parties walking through the property at any time and an agent cannot possibly keep an eye on every person throughout the event.

Finally, remember that all marketing is most effective at the inception of the listing. This is when your property will garner most interest, so be sure to take advantage of that window by presenting your property in the best light possible.

As always, for further discussion on this or any other real estate matters, contact me at 978-423-9309 (cell) or via email to john@jw-realestate.com.