Improving Real Estate: Beige Book Reports

All 12 Fed districts reported existing homes sales grew stronger and in some areas, substantially. There has been a rise in home selling prices or they have at least held steady. Areas such as Boston, Atlanta, Minneapolis, Dallas, and San Francisco experienced declining inventories which creates opportunity for higher listing prices. More modest increases were found in New York, Richmond, Chicago, and Kansas City Districts. The residential rental market also is still strong despite the fact that some areas saw lower increases in rent.

Overall, the beige book paints a picture of improvement, at least in real estate, for August and September 2012. The report stated that economic activity "generally expanded modestly". Consumer spending increased or remained level.

These findings are used in discussions at Fed policy meetings this month. A recent boost from the Fed, to help encourage lower mortgage interest rates, came last month when the central bank agreed to buy an additional $40 billion of mortgage-backed securities monthly. The bond-buying program will continue until the labor market significantly improves.

Despite this rosy report from the Fed, as the year begins to wind down, some sellers are still patiently waiting to sell their homes. If your home is on the market or you plan on listing it soon, pay attention to these deal-breaker tips.

Once you've accepted an offer there are still things that can go wrong and cause the deal to break. For instance, if your appraisal comes in too low, the buyer might not be able to qualify for the necessary funds from the lender thus forcing the buyer to come up with the difference or to walk away from the sale.

The best way to avoid this from happening is to make sure your experienced real estate agent provides details about your home and other comps in the neighborhood. Because there are so many distressed sales and decreasing home prices, it can be difficult to effectively compare homes. This ultimately can negatively impact your home's appraisal. Also, note that if the appraisal comes in much lower, you may need to consider dropping the sale price or risk losing that particular buyer.

Another deal-breaker is not fixing up your home before you list it for sale. Sometimes, buyers will insist on various home repairs and other times, the lender will require certain maintenance be completed before escrow can close. This might occur if the appraiser notes that there are various maintenance issues that need repairing. The lender can then push the closing date out by weeks or months to ensure that the repairs are completed and the appraiser has come back, reviewed, and signed off. The key is to inspect your home before listing it for sale. Make a list of the necessary or "likely needed" repairs (anything an inspector/appraiser might notice) and then tackle them right away. One way or another, they'll need to be addressed...might as well get started now.

Another area of concern has to do with do-it-yourself remodeling or, for that matter, even professionally remodeled projects. If you remodel and need permits for the remodel, be sure you have those in order. They'll be necessary when you sell your home. Sometimes homeowners remodel and, at the time, they're not concerned with the necessary permits but when it comes time to sell, the permits are vital. Not having them could be a deal-breaker. Consult with your real estate agent. Agents can help you make sure you have all the documents you need in good order before you list your home for sale.



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