Real Estate Information

First and Foremost ... Understand the Financial Implications

Financial viability is a crucial aspect and one cannot ignore it. It is very important to ensure that one can manage that pinch of the down-payment and the EMI and the impact thereof on other key financial goals. In most cases there are cost over runs and hence careful planning is required. Try and ascertain the overall cost so that there are no surprises later - registration, furnishing, legal costs, broker fees, etc. If you are constructing a house, keep a buffer over and above the estimate that you get. As an investment, buying land would be preferred route, especially if affordability is an issue.

A key reason for investing in real estate today is the tax savings that it offers. While we look at the tax benefit that one gets, we forget that we would be losing the HRA benefit. Hence the tax benefit is lower than what is anticipated. If this is a second residential property investment, then there are aspects which need closer focus, such as the likely rental yield. Real Estate, as an investment has to be evaluated on the grounds of the capital appreciation that it would offer in the medium term.

Good Monday Morning!  With the holidays right around the corner now is a great time to get some Fall cleaning done before the hectic season begins!  Three great cleaning projects to get done now are:
 
Oven and Range
You probably do this as needed, but this is a good time to do a thorough oven cleaning, especially if you cook and bake a lot during the holidays. Use a spray cleaner and let it sit overnight. Wipe clean in the morning. This is a much safer technique than using a self-cleaning oven. Starting with a clean oven makes it a lot easier to simply wipe the oven clean the day after Thanksgiving. Don't forget to take off the range and oven dials and let them soak in soapy dishwater.

Patio Furniture
Clean the patio furniture and store it for the winter

Carpets
According to carpeting industry experts, you should have your carpet professionally cleaned every 6-18 months depending on traffic. If you do it once a year, fall is the perfect time. Your carpet will be beautiful for holiday family gatherings and parties. Most carpet cleaning companies offer a special deal where they will come back and take care of any stain within so many months of cleaning. If you clean in the fall and one of the kids spills cranberry sauce on the carpet at Thanksgiving, you're covered. You should also let them professionally vacuum your carpet before cleaning. They can remove more dirt than your vacuum.

With the holidays right around the corner now is a great time to get some Fall cleaning done before the hectic season begins!  Three great cleaning projects to get done now are:
 
Oven and Range
You probably do this as needed, but this is a good time to do a thorough oven cleaning, especially if you cook and bake a lot during the holidays. Use a spray cleaner and let it sit overnight. Wipe clean in the morning. This is a much safer technique than using a self-cleaning oven. Starting with a clean oven makes it a lot easier to simply wipe the oven clean the day after Thanksgiving. Don't forget to take off the range and oven dials and let them soak in soapy dishwater.

Patio Furniture
Clean the patio furniture and store it for the winter

Carpets
According to carpeting industry experts, you should have your carpet professionally cleaned every 6-18 months depending on traffic. If you do it once a year, fall is the perfect time. Your carpet will be beautiful for holiday family gatherings and parties. Most carpet cleaning companies offer a special deal where they will come back and take care of any stain within so many months of cleaning. If you clean in the fall and one of the kids spills cranberry sauce on the carpet at Thanksgiving, you're covered. You should also let them professionally vacuum your carpet before cleaning. They can remove more dirt than your vacuum.

NAR Statement: What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry

In short-term, home sales should improve as mortgage rates fall.

Washington, D.C. (September 8, 2008) — The federal government's takeover of secondary mortgage giants Fannie Mae and Freddie Mac should cause a drop in mortgage rates in the short term that benefits home buyers, but the long-term outlook is too early to call. NAR fully supports the action of the U.S. Treasury and the Federal Housing Finance Agency.

The federal government had no choice. The capital situation of the tow companies was not enough to handle the fallout from rising mortgage defaults in the near future. In addition, investors who purchase Fannie Mae and Freddie Mac debt have lost confidence in the two.

In a statement, NAR commended the Treasury's action, announced yesterday, to bring stability and continued liquidity to the mortgage market. "The plan will help restore confidence in the secondary mortgage market," said NAR President Richard F. Gaylord. "We appreciate the steps taken to calm the market, make mortgages more widely available and protect taxpayers. We look forward to working with the administration and Congress to ensure the continued vibrancy of the secondary mortgage market."

Summary of what the Treasury actually did and what it means:

In the takeover, Treasury placed the GSEs into a conservatorship — similar to a Chapter 11 bankruptcy — which fully protects taxpayers from conflicts of interest between taxpayers and shareholders or current management.

The federal government is authorized to take up to an 80 percent stake in the companies, will review their financial condition quarterly, and inject money into the operations as needed. That means the market for GSE securities will be treated more like Treasury obligations, which should push mortgage interest rates down. That in turn, is expected to speed up home sales and help stabilize home prices.

The GSEs will be allowed to increase their mortgage funding over the next year and a half to help stabilize markets. Starting in 2010, the plan calls for them to reduce their portfolios.

The heads of Fannie Mae and Freddie Mac have been relieved of their duties. Treasury selected HErbert Allison, former Merrill Lynch vice chairman, to lead Fannie Mae and David Moffett, former U.S. Bancorp CFO, to guide Freddie Mac.

Talking Points

NAR, as the leading advocate for homeownership and housing issues, has closely monitored the market turmoil affecting the stock and debts of the two government-sponsored enterprises (GSEs) - Fannie Mae and Freddie Mac. Their mission is crucial to the economy to make fair and affordable mortgages available to home owners and home buyers. That mission must not be interrupted.

Fannie Mae and Freddie Mac play a vital role in the U.S. economy by making fair and affordable mortgage loans available for home buyers and owners. That must not be interrupted. Treasury Secretary Henry M. Paulson Jr. and James B. Lockhart III, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, have issued strong statements assuring the public that credit will continue to flow over the next 12 to 18 months.

Short term, the takeover will result in government money driving down interest rates, which is expected to spur an increase in home sales.

Long term, the action will lead to a major reorganization of the two GSEs as privately owned models. The brunt of that work will fall to the new administration and new Congress. NAR will help shape that process and the association is already working on a plan to do that.

The action taken by Treasury and FHFA, which regulates GSEs, makes clear the government will not let the deteriorating conditions of the GSEs disrupt the flow of capital to the housing sector, or harm the national and international financial system. The GSEs guarantee more than 40 percent of the nation's mortgages and own or guarantee more than $5 trillion in mortgages. Since the credit crunch began in August 2007, the private sector mortgage securitizatation market has virtually disappeared and the market share of the GSEs has jumped to about 70 percent.

NAR will continue to follow events closely and develop recommendations on the future of the GSEs' mission to ensure there will be a robust secondary mortgage market in all markets.