4 ways to fight for your home

If you're feeling pinched by an adjustable-rate mortgage or a falling salary, take action before the situation gets worse.

Kiplinger.com

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Even if you're a fiscally conservative homeowner, you may be feeling the pressure of high housing costs, particularly if you have a mortgage with a rate that's headed up or if your income has taken a hit. Here’s what to do if your home is on the line.

Spot trouble early. Assess where you stand, especially if your house payments are rising. For advice on cutting back your spending or increasing your income, consult a fee-only financial planner or a nonprofit credit counselor, such as one certified by the U.S. Department of Housing and Urban Development. Credit-counseling services should be free or low-cost -- say, less than $50 for a session.

Try a refi. Rates on 30-year, fixed-rate mortgages are still attractive and are generally lower than fully indexed rates on adjustable-rate loans. If you can't refinance because your financial prospects are poor, you have no equity in the home or you're looking at a large prepayment penalty, you may want to try selling your home. If you can't afford a full-service agent, try one who offers a limited package of services for a flat fee. See "3 ways to pay lower real estate commissions."

Doing it yourself is no easy task -- you have to price the property aggressively, make yourself and your home available for showings, and close the deal.

Take advantage of mortgage relief, if it's available. In Massachusetts, for example, the governor mandated that homeowners in financial trouble be allowed to request extra time to avoid foreclosure. Their cases will be considered individually. In California, legislators have proposed creating a mortgage pool to assist first-time homeowners in trouble. Fannie Mae and Freddie Mac soon will introduce their HomeStay program, which is designed for borrowers with adjustable-rate mortgages who are at risk for payment shock.

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Head off foreclosure. As soon as you think you will miss a mortgage payment, call your lender to discuss your options. Besides refinancing, these may include a forbearance (you temporarily pay nothing or only a minimum amount, making up the payments either over time or at the end of the loan) or a loan modification (the lender temporarily adjusts the interest rate). The better your credit score and employment history, the more receptive the lender will be. But note that some lenders may not be able to change the terms of your loan until you're at least 30 days delinquent, and sometimes as many as 120 days past due.

If all else fails, you could try to negotiate a short sale. In that case, the lender agrees to cancel your debt in exchange for the proceeds from the sale of your home. As long as you're an owner-occupant, not an unhappy investor, lenders are likely to be receptive. Plus, they want to avoid the hassle and expense of foreclosure.

A real-estate agent can help you negotiate the deal. (Call local agencies and ask for an agent with experience or training in short sales.) You have a limited window of opportunity: Most lenders allow only three months' delinquency before they issue a formal notice of foreclosure, and state law mandates how quickly the process moves after that.

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How to sell in a homebuyer's market

A real estate marketing pro shares her tips for selling in tougher conditions.

Thanks to www.realestate.msn.com for this article.

By Marilyn Lewis

• Back to: The best time to buy a home
• Should you hold an open house?
• 5 tips for a better open house

Has it been a while since you sold a house? Things have changed in the last six months.

Angela Stamoulos, an education manager for Coldwell Banker Residential Brokerage in Massachusetts and Rhode Island, trains agents to educate sellers about the changed market.

The trick these days, she says, is to distinguish your property from the large number of similar homes in the same price bracket. "These wallflowers are the big problem right now, from the point of view of sellers and real estate agents," she says.

Stamoulos' tips:

1. Don't let your property languish while new, competitive inventory is building up. Price it right initially to give buyers a sense they are getting a value for their money and to avoid numerous, incremental price reductions that reek of desperation.

2. If you get a lot of activity -- visits and second showings -- don't respond instantly to an offer. Tell buyers you'll allow a couple of days to give adequate time for multiple house hunters to view your home. Even in this difficult market, Stamoulos says, well-priced properties are bid up over the asking price.

3. Educate yourself about your local market. Ask agents for these statistics, including comparisons from last year:

• Inventory. The number of homes currently on the market.

• Days on the market. The length of time properties are staying on the market.

• Average sale price. This is helpful information, but it can be skewed by, for example, numerous high-end properties sold. The average price in your market may still be $350,000, just as it was last year, but today $350,000 may buy a lot more house.

• Median price. This is the price at which half of the homes sold for more and half sold for less.

• List-to-sell ratios. This ratio, expressing the list price of homes over the selling price, will reveal drops in prices. Ratios are given for periods of time -- say, a month or a quarter -- showing the effect of price reductions on time on the market.

4. Find the agent who can expose your property to the most buyers:

• Ask whether the company is part of a larger company or network. How many agents does the company employ to promote your property to buyers? The more the better.

• Use Alexa Internet to compare agencies' Web-site traffic. Be sure to compare local -- not national -- Web sites when checking local offices of national companies.

• Learn about the agency's overall marketing strategy. Do they use newspaper ads? E-mail? Their Web site? What's their marketing plan for your property?

• To screen agents, interview several, asking each for their market data and their interpretation of local trends.

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