Pending home sales have leveled from a market swing driven by response to the home buyer tax credit, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in December, increased 1.0 percent to 96.6 from 95.6 in November, and remains 10.9 percent above December 2008 when it was 87.1. In November, the monthly index had fallen by 16.4 percent from surging activity in preceding months.

Lawrence Yun, NAR chief economist, said it’s important to recognize how the tax credit is skewing market data. “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”

What is staging, anyway? Staging is the process of enhancing the impression a prospective buyer has about your home. Staging is all about removing things from your home that make it look smaller, drab or dated. It differs from decorating because decorating involves bringing things into the home to enhance the look of it.

The key to staging is simplicity and getting prospective buyers to a place where they can picture themselves in the home. You can begin by focusing on these staging basics:

DECLUTTER - Remove “you” from the home (meaning pictures and personal items). Replace personal photos with scenery or postcards. A good rule to follow is to have no more than 3 items on any surface. Remove all items from kitchen counters and store them away.

NEUTRALIZE - Neutralize the rooms with light- colored paint, like creams, tans and white. Keep bright colors to a minimum and use neutral and/or natural colors that can work with many different styles.

KEEP IT CLEAN - Nothing sells better than a clean and well - maintained home. Always keep the home feeling and smelling clean for showings. Some inexpensive upgrades that can make a huge difference to the buyer include:

- New bed treatment (especially for the master bedroom)

- New towels

- Fresh paint

- Replacing old lamps or lighting fixtures

Start with these staging suggestions and talk to a REALTOR® about your home and what specific changes will give you the biggest bang for your buck. Enter “Staging” in the search field on www.REALTOR.org and you’ll find the Field Guide to Preparing and Staging a House For Sale, offering in-depth staging and curb appeal information.

The goal of RESPA is more informed customers - The objective of the many new government requirements that relate to home financing is to provide information that can help every home buyer or owner make better home financing decisions.  

RESPA Reform was enacted by the U.S. Department of Housing and Urban Development (HUD) with the intent to help protect borrowers applying for home financing by standardizing the industry and:

* providing for a more thorough explanation and disclosure of key loan terms and settlement charges [via revisions to the Good Faith Estimate (GFE) and Settlement Statement (HUD-1)];

* including a side-by-side chart (on the new page 3 of the HUD-1) to help compare the estimated charges shown on the GFE with the actual charges at closing;

* and requiring that fees not increase between issuance of the GFE and closing except under limited circumstances.

For example:

Home Valuation Code of Conduct (HVCC) - ensures that borrowers have sufficient notice of appraisal content and promotes the accuracy of appraisals by shielding appraisers from undue influence;

HERA Mortgage Disclosure Improvement Act (MDIA) - protects borrowers by making them more informed and confident in their home financing choices by specifying timing in regard to initial disclosures, fee collection and final disclosures; and RESPA Reform (the most recent government requirement) - intends to help borrowers avoid surprises at closing by placing tolerance levels on all charges for services associated with obtaining the mortgage where the vendor is not borrower-selected.

The impacts: changes to the transaction - Certainly, the May 2009, HVCC and the July 2009, HERA MDIA requirements may both impact the loan closing timeline. RESPA Reform may also influence the timeline and certainly has many process impacts for lenders, settlement agents and attorneys. However, the transaction experience for the consumer and other parties should remain relatively unchanged.

Most sellers want to sell their property sooner rather than later, so an agent is really doing sellers No favors if they are not totally straight with them regarding accurate pricing. Things are not like they used to be in real estate. Most sellers have NO idea of how the recession has affected real estate prices; and most sellers still believe their house is the best house in the neighborhood and should get more money than the next guy’s.

This is where professional agents come in. It is first and foremost the priority of professional agents to price properties correctly. If agents don’t inform the seller that their prices have to be priced accordingly in order to sell before their competitor’s home, agents have done a disservice to their clients.

Many Listing agents today are losing current and future customers because sellers are left with the idea that the agent is not working hard enough on their behalf. These are the same agents who use to promise to “always get the highest prices for their sellers!” These agents were always on the record for over-pricing properties to achieve that.  It used to work 2 or 3 years ago in the “hot,” uncontrolled market, but not anymore.

Over-priced properties today will hardly get any showings, much less get sold! Buyers are even reluctant to bid on properties even slightly over market value, since so many homes are available at lower prices. These “over-priced” properties are usually on the market for extended periods, and even when sellers realize they were over-priced, their home has that “over-priced stigma,” even after the price is dropped to reflect actual market value.  Typically, they end up getting less than they would have if they priced the home right the first time.

So pricing homes correctly the first time is paramount if agents are going fulfill their fiduciary duties to help their seller’s sell for the best price and in the timeliest manner.

The IRS has released IR-2010-6, which provides a revised Form 5405 to reflect the changes to the tax credit made in the extension and expansion legislation enacted in November 2009. The release reminds taxpayers that those claiming the credit cannot use the IRS E-File automatic system but must file their returns manually. The revised form includes a section for repeat buyers who are eligible to claim the $6,500 tax credit. The HUD-1 or evidence of the transaction must be filed with all returns claiming the credit (both the $8,000 and $6,500 credits). Individuals who claim the repeat-buyer credit must also provide evidence that they have owned and used the prior residence for five consecutive years. Property tax or home-owners insurance records are sufficient for this purpose, the form indicates.