The housing rebound has given new life to an old, but little-known sales practice called “pocket listings,” where agents reserve homes for serious buyers only.

Most homes that are put up for sale are posted on databases called multiple listing services (MLS), on which agents share information with one another in order to find buyers. There are open houses on Sunday afternoons and listings posted on real estate websites.

“High-end sellers often don’t want to have the world coming to their property,” said Michael Izquierdo, a Los Angeles-based real estate agent and acquisitions manager for LAPocketListings.com. “When it’s put on the MLS, sometimes the next morning you see people standing outside the property, hoping to talk to the sellers.”

Izquierdo recently got a pocket listing for a $1.2 million home in Mar Vista, Calif., where the sellers wanted to preserve some privacy. They also hoped to heighten interest among buyers by creating an aura of exclusivity.

But pocket listings aren’t just for luxury clients anymore. With the number of buyers far outpacing the number of homes for sale in hot markets like Los Angeles and Manhattan, pocket listings are becoming more common among more moderately-priced homes as well, he said. He has some pocket deals where sellers are asking for as little as $500,000

When Izquierdo gets a pocket listing, he combs his client list for good fits. If he can’t find one, he contacts colleagues to see if they have potential buyers.

If the home is overpriced, the seller and agent will find out quickly, said Alex Clark, founder of pocketlistings.net. “I put in the email, ‘Not listed on the MLS,’” he said. “If it’s priced right, there’s a really good chance you can sell it as a pocket listing.”

If it doesn’t sell, then Clark tries to convince the seller to readjust the price and list it publicly on the MLS.

Some sellers, however, aren’t interested in going public. They are purely using the pocket listing to fish for a “make-me-move” deal. “These are not motivated sellers. They’re saying, ‘Get me a good price,’” said Manhattan real estate agent Wei Min Tan.

Not everyone endorses these pocket deals, however. In New York, the practice could violate the Universal Co-Brokerage Agreement, according to Neil Garfinkel, counsel for the Real Estate Board of New York, the local trade association. Under the agreement, agents must share listings. They can only withhold listings if sellers request they do so.

In some cases, agents may try to convince sellers to use pocket listings in order to double their commissions by acting as agent for both the buyer and the seller.

“That’s where it starts to get into the gray area,” said Garfinkel. “If an agent is putting their own economic interest ahead of the seller’s, it’s a violation of state law.”

They may, for example, steer the deal to a buyer they represent even though another broker’s buyer put in a higher bid.

“Most of the time, pocket listings are done ethically and fairly,” said Betty Graham, president of Coldwell Banker Previews International/NRT, Realogy’s luxury brand.

Nevertheless, she believes listing the property publicly increases the likelihood that a home will sell for the best price.

The National Association of Realtors does not have an official policy on pocket listings, according to spokesman Walt Molony. But most agents, like Graham, profess that sellers are almost always better off getting as many bids from as many potential buyers as possible.

But today’s flippers are getting credit for helping the market recover. They’re taking time to add value, sprucing up the landscaping and putting in new floors and appliances.

“When I put a house back up for sale, it usually goes very quickly,” said Bruno Duarte, a 34-year-old former stock broker.

A recent study showed that South Florida is one of the most profitable areas in the country for flipping homes.

South Florida investors flipped 4,299 homes last year, up 36 percent from 2011. They bought at an average price of $138,064 and resold at an average of $189,291.

Orlando was the top market for flipped homes, with a 63 percent gross profit, RealtyTrac said.

The best areas for flips are those where prices fell the most, industry observers say. In South Florida, values tumbled by about half before hitting bottom in 2012.

Flippers also are drawn to the region because of the strong demand from foreign buyers. With European economies in turmoil, foreigners view U.S. housing as a safe place for their money, said Ken H. Johnson, a professor and economist at Florida International University’s Hollo School of Real Estate.

In many cases, flippers are paying cash for dilapidated properties that other buyers won’t touch or can’t get a lender to finance, said Daren Blomquist, a spokesman for RealtyTrac.

“There will always be some bad players, but overall, flippers seem like they’re filling a necessary gap in the market,” he said.

Although South Florida investors are enjoying robust returns, their biggest problem these days is a lack of homes for sale.

Many owners are holding off until prices rise, or they can’t sell because they’re “underwater,” owing more than the house is worth. Also, large investment funds have swooped into South Florida and other markets and are buying foreclosed homes in bulk, depleting already-thin inventories.

Lex Levinrad, founder of the Boca Raton-based Distressed Real Estate Institute, said individual investors looking for homes to buy should target short sales rather than bank-owned homes.

In a short sale, the homeowner needs the bank’s permission to sell for less than the loan amount. To find delinquent homeowners in need of a short sale, investors can search public records or team with an experienced real estate agent, he said.

“Short sales are easier than foreclosures because there’s not as much competition,” said Levinrad, who trains investors. “Some of the best deals are short sales, hands down.”

DaVinci Realty Group is expanding again, we are proud to announce we are representing Callisto Builders of Houston, Texas.

Calliso Builders are presently building 100 new construction homes in the downtown Houston metro area, in most cases, tearing down old dilapidated and building new freestanding single-family homes. We call this “urban infill”. We are providing new housing where people want to work, eat, shop and play without taking a car. Our target market is the professionals that work in the Houston urban area. Please visit the Callisto website for more information about our products and our company.

Also, we are happy to announce DaVinci Capital as one of our Funding Partners for both DaVinci Realty Group and Callisto builders.

Combining our own equity with well-established private investors, Da Vinci provides a strategic advantage to its shareholders and partners.

Our expertise, relationships, flexibility and global reach in the Real Estate market, allow us to complete complicated transaction with successful results.

Da Vinci capital works with its partner with full transparency and integrity, using the most advanced tools to provide an accurate and updated status for each project in the portfolio.

Da Vinci capital is focusing now in the American real estate market specifically in Houston, Texas and  South Florida.

The S&P Case-Shiller index of home prices in 20 major markets posted a 9.3% rise over the last 12 months. That’s up from the 8.1% rise in January. It was the biggest 12-month gain in the index since May 2006, which was just one month after the index showed record-high home prices.

The index showed a 12-month decline in prices almost every month over a five-year period through May 2012. But every month since then has shown a gain in home prices, and each month’s gain has been stronger than the one that came before.

“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Stan Humphries, chief economist for home price tracker Zillow, said there are signs in the market that the pace of increase started to slow in March.

“Regardless what data you look at, home values are clearly rising at an unsustainable pace,” he said. He said the increases in the index need to be taken with a grain of salt, being distorted by the shift in transactions to private home sales rather than the foreclosure sales that had been dominating the market.

The housing recovery has been driven by a number of factors, including near record-low mortgage rates, a drop in foreclosures and reduced unemployment, all of which have helped lift both new-home sales as well as sales of previously owned homes. The rising home prices has helped bring back some buyers who had been reluctant to buy while prices were falling.

Mike Larson, real estate analyst at Weiss Research, said he’s concerned that much of the increase is being driven by investors flooding into some markets to buy homes in order to rent them out, outbidding the potential homeowners who want to live in a home.

“Prices are not at bubblicious levels, but you’re talking about a trend that can be destabilizing,” he said.

Mark Vitner, senior economist with Wells Fargo Securities, said part of the reason for the sharp rise in prices is the comparison to depressed prices a year earlier. He said comparisons will become more difficult later this year. and the pace of increase should slow.

Home price increases boost the overall economy. Besides the jobs created by a pick-up in construction and home sales, rising prices mean fewer homeowners are underwater on their mortgages, owing more than the home is worth. That allows more homeowners to refinance, saving money they can spend on other things.

The Case-Shiller index showed the improvement in home prices is broad based, as every market posted an increase for the second straight month. The biggest increases came in Phoenix, a market hit hard by the bursting of the housing bubble, where prices were 23% higher than a year earlier.

But prices were up more than 10% in half of the markets — San Francisco, Las Vegas, Atlanta, Detroit, Los Angeles, Minneapolis, Miami, San Diego and Tampa all posted double-digit percentage gains, and Denver just missed that mark. New York posted the smallest gain, with only a 1.9% rise in prices.

Dean Baker, co-director of the Center for Economic and Policy Research, said some neighborhoods in Phoenix are actually seeing a 40% increase in prices over the last year, driven once again by property speculators. He said in many markets that were most hurt by the bursting of the housing bubble, there is a danger of new bubbles forming.

“The end of this round of speculation is not likely to be much prettier for the areas affected than the end of the last round,” he said.

Even with the strong improvement in prices over the last 12 months, the index is still down 28% from the 2006 peak. 

Most of the first time home buyers are intimidated by the thought of investing a fortune on their first home. So, these buyers often select the first home they see within the price range or continue renting. Make sure you do not repeat the same mistake as this article can guide you to buy your dream home with ease. You need to keep the above mentioned points in mind when you plan to buy your home for the first time.

What are the points you need to consider before buying a home?

If you’re a first time home buyer, then you need to determine your long term goal before buying your home. You need to analyze whether you’re ready to transfer your rent payments into mortgage payments. Well, home ownership surely gives you a feeling of independence and joy, especially when you invest your money to achieve your goal. However, before you plan to buy a home, make sure you consider some of the points mentioned below.

Here are some of the important points you need to consider before buying your first home:

1. Home suitable according to your need: You may have several options on the platter while buying your dream home like a traditional single-family, a condo and so on. Each option comes with its advantages as well as disadvantages and it depends on the basis of the ownership goal. However, you need to choose a home in accordance with your requirement.

2. Find out your specific requirement: You need to analyze whether you’ve any specific requirement. Make sure you’re not rigid in this list, so you get a perfect home that you desired. Once you have shortlisted a home you need to analyze the features of the home whether it fits both your needs and requirement as closely as possible.

3. Home that you can afford: Make sure you estimate the amount that you can afford while planning your purchase of your dream home. When you apply for the mortgage, make sure you calculate the total cost instead of only the monthly payment. Try to find out about the down payment, property taxes, insurance cost and home repairing cost.

Are you aware of the home buying process?

The real estate agent may guide you to find a home that is within your price range and that meets your requirement. Once you’ve decided to buy a home, an agent can help you through the process. Here are a few basic progresses that you can expect as a part of your home buying process:

• Locate your home: Make sure you locate a home on the market with the help of your real estate agent. You can also check with online realtor to get you some good deal that meets your requirement.
• Find about the financing option: Your next task is to consider the financing option once you’ve spotted your home that you’re planning to buy. Make sure you acquire more information on the federal guaranteed loan or loans for the home buyers. You need to make a down payment of at least 20% on these loans. Find out whether your state has any loan program designed for the first time home buyers.
• Complete the home inspection: You need to complete the home inspection before you buy the home. You need to ensure that the property does not have any flaw. You’re required to hire a reliable home inspector who may inspect the quality, safety as well as over all condition of the property.
• Close the deal: If your home inspector did not give negative report on the property, then you can close the deal with the seller.

   

Therefore, as a first time home buyer you’re required to keep the above mentioned points in mind when you plan to buy your dream home.

Springtime is for selling houses. The months of April, May, June and July typically account for more than 40% of all housing transactions annually, in large part thanks to weather.

But unlike the painful post-bubble home buying seasons of the past several years, this year has kicked off amidst a cornucopia of experts trumpeting the U.S. housing market’s recovery. Inventory is at record lows, home prices are on the upswing and foreclosure activity has ebbed in many parts of the country. In 2012 residential real estate contributed its first positive year of gains to the overall economy since 2005, and the Federal Reserve has repeatedly called housing a “bright spot” of the economy.

The rosy recovery statistics have an increasing number of Americans feeling more confident about the prospect of buying a home.  A March survey from Fannie Mae revealed that 48% of consumers believe home prices will rise over the next year — an all-time survey high.  And another recent survey, from Prudential Real Estate, found that confidence is at a high of 69% among folks thinking about buying a home.

While promising news for aspiring sellers, it means that many of this year’s spring and summertime buyers will face a markedly different landscape than their predecessors did just a year or two ago. “In many markets around the country we have fundamentally shifted from a buyers’ market to a sellers’ market,” says Budge Huskey, chief executive of Coldwell Banker Residential Real Estate.

“The story of the day is on the inventory front,” stresses Lawrence Yun, chief economist of the National Association of Realtors.  It’s a sentiment echoed by many.

The number of available homes has plunged to record lows, thanks to both an abnormally small supply of existing homes for sale and a dearth of new construction. Despite the fact that new residential construction is on the rise, the current annualized rate of 618,000 housing starts is still well below the 1.5 million annual starts indicative of a healthy market, according to experts. And with more than 10 million homeowners still underwater on their mortgages, many prospective sellers are holding off on listing until home prices strengthen further.

Coupled with the brisk pace of sales, there is currently 4.7-month supply of existing homes on the market (a six-month supply is considered healthy), according to the National Association of Realtors.  That’s nearly 20% less nationally that during this time last year, and in the most sought-after markets levels are down by as much as 50%, 60%.

Traditionally this time of year welcomes a jump in inventory levels as sellers time their listings with the buying season. But even an uptick in stock won’t be enough to fend off the looming shortages in some markets: “I don’t see any relief to the housing shortage. It can only come from new home construction, which will take time to come online,” says Yun.  He and other economists suspect inventory levels will remain tight throughout the rest of this year, especially since construction lending for many small- to medium-sized homebuilders remains constrained.

Increased Competition

In addition to a dwindling supply of available homes, the number of buyers has surged. And not traditional buyers. Investors have comprised a sizeable chunk of the buyer pool since the downturn and continue to do so. NAR estimates that real estate investors are responsible for about 20% of existing home sales each month.  In hard hit markets, particularly in Sun Belt states like Arizona, Nevada, California and Florida, domestic and foreign investors have been even more prevalent.

More interestingly, investors haven’t just consisted of mom-and-pop landlords and professional house flippers either. Wall Street institutions – private equity firms and hedge funds, predominantly – have allocated billions to large-scale single-family homes, snatching up distressed properties and transforming them into rentals, typically through bulk sales. Major Wall Street firms, including Blackstone and Colony Capital, have accounted for as much as 30% of sales activity in Miami, Fla., 19% of sales in Las Vegas, Nev., and 16% of sales in Phoenix, Ariz. in 2012, according to data provider CoreLogic, helping push home prices up dramatically in all three metro areas.

Investors aside, traditional consumers have been haggling over the most desirable properties — on good streets, near good schools, in move-in condition – as well. Realtors in many markets have been reporting bidding wars since late last year. “Prices are being bid up above asking price, particularly in the mid-range of the market,” says Huskey.  “In the Seattle market, for example, our agents say quality properties have been receiving six to 10 offers within the first week.”

He also notes that in areas where bidding wars have been especially prevalent, buyer tactics reminiscent of the housing bubble, for example, proffering photos of children and personal letters demonstrating why a bidder should be chosen, have begun to creep back into the marketplace.

What does this competition mean? That you the prospective buyer need to be prepared to move fast if you find a property you’d like to buy. “Buyers need to be patient because many will be outbid by others and might have to bid on multiple homes,” cautions Jed Kolko, chief economist of Trulia. “It also means thinking hard about the trade off: what you need to have in your home and what you’re willing to bend on because with tight inventory and lots of competition, it will be a temptation to take what you can get.”

Cash Is Still King

Given the steep competition, all-cash buyers who can close a deal relatively quickly offer great incentive to sellers. “Cash will still be king if there are multiple bids because from a seller’s view, they want a deal with fewer hiccups,” says Yun. About 30% of home sales are all-cash each month, according to NAR.

Over the past few years, mortgage lending has been incredibly tight – an irony given the fact that rates continue to hover near record lows. And due to the overwhelming number of foreclosures acting as comps, appraisals coming in under the agreed-upon price have steadfastly hampered many a financed deal.

The good news: LendingTree chief executive Doug Lebda says, in light of the recently unveiled new home-lending standards, lenders are slowly starting to make it slightly easier to get approved. “Lenders are reducing credit standards, allowing higher loan-to-value ratios than in the past,” says Lebda. “Nothing below the FHA and Fannie Mae and Freddie Mac guidelines, but they are underwriting closer to them.” And as home prices rise – Case-Shiller reported an 8% yearly increase in February – appraisals may begin to fall more in line with pending sales prices.

In the meantime, cold hard cash continues to hold sway in many markets, say realtors. To better compete against the speedy certainty that a stack of green promises, buyers taking out a mortgage should always get preapproval before they embark on their hunt and plan on plunking down a sizeable downpayment.

Less Distressed Deals

The good news for housing as a whole is that nationally foreclosure activity is falling. RealtyTrac reports 30 consecutive months of declines on a national level, driven largely by double-digit declines in many of the traditional foreclosure hotspots like California, Arizona, Georgia and Michigan.

Decrease in activity coupled with fierce competition from investors targeting distressed inventory means the possibility of picking up a decent fixer-upper at a discounted price from the bank has greatly narrowed. And when such a property does come to market, the discounts are much smaller than they once were. In February short sales and foreclosures comprised 25% of home sales,  down from 34% a year ago, according to NAR. And the discounts have diminished too: short sales fetched 15% discounts on average, foreclosures 18%.

“Foreclosure inventory has been somewhat picked over,” says Daren Blomquist, vice president of RealtyTrac. The largest distressed inventory increases have been among homes built prior to 1960 and/or valued below $50,000. “Finding one in a condition the buyer can work with in a decent location has become a challenge to find.”

Nonetheless real estate is local and, despite the drop in foreclosure activity nationwide, several states are actually experiencing significant increases in foreclosure starts, as lenders continue to process a backlog of defaults. This is especially true of judicial foreclosure states. “In some of the markets like Florida, New York, New Jersey, and Ohio, we have seen increases in foreclosure activity counter to the national trend,” notes Blomquist. “Many aren’t listed for sale yet so this season some of them will be will be. So from a buyer perspective there may be some more inventory in the pipeline.”