Mortgage Rate Forecast: July 2007

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

Owning a home is one of the most important parts of the American dream, but having the deed to a piece of land does not necessarily mean the property is yours free and clear.

Other people may have certain prior rights or claims that your deed will not erase. Such rights can go back all the way to the earliest owners of your new property. In order to protect your investment, you may consider purchasing title insurance.

There are two types of title insurance policies that may be purchased at the time a property changes from one owner to another: an owner's policy and a lender's policy. Both the owner's policy and the lender's policy protect the named insured against an unknown defect in the title of property.

A defect may mean you could incur additional costs in the future or even lose legal title to the property if the defect is not resolved before you take possession. If you have a title insurance policy, the insurance company will defend your title in court and pay any settlement amount you owe to clear the title, as long as it is a covered item.

What Owner's Title Insurance Covers

Most likely there are no hidden risks connected to your new property. However, such risks do exist, often as a result of errors made during past title transfers.

If an error occurred but is not discovered until you buy the property, you may face a hidden risk and your ownership of the property could come into question. Owner's title insurance protects you from such errors, as well as:

• Protects you from financial loss due to covered claims against your title, up to the face amount of the policy.
• Pays your legal costs if the title insurance company is required to defend your title against covered claims.
• Pays successful claims against your title, up to the face amount of the policy.
• Continues protection after you no longer own the property.

Here are a few of the most common hidden risks that can cause a loss of title or create an encumbrance on property:

• Forged deeds, releases, or wills
• Undisclosed or missing heirs
• Liens for unpaid estate, inheritance, income or gift tax
• False impersonation of the true owner
• Confusion caused by similiar names
• Signatures of minors or persons who are not mentally competent
• Signatures of persons represented as single but who are acutally married
• Errors in recording legal documents
• Clerical errors in public records
• Invalid documents executed under an expired power of attorney
• Fraud
• Invalid divorces
• Unpaid child support lien
• Unpaid taxes (local, state, federal)
• Unrecorded easements (right of way)

Title Insurance Tips

If you decide you want owner's title insurance, companies offer "simultaneous issue credit" as long as you buy the owner's insurance within 30 days of closing (and buying the loan policy). Simultaneous issue credit decreases the amount of your premium.

If the house you are buying was owned by the seller for only a few years, check with the seller's title company. You may be able to get a "re-issue rate," because the time between title searches was short. If no claims have been made against the title since the previous title search was done, the insurer may consider the property to be a lower insurance risk.

Look for an "owner's title policy" with as few exclusions from coverage as possible. Exclusions are listed in each policy, and if a policy has many exclusions - that is, situations under which the insurer will not pay for your title problems - you may end up with little coverage on the property.

Frequently Asked Questions

What does a title insurance agent do?

Title insurance agents check for defects in your title by examining records on file at the Register of Deeds office. These records may include deeds, mortgages, wills, divorce decrees, court judgments, tax records, liens, and encumbrances. If any problems are found, those items will usually have to be cleared before the mortgage company will loan you the money or allow you to take possession of the property.

At the time of closing the agent should explain the title policy commitment, and any exclusions found on pages numbered Schedule A and B. Once all closing papers are signed and filed, the title commitment provides coverage until the title insurance company issues the actual policy. Title insurance agents also may hold money in escrow and perform closing services for an additional fee.

Who pays for the policy?

Usually the purchaser of the property is required to buy the lender's title insurance policy. This policy only protects the lender's interest. Either the seller or the purchaser can buy the owner's policy. The party who will pay for the owner's policy can be negotiated during the purchasing process. The owner's policy protects you, the new owner of the property, from any defects in the title once you take possession.

The concept may not be new, but the term "staging" has taken the real estate industry by storm. Professional stagers can transform a home in a few hours, helping to highlight a home's best features and minimize its flaws.

Surveys show that staging pays off, often boosting a home's selling price by thousands of dollars. But you don't have to spend thousands to make a big impact. Here are 9 tips for staging your home for a faster sale:

1. First impressions count. Roll out the red carpet for potential homebuyers by sprucing up your entryways, especially the one on a lockbox. Welcome mats, planters filled with seasonal flowers, and clutter-free foyers and hallways set the stage.
2. Sell the space, not your stuff. Remember that the goal of a successful showing is to make a prospect feel at home - like it's theirs, not yours. Put away your extensive personal collections. Less is more: open up your space so prospects can actually see what they're buying.
3. Paint and elbow grease work wonders. Fresh paint and a thorough cleaning will give you the greatest "bang for your buck." Remember that neutral walls are your best bet when staging a home for sale.
4. Go with the flow. Arrange furniture for easy traffic flow. Consider placing a major piece of furniture at an angle, such as a couch or desk. Angles add interest and can create a more open feel.
5. See the light. Move lamps to dark corners and arrange window treatments so that natural light floods your rooms. Brighter is better, and your rooms will look larger.
6. Go green. Live plants can add decorative flair, without spending a bundle. Plants and cut flowers have a way of warming up a room.
7. Don't forget the outdoors, especially this time of year. If you have a porch, deck or patio, clean the furniture and replace worn cushions. Breath new life into your deck with a fresh finish.
8. Make the kitchen sparkle. De-clutter the countertops by removing toasters, food processors and other non-decorative items. If you have a breakfast table or counter, put out a couple of table settings complete with place mats, napkins and dinnerware.
9. Warm up an empty home. If your home is vacant, consider renting furniture for key rooms, but don't go overboard. Ask your real estate professional for advice, based on your home's unique features and selling points.

Six states are trying to reduce the number of home-mortgage foreclosures by setting up funds that help home owners with sub-prime mortgages refinance into more affordable ones.

Maryland, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania are investing $500 million in programs that are either supported by bonds or are offered in conjunction with Fannie Mae (FNMA) and Freddie Mac (FDMC).

About 2.3 percent of the nation's 44 million home loans are expected to move into foreclosure this year. Freddie Mac says 60 percent of these home loans are sub-prime. The projected foreclosure rate is higher than during the oil bust of 1987, but not as high as in the 2002 recession.

The success of these programs hinges on the cooperation of mortgage lenders. I doubt the states taking over the role of mortgage lender. However, nobody wins in a foreclosure, and it's doubtful mortgage lenders are going to agree to both take a hit and lose a consumer.

If you live in New Jersey and are facing foreclosure, you owe it to your self to explore options BEFORE it's too late.  Go to http://neforeclosures.blogspot.com/.

Remodeling, stingier policies and rising construction costs mean owners of three-fourths of American homes would face huge out-of-pocket expenses to rebuild if disaster struck. Here's how to tell if you're covered

If your home burned down tomorrow, chances are good you wouldn't get enough money from your insurance company to replace it.

A whopping three out of every four homes nationwide are underinsured, according to a survey by Marshall & Swift / Boeckh. This Princeton, N.J., company specializes in estimating construction costs, and its annual reviews of 3 million insurance policies consistently show homeowners don't have enough coverage.

We're not talking small amounts, either. The latest survey showed the typical homeowner was underinsured by 35%.

These figures aren't news to the insurance industry, which has known for years that most of their customers weren't buying enough coverage. The point was driven home again this year by the Colorado wildfires, which so far have cost insurers $79.3 million.

"Most of the homes that were covered were underinsured," said Loretta Worters, spokeswoman for the Insurance Information Institute, a trade group.

Remodeling, Stingier Policies Take Toll

Several factors are at work:

• Insurance policies cover less than in the past.  In the past five years, the vast majority of insurers have done away with, or radically modified, their guaranteed replacement policies. Whereas once your company would rebuild your home no matter the cost, today most insurers cap how much they pay to 120% of your policy's stated coverage amount. 
• Construction costs are on the rise.  The cost of rebuilding a home has risen about 3% a year on average for the past decade, said Gopal Ahluwalia, director of research for the National Association of Home Builders. Many homeowners haven't updated their coverage to reflect those costs. "Often, the last time people think about their homeowners' insurance is when they get a mortgage," said Worters. 
• Homeowners are remodeling like crazy.  Americans spent $180 billion last year updating their homes, often boosting the value of their homes in the process. An estimated 75% of remodelers fail to update their insurance coverage to reflect those improvements, said Bob Crine, president of Marshall & Swift, the construction estimating company.  "Most people don't think when they remodel their home to tell their insurer," Crine said. "When you think of all the money that's going into houses that doesn't get picked up (by policy coverage increases), you begin to see the problem."

Crine's 70-year-old company uses a huge insurer-supplied database that compares existing coverage with construction costs in different areas all over the country. In addition, some homeowners are asked to complete surveys detailing all the features of their home, while others houses are inspected personally by Marshall & Swift employees.

The company has found that homeowners consistently shortchange themselves when it comes to getting enough coverage, Crine said. Homeowners have more at stake now, however, because so many insurers have capped their replacement coverage.

The insurance industry isn't rushing to fix the problem, either. Consumers are already sensitive about rising homeowners' premiums, and few agents want to risk losing a customer by suggesting they pay even more.

People have to take the responsibility on themselves of monitoring their coverage and making sure they have enough. I wouldn't want to rely on one person (your agent) who may or may not know what your needs are.

The best insurers, Crine said, ask their customers numerous, detailed questions about the features of their homes to determine how much coverage they should have. Others rely on less effective methods, such as multiplying the home's square footage by average construction costs in the area.

The problem with using average construction costs, said Ahluwalia of the builders' association, is that your home could cost much more to rebuild.

"A basic home with regular carpet, two bathrooms and no fireplace is going to cost a lot less (to rebuild) than a home with two fireplaces, a three-car garage and hardwood floors," Ahluwalia said. "And the trend has been to update and improve everything, not only in new houses but in existing stock."

Are You Covered?

So how can you tell if you have enough coverage? Take the following steps:

• Read your policy.  It's not exactly summer beach reading, but insurers have generally made their policies more understandable in recent years. You should be able to get a good idea of what's covered and what's not. If you have any questions, call your insurer and ask. 
• Insure the house, not the land - or the mortgage.  The price you paid for your home, the amount it's worth now and the mortgage you're carrying are all pretty much irrelevant when it comes to determining how much insurance you should have. What you really need to know is how much it will cost to rebuild your house, and that could be significantly more or less than any of the above figures. Nationally, about 24% of the average home price is the value of the land, Ahluwalia said, although that percentage can spike to over 50% in expensive markets such as Orange County, Calif., New York or San Francisco.
• Use averages only as a starting point.  The average cost for building a home nationally ranges from $65 to $150 a square foot, Ahluwalia said, with homes on the coasts and in major metropolitan areas coming in on the high end of that range. Custom-built homes in these high-cost areas often can cost $200 to $400 a square foot. "The average homeowner in today's market should start with (rebuilding costs) of $75 to $85 a square foot, and then make adjustments from there," Ahluwalia said. 
• Talk to builders in your area.  If your insurer can't help you nail down the cost of rebuilding your home - and many can't - your best bet may be to chat with contractors doing work in your neighborhood. Their ballpark estimates are likely to be much more helpful and accurate than a guesstimate from a company or agent who isn't as familiar with the quality and cost of homes in your area. If you're still having trouble coming up with a solid estimate, consider hiring an appraiser to do the job. This can cost you $200 to $300, but in the long run could save you a world of grief. 
• Consider adding upgrade coverage.   The older your home, the more it will cost to bring it up to current codes - and those costs typically aren't covered in the standard replacement policy being sold to most homeowners. Upgrade coverage is a relatively inexpensive addition to your policy that could pay off should you ever face disaster. And the possibility of disaster is, after all, why you have insurance in the first place. Make sure you have enough so that the tragedy of a fire or other disaster isn't compounded by not having enough money to rebuild.

Has your lawn grown up around that "For Sale" sign? Have the wasps moved into the lock box on your front door? Did you just receive an invitation to your real estate agent's retirement party?

If so, chances are your home sale fizzled.

So now you're in agony because your home has languished on the market week after week. Here are the six most-common culprits that may be keeping buyers away in droves, and what you can do about it.

1.  Your Home is Overpriced

Optimistic home sellers love to parrot the old adage, "There's a buyer for every home." But they often leave off the qualifier: "at the buyer's price."

The fact is that buyers, not sellers, ultimately determine the market value of a home. You can ask for the moon and set your listing price well above comparable properties in your neighborhood, but at some point it will be up to you, the seller, to accept what the buyer thinks your home is worth.

Overpricing is the most common reason homes don't sell. When you ask an unrealistic price, it sets in motion a process that often works against you. Here's why:

Most real estate agents, and hence most qualified buyers, will see your new listing within 30 days. If it is overpriced by as little as 5%, it will be duly noted and interest in your property will wane, especially if you show no intention of coming off your asking price. You likely already priced out buyers who might have qualified for financing at a more reasonable price. Even if you manage to find a buyer at your inflated asking price, the property may not appraise at that figure and the financing will fall apart.

Your real estate agent may have approved or even suggested the inflated asking price to secure your listing. Conversely, other agents often use overpriced properties like yours to help sell their own listings. ("Here's what they are asking. Now would you like to take a second look at that first house I showed you?")

If you have a house that really should be priced at $200,000 and you've got it listed at $260,000, you are trying to compete against homes that really are worth close to $300,000 and all of a sudden your home really is not competing well. You want to compete with what is available out there among homes similar to yours.

If your home remains on the market for too long, agents and buyers may begin to wonder if there are other, perhaps more serious reasons why it isn't selling.

It becomes shopworn, the same as a jacket hanging in the store week after week. People are aware that it has been on the market a long time and agents stop showing it.

2.  Your Home Doesn't 'Show' Well

Your home is competing against shiny new houses in those pristine subdivisions out in the suburbs with their attractive prices, incentives and community amenities.

Face it: Even the best old house needs a little makeover if it hopes to attract a qualified buyer.

The good news is most of the work will be cosmetic and relatively inexpensive: a new coat of paint, a few attractive window boxes, a thorough cleaning of floors and carpets. Voila! The place may look good enough to reconsider.

A good real estate agent can advise you on where your time and money are best spent.

Price and condition are two things that the seller can do something about. I always give people my 'honey-do' list. I think paint is probably a seller's best friend because it makes things smell fresh and look fresh. If it's time to paint, it's time to paint. It's the best return on investment.

3.  You're in a Bad Location

Nothing has a greater effect on your home's value than its location. Your humble abode might be worth a king's ransom were it located in Palm Beach, Aspen or San Francisco. It might even jump thousands in value just two streets over in the next (and far superior) school district.

If you're in one of the higher-ranked schools around here, you're going to add $50,000 to $100,000 to the price of the same house.

The point is, location rules in real estate.

If your home's location is less than desirable, your options are somewhat limited. A good real estate agent will do his best to help you accentuate the positive and eliminate the negative of your circumstances, say by using foliage to screen off offensive adjoining properties or dampen traffic noise.

The best way to compensate for a poor location is to reduce your asking price or offer attractive incentives such as seller financing or a lease option with rent credit.

4.  You Have a Lousy Listing Agent

Yep, they exist: Real estate agents who mislead, misfire and misbehave.

Their bad advice can cost you plenty in time, money and the sheer hassle of keeping the place show-ready 24/7.

The agent from hell will allow you to overprice your home ("Here's what I can get for you if you list with me!"), not market it properly, fail to screen for qualified buyers, be unresponsive to interest from other agents (if they sell their own listing, they don't have to split the commission) and keep you totally in the dark throughout the process.

What's more, if your agent is abrasive, arrogant or otherwise difficult to work with, other agents may not want the hassle of showing any of their listings to prospective buyers.

5.  You are Battling Competition or Market Conditions

We've all heard the terms "buyer's market" and "seller's market." In real estate, market conditions are affected by any number of external forces, some of them predictable (the weather, sort of), some of them unpredictable (the local economy, interest rates, public optimism or pessimism).

In a "hot" or seller's market, homes go fast. Inventory (homes on the market) may be low, meaning less competition for you. Chances are better that you will get your asking price in a hot market; in fact, it is not uncommon to even be offered more than your listing price.

But in a "flat," "cold" or buyer's market, sales slow to a trickle, inventories grow and buyers can find bargains, especially when they know the seller is motivated (i.e., paying on two mortgages).

If you're trying to sell in a flat market, you're not only competing against all that vacant new construction, but against rentals as well. In this case, be prepared to settle for less than top dollar, or wait to sell until the pendulum swings once again in your favor.

6.  You Have Ineffective Marketing

Gone are the days when an agent could simply place your listing with the local multiple listing service, hold a halfhearted open house and wait for another agent to bring forth a buyer.

Today's top performers launch a multilevel marketing plan that includes listing tours for area agents, newspaper and even TV ads, weekend open houses, listing fliers and placements in local real estate publications.

Computers and the Internet also have changed the face of real estate. According to the National Association of Realtors, today more than two-thirds of all home buyers use the Internet for house hunting. The best real estate agents are computer-savvy. They have your listing in color on their laptops to show clients and communicate frequently via e-mail, a particular boon when working with out-of-town buyers.

Suffice it to say that if your real estate agent isn't listing your home online through the company Web site as well as with the local MLS, you may not be getting the exposure necessary to find a buyer.

There are those who just put the listing in the multiple and pray it will sell and those that put a lot of effort into marketing their listings. Unfortunately, with this weird system of compensation we have, they all get paid the same, whether they know nothing or have many years of experience.

The road to buying a house is paved with dwindling bank accounts, devious brokers, and home owners who (you hope) are desperate to sell. Yup, it's a challenge. But with the help of these easy to follow instructions, you can negotiate your way into unimaginable debt.

1. Decide you must buy a house because your present one is:

• too small;
• b. too large;
• c. non-existent.

2. Review monthly budget. Go over it again. Accuse each other of fiscal malfeasance. Curse invention of cash machine. And credit cards. Figure how much you'd save by giving up meals and walking to work.

3. Calculate what you can afford to pay. Promise yourselves not to exceed it by thirty grand.

4. Choose where you'd like to live. Check real estate ads. Call a few real estate agents. Select more realistic locale.

5. Meet with highly touted real estate agent. Wonder if he ever sold used cars.

6. Advise real estate agent of preferences about neighborhood, school system, house type, cost. Watch him laugh.

7. Tell real estate agent the top price you're willing to pay. Make the mistake of being dishonest. Spend the next month looking at houses $50,000 over budget.

8. Switch real estate agents because he showed you houses that are $50,000 over your budget.

9. Spend two weekends scouting houses within your means. Houses that would give any self-respecting slumlord a bad name. Tell real estate agent you won't buy a handyman's special, unless it comes with a handyman.

10. Up ante by $15,000. Decide you can swing extra cost by giving up luxuries ... like furniture, draperies, and heat.

11. Tour houses only a bit better than those you saw before. Houses that are about to fall down. Houses that have never met a paint brush. With paint on it.

12. Realize you can afford a nicer home only if you borrow from relatives. Think about consequences. Decide to do it anyway.

13. Visit a house that's smaller than you want and on the wrong side of the tracks, but that somehow feels right. Just as you're about to commit, realize you've been duped by the aroma of apple pie.

14. Take breather from house hunting. Reevaluate your home. Wonder whether you can stay there after all, if you knock down a wall and throw out everything you own.

15. Return to first real estate agent and tell him your new top price. This time he laughs even harder.

16. Spend weeks looking at houses while interest rates rise. Hate them all. (Houses and rates.) Quarrel with spouse over whether to compromise. Then, just as both of you are about to give up, find a house of your now modified dreams.

17. Wonder if you can afford it even with loans from both pairs of parents. Conclude you can't unless you each get a twenty percent raise. Decide to buy it anyway.

18. Call broker. Find out that five minutes ago another couple put deposit on the house. Cry. Blame broker. Blame spouse. Blame sellers. Blame conniving buyer who stole your home. Buy voodoo doll and put hex on sale.

19. Voodoo works - the house is yours. Call attorney, parents, many banks. Review personal property that comes with house. Become obsessed by ancient curtains the sellers refuse to leave behind.

20. Be persuaded not to kill deal despite curtain calamity. Sign contract. Apply for mortgage. Spend your days hoping the loan will come through ... and your nights hoping it won't.

21. Hire an inspector to check out house. Find out termites have been feasting on it for years.

22. Order title search. Learn that a piece of the driveway's on public land. Learn that a neighbor's fence is on your future land. Worry. Learn there's no reason to worry. Wonder why you bothered with a title search.

23. Qualify for mortgage. Celebrate. Suddenly realize there's no way out. Cry because mortgage interest rates are now 3% higher than when you started.

24. Arrange for closing, insurance, movers, utility hook-up, phone installation, re-direct of mail, newspaper delivery, heating oil delivery.  Remind parents about loans. Deal with their second thoughts ... and yours.

25. Do final inspection. Argue about whether the water stain you just noticed was always there. Discover that what you thought was wall-to-wall carpeting, isn't.

26. Attend closing. Sign reams of paper you don't understand. Papers your lawyer says are "standard." Give lawyer lots of money for invaluable advice. Give sellers money. Give bank money. Give title insurer money. Ask if anyone wants your next born child. Leave with door prize - a set of well-worn keys and deed.

Now that you're a home owner, get ready for some surprises. A broken boiler. A roof that leaks. A washing machine that refuses to rinse. Pipes that clank in the middle of the night. Squeaks in the floor joists. So keep your wallet open. The check writing's just begun.

Enjoy your new home!

First time home buyers are having an increasingly tough time acquiring their first dream home. Prices continue to slowly increase along with mortgage interest rates, and lenders are more picky about qualification requirements. However, those young first-timers seem to be more determined than ever to find a way to purchase a home - perhaps even more determined than their parents a generation earlier.

To help first-timers during this active summer home buying season, some timely suggestions were offered by Freddie Mac, a major government-sponsored buyer of existing home mortgages. Here's a few of their tips:

While preparing for your home purchase, take steps to improve your credit rating and score. This will have a major impact on your ability to obtain a mortgage at the best rate and terms. It will even affect the pricing of your homeowners' insurance. Establish a home buying budget.

Pre-qualify yourself for a home mortgage. Before looking at homes, work with your mortgage broker or lender in become pre-qualified for a loan. Lenders will consider your 4 Cs - capacity, credit, capital and collateral - in determining your qualification capabilities. Capacity is your ability to repay a loan based on your income and work history. Credit means your history of repaying loans and paying your bills and other obligations. Capital is your wealth in terms of the property or money you have now. Collateral is any property you own that is acceptable as security on a loan.

After you make an offer on a home, and it's accepted, you will need to make a formal mortgage application. There are many types of mortgage plans available to home buyers in today's market. Be sure you understand all the terms of your selected loan.

The best chance for selling your property is within the first seven weeks. Studies show that the longer a property stays on the market, the less the seller will net. Below are 5 main factors to accomplishing this goal.

Pricing Factor

It is very important to price your property at a competitive market value right when you list it. The market is so competitive that even over-pricing by a few thousand dollars could mean that your house will not sell. It's interesting, but your first offer is usually your best offer. Here are reasons for pricing your property at the market value right from the start in order to net you the most amount of money in the shortest amount of time. An overpriced home:

• Minimizes offers
• Lowers showings
• Lowers agent response
• Limits financing
• Limits qualified buyers
• Nets less for the seller

80% of the marketing is done when we decide on what price to list your home. If you're unwilling to list at current market value, you would be better off not putting it on the market at this time.

Clean Factor

Most people are turned off by even the smallest amount of uncleanness or odor when buying a home. Sellers lose thousands of dollars because they do not adequately clean. If your house is squeaky clean, you will be able to sell your home faster and net hundreds, if not thousands of dollars more. If you are planning on moving, why not get rid of that old junk now so that your house will appear larger? Make more space. Odors must be eliminated especially if you have dogs, cats, or young children in diapers or if you are a smoker. You may not notice the smell, but the buyers do! Most agents have a difficult time communicating to their sellers about odor. If you employ an agent to get the most amount of money for you, please don't take offense if he must confront you about odor problems.

Access Factor

Top selling agents will not show your home if both the Key and access are not readily available. They do not have time to run around town all day picking up and dropping off keys. They want to sell homes! The greatest way to show a house is to have a key! When your home is being shown, please do the following:

• Keep all lights on
• Keep all drapes and shutters open
• Keep all doors unlocked
• Leave soft music playing
• Take a short walk with your children and pets
• Let the buyer be at ease and let the agents do their job

Paint & Carpet Factor

Paint is your best improvement investment for getting a greater return on your money. Paint makes the whole house smell clean and neat. If your house has chipped paint, exposed wood, or the paint looks faded, it is time to paint. If your carpet is worn, dirty, outdated, or an unusual color, you may need to seriously consider replacing it. Many houses do not sell because of this problem. Don't think that buyers have more money than you have to replace carpet. They don't. They simply buy elsewhere.

Front Yard Factor

Your front yard immediately reflects the inside condition of your house to the buyer. People enjoy their yards. Make certain that the trees are trimmed so the house can be seen from the street. Have the grass mowed, trimmed and edged. Walkways should be swept. Debris cleared away. Remove parked cars. This all adds to curb appeal. If a buyer doesn't like the outside, they may not stop to see the inside.

Changing price and listing exposure will boost interest.

Question: I hope you can help us get our home sold. It has been listed for sale more than five months. The local market is very slow now. The listing agent has the house on her Web site and occasionally holds a weekend open house. What can we do to get our house sold so we can buy another home near my husband's new job site?

Answer: The primary reason a house doesn't sell is it's overpriced. If your home has been listed for sale more than five months, something is seriously wrong.

Ask the listing agent to prepare a new CMA (comparative market analysis) and a price trend analysis. These forms shows recent sales prices of similar nearby homes, the asking prices of competitive neighborhood homes (your competition), the asking prices of recently expired comparable listings (usually overpriced), as well as the trend in recent sales of homes and market absorption rate.

The market absorption rate is the rate at which a market can absorb additional units of supply without causing market saturation and severe price distortions. For example, during a recessionary period, many homeowners may list their house for sale. If the supply of homes entering the home resale market increases without a corresponding increase in demand, the market absorption rate has been exceeded, and the market price of the resale homes declines.

The CMA should also show your listing agent's recommended asking price. If your home is overpriced, it's time to face reality and reduce the asking price.

Equally important, be certain your home is correctly listed in the local MLS (multiple listing service) and on the local MLS Web site, the listing agent's most powerful marketing tool. Also, check your home's listing at http://www.realtor.com/ where more than 75 percent of today's home buyers begin their search.

In addition, ask the listing agent to explain what she has done - and is doing - to properly market your home in a slow market. How often does your real estate agent advertise your home in the newspapers and in local home sales magazines? How well is your home being marketed online? Internet advertising should have an ample number of photos of your home. Your real estate agent should also be holding a well-advertised open house at least once a month.

In addition, your real estate agent should "network" among the other MLS member agents who sell homes like yours to be certain they are aware of your home. Lastly, ask the listing agent if she recommends "staging" your home to show at its best, such as by removing old-fashioned furniture and sprucing up the interior to make it appear more attractive.