Warren Buffet, Ron Peltier: "This is a time of opportunity"

Team spirit turns hockey star into real estate czar
By Noelle Knox, USA TODAY
WASHINGTON — Lenders are collapsing, home sales and prices in many markets are falling and lots of investors are panicking. Not Warren Buffett. He told a group of his real estate managers late last month in Omaha that he sees this as a time of opportunity.
The man who will try to seize some of those opportunities for him is Ron Peltier, CEO of HomeServices of America, the real estate arm of Berkshire Hathaway (BRKA, BRKB) and the nation's second-largest residential brokerage firm. It's Peltier's task to scope out deals with high-quality, but beaten-down, realty firms that might be ripe for acquisition.
"We want to be in the top 60 markets in America in the next five years," Peltier says. "And we want to be the No. 1 or No. 2" real estate company in those areas.
Since Buffett bought HomeServices seven years ago, the Minneapolis-based company has shot up from about 4,000 agents in three markets to 20,000 agents in 20 markets, including Prudential California and Edina Realty in Minneapolis. HomeServices also offers homeowners insurance and title services, and it runs a mortgage venture with Wells Fargo.
In keeping with Buffett's conservative approach, Peltier's lending division, which accounts for about 15% of the company's profits, avoided offering the kind of risky adjustable-rate loans that have burned many lenders.
"I don't want to sound holier-than-thou, but it was irritating when there were all kinds of players out there in the market offering all kinds of products that were questionable," says Peltier, 58.
HomeServices has a broad reach
HomeServices of America is the nation's second-largest real estate brokerage firm, with about 20,000 agents in 20 markets across the country.



For the Complete article, go to: USA Today

Some home buyers gain edge from credit crisis

By Christine Dugas and Sandra Block, USA TODAY
August 27, 2007


What credit crunch? Home buyers with solid credit and money for a down payment are now better positioned than they were a few weeks ago.

The average 30-year fixed mortgage rate is at a three-month low. Home prices in many areas have fallen. And despite the meltdown in non-traditional mortgages, many community banks still offer jumbo loans (above $417,000), though rates have risen.

"If you want to move up to a bigger house or buy a home for the first time, and you have the credit and qualifications to do so, it's an excellent time to buy," says Gerri Detweiler of FreeRateSearch.com.

Contributing to a Buyer's Market:

•Lower long-term mortgage rates. The average 30-year fixed rate reached 6.52% last week, the lowest since May 31, according to Freddie Mac (FRE). Frank Nothaft, Freddie Mac's chief economist, says declining yields for Treasury securities and the housing slowdown helped produce lower mortgage rates.

•Falling home prices. Nationwide, median home prices fell 1.5% in the second quarter, according to the National Association of Realtors. In addition, sales were down in most states, the NAR said.

That's given buyers with sound credit a lot of bargaining power. James Aberle, 38, of Phoenix recently paid $288,870 for a home originally listed at $350,000. The builder, through its mortgage arm, arranged 100% financing and paid for private mortgage insurance, which typically kicks in for buyers who put down less than 20%. The builder also paid $7,400 toward closing costs, Aberle says.

And for some buyers, real estate appraisals are producing lower home values, allowing them to renegotiate the price, says Kyle Kilpatrick of LendingTree.com.

•Available jumbo loans. Many lenders have abandoned non-traditional loans, including jumbos. That's because investors, fearful that the crisis in the subprime market is spreading, are reluctant to buy jumbos and other loans that mortgage investment giants Fannie Mae and Freddie Mac won't buy. But now, many community and national banks have stepped in to offer jumbo loans. They're better positioned than some other lenders to make those types of loans because they can fund them with customer bank deposits, says James Chessen of the American Bankers Association.

•Lower rates on adjustable-rate mortgages. Rates on ARMs are often based on Treasury yields, which have fallen, notes Keith Gumbinger of HSH Associates.

For the complete article, go to USA Today

New-Home Sales Post Surprising Gain

MSNBC.com

Separate data show big-ticket factory orders jumped in July
The Associated Press
Updated: 10:34 a.m. PT Aug 24, 2007

WASHINGTON - Sales of new homes perked up, while factory orders took off in July, raising hopes that the economy can safely weather financial turmoil that has shaken Wall Street.

The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally adjusted annual rate of 870,000 units. A second report showed that orders to factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months.

Both reports were better than analysts expected. They were forecasting home sales to fall and were calling for a much smaller, 1 percent gain in factory orders.

In the housing report, the improvement in sales reflected gains in the West and the South, where sales went up by 22.4 percent and 0.6 percent respectively. Sales, however, tumbled 24.3 percent in the Northeast and were down 0.9 percent in the Midwest.

For the complete article, go to www.msnbc.com

4 Tips for Cooling Down Your Energy Bills

We talk a lot about ways to increase your home's efficiency here, and here we talk some more. Nice information, but if we don't put it into practice, it means nothing. During one of the driest and hottest years on record here in the Desert, it's time to put all this good information into action.

You know August is approaching when temperatures are heating up and air conditioners seem to be constantly humming — and staying cool is on everyone's mind.

But many home owners are equally concerned about how they can cut down on their energy consumption and reduce their monthly cooling bills.

The American Council for an Energy Efficient Economy (ACEEE) has a few suggestions:

Clean or replace air filters in air-conditioning units to keep cool air moving and to reduce electricity consumption.

Have an air conditioner tune-up performed by a qualified contractor.

Make sure your attic, which traps a lot of hot air, is adequately insulated.

Replace old equipment. A new high-efficiency unit not only pares down utility bills; it can help you qualify for a federal income tax credit.

But before you buy something new, do your research. “Often people are so desperate to replace their equipment that they don’t take the time to research the investment, locking themselves into high cooling bills and less comfort,” says ACEEE researcher Katie Ackerly.

For more information log on to www.EnergyTaxIncentives.org

You can find more information for local rebates and resources on the SoCal Edison site at www.SCE.com

What have YOU done to improve the efficiency of YOUR home? Let us know!

You’ve Heard of a 1031 Exchange, but…

The basics are rather simple: You currently own a business or investment property and you are considering selling this property in order to purchase another investment property. Don’t just sell one, buy the next; utilize what is perhaps the Feds best program ever available for deferring your taxes on real estate capital gains, the 1031 Like-Kind Exchange.

This option gets its name from section 1031 of the United States Internal Revenue Code, which allows capital gains taxes on an investment asset to be deferred if the asset is traded for one of “like-kind.” And what, exactly, are “like-kind” assets? Like-kind simply means that they’re of the same nature or character. All real estate is considered to be of like-kind, even if one parcel is an undeveloped plot and the other is a newly built retail complex. The caveat here is that both MUST be business or investment properties. The money that you save by not paying taxes today may even be used to purchase a higher-priced and more valuable property than you might otherwise have considered. You don’t actually pay the capital gains tax until you sell the new replacement or like-kind property.

A 1031 exchange doesn’t need to be limited to a single property. With guidance from The Thomas and Drake Group and a qualified intermediary, you may be able to trade one property for two, or even swap multiple properties in what is known as a “multi-asset exchange.” The Thomas and Drake Group can help you determine what types of property can be exchanged for the one you currently own. One stipulation is that all real estate involved in the exchange exists within the United States. Another is that all properties involved are solely for business or investment purposes and do not serve as the owner’s primary residence.

While simple in concept, the 1031 exchange has some very specific details, which is why having professional guidance is imperative. Strict rules detail when the properties can be exchanged and how the exchange will be reported to the IRS. Once you relinquish your property to the new owner, for instance, you have just 45 days in which to either: (1) take possession of the new property, or (2) create a legal document that lays out the terms of the exchange, identifies each property by its official name, and is signed by the parties involved. In either case, all exchanged properties must be officially closed within 180 days or the tax benefit may be disallowed. Making sure that everything takes place within the time restraints can be tricky–especially when a multi-asset exchange is involved. This is where our professional services and the “Qualified Intermediary” come in.

The IRS says if you touch the money you pay the tax. However, if you use a qualified intermediary to transfer the money from the sold property into the purchased property, you qualify for a tax free exchange. The IRS does not permit your accountant, attorney, Realtor, Broker or escrow company to be your qualified intermediary. As a professional qualified intermediary, 1031 Exchange Advantage is a member of the Federation of Exchange Accommodators and bonded. No matter which intermediary you choose, they should be members of this important trade organization and should be bonded. Ask to see proof of both before doing business with any intermediary.

The benefits of a 1031 exchange may well be worth the time and effort. The Thomas and Drake Group can even help you come up with some creative ideas to roll the perks of a 1031 exchange into other aspects of your life. For instance, you might be able to buy a rental property in a place where you’d like to vacation; or purchase a condominium or an apartment building that can generate income. The possibilities are almost limitless.

Take time to read the information provided by 1031 Exchange Advantage on their website (click on the link to the right), and if you ask for additional information, here is our gift to you: send us a quick email first and ask us for a rewards code. This may qualify you for discounted services from 1031 Exchange Advantage.