Julie Staradumsky CREN

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you'll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don't rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the "Buy vs. Rent" calculator at www.GinnieMae.gov.

10 Ways to Prepare for Homeownership

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you'd like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

4. Start saving.Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don't forget to factor in closing costs. Closing costs - including taxes, attorney's fee, and transfer fees - average between 2 and 7 percent of the home price.

5. Get your credit in order.Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications.How large of mortgage do you qualify for? Also, explore different loan options - such as 30-year or 15-year fixed mortgages or ARMs - and decide what's best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you've saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process

List: Areas with the Best and Worst Economies

Thirty-eight of the country's top 100 metro areas avoided declines in home prices in the past year, reports the Brookings Institution's quarterly MetroMonitor, which tracks indicators of economic recession and recovery in these areas.

Areas with stable home prices were concentrated in the less-affected parts of what Brookings calls the "Manufacturing Belt," Pennsylvania and upstate New York, and the Sun Belt: Texas, Oklahoma, Arkansas, and Louisiana. These areas also had below average shares of properties affected by foreclosure.

Cities whose economies were the strongest had businesses involved in oil and gas exploration, military employment, education, and government.

Here are the top 10 and the bottom 10 metro areas, according to how MetroMonitor ranked their economic health:

Top 10
1. San Antonio
2. Oklahoma City
3. Austin
4. Houston
5. Dallas
6. McAllen, Tex.
7. Little Rock, Ark.
8. Baton Rouge, La.
9. Tulsa, Okla.
10. Omaha, Neb.

Bottom 10
1. Providence, R.I.
2. Toledo, Ohio
3. Stockton, Calif.
4. Fresno, Calif.
5. Modesto, Calif.
6. Jacksonville
7. Lakeland, Fla.
8. Tampa
9. Bradenton, Fla.
10. Detroit

Source: The Brookings Institution (06/17/2009)

To reach out to homeowners in danger of foreclosure, real estate practitioners can obtain training in short sales and develop a consumer-centric Web site disconnected from their brand that provides a place for distressed homeowners to locate reports, worksheets, and other information about short sales and foreclosure.

Practitioners can issue a press release through local media outlets to drive traffic to the site, as well as run a classified "stealth" advertisement in the newspaper to let sellers know about the site and ensure their privacy.

Additionally, they can:

• Target neighborhoods hit hard by foreclosures.
• Send postcards to residents of these communities informing them of the Web site.
• Add a button to their flagship Web site that will connect visitors to the short sales site.
• Reach out to their sphere of influence to let contacts know they have resources to help them or people they know avoid foreclosure.

It also is important for these practitioners to keep the seller's emotional state in mind as they prepare marketing materials, as distressed homeowners often feel embarrassed, overwhelmed, and confused about their options.

Note: Legal specialists have recommended that practitioners avoid identifying themselves as experts in foreclosures and short sales, because such self-identification can expose them to legal liability if a deal collapses. A safer approach from a liability standpoint is to identify their experience and training but not refer to themselves as an expert.

Source: RISMedia, Tricia Andreassen (06/15/09)

How to Respond to Appraisals That Miss the Mark

What can be done if a home appraisal comes in dramatically lower than the agreed-upon sale price?

Lenders will consider an appeal, but sellers must provide them with evidence.

Start by examining the appraisal carefully for errors. If the appraiser missed one of the bathrooms, miscalculated the square footage, or didn't note the garage, the seller has grounds for an appeal.

Look at the comparable: Is the home used as a comparison in a different and more challenged school district? Is the comparable next door to something undesirable? If possible, pull some more realistic comps.