Could the News be Any Better??

Hallelujah!!!   The Congress got together for at least a partial deal!!  You would think it was time to celebrate but there is more to do on the debt side.   Call your Congressman and Senator!!!

And the Real Estate News??  It only keeps coming!!!   As reported previously and echoed again in Jim Belote's Mortgage Matters, the Housing Market is coming back!!  More good news.

With the sense of calm that will occur in the market due to the recent compromise in Congress, sellers should feel very confident that the market improvements will continue.  And buyers, you best run!!  The prices will only continue to firm and, as noted in the Mortgage Matters, interest rates are projected to rise over time.  No one can tell you the exact time when the rates could move up.

Yet do you want to wait to get the double whammy of higher prices and higher rates???

Keeping you updated on the market! For the week of  December 31, 2012 MARKET RECAP Last week, we sang hosannas for home builders and new-home sales. This week, existing home-sales get their turn. We praise existing homes because sales have taken a significant turn for the better. Late last week, existing-home sales posted at an annualized rate of 5.04 million units for November – a 5.9% increase over October. The pace of existing-home sales has risen to the point they are on par with the federal-tax-credit days in the spring of 2010. The good news is the market is much healthier today compared to 2010. Back then, we were skeptical that tax credits would sustain existing home sales. Our view was that the credits were simply pulling sales in from future demand, while aggregate demand remained low. This time is different. We expect sales to continue to trend higher. The housing market is more robust today than it was in 2010. For one, distress properties are becoming less of a factor. For November, distressed properties accounted for 22% of existing-home sales, down from 24% in October. What's more, that percentage has been trending down for much of 2012. Supply has been an issue, and a mixed blessing. Current inventory of existing homes is at a multi-year low of 4.8 months. The number of existing homes on the market, 2.03 million, is retarding sales-volume growth. On the other hand, low supply is helping prices. The national medium price of an existing home is up to $180,600, a 10.1% increase over the median price this time last year. All in all, the latest data show that housing – new and existing – is increasingly taking leadership for economic growth. In other words, the world is finely returning to some sense of normalcy. Normalcy might not be the word we'd use to describe mortgage lending. Yes, rates continue to skim along multi-decade lows; that is, when they are not setting new multi-decade lows. But this is an unusual lending market. Rates are low, but risk aversion remains high (particularly among regulators). The Federal Reserve is doing everything within its power – by purchasing mortgage-backed securities and long-term Treasury notes – to hold interest rates low. This is an unprecedented move by the Fed.  To be sure, the Fed's efforts have worked, but it's worth keeping in mind that the events of today are an aberration. A more normal lending environment would consist of higher-rate 30-year mortgages. From an investor's standpoint, the rate today barely compensates for inflation and doesn't compensate for risk and the time value of money. The point we want to emphasis is that the housing market has returned to normal; we think that it's a matter of time (which isn't too far into the future) when mortgage lending returns to normal too.   Economic  Indicator Release  Date and Time Consensus  Estimate Analysis Mortgage Applications Wed., Jan. 2, 7:00 am, ET None Important. Markets expect the rising trend in purchase applications to continue into 2013. Construction Spending (November) Wed., Jan. 2, 10:00 am, ET 0.1% (Increase) Important. The residential sector is fueling gains in overall construction spending. Federal Reserve FOMC Minutes Wed., Jan. 2, 2:00 pm, ET None Moderately Important. The Fed minutes will likely report moderate, but sustained, economic growth. Employment Situation (December) Fri., Jan 4, 8:30 am, ET Unemployment Rate: 7.8% Payrolls: 140,000 (Increase) Very Important. Accelerating job growth will make it more difficult for the Fed to maintain its low-interest-rate policies.   A Look Back and a Look Ahead   It appears we were fairly accurate in our predictions for 2012. This time last year we predicted that home sales volumes would continue to improve. We said the same for pricing. We even expected prices in the sand & shore states to lead the rebound. That's been the case (even Las Vegas is rebounding). One reason we thought 2012 would be a strong year for housing is shadow inventory would be less of an issue than many pundits were ominously projecting. Our rationale was simple: What's known doesn't roil markets; it's the unknown that roils markets. The problems associated with shadow inventory are well-known and well-vetted. Markets are masters at dealing with what's known. Now, we said “fairly” accurate, not completely accurate. Our prediction on mortgage rates was wrong. We expected higher lending rates in December 2012 compared to December 2011. That wasn't the case. In our defense, we didn't expect the Federal Reserve to intervene in the mortgage market to the extent it has. For 2013, we are doubling down: Existing-home and new-home sales will continue to improve, as will overall pricing. Home starts will also pick up pace throughout the year. As for shadow inventory, it will become even less of an issue than it is today. We're also doubling down on mortgage rates. We see higher rates this time next year. We say that because the Federal Reserve's interventionist policies are becoming less effective. After the Fed announced it would double its purchases of longer-term notes and bonds, the yield on the 10-year Treasury actually increased 20 basis points. This suggests to us markets are becoming more concerned with inflation. So that's our call for 2013. Have a safe and happy New Year.

Trends Are Great....Why are You just Setting There

Amazing Survey Results!!!

Realtors are surveyed regularly by various groups to get a sense of the market for buyers and sellers.

A recent report by Credit Suisse was quite revealing.   There was not a trend in any factor measured that was lower than 2011.  In fact most factors have steadily improved since November 2011.

This is quite impressive as this is a nationwide survey in the top 45 Markets.  And it is based on the experiences of Realtors in our day to day  interaction with buyers, sellers and prospects.

Here is a summary by factor:

Buyer Trends:  Increase 26.9(factor) to 51 in July 2012, with peaks as high as 63.5.

"Buyer interest remains solid due to the favorable affordability but a lack of inventory is a dray on sales in many markets"

Price Index:  "All time high of 63 in July"
Note:  Reading above 50 indicates higher home prices in past 30 days.

Incentives(closing costs, buydowns, etc):  
Rose from 37.6 August 2011 to 50 in July 2012
(indicating incentive are less prevalent).

"Unchanged in July(from May/June) and likely to fall as demands improve"  

Inventory Levels:  "Inventory levels continued to trend lower in July, as our home listing index rose to 72 from 68 in June, the highest reading since our survey began."

Length of Time to Sell:  "Decrease again in July"...a growing trend since August 2011

Across the board, the market has improved for sellers and become a bit tougher for buyers(improving prices and low inventory).   No doubt every market is not responding the same!  Yet every market is moving forward.

Whether trying to buy or sell, don't let this market past you.  

Buyer:  Rates are unbelievable

Seller:   Buyers are looking for you!

Finally, is your market better

                   or 
        
                      worse than this survey suggests??

Interest Rates Drive Market...Are You in Driver's Seat?

Time to talk interest rates...Again!!!


With the frequent mention of the stablized but not accelerating Real Estate sales nationwide, so much misinformation or at least misinterpretation of the "true nature of today's market" is too common.


The facts are very simple in most markets:


     Home prices are steady to rising slowly


     Short Sales and Foreclosure are still a meaningful 
         part of the market


    Banks will be required to reply to buyer contracts on Short Sales 
         and Foreclosures in under 30 days beginning July 1, 2012


    Qualified buyers are getting mortgages...just extra paperwork            
         required


    Interest rates are the lowest in history...last week's average
         30 year mortgage    3.75%
         15 year mortgage    2.25%


All these factors should motivate individuals and families needing a new place and investors looking to get in while the getting is good to "jump in" while the water is great.


Take interest rate benefit:


    The difference in Principal and Interest payment between 3.75% 
      mortgage(today) and a historical 'good' of 7% mortgage is as 
      follows:


                                        3.75%               7%          Monthly
      Mortgage                Payment          Payment     Savings


    $100,000                    $463                $665           $202 
   
    $200,000                    $926             $1330            $404


    $300,000                  $1347             $1996            $649


    $400,000                  $1796             $2661            $935


  To realize the real value of these rates, simply note that
  a buyer can buy a home with $400,000 mortgage for $200 per
  month less than Principal and Interest Payment on a $300,000
  mortgage at 7%.


  Now that is saving big dollars by striking when the fire is hot!!!


   And is it ever HOT!!!

Interest Rates Roar!!

 Jim Belote provides another great market update.  Thanks, Jim!!

Have you noted the new low interest rates???  3.75% for 30 year and 2.75% for 15 year note was the "average" reported last week.   Great for buyers!!  If you read Jim's notes below,

you can see these rates and homes sales continuing to improve...could they be related???

                             They should be

Keeping you updated on the market! For the week of  May 28, 2012

---

MARKET RECAP As each week passes, the data on housing becomes more encouraging. This past week's data added to the good feelings. Existing homes sales continue to post monthly gains, rising 3.4 percent in April to an annualized rate of 4.62 million units. If you go back to July 2011, you'll see a trend that is very noticeably up, with monthly sales trending 15-percent higher over the time period. Perusing the existing home sales data a little deeper, we find many encouraging details. When local market prices are aggregated into the national number, we find the national median price has increased to $177,400 – a 10.1 percent improvement over the national median price in April 2011. Strengthening home prices are surely the result of easing competition from distressed sales, which now comprise less than a third of total sales. Fewer lower-priced distressed properties in inventory obviously means less downward pricing pressure. More seller interest is the corollary to less pricing pressure. The NAR reports that inventory increased to a 6.6-month supply in April from 6.3 months in March. A few co mmentators positioned the inventory increase as a negative, but we don't necessarily agree. Compared to last year, when inventory stood at a 9.1-month supply, 6.6 months is a vast improvement. Composition of inventory is also worth considering, and the composition of existing-home inventory this year is of higher quality compared to last year. Better pricing invariably brings better homes to market. We’ve see pricier, higher quality homes hit the market over the past six months. The trend in new home sales and pricing is also encouraging. New home sales increased 3.3 percent in April to an annualized rate of 343,000 units, easily beating the consensus estimate for 330,000 units. Meanwhile, the national median price of a new home rose to $235,700 compared to $234,000 in March and $224,700 in April 2011. We don't see new-home prices backsliding any time soon. Inventory stands at a mere 146,000 homes, which is a 5.1-month supply at the current sales pace. A dearth of inventory, coupled with a rising-price environment, means that anyone looking to buy a new home should think hard about procrastinating; rising demand plus shrinking inventory always equals higher prices. That said, a few opinion leaders are less sanguine than we are, at least on prices. New York-based Fitch Ratings weighed in on the subject and said it sees another 7.8% drop in national home prices this year. In our opinion, that's an awfully steep (and unlikely) drop at the national level when you consider the vast improvement in many formerly forlorn markets – Phoenix, Miami, Detroit, Orlando – that are recovering vigorously. Bottom line, we still see no persuasive evidence to think the majority of housing markets aren't recovering and moving forward.

Economic Indicator	Release Date and Time	Consensus Estimate	Analysis
Mortgage Applications	Wed., May 30, 7:00 am, et	None	Important. Falling rates fail to stimulate additional purchase demand, but cash sales remain strong.
Pending Home Sales Index (April)	Wed., May 30, 10:00 am, et	101 Index	Important. The trend in contract signings points to a strong su mmer season.
Gross Domestic Product (1st Quarter 2012)	Thurs., May 31, 8:30 am, et	1.9% (Annualized Growth)	Important. Growth slowed in the first quarter, but recent data on spending and investment point to stronger growth going forward.
Employment Situation (May)	Fri., June 1, 8:30 am, et	Unemployment Rate: 8.1% Payrolls: 170,000 (Increase)	Very Important. Payroll growth approaching 200,000 per month will force the Federal Reserve to rethink its low-interest-rate policy.

Money and Opportunity Costs Mortgage lending rates continue to hold multi-decade lows. Could they continue to hold these lows through 2012? We wouldn't be surprised. On the other hand, we don't see much impetus for rates to go much lower either. We ask rhetorically, why procrastinate? We also see little reason not to borrow to buy. A borrower who takes a 30-year fixed-rate loan at 4 percent is looking at an after-tax cost of 2.875 percent, assuming a 28 percent marginal income tax rate. That same borrower who assumes a 15-year fixed-rate loan at 3 percent is looking at an after-tax cost of 2.16 percent. Both rates are below the annual inflation rate of 3%. It's almost like interest-free money. What's more, tying a large sum up in owner-occupied real estates means tying up money that could be put to more profitable use. If a buyer puts 20 percent down on a $200,000 home, that means financing $160,000. If a buyer pays cash, he or she no longer has use of that $160,000. That's money that could be used to buy cash-generating investments, such as dividend-paying stocks and rent-generating investment real estate, that yield two or three times the borrowers net interest-rate costs. In short, tying an excessive amount of money up in real estate when cheap financing is available means enduring a possibly high cost of foregone investment opportunities.

Homeowner's Associations..Your Friend?

Home Essentials December 2011

Bryan Cerny Rose & Womble Realty Phone: (757)580-6546 Email Bryan Visit Our Website   Homeowners’ Associations – Friend or Foe? You’ve probably heard the horror stories—homeowners’ associations nitpicking about insignificant details, tying up property sales with costly lawsuits, or enforcing expensive and unexpected assessments. But, homeowners’ associations (also called HOAs) can help protect property values, provide great amenities that you couldn’t afford on your own, get you involved with your community, and keep your neighbors from parking cars on their front lawns. Whether you love, hate, or don’t know much about homeowners’ associations, if you’re thinking about purchasing a home that is affiliated with one, it’s important to do your research. Before you sign on the dotted line, ask these important questions: Does this home belong to a homeowners’ association? This question isn’t as simple as you’d think—HOAs aren’t just for condominiums. Don’t assume that just because you’re looking at a townhome, single-family home, or vacation property that you’re in the clear. In fact, according to the Community Association Institute (CAI), four out of five houses built since the late 1990s have an HOA. Can I see some documentation? Ask to see the community’s Covenants, Conditions, and Restrictions, commonly known as CC&Rs. These documents are the association’s governing rules, and explain protocol and regulations that officers, homeowners, and tenants are expected to follow. In most cases, CC&Rs are legally enforceable. In addition to reviewing the CC&Rs, ask to see recent meeting minutes and up-to-date financial statements. These documents will let you know if there are any upcoming assessments in the works and help you determine the overall financial health of the organization. How are the HOA’s finances managed? How much can I expect to spend? A well-organized HOA should make very clear the financial responsibilities of its members. Are dues billed monthly, quarterly, or yearly? How much are they? Are there late fees? If a homeowner violates a regulation, are there monetary penalties? Are there limits to the dollar amount and frequency of one-time assessments? What do my dues cover? Inclusions vary dramatically and it is safe to assume that the lower your dues, the fewer services, amenities, and utilities are included. In a traditional condominium association, dues may likely include water, cable, ground maintenance, trash, sewer, recreational amenities, parking, security, and more. HOAs in neighborhoods with single-family homes may cover sidewalks, landscaping, and common areas. Ask to see a comprehensive list of what is included. How do you like the HOA? Hit the pavement and ask neighbors about the association. How is the leadership elected? Have you had any negative interactions? How common are expensive assessments? Can I follow all of the rules? Before you commit to living in an HOA-affiliated building or neighborhood, take an honest look at the rules and make sure that you are comfortable following every single one. Make sure that your lifestyle fits with the HOA’s parameters. For example, if you’re buying vacation property, make sure that the HOA doesn’t have rules limiting or forbidding owners from renting their property. Homeowners’ associations can be a good influence on your condo or neighborhood, but only if everyone follows the rules. Understanding the rules and responsibilities before committing to a purchase is crucial to happiness in your new HOA-affiliated home.

Moving Forward...Always Forward

Moving Forward...Don't Look Back (edit/delete)

More often than not, we all love to play "Monday Morning Quarterback".  We love to rehash the plays that failed and those that were are highest moments of success.

And the Real Estate Market faces the same dilemna day in and day out.  When the market was crazy in 2004/2005, buyers and sellers saw the quick sales pace so differently.  The buyers moaned about the home they bought was there third or eighth offer and they finally got a house, wondering in the coming months if it was a good purchase or just bought because "it was the only one we could land".

The sellers estatic at their good fortune of a quick sale at a price they never thought they would get soon feel like they fumbled the ball.  Their old neighbor only three months time sells his home for $10,000 more!  "Oh, did we sell too quickly??  Did we leave money on the table?"  the seller might have wondered as he rehashed the events.

Neither party frequently retained the joy of the transaction by second guessing the result.  Not much is to be gained by this action but it continues.

Though interest rates are as low as they have been in 50 years, inventories lower than 2010 and market conditions in many areas of the country have improved, "Monday Morning Quarterbacks" abound.  Who hasn't heard some one moan about the impact of short sales and foreclosures on home values while buyers snap up these bargain(with the challenges involved) thus reducing the possible glut of depressed values!!!

Or the home owner with $50,000 equity wondering if just would have sold two years earlier when prices were "stronger" that doesn't realize he would have paid more for the house he purchased at that time.

Rather than looking in the rear view mirror, march ahead!!!   Realize in Real Estate as in life, the present reality is the "reality" we live in.  There is no such thing as the "New" Reality....it just  is.

If you are ready to move forward, knowing that is the only way to go, you are ready to take advantage of this market's current reality...the only one there is!!!

Bryan Cerny, Associate Broker, GRI, ABR, SRES, SFR
Rose &Womble Realty, Chesapeake, VA
Licensed in VA & NC

 

Interest Deduction Saved????

POWERFUL LEGISLATOR CLAIMS INTEREST DEDUCTION STILL SACRED

Powerful Legislator Claims Interest Deduction Still Sacred  Topic Summary: With all the talk of cutting the deficit and putting the government on firm financial ground, there have been several attempts to reduce or even eliminate the deductibility of mortgage interest. Congressman Barney Frank, a powerful legislator claimed a few days ago that there are not enough votes to kill the deduction and it will remain "sacred" for the foreseeable future. Current Status:   Homeowners can deduct interest on a mortgage taken out to buy or improve a home if the amount of the loan is less than $1 million for married couples and $500,000 for a single taxpayer. Home equity loans taken out for anything else is capped at $100,000 for couples and $50,000 for singles. (See Mortgage Deduction Facts Video from The National Association of Realtors Below) Recent Activity:  When President Obama released his budget for 2012, the deduction, long considered a "sacred cow" to homeowners came front and center. The President advised an 30% cut to itemized deductions for high-income taxpayers. Other legislators said the deductions should be eliminated and replaced with a 12% tax credit covering all deductions. "The mortgage interest deduction is going nowhere," Congressman Frank said. "The sun will go away before it does." Frank said think there are not enough votes in the House to gut the deduction. He also said that the deduction would play a role in the new Housing Policy that is being crafted in Washington. As mentioned in previous alerts, Fannie Mae and Freddie Mac are undergoing transition (NPR ARTICLE) and may even be eliminated. Other forms of housing finance assistance are being contemplated as all agree the old ways of propping up the housing market are broken. Congressman Frank added, "If I were starting a new country, I would not have it. I do not think it is ideal tax policy," Frank said. "Given the extent to which people's legitimate, vested interest include that, trying to abolish it now, even if we were in a wonderful economy would be unfair. Houses are still a large part of the wealth for many people. I think it's important for people to know that that's staying around and we can build on that." "The Sacred Cow" Part of the reason the deduction is called "sacred" is that its longevity is partly owed to the powerful housing lobby in Washington and the states. The leader of the pack is the National Association of Realtors, claiming that the housing market is too fragile now to alter the landscape and that home values would drop by about 15 % of the deduction were eliminated. Click and learn some more on how the deduction impacts all homeowners even if you do not deduct mortgage interest. We will keep you up to speed on this ever-changing situation

Buyers: Price vs Cost

Buyers have questions.  The key one today is:  "Is it the right time to buy?  Aren't homes getting cheaper by the day?"

                            

                                                                   by Kenneth Fisk

This is the question of the day.   Just today in about 15 different news cast and mortgage company blogs/newsletters.   This AP article is a sample:

LOS ANGELES -- Home prices were falling across most of America's largest cities in November, and average prices in eight major markets hit their lowest point since the housing bust.

The Standard & Poor's/Case-Shiller 20-city home price index released this week fell 1 percent in November from October. All but one city, San Diego, recorded monthly price declines. San Diego prices rose 0.1 percent.

Prices in eight cities sank to their lowest levels since prices peaked in 2006 and 2007: Atlanta, Charlotte, N.C., Las Vegas, Miami, Portland, Ore., Seattle, Tampa, Fla., and Detroit, which saw the largest drop at 2.7 percent from the previous month.

As of November, average home prices in Las Vegas have fallen 57.2 percent from their peak in August 2006 and are back to where they were in late 1999.

Millions of foreclosures are forcing prices down, and many people are holding off making purchases because they fear the market hasn't hit bottom yet.

"With these numbers, more analysts will be calling for a double-dip in home prices," said David Blitzer, chairman of S&P's Index Committee.

As a buyer, the focus needs to be on cost of home ownership.  Price is the amount one pays for an item while cost is value of an item versus quality and time.  For example, purchase a pair of jeans at discount for $10 and a well constructed pair of jeans for $45 at the same or different store.  The price is $35 cheaper but the cost could be much higher via shrinkage, deterioration, fading or fit.   Any of these items can result in subsequent purchases which in the long run equals a higher expense.

So it is with Buying a home.

If a home priced today at $200,000 at  4.5 % interest were to be reduced to $185,000 within 2 months would it be a better deal?   If the world stood still, perhaps.  But interest rates are moving up!  And there is a cost to indecision.

If the interest rate goes to 5.5%, the increase in payment though price is lower is $37 more per month or $13,300 over 30 years.   It could be much worse in two months if either price doesn't decrease and/or rates are higher.

Add the cost of delay if rent is $800 per month and the buyer is in a 25% tax bracket. The delay will cost the buyer:

                                        $1600 additional rent                                             + $  500 loss tax credit

                    Total            $2100                       

Add the changes in Mortgage guidelines.   If any of the banks move to the higher down payments(30%) or higher Private Mortgage Insurance(PMI) rates that are being discussed, a buyer will have to come up with more money for his down payment and possible higher payment via PMI.

So the Buyer must ask themselves:  Am I really worried about the PRICE or the Cost of my new home

Questions to Ask???

THINKING ABOUT BUYING OR SELLING A HOME???

You should be!   Prices are sharp and rates still remain awesome!!

But should you not have a friend that can refer you to a great Realtor.....or you just simply want to know what that Realtor is about, here are some key questions to ask!!!

Questions to Ask

         1.      Are you a Realtor?  If so, tell me what value 

           it brings to me.

2.      What percentage of your potential commission

     will go to advertising my property?   What  

     sources of advertising do you use and why?

3.       Where does your company rank among the

     Real Estate Companies in " YOUR AREA,

     CITY OR STATE"?

4.      What services does your company provide 

     that differentiates it from your competition?

5.      How many offices and agents are associate 

    with your firm? What advantage is that to me?

6.      Describe your Buyer Pool?  How will that

     impact the sale of my house?

7.  How do you ensure I get the best deal on my

     new house?

8.      What Relocation assistance can you provide?

9.      What assistance can you provide in me 

     preparing my house to sell?

10. How will I be assured that I am notified on a

      newly listed home??

11.      What specific experience do you have selling

       in this neighborhood?

12.       How do you:

1)      Ensure I don’t move until I’m ready to 

     move? 

2)      Ensure only qualified buyers see my house?

3)      Ensure the potential buyer has solid

     financing?

13.  How does the Standard Purchase Agreement

     work in my favor?

14.  Where do you rank in your company in sales

      and listings?  In "Your Area"?

15.  How many years have you been a Realtor? 

      Number of Circle of Excellence Awards or 

      other awards?

16. What training do you have that will help me

       specifically??

17.   Do you have letters of recommendation

       that you can provide?

Any real estate agent should welcome the chance to answer these questions.   I know I will answer these for any one in Hampton Roads!!!

Key Rent vs Buy Decisions

Rent vs Buy  dilemma has haunted 1st time home buyers forever.  Yet, for the uninitiated home buyer, this has to be an expected challenge.

At face value, buying a home is a better decision than renting one. With a home purchase, the buyer has a key opportunity to gain equity(value) as the first step of his future financial success.

 Anyone who has rented for more than 6 months quickly realize that they may as well as light a match to the rent check as they are gaining no value from the rent payment other than a roof over their head.  Typically, the home owner can expect to receive a 2 to 5% return on their investment in a home ever year.

Though the bubble of the early part of 2000s has cause this paradigm to be turned on its head for some people,  this by no means suggest that home ownership is worse than renting.  It just "aint' true".

 Key Advantages to Home Ownership:

• Initial "One Month" Grace Period between last rent payment of prior month and 1st Home Mortgage Payment
• Tax Benefit -- Mortgage Interest Deduction can lower taxes, increasing refunds significantly.
• Improved Credit Score
• Improve Ability to Qualify for other credit purchases....buy a house and the car dealership will darn near       give you a car!!!
• Improve the Community...home owners take care and improve a neighborhood
• Possible Equity Growth assist housing market through move-up purchases as lifestyle, job transfers/promotions and family needs permit

Yet, the prep for the renter to become a home owner is paramount!!!

• Clean up Credit Report; Raise credit score above 600(minimum)
• Take 1st Time Home Owners Class
• Learn about Mortgage Types, Down Payments and Qualifications
• Save...Save...Save  Downpayment and Closing Costs
• Investigate areas of town that interest the buyer and are within the purchasing power of the buyer
• Be employed in the same field, preferably the same employer, for a minimum of two years.  All mortgage applicants should meet this requirement.
• If Gift to be provided by Parents or another family member to make the home purchase, find out guidelines and stipulations now.
• Know that unlike renting, home ownership is a long term commitment.  Purchasing a home for one year prior to relocation out of town will be financially disastrous for most buyers...think 5-7 years.

Selecting a Realtor like me early in this process is invaluable for the 1st Time Home Buyer.  The Realtor can help the renter prepare to buy and guide him/her through the steps noted above.   Every buyer's needs are specific and the Realtor will ensure those needs are met!!!

 

Don't Be Scared...of Short Sales

The latest in horror shows....The Short Sale!

   If you were to read the press and speak to some real estate agents or buyers, you would hear exclamations of fear and trepidation.

What is a Short Sale?  

 The sale of a home by a party that needs to move that owes more on the home than the present market(buyers) will pay for the home

Yet, no home purchase or home sale needs to be a "fearful" venture.  Though no two home purchases/sales will ever be the same, it is true that a Short Sale brings extra wrinkles to the process.


The biggest wrinkle is that the Bank(s) holding the mortgage liens must approve the sale price and terms that the ready and able buyer and the ready and able seller agree upon.  A second wrinkle is the seller's lack of funds to do any repairs; home is sold "as is".  Typically, a home inspection is allowed but only as a "check point" for the buyer as no repairs will be completed.

Thus, a buyer or seller must be prepared for:


    A:  Probable slow response for the bank's approval of the contract
    B:  Additional forms or submissions of documents at the
             time a contract is ratified by the buyer and seller.
    C:  Conflict between 1st Lien Holder and 2nd Lien Holder(s)
    D:  Contract falling through due to home inspection noting
             major system faults in home or the buyers/sellers 
             unwillingness to accept bank's terms of sale.

Recognition of these factors plus proactive steps by a buyer or seller will relieve much of the stress and "pain" of the transaction.


Steps the Seller can take:
     1.   Contact Bank immediately for Short Sale package, gathering 
               all the information required.
     2.   List your home with an SFR(Short Sale and Foreclosure 
               Resource) certified Realtor. 
     3.   Be honest with Realtor regarding mortgage(s) owed so that
               a "possible short sale" can be recognized and addressed.
     4.   Contact and secure the services of a Real Estate Attorney
     5.   Consult with your accountant regarding the tax implications
     6.   Assist in all matters that any party requires in a timely
               manner.


Steps the Buyer can take:


     1.  Search for homes with an SFR Realtor.
     2.  Recognize that Short Sales will require a longer than
            normal closing time.
     3.  Recognize that Short Sale doesn't always equal "Bargain".
            It is not unusual to see a Short Sale priced higher than
             the market will bear.
     4.  Recognize the Seller may agree to a "low ball" offer but
            the Bank may reject the "net proceeds" it will receive.
     5.  Have Title Work completed prior to submitting an offer to
            verify the liens on the property(your Realtor can ask
            the Seller's Realtor but it is possible that Realtor doesn't
            have the whole story).
      6.  Read all of the Bank's addendums to the Sales Contract!!!
             Submit to your attorney anything you don't understand
              or can't believe you must adhere to.


So don't run "Scared"...... Be Prepared!!!


Questions???  


 Ever buy a short sale?? 
                                        WHAT DID YOU EXPERIENCE???
Did you ever need to sell short?