Real Estate Information Archive

Good Monday Morning!

A large percentage of home sales today are to first time home buyers.  The current market of low mortgage interest rates has given first time buyers an excellent opportunity to become home buyers.  The following is an article from Realty Times that offers some great tips for anyone considering the opurchase of their first home.

Before you start seriously shopping for a home, there's some groundwork you should do to put yourself in the best position to buy a home.

Start early, a couple of months before you talk to a lender or hire a real estate professional.

Check and repair your credit

The Fair Credit Reporting Act requires the three nationwide consumer credit report companies, Equifax, Experian, and TransUnion, to provide you with a free copy of your credit report and FICO scores upon request once a year. You can order the reports by visiting AnnualCreditReport.com, or call 1-877-322-8228.

Each credit report company has its own criteria for scoring your credit report. A lender will usually use the middle FICO score. All three scores need to be as high as possible for you to receive the best interest rates.

If you can, order the reports at least three months before applying for your home loan. If you find a mistake you need to correct, or you want to improve your score by paying down an account, you'll need at least two months before the credit score improves.

You can dispute an inaccurate item on the report by contacting the consumer reporting company and the information provider in writing. Be sure to include copies of your proof.

Don't accidentally raise your scores

Lenders not only look at how much credit you're using, they consider how much credit you have available. However, now is not the time to be opening any new accounts or closing existing accounts.

Don't purchase furniture or a new car or any other big ticket item before buying a home. Lenders are very careful about the amount of debt you have and how much you pay down every month on the debt payments you have.

Get Loan Pre-approval

Don't start house hunting without knowing how much home you can buy. To find out, you have to apply for a loan, which means you're sharing financial information with the lender such as income and work history, student loans, child support or alimony, and credit card balances.

Contact your lender for a preapproval letter. The letter shows that the lender has taken a 1003 loan application, studied your debt ratios to your income, and helped you select a loan program such as fixed rate, ARMs (adjustable rate mortgages), FHA or VA government-backed loans, etc.

Your lender will confirm your down payment source, interest rate, type of loan that's best for your circumstances, and the terms of your loan. The lender will give you a loan commitment based on your qualifications. The home you select must meet appraisal, and the underwriting department must approve the loan.

A preapproval letter will open doors for you, pardon the pun. Sellers will be impressed because you're prepared to buy and that a lender has agreed to process your loan. Your real estate agent will have to know the terms of your loan in order to write your offer.

Find out about federal, state, and local government incentives

Get help with your loan rate, closing costs and/or down payments through federal and state housing authority programs. For example, there are also incentives for workforce personnel – police, fire fighters/emergency services personnel and teachers.

Each community is different, so click on HUD's Housing Authorities to find out what's being offered in your community. Your city may be offering tax incentives to revitalize a designated public improvement area.

Narrow the choices

Think about how you want to live. One story or two? Low-maintenance condo or big yard for the kids? New or older home?

Drive through the neighborhoods you're interested in and look at homes. Visit a few open houses in the neighborhoods you will consider. They will usually be listed in your local newspaper with the hours hosted. Be sure to tell the real estate professional hosting the open house that you are already working with a buyer's agent.

With Google maps, video, virtual tours, multiple photos, school reports, neighborhood reports and more available online or on phone apps, you can get a good idea of what neighborhoods, home styles, and home prices are like where you want to live.

Find an Experienced Real Estate Broker or Agent

Buying a first home is a complex process. An experienced real estate broker or agent will assist you all through the process: the home search, comparable homes sold, making an offer, inspection, repairs, and the appraisal, as well as help you find the best value, neighborhood, and quality home for your budget and requirements.

The seller's real estate broker pays your broker or agent out of your loan proceeds. If you don't use your own agent, the seller's broker keeps the commission, so you might as well avail yourself of professional advice. Your real estate broker or agent works in your best interest.

Don't expect perfection

There's no perfect home. You may want all the latest amenities of a new home, but even new homes come at a price, including longer commutes, higher community fees, and bigger pricetags.

Homes that need updating are priced below homes that are up to the minute and move-in ready. That could be to your financial advantage, so try to look beyond outdated fixtures and focus instead on the floorplan and dimensions. Ignore the seller's tastes and imagine each room clean and clear of clutter and with your own things in them.

Most cosmetic changes are relatively inexpensive, and you can even pay for them with your mortgage loan, in some cases. Talk to your lender.

Think long-term investment

Buying a home can be a wise financial investment, if you buy right and hold your home for long-term gain. Because of closing and moving costs, it's nearly impossible to buy a home and sell it immediately for a large gain, but it is possible to sell after a couple of years with no capital gains tax should you make a profit.

According to the National Association of REALTORS^®, home equity growth beats inflation by about one to two percent annually, not to mention government subsidies for home ownership in the form of tax relief and other incentives.

However, if you look at owning a home strictly as an investment, you'll miss many pleasures. Look at your home as a home, rather than part of your portfolio. Buying a home allows you to live in the neighborhood you want for as long as you want, without having to worry that the landlord is going to sell out from under you. Your stake in a home makes you part of the community, committed to making it a better place to live.

Have An Awesome Week!

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AND HERE'S YOUR MONDAY MORNING COFFEE!! 

Good Monday Morning!

The rain showers stayed away long enough for all of the graduation activities this weekend.  Congratulations to all of the graduates of 2009.

The Real Estate Market in the Eugene and Springfield area continues to breath new life.  Even as mortgage interestst rates jump up and down, sales seem to be better and buyer interest in homes is certainly improved over 1st quarter.  Look for mortgage interest rates to be up and down for the next few weeks.  Savvy home buyers are watching the rates and locking their loans as the rates hit low points.  The combination of being able to continue to realize low mortgage rates along with extremely affordable home prices should keep activity strong for the near future.

One word of caution is that mortgage loans have attractive rates right now, but getting your loan closed could present some challenges.  Right now it is more important than ever to choose a professional loan officer with a great track record.  Having a professional who know how to deal with this current market can save you both time and money.  If you would like a list of exceptional local lenders, please contact me and I can provide you with a list.

Have An Awesome Week!

THIS WEEKS HOT HOME LISTING!

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Sincerely,
Galand

Good Monday Morning!

The sunshine was a welcome site over the weekend.  Cold mornings and warm afternoons are very enjoyable this time of year!

The month of December 2008 Real Estate market statistics are in for the Eugene and Springfield area.  As expected the numbers show a continuation of the decline in our local housing market.  Average time on the market for single family homes was 126 days and the median home price dipped to $200,000, which was down from $225,600 in December of 07.  There was 10.7 months of active home inventory, which means at the current rate of sales it would take this many months for the inventory to sell if no new homes hit the market.  Overall home sales were down by 28.9% from December of 07 and the overall gross home sales volume for 08 was $740 million in comparison with $1.1 billion in 07.

For home buyers this is the perfect market with mortgage interest rates remaining under 5% for 30 year fixed conventional loans.

THIS WEEKS HOT HOME LISTING!

AND HERE'S YOUR MONDAY MORNING COFFEE!!

Sincerely,
Galand

Good Monday Morning!

The press has really given the Real Estate market a thrashing both locally and nationally.  Bad press keeps people from making good decisions out of fear.  The reality is not always what we perceive from the media.  Right now the opportunity for home buyers has not been better in the 20 years of my Real Estate career.  We have a very-very good inventory of well priced homes and mortgage interest rates that remain at extremely low levels.  We are finding tremendous home purchase opportunities for the few buyers we are working with.  We just keep hearing the same thing from potential home buyers.  "We are just going to wait until prices come down even more".  Well, maybe this will take place, but a rise in interest rates could quickly negate any continued drop in home values.  The truth is that we know we have a great buyer opportunity right now!  Trying to wait for the better deal is a real gamble.

Have An Awesome Week!

Monday, January 08, 2007

By Dian Hymer
Inman News 
 

David Lereah, chief economist for the National Association of Realtors, recently said that the home sale market has started to stabilize and could even turn around by spring 2007. Other economists are less optimistic.

Ken Rosen, a noted real estate forecaster, predicts that it will take about three years for the San Francisco Bay Area housing market to turn around. Leslie Appleton Young, chief economist for the California Association of Realtors, thinks it will take 18 months for the California market to recover. But, in a recent survey conducted by WSJ.com, the Wall Street Journal's Web site, economists by a margin of 2 to 1 predicted that the worst was over for the housing market.

The opinions about the direction of home prices are equally diverse. Rosen sees home prices dropping by about 8 percent in the San Francisco Bay Area and 11 percent in Miami over the next few years. NAR predicts increases in home prices next year. Some think we've already hit bottom; others think we haven't hit bottom yet.

 
After this cycle is over, we'll be able to look back and pick the point at which excess inventory disappeared and home buyers were back in force. Until then it's anyone's guess as to exactly what the housing market will look like over the next few years.

Diverse opinions about the housing market are not unusual. For the last several years, many economists predicted interest rates in the 7 percent range for 30-year fixed-rate mortgages. But, that didn't materialize. In fact, lower rates fueled a hot market in which home prices rose at historic rates in many areas. This was at a time when most economists were sure that home prices had peaked.

Even though most housing experts would not recommend buying at the top of a market cycle, last years' home buyers bought with reckless abandon, confident that home prices could go nowhere but up. Now that conditions are generally better for home buyers, many are waiting on the sidelines for a clear sign that the market has bottomed out.

Most people feel more comfortable buying when there is a lot of home-buying activity. However, savvy real estate investors take a different approach. They buy when the market is soft and sell when the market is hot.

However, home buying and selling decisions are rarely based simply on whether it's the best time to buy or sell. This is because the "investor" is buying a property that will also function as a home.

Few home sellers who are happy in their current home sell just because the market is strong. On the other hand, no matter how content you are in your home, if your job moves elsewhere, you could find yourself having to sell in a soft market. Lifestyle factors impact home buying and selling decisions.

HOUSE HUNTING TIP: If you have the luxury of picking the time to buy or sell a home, you should first carefully analyze the housing market in your local area. It can be misleading to rely on a forecast that deals with the national housing market, or even a smaller regional market like the San Francisco Bay Area.

There are pockets of strength where demand is high and inventory low even in the midst of markets that are otherwise stagnant or declining. And, some markets like Utah and Washington state aren't declining at all.

THE CLOSING: When you have a grip on local market conditions, you'll be better able to decide if it makes sense to move now or to wait. But, keep in mind that waiting could cost you more if you're a buyer and yield you less if you're a seller, depending on how long you wait.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
 
 

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Mortgage Originations Projected to Drop Through 2008

Fewer mortgages will be written in 2007 because of higher interest rates and a slowing housing market, predicts the Mortgage Bankers Association.

MBA Chief Economist Douglas G. Duncan told the Associated Press that markets are normalizing after historically low interest rates spurred record numbers of home owners to buy and refinance.

The Washington, D.C.-based trade group says it expects the total value of new mortgages and refinanced mortgages to drop 5 percent this year to $2.39 trillion from $2.51 trillion in 2006. The association projected a further drop of 4 percent to $2.29 trillion in 2008 as fewer home owners refinance their mortgage.

Mortgage originations had already declined 17 percent in 2006 from more than $3 trillion in 2005, a near-record year.

Source: The Associated Press, Eileen Alt Powell (01/09/07)
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What to Know Before Buying a Fixer-Upper

A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.

Here are three major things to think about when considering a home in need of lots of improvements:

Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as — not a lot more — than other homes in the neighborhood?
How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, then take off another 10 to 15 percent for unexpected problems. If you can’t get the property for that, then it's probably a bad deal.
Prepare for the mess. Get ready for renovations to take longer than expected. Know that your life will be disrupted if you can’t afford to live somewhere else while the work is being completed.

Source: Charlotte Observer, Kathy Haight (01/08/07)
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30-Year Mortgage Rates Hold, Others Mixed

The financial markets during the first week of the year were still trying to determine how much the economy is likely to slowdown, according to experts. For the second consecutive week, Freddie Mac reported 30-year fixed loans averaged 6.18 percent.

However, other rates remained mixed. Interest on 15-year, fixed mortgages rose slightly to 5.94 percent, rates on five-year adjustable-rate mortgages moved up to 6.02 percent, and one-year ARMs slipped to 5.42 percent.

"Currently, the market is waiting for a clearer signal on the direction in which the economy is headed," says Frank Nothaft, Freddie Mac chief economist. Rates on 30-year loans declined over much of the second half of 2006 as the housing market continued to falter.

Source: St. Paul Pioneer Press, Martin Crutsinger (01/05/07)

© Copyright 2006 Information Inc.
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5 Tips for Selling a House in Foul Weather

Selling a home during the cold-weather months can be a challenge. Here are some tips for handling a sale in the dark winter months:

Don’t wait for spring. Point out to sellers that postponing can be the wrong choice when it means they must continue to pay the mortgage, insurance, and utility bills.

Get rid of the holiday decorations. “Holiday decor says to buyers that you aren’t prepared to move out so they can move in. It clutters and detracts from the home,” says Mark Nash, a real estate professional and author of the forthcoming book, Real Estate A-Z for Buying & Selling a Home.

Clean and light. Render the place dust-free and if necessary paint the walls with a light color. Linen tones are often the best.

Be creative. Nash, who sells homes in Chicago, had success last year selling an ordinary house quickly after he displayed poster-size photos of the home’s garden in full bloom near the windows.

Be realistic. No amount of creative marketing can overcome an overly steep price tag.

Source: Universal Press Syndicate, Ellen James Martin (01/04/07)
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 Borrowers eye benefits of FHA home loans
Product offers lower rates, better choices than subprime sector
Monday, January 08, 2007

By Jack Guttentag
Inman News 
 

"What type of borrower finds it advantageous to take an FHA loan?"

The answer to this question is a little different today than in 2000 when I first addressed it because FHA's market niche is smaller. This reflects developments in the conventional sector that have not been matched by FHA, including the growth in popularity of loans with no down payment, interest-only monthly payments, and option ARMs. Reflecting these developments, FHA's market share fell from about 15 percent in 2000 to about 5 percent in 2006.

The FHA Market Niche in 2006. An FHA borrower:

Has blemished credit acceptable to FHA, but not strong enough for prime pricing in the conventional market.

Doesn't need a loan larger than the FHA maximum, which varies by county. (In 2006, it ranged from $200,160 to $362,790 in the highest-cost counties.)

Can put 3 percent down in cash.

Doesn't want an interest-only mortgage or an option ARM.

Credit Requirements: At risk of oversimplifying, credit standards in the conventional market range from A+ to D-, and within that range, FHA would be about B- or C+.

FHA credit requirements overlap the higher levels of subprime requirements. A good illustration is the underwriting rules applicable to a prior foreclosure. With exceptions, FHA won't accept a loan applicant who has had a foreclosure within the prior three years. Subprime lenders may have a three-year rule for their best credit grade, but the period scales down by degrees and might be only one year for the lowest grade.

Similarly, the maximum ratio of total debt service to income acceptable to FHA is 41 percent, which is generally high relative to prime standards, but well below what passes in the nonprime sector.

A borrower who meets FHA credit standards will usually do better with an FHA loan than with a subprime loan, despite having to pay a mortgage insurance premium. The rate will be lower, the borrower will have access to a large menu of mortgages, and there are no prepayment penalties. Most mortgages in the subprime market are 2-year adjustables with large margins, which means a high probability of a rate increase after two years, and they have prepayment penalties, usually for three years.

Loan Limits: The loan limits on FHAs are a major deterrent. HUD has asked Congress to allow the same loan amounts on FHAs as on loans purchased by Freddie Mac and Fannie Mae. In 2006, this would have meant an increase to $417,000 uniform across the country.

Down Payment Requirements: In 2000, FHA's 3 percent down payment compared with 5 percent on most conventional loan programs. In 2006, however, zero-down loans were widely available in the conventional sector, while the FHA minimum of 3 percent remained unchanged. Since zero-down loans have long been available under the VA program, FHA is now the only sector that does not have them.

This disadvantage of FHA is partially offset by down-payment-assistance programs available to FHA borrowers. One form of such assistance is second mortgages at preferential rates, which is the preferred method of public agencies at the city, county or state levels. These agencies have their own eligibility rules independent of FHA.

A second form of assistance is cash contributions from nonprofit corporations. These have no repayment obligation, but the funds provided come from home sellers who take account of the contribution in setting their sales prices.

Neither type of assistance is a good substitute for a zero-down program, a bill for which was introduced in Congress in 2004. So far, however, it has not been passed.

Interest-Only Mortgages and Option ARMs. These instruments exploded in popularity after 2000, but were not available under FHA and there is little likelihood that they ever will.

Prospects For a Revival in FHA's Market Share. Congressional authorization of no-down-payment loans and a rise in loan limits would increase FHA's market share. So would an increase in public awareness that some subprime borrowers would qualify for, and do better with FHA loans.

A marked increase in FHA's market share would result from an explosion in foreclosures, which would cause a drastic restriction of lending terms in the conventional sector. This is not something I would care to see, but if it happened we will be pleased that FHA was there to help cushion the blow.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
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What's Hot and What's Not in Home Design

Mark Nash, the Chicago-based real estate broker who penned 1,001 Tips for Buying and Selling a Home (Thomson/South-Western, 2004), has released a list of home features that remain popular among buyers and those that are no longer in vogue. His list is based on responses from more than 900 real estate professionals nationwide.

For example, practitioners surveyed reported that the inability to keep stainless steel appliances, glass-front cabinets, and vessel-style sinks clean has caused them to fall out of favor with buyers. Also, spiral staircases have become less popular, particularly among buyers with young children.

As for what's "in," Nash found buyers are increasingly looking for some of the following features in homes:

Glass bathroom and kitchen tiles.
His-and-her home offices complete with fiber-optic cables for Internet connectivity.
Wood floors — except for those made of bamboo, which is not as durable.
Extra storage space in the form of linen closets, pantries, and luggage rooms.

With a large supply of unsold homes on the market, practitioners note that buyers have become pickier and expect homes to be in move-in condition.

Source: Washington Post, Kirstin Downey (01/06/07)

© Copyright 2006 Information Inc.

It was a weekend of heavy traffic at the shopping areas and long lines at the stores.  Tis the season!

The Real Estate market in the Eugene and Springfield area continues to improve as the number of acitve home buyers seems to be on a steady increase.  This has been the trend for several weeks and the number of recent or pending sales has increased as a result.  This trend may continue through the Holidays and possibly even pick up more momentum in January and February of next year.  If you are considering the sale of your home, the next few months may offer you the best opportunity to do so in the the upcoming year.

If you would like an updated look at your homes current market value log onto www.forhomesellers-nonSmartZip.com.  You can order an accurate home value analysis at this site that wil be delivered to you by e-mail.

Have An Awesome Week!   AND HERE'S YOUR MONDAY MORNING COFFEE!!