Real Estate Trends

Because there are a lot of buyers..I mean, it’s a buyer’s market, no question…and they’ve looked at the inventory, they keep an eye on the inventory, that when something comes on that’s priced right, sometimes it can be days (not months) it’s on the market. It really is something else. But again, it’s being priced right for the market place. It’s regardless, unfortunately, of the payoff amount on the mortgage. You gotta price it to the market place and again, too, I will tell you that the deals to be had this year are really not in the 50, 120 and 150 thousand dollar price range. They are really above that, if you go into the 200, 250 and 300 thousand dollar price range and the house is priced right, ready to sell, those are the individuals that are really looking at picking up a deal that will see some growth over a period of time. Now most of us, can’t afford an 800 or 900 thousand dollar house, but if you can those are the really good deals where maybe over the next 10 years you may see a significant increase in price. But that marketplace is really tight right now. I don’t mean to go in and offer way below asking price. Really look at the asking price of some of these houses. They are priced right to begin with, so I do believe that those are the deals to be had.

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As soon as the sun comes out, activity in the Real Estate business tends to pick up. Between now and the end of April, we are going to see a significant up tick in the amount of activity going on in our local market place. Now there are two reasons for that and it’s the big push. Is the Home buyer tax credit, whether your a 1st time home buyer or an existing home buyer, a lot of people are now starting to say, “Wow, the clock is really ticking on this”. There’s a lot of movement in congress that this may be the last of this home buyer tax credit. They probably are not going to extend it. They are going to take the money and use it in other places to help spur economic development and job creation. Of course, we (Realtors) believe that can be done in the housing industry especially if we have new starts. So we’ll see where that goes closer to the end of April.

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The view in January: November and December housing numbers all looked very good. Inventories are declining which is interesting because that’s going to have an impact on the price of homes.

Basically right now is the optimal time if your going to buy a house. If your a 1st time home buyer, you still have the tax credit. Free $8,000. If your an existing home buyer and have lived in your house 5 in the last 8 consecutive years. Free $6,500. Secondly, interest rates are starting to stabilize and maybe even starting to see a tick up in the interest rate numbers. That happened last week, I believe we are going to continue to see it through this coming week and maybe through the month of January based on what I’m hearing through the lenders. Now that’s all signs that the economy is improving. It’s going to start to impact the availability of money and where we go. If your trying to second guess and maybe get a better scenario, I don’t recommend it.

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1. Hanging on the fence for the market to improve or not buying at all. No one can see the future or where the market is going, so waiting for the BEST time to buy is pointless. If you’re financially ready to be a homeowner, it’s always a good time to buy for one reason or another.
2. Making an offer without a contingency. A “way out” is a smart move for home buying. If the home as an unfix-able problem, the appraisal comes in under the contract price, or you are denied financing, a contingency gives you the right to cancel the contract to purchase.
3. Not doing your homework. If you didn’t read the fine print or have your Realtor review all your paperwork with you, you may be in for an unexpected surprise at closing. Request a copy of the most crucial documents ahead of time and review them with your Realtor or Closing Attorney.
4. Not getting a home inspection. Even if you love everything about the home and you “see” nothing wrong. It’s a big mistake to presume that it’s trouble free. All homes have shortcomings, even new construction, so getting a professional inspection is key.
5. Falling in love with the first house. If you don’t preview several houses, you could miss out on a good deal or regret your purchase down the road.
6. Buying more than your budget can handle. A lender can tell you that you can afford a certain amount. But do they really know your other financial responsibilities. Only you do. As a rule of thumb, your mortgage payment should be less than 28% of your gross monthly income.
7. Buying an investment property or renovation project before looking into the costs. Don’t be fooled by the “deal” and remember that repairs can be an aggravation and expensive.
8. Not exploring the neighborhood. It may be your dream home but not your dream neighborhood. It should be a good fit for your way of life such as work commute, amenities, school districts, etc. A nice neighborhood will increase your home’s value, while a not so nice one will bring it down.
9. Not thinking long-term. It should feel like home to you and your family. Never forget that this is a large investment, it pays to think of resale in the future.
10. Not getting pre-approved by a lender. Know what price range you should be looking in. Not only does this let you know how much house you can afford, it lets sellers know that you’re serious and qualified.

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The $8,000 tax credit runs out Nov. 30th but it can take 45-60 days to close on a home. There are some ways to expedite your home purchase so you can take advantage of this gift.

To find out if you qualify for the credit, check the IRS website.

The process of buying a home is neither quick or easy. Gathering your financial paperwork, applying for a  loan, negotiating an offer and signing contracts can take months. That’s if it goes smoothly.

Here are 2 of 4 tips that can expedite a closing:

1. Make sure you’re liquid

Be prepared for the down payment. Have enough cash available. Funds should not be tied up in a stock portfolio, 401 (k) plan or other investment that could delay the money. Even using a ‘gift’ can delay the process because the bank underwriting will need a paper trail to track the money’s origin. Money that just shows up in your account can raise a red flag and buyers should expect a thorough financial examination which would slow down the process.

2. Forget about the short sales

A short sale occurs when a homeowner is no longer able to make his mortgage payments and owes more on his home loan than what it can sale for in the current market. They are attractive but can take months to close. So if your after the tax credit, this won’t work for you. When you make an offer on a short sale, not only does the seller have to accept the offer, but the bank must accept and approve it, too. It could approve in 30 days or 300 days.

smartmoney.com

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Tip #7: Inspect exterior walls, doors & windows. Check walls & window sills for damage such as cracks, gaps, loose or crumbling mortar, along with splitting & decaying wood. Caulk exterior joints around windows & doors, which helps keep the home weather tight & lower heating bills. Check windows & doors to make sure locks work properly & that they are in good condition. Clean tracks & lubricate hinges. Repair or replace any cracked windows.

Tip #8: Maintain steps & handrails. Repair broken steps & secure loose banisters & handrails. Broken steps can cause a dangerous fall. Similarly, a person slipping will grab a handrail for support.

Tip #9: Inspect the attic & basement or crawlspace. Insulate voids in the attic- the entire attic floor above a living space should be insulated with at least six inches of insulation, except around electrical fixtures such as recessed lights that aren’t rated for contact with insulation. Damp basements & crawl spaces can become mold & mildew problems. Watch for leaks from you water heater, plumbing system and seeping rain water from the roof. Locate & maintain a clear access to your main water shut off valve. If you have a sump pump, test, clean & lubricate it.

Tip #10: Shut down sprinkler systems & outside faucets. Homeowners can shut down outside faucets, however weatherizing the underground sprinkler system is best preformed by industry professionals who will flush the system before the cold sets in, preventing cracked pipes.

brought to you by Old Republic Home Protection Home Warranties www.orhp.com

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Tip #3: Test fire alarms, smoke detectors and carbon monoxide detectors, and vacuum out the dust. Batteries should be checked every six months to ensure that they’re working.

Tip #4: Remove excess leaves and damaged branches from trees surrounding the house. Dead branches have the potential to break and fall, ruining roofs, decks, or vehicles and possibly causing injuries to people.

brought to you by Old Republic Home Protection Home Warranties www.orhp.com

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Fall maintenance is important because it helps make homes more energy efficient during the winter months, and will safeguard homes against potential seasonal ‘disasters’ such as leaking roofs or home fires caused by neglected chimneys. Here are some tips to a safer, warmer winter.

#1. Check the heating system. Check the filter, pilot light and burners in a system fueled by gas or oil. Fireplaces, boilers, water heaters, space heaters and wood burning stoves should also be serviced every year. Have the specialist inspecting your unit show you how to change the filter and then you should change it at least once every 2 months. Clean ducts in the heating system. Clean and vacuum dust from vents, baseboard heaters and cold air returns. Dust build-up in ducts is a major cause of indoor pollutants. Ducts should be professionally cleaned about every three years.

#2. Have the chimney inspected by a qualified chimney professional. Chimneys should be checked and cleaned, if necessary, on an annual basis. If you are using a wood stove this season, be sure that the stovepipe was installed correctly according to the manufacturer’s recommendations and local codes. If there is any doubt, a building inspector or fire official can determine whether the system is properly installed. If you have a chimney that will not be used, consider having it sealed shut.

brought to you by Old Republic Home Protection Home Warranties www.orhp.com

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One thing I want to make sure that people don’t miss-understand is that this is business in the “new economy”. You’re going to have to bring something to the table, this is no longer the game, the “hocus pocus” that was played before that caused all the downturn that we’ve been in. A lot of the downturn was caused by inappropriate actions by the consumer, led by the banks, you name it, everybody has got a little bit of fault here. When you start looking at what the new economy is, bring something to the table means: I’m bringing cash to the closing. Now, if you want to bring 20% down on a house, I can usually get that transaction from contract to close in 30 days. There are still 100% financing opportunities out there, USDA is one of them. There are some banks doing 100% financing but again they are looking for you to bring something to the table. In other words, you may be able to finance 100% of the cost of the house but you will have to bring closing costs and they are going to charge you more in fees. Also, boy or boy you are going to be scrutinized like never before if you’re looking for that type of financing.  So when you look at what the new game is, it is coming back with something to give the lender, some kind of idea to collateral, your character, and your capacity to borrow.  You need to understand that that is how we are going to be expected to participate when it comes time to purchase a house and get a mortgage. The rates have been very, very low and the pressure on the rates is certainly going to pick up so it is continuing to be a great time to buy!

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The local development community is a lot smaller than it used to be. The reality of it is, us as consumers, when you look at a developer and the money that they had made over a period of time, it’s easy to say, golly they were the evil ones, making all the money. Remember, these guys were also (and ladies) taking all the risk. And that has played out as the economy changed and people and big builders were not building as many houses. These were the ones that were stuck with their projects making sure that they could continue to make their payments and go from there. Now these local developers, the ones that still have projects going, are starting to see a little more movement in the projects. Where we were almost at a stand still on a lot of them. We’re starting to see a lot of interest in which lots are being purchased, whether or not for investment or for home builders coming in and building those projects out. We’re seeing new home builders in the US, kind of like the successors to the big (maybe) 12 that were out there originally, like Centex and Pulte have now merged. But you also have DR Horton, who’s done well in our area. You have a lot of these builders that will continue to build good products and continue to purchase up lots. So the developers are starting to see a little bit of a turn in the amount of lots on the market. It’s been said before, those who take great risk, should have the potential for great reward. And what people forget, is that a lot of these projects that you see coming up out of the ground are financed by the bank with money put in by the local developer. During this downturn the bank climate changed drastically as well which put these guys and ladies backs up against the wall. A lot of them have, and what I believe we’re going to see in the future is that we are going to see more of the developers coming with, their own cash which helps these projects go without that extra hand in the pocket. Also great for the local economy.

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