Interest Rates Compared to Home Prices

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are below 4% with 20% down and a 740 FICO score.

Don't get priced out of your 'Dream Home'... pay attention to interest rates, they have a direct impact on your purchasing power.  See the diagram below.  When interest rates are higher, you can have about the same house payment as a home that is $40,000 more with a point less in interest rates.

Remember as interest rates go lower, home prices usually will increase and as rates rise home values will normally diminish. 

Don't hesitate to contact me directly if you have any questions, 661-702-4767.

Most buyers are overwhelmed!

There was an interesting survey I read about that home buyers revealed how prepared they actually are for the mortgage process. The survey reported that 94% of prospective buyers believe they are making a good investment decision if they buy a home. The survey also explained that 66% of buyers reach out to real estate agents to help determine whether buying a certain home would be a good investment. However, there is less certainty regarding the mortgage process.

Most buyers overwhelmed

The majority of potential buyers are actually overwhelmed with the plethora of information available about the home financing process.  Here are some interesting highlights from the report:

• Nearly 66% feel overwhelmed with the amount of information available
• 76% of those under the age of 30 feel overwhelmed
• 76% of first time buyers feel the same way
• 54% of those buyers who have previously owned also were overwhelmed
• 59% of buyers turn to mortgage bankers to help evaluate mortgage terms and comparing offers
• 49% of buyers turn to real estate agents to help evaluate mortgage terms and comparing offers

There is help available…use it!

Cameron Findlay, chief economist at Discover Home Loans, gives great advice:

“The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process. The sheer amount of information can lead to confusion and stress. Those looking to purchase should work closely with their lender and realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances.”

Bottom Line

When you are ready to purchase a home, don't go it alone!  As your real estate agent, I am here to advise you on finding you the best lender out there.  Use me for all the advice you can get!

Five Demands To Make On Your Real Estate Agent

As a real estate agent, here are 5 demands you should make on the real estate agent you choose to represent you in the sale of your home

Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.

You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one.

Here are the top 5 demands to make of your Real Estate Agent when selling your house:

1. Tell the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank.

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The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. A recent survey showed that there was a challenge with the appraisal on 24% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which your family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan.

This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. You agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work.

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them and their family  (commission, length, etc.), don’t expect them to turn into Super hero when they are negotiating for you and your family with your buyer.

4. Help with the relocation

If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving.

You are moving on with your life in some way. The reason is important or you wouldn't be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT! If you are interested in selling call me today so we can discuss you being represented by a great agent-ME!

Whats On Your October Home Maintenance To Do List?

The weekend is here and with the air turning crisp, leaves falling and farmer’s markets overflowing with squash, gourds, apples and potatoes, October is a time to celebrate the harvest — and button up the home and garden for the winter ahead. From raking leaves to sharpening knives, see which of these 13 to-dos make your list this month.

 

1. Rake leaves. Clearing away leaves from lawns is hard work, so be sure to choose a rake that feels good to you. Plastic rakes don’t last as long, but they are lightweight — which helps if you get fatigued easily (or have a lot of leaves to contend with). Instead of bagging all of the leaves you collect, try chopping some with your mower and using them as mulch in flower beds, or add them to a compost pile.

2. Clean gutters and downspouts. Schedule rain-gutter cleaning for after most of the leaves have fallen. Inspect gutters and downspouts for cracks and loose parts, and make repairs as needed.

3. Put up storm windows and doors. If you use storm windows or doors and haven’t put them up yet, now is the time.

4. Decorate outdoor spaces. Fall flowers, pumpkins and gourds are versatile enough to work throughout the season. If you enjoy decorating for Halloween, get out that frightful decor.

5. Shut off exterior faucets and store hoses for winter. Disconnect, drain and roll hoses before storing them indoors for the winter. Shut off the water supply to exterior faucets to prevent frozen pipes.

David Sharff Architect, P.C.

6. Sharpen knives. The holidays are around the corner — be sure your knives are ready to take on all of that cooking by having them professionally sharpened now.

7. Launder and iron holiday linens. Get ahead of the holiday crunch and prep your linens — roll up the freshly laundered and ironed linens on old wrapping paper tubes to prevent wrinkles.

Bardes Interiors

8. Decorate with layers of warmth. Get toasty indoors with cozy throws, thicker curtains and soft rugs. If you haven’t done so yet, swap out your bedding for thicker blankets and fluffy duvets.

9. Check safety devices. Test all smoke and carbon monoxide detectors in the house, and replace batteries as needed. Check the expiration date on the kitchen fire extinguisher and replace it if needed.

10. Swap seasonal clothes. Depending on where you live, September can be a fickle month — but now that October has arrived, it’s time to settle into more predictable fall weather. Gather up stray sandals and lightweight clothing that you don’t plan to wear again until spring, and pack it away. Also look over your fall and winter clothes, and note anything you will need to replace this year.

11. Start an art wall for all of those school projects. Corral those stacks of paper coming home from school with a dedicated space for display. A large bulletin board or magnet board makes hanging art and papers easy. Or you could try art wire with bulldog clips, or simply tape art to the wall with colorful masking tape.

12. Start planning or making holiday gifts. I know it seems like the holidays are still a long way off, but that’s exactly why it’s smart to start thinking about gifts now. Especially if you have hopes of making anything by hand! At the very least, start a gift list that you can add to as you think up ideas.

Whitten Architects

13. Savor your favorite fall traditions. Is there a local harvest festival you’d love to attend, a favorite pumpkin patch or apple orchard to visit? Mark some dates on your calendar so you don’t miss out.

Tell Me: What’s on your to-do list for October?

What Does A Real Estate Agent Do For You?

IF YOU HAVE STARTED YOU HOME SEARCH AND ARE FEELING A LITTLE OVERWHELMED HERE IS THE BEST WAY TO FIND AN AGENT FOR YOU.

HOW DO I FIND THE BEST AGENT FOR ME?

To find the best agent you should think of the selection process as an interview to find someone that is the right fit. You are interviewing potential agents to determine which one will get you into a new home, in the shortest amount of time possible, and for the least amount of money. With that in mind, you should attempt to find an agent through a referral (more than 50% of buyers find an agent through referral or from previous home buying experience), or by contacting your State’s Association of Realtors.

Your evaluation should focus on the following criteria:

EXPERIENCE

Does your agent have recent and in-depth experience helping buyers locate homes that fit your criteria, and in your preferred location?

• Location: What areas do you work in the most?
• Price-Range: What was the price range of homes for which you acted as buyer agent last year? Average / median home price?
• First-Time Buyers: What percentage of your work is with first-time home buyers?
• Experience Closing: How many buyers have you represented? How many transactions did you complete in the last year?
• Buyers vs. Sellers: What percentage of your business is with home buyers (as opposed to sellers)?
• Types of Home: What type of homes do you specialize in? Single-family / condo / townhouse?

PERSONALITY

Trust is important in real estate transactions; does your agent have a personality that you’re comfortable with and do they seem trustworthy?

• Timing/Organization: How many clients do you work with? Can you work around my schedule?
• Communication Style: What is your preferred method of communication? (phone / email / text / in-person)? How often do you stay in touch?

KEY INTERVIEW CONSIDERATIONS

• Does the agent intimidate you? Do you feel they would pressure you into making a decision before you are ready?
• Would the agent work around your time schedule? Do they seem like they have time for you?
• Do you have confidence in their experience and abilities?
• Are they a member of the National Association of Realtors?

WHAT TO WATCH OUT FOR WITH AN AGENT

• An agent who is reluctant to show houses being sold directly by the owner – commission is usually only paid to agent for transactions in which a seller’s agent is representing the owner (you may need to discuss directly compensating your agent for this type of transaction).
• An agent who may be financially motivated to pressure you into completing a transaction – could pressure you or suggest that you pay a higher price so that you are more likely to secure the home, especially in the event of a bidding war.
• The potential exists for a “dual agency” situation, where an agent represents both the buyer and seller (and stands to collect the full commission). In these cases, the agent is purely interested in making sure the transaction closes, instead of protecting the buyer’s best interests, to receive a double commission.
• Service providers recommended by an agent may be less motivated to discover potential problems with the house in order to maintain business with the agent.

HOW DO YOU FIND THE BEST REAL ESTATE AGENT?

IF YOU HAVE STARTED YOU HOME SEARCH AND ARE FEELING A LITTLE OVERWHELMED HERE IS THE BEST WAY TO FIND AN AGENT FOR YOU.

HOW DO I FIND THE BEST AGENT FOR ME?

To find the best agent you should think of the selection process as an interview to find someone that is the right fit. You are interviewing potential agents to determine which one will get you into a new home, in the shortest amount of time possible, and for the least amount of money. With that in mind, you should attempt to find an agent through a referral (more than 50% of buyers find an agent through referral or from previous home buying experience), or by contacting your State’s Association of Realtors.

Your evaluation should focus on the following criteria:

EXPERIENCE

Does your agent have recent and in-depth experience helping buyers locate homes that fit your criteria, and in your preferred location?

• Location: What areas do you work in the most?
• Price-Range: What was the price range of homes for which you acted as buyer agent last year? Average / median home price?
• First-Time Buyers: What percentage of your work is with first-time home buyers?
• Experience Closing: How many buyers have you represented? How many transactions did you complete in the last year?
• Buyers vs. Sellers: What percentage of your business is with home buyers (as opposed to sellers)?
• Types of Home: What type of homes do you specialize in? Single-family / condo / townhouse?

PERSONALITY

Trust is important in real estate transactions; does your agent have a personality that you’re comfortable with and do they seem trustworthy?

• Timing/Organization: How many clients do you work with? Can you work around my schedule?
• Communication Style: What is your preferred method of communication? (phone / email / text / in-person)? How often do you stay in touch?

KEY INTERVIEW CONSIDERATIONS

• Does the agent intimidate you? Do you feel they would pressure you into making a decision before you are ready?
• Would the agent work around your time schedule? Do they seem like they have time for you?
• Do you have confidence in their experience and abilities?
• Are they a member of the National Association of Realtors?

WHAT TO WATCH OUT FOR WITH AN AGENT

• An agent who is reluctant to show houses being sold directly by the owner – commission is usually only paid to agent for transactions in which a seller’s agent is representing the owner (you may need to discuss directly compensating your agent for this type of transaction).
• An agent who may be financially motivated to pressure you into completing a transaction – could pressure you or suggest that you pay a higher price so that you are more likely to secure the home, especially in the event of a bidding war.
• The potential exists for a “dual agency” situation, where an agent represents both the buyer and seller (and stands to collect the full commission). In these cases, the agent is incentivized purely to make sure that a transaction closes, instead of protecting the buyer’s best interests.
• Service providers recommended by an agent may be less motivated to discover potential problems with the house in order to maintain business with the agent.

Why Do I Need A Buyers Agent?

Many people today figure that with real estate listings published online, the buyer’s agent’s role is irrelevant. By searching and researching independently, buyers going directly to the listing agent assume they can negotiate a better deal by cutting out the middleman—the buyer’s agent.

The role of the buyer’s agent was never solely about accessing listings, of course. A good buyer’s agent has always had their feet on the street and keeps a finger on the market’s pulse. They know the comps and the other agents, so they can add an incredible amount of value simply through sharing their experience and knowledge.

Buyers, left to their own devices, “don’t know what they don’t know.” A good buyer’s agent can step in, track the buyer’s process and help uncover some of the unknowns about a particularly house, an agent or the market in general. A good agent has years of market and transaction experience.

Additionally, the seller is going to pay the commission whether or not there’s a buyer’s agent. For the buyer, then, there’s rarely any savings by going without an agent. Instead, the listing agent simply makes double the commission. There’s no savings to the seller or the buyer when the buyer doesn't have an agent.

Also, by having a listing agreement with the seller, the listing agent is looking out first and foremost for the seller’s interests, not the buyer’s. By working with an agent (at no cost), the buyer gets an adviser/advocate working to represent their best interests.