WHAT THE COMMERCE DEPARTMENT HAS TO SAY ABOUT SALES

The Commerce Department reports sales of new, single Family homes fell 2.4%in July to an  annualized rate of 412,000 units. Wall Street expected sales to rise to an annualized rate of 430,000 units.

 

Mary Ann Graboyes

215-416-5969

WHAT IS GOING ON IN THE REAL ESTATE INDUSTRY

Home prices in 20 major metropolitan areas ticked 1% higher in June on a non-seasonally adjusted basis,matching expectations, according to the S&P/Case-Shiller home prices index. From the same period the year prior, home prices were up 8.1%,slightly shallower than the 8.4% increase the Street expected.

Mary Ann Graboyes

215-416-5969

Still a Great Time to Buy a Home…but HURRY!!

Still a Great Time to Buy a Home…but HURRY!!

Still a Great Time to Buy a Home…but HURRY!! | Keeping Current Matters

Kevin Kelly, Chairman of the National Association of Home Builders (NAHB), recently explained that:

“With interest rates near historically low levels and strengthening job growth, now continues to be a great opportunity to buy a home.”

We couldn’t agree more. However, we must realize that, with prices and interest rates both projected to increase, waiting could cost us. 

There are two organizations that look at the affordability of purchasing and actually measure it over time. The National Association of Home Builders has their Housing Opportunity Index (HOI) and the National Association of Realtors’ has the Housing Affordability Index 

Both indexes are reporting the same thing. The cost of buying a home is beginning to increase leading the affordability indexes to dip. 

Both indexes say we passed the bottom of the housing market

According to NAHB’s HOI housing affordability dipped slightly in the second quarter of 2014. NAHB’s Chief Economist David Crowe explains:

“The second quarter HOI reflects the slow but steady march toward the historic levels of price appreciation and interest rates that result in affordability levels we experienced before the mid-2000s boom.”

According to NAR in a recent Economists’ Outlook post, home affordability is down from both one month ago and one year ago in all regions. 

Michael Hyman, Research Assistant at NAR said:

“At the national level, housing affordability is down for the month of June due to higher prices and qualifying income levels despite the lowest mortgage rates of the year.”

In a recent article, the Wall Street Journal also revealed that the cost of home ownership is higher than any time in over five years:

“Housing affordability hit its lowest level in nearly six years in June as home prices continued to climb.”

Bottom Line

If you were waiting for the bottom of the market, you missed it. Yet, with prices below values of seven years ago in most parts of the country and interest rates near historic lows, it is still a great time to buy a home…but hurry!

Do you know the True Cost of Waiting?

With Interest Rates and Home Prices on the rise, do you know the true Cost of Waiting?

With Interest Rates and Home Prices on the rise, do you know the true Cost of Waiting? | Keeping Current Matters

At Keeping Current Matters, we have often broken down the opportunity that exists now for Millennials who are willing and able to purchase a home NOW… Here are a couple other ways to look at the cost of waiting.

Let’s say you’re 30 and your dream house costs $250,000 today, at 4.12% your monthly Mortgage Payment with Interest would be $1,210.90.

But you’re busy, you like your apartment, moving is such a hassle…You decide to wait till the end of next year to buy and all of a sudden, you’re 31, that same house is$270,000, at 5.3%. Your new payment per month is $1,499.32.

The difference in payment is $288.42 PER MONTH!

That’s basically like taking a $10 bill and tossing it out the window EVERY DAY!

Or you could look at it this way:

  • That’s your morning coffee everyday on the way to work (average $2) with $11 left for lunch!
  • There goes Friday Sushi Night! ($72 x 4)
  • Stressed Out? How about 3 deep tissue massages with tip!
  • Need a new car? You could get a brand new $20,000 car for $288.00 per month.

Let’s look at that number annually! Over the course of your new mortgage at 5.3%, your annual additional cost would be $3,461.04!

Had your eye on a vacation in the Caribbean? How about a 2-week trip through Europe? Or maybe your new house could really use a deck for entertaining.  We could come up with 100’s of ways to spend $3,461, and we’re sure you could too!

Over the course of your 30 year loan, now at age 61, hopefully you are ready to retire soon, you would have spent an additional $103,831, all because when you were 30 you thought moving in 2014 was such a hassle or loved your apartment too much to leave yet.

Or maybe there wasn’t an agent out there who educated you on the true cost of waiting a year. Maybe they thought you wouldn’t be ready, but if they showed you that you could save $103,831, you’d at least listen to what they had to say.

They say hindsight is 20/20, we’d like to think that 30 years from now when you are 60, looking back, you would say to buy now…

Home Staging Ups the Ante in Today’s Competitive Market

Home Staging Ups the Ante in Today’s Competitive Market

By Keith Loria

When selling a home, it’s important to have that special something that will set your home apart from the competition. And one great way to make your house more appealing to prospective buyers is by hiring a professional home stager to prepare the home in a way that will increase the chances of it selling quickly at the price you’re looking for.

Even more appealing is the fact that the cost is almost always off-set by the final price of the sale compared to what you may have gotten had you not brought in a stager.

Staging isn’t always easy for sellers though, as they might not agree with the stager’s decisions or choices of furniture or accessories. But, if you’re going to hire a stager, remember that these are professionals who get paid for doing their job well, so it’s important to trust them and take their advice to heart.

Here are five key things a stager is likely to focus on.

Cleanliness. Even the slightest mess can be a turnoff to potential buyers. Cleaning a house for staging doesn’t just mean dusting, sweeping and vacuuming. You also need to clean places that are typically ignored, such as the area under countertops, as well as the bottom of closets and cabinets. Carpets should be steamed, windows cleaned and ceiling fans and molding dusted.

Painting for Success. Adding a fresh coat of paint is one of the easiest, least expensive ways to increase the salability of your home. Colors should be neutral so that buyers aren’t distracted, however, this doesn’t mean all the walls have to be white. Instead, try subtle colors with neutral hues like beige. If wallpaper is outdated or worn, take it down and paint the walls. Low-sheen paints are recommended.

Removing Clutter. Do you have boxes of stuff you don’t know what to do with? A stack of magazines you haven’t gotten around to reading? A pile of mail that you don’t think you need, but are afraid to throw away? It’s time to get rid of all that stuff. Clutter is a big turnoff, making a house look more like a storage facility than a home. Take a look at your house – room by room – and be honest with yourself. The goal here is to make all of your rooms presentable.

Personal Touches. You’re proud of your kids, grandkids and even your dog, and you love the pictures of family and friends hanging on the walls. The problem is, prospective buyers only look at a home for a few minutes, and the time they spend looking at pictures or other beloved possessions will ultimately take away from the time they spend looking at the house itself.

Shedding Some Light on the Subject. Now that your house is clean and clutter-free, make sure people can see it in all its splendor by opening curtains and shades to let in the natural light. You may even want to remove window dressings, assuming there aren’t holes, nails and hooks that’ll be exposed when they’re all taken down. Not only does this let light in, it also allows prospective buyers to picture how they would dress the windows.

For more information about staging your home, contact our office today.

5 Reasons to Hire a Real Estate Professional

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO. The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened in recent months due to the projections of higher mortgage interest rates & home prices as the market continues to recover.

 1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

 2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

 3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

 4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS“the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.” Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

 Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

 Bottom Line:

You wouldn’t hike up Mt. Everest without a Sherpa, or replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

 

Nar Applauds New Credit Scoring System

NAR applauds new credit scoring system
Diana Dietz, e-PRO
Aug 12, 2014
 The nation’s dominant credit-scoring system is being revised in a way that could improve credit scores for many consumers.

FICO introduced its new FICO Score 9 as a way to assess consumer collection information, bypassing paid collection agency accounts and differentiating between medical and non-medical collection agency accounts.

The revisions, to take effect this fall, will alter the formulas used to generate the credit grades used in more than 90 percent of the decisions that lenders make about how much consumers can borrow and at what interest rates.

As a result, median FICO scores for consumers whose improved scores could make it easier to qualify for mortgages and car loans and get lower interest rates.

The National Association of Realtors® (NAR) applauded FICO Score 9. “This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates because of flawed credit scores. Since the housing crash, overly restrictive lending has been the greatest obstacle to homeownership,” NAR President Steve Brown said in a statement.

“NAR will continue to support efforts to broaden access to credit for qualified homebuyers,” he added.

Experts cautioned, though, that borrowers might have to wait a year or more to see the effect of changes because lenders will not quickly overhaul their systems to evaluate consumers and price loans for them.

The Importance of Using an Agent When Selling Your Home

The Importance of Using an Agent When Selling Your Home

by  on August 4, 2014 in For Sellers

  • The Importance of Using an Agent when Selling Your Home | Keeping Current Matters

When a homeowner decides to sell their house, they obviously want the best possible price with the least amount of hassles. However, for the vast majority of sellers, the most important result is to actually get the home sold.

In order to accomplish all three goals, a seller should realize the importance of using a real estate professional. We realize that technology has changed the purchaser’s behavior during the home buying process. Today, 92% of all buyers use the internet in their home search according to the National Association of Realtors’ 2013 Profile of Home Buyers & Sellers.

However, the report also revealed that 96% percent of buyers that used the internet when searching for a home purchased their home through either a real estate agent/broker or from a builder or builder’s agent. Only 2% purchased their home directly from a seller whom the buyer didn’t know. Buyers search for a home online but then depend on the agent to find the actual home they will buy (52%) or to help them handle the paperwork (24%) or understand the process (24%).

It is true that the percentage of buyers that are using the internet to search for homes and information on the home buying process has increased dramatically over the last decade. But the plethora of information now available has also resulted in an increase in the percentage of buyers that reach out to real estate professionals to “connect the dots”. This is obvious as the percentage of overall buyers who used an agent to buy their home has steadily increased from 69% in 2001.

BOTTOM LINE

If you are thinking of selling your home, don’t underestimate the role a real estate professional can play in the process.

Top 10 Ways to strengthen your purchase offer and beat out competing buyers

Top 10 ways to strengthen your purchase offer and beat out competing buyers

Going above the asking price doesn’t always sweeten the deal
This post by real estate agent , of Keller Williams Realty Coeur d’Alenewas originally posted on ActiveRain.

I just finished up with my fortunate seller client who had the difficult task of deciding which one of three excellent offers to accept for the purchase of her home. That’s right, three outstanding offers.

I had a conversation with the agent for each potential buyer and explained the following to them: There will be three competing offers. The seller is doing a Home Affordable Foreclosure Alternatives-approved short sale. There was no point in running the purchase price up above the fair market value that Wells Fargo was willing to accept, which was the listed price. The seller is not going to receive any of the sale proceeds. What would be the deciding factor for her is the strength of the buyer, and their willingness and ability to hang in for the duration. I suggested each of them do whatever they could to strengthen their offer in every possible way.

House for sale image via Shutterstock.
House for sale image via Shutterstock.

We ended up with three excellent offers, essentially all full price. How to decide? We could have used a dart board, because the fact is they were all great. I pulled out my legal pad and started splitting hairs in a side-by-side comparison.

Sometimes I think buyers and their agents don’t realize that there are many different ways to strengthen a purchase offer besides just the obvious one, the purchase price. This is always something to seriously consider when making any offer, whether or not competing with other buyers. What follows are some things a savvy buyer will consider when making  a purchase offer in any situation.

Top 10 ways to strengthen your offer:

10. Present it in person. This seems to be a dying art in my market. Almost never happens. There is just something about making the effort to come hand me the offer in person, make eye contact and explain a bit about the buyer. I always attempt to present offers in person, and at the very least will include a letter to the seller’s agent and seller telling a little bit about my buyer, what they love about the house and pointing out the strengths of our offer.

 9. Include any requested addendums and documentation with the offer. In this case, I had requested the offer be submitted along with some addendums I had made available to agents in advance by uploading them into the MLS. Specifically, a short-sale addendum, a Wells Fargo affidavit, as well as the Property Condition Disclosure. One of our potential buyers failed to include any of the requested documents.

In a side-by-side, hair-splitting comparison of offers, this was a negative. We didn’t know FOR SURE that they wouldn’t find something on the PCR they would object to, or that they would be willing to wait for third-party approval. Just a couple of little question marks hanging out there that could have easily been eliminated.

8. Include proof of funds to close if a cash offer, or a lender’s preapproval letter. One of our offers was accompanied by a very strong lender preapproval letter. One of the cash offers was accompanied by a very impressive proof of funds to close. When I asked for proof of funds for the third offer, also cash, I was told that the buyer would submit proof of funds necessary to close only after her offer had been accepted. Would you be surprised if I told you this was the same buyer who wasn’t forthcoming with any of the signed documents that were requested?

7. Inclusions. If you are competing with other offers, this is not a good time to ask the seller to include personal property in the sale. Especially if the refrigerator, washer and dryer are specifically excluded in the MLS information. Why risk losing your dream house over an appliance or some kitchen curtains?

6. Inspection contingency. In our case, one of the two deciding factors (remember that we are really splitting hairs here) was that one of the buyers waived their right to an inspection contingency. This eliminated one potential pitfall that could possibly arise down the road, of a buyer canceling their contract based on an inspection. Short sales are sold “as is,” but a buyer always has an opportunity to have a professional inspection, and rescind their contract if they find something unacceptable. This buyer felt that this was a reasonable risk given that the home was fairly new construction and obviously well cared for with no deferred maintenance.

Short of eliminating it altogether, a good way to strengthen any offer is to shorten up, as tight as possible, the length time you are requesting in which to perform an inspection.

5. Requests for seller concessions. In our case, this wasn’t any determining factor. But it is always something to consider in any offer. If you are going to request that seller pay for some of your closing costs, vacate the home prior to closing, allow you to take possession prior to closing, take a big hit in the purchase price or otherwise concede something, for heaven’s sake compensate them by strengthening up everything else that you possibly can!

4. Earnest money. In my state it is customary for a buyer to put up earnest money with an offer, to be held in trust until closing. Unlike the state I used to live in, sellers don’t post in the MLS the amount of earnest money they are requiring. Buyers can offer anything. The more skin you are willing to put into the game, the more solid your offer appears to a seller. This is one area that really gets a seller’s attention when you are trying to offset a concession somewhere else in the offer.

In an offer on a short sale, an offer will ALWAYS beat out any others when accompanied by a provision that the earnest money is nonrefundable if the buyer withdraws their offer prior to third-party approval.

3. Closing and date of possession. Generally, the sooner you are willing and able to close, the better. If you can be flexible, based on what works best for the seller, you will have a big advantage. This is a detail where conflicts can occur between buyers and sellers. Find out what the seller prefers. A quick closing? An extended closing? Accommodate the seller’s needs if at all possible. Or, if you are asking for a closing time frame that isn’t ideal for the seller, be sure to offset it by strengthening the offer in all other areas that you can.

2. Costs paid by? In any real estate transaction, there are closing costs in a variety of areas. Appraisal, loan origination fee, lender’s title policy, septic inspection, escrow fee, survey, and so on. Although always negotiable, typically the person who benefits from a particular action is the one who pays for it. An appraisal required by a buyer’s lender should be paid for by the buyer, for example.

To strengthen your offer, be sure that you are not asking the seller to pay costs that are not obvious seller costs. If you do, realize that this is a concession you are asking of the seller and it weakens your offer.

1. Cash is king. Obviously, this isn’t an option for a lot of buyers, but a buyer will always be in a better position with a cash offer for several reasons. First of all, cash closings are uncomplicated and quick. There is no concern that an appraisal will come in lower than the price in the purchase contract. There are no worries that the buyer’s lender may discover something objectionable, while raking him over the coals, which would disqualify him from obtaining a mortgage to buy the home.

In the case of my seller and her three excellent purchase offers, here’s what it all boiled down to:

First, the offer from the buyer that hadn’t provided proof of funds to close or the requested documents was eliminated.

That left us with another cash offer, and an offer from a well-qualified buyer (a personal friend of the seller) who was preapproved to obtain an FHA mortgage. As much as my seller would have loved to see her friend get her beloved home, she opted to accept the cash offer for the reasons stated above. In her case, closing quickly with cash versus waiting for a mortgage to close also meant she would eliminate a ding on her credit score from a missed mortgage payment.

Now, for the rest of the story. I knew from my initial conversation with the agent for the winning cash buyer that this first-time homebuyer had saved a down payment, was preapproved and planning to get a mortgage. Imagine my surprise when the offer arrived as a cash deal. He and his parents were on the contract as joint purchasers, and their retirement account would be funding the purchase. This sharp buyer’s agent had acted on my advice to strengthen the offer in every possible way.

There is nothing stopping the parents from selling their share of the house to their son after closing, and him getting the mortgage he is preapproved for so they can repay their retirement fund. They went to the trouble of working it into a cash offer simply to strengthen their chances of being chosen, and it worked.  This was the buyer who also waived the inspection contingency.

Ironically, had they made the same offer but with the buyer still needing to obtain a mortgage, they would have been competing against the other buyer with the same preapproved mortgage status, and they would have lost! Why?  There would have been only two things differentiating the offers: that waiver of the inspection contingency from one buyer, and the fact that the other buyer was a personal friend of the seller. In this case, the friendship would have prevailed.