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Questions and Answers

Saturday, March 26th, 2011

ARE YOU GOING TO LEAD OR CHASE THE MARKET?

The old saying of buy low, sell high is something everyone is thinking about today as prices seem to have stabalized a bit.  BUT, have we hit the low yet?  There is no way to know this answer until it’s too late.  Today is a great time to buy a home and is certainly not a bad time to sell if you price your home properly.  We still have historically low rates…you can still lock in a 30 year loan for under 5% interest.  As the economy improves and mortgage banking reforms are put in place, this may be the best chance you have to make a real estate investment. 

Remember, that the COST of a home, not the price of a home is what you want to pay attention to as you make your decisions.  Your interest rate is one of the biggest factors in the final cost of your home.  Assume you purchase a home and take out a $150,000 mortgage at 5% today.  Your monthly payment would be $805.50.  BUT, if you wait and interest rates go up just 1%, your monthly payment would be $900.  This $95 change in monthly payment could mean that you would have to settle for a home in a lower price range and obviously less desirable to you. 

This is good information to keep in mind as you analyze whether you want to sell now or wait until the price of your home recovers to pre-2009 prices.  First of all, all experts expect the market to slowly recover, not rebound in great leaps.  Secondly, if you wait for the market to recover, you will also be buying your home at the higher prices and most likely higher interest rates. 

If you would like to discuss your particular situation and develop a strategy to make the best of this great market opportunity, give me a call so we can get together to discuss.

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Posted in Buy a House, Homes, Housing Market, Questions and Answers, Real Estate | No Comments »

Pricing Is Key In Today’s Market!

Wednesday, March 10th, 2010

I just listed a house in Omaha Saturday and it sold this week!  Pretty incredible considering the horror stories you have been hearing in the news.  The reason I think we were so successful is PRICING.  I viewed the home and made a few staging suggestions for the homeowner which she implemented, but the most important step was looking at the current market and making an informed decision on how to price the property to sell it. 

There is a tendency, especially in today’s market, to say “Let’s price it here and we can always come down”.  Not necessarily so.  Did you know that buyers tend to look at homes in $5,000 price increments?  So, if you price your home at $154,500 and it’s really a $145,000 house, you are getting entirely the wrong group of people in the home to look.  Your home will be compared to other homes ranging from $149,500 to $159,500 and most likely won’t stack up against the competition well.  Generally, buyers will not embarrass you by making what they consider to be a low ball offer.  You miss out on getting the right buyers into your home during the most important marketing time…the first 2-3 weeks from listing.  When you finally make the decision to reduce the price, many buyers will have already found another home and your home will look “worn” because of the days on market.

I can’t stress enough how important it is to price right.  Then, when you receive an offer, consider it carefully as your best offer is generally the first offer you receive.  Not necessarily the price being offered, but the most motivated buyer, so you should negotiate this offer with great care.  We all have a number in our heads that we think is right for our home…remember it’s just a house to the buyer!  When considering offers, consider the time factors, cost of staying in the home and the inconvenience of not being able to move on to where you want to be.  Is is worth $1,000-2,000 ?  Buying and selling a home is an emotional process, but I encourage you to try to step back and make the best business decision you can make.  That’s why I am here….to provide you with a nuetral opinion and help you keep perspective as you go through the process.

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Posted in Buy a House, First Time Home Buyers, Homes, Homes for Sale, Housing Market, Questions and Answers, Real Estate | No Comments »

Short Sales Are Not For The Faint Of Heart, But They Can Be Worked!

Tuesday, March 2nd, 2010

In case you don’t know what a short sale is…it is when the bank agrees to release the owner of a property from their mortgage obligation for less than what is owed.  There are plenty of people in situations where they must do a short sale on their property because the value of their home has declined and they have no equity in the home.  Many of these people are ones that took out 100% loans or have taken a 2nd mortgage and used their equity for other purposes.

Banks will accept short sales, but you must be PATIENT whether you are a seller or  buyer.  If you are getting behind on payments and feel like the ball is starting to roll down hill, DON”T WAIT, contact a Realtor that can work with you and your bank to get a short sale approved.  If you are a buyer, don’t expect to get a response from an offer within 48-72 hours as the banks have a process to go through.  There is nothing you can do to speed that process up.  The bank will get financial information from the bank, then get an appraisal on the property.  It depends on the type of loan and mortgage insurance on what the bank will accept.  It is usually somewhere in the 88% level.  If an offer is received, it’s not uncommon for a bank to tell the Realtor not to even submit it unless it meets their financial objectives.  They usually will not respond in writing so it’s frustrating as anybody with business sense knows that this is not the way to do business.

So, today reminds me of why customers feel so alone in dealing with this difficult process.  The banks are not real responsive, they have generally hired someone that quite frankly doesn’t care about the house or whether it sells, it’s just another file on their desk.  I am working on just such a case today.  I am so frustrated that I wrote to my representative and the Majority Leader to express my frustration with the current environment.  Probably won’t change things, but I feel a tad bit better.

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Posted in Appraisal, Buy a House, First Time Home Buyers, Foreclosures, Homes for Sale, Housing Market, Mortgages, Property, Questions and Answers, Real Estate | No Comments »

Council Bluffs Housing Market Needs Fresh Homes For Sale!

Thursday, February 25th, 2010

We have all heard how terrible things are in the real esate market,  how now may not be the right time to sell, and that it is a buyer’s market.  All of this information may be true depending on where you live.  To satisfy my own curiosity, I did some research on the market today (1-1-10 until today) compared to last year at this same time.  In Council Bluffs, we have nearly 100 less homes on the market today as the same time last year, we have sold about 20 less houses with the samedays to close as last year, BUT the average sales price is actually up slightly.  Houses continue to sell for about 96% of their list price. 

 This all leads up to me saying…  What we need are some new properties.  If you know anyone who may be thinking of selling, please have them contract me….NOW IS THE TIME!!!  Don’t wait until everyone else is selling.  There are only 3 things that are considered when purchasing a home:  Location (can’t do anything about that it is where it is), Condition (future blogs will give you some good ideas on staging and presentation…the owner controls this!)  and Pricing (The most important factor and the one the owner definitely controls!)  In this market place, correct pricing is key.  Let me design a marketing plan that will get your home sold quicker than the average 121 days!  First time buyers have less than 90 days to have a contract on a new home in order to qualify for the $8500 tax credit!!

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Posted in Buy a House, First Time Home Buyers, Homes for Sale, Housing Market, Questions and Answers, Real Estate | No Comments »

Do I Have To Have An Open House To Sell My Home?

Wednesday, February 24th, 2010

 

This is a tough question for me to answer because, on one hand, any exposure you can get for your home will only help sell the home.  However, in most cases a home does not sell from an open house rather from a realtor showing the home to an individual client.  Open houses are a chance for people to come through the home without any strings or prequalification, so you really don’t know if the people looking can even purchase your home.  A good agent will market your home in several ways, the web (as many sites as we can possibly get), the paper, real estate magazines, the Southwest Iowa Association of Realtors MLS site, the Omaha Area Board of Realtors website and direct mail campaigns in addition to one on one marketing with their own clients and other realtors that they have cultivated realtionships with.  I think if you have too many open houses, it can give the impression there is something wrong with the home.  You can glean comments that may be helpful in staging the home from people coming through the open. 

In summary, I would say, don’t count on an open house to sell your home, rather look at it as a way to gain feedback from the market place.  On thing I know for sure, you may not like what the market place tells you, but it is never wrong.

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Posted in Buy a House, First Time Home Buyers, Homes for Sale, Housing Market, Questions and Answers, Real Estate, Uncategorized | No Comments »

Can I Get The $6500 Tax Credit If I Close On A Home After April 30, 2010?

Wednesday, February 17th, 2010

The answer is YES!  If you qualify for the $6500 tax credit, you must have a purchase agreement accepted no later than April 30, 2010, but you have until June 30, 2010 to close on that property.  To qualify for the tax credit you must have lived in your current primary residence 5 of the last 7 years.  There are no stipulations on what type of new primary residence you must buy, so this is a great time for those thinking of downsizing to their retirement home to make a move.  What’s better than getting $6,500 from the government! 

It’s also a great time for those that are thinking about moving up to their dream home.  It’s likely that your current home is in a price range that would be attractive to first time buyers who can qualify for up to an $8,000 credit which brings more buyers to the market than otherwise would have been AND you will buying/building your dream home at a time when prices have come down and stabilized.  It’s a win-win situation that shouldn’t be missed if you are thinking of making a move.

For those that are thinking of listing and worried that this is a bad time, not necessarily.  With these incentives, the market should have more buyers than normally expected.  Why wait until the press says it’s ok to make a change when everyone will be flooding the market with houses for sale?

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Posted in Buy a House, First Time Home Buyers, Homes, Homes for Sale, Housing Market, Questions and Answers, Real Estate, Uncategorized | No Comments »

Is A Reverse Mortgage Right For You? Reaping the Rewards of a Lifetime Investment in Homeownership

Thursday, February 4th, 2010

Homeownership is like the most important investment you’ve made on the road of life.  As you retire and your income needs change, the equity you’ve built in your home over the years can serve as a resource to provide financial security and peace of mind.  Now may be the time to put your home to work for you!

A reverse mortgage allows you to borrow against the equity you’ve established in your home.  Instead of making payments, you can now receive them.  To be eligible, you must be age 62 years or older and own your home free and clear or have a mortgage balance that can be paid off by the reverse mortgage.

With a traditional mortgage or home equity loan, you qualify based on your credit history and debt-to-income ratio.  With a reverse mortgage, your home makes the payments to you and there are no income, employment or credit score qualifying restrictions.

Reverse mortgage proceeds may be used for any purpose including:  eliminating your existing mortgage, meeting daily or monthly expenses, covering healthcare expenses, remodeling or home repairs, reducing credit debt or taking that last dream vacation with your family. 

There are many misconceptions that keep many senior homeowners from looking into the advantages of a reverse mortgage.  Contrary to what you may have heard–as long as all program requirements are met:

  • You retain the title to the property and continue to own your home
  • Instead of making mortgage payments you can have a mortgage that pays you
  • You cannot owe more that the value of the home

Some of the program requirements are things you are already doing like one of the borrowers must continue to live in the home, the taxes and insurance must be curent and the property must be maintained according to FHA standards.

Generally, reverse mortgage loan proceeds are not considered income and will not affect Social Security or Medicare benefits.  However, receiving monthly reverse mortgage advances could affect your eligibility for some public assistance programs that are based on need. Consult your attorney to determine how distributions may impact your particular situation.

To obtain a reverse mortgage, you are required to participate in a consumer education session with a HUD-approved conselor.  Family members and others are welcome to attend with you. 

What are the costs?  Generally, you will be asked to deposit the cost of the appraisal at the time of application, then there are additional closing costs such as origination fee, title insurance, a mortgage insurance premium and attorney fees which can be financed into the loan.  This total cost is around 5% of the loan amount  in my experience.

One common question is “Can the lender take my home away if I outlive my loan term?”  No.  In addition, you do not need to repay the loan as long as you or one of the borrowers continue to live in the house, keep the taxes and insurance up to date and maintain the property.  You may leave the property for up to 12 consecutive months for medical reasons.  After this time, the borrower must be able to return to the home as their primary residence.  If you can not do this, the loan must be repaid. 

Reverse mortgages may be the tool seniors need to extend the time they spend in the home that they worked so hard for and love.  Call me if you would like to get additional information.

This is a good thing…..I only wish I were 62 some days!

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Posted in Housing Market, Mortgages, Questions and Answers, Real Estate, Uncategorized | No Comments »

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