Archives

June 2008

Buyers Can Still Buy, Sellers Can Still Sell

Posted at 11:36 AM, Jun. 24, 2008

Where to go, what to do, who to believe?  These are questions that buyers AND sellers are asking today.  There is an inordinate amount of media attention to the housing market.   Depending on what day of the week and what cable or network channel or what media is expounding on the topic, the opinions can be as varied as the weather and often in opposition to one another.

So, now what?  Well, it's really quite simple.  Buyers can STILL get mortgages, often with as little as 3% down payment, sometimes even less with Seller contributions.  FHA loans are readily available to Buyers with reasonably good credit and a decent ratio of debt to income.  Conventional loans may have different criteria but still available to credit worthy Buyers.  The difference is that the down payment requirement is at least 10%.    If the Buyer stays in the home for 5-7 years, it will most certainly be a very good investment with a very good return.  The truth is: BUYERS CAN STILL BUY in today's market.

What about our beleaguered Sellers?  Gone are the days when a Seller can overprice a home with the intent of either "testing" the market or in the hopes of receiving multiple offers.  I think, for the most part, we've seen the end of those overheated days.  So, what is a Seller to do? 

First, the Seller has to be realistic and accept the market for what it is.  This IS a Buyer's Market because there are hundreds and hundreds of homes for sale in any particular price range.  The house must be in pristine condition, inside and out.  It must be in "showing condition" at all times.  Those bothersome repairs you've been putting off should be done NOW.  In fact, it's a very good idea to get a pre-listing Home Inspection to uncover issues that a Buyer is sure to find with the Buyer's Home Inspection.  Sellers who take this preemptive action to identify and resolve these issues are more likely to get top dollar for their home. 

Finally, the Seller has to let go of the past and disregard what the sales prices were even as recently as 6 months ago.  The market is changing frequently and the comparable sales of a year or 6 months ago are no longer the best barometer.  The truth is:  A house is worth what a Buyer is willing to pay for it.  The Seller should reflect on what the competition is in the neighborhood or price range and, to get an acceptable price in a reasonable amount of time, use the strategy of pricing the house slightly less than the highest priced home currently on the market.  The truth is:  SELLERS CAN STILL SELL in today's market.  It just takes a reasonable approach and a fair amount of patience.

So, Go Get Em!

Rates creep up

Posted at 10:11 AM, Jun. 16, 2008

Recent indication is that first time home buyers are getting tired of sitting on the sidelines. According to a recent online poll taken by the National Apartment Association, 17 percent of renters plan to make the jump to home ownership in the next year; 41 percent of the 2,041 respondents planned to be home owners within two years. Only 31 percent planned to still be paying rent five years from now.

Another factor that could very soon contribute to an increase in home buying could be rising mortgage costs. Fixed-rate mortgage rates rose to 6.32 percent, the highest it has been since October. After months of aggressively dropping interest rates, many lenders are worried that the Fed will be forced to raise rates back up. As interest rates rise, so do mortgage rates. According to a press release on freddiemac.com, Frank Nothaft, Freddie Mac vice president and chief economist said that, "Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman [Ben] Bernanke and Vice Chair [Donald] Kohn, expressed concern over a threat of inflation." We may very well be seeing the beginning of the end of the super-low mortgage and potential buyers may realize that with rising rates, now may be the time to jump in. Nothaft added, "Moreover, pending home sales for April unexpectedly rose by 6.3% and mortgage applications for home purchases ... were also up last week."