As interest rates have moved up slightly, more people are choosing to buy down their interest rates by paying points.  Typically that works by you, the borrower, paying 1% of the value of the mortgage at settlement in order to reduce your interest rate by .25%. However, it now turns out that most people should not be buying down their interest rates.

A new study by Abdullah Yavas, an Elliott Professor of Business Administration at Penn State's Smeal College of Business and Freddie Mac analyst Yan Chang shows that with very few exceptions, borrowers are losing money when they pay points.

Only 1.4% of borrowers who bought points held those mortgages long enough for that strategy to pay off. And, of those borrowers who didn't purchase points, only 1.5% would have been better off buying points.

The typical homeowner needs to keep that mortgage for five years in order to make it pay off. Most of are moving more often these days. And, even if you're not, you are likely to refinance that mortgage before the five years is up.

There are calculators out there to help you do the math and determine if you should pay the points. One source is The Motley Fool at http://www.fool.com

Before you refinance or buy your next home, do the math and save yourself some money!

Buyers are always interested in how many days a property has been on the market. Buyers assume that the longer a property has been on the market, the more negotiating leverage they have.  And, generally speaking, that's probably true. That assumes, of course, that the seller really does need and/or want to sell!

Sellers, in this market, are very sensitive to days on market as well, and are worried about the perception buyers have as they see that Days on Market number increase.  Again, this is perfectly reasonable. They don't want to give buyers the impression they have more leverage, even if it might be true! No one wants to give away information that might hurt their negotiating position.

Sellers are asking more frequently how they reset the counter to show their property as newly on the market.  Many times they believe that if they withdraw their house from the market for a few days and then put it back on, that will reset the counter. Some believe that if they relist with a new agent the counter will go back to zero. Generally, what I tell them is that this doesn't work. But the full answer is a little more complex than that and this seems like a good place to go into a little more detail.

The Multiple Listing Service that we use in this area actually carries to Days on Market numbers for every listing.  They are shown as DOM-M and DOM-P. They stand for Days on Market-MLS and Days on Market-Property. The first one, DOM-M, does reset when you relist your home with a new agent. Or, if your listing expires and then is put back on the market a week or two later. But the second category, DOM-P does not reset unless your home is off the market for at least 180 days. Since both of these fields are available to both agents and consumers in the data they see, it's pretty hard to fool anyone about how long your home has been for sale.

As with almost everything in life, prevention is the way to go here! Price it properly, make sure it shows well and odds are most homes will sell within the average days on market for this area.