House hunting? It’s not a buyer’s market everywhere

Some potential home buyers, especially first-time buyers, may be misinformed about today’s market, believing that all sellers are desperate and will accept any offer. However, in many desirable, middle-class neighborhoods, bidding wars are prominent and buyers often have to make offers slightly above the asking price.

• Although California’s median home price – the price point where half of the homes sold for higher and half for lower — was 39 percent lower in March than a year ago, many of the sales taking place are in areas, such as the Central Valley and the Inland Empire (Riverside and San Bernardino counties), which have higher foreclosure rates. These regions offer home buyers better opportunities to purchase homes at extremely low prices.

• The California housing market is often characterized as having three pricing segments: under $500,000, $500,000 to $1 million, and more than $1 million. Homes in the under-$500,000 segment have accounted for the majority of the state’s price declines thus far.

• As real estate is local, a home in one neighborhood with the same square footage and amenities may not sell for the same price as a comparable home in a neighborhood one mile away. By working with a REALTOR® familiar with a specific area, home buyers should be able to submit reasonable offers that are more likely to receive seller approval.

Read this Story

 

The Home Team Girls Realtors® Real Estate Team helping you with Investment properties, Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Serving the Military and Veterans, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

Home ownership becoming more appealing than renting

Rent versus own- that is the question…

Declining home prices are helping to close the gap between the costs of renting versus the cost of owning a home, making homeownership more appealing and affordable in many metropolitan markets.

 

·      Historically, after-tax mortgage payments have averaged 26 percent more than rent payments, according to Greet Street Advisors.  At the peak of the current real estate cycle, mortgage payments reached as high as 66 percent more than rent payments.  However, by the end of 2008, mortgage payments averaged just 24 percent more than rent payments, the narrowest gap since 2001.

 

·      In Los Angeles, mortgage payments averaged 60 percent more than rent payments between 1990 and 2008, but have since fallen to only 30 percent more than rent payments.

 

·      Some economists predict mortgage rates could fall to 4.5 percent, which could push mortgage payments to an average of 14 percent more than rent payments, a level last reached in 1998.

 

·      In some markets, well-qualified home buyers are finding that they can pay less for a mortgage payment than they spend on rent.

 

·      Although mortgage payments in some areas may be slightly higher than rent payments, the long-term benefits of homeownership outweigh the costs.  Homeowners can deduct the interest they pay annually on their mortgage.

 

·      Additionally, homeowners can build up equity in their homes over the long term. Historically, homeowners who remain in their homes for at least five years have an average annual rate of return of nearly 12 percent.

 

·      Unlike rent payments, a mortgage can be paid off, enabling the homeowner to live in a house free and clear.

 

To read the full story, please click here

 For more articles:

New Home Buyer Fence Sitters may Lose out to Market

Snag a Deal on a Short Sale

Questions on the 8,000 Federal Tax Credit

 

The Home Team Girls Realtors® Real Estate Team helping you with Investment properties, Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

 

 

 

 

 

Qualifications tightend as mortgage interest rates lower

Mortgage rates are near historic lows, spurring an increase in mortgage applications and applications to refinance.  However, most financial institutions have tightened their loan underwriting standards, making it more difficult for home buyers to qualify for the best rates.  In many cases, borrowers must issue a down payment of at least 20 percent; borrow $729,750 or less; have a credit score of at least 720; carry low debt relative to reliable income; buy in an area where home prices are relatively stable; and use a community bank rather than a national bank, to qualify for the best rates.
 

·      Most of the risky loan packages, such as “stated income” loans, where borrowers were not required to document their income, and option adjustable-rate mortgages, where consumers could choose to pay less than the interest due, are no longer available.  Some financial institutions offer interest-only loans, but they can be quite costly.

 

·      The majority of today’s mortgage loans are through Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA).  Combined, the government sector accounts for 87 percent of mortgages.  Purely private financing is rare.

 

·      The government entities purchase and/or guarantee loans up to a certain limit.  In high-cost areas, such as most areas of California, the conforming loan limit is $729,750.  The best interest rates are offered on conforming loans.  Jumbo loans – those that exceed $729,750 – are more expensive and can cost a quarter-point to a full percentage point more.

 

·      Fannie Mae and Freddie Mac also have added a quarter-point “adverse market delivery charge” due to declining home prices.  They also have instituted “risk-based pricing,” which raises fees on borrowers with credit scores of less than 720.  Borrowers purchasing a condominium and putting down less than 15 percent also will pay more for a Fannie Mae or Freddie Mac loan.

 

·      Borrowers with a down payment of less than 20 percent also are required to take out private mortgage insurance.  Premiums have increased in most parts of the country, including California.

 

·      Consumers without a 20 percent down payment may be eligible for a mortgage loan through the FHA, which accepts down payments as low as 3.5 percent.  The FHA charges an upfront mortgage insurance premium of 1.75 percent, which can be added to the loan, in addition to a monthly premium.

 

·      Although rare, the U.S. Dept. of Veterans Affairs (VA) and U.S. Dept. of Agriculture offer loans in rural areas with no down payment or mortgage insurance requirements.

 

To read the full story, please click here

The Home Team Girls Realtors® Real Estate Team helping you with Investment properties, Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

 

 

Questions on the $8000 Fed Tax Credit?

Confused about tax credits

Confused about the qualifications for the $8,000 federal tax credit for first-time home buyers?  Need help understanding the differences between the $7,500 tax credit signed into law last year, and the $8,000 tax credit added this year?

 

Well here’s the scoop plain and simple~

 First-time home buyers – those who have not owned a principal residence for three or more years – received two tax credits over the last two years.  One was passed and signed into law in 2008, the other in 2009.

 ·      The 2008 credit is a tax credit for first-time home buyers who purchased a house between April 8 and Dec. 31, 2008.  The home buyer may claim 10 percent of the home’s purchase price, as a credit, capped at $7,500.  Although called a “tax credit,” this homeowner benefit actually is a 15-year interest-free loan, which must be paid back in equal installments over a 15-year period.

 ·      The 2009 credit is for 10 percent of the home’s purchase price, capped at $8,000.  This credit is for first-time home buyers who purchase a house between Jan. 1 and Nov. 30 of this year.  The $8,000 tax credit does not have to be repaid.

 

·      In both cases, the home buyer may choose to claim the tax credit on either the 2008 or 2009 federal tax return.

 

·      The tax credits are offered on a sliding scale, based on income.  Individuals with annual incomes of $75,000 or less may be eligible for the full amount of the tax credit.  Married couples filing jointly must earn less than $150,000 to qualify for the full amount.  Individuals earning between $75,000 and $95,000, and married couples filing jointly who earn between $150,000 and $170,000, may be eligible for a smaller portion of the tax credit, but not the full amount.  The tax credit is not available to individuals who earn more than $95,000 or married couples filing jointing who earn more than $170,000.

 

·      Nonresident aliens, homes outside of the United States, and homes inherited, gifted, or acquired from a relative are exempt from the tax credits.

 

To read the full story, please click here

 

The Home Team Girls Realtors® Real Estate Team helping you with Investment properties, Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

  

Snag a deal on a short sale

As more homeowners find themselves underwater — owing more on their mortgage than their home is currently worth — and unable to make the monthly mortgage payments, many are turning to short sales, which allows a homeowner to sell their home for less than owed on the mortgage. With the lender’s approval, home buyers can purchase properties in desirable neighborhoods and at favorable prices.

KEEP THIS IN MIND

 
• According to real estate Web site Zillow.com, 14 percent of homeowners nationwide are currently underwater. In some areas, especially those hardest-hit by foreclosures that have experienced the greatest price declines, more than 50 percent of homeowners would owe more than their home is worth if they sold today.
• Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained as many owners may still live in the home.
• In a short sale, the homeowner must receive approval from the lender before the sale of the property can proceed. With many lenders overwhelmed by short-sale transactions, it can take between two and six months to execute.
• Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator between the seller and the lender and lead to a successful transaction, while a buyer’s agent can help with offers, counter offers, home inspections, closing, and more.
• It is important to remember that although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Therefore, home buyers should work closely with their REALTOR® to submit a realistic offer.
• According to REALTOR® Loni Parmelly, author of Success in Short Sales, buyers should ask the lender to pay for all closing costs as part of the contract. The contract also should specify that the buyer will not conduct an appraisal or inspection of the property until the offer is approved. This
added guarantee can protect home buyers from spending money on a home they may not purchase.
To read the full story, please click here

For more articles:

A Short Sale May be a Way Out… But Beware

Questions on the 8,000 Federal Tax Credit

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

 

New Home Buyer Fence Sitters may lose out on the market?

Fixed-rate mortgages of Four percent,  zero-down payment requirements, and a 30-40 percent break on the market value of the house appear to be what many “on the fence” home buyers are waiting for before they consider purchasing a home.

WE ARE THERE!

KEEP THIS IN MIND
• According to a study of more than 700 self-described “on-the-fence” buyers, 44 percent responded that they haven’t yet committed to purchasing a home because they are waiting for lower mortgage rates.  (WE AREW THERE NOW) 

The study, conducted by the National Association of Home Builders’ research subsidiary,  found that 41 percent of undecided buyers are unsure if they could qualify for financing.  Another 38 percent reported they expect to see home prices decline further. 

Again people we are there now- my optionion- people are gambleing if they wait longer. The interest rates are good now- even if and when homes will go down- I believe the rates will go up again.

• The study found that concerns about declining property values were most prevalent among home buyers in the Western region, while buyers in the Northeastern and Midwestern states were more concerned with lower mortgage interest rates.

• Of the potential home buyers surveyed, the mortgage rate that seemed most favorable and would be most effective in persuading consumers to buy now is a 30-year, fixed-rate mortgage at 3 percent.  Now reate are closer to the mid 4’s.  According to Freddie Mac, interest rates on 30-year, fixed-rate mortgages averaged 5.25 percent for the week ending Feb. 5.
• Survey respondents said guarantees by home builders that their loan applications would be accepted with verifiable proof of income and a “fair” credit score ranked six times more effective than standard application procedures.
• Price concessions, such as a 10-percent discount below market value, appeared to be the most compelling option for on-the-fence buyers.
To read the full story, please click here

To put this into perspective- if you plan to stay in your home for awhile- waiting can price you out of the market.   Home prices are already good.   Get in now while interest rates are still low.  They are the lowest they have been in over 30 years.   While people gamble and wait for prices to drop, they may lose the ability to qualify for a loan if rates climb.  Buyers have to live somewhere and paying rent can be the same price as paying on a mortgage.  Have a CPA run Numbers for you on tax savings with owning a home.  At least once you buy, you are gaining equity for the future when prices come back up.

 

More articles:

Snag a Deal on a Short Sale

Questions on the 8,000 Federal Tax Credit

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Re-locations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

Plunging Home Prices good news for 1st time home buyers

Good news for First Time Home Buyers! There are great deals out there.

We have found that at the under $250,000 price range that there are multiple offers all competing for the best deals. We have found that buyers who shop with a Realtor have a better chance getting a house than those who do not. Most times than others- First Time Home Buyers  don’t see the listing until it is too late. By the time they put in an offer, they are already beat out.

Read the article below on some great stats.

NATIONAL ASSOCIATION OF REALTORS® (NAR), the median home price nationwide in December was down 15 percent to $175,400. With current interest rates at or near historic lows, borrowers with a 10 percent down payment could save $254 per month on a median-priced home compared with a year ago.

•  The percentage of First Time Home Onwers that could afford to buy an entry-level home in California stood at 53 percent in the third quarter of 2008, compared with 24 percent for the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

 

• The minimum household income needed to purchase an entry-level home at $287,760 in California in the third quarter of 2008 was $56,100, based on an adjustable interest rate of 5.91 percent and assuming a 10 percent down payment. The monthly payment including taxes and insurance was $1,870 for the third quarter of 2008.

To read the full story, please click here

For more reading:

Snag a Deal on a Short Sale

Home Ownership more appealing than renting

New Home Buyer Fence Sitters may Lose out to Market

Questions on the 8,000 Federal Tax Credit

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

That house may fit your budget now

With home values in many areas declining, the market is providing an opportunity for many first time home buyers to purchase homes that previously may have been out of reach.  With increased affordability, families can now purchase homes with more square footage, in desirable neighborhoods, and in closer proximity to amenities and public transportation.

 

·      In California, the median price of an existing home declined to $285,680 in November 2008, down 41.8 percent from November 2007 when the median price of an existing, single-family home was $490,511.   

 

·      The average rate for 30-year, fixed-rate mortgages was 5.01 percent for the week ending Jan. 8, according to Freddie Mac. Lower interest rates coupled with lower home prices can lead to more affordable mortgage payments, enabling some homeowners to move up, and first-time home buyers to enter the market.

 

·      To qualify for the record-low interest rates, borrowers will need a down payment of at least 20 percent and a FICO score of 700 or higher.  In California, a 20 percent down payment on a median-priced home would be $57,136.  Additionally, home buyers will need to pay for any closing costs not paid by the seller. There are though still first time home buyers programs that will help a new home buyer to get into a home with little money down. Just call you Lender for more info to see if you qualify.

 ·      The large number of foreclosures on the market also is presenting an opportunity to purchase a home at a favorable price.  However, some foreclosed homes may be in disrepair and may require additional work to make the property livable.  A program offered by the Federal Housing Administration, 203K Streamline, allows home buyers to borrow as much as $35,000 more than the mortgage to pay for certain renovations, such as new paint, carpeting and appliances that a foreclosed home may need.

 

·      To calculate how much house is affordable, consumers should follow the general principle of dedicating no more than 28 percent of their gross monthly income to covering the monthly mortgage payment, including property taxes and homeowners insurance.  All debt payments combined, including mortgage, credit cards, car payments, student loans, etc., should be less than 35 percent of the gross monthly income.

 

·      Using a home-loan calculator also can be helpful to determine how much house is affordable based on a borrower’s income.  Click here for a mortgage home calculator.

 

For related articles for New Home Buyers

Best Place to Buy a Home 

Top Mistakes Buyers Make when Placing Offers

Top 10 Questions Buyers Have

Rent vs Own

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Relocations, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

 

 

 

Best Place to Buy a Home

Some real estate experts believe that home buyers who purchase a house during the current market will gain equity if they stay in the house for at least five years and purchase in a desirable neighborhood.

· Neighborhoods with strong employment bases, such as hospitals, universities, and government, tend to be recession-proof. People desire to live near their jobs, so housing that is in close proximity to these types of industries are generally in higher demand than those in other areas.

· High gas prices and roadway congestion have led many people to seek “walkable” communities – neighborhoods that offer both daily needs such as grocery stores and coffee shops to more specialty items like hair salons, all within walking distance. Walkable communities also provide public transportation, which is becoming more desirable to many home buyers and is increasing demand for housing in these areas. One Web site, walkscore.com, calculates the walkability of a community by locating stores, restaurants, schools, parks, and other attractions that are within walking distance. The scores are based on a 100-point scale with 100 points being a “walker’s paradise.”

· Home buyers who seek a new or nearly-new home should search in areas where the homebuilder is known for honoring warranties and building high-quality homes that are structurally sound. Homes in these areas are more likely to weather well and gain value in the future than homes in areas where the homebuilder is unknown.

· Homes in neighborhoods with sales momentum generally appreciate at a faster pace than areas where sales are flat. Some real estate industry consultants advise clients to pay close attention to the “list to sale” numbers, which reflect the difference between the asking price and the final closing price. Usually, if the gap in list-to-sale numbers is narrow, then the real estate market in that area is improving.

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.

Top Mistakes Buyers Make When Making Offers

 

Top Mistakes Buyer Make When Making Offers

1. Pricing is too low:  Many buyers think when making an offer on a bank owned property that they can low ball the listing price. In most cases, banks sell at listing if not a little higher than listing price. Don’t automatically low ball a price. Have your Realtor do a market analysis and compare the comps that are nearby. Very often you will be bidding against other buyers, if the home is newly listed and is in good condition prepare for multiple offers and give it your best offer. If the home has been sitting on the market for some time- over 40 days, you may consider lowering the price. Once your offer is accepted, expect a counter offer. It may be a higher price than you expect but the banks have to demonstrate to their investors, shareholders, and auditors that they are trying to get the highest price possible. Your Realtor and you can do a counter to the counter offer. Sometimes this approval will take up to 5 days.  
2. Asking for repairs or inspection to be paid for:  Banks always want to sell a property in “as is” condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs. Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct.
3. Do not have a loan pre-approval letter:  Some buyers think that the bank will take their offer because they have a high FICO and will take their offer based on that. The highest percentage of buyers fall out of escrow because of some loan situation. Banks want to make sure the buyer will be able to close their loan on time. Getting a pre-approval letter means that the lender already has all the documents from the buyer, pulled credit, has picked out the loan and has done some of the underwriting already. This will speed up the loan process considerably. Have your lender state your FICO score on the loan letter along with the type of loan you are getting.  You will need to show verification of funds to be used in buying your home. Make a copy of the statement where your down payment is coming from. Make sure that the funds are accessible and within the state you are buying your home. Out of state checks can take up to 3 weeks to clear.
4. Long Contingency Periods:   Most banks do not want to approve long contingency periods- Try shortening your contingency periods to 10-15 days. See if your lender can close within 15 days. Sometimes terms are more important to a bank than a little more money. We have seen banks take $15,000 less for a 15 day closing with a 5 day contingency period.

 

The Home Team Girls Realtors® Real Estate Team helping you with Homes For Sale, Seller Strategies, Certified Buyer’s Agent, Bank Foreclosure Specialist, Short Sale Specialist. We use the service of a certified  Home Stager on all of our listings. For Roseville and Sacramento Realtor Services call on the Home Team Girls.