Financing is Favorable...For Now

Some buyers are concerned about buying a home that will drop in value in the coming months. But buying a home is a long-term investment, and there’s more to consider than just the purchase price. From 1980 to today the 30-year fixed rate mortgage has ranged from more than 18 percent to less than 5%.

 

If you’re waiting for home prices to come down another $10,000, you may pay more in the long run if mortgage rates rise in the meantime. For example, look at the below chart. You’ll see that even with a higher loan amount at a 5% interest rate, the monthly payment is $50/month lower verses a lower loan amount at a 6% interest rate. Also, the amount of interest paid during the total life of the loan is almost $30,000!! So, waiting for prices to come down is very risky.

 

Loan	Rate	Payment	Total Int
$270,000	5.00%	$1,449	$251,791
Loan	Rate	Payment	Total Int
$250,000	6.00%	$1,499	$289,595

When you are looking for a bargain, don’t lose sight of the big picture. If you try to time the market to save a few thousand on the price of a home, you could end up with a higher monthly payment and total overall cost of home ownership.

 

 

 

The Importance of a Home Inspection

Should you get a home inspection when selling or buying? Watch this 5 minute video for important information on the value of a home inspection…

https://www.thinkbigworksmall.com/public/showArchiveVideo/3909/4116

 

 

 

Will a Seller Pay my Closing Costs?

“Will a seller pay my closing costs?” is a question we are asked frequently. It depends on two main items:

1) Type of loan you are pre-approved for

2) Situation with the property

 

Credits for closing costs can be anywhere from 3%-6%. On a $300,000 loan that can be anywhere from $10,000-$18,000. Typically for conventional loans the lender will allow the seller to credit you back 6% of the purchase price towards your closing costs. For FHA loans, it is a maximum of 3%.

 

It also depends on the situation with the property. For example, if there are multiple offers and/or you are going in under the asking price, then chances are the seller is not going to accept your offer if you also ask for closing costs to be paid. However, if you are the only interested party and the home has been on the market for several months the seller may agree to pay all or part of your closing costs. It is important to have us or the Realtor you are using find out the maximum credit allowed by your lender and understand the seller’s situation. We work with our clients to get them credits towards their closing costs whenever possible. The more money you save and the overall lower price you get for your home, the happier you will be.

 

 

 

 

What should I list my house at?

Rule number one in the current market is NOT to start out overpricing your home just to “see what happens”—you will only reach 10% of the buyers. Buyers are shopping price. They want a good deal.

 

For example, if you list your house 15% over market value than you are attracting only 10% of the buyers. If you ask 10% above market value you open it up to 30% of the pool of buyers.

 

Pricing it at market value in this market still only attracts 60% of the buyers. It is not until you begin to price it under market value that you will see higher activity and traffic through your property. 10% under market value typically yields interest from 75% of the buyers out there and 15% under market value widens your target market of buyers to 90%!!!

 

So, what should you list your house at?....Obtain the current market value from your Realtor, then price it at least 10% under that value to receive an offer faster and possibly multiple offers. You can create competition at the right price. Good luck!!

 

 

 

Global On-Line Bidding

Are you interested in selling your house and want to get the highest price possible in a short amount of time? Global On-Line Bidding is the answer. Here are several of the benefits to selling your house via this new innovative marketing approach.  

 

•         Create Competition Among Buyers

•         Expose the Property to a large number of Pre-approved Buyers

•         Accelerate Sales

•         Auction Brings Interested Buyers to a point of Decision

–        They must act now or lose an opportunity to purchase

•         It is a True Market Forum

–        The highest buyer pays the lowest price a seller will accept

•         You know exactly when the Property will Sell

 

Buyers love this method because they get full transparency…they know exactly what their competition is bidding and can feel comfortable going as high as they can afford.

Are we at the Bottom of the Real Estate Market?

As we have said before, we will not know that we have hit the bottom of the Real Estate market until we start going up. However, current listing prices in several Bay Area cities are indicating that we could definetly be at the bottom.

 

How do we know?...Key Real Estate economists have advised that areas which experienced 10%-20% appreciation several years ago needed to roll back to 2001/2002 pricing before home prices stabalized. Well folks, we are seeing this now. Many homes are coming on the market at the prices they sold at in 2001 and 2002.

 

We are now seeing multiple offers on properties not just in the outlining Bay Area cities such as Brentwood, Patterson and Tracy but also now in many cities around the Bay and the Tri-Valley.

 

These low prices and extremely low interest rates are the cause for this incredible market activity.

 

Homes "on-sale": Finding Value

Rich Dad Poor Dad author Richard Kiyosaki uses the example of a sale at the local supermarket to illustrate a common investor mistake---focusing on price movements instead of value. He notes that if a supermarket held a “25% off everything in the store” sale, the store would be packed.

 

But when prices plunge in the stock market or real estate market, many investors hear the bad news and head for the sidelines until prices begin climbing again. In any market, it’s important to consider value along with price. Supply and demand dictates that real estate values are easier to find in slow periods and become harder to find when markets heat up.

 

So, what’s lasting value? Here’s a list of homebuyers’ most sought-after-features, according to the NAR:

1. Central Air Conditioning
2. Garage with two or more spaces
3. Walk-in closet in master bedroom
4. Backyard/Play area
5. Cable/Satellite TV-ready
6. High-speed Internet Access
7. Separate shower in master bath
8. Patio
9. Fencing
10. Home newer than 10 years old

 

If you have looked in the past and not found these features in your price range, it may be time to check again, while properties are still “on-sale”. Be sure to consider features that will make homes more valuable in the future, such as energy-efficient construction and appliances and shorter commuting times. Features like water or mountain views, good schools, recreation opportunities and unique architecture never go out of style. For a list of homes for sale with specific features in a particular neighborhood, call or email us.