Buying a Home

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10 Things You Need to Know Before Buying a Home

February 7th, 2012
  1. Make sure you are credit worthy. Check your credit history, build up your rating if needed, and fix any errors on your credit report.
  2. Consider buying vs. leasing. With costs of buying and selling, plus time needed to build equity, you could end up losing money if you move too soon.
  3. Buy a home you can afford. The rule of thumb is you can afford housing that cost about two and one half times your salary, but there are calculators available online to help you figure exactly what you can afford based on income, debts and expenses.
  4. You may qualify for a loan with less than 20 percent down. Meet with a lender to discover programs that you qualify for.
  5. Even if you don’t have children, buy in a good school district. When it comes time to sell, good school districts are a top priority to many home buyers.
  6. Get a REALTOR®. Sure, you can go online, and go shopping. But you’re better off with someone who has your best interests at heart and a buyer agent can help you in negotiations and strategies in the bidding process.
  7. Choose wisely between points and interest rate. If you plan to stay in the house a long time, it’s usually better to pay additional points to lower the interest rate.
  8. Get pre-approved before house hunting. Know upfront what you can afford to save you time lost looking at what you can’t afford and you will be able to make a serious offer when you do find one you want.
  9. Be a smart bidder. Ask your REALTOR what similar homes in the area have sold for, and if homes have been selling for 5% less than asking price, then work with your REALTOR to make a competitive offer.
  10. Hire your own home inspector. One can be provided for you, but choose one that you feel will do a thorough job and have your best interest in mind.

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Is there a light at the end of the tunnel?

November 18th, 2011
  • For the first time this year, Year to Date Units Sold exceed total units sold in 2010-3379 in 2011 to 3356 in 2010, but total volume sold still lags because Median Sale Price this year is lower, $163,00 to $173,000 last year. We still expect by 2011 year end, total volume may exceed last year.
  • The second half of 2011 is dramatically better than the same time last year. Last year after the tax credit expired, sales tanked. We are now in a true -no sugar added market…a new normal for certain.
  • Important to note, total active listings are down considerably, bringing inventory levels down currently to about 8 months worth compared to a year ago at 12 months worth…hence, absorption rate getting back to near normal. Once inventory drops below 5 months, it begins to transcend into a seller’s market.
  • The key factor to watch is Mortgage Interest Rates. They are poised to increase, but we don’t know exactly when. A simple 1% increase in mortgage rates, say, from 4% to 5%, will cause a typical family to have to scale down their purchase by nearly 15%…or said another way…If you qualify now at 4% for a $200,000 home, but you choose to wait, and rates increase 1% to 5%, the same borrower now qualifies for only $170,000 home. That is the true cost of waiting.
  • Lawrence Yun, PhD, Chief Economist for NAR has noted several indices that indicate there is light at the end of the tunnel. He will be our SCCAR guest Feb, 2011…stay tuned.
  • Thanks again to Cindy Fox, our volunteer statistician, for her unwavering service for PR for over three years now. :)


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Posted in Home Buying, Home For Sale, Mortgage Knowledge

With unpredictable weather comes unpredictable water damage. Homebuyers should be vigilant about finding moisture hotbeds.

October 18th, 2011

Weather is unpredictable, regardless of the nightly forecasts. We checked the 2012 issue of Farmers’ Almanac as backup and, for the Midwest, predictions are average temperatures (whatever that is) and wetter than normal. Looks like our friends in the Northeast are going to take a pounding again this year.

For potential homebuyers, weather can play a big part in the home’s saleability. We’re talking about leaks, drips, mold and structural damage that happen because of weather. Smart home sellers have done a pre-sale inspection with a qualified inspector to address any of these issues. Still, buyers should watch for any signs of moisture.

As you tour the home, look for these moisture alerts:

  • Look up and in front of you. Windows and skylights are prime places for water and air leaks. Houselogic.com suggests shaking the windows a bit. If they rattle, the frames aren’t secure and you’ve got a leak there. As for skylights, if you can see through the frame and brown spots are present, this is a sure sign of a leak. Most likely, water has collected on the drywall, which can lead to rot and mold.
  • Doors are another area prone to leaks. Is the weather stripping around the door adequate to keep out drafts and moisture? Are the hinges secure, balancing the door correctly? Can you see daylight through cracks around the door? If so, more work needs to be done here.
  • Check corners in the rooms. Are there stains, do the floorboards creak, has the woodwork pulled away from the wall? If so, there may be problems behind the walls, most likely caused by water leaks.
  • Your inspector will go up on the roof while you stay put on the ground. He’ll let you know about missing shingles, chimney leaks, loose flashing and droopy gutters.
  • In the basement, check the walls, especially in older homes, for moist stone and water pooled in the corners. Also, look at the floor for staining, cracks and protrusions, indicating a water issue is somewhere under the home.

As a buyer, pay careful attention to areas that may be hotbeds for water damage. It doesn’t have to be a deal breaker, but you do want to be vigilant to head off any unwanted surprises.

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Posted in Home Buying

Are mortgage interest rates really ‘historic’ now?

June 21st, 2011

We hear it all the time. Headlines trumpet “mortgage rates at historic lows!” Could this really be true, or is it hype? Curious to find out, we researched mortgage rates way back to 1981 to find out the real story. Which is to say, yes, our current interest rates are historic.

Back then, some 30 years ago, the interest rate was a whopping 16.70 percent (can you image that?) for a 30-year fixed rate mortgage in June 1981, according to mortgagenewsdaily.com. In between then and now, rates did moderate to averages of about 11.50% in 1983; 8.43% in 2000; 6.88% in 2008.

So yes, the 4.73% average now really is historic. For buyers and sellers, this may be the most influential component in deciding to enter the housing market now. Buyers are enticed by the low rates and the increased housing stock. Sellers have the advantage too. Low interest rates bring in potential sales, and if your home is competitively priced and improved to match comparable homes in your neighborhood, your success rate will be high.

Spring and early summer are the peak times for buying and selling. Buyers want to settle into their new neighborhood when the weather is nice and they can be outside to meet neighbors. Children also benefit with an early summer move so they can adjust to new friends and schools.

For sellers, advantages include the opportunity to increase curb appeal and add special touches to landscaping to really show off their property. Homes show much better in the summer months with loads of outdoor natural lighting streaming in through the windows. And sellers want to be somewhere else, established in their new neighborhood.

If the interest rate is the prime motivation for buying or selling, this is the right time. We see the rates hovering around 5% or less for the foreseeable future. Wait or not, there is success out there for both buyers and sellers.

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Just don’t do that. Some over-the-top renovations won’t help sell your home or impress buyers.

June 21st, 2011

Selling a home usually means some updating, possibly remodeling a few areas. Kitchens and bathroom renovations reap payback at closing time, but a word to the wise: don’t over improve. You’ll set yourself up for a yield of diminishing returns.

The smartest way to increase your home’s value is to bring it up to neighborhood standards. Leaping ahead of the Joneses will only stall your sale, especially in a market where buyers are cautious and want to see solid value. Always consider your neighborhood and research comparable properties before you jump into renovation projects.

Here are some don’ts and do’s.

Don’t assume more space means more profit. Depending on your neighborhood, over-the-top improvements can be a real turnoff for buyers, especially if it means that additional maintenance isn’t worth the effort. For instance, kitchens catch a buyer’s eye, but if you’re dead set on a chef’s kitchen, take a step back and think about it. Sprucing up a kitchen is a good move, and a nice makeover can be done with minimum investment.

Don’t turn a bedroom into an office space when you’re ready to sell. Buyers want bedrooms and want to see rooms as bedrooms. If you already have a home office, which most of us do these days, upgrade that space with attractive storage units to reduce clutter, and maybe a new desk that you can take with you to your next home.

Do think long and hard about installing a swimming pool, unless you plan to stay where you are for a long time. Buyers can see a pool as a major headache and safety issue if they have small children. Heating, skimming, repairing, balancing the acidity level and winterizing are a lot of work for buyers moving into a new home. Instead, take some of that money to create a beautiful landscape with perennials–a lot less work.

Don’t install that media room with theater seating. As buyers downsize, that’s one recent improvement that is no longer enticing. A family room is a better value, but so is a clean, waterproof basement for storage and an efficient laundry space.

The way you look at your living space is very personal. If, indeed, you want an Italian wine cellar with imported stonemasons, by all means do that should you plan to stay for a while. But, that wine cellar isn’t going to add bottom line value to your home if you want to sell now.

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