Selling Your House Now Is Not A Bad Idea At All

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So many prospective sellers are unsure of the best time of year to sell their home. Sure, there are more buyers lurking in the warmer months but that is not to say that inventory does not move at all during the fall and winter months. In fact, very surprisingly to many, there is only a small difference in the numbers of closed and pending sales that take place in the summer versus winter.


Fewer, But More Serious Buyers

While there are fewer buyers out there seeking their dream home beginning September onwards, there are still buyers who must buy a home. In fact, it turns out those buyers are the ones who are more likely to be serious about their purchase. One of the advantages to buyers who are in the market during off-seasons is that mortgage lenders are less busy than during other times of the year. These are often buyers who want to find their home, make an offer and move in quickly and efficiently.

Not Too Much Difference Between Mid-Year and Year-End

Looking at the sales in our area last year, the 2010 numbers clearly demonstrate how there is not much difference in the cooler months compared to the warmer time of year when looking at homes that come off the market in pending or closed status.

June 2010: Of the reported 14,530 potential units that were offered for sale, 1,481 were removed from the market after going under contract. This translates to 10.1% of the total inventory of homes that came off the market.

September 2010: Considering the same factors, 14,665 units were listed for sale in September, of which 1,339 of them were removed from the market after going under contract. The total percentage of inventory removed during this month was 9.1%.

October 2010: This month the numbers were almost identical to September, with 9% of total inventory coming off the market after going under contract.

November 2010: Again, 9.2% of the inventory was removed from active listing status in November, demonstrating the same sale to pending ratio for several preceding months.

December 2010: What is considered one of the coldest months of the year in many markets and what many would believe is the heart of the “off-season”, the total percentage of inventory in December that changed to pending status was 8.6%.

What Do The Numbers Mean?

Even though the number of sales may differ, the main thing to keep in mind is that the ratio of homes sold or those that go into pending contract status typically remains about the same throughout the year. As you can see in 2010 in our market, as the inventory moved throughout the year, the number of available properties decreased significantly but the percentage of houses going under contract stayed about the same.

With only a 1.4% difference between what most would consider peak season in June versus what many perceive to be the worst time to sell, it is clear that buyers will buy despite the season and sellers should continue to list their homes no matter what season it is.
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Regardless of where a property is sold, there is a moving economy and life must continue. People get new jobs; sadly there are layoffs in some cases, families increase in size and financial situations change. There will be a number of reasons that many people will need to sell or buy a home regardless of what time of year it is. So to answer one of the most frequently asked questions, “when is the best time to sell my house?” – the best time is NOW.

Fannie Mae Partners With HomePath Properties to Provide More Avenues for Home Ownership

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With the ever-increasing number of distressed homeowners and consequently distressed homes on the market for sale, Fannie Mae is doing what it can to relieve the market of some of those properties.  Recently foreclosed properties are now being offered together in partnership with HomePath Properties with the special incentives provided to HomePath buyers – in an effort to free up some of the inventory that bogs the market down these days.  In this article, we share some of the incentives available through HomePath and a few reasons why this is a fantastic program that you don’t want to miss out on if you’re in the market for a new home.

Know the Expression “Pennies on the Dollar”?

That’s right -- foreclosed homes owned by Fannie Mae are sitting there waiting to be grabbed by a savvy buyer who knows the incentives out there right now to buy through this avenue – and they are being sold for pennies on the dollar.  Now, we’re not being unrealistic here nor are we exaggerating – but the truth is that for about 50 cents on the dollar on average, you can be the owner of a new home.

Lower Closing Costs – Plus Seller-Paid Appraisals

HomePath financing allows lower closing costs of just 3%, which adds up significantly and can make an impact on the move-in expenses for many people – especially in light of our current economy.  To add icing on the cake, if you close on your home before October 31, 2011 – HomePath Property homebuyers are receiving 3.5% back toward all closing costs.  That means you will have a half percent bonus in your pocket – just like that.  And the beauty of this arrangement is that your monthly payments will also be reduced.

What’s more, appraisals are not required to be paid by the buyer.  As if it wasn’t already the best time to be on the buying side of the fence – now, you can count on even more money in your pocket.

Monthly Mortgage Insurance – “WAIVED” Goodbye

One of the hardest things to endure is the private mortgage insurance payment that gets rolled into the monthly mortgage payment of most “under 20% down” home purchases.  The Fannie Mae properties that are being sold via HomePath have the unique feature of having NO PMI payments tacked on each month.  The savings are incredible – as much as $200 per month on an average property.

Renovation Loans Available for Some HomePath Homes

There has been a lot of buzz about the 203K loan lately, especially with higher inventory levels and less demand.  The homes that are on the market are not always necessarily the ones that buyers are interested in.  With the 203K home renovation loan, buyers can roll the cost of changes they want to make to the house right into their mortgage.

There are a few guidelines to keep in mind with the 203K loan; the cost of repairs/renovations must be at $5,000, investment properties are eligible but they require a 20% down payment and the dwelling type is limited to single-family homes.  Further, not all HomePath Properties are eligible for the renovation loan but it is fairly easy to find out by visiting the website www.homepath.com and checking to see if the property is tagged by Fannie Mae as eligible for renovation loans. The only other guideline is that all work must be completed by a qualified General Contractor and an inspection will be done pre and post renovations.
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Keep in mind that the home being purchased must be used as your primary residence in order to qualify.  Also, properties that are financed through the Fannie Mae HomePath properties incentive – have to be processed by a Realtor.  The good news is that there are lots of Realtors out there.  The bad news is that you will need to spend some time looking for one who knows what they are doing with HomePath property financing. So, in your home buying endeavors, if you find a HomePath house you like, go for it!  With all these great incentives, it’s definitely going to be worth it.

Top, Most Frequently Asked Questions About Refinancing Your Home Today

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Many people tend to oversee the fact that when interest rates are low, they have a significant impact on more than just people buying a home.  Low interest rates, in fact, have a HUGE impact on the overall cost on a mortgage so when people refinance their existing properties under lower rates it translates to thousands and thousands of dollars in savings.  Not only that, if these same homeowners who opt to have their homes refinanced also reduce the term on their mortgage, the savings are unprecedented.

To help explain some of the most widely asked aspects of the refinancing process, here is a list of questions and answers that shed light on the issues that will help you in determining whether refinancing is right for you.

WHAT ARE SOME REASONS TO HAVE YOUR MORTGAGE REFINANCED?

The current real estate market today is experiencing all-time low, historic interest rates on mortgages.  For many professionals in the industry, this is the first time they have witnessed rates at this level.  Reasons for obtaining refinancing on a property include reducing interest rates, reducing the overall term on the mortgage i.e. going from a 30-year loan term to a 20-year term and also to be able to leverage equity that is held up in an existing property.

HOW DOES A TERM REDUCTION LOOK ON PAPER?

When the number of years of a mortgage loan is reduced, also called a term reduction, payments may or may not remain the same but the time within which the loan must be paid off is significantly less.  For example, a previous mortgage at 6% for a 30-year term can be refinanced at 3.5% payable in 15 years, which adds up to a savings of hundreds of thousands of dollars and reduces many years off the loan repayment schedule.

WHAT FACTORS GO INTO ELIGIBILITY FOR NO CLOSING COSTS REFINANCING?

Many mortgage companies are now crediting closing costs.  Though this is a facility that is scrutinized based on an applicant’s eligibility, the savings add up. Eligibility is determined based on specific criteria including the applicant’s credit report and credit score, plus whether or not there is a second mortgage.  Credit score expectations are within the low to mid 700 range, with the higher score translating to better concessions.

HOW DOES A LOAN OFFICER DECIDE ON A REFINANCE APPLICATION?

Each borrower’s situation is different.  Mortgage lenders consider what the loan’s value is, the credit scores, home value and how the market is performing such as in a depreciating market.

WHAT IS PMI AND CAN I AVOID IT IN A REFINANCE?
Private Mortgage Insurance, or PMI, is required by lenders of most homeowners that borrow at least 80% of the home’s value.  It works as a protective measure in case of default. In cases where the current mortgage is owned by Fannie Mae or Freddie Mac, there is a provision for appraisal relief that can result in exemption from PMI.

WHAT IS THE TYPICAL TIME FRAME FOR A REFINANCE PROCESS?

Most applications take about 4-6 weeks if it is a straightforward case. If there is a second mortgage it involves another bank and entails coordination and additional time for processing.

CAN I USE REFINANCING FOR LEVERAGE IN THE MARKET?

Refinancing would unlock any equity in your home, allowing you the leverage to use those funds in a new purchase.  Not only will it boost the sale process on a new home but it could also eliminate the need for PMI if you put at least 20% down.

WHAT DOCUMENTS ARE REQUIRED FOR THE INITIAL CONSULTATION?

In order to initiate the application process, people applying for a refinance should produce the last two paycheck stubs, W2 statements from the previous two years and the previous two months’ bank statements.
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Regardless of if you are selling, refinance should be considered to be able to reduce monthly payments on a home.  This is also a good time for investors to cash in on the opportunity. For a customized assessment, it is advisable to consult with your Realtor.

Reasons Why Properties Under New Construction Can Benefit from Home Inspections

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There is a common misconception that home inspections are meant only for those properties that are being resold – not those that are being built from scratch. Contrary to this popular belief, industry professionals and consumers alike benefit significantly from inspections done to the property prior to it being completed. Here are some key reason that having a home inspection done while your property is under construction with a builder, is a good idea:

It’s Not Just The Financial Cost That Matters; Time, Energy and Resources Can Be Saved

Even though a builder will provide a warranty on everything in the new home and even though things are brand new, there is still a margin of error. And if something is caught too late in the game, it can end up in a long, drawn out repair process that could have otherwise been avoided had an inspector caught the error in advance. Since home inspectors are so meticulous, regardless of what stage you have the inspection performed, you always stand to benefit.

The primary advantage you have to gain from conducting an inspection during the building stage is that below the surface items are visible, which are otherwise listed as “unable to review” on many standard inspection reports. This means you will gain some valuable insight as to the quality of wiring, plumbing, ductwork and other concealed aspects of a home, before things are “buttoned up”.

It’s Never Too Late for Quality Control and Quality Assurance

Though it is normal to expect perfection in a brand new, newly constructed home, there is always room for mistakes. Having a qualified professional spot-checking the entire functionality and structure of your building is a great way to assist your builder, in a way, who at any given time employs a large staff to work on many areas of your home.

Builders who stand by their product welcome the process of a home inspection brought on by the prospective homeowner, as it is an added measure of quality control – something that you can never get enough of in quality home construction.

Benchmarked Level of Workmanship and Excellence Is Established

Once a thorough walk-through has been done, any potential or imminent issues have been addressed and the home is presented to the buyer at closing, a revisit by the same inspector will ensure that all the finishing touches have been done correctly and any concerns that had been apparent before have been resolved. Again even though the builder warrants all their workmanship and the final product, it is reassuring to know that all systems are in top condition from within. The last thing a new homeowner would want to do is to engage in further construction, whether for repairs to correct an issue that had not been properly resolved. As the homeowner, you would expect and hope your place to be completely move-in ready at the time of closing.
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The bottom line is this: You can never be too proactive, careful or involved when it comes to the building of your new home. Even though you may have a reliable builder, there is always room for human error. So, instead of wasting precious time that you could be using to enjoy your new home on repairs – it’s better to be safe than sorry and get that inspection done ahead of time.

Exploring the Main Differences That Makes a Short Sale a Better Choice Than a Foreclosure?

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Just a couple years ago, most people usually thought they had to give up their home in a foreclosure when they faced a financial stonewall.  However, since then the phenomenon of short sales has been on the rise, leaving homeowners a bigger, better and brighter option for the present and future.  In this article, we explore the comparative differences between the two so you can gain an edge when deciding which is better for you.

Purchasing Power

After walking away from your mortgage through a foreclosure, you can expect to feel the negative impact of it for five years, in terms of being able to purchase another home.  Even then, like a bankruptcy, a foreclosure is something you will perpetually have to report no matter how long it has been since the home went into foreclosure.

Though these days you see a lot of talk about the financial and credit impact foreclosures have on homeowners, the unseen part of it is something to be dealt with.  Going through this process can leave a lasting emotional hole in people who otherwise were law-abiding citizens, going about their normal lives when all of a sudden they are faced with severe financial hardship and must resort to extreme measures.  That, or if the value of their home has dropped well below the amount they paid for it and they see very little hope for the future.

Short sales are much simpler.  They will affect your purchasing power for a mere two years, often just the amount of time it takes to get back on one’s financial feet.  Not only that, there is no requirement to report a short sale transaction.

Credit Outlook

There are two main areas that are of concern when it comes to your credit – your credit score and your credit history.  In case of a foreclosure, credit scores drop a whopping 200 to 300 points.  This can have a significantly negative impact on your ability to purchase big-ticket items or secure loans in the future.   Not to mention it takes years to rebuild a credit score that has dropped that low.   In terms of credit history, a foreclosure remains visible on your credit report for anywhere from ten years or more, rendering each future potential lending transaction either useless or very hard-pressed at getting approved.  The overall impact you will see on your credit will be for about three years.

Short sales are far easier on your credit outlook, in that the point drop is only about 50 on average and the transaction itself will impact your credit profile for as relatively little as 12 to 15 months.  The one thing to keep in mind is that if you have defaulted on any payments or if you already have a weak credit profile, the post-short sale point drop on your credit report can be more than just 50.  Also, there is no formal reporting or declaration of a short sale on your credit report like a foreclosure although the transaction will show up as either settled or not paid in full.

Amount Still Owed

Usually there is a gap in the amount owed after owners walk away from a property and the bank assumes responsibility.  In case of a foreclosure, given the amount of processing time and resultant vulnerability and exposure of the property, the value can and often does drop greatly after vandalism and from sitting there unused.  The Deficiency Amount (also called Judgment Amount) is the difference that remains after the bank calculates what was owed on the property at the time of foreclosure and when they sold the home. Because of this vandalism and vulnerability, the amount of value drop is far more than with a short sale, when the homeowners are still residing in the property during processing.  The bank has the legal right to pursue homeowners for the amount difference.

Short sales differ in that not only is the deficiency amount much less but also, your Realtor can negotiate a waiver of that amount so you don’t have to pay for it.