Real Estate Information Archive

Current mortgage rates are currently hovering around 5 percent, which is up from the 3.75 percent being offered a just few months ago.

Here is an example of how a small interest rate differential can affect a mortgage payment.  This example is based on a $200,000 mortgage and does not include taxes and insurance.

    Interest Rate             Payment

       4 %                     $954.83

       4.5%                   $1013.37

       5 %                     $1073.64

The general consensus in the mortgage industry is that interest rates will be continuing to rise, which translates into diminished buying power.

Global investors who buy interest denominated securities are going to go to the highest source of revenue.  How does that affect the home buyer? 

In order for the mortgage companies to keep those investors interested in their securities, they must offer comparable yields.  In order to do that, they raise interest rates on mortgages,  which in turn means less house for the money.

So - if you have buying a house in mind, now is the time to act, before interest rates increase further.

Narrowing Down Your Choices

After a few days of viewing homes that fit your list of needs, you should be close to finding a home you will want to bid on. If you have other homes you would like to see, or if you have changed your mind about what you are looking for, you should tell the agent.

Many times, if a person likes the neighborhood but not the home they were shown, they will want to see other homes for sale in the neighborhood. You should ask to see all available houses in a neighborhood you like, in your price range.

If you are still not finding a home you like, you may need to change the neighborhood. While this can seem disappointing, I will be happy to show you homes in different neighborhoods, cities and towns. Sometimes if you compare homes to one another, you will find redeeming qualities in a home you have already seen. Often you will find another neighborhood is even better than the one you had in mind.

Once you have found a home you love, you will know it almost from the second you walk in. It could be the very first one you see, or the twenty-second.

Again, you will know the right house when you are there. I have seen it many times – people will walk in, walk around some and they just know it. They start talking to each other about where the bed is going, how the table will be set and where the chairs are going to go. You just know it is the right house to make into a home.

If that time comes, you should make an offer right then and there. If the house is that good and it’s the right place for you, someone else might come in at the next showing and think the same way. I have all the forms and paperwork with me, and many times have sat at a kitchen table and written up the offer on the spot.

If another agent is involved, I will need to contact that agent and get an offer to them before another person does. Make an offer as soon as you can, in order to avoid a bidding war or losing your dream house because you wanted to sleep on it. This happens more often than people realize.

Bidding can be long and drawn-out in some cases. If a seller has a price stuck in their head – not a penny less – and a buyer has a price in their head – not a penny more – then chances are good the seller will still own the home and the buyer will have to keep on looking. As often as we try, realtors cannot make a person change a mind that is set, sometimes wrongly.      

I do this every day and understand that you do not. I will be there to guide you along the way during this time. Ask all the questions you have before making an offer. But when you are ready, do not second-guess yourself. I have seen several transactions end $5,000 over the original bid. Now that may seem like a lot of money, and it is, but it’s about a cup of coffee per week. $5,000 at 5% for 30 fixed is $27.00 per month more.

Taking Pictures while Visiting Homes

One of the best ways to remember the homes you have seen is to bring a camera and take pictures. Get permission from the agent first before taking pictures of another person’s home. Do not take pictures of the owner’s stuff, their personal belongings, only take pictures of things like:

• Kitchens
• Baths
• Windows
• Stairways
• Walls
• Dinning rooms
• Fireplaces
• Living rooms
• Studies

Write out notes on each home while you are there. Take a measuring tape to measure rooms and spaces. If you can, sketch out the floor plan of each home, so you will remember it, to make sure your belongings (couches, bedroom furniture, dining room furniture, etc.,) will fit.

Often, after looking at a few houses, you may forget how big the kitchen in home number two was in comparison to home number five. Having pictures and floor plans will give you a better idea of the square footage and layout.

Preparing To See Homes with Your Realtor

Create a wish List

Once you have found me or another realtor you are comfortable with, you will want to make the most of your time when house hunting. Give me a wish list of what you are looking for. That will help narrow the search and save everyone hours of time. Your list should include:

• Price range
• Deposit amount (Your mortgage payments should not be more than 30% of your earnings. A little more, a little less, but to keep from getting in over your heads I like buyers to stay in the old-fashioned mortgage range of 30% or less.)
• Style: Colonial, Cape, Ranch, Contemporary, etc.
• Number of bedrooms
• Number of bathrooms and half baths
• Number of fireplaces
• Size of property – both home and land
• Basement (finished or unfinished...is a walk-out basement important?)
• Porch, patio or balcony?
• Heat: central; hot water base board; steam; hot air; electric; heat pump
• Air conditioning
• Pool or hot tub
• Garage (how many cars, do you do projects so it needs to be extra large?)
• Neighborhood
• Any other amenities you would like

Giving me a list of your preferences will allow me to spend more time researching homes to fit your criteria. You should list these amenities from greatest to least important, because no home is perfect and you may not get everything you want. Let me know that you are flexible on some, but firm on certain items for your new home. More often than you think, you will know the right home as soon as you walk into it.

This blog is the first in a series that I will be posting on how to evaluate Realtors and find one who suits your needs.

Finding a Good Realtor (Like Me)

If you are like a lot of the people I have worked with over the years, chances are you’ve looked around at the different towns, cities and neighborhoods in the area of your choice and seen a few homes for sale, maybe visited an open house or two, and then felt stuck.

So now what do I do?

What is the next step? Approach the homeowner with a potential offer? Visit a realtor for more information and help? What should I do next?

Finding and working with the right realtor when buying a home depends on how you want to work with that person, what your needs are, what you are looking for in a home, and where you want your home to be. You may have to visit several realtors before finding one who will really listen to your wants, needs and requirements.

After all, they will be paid a commission (in most cases the seller pays the commission) once you have found a home, so you should be comfortable working with them during the house-hunting process.

Choosing a Realtor

There are a many ways to find a reliable realtor who can help. For example, you can:

• Ask friends and family for referrals.
• Real estate companies often post the top agents for their offices on their websites. These agent are tops for a reason – they work hard for their clients
• Search online for approved realtors.
• Attend some open houses and meet the realtors personally. It’s a great way to find out if their personality fits yours during the house hunting process. I have helped many people purchase homes whom I have met while hosting an open house.
• Visit a local real estate office. Generally there is an agent in the office who will be available to meet with you on the spot.
• Look for local realtors in your neighborhood by paying attention to For Sale signs. This way you will know who is doing the work in the area.

Asking plenty of questions before looking at houses may seem like a lot of work, but when you visit a realtor for the first time, think of questions that will help you get to know the person who is going to help you find your dream home.

Some questions to ask are:

1. Are you a certified realtor? Do you have any advanced certifications such as ABR, GRI?
2. How long have you been in the real estate business?
3. Which neighborhoods are you most familiar with?
4. How many homes that fit my needs are on the market?
5. What makes you different from other realtors? And why do I want to work with you?

Once you have asked these questions, you should be looking for honest and complete answers – good communication. These are questions the realtor ought to be able to answer from the heart. He or she should not have to give you a standard sales pitch.

Here is a bit of who I am as a realtor:

1. I have tried to go to advance training classes at lease twice a year. Because of that I now carry the advanced credentials of ABR (Accredited Buyer’s Representative), GRI (Graduate Realtor Institute), SFR (Short Sales and Foreclosures Resource), and CRS (Certified Residential Specialist). I am also a Conway Senior Specialist.
2. I have been working as a realtor for six years. Before that I was a self-employed masonry contractor. I have been working around home construction all of my adult life.
3. As far as listing homes is concerned, I prefer to stay within 15 to 20 miles of home so that I can provide prompt and complete service to the listing.
4. As far as helping clients to purchase property is concerned, I will travel to where you want to go.
5. You tell me your true need and I can show you as many homes as you wish.
6. My goal is to give my customers and clients honest and excellent service which is as personalized as possible.
7. [The deleted item seemed not to fit here, but with general info]

If you feel uncomfortable, remember that you are under no obligation to continue with me or any other realtor unless you signed a contract with them. If you find yourself unhappy with the service you are receiving, you can go to their boss and be reassigned a new agent.

You should also pay attention to:

• How well your realtor listens to you
• How well they understand current real estate law
• How many other clients they work with
• How they speak to their co-workers
• How often they communicate with you on the phone or email, and does that suit your needs?

In the end, you will have to be the judge of the real estate agent. If they know what they are talking about, can quickly gather the information you need, and are willing to take the time to listen to what you want, you should be able to work very well with them.

In some cases, you may be asked to sign an agreement stating you will only be working with a specific real estate agency or agent when looking for a home. You are under no obligation to sign this paperwork and should only do so if you feel very comfortable. On the other hand, the agent is working on straight commission, meaning that they only get a paycheck if they get the sale.

Why would a sales person want to spend numerous hours showing and reviewing properties for a person, and then have them purchase from another agent? I have had this happen to me, and can tell you it is very disappointing. Only sign agreements if you feel comfortable, but please be loyal to the person who is working for you.

If you sign an agreement with me and want out, I will let you out as long as you do not purchase one of the homes I showed you from the listing agent there. [This is unclear to me. What listing agent where? Maybe “...from another agent listing that house”?]

During your search for a real estate agent, you will find a variety of agents who will want to work with you. These include:

• Experienced agents
• New agents
• Pushy agents
• Absentee agents
• Hard working agents
• Full time agents
• Part time agents (they have another job for steady income)
• And just darned good agents – these are the ones who will move a mountain to help you

Experienced Agents vs. New Agents

This is an age-old debate that should be addressed. While an experienced agent may have sold more homes and earned more commissions, new agents can be just as helpful and need to get some sales under their belt, which may prompt them to work harder for you.

While you are smart to ask about their experience, you should take into consideration other traits such as ability to listen and their willingness to only show you homes in your price range.

Experienced agents and new agents have been trained in a similar fashion and only have their personalities and working habits to bring to the table.

There are experienced agents who will drag their feet in terms of offering the best possible service because they may be overconfident, or they are not as interested in their business as they once were. Experienced agents may know more about different neighborhoods, but some of them are not as proactive as they once were.

Do not let inexperience deter you from choosing the right agent. Many times new agents will work harder because they want to gain a reputation they can use to build confidence in their future clients.

Pushy Agents

I dislike pushy people and pushy sales people even more, be it someone at the shoe store, the auto dealer or a realtor. In a realtor, I want a partner, not a boss. [Or add something that ties the second sentence into the first, in the paragraph.] If as a customer, I do not know exactly what I want and need and can afford, then I want an agent to take the time to teach me.

Most people learn best by show and tell. The way I try to work is to show a house and then review what we saw at each showing before that. This way we can go over your priority list and see how the house compares with your list. Sometimes it becomes apparent that the priority list needs to be changed to meet budgetary restrictions.

Unfortunately, you will meet real estate agents who will want to sell you more home than you need, want, or can afford. In an effort to earn larger commissions or to sell properties that are more difficult, many agents will try this tactic. This is where you will need to stand firm, and maybe change agents.

You do not want to waste your time looking at houses that are beyond your price range, unless the agent can find a way to lower the price. While looking at possible homes is exciting, this will not last long as you will grow weary of spending all of your available time on the hunt, if you have an agent who keeps showing you houses out of your price range. 

Absentee Agents

Absentee real estate agents are those agents who show you a few homes and then disappear for weeks. These agents may be overworked, may not be able to find a home in your price range or neighborhood, or have higher-priced commissions to find. Perhaps they have a full-time job and are selling real estate on a part-time basis. Whatever the reasons, this is unprofessional behavior and should be rectified immediately – especially if you need to find a home quickly. During your initial meeting, a buyer should ask the agent if they work full time, and how long that has been.

Even agents who are overworked have time to make a quick phone call to you. If you do not hear from your agent in a week, or as often as you feel you should, let them know you want more contact. If they do not change, then find another agent.

I work hard to stay in touch with buyers I work with, but sometimes don’t call as often as some would like. I find it hard to call just to say I’ve not been able find anything yet. If you need to talk to me more often, please either call me or tell me to call you more often. Again, I work with some people who want or need a phone call once a day, while others do not want to talk unless I have something to show them.

Hard-Working Agents

These are the best agents to find when you are buying your first home. If you find an agent like this one, keep them. They will move mountains if needed, to make your home buying seem like magic. These are the agents that will follow every lead, pass your wants and needs to another agent, and try their best to find you a dream home. You should expect to see a handful of homes when working with an agent like this one.

When looking at homes with your real estate agent, you should ask questions about the home, you need to open ALL the doors and drawers, do a homeowner inspection of the whole home. As a realtor unless we live in the neighborhood, the city or the town, we can only tell you what we know about the area, and tell you how to get answers to some of your questions.

I like to stop people who live in an area and ask them to tell the new home buyer all about the location. They are the ones that live there. They know about everyone and everything and love to brag about just how good or bad the area is. Ask all the questions you need in order to make an informed decision. That is my job – to help get your answers, or to tell you where to find them.

Now that you know more about what to look for in a real estate agent, I hope you feel a little more comfortable about working with one. They can be an invaluable source of information when you want to know more about homes, neighborhoods, or the communities you are looking at.

This is a message that everyone needs to here I send the below message to my friend and he saved a boat load of money, so I am resending it here for everyone to see and work on. I did have the right number and as soon as he recived my email he called me back.

Todd I have been trying to call you for the past 3 days, I think the number that I have for you is not working. The reason that I have been trying is that the fact is interest rates have hit a all time low and I trying to make contact with everyone that I know and everyone that I have worked with and everyone that they know to encourage them to look into refinancing their home loan.

I have several names of Mortgage brokers if needed. 300k loan at 6% has payments of $1798 at 5% payments are $1610, 4% the payments are $1432 for 30 years plus taxes and insurance. Now at 15 years at 3.75% for 15 years the payments would be about 2181,

Dear: Home Buyer

 Because of the many changes in the new finance rules, there are several things that can negatively affect your ability to close your loan. Keep these in mind as we proceed. Many banks will check your credit score right before they release funds for the closing if your credit score has gone down they will not fund the loan. You could lose ALL of your deposits. They ALL check your job status a day or two before closing.

 • DO NOT get mad at your boss say something stupid and lose your job, you need your job to get the loan and to pay it after you get it.  

 • DO NOT change jobs without inquiring about the impact this change could have on the approval/ approvability of your mortgage loan. Please call your mortgage person first.

 • DO NOT open or increase any liabilities, including credit cards, signature loans, etc., during the loan process. This could have a major impact on your credit score. It would be very best not to use your credit all while we are going through this time. After you move in to your new there will be plenty of time to spent money.

 • DO NOT make major purchases during or prior to closing, no new car loans, store credit (i.e., new car, furniture, appliances, electronics) because this might impact your qualification ratios. Please call your mortgage person to calculate what your ratios would be with any additional debts.

 • DO NOT obtain and/or deposit sums of money over $500. FNMA/HUD guidelines require documentation as to the source of these funds (i.e., copy of bonus check, copy of tax refund, copy of insurance settlement, gift letter with copy of check and deposit slips, etc.) piles and piles of paper work.

 • DO NOT close/open or transfer any asset accounts without inquiring about the proper documentation required for our loan file (i.e., if you transfer all the funds in your stock account to your savings account, documentation is required).

So what should you do?

 If you get a large check from any source deposit it in ONE account DO NOT split the deposit into several accounts, DO NOT deposit half into one account and take the rest in cash. You need a paper trail.

 • DO keep originals of all pay stubs, bank statements, and other important financial documentation. We are required to update any documents that are over 30 days old prior to the closing of your mortgage loan (this is required even if your loan is approved).

 • DO provide all documentation for the sale of your current home (i.e., sales contract, closing statement, employer relocation/buyout program).

 • DO notify me and your mortgage person if you plan to receive gift funds.

 • DO notify me and your mortgage person of any employment changes (i.e., change of employer; recent raise/promotion; change of pay status, such as salary to commission, etc.).

 When closing time comes, anyone who is going to be listed on title (even if they are not on the loan) must attend the loan closing. You will be required to show identification so bring a copy of your driver’s license with you.

 Any funds required to close must be in the form of a cashier’s check made out to the Bank or title company. You should know the exact amount for the check a few days before closing.

 If there is any doubt in your mind regarding what to do, please call me or your mortgage person. Let my experience work for you. Thanks for placing your trust in me and I look forward to serving you and your friends.

 Sincerely,

Terry Twombly

Agent for Jack Conway

ttwombly@jackconway.com

www.terrytwombly.com

508-212-6511

NAR: Homeownership, stable communities linked

WASHINGTON – Aug. 13, 2010 – A new report from the National Association Of Realtors® (NAR) – Social Benefits of Homeownership and Stable Housing – explores the impact and positive social outcomes that result from homeownership.

According to NAR’s study, homeowners are more active in communities, benefit from improved education opportunities, and report higher levels of self-esteem and happiness compared to renters.

“Homeownership is in investment in your future – home is where we make memories, build our lives and feel comfortable and secure,” says NAR President Vicki Cox Golder. “Owning a home has long-standing government support in this country because homeownership benefits individuals and families, strengthens our communities and is integral to our nation’s economy.”

NAR’s study identifies research from government, industry and academia that looked at the relationship between homeownership and stable communities. Homeowners move far less frequently than renters, and therefore are embedded into the same neighborhood and community for a longer amount of time. This allows for social cohesion, ultimately resulting in social benefits and stronger communities.

“Realtors care as much about keeping families in their homes as they do about helping them find the home of their dreams,” said Golder. “Social benefits do not arise solely from ownership, but also from greater housing stability and social ties associated with less frequent moves among homeowners.”

Several research studies cited in the NAR report found that homeownership has a significant impact on educational achievement. The decision by teenage students to stay in school is higher for those raised by homeowners compared to renters. Access to economic and educational opportunities is also more prevalent in neighborhoods with high rates of homeownership. Furthermore, studies have shown that changing schools frequently due to moving negatively impacts a child’s educational outcome.

Civic participation is another social benefit resulting from homeownership and stable housing. Homeowners are more politically active and more likely to vote in local elections compared to renters. In addition, homeowners have a higher membership in voluntary organizations.

“The research shows that homeowners report higher self-esteem and happiness than renters, resulting in better overall health, both physically and psychologically,” says Golder.

When it comes to property, homeowners have more invested both financially and emotionally. Property crimes affect homeowners directly, but nonviolent property crimes can impact the property values of an entire neighborhood. Therefore, homeowners are more motivated to deter crime by forming and implementing voluntary crime-prevention programs. In addition, it’s easier for homeowners to recognize perpetrators in stable neighborhoods because of extensive social ties. Unstable neighborhoods often display social disorganization, which can lead to higher levels of crime.

Along with protecting their home and neighborhood from crime, homeowners spend more time and money maintaining their home than renters. Neighbors also influence other homeowners to improve their property, resulting in a better overall quality of the community.

“Homeownership certainly contributes to positive social outcomes, but those outcomes are truly a result of stable housing communities,” says Golder. “With strong social ties and a cohesive community, homeowners can enjoy not only the long-term financial benefit of owning a home, but also a more satisfying life – which is what’s really at the heart of the American Dream.”

Should you focus more on getting a low rate or wait for a price reduction on homes?

My feelings are if you need a home, buy one now, the interest rates are at historic lows and prices are down below where they were ten years ago, the bottom must be close. Please review the example below, no one knows for sure what will happen in the future but more than likely there will be a future.  

The Fed's Mortgage Backed Securities purchase program ended. The markets have seen much more volatile price swings. For potential buyers who are waiting to see if home prices come down a little more, that means the wait could well cost you more money in the long run.

Let's look at an example to see why. Say a homebuyer wants to buy a home that costs $300,000. But the buyer wants a better deal on the home, so she delays a transaction until the home is reduced by $10,000. If, in the meantime however, rates were to rise .75% to 6.00% and the buyer financed 90% of the purchase price, the amount of total payments over a 30-year term would be over $35,000 more than paying the $300,000 purchase price and locking in the 5.25% interest rate. In other words, the buyer would save $10,000 only to end up paying $35,000 more.

Now these prices and rates are just for the sake of example. But the point is that home prices are already very affordable...and rates are still at historic lows for now. So in the end, waiting for a home price to reduce may end up costing you much more than you expect if rates rise.

For more info or to get pre-approved, please contact me. I work with several lenders that will work very hard for you and I. I have access to a loan that is insured if you lose your income for a period of time.  Right now is the right time buy now.

 Terry T

  Have you noticed an increase in the number of "for sale" signs around your neighborhood, and for good reason: Studies show that home listings increase this time of year, as homeowners want to get their families settled before the next school year begins. If you are thinking of selling your home in today's tough market, the experts recommend completing a few projects that will help your home look its best and stand out from the crowd.

 These projects don't have to cost you a lot of money or take a lot of time. "There are four easy and inexpensive projects that I recommend every homeowner complete before they stick that 'for sale' sign in their front yard."

Improve curb appeal

Curb appeal is, quite simply, what prospective buyers first see when their car pulls up to your house. According to the National Association of Realtors, half of all buying decisions are based on curb appeal. "Your mother's advice holds true here - nothing is more important than a good first impression, Strong curb appeal will help set a positive tone for the rest of the house."

Walk out to your sidewalk and take a look at the front of your house, checking for anything that needs to be cared for. A good first step is to update your exterior hardware, including house numbers, which often become dirty and dated over time. Today there are several great options on the market that incorporate some color and style, which can be customized to your home.

Another quick project is to replace your mailbox. Choose one with a more modern, sleek design such as the Postmaster Amboy Mailbox in black, which looks great on any house and is easy to install. This updated fixture, although small, can do wonders for the overall curb appeal of your home.

Create a luscious green lawn, lush lawns always receive a lot of attention. Help your lawn reach its full potential by providing it with the proper lime, fertilizer and grass seed. Make sure that your lawn receives between one and one and a half inches of water per week, including rainfall. Watering in the morning 4 to 5 o’clock is the best time to water. You want your lawn dry at night.  

Groom your garden and prune the bushes, nothing compliments a great lawn more than a well-manicured garden. After the cold winter months, gardens and flowerbeds can be left looking unruly. Prospective buyers are searching for outdoor spaces where they can enjoy spending time, so it's important that you tidy up these areas.

An easy way to do this is by spreading new mulch. Also trim and prune the shrubs and trees to create a refined look, A 'jungle theme' makes the home look unkempt.
Finally, give your garden a pop of color by planting inexpensive annuals, such as marigolds and snapdragons.

Now on to the interior spruce up with paint and remove the old carpet, If you know that you have wood under the old carpet, I feel it is much better to remove the old carpet and either leave the wood to be re-finished or have it redone if it needs it.

 Then spend some time on the interior painting, painting is one of the most inexpensive and simple projects that homeowners can do, and, it makes a huge difference!" Choosing neutral paint colors over bold ones won't distract prospective buyers and will help them visualize making the space their own.  

Just some ideas, to sell fastest, when the home goes on the market it wants to be the best home, in the price range that it is in, looks matter.