What are buyers willing to do for the House they want?

The Housing Market is picking up, however the inventory is still low!
If you have been thinking of selling your house this is the perfect time. 
You may just have the upper hand in the negotiation process!

Here is a look at what some buyers are willing to do when they find their perfect home

• 25% of buyers are willing to pay 1-5% OVER asking price
• 9% of buyers are willing to pay 6-10% OVER asking price
• 4% of buyers are willing to pay 10+% OVER asking price

Other things buyers are willing to do:

• 25% will pay the sellers closing costs
• 17% write a personal letter to the seller
• 8% are willing to remove all contingencies
• 12% are willing to ask family & friends to borrow money so they can have 20% down payment
• 5% are willing to ask family & friends to borrow money so they can offer a full cash payment

New FHA Program Seeks to Give Borrowers Back their Buying Power

It’s no surprise that over the last several years a lot of people have experienced financial problems due to the economic downturn. Now that consumer confidence and employment opportunities have returned (respectively), traditional buyers are looking for ways to get back in the home buying game. 

 Now there is “The Back to Work Extenuating Circumstances Program,” and is designed to allow people who experienced a “Negative Credit Event” like a short sale, foreclosure or bankruptcy during the housing crisis to purchase a home.  Typically these people would have experienced an extended delay of anywhere between two and seven years before they could purchase a home. Through this program, they have an opportunity to get back in within as little as 12 months. The program is going to remain in effect for any applications that have a case number through September of 2016.

In order to be eligible for this program, applicants are going to need to prove four things.

• First, they need to prove that they’re income declined by 20 percent or more for a six month period and that those circumstances were the result of a negative credit event.
• Second, they’ll need to be able to provide documentation if the negative credit event qualifies under the “Job lost beyond applicant’s control” category. This might include publicly available information on a reduction in workforce or that a company closed. Applicants can also look to see if they had unemployment compensation.
• Next, they have to prove that, over the course of the last twelve months, they haven’t had any credit hiccups like a late installment or any new collections or judgments.
• They also have to have a clean credit record for the last 12 months. So, they’ll need to show that they’ve had a positive rental history or that if they’re living with their parents they haven’t had any other credit issues.
• The last criteria is that applicants will have to go through Housing Counseling with an approved counselor no later than six months from the application date and no sooner than 30 days from the application date.
  
  
  Another bonus is that this is an FHA program. So not only does somebody have the ability to get back in after a 12 month delay, they have the ability to do so with a 3.5 percent down payment if they still qualify for that loan type.
  
  
  

  “You may not have thought that you could purchase a home today. But I’m here to tell you that many of you can. Call me for information on the new ‘Back to Work Program’ from HUD so we can try to put you in a position to buy.”

5 Reasons to Hire a Real Estate Professional

The real estate market is a place where most people will make their largest investment ever. It is a place where fortunes can be, and often are, made.  It is not a place, however, for you to
“wing it”.

 

While the myriad TV shows about real estate make the process look so simple – it’s not really that simple… they make it seem like all you need to do is slap a for sale by owner sign in the yard, have one open house with fresh flowers and fresh baked cookies and bam! SOLD! in one day.  On average in Massachusetts it takes roughly 100 days to sell your home (That is just an estimate, some may take less and some longer).

You need a professional, full time, well educated, ethical and trustworthy REALTOR to represent you whether buying or selling real estate.

* There are about 180 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by  full service real estate brokerages in return for their sales commission. (Based on a report prepared by the Orlando Regional REALTORS Association).  So this means that if you choose to go it on your own, you are going to have to do all these things yourself… or they don’t get done… which probably means your transaction doesn’t end in a successful purchase/sale.

* While there will always be that one guy (or gal) who thinks he (she) is the all-time greatest negotiator, the vast majority of folks do not like confrontational interactions.  A negotiation for the purchase/sale of an asset as large as a piece of real estate can be a very confrontational interaction. The role of the REALTOR is to act as a buffer between the two parties who are in the midst of a very emotional and high-level financial transaction, both wanting to get the best they can get often at the detriment of the other party. A real estate professional is experienced in all aspects of the negotiation and is bound legally to do only what is in the best interest of his/her client. 

*  Perhaps the single most important aspect of the transaction is the value of the piece of property.
If you are a seller you want to know how much you can expect to get for the sales price and how much of that you will walk away with in your pocket. You want to advertise the property for sale at the right price so you sell for as much as possible but you don’t want to price it so high that no buyers make you an offer (and YES if you price it too high MOST buyers will not want to offend you by making a low offer…thus you don’t get any offers).
If you are the buyer, you want to know how much to offer. Now multiple offer situations are happening more frequently and if a buyer offers too low, they can either be rejected completely by the seller or they can cause the negotiation to take too long thus allowing time for a competing bid to come in… allowing the seller to be in the driver’s seat.

*  Any good professional, whether a real estate professional, doctor, lawyer, CPA, etc., will have the heart of a teacher. Real estate brokerage is a service business. The professional REALTOR is there to educate you about the conditions impacting today’s real estate market.  It is as easy as picking up the newspaper or searching the Internet for real estate news to see conflicting headline after conflicting headline. “Prices are up 20%”, “Among worst markets in nation”, “Best year since the crash”…well which is it? All real estate is local and your real estate professional will know the local market conditions and will lead you through the process, like any good teacher would, making sure you understand all that is going on around you.

A real estate professional is a crucial member of your team when buying or selling real estate.

You could be buying your first home or your tenth home, an investment property or a vacation home, commercial or residential…whichever it is you are best served in the care of a full time, well educated, ethical, trustworthy real estate professional.

Why it's a Great Idea to Buy or Sell before the end of 2013!!

The Fed's just announced last week that they will not be winding down their bond buying program right now.  What does that mean for you?

The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The assumption that there would be a reduction in bond purchases has caused 30 year mortgage rates to spike upward over the last few months.

       

"The Fed could have caused rates to shoot up this week if it had announced the tapering of its bond-purchasing program.   For now, borrowers have dodged another spike in rates. The Fed's announcement might even cause rates to drop in coming days, says Paul Edelstein, director of financial economics at IHS Global Insight.
‘Mortgage rates should fall back -- not massively, but to some extent,’ he says.
That doesn't mean homebuyers and homeowners should wait for lower rates, mortgage professionals say.
Eventually, once the Fed lets the mortgage market and the economy start walking on their own, rates will probably head back to the 5 percent or 6 percent range, says Scott Schang, manager for Broadview Mortgage Katella in Orange, Calif." (Bankrate.com)

Federal Reserve policy makers decided this week that the economy isn't in the right place for them to start winding down their bond-buying program.  By the time they meet in December, it might be.

Don't wait until the Fed's make the announcement that they will wind down their bond-buying program, by then it will be too late!!


Another Great Reason to Sell now, especially if you are upside down in your mortgage!

On January 1, 2013, Congress passed an extension of the Mortgage Debt Relief Act.
This was set to expire on December 31, 2012, however their extension could be very helpful to you.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.  It's a good opportunity to walk away from a home you can no longer afford.  There are many reasons for this.  If you want to know if you qualify just contact your local realtor for more information.

So Many Great Reasons to Buy a Home!

Here are just a few of the reasons why American Family's are still buying homes!

There are many opinions voiced by real estate gurus as to why the dream of home ownership is so important to most Americans. However, study after study reveals the same five reasons families decide to buy a home. They…

 

1. Want a good place to raise children
2. Want a place where their family feels safe
3. Want more living space
4. Want control of that living space
5. Realize that owning makes better financial sense than does renting

 

If you are considering purchasing a home, look at the five reasons mentioned above. If any of them apply to you and your family, perhaps it is time for you to take the plunge. With both prices and interest rates rising, waiting will only increase your monthly cost.

How has the cost of buying a house changed in the last few years?

The cost of a home is determined mainly by two components: price and mortgage rate.
How has the price of a home purchase changed over the last twelve months?  How might it change over the next twelve months?

LAST YEAR

The median priced home in the country was selling for $187,800. The 30-year fixed mortgage rate was at 3.5%. Here is what it would cost to buy a home last year:

TODAY

The median priced home in the country is selling for $213,500. The 30-year fixed mortgage rate is at 4.5%. Here is what it would cost a purchaser to buy a home today:



The monthly cost increased by: $190.78!

 

Next Year's Projections: 

Projecting into the future in real estate can be rather tricky. Future pricing was based on a survey taken by 100 housing experts (Home Price Expectation Survey) who called for an approximate appreciation rate of 5% over the next twelve months. The interest rate is based on the projections from the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae.
Here is what these experts project will be the approximate cost of a home a year from now:



The monthly cost will increase by about: $97.32!

Bottom Line

From a financial perspective, why wait if you are thinking about buying?

How Housing is helping to Rebuild the Economy

Housing drives the economy in three ways:

Demand for Housing Will Drive Employment

Increased demand for housing will help stimulate new single-family and multifamily construction and boost home sales. We expect starts to hover just below one million over the second half of the year. This also helps other industries such as appliances, services, and furnishings.


Rising Prices = Increased Family Wealth = Increased Spending  

With housing being the biggest asset of most American households, rising house prices directly affect the balance sheet of homeowners. Home equity is the largest component of net wealth for many families. As wealth rises, households generally increase their consumption spending. They may even tap into their equity through a home-equity loan, using the proceeds for either consumption or investment spending. Some evidence that home equity lending has picked up was found in Freddie Mac’s Refinance Report for the second quarter, which saw $9.5 billion in home-equity cashed-out as part of a refinance, up from a year ago.   

Small Business Development is Funded through Home Equity 

Rising house prices will help the economic recovery by spurring small business formation, as a business owner’s home often serves as collateral for a start-up. 


As you can see from the graph, Massachusetts comes in fourth in the country for strong economic growth directly related to home sales. 
 



*Housing’s contribution to the economy, while muted in recent years, remains strong. What’s more, housing’s role in the economy will only expand as modest price growth and stronger sales volume boost agent incomes, new construction puts more workers back to work with expanding incomes, and stronger sales and rising prices result in robust follow-on spending.