Why You Need A Professional Real Estate Agent When Buying

Why You Should Hire a Real Estate Professional When Buying A Home! | Keeping Current Matters

 

Many people wonder whether they should hire a real estate professional to assist them in buying their dream home or if they should first try to go it on their own. In today’s market: you need an experienced professional!

You Need an Expert Guide if You Are Traveling a Dangerous Path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a home that is priced appropriately and ready for you to move in to can be tricky. An agent listens to your wants and needs, and can sift through the homes that do not fit within the parameters of your “dream home.” A great agent will also have relationships with mortgage professionals and other experts that you will need in securing your dream home.

You Need a Skilled Negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes. Realize that when an agent is negotiating their commission with you, they are negotiating their own salary; the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

Famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

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Qualifying for a Mortgage?

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The widespread myth that perfect credit and large down payments are necessary to buy a home are holding many potential home buyers on the sidelines. According to Ellie Mae’s latest Origination Report, the average FICO score for all closed loans in May was 724, far lower than the 750 or 800 that many buyers believe to be true. Below is a graph of the distribution of FICO scores of approved loans in May (the latest available data):
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Looking at the chart above, it becomes obvious that not only do you not need a 750+ credit score, but 54.9% of approved loans actually had a score between 600 and 749. More and more experts are speaking up about the fact that if potential buyers realized they could be approved for a mortgage with a credit score at, or above, 600, the distribution in the chart above would shift further to the left. Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage:
“The high median credit score is due to many millennials believing they won’t qualify with the score they have – and are therefore waiting to apply for a mortgage until they have the score they think they need.” (emphasis added)
CoreLogic’s latest MarketPulse Report agrees that the median FICO score does not always tell the whole story:
“The observed decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity.”
It’s not just millennials who believe high credit scores and large down payments are needed. Many current homeowners are delaying moving on to a home that better fits their current needs due to a belief that they would not qualify for a mortgage today.

So what does this all mean?

Moe put it this way:
“Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO Score and a 20% down payment to buy.”

Bottom Line

If you are one of the many Americans who has always thought homeownership was out of their reach, meet with a local real estate professional who can help you start the process of being pre-qualified to see if you are able to buy now!

Hudson Valley Home Sales Soar to Five-Year High

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WHITE PLAINS—Prospective homebuyers who were out in force during the first several months of 2016 came to the closing table during the second quarter to post a five-year high of transactions.
Realtors in the four-county area comprising the Hudson Gateway Multiple Listing Service, a subsidiary of the Hudson Gateway Association of Realtors, reported 4,526 closings of single-family houses, condominiums, cooperatives and 2-4 family houses, an increase of 23% over the 3,669 closings reported in the second quarter of last year. The powerful second quarter results continued the strong recovery in this region that commenced in 2011.
The increases were largely concentrated in the single-family house sectors of the four counties. Overall, Putnam County had the largest increase in sales—32%—followed closely by Orange County at 30%. There were no decreases by county or by property type but for a few statistical artifacts in low-volume cooperative and multifamily sectors in Orange County.
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For the past two or three years member Realtors have reported a gradual tightening of the availability of properties for sale in the region, reflecting that high sales volumes have been outpacing new listings. Up to now, this has not been too much of a problem; the main consequence being to slow the decision-making process of prospective purchasers as they take more time to find suitable properties. That may be changing, however, as the second quarter closed with significant year-over-year double-digit decreases in inventory.
At the close of the second quarter of 2015 there were 12,400 for-sale properties recorded with the multiple listing service in its four-county service area and among the four property types. At June 30, 2016 there were 9,972 properties, a decrease of 20%. On a percentage basis, Putnam County inventory dropped the most—22%. On a volume basis, Westchester being the largest county, end-of-quarter inventory fell by 945 properties or 16% from last year at this date.
That sort of imbalance may have consequences: either price increases and/or diminished sales volumes. Putnam, Rockland and Orange counties all posted second quarter price increases for the median sale price of single-family houses. Putnam County posted the largest percentage increase—8.5%—from $289,500 last year to $314,000 this year. Orange County followed at 6.0% and Rockland County at 4.9%.
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Westchester on the other hand posted a 1.6% decrease in the median sale price of a single-family house, from $660,500 to $650,000. Its condominium median, $356,438, also was down by 1.5%. The $155,000 median price of cooperatives on the other hand was an increase of 6.9% from last year. While looking back over the past few years indicates a lot of seasonality in prices, it also shows that since 2013 the seasonal bumps themselves are trending flat.
Analysis
Each county is different as to its size, dominant property type, and price range, so it will take a few more months to discern the likely path of the region as a whole. Certainly the foundation forces affecting the real estate market are favorable for all. Mortgage interest rates are as low as they have ever been, and in this region at least, employment and job security are supportive of prospective purchasers. As always there are the wild cards that can affect real estate markets everywhere, current examples including “Brexit,” Puerto Rico insolvency, Federal Reserve rates, and not the least consequential, the upcoming elections. But, so far we are having an excellent run in our market.
Click here to view the full article with charts.
Reference article here.

If You’re Buying a Home You Must Read This – Cost vs Price

Saving to Buy a Home? Do You Know the Difference Between Cost & Price? | Keeping Current Matters

As a seller, you will be most concerned with the ‘short term price’ – where home values are headed over the next six months. As a buyer, you must be concerned not with price but instead with the ‘long term cost’ of the home. Many economists have pointed to Brexit (Britain’s exit from the European Union) as a reason that interest rates will remain low for the next few months. But Trulia’s Chief Economist Ralph McLaughlin warns that this will not always be the case in a recent post:

“While the departure of the UK from the European Union has driven down the 10-year bond, and thus mortgage rates, we expect them to rebound later in the year as uncertainty over the economic consequences of the departure lifts.”

The Mortgage Bankers Association (MBA), the National Association of Realtors (NAR) and Freddie Mac all project that mortgage interest rates will increase by close to a full percentage point over the next twelve months. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 5.3% over the next 12 months.

What Does This Mean as a Buyer?

Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.3% predicted by CoreLogic over the next twelve months:
Saving to Buy a Home? Do You Know the Difference Between Cost & Price? | Keeping Current Matters

 

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Home Sales At It’s Highest!

Sales at Highest Pace in 9 Years [INFOGRAPHIC] | Keeping Current Matters

Some Highlights:

  • Sales of existing homes reached the highest annual pace in over 9 years at 5.29 million.
  • Inventory remains below the 6-month norm and prices are still on the rise.
  • Interest rates are at a historic low of 3.48%.

 

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Homeowners Equity Position Update!

Do Homeowners Realize Their Equity Position Has Changed? | Keeping Current Matters

 

Yesterday, we reported that according to CoreLogic’s latest Equity Report, nearly 268,000 homeowners regained equity and are no longer underwater on their mortgage in the first quarter. Homes with negative equity have decreased by 21.5% year-over-year. A study by Fannie Mae suggests that many homeowners are not aware of how their equity position has changed as their home has increased in value. For example, their study showed that 23% of Americans still believe their home is in a negative equity position when, in actuality, CoreLogic’s report shows that only 8% of homes are in that position. The study also revealed that only 37% of Americans believe that they have “significant equity” (greater than 20%), when in actuality, 74% do! Do Homeowners Realize Their Equity Position Has Changed? | Keeping Current Matters

This means that 37% of Americans with a mortgage fail to realize the opportune situation they are in. With a sizable equity position, many homeowners could easily move into a housing situation that better meets their current needs (moving to a larger home or downsizing). Fannie Mae spoke out on this issue in their report:

“Homeowners who underestimate their homes’ values not only underestimate their home equity, they also likely underestimate: 1) how large a down payment they could make with their home equity, 2) their chances of qualifying for mortgages, and, therefore, 3) their opportunities for selling their current homes and for buying different homes.”

CoreLogic’s report also revealed that if homes were to appreciate by an additional 5%, over 800,000 US households would regain positive equity.

Bottom Line

If you are one of the many homeowners who is unsure of your current equity situation and would like to know your options, contact a local real estate professional who can help.

 

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You Don’t Need 20% Down to Buy a Home Now

One More Time... You Do Not Need 20% Down To Buy NOW

 

A survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less. Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

2. FICO Scores

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower. The average conventional loan closed in March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The chart below shows the distribution of FICO Scores for loans approved in March. FICO Score Distribution | Keeping Current Matters

Bottom Line

If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, sit down with a professional who can help you understand your true options.

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A Rebound in 2015 Home Sales [INFOGRAPHIC]

Investment Home Sales Rebound in 2015 | Keeping Current Matters

Some Highlights:

  • 2015 marks the first year-over-year increase in investment home sales since 2011.
  • 62% of all investment homes purchased were single family homes.
  • The South saw the highest percentage of investment home sales (39%) with the West coming in second (28%).

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Home Prices Soaring! But you need to know this…

Home Prices Are Up...but there is a Challenge | Keeping Current Matters

 

Home values continue to climb and are projected to increase by about 5% over the next twelve months. That is great news for anyone who owns a home. However, it could present a challenge for a family trying to sell their house. If prices are surging, it is difficult for appraisers to find adequate, comparable sales (similar houses in the neighborhood that closed recently) to defend the sales price when performing the appraisal for the bank. The National Association of Realtors (NAR) recently released information revealing just how prominent the challenge is in today’s market. Home Prices Are Up...but there is a Challenge | Keeping Current Matters

And the challenge is deepening…

Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.
Home Prices Are Up...but there is a Challenge | Keeping Current Matters
As we can see the difference has increased each of the last two months.

Bottom Line

Every house on the market has to be sold twice; once to a prospective buyer and then to the bank (through the bank’s appraisal). With escalating prices, the second sale might be even more difficult than the first. If you are planning on entering the housing market this year, meet with an experienced professional who can guide you through this, and any other obstacle that may arise.

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