August 22, 2006 – 10:35 am
Market Conditions
Interest rates will likely go to 7% by the end of the year. Getting a fixed-rate mortgage now would be a good thing.
Most markets in the US are experiencing what is termed a buyer’s market. That means you can be a picky buyer and negotiate prices.
If you use a commissioned agent that represents the seller then they are not likely to want to negotiate the price downward.
Now is a good time to try Flat-Fee MLS. By charging a flat fee to homebuyers and sellers, their interest is in providing service while the price doesn’t matter as much.
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August 15, 2006 – 4:53 pm
Should it be a deal breaker?
Okay, you find a real estate agent and they help you locate the property you want to buy. A condo, a house, whatever.
You plan to finance 80-90% and put the rest down in cash.
Your real estate agent tells you other homes or condos in the same area have sold for the price you are paying so the appraisal will reflect that.
Okay, you see the realtor has it under control and you don’t make the financing and offer contingent on the appraisal being at or above the price you are paying for the property.
Your lender is only going to loan you the 80-90% based on the appraised value of the home. If that turns out to be less than the price you agreed to pay then you have to come up with more money for a down payment and you are now paying more than the home is worth.
You should always include a financing contingency in the contract that states it depends on the appraisal.
If this happens to you, there is very little you can do unless the real estate agent deliberately falsified the value of the home or condo or the Appraiser did not do a thorough job of evaluating it.
You should examine the Appraiser’s complete report even if they appraised it at the value you agreed to pay for the property. Make sure they actually did a physical walk-through and that all of the assets of the property were included in the appraisal.
You have the right to ask them to reappraise the property if you find descrepencies in the complete report.
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August 14, 2006 – 12:12 pm
They want the best: A national survey by Wells Fargo Home Mortgage shows many first-time home buyers are unwilling to compromise on
certain key elements when they shop for a home, and would even consider renting longer if they can’t get exactly what they want.
Among the renters surveyed, four of every 10 are unwilling to buy a home that is smaller than they’d like or one that needs significant improvements. Forty-six percent are unwilling to buy at a distance farther from work than they would like; and 70 percent are unwilling to move to a less-desirable neighborhood than they consider ideal.
Other key findings:
• 97 percent of first-time home buyers would never go back to renting.
• 77 percent believe buying their home is the best investment they ever made.
• Nearly 75 percent believe that the value of their home will go up in 2006.
• 78 percent of renters believe that it is generally true that people cannot obtain mortgages without perfect credit, and 52 percent of renters believe that they personally can’t get a mortgage because of credit issues. But 46 percent of the first-time buyers surveyed didn’t believe their credit was "excellent" or even "very good."
Don’t assume you can’t qualify for a mortgage. If you truly want to buy that new home, go fo it. If you are turned down for a mortgage, then look at ways to improve your credit score and try again.
You have to try if you really want to own your own home. If you want the things you have never had, you have to do things you have never done.
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