Archive for Buyers

Home Prices Have Already Hit Bottom

An interesting item in DSNews: Economists Say Home Prices Have Already Hit Bottom

I’m glad that a panel of economists could read the writing on the wall:

 “When it comes to the distressed side of the business, it’s become clear that the nation’s high level of unemployment is now one of the primary triggers of default among struggling homeowners. Getting more people back to work is key to a recovery in housing and getting a handle on still-rising delinquency numbers.”  

Home prices in some markets have hit the floor, some may be rebounding and some may still experience a dip, it has a lot to do with what the local (key word here is “local”) economy is doing including housing inventories, the job market, business growth, and potentials for lender owned properties to come into the market (affecting inventory).

Locally, there are vast differences between markets that are virtually contiguous. For example, Albany and Corvallis have vastly different economic profiles. Philomath is a community adjacent to Corvallis; it’s small and often gets overlooked in “searches” (Realtor.com, Zillow, Trulia, and other real estate search sites.) One does not “compare’ properties in these differing markets against each other when attempting to establish a market value.

Job availability and types of jobs, growth rates, volume of new construction during the “boom” (which added to inventory), profile of homes built, price appreciation during the “boom”, supply and demand (including supply and demand for rental properties), homeowner and home buyer demographics all play into the availability, pricing and negotiability of prices. 

Further, “The group of economists is projecting gains in home prices of 1.2 percent over the course of 2011”, I personally find it inappropriate to make sweeping comments about “home prices”.  There is no “national real estate market” it’s all local. Saying there’s a “national average home price” or a “national median home price” is a little like saying there’s “a national average temperature” or “a national median temperature”.  Those kinds of statistics are a method of measuring change, but one should not take the figures and attempt to apply them to any specific market. 

Consumers, either Buyers or Sellers, looking to enter any market are best served to research that market, taking into consideration the local economy and local housing market prior to drawing conclusions. Investigate communities near-by. Good values can be found in surrounding communities. Don’t assume that the market where you are going is similar to the one from which you are moving. Let’s all just know that the key to any recovery is the strength of the local job market and get on with the business of living.

Dava’s Corvallis House Adventure: Three Incidents during the Move (that I’d rather not have happened)

Three little things during the move–that I’d rather not have happened and how I might have prevented them.

  1. My husband hit head on the light fixture that used to be over the table.  Table had been moved, but stuff was still being packed in that area.  This was not the first time for this bit of glass.  I worried about it a lot and generally had it protected (faked a table with boxes under it, but they got relocated and …)  I think for future if I have a light fixture like that, I’ll simply remove the glass to a safe place.  
  2. Sudden loss of water at the new house. Ohhhh, freak out! I’ve not lived with a well before, so of course, all the worst case scenarios leaped to mind before we discovered that the cable guy had unplugged the pump.  Maybe there should be a sign that says “don’t unplug this” near the well pump.
  3. Limited participation on my part.  I was busy, busy, busy with work. So a lot of the actual moving day stuff was handled without my assistance.  Perhaps this is a good thing, as I tend to the bossy side of life. Also, it was much less stressful for me, but still, stressful.  The good thing is, the work I did was very productive.

All in all it wasn’t a bad move. Everything made it here it good condition.  It will be a while before we find everything (especially since we’re starting a remodel as soon as we move in…).    The pre-planning and pre-packing was well worth the effort.

Quick Real Estate News

The Oregon Association of Realtors Reports the Following as of Today (07-01-2010):

Congress Extends Closing Deadline for Homebuyer Tax Credit 
After a close encounter with the deadline, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline last night. The extension applies only to transactions that have approved contracts in place as of April 30, 2010 and have not yet closed. The legislation should create a seamless extension and the new closing deadline for eligible transactions is now September 30, 2010. There will be no gap between June 30, 2010 and the date the President signs the bill into law.

It’s important to note that this does not extend in any way the time frame for buyer’s to make a contract or get into one. It helps the approximately 180,000 individuals that have already entered into binding agreements as of April 30th and have not been able to finalize their transactions–this is espeically true for those that are involved in Short Sale transactions or are bogged down in the lending process.

National Flood Insurance Extended

Last night, the Senate also passed the National Flood Insurance Program Extension Act of 2010, which extends flood insurance until September 30, 2010, and will allow transactions to move forward. The bill is retroactive and covers the lapse period from June 1, 2010, to the date the extension is enacted.

Hopefully, before September 30th, they’ll come up with a more permanent solution. The lack of flood insurance creates instablility in the market and is potentially damaging to many homeowners.

Lending News!

Lending News!

On June 1st, Fannie Mae instituted a new lending rule that is affecting all Conventional loans that could make the lending process take a little longer.

Fannie Mae Loan Quality Initiative:

For ALL new Conventional loan applications taken ON or AFTER June 1st 2010, the following will be required:

  • Lenders will be required to pull an additional credit report prior to funding (closing) the loan. The purpose of this report is to specifically look for any new credit inquiries, new debt accounts, or increase in any existing debt accounts.
  • If there are any new inquiries since the original credit report date, the buyer/borrower will have to submit a written explanation for those inquiries and whether any new debt was opened. The lender will have to also confirm whether any new debt was opened with any vendor for which there was a new inquiry.
  • If any current liability balances (debts) have INCREASED since the first credit report, or if any new debts appear, the loan will need to be reviewed to confirm that the buyer still qualifies for the loan (a recalculation of debt-to-income ratios will need to be done).
  • Any changes (as listed above) for either increased debt or inquiries will have to be sent back to underwriter for sign-off before final documents (loan papers needed for closing) can be sent to the title company.

Conclusion:

In light of these changes, it is really important that the buyer (or someone in the process of a refinance) avoid creating situation where additional inquiries on their credit (other than for homeowner’s insurance) are made… and even more important to NOT incur any additional debt.

From a practical standpoint, many people use credit for buying gas or food, and most people pay that off quickly. This probably won’t cause any issues, unless the client is right on the edge of whether they qualify or not. The main caution is to counsel clients to pay cash for major purchases … refrigerator, new home items, etc, if they plan to make a purchase during the loan process. Even better, hold off on those types of purchases until after closing, keep credit use at a minimum and hold on to your cash.

Any significant jumps in debt balances that show on the final credit report will have to go back to underwriting, and that will delay closing and could affect an approval.

This is a Fannie Mae rule, Freddie Mac’s rules are typically the same as Fannie’s and most lenders take the Fannie/Freddie guidelines and adopt them, even if they don’t sell the loans immediately.

Coldwell Banker Buyer Bonus Program

Coldwell Banker Buyer Bonus Program

The Coldwell Banker Buyer Bonus Event is a three month-long national sales promotion that began on May 1st and ends on July 31st, 2010. These dates coincide with the end of the Federal Tax Credits and the objective is to maintain the momentum initiated by the government’s tax credits. The benefits of the Buyer Bonus program apply to a much wider audience of buyers than did the tax credits.

How it works: It’s not complicated. If a seller decides to participate in the promotion, they agree to provide the buyer, at closing, a credit toward allowable closing costs and prepaid expenses of 3% of the purchase price, up to $8,000. Buyer’s may take advantage of the bonus, but need to confirm that it will work with the loan program they have selected.

Coldwell Banker is investing in national advertising to promote the event. There are currently Coldwell Banker television commercials airing during the months of May, June and July promoting the event. The event is also being heavily promoted on ColdwellBanker.com with flash headers, and banner/buttons as well as a quick searches for Buyer Bonus participating properties. Coldwell Banker is promoting the program with messaging on Facebook and Twitter and with a consumer video on OnLocation (our YouTube Real Estate channel). Locally, properties participating in the event will have special sign riders, notations on property fliers, special advertising sections in the newspaper insert (This Week In Real Estate) and special logos on search results for participating properties on websites.

Benefits to sellers are additional exposure of your property through the extra advertising avenues available only to Buyer Bonus properties.

My Corvallis Oregon Move–7 Things that Worked for Me

My Own Recent Corvallis, Oregon Move

I recently sold my home of 11 years in Corvallis, Oregon and moved to a rural subdivision just outside Corvallis (technically in Benton County, but still with a Corvallis zip code).  The “new” home on a very big lot (nearly 3/4ths of an acre), similar in vintage to the “old” house, a little larger,  a little “newer” (1963 vs 1959) and it has a shop.

I’m pretty experienced at “moving”.  We moved around a lot when I was a kid (something like 14 or so different times before high school) and there are a lot of moving stories associated with all those moves. All-in-all, I have to say the process went very well this time.  Of course, I think I had the best real estate agent around…  Even so, we had our ups and downs.  There is rarely a home sale process that occurs without some “challenges”.

We needed to sell the home we lived in, so that we could move the money and buy the home we wanted. A fairly normal scenario, but it can be a tricky process.  The one thing I can say that worked in our favor was that I do know how to do this. I even listened to my own advice.

Here are the 7 things that worked for me.

  1. Prepare the house to be sold for market (commonly called “staging” but oh, so much more than “decorating”  
    1. Finish projects—the ugly old half bath finally got a face lift
    2. Fix what needs fixing—refinished some wood flooring, put back closet doors, installed new appliances, replace glass in windows with seals that were compromised, fine tune to the nth degree
    3. Eliminate anything that’s excess—pack away items that are specific to us, clear out closets, haul away excess (how in the world did we accumulate so much stuff?) and stash the rest–preferably off site
    4. Touch up paint—this one item has the biggest impact and is the least expensive to do
    5. Touch up the landscaping—weed, mow, bark dust etc.  Haul away that “extra yard stuff”
  2. Do a market analysis—list within the confines of that analysis. This is a crucial step. Going over won’t bring an “offer”.  Listen to feed back from other professionals (even though this is what I do, it’s difficult to be objective–but used my own judgment as well, some thought I could list higher…)
  3. Take many, very good, photos, publish the very good photos in real estate specific web sites that are well trafficked the local MLS (Willamette Valley MLS), ColdwellBanker.com, ValleyBrokers.com,  Realtor.com and nearly every other web site known to the real estate world.
  4. Disclose everything I know. Detailed information. No guessing,  ”just the facts, ma’am”
  5. Negotiate the best offer. Received two offers, focused on the best. In contract within 6 days of publishing to MLS. No worries from the home inspection (because we knew pretty much what we had). Sweated out the appraisal (it was fine—I thought it should be, but these are weird times)
  6. Move! (the seller of the house I purchased gave me early possession—that won’t always work, but there’s almost always a solution).  We hired a local professional mover, because after all, we are not kids anymore.  Get in touch with me if you need his name.
  7. Closed! Signed papers, used a local, lender. Everything there went like clockwork.

Of course there will be some glitches.  Some of the things that happen right after a move are funny, some are not.  We are very happy with the new place.  No, the boxes are not yet unpacked, but the bird feeders are up and we’re looking forward to the next phase.

Related posts: What is Staging and Why Bother?

Why A Home Protection Plan

Why A Home Protection Plan (Warranty)


Your home is one of your biggest investments. Unexpected repair or replacement costs can put a strain on your budget, especially with the other expenses associated with moving.

The home protection plan offered by Coldwell Banker (via American Home Shield) provides peace of mind to both the seller and the buyer during the time in which the home is on the market (seller protection) and for at least one year after closing (buyer protection).

The plan offers quick relief from hassles and expenses when covered items break down during the course of the listing or the first year of home ownership.

What is a home protection plan? It is a service contract (not really a warranty, but commonly referred to as that) that covers repair or replacement of many of the most frequently occurring failures of home systems and appliances. A home protection plan pays for repair or replacement of any covered item that breaks down due to normal wear and tear or items that fail due to typical use. The owner at the time of the service call pays a minimal service charge.

When a seller purchases a warranty during the listing period, they:

  1. are protected in the event that a covered component fails while the home is listed
  2. are protected in the event that a covered component has failed, and the failure is discovered during the course of a home inspection (for either a buyer or a seller)
  3. have the peace of mind of knowing that some of the expenses, that could become problems during the course of selling the home, are minimized

When the buyer obtains a warranty they have the peace of mind of knowing that their potential for major home repairs are mitigated during the first year of home ownership, often a time when savings are at a low point.

Warranties are renewable, so buyers have the option of purchasing additional coverage after the first anniversary of their home ownership.

Some of the most common items I’ve seen handled by the Home Protection Plan for my clients have included: Plumbing repairs, electrical repairs, heating system repairs, and appliance repairs.

Three Things to be Aware of When Shopping for a Home…

Here’s some basic advice from CBS MoneyWatch.com that will help buyers in the Corvallis, Albany, Philomath or other markets in the mid-Willamette Valley.  Most buyers are starting their research process on the Internet, and there’s a ton of data out there.  Not all of it accurate, so it takes some time and experience to filter out the good from the bad. I think this is great advice. What do you think?

Don’t Miss Out | Existing Homeowners may qualify too!

home_eligibility_buttonDon’t Miss Out!

Some existing homeowners who purchase a replacement personal residence may qualify for a tax credit as well.  Here’s a link to a guide that can help you determine if you qualify or not. Timing is crucial and of course, check with your tax advisor for complete details. This eligibility test works for either existing homeowners or first time homebuyers.

Tax credit timing:  You must be in a contract by 4/30/2010 and close by 6/30/2010 to qualify.  We are not anticipating this credit to be extended.  The industry leaders that worked so hard to accomplish getting this credit passed, have publicly stated that they will not be asking for more.

If you’re interested in buying, time is running out; you need to get into the market sooner rather than later.  I specialize in residential real estate in Corvallis, Albany, Philomath, Lebanon and surrounding areas of the mid-Willamette Valley in Oregon.  I’d be happy to help you work your way through the process.

Check to see if you qualify for a home buyer tax credit (first time or current homeowner)

Note: Test provided by Alishia Jones, Mortgage Loan Officer, Bank of America, Corvallis, Oregon.

Money Matters

Money Matters

  • Federal Housing Administration (FHA) is rolling out new guidelines soon (April) for their loan programs, increasing the up-front Mortgage Insurance Premium (MIP) to 2.25% (currently at 1.75%).  For every $10,000 in loan amount, this translates to a cost of $50.00 extra in closing costs.  For example, if you were to borrow $200,000 the additional cost would be $1,000.
  • FHA is also reducing the amount that a seller can contribute toward closing costs from up to 6% of the purchase price to 3%.
  • The first time homebuyer credit is expiring soon as well.  April 30th is the deadline for a written contract to be in place; June 30th is the last date for that contract to close.
  • Attention existing homeowners; you too may be entitled to a tax credit.  There are many out there that are unaware that if you purchase a replacement primary residence (in contract by April 30th, Closed by June 30th) you may qualify for a $6,500 tax credit.


(Certain conditions apply for transactions to be eligible for tax credits—check this web site: http://www.homebuyertaxcredit.com/  and get advice from your professional tax advisor)

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