Mortgage credit availability easing says Fannie The latest survey of mortgage lenders by Fannie Mae shows that lending restrictions eased in August. The poll of senior mortgage executives also reveals that they are generally more optimistic than general consumers about the economy, future home prices and the ease of getting a mortgage today.
“For the first time in seven quarters, we see a pronounced increase in the share of lenders, particularly medium- and larger-sized lenders, reporting on net an easing of credit standards in both the GSE eligible and non-GSE eligible loan categories. This is a significant result in light of public discourse on credit availability and standards,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
Mortgage applications 7 per cent lower last week
The level of new mortgage applications fell for the week ending Sept. 11 2015 compared to the week earlier. The Mortgage Bankers’ Association’s analysis found that on an adjusted basis there were 7 per cent fewer applications even taking into consideration the Labor Day holiday.
On an unadjusted basis, the weekly index decreased 17 per cent; the Refinance Index decreased 9 per cent; the seasonally adjusted Purchase Index decreased 4 per cent; the unadjusted Purchase Index decreased 16 per cent.
The refinance share of mortgage activity decreased to 56.2 per cent of total applications from 56.9 per cent the previous week. ARM decreased to 6.8 per cent; FHA share increased to 14.2 per cent from 13.4 per cent; VA share decreased to 10.7 per cent from 10.8 per cent; and the USDA share remained unchanged at 0.8 per cent.
Builder confidence still rising
The National Association of Home Builders says that the confidence of its members continues to rise. In its latest Housing Market Survey in conjunction with mortgage lender Wells Fargo, the association’s index rose 1 point to 62 per cent confidence in the market for newly-constructed single-family homes. That’s the highest reading since October 2005.
"NAHB is projecting about 1.1 million total housing starts this year,” said NAHB Chief Economist David Crowe. “Today's report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.”
Looking at the three-month moving averages for regional HMI scores, the West and Midwest each rose one point to 64 and 59, respectively. The South posted a one-point gain to 64 and the Northeast dropped one point to 46.
Sunday, September 20, 2015
Monday, September 14, 2015
Ways Home Buyer (s) Overpay
Following your Peers
It's
easy to get caught up in frenzy of a group of people. When you see
everyone around you buying a home and paying over asking price for the
home, then you think, hey, these are smart people and they are doing it,
so why should I not do it also?
Try to make your purchase price decision based upon as many concrete factors as you can gather.
Try to make your purchase price decision based upon as many concrete factors as you can gather.
Buyer in a Hurry
Typically,
buyers spend months or more searching for a home. But not all buyers
have that kind of time, especially if the purchase is driven by a life
change, such as a new job or a divorce.
Any time a lengthy process is condensed into one or two weekends, the potential for mistakes is amplified. If not handled properly, a rushed purchase during a potentially stressful life change can often lead to buyer's remorse on multiple levels, including overpaying or choosing a home in the wrong area.
A buyer in a time crunch can mitigate the problem by working with an experienced agent who is active in the area.
Neighborhoods tend to have nuances and trends that are not necessarily obvious to most buyers. An experienced agent may have specific knowledge about a property that can be advantageous to the buyer, especially if they're on a tight timeline. It could be that they know of a house that's a better fit, or they might have a local's understanding of maintenance issues, for example.
Any time a lengthy process is condensed into one or two weekends, the potential for mistakes is amplified. If not handled properly, a rushed purchase during a potentially stressful life change can often lead to buyer's remorse on multiple levels, including overpaying or choosing a home in the wrong area.
A buyer in a time crunch can mitigate the problem by working with an experienced agent who is active in the area.
Neighborhoods tend to have nuances and trends that are not necessarily obvious to most buyers. An experienced agent may have specific knowledge about a property that can be advantageous to the buyer, especially if they're on a tight timeline. It could be that they know of a house that's a better fit, or they might have a local's understanding of maintenance issues, for example.
Lowball Offer Backfires
Unless
the property has been sitting on the market for months or more without
so much as a nibble, most real estate agents advise buyers against
making lowball offers, which are substantially below the asking price.
The reasoning is that lowball offers really aren't offers at all
because sellers either don't take them seriously or see them as an
insult.
Aside from the strong possibility of losing out to a higher bidder, the big risk is starting off on the wrong foot with the seller. If the seller gets insulted, or feels that yours is not a serious offer, they are less likely to respond with a reasonable counteroffer, and you've basically shot yourself in the foot.
While that doesn't mean the deal is dead, it can mean that the seller will be reluctant to negotiate when the buyer makes a serious offer. By starting off with a respectful offer, even if it's below the asking price, buyers create an opening to adjust the price downward as the deal moves toward closing.
Aside from the strong possibility of losing out to a higher bidder, the big risk is starting off on the wrong foot with the seller. If the seller gets insulted, or feels that yours is not a serious offer, they are less likely to respond with a reasonable counteroffer, and you've basically shot yourself in the foot.
While that doesn't mean the deal is dead, it can mean that the seller will be reluctant to negotiate when the buyer makes a serious offer. By starting off with a respectful offer, even if it's below the asking price, buyers create an opening to adjust the price downward as the deal moves toward closing.
What Sellers Need To Know About Mortgages
Home sellers who receive an abundance of offers might be tempted to grab the
highest price and call it a deal. But that might not be the smartest way to
choose the best offer of the bunch.
A better approach is to consider a variety of factors, including the buyer's
ability to pay cash or obtain a home loan. One of the first things too address is how strong the buyers are financially and how confident we feel that they're able to close.
An all-cash offer always merits consideration because a failure to obtain
financing is "the most prominent reason" why transactions fail to close, Berg
says. In some cases, the buyer is unable to qualify for a mortgage. In others,
the appraiser's opinion of the property's value falls short of the purchase
price, causing the lender to quash the financing due to a so-called low
appraisal. With a cash offer, no lender is involved, so both risks are
eliminated.
A cash offer isn't a guarantee, however. And there's another downside for the
seller: Most cash offers come from investors looking to "fix and flip" houses
they buy at a discount.
If you, as the seller do not get an all cash offer, then that means you will get a financed offer. With financed offers, you have to take into consideration the pre-qualification letter.
Prequals are written by lenders to inform sellers that would-be buyers are
qualified to obtain financing. Not all prequals are equal, so
sellers -- or their agents -- need to do some legwork to assess which prequals
are credible.
My advice to a seller would be to take a look at the qualifications of the
individual who wrote that letter.
While loan officers shouldn't disclose the buyer's personal information to
the seller's agent, that agent can call the loan officer and engage in a
conversation about the buyer's strengths. One question might be
whether the buyer could be characterized as "qualified," "well-qualified" or
"barely qualified."
Naturally, there's a bit of self-interest in all advice of this type. Real
estate pros say some agents push for cash offers to improve their chances of a
commission and some loan officers tout a buyer's financial prowess to increase
their odds of a paycheck. Either way, sellers should have the final say and the
opportunity to choose the offer they prefer.
www.wcrealtyandfinance.com/blog
highest price and call it a deal. But that might not be the smartest way to
choose the best offer of the bunch.
A better approach is to consider a variety of factors, including the buyer's
ability to pay cash or obtain a home loan. One of the first things too address is how strong the buyers are financially and how confident we feel that they're able to close.
An all-cash offer always merits consideration because a failure to obtain
financing is "the most prominent reason" why transactions fail to close, Berg
says. In some cases, the buyer is unable to qualify for a mortgage. In others,
the appraiser's opinion of the property's value falls short of the purchase
price, causing the lender to quash the financing due to a so-called low
appraisal. With a cash offer, no lender is involved, so both risks are
eliminated.
A cash offer isn't a guarantee, however. And there's another downside for the
seller: Most cash offers come from investors looking to "fix and flip" houses
they buy at a discount.
If you, as the seller do not get an all cash offer, then that means you will get a financed offer. With financed offers, you have to take into consideration the pre-qualification letter.
Prequals are written by lenders to inform sellers that would-be buyers are
qualified to obtain financing. Not all prequals are equal, so
sellers -- or their agents -- need to do some legwork to assess which prequals
are credible.
My advice to a seller would be to take a look at the qualifications of the
individual who wrote that letter.
While loan officers shouldn't disclose the buyer's personal information to
the seller's agent, that agent can call the loan officer and engage in a
conversation about the buyer's strengths. One question might be
whether the buyer could be characterized as "qualified," "well-qualified" or
"barely qualified."
Naturally, there's a bit of self-interest in all advice of this type. Real
estate pros say some agents push for cash offers to improve their chances of a
commission and some loan officers tout a buyer's financial prowess to increase
their odds of a paycheck. Either way, sellers should have the final say and the
opportunity to choose the offer they prefer.
www.wcrealtyandfinance.com/blog
10 Real Estate Tips
Tip 1: Get off the sidelines
For good-credit buyers waiting for the bottom of the market, it has passed,
but the good news is that home prices and interest rates are still quite low.
For sellers waiting for market improvements, they're here. Stretch, take a deep
breath and jump back in the game if your budget allows. The rules have changed a
bit, however, and lenders want buyers to put a little more skin in the game. So
expect to make higher down payments than in those pre-bust years. Another
caution: Sellers will likely find that buyers have a harder time qualifying for
mortgages.
Tip 2: Screen your buyers
Save your time, and weed out the tire-kickers. Make sure potential buyers are
preapproved, which means they've already had their credit and employment
checked thoroughly to determine how much they can borrow. Have your agent call
their loan officers. Serious borrowers will find this acceptable because it
shows they are ready to act.
Tip 3: Create a good impression
Most folks start their home searches online these days, so the number of
murky, drab photos posted on website listings is baffling. Consider hiring
professional photographers or videographers to create an optimal presentation,
particularly for high-dollar spreads. Winter exteriors might show sun shining
off the snow, spring shots could sport blossoms, summer shots ought to spotlight
that shimmering pool or well-coifed lawn, and fall photos might show vibrant
leaves. Think vividly, but not deceptively. Shots should accurately reflect the
depth of rooms. Interiors should show bright, uncluttered spaces and highlight
the best outdoor views. Remove a few furnishings for your photo session and
brighten up (or even repaint) dark rooms
Tip 4: Renovate wisely
A thorough remodeling can help seal a deal, but it rarely pays for itself. In
fact, the average remodeling payback in the past 10 years has dropped from 82
percent in 2003 to about 57 percent, according to Remodeling magazine. Bringing
up the rear are added back-up power generators (47.5 percent return) and sunroom
additions (45.9 percent). Topping the list are steel entry-door replacements
(73 percent return) followed by garage door replacements (71.9 percent). Unless
the place is a wreck, focus on the small stuff: Sellers routinely underestimate
the positive impact of simple home improvements such as repainting and minor
fix-ups, say 3 out of 4 Realtors.
Tip 5: Build your team wisely
Vet the help. This goes for such crucial players as your agent (interview at
least three), your inspector, appraiser, title company and if applicable, your
attorney, surveyor or even energy auditor (a good idea if you're buying a large
home). Look them up at the Better Business Bureau, Angie's List and any of a
number of websites where service reviews can be found
Tip 6: Don't let the heart lead the head
No clinging to false hopes, please. Win the game of "the price is right" by
pricing your house correctly from day one. Find a proven, seasoned agent and
follow his or her lead on listing-price suggestions. Pricing should be based on
comparable sales, specific neighborhood time-on-the-market trends, an up-to-date
appraisal and the home's inherent pros and cons. No amount of marketing
hocus-pocus or staging can overcome a bloated price tag. Cut your price if no
serious offers emerge in the first 30 to 45 days. It's not 2006 again.
Tip 7: Open your marketing options
Give your agent (or yourself) the green light to creatively market your home
in varied venues, be they virtual or terra firma. Sellers are tapping into
Twitter, Facebook, Pinterest, LinkedIn and any number of sites to tickle buying
bones. Agents and owners are customizing websites and blogs as well. But be
tactful and imaginative. For example, a blog called "What you'd like about
living in my town," might cover culture, education and other quality-of-life
niceties -- followed by a playful pitch for your home, of course. Social media,
unlike listings on the Multiple Listing Service or newspaper ads, allow for
quick feedback and Q-and-A. You might also suggest your agent market your home
to foreigners via overseas property sites or local partners abroad and to
corporate relocatees.
Tip 8: Run the numbers
Are you really poised to buy? The housing market is improving, but
that doesn't mean exuberant buyers should write a check and empty their savings
accounts. Back up a bit and first get a free copy of your credit report, then
fix any blips to save on higher mortgage interest rates. Break down your
essential monthly bills and reconcile them against your family income, then use
an online mortgage calculator to see how much wiggle room you'll have once you
buy. Remember to factor in closing costs, inspection fees, loan fees, legal fees
and emergencies.
Tip 9: Work your ground game
You're not just buying brick and mortar, you're buying a neighborhood.
Consider this short checklist before making your buying decision.
Tip 10: Leave nothing to chance
Switch on that stove, run the faucets (including the baths), check the water
pressure, activate the sprinklers, turn on all the lights, flush the toilets,
turn on the air conditioning and heat, test the remotes and venture into the
closets and look for signs of brown splotches or fresh paint for evidence of
roof leaks. Granted, you might not feel comfortable doing all these at the open
house, but you certainly can at the final walk-through. Sometimes agents and
inspectors miss things.
www.wcrealtyandfinance.com/blog
For good-credit buyers waiting for the bottom of the market, it has passed,
but the good news is that home prices and interest rates are still quite low.
For sellers waiting for market improvements, they're here. Stretch, take a deep
breath and jump back in the game if your budget allows. The rules have changed a
bit, however, and lenders want buyers to put a little more skin in the game. So
expect to make higher down payments than in those pre-bust years. Another
caution: Sellers will likely find that buyers have a harder time qualifying for
mortgages.
Tip 2: Screen your buyers
Save your time, and weed out the tire-kickers. Make sure potential buyers are
preapproved, which means they've already had their credit and employment
checked thoroughly to determine how much they can borrow. Have your agent call
their loan officers. Serious borrowers will find this acceptable because it
shows they are ready to act.
Tip 3: Create a good impression
Most folks start their home searches online these days, so the number of
murky, drab photos posted on website listings is baffling. Consider hiring
professional photographers or videographers to create an optimal presentation,
particularly for high-dollar spreads. Winter exteriors might show sun shining
off the snow, spring shots could sport blossoms, summer shots ought to spotlight
that shimmering pool or well-coifed lawn, and fall photos might show vibrant
leaves. Think vividly, but not deceptively. Shots should accurately reflect the
depth of rooms. Interiors should show bright, uncluttered spaces and highlight
the best outdoor views. Remove a few furnishings for your photo session and
brighten up (or even repaint) dark rooms
Tip 4: Renovate wisely
A thorough remodeling can help seal a deal, but it rarely pays for itself. In
fact, the average remodeling payback in the past 10 years has dropped from 82
percent in 2003 to about 57 percent, according to Remodeling magazine. Bringing
up the rear are added back-up power generators (47.5 percent return) and sunroom
additions (45.9 percent). Topping the list are steel entry-door replacements
(73 percent return) followed by garage door replacements (71.9 percent). Unless
the place is a wreck, focus on the small stuff: Sellers routinely underestimate
the positive impact of simple home improvements such as repainting and minor
fix-ups, say 3 out of 4 Realtors.
Tip 5: Build your team wisely
Vet the help. This goes for such crucial players as your agent (interview at
least three), your inspector, appraiser, title company and if applicable, your
attorney, surveyor or even energy auditor (a good idea if you're buying a large
home). Look them up at the Better Business Bureau, Angie's List and any of a
number of websites where service reviews can be found
Tip 6: Don't let the heart lead the head
No clinging to false hopes, please. Win the game of "the price is right" by
pricing your house correctly from day one. Find a proven, seasoned agent and
follow his or her lead on listing-price suggestions. Pricing should be based on
comparable sales, specific neighborhood time-on-the-market trends, an up-to-date
appraisal and the home's inherent pros and cons. No amount of marketing
hocus-pocus or staging can overcome a bloated price tag. Cut your price if no
serious offers emerge in the first 30 to 45 days. It's not 2006 again.
Tip 7: Open your marketing options
Give your agent (or yourself) the green light to creatively market your home
in varied venues, be they virtual or terra firma. Sellers are tapping into
Twitter, Facebook, Pinterest, LinkedIn and any number of sites to tickle buying
bones. Agents and owners are customizing websites and blogs as well. But be
tactful and imaginative. For example, a blog called "What you'd like about
living in my town," might cover culture, education and other quality-of-life
niceties -- followed by a playful pitch for your home, of course. Social media,
unlike listings on the Multiple Listing Service or newspaper ads, allow for
quick feedback and Q-and-A. You might also suggest your agent market your home
to foreigners via overseas property sites or local partners abroad and to
corporate relocatees.
Tip 8: Run the numbers
Are you really poised to buy? The housing market is improving, but
that doesn't mean exuberant buyers should write a check and empty their savings
accounts. Back up a bit and first get a free copy of your credit report, then
fix any blips to save on higher mortgage interest rates. Break down your
essential monthly bills and reconcile them against your family income, then use
an online mortgage calculator to see how much wiggle room you'll have once you
buy. Remember to factor in closing costs, inspection fees, loan fees, legal fees
and emergencies.
Tip 9: Work your ground game
You're not just buying brick and mortar, you're buying a neighborhood.
Consider this short checklist before making your buying decision.
- Do a criminal search, including the ZIP code's crime statistics and the
National Sex Offender Public Website at NSOPW.gov. - Chat up residents about pros and cons of the neighborhoods.
- Visit at different hours; be wary of poorly kept homes and yards, unsavory
visitors, traffic and pet noise, industrial or landfill odors, blaring train
horns, too-bright lighting, and vacant-but-developable commercial lots. - Practice your work commute and find mass transit options.
- Research school performance and student-teacher ratios.
Tip 10: Leave nothing to chance
Switch on that stove, run the faucets (including the baths), check the water
pressure, activate the sprinklers, turn on all the lights, flush the toilets,
turn on the air conditioning and heat, test the remotes and venture into the
closets and look for signs of brown splotches or fresh paint for evidence of
roof leaks. Granted, you might not feel comfortable doing all these at the open
house, but you certainly can at the final walk-through. Sometimes agents and
inspectors miss things.
www.wcrealtyandfinance.com/blog
Almost Do It Yourself Remodel Or Addition
A person can acquire quite a bit of skills in life. Maybe you helped your
mother and/or father install some cabinets. Or you helped your neighbor lay
some tile. Regardless of the source of where you learned the skill, you are now
ready to use the skill in your own home. Great! The following are steps to
consider in your home remodel/addition.
mother and/or father install some cabinets. Or you helped your neighbor lay
some tile. Regardless of the source of where you learned the skill, you are now
ready to use the skill in your own home. Great! The following are steps to
consider in your home remodel/addition.
Do Some Research
Learning from others mistakes is better then learning from your own. Find out
what problems other people ran into when doing a home remodel/addition.
what problems other people ran into when doing a home remodel/addition.
Develop A Budget
In addition to the obvious, be sure to allocate an amount in the budget for
contingencies. For example, a certain supplier of material does not have it in
stock; you might have to pay a little extra somewhere else. It can work the
other way too. Maybe you could rent a tool instead of buying one.
contingencies. For example, a certain supplier of material does not have it in
stock; you might have to pay a little extra somewhere else. It can work the
other way too. Maybe you could rent a tool instead of buying one.
Create A Rough Design
This is not a formal design. It can be on a napkin if you like but it is
probably better to put it on writing paper. Remember to discuss the design with
all stakeholders involved!
probably better to put it on writing paper. Remember to discuss the design with
all stakeholders involved!
Determine If The Home Remodel Or Addition Is Exempt From A Permit
Go to your local building departments website. Look for a link that is titled
“Work Exempt from a Permit”. The link should be in the main web page for
building permits. This portion of the web site will define a scope of work that
does not require a permit. If the scope of work that you are planning meets the
scope of work defined in this section, then you might not need a permit. Before
you make a determination that you do not need a permit, I suggest you confirm
your determination with the local building department by either giving them a
call or going to the office.
“Work Exempt from a Permit”. The link should be in the main web page for
building permits. This portion of the web site will define a scope of work that
does not require a permit. If the scope of work that you are planning meets the
scope of work defined in this section, then you might not need a permit. Before
you make a determination that you do not need a permit, I suggest you confirm
your determination with the local building department by either giving them a
call or going to the office.
Prepare Construction Drawings
This is one of the reasons that the title of this article is almost do it
yourself home remodel/addition. Unless you are familiar with the local building
codes and know how to prepare construction drawings, I suggest you hire an
architect. There are a number of companies in the market that provide this
service. For house remodels/additions, you will need “as-built” plans and
“construction drawings”. Please note that in regards to the “as-built” plans,
depending upon the size of the remodel/addition, only part of the house may need
to be drafted.
yourself home remodel/addition. Unless you are familiar with the local building
codes and know how to prepare construction drawings, I suggest you hire an
architect. There are a number of companies in the market that provide this
service. For house remodels/additions, you will need “as-built” plans and
“construction drawings”. Please note that in regards to the “as-built” plans,
depending upon the size of the remodel/addition, only part of the house may need
to be drafted.
Recalculate Budget Based Upon The Construction Drawings
Once the construction drawings are complete, the costs for the project can be
calculated in detail. This is a good point to determine if you are going to be
under or over budget. The completed construction drawings are submitted to the
local building department for building permit approval and to banks, if a
construction loan is being used to finance the project. Once the plans are
approved by the local building department construction can begin.
calculated in detail. This is a good point to determine if you are going to be
under or over budget. The completed construction drawings are submitted to the
local building department for building permit approval and to banks, if a
construction loan is being used to finance the project. Once the plans are
approved by the local building department construction can begin.
Consideration For Electrical Work
This is another reason why the title for this article is “Almost do it yourself
house remodel/addition”. Unless you are very skilled in electrical work, it is
suggested that you hire an electrician.
house remodel/addition”. Unless you are very skilled in electrical work, it is
suggested that you hire an electrician.
Inspections
To verify compliance with the requirements of the various building codes, an
inspection of the work authorized by a permit is required at various points
during construction. Go to your local building departments website and look
under inspections in order to determine at which point of construction an
inspection is required for your specific project.
inspection of the work authorized by a permit is required at various points
during construction. Go to your local building departments website and look
under inspections in order to determine at which point of construction an
inspection is required for your specific project.
Comments Regarding Permit Costs
The building permit fees generally increase as the total project costs increase.
Inspections generally charge according to a minimum fee and hourly rate and
these costs are in addition to the building permit fees.
Inspections generally charge according to a minimum fee and hourly rate and
these costs are in addition to the building permit fees.
Conclusion
The above steps are not exhaustive list. I have been in real estate since 2003
and I have seen some project scopes of work that cover 20 pages or more.
However, the above steps provide a good framework that will lead to successful
home remodel/addition.
and I have seen some project scopes of work that cover 20 pages or more.
However, the above steps provide a good framework that will lead to successful
home remodel/addition.
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