Buying a Home? How the Serenity Prayer May Help

You may be frustrated while attempting to buy a home in today’s market. You may feel powerless to the process. How could YOU possibly know whether the current good news about housing will continue? There is no doubt that today’s real estate market is extremely difficult to navigate. However, we want you to know that thousands of homes sold yesterday, thousands will sell today and thousands will sell each and every day from now until the end of the year.

It is totally within your power to decide whether it is the right time for you and your family to move. Even in the current market.

“How?” Let’s look at the simplicity of the famous Serenity Prayer and apply it to buying a home in today’s real estate market.

“God, grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.”

Accept the things you cannot change

The two main concerns many talk about when discussing the housing market are:

1. the current lack of inventory impacting housing prices


2. the impending raise in interest rates

As an individual, there is very little you can do to impact either of those two situations. The best think-tanks in the country are struggling to discover what impact each of these items have on real estate.

Have the courage to change the things you can

Whether you are a first-time buyer or a move-up buyer and you believe now is the right time for your family to purchase a home – DO IT! Prices will only be higher later this year and though interest rates are rising they are still at historic lows. That means that your monthly housing expense will still be lower than almost any time in the last 50 years – and probably lower than your current rent payment.

The wisdom to know the difference

With the winter ending, the outlook on inventory is positive. Sellers will look to come out of hibernation and list their homes. The question is whether or not it makes sense to delay moving on with your life until everything gets ‘better’. Should you not buy a house and enable your kids to attend the school you have already decided is best for them? Should you spend another winter up north even though your doctor recommends you move to a climate better suited to your current medical situation?

This is where your wisdom must kick in. You already know the answers to the questions we just asked. You have the power to take back control of the situation by moving forward. The time has come for you and your family to move on and start living the life you desire. That is what truly matters.

 

Must Haves to Attract Younger Homebuyers

The millennial generation is becoming an increasingly important part of the housing market. According to a 2013 National Association of Realtors study that looked at generational housing trends, millennials (or, Generation Y), those born between 1980 and 2000, are the second biggest segment of the buyer market, behind only Generation X, which covers those born between 1965 and 1979.

Together, these two generations represent today's young buyers, and broadly speaking, they tend to fall into one of two categories, says Margie Gundersheim, a Realtor with Keller Williams in Newton, Mass.

"They're young professionals who prefer a turnkey home that needs little or no work," says Gundersheim. "(Or they're) creative/romantic buyers who want to invest sweat equity and money over time, and put their personal stamp on the property and add value for the future."

But while those two groups may seem like they want entirely different things from a home, many agents say that younger buyers of all stripes have a lot of the same "must-have" features on their lists.

Read More From Bankrate: 8 tips to sell an old home to young buyers

1. 

Updated kitchen and bath

We all want to buy a home with new kitchen and bath fixtures, but new fixtures are especially important for today's young, budget-conscious buyers, says Jack Curtis, a real estate agent in Dublin, Ohio.

"The primary reason younger buyers seek updated kitchens and baths is because they have limited budgets," Curtis says. "Most of their savings will go toward the down payment and furnishings. Kitchens and bathrooms are also the most expensive parts of a home to update, and young homeowners cannot afford to sink a lot of money into those areas."

While updated kitchens and bathrooms may bring in a younger crowd, remodeling costs should give a seller pause. After all, if those updates aren't in a young buyer's budget, they probably aren't in a seller's budget either. Unlike a new roof or plumbing, bathroom and kitchen fixtures are also a matter of taste, so not every buyer will like what you pick, according to Curtis.

2. 

Big kitchen, open floor plan

A generation ago, formal dining rooms may have been on every buyer's wish list. But today there really isn't much appeal to the formal dining room, according to Lou Cardillo of The Lou Cardillo Team in Yorktown Heights, N.Y.

"The kitchen has become the hangout room along with the family room," says Cardillo. "An open space that can easily transition from kitchen to TV room is high on the list of the perfect home for young buyers. In essence, the kitchen is the new living room."

Read More From Bankrate: 4 big money mistakes of first-time homebuyers

Along similar lines, Curtis says today's young buyers are also more attracted to an open floor plan, rather than a layout that compartmentalizes the home. Again, the reason has a lot to do with how younger homeowners entertain.

"They want people to flow through the home during gatherings, rather than be sectioned off in rooms," Curtis says.

3. 

Home office

More than 13 million Americans work from home, and all signs point to that trend continuing, which makes a home office important for many buyers.

"Home offices have vast appeal," says Paige Elliott, a Realtor with Dave Perry-Miller & Associates in Dallas. "Most agents will point out that a room could be used as an office or other flex living space, especially if it is currently used or staged as a bedroom."

Home offices aren't just for those who work from home full time, according to Cardillo.

Read More From Bankrate: 4 tips for single, female homebuyers

"As technology continues to make us more mobile, young buyers have more options than ever to work from home, depending on their job," says Cardillo. "Having a dedicated space is important because it will help keep them focused and concentrated on work while they are at home on a Skype call, planning a presentation, setting up their workday or simply paying bills."

4. 

Good location

Younger buyers tend to see location differently from their parents, who didn't face high gas prices and traffic, says Allison Nichols, an agent with Related Realty in Chicago.

"My younger buyers look for properties that are in proximity to public transportation and that have a good walking score," Nichols says.

But there are young buyers, and then there are young buyers with children. The former group may prefer to be close to the action of the city, while the latter might prefer something a little more residential.

5. 

Low maintenance

Most young buyers look for homes that are low maintenance, says Cardillo, who points out that low-upkeep features such as wood floors (as opposed to carpet) and granite countertops are seen as positives for this generation because they're both attractive and relatively hassle-free.

Cardillo says he sees a generational shift toward a society that's more "disposable," where homeowners prefer to replace rather than repair.

"Most young homebuyers grew up watching their parents spend weekends with their honey-do lists, or they had chores to do on the weekends," he says. "Most young buyers are not going to follow in their (parents') footsteps. They don't want to do that stuff. … They want their weekends to themselves and don't really want to be cleaning gutters or cutting the grass.

6. 

Technology

A generation ago, buyers didn't care about a home's technological capabilities. Either it had cable hookups or it didn't. Today, buyers want to know about the home's technology. They want to hear about cell service and Internet, not cable and telephone.

"Most young homebuyers laugh at a landline phone, and even if they buy a house that has a jack, it is rarely used," Cardillo says.

In some cases, a house's appeal can be increased or diminished because of the strength of a mobile carrier's signal or its Internet service provider options, Cardillo says. While cell phone and Internet services are out of the seller's hands, Cardillo says sellers or their agents should be prepared to field questions on that front.

"Internet and cell service matters a lot to this generation, and they're going to ask, so you need to have answers," he says.

7. 

Energy efficiency

With energy cost on the rise and growing interest in protecting the environment, young buyers are conscious of buying homes that are green. They may not be alone, according to Jeff Hyland of Hilton & Hyland real estate agency in Beverly Hills, Calif.

"Today, not only younger buyers, but buyers in general, are looking for energy-efficient homes," says Hyland. "And if they are not already set up (for energy efficiency), then the buyers will often factor those costs into their budgets so they can do it after the close of escrow."

Before sellers green wash their homes, Elliott offers a caution: "I am not seeing the energy efficiency of a home as a top selling feature that attracts young buyers," she says. "They seem to be savvy on insulation levels, seasonal energy efficiency ratios and other energy-efficiency factors, but (energy efficiency) still isn't the top reason for a home purchase."

Oftentimes, Elliott says, young buyers ask about these things and then update them after they close on the house. And in some cases, buyers who make those upgrades themselves do so because of tax credits.

8. 

The cable TV effect

Whether we admit it or not, we've all seen at least a few of the home shows on cable networks like TLC and HGTV. But while those shows can be fun and informative, they also do a lot to shape buyer expectations.

"Real estate shows on TV have impacted all buyers on the way they look at houses," Elliott says. "But young buyers will often comment on how a house is, or isn't, staged."

Either way, staging is a critical part of selling your home, Hyland says.

"Staging a home is always helpful as it helps people to feel at home the moment they walk through the door, as opposed to having to imagine what it could look like once they move it," Hyland says. "Buyer expectations are often met, and at times, exceeded by staging a home."

9. 

Keep HOA costs down

Young buyers tend to get caught in a trap when gauging the affordability of condos or town homes, Nichols says. The asking price often fits their limited budgets, but HOA dues and the possibility of large assessments can sink the purchase.

"When it comes to condo buildings, my younger buyers are looking for properties with no special assessments," Nichols says. "These can be as high as $10,000, and young or first-time buyers don't necessarily have this in their budget. Likewise, they want to maximize their monthly housing budget by finding a property with low monthly assessments."

The possibility of a hefty assessment or high HOA dues deters some young buyers, but a building that's eligible for FHA financing can be attractive, Nichols says.

10. 

Online photos

If you're serious about attracting young buyers, you need to think about how your property shows online, Elliott says.

"Younger buyers start their searches online," Elliott says. "The home must have professional photography that shows the home in its best light, or they will move on before ever stepping foot in the door."

Looking at the data, it's hard to underestimate the importance of a quality online listing. According to the most recent analysis from the NAR, 90 percent of buyers use the Internet to search for homes. By comparison, real estate agents were the second most common resource for finding a home, with 87 percent of buyers citing an agent's help as a key factor.

The most telling piece of data may be what happens after buyers see an online listing. According to the NAR, 62 percent of buyers said they walked through a home after viewing the listing online, and 76 percent said they at least drove by the home because of an online ad.

From ABC News

The PTC Index for January.

The PTC Index utilizes a proprietary algorithm that weighs nine key real estate variables. These variables, though widely available, have not been easily collected in a single location. The PTC Index changes that.

This months PTC Index details are below. Previous months can be viewed by selecting a date from the drop down menu below.

These numbers are for Ada and Canyon County.

January 2014

Building Permits	218
New Home Sales	133
Existing Home Sales	468
Refinance	679
Average Sales Price	194017.5
Financial-Bond Market(10-yr Treasury)	2.86
Days on Market	73
Distressed(Short Sales and REO)	1102
Notices of Default	192
PTC Index	130

As January 2014 came to a close, many characteristics of the PTC Index show sharp declines in several key areas and increases in others that weren’t necessarily ideal. As expecting, January was a plodding month for real estate as consumers put the holiday months behind them while, perhaps, beginning to devise financial plans for 2014 before making a major purchases – like a home – in the busier spring months. For the second consecutive month, Notices of Default increased by 10 percent from the month prior, down 16.5 percent from a year ago. Distressed inventory dropped with a year-ago decline of nearly 45 percent - the highest in the last 14 months. New home sales,and existing home sales also fell significantly in January by 24 percent and 23 percent, respectively. Conversely, these categories have increased from the year-ago time period by 42 percent and 10 percent, respectively. Building permits inched up after two months of decline by 9 percent, up slight from a year ago. Refinances declined from the month prior by 16 percent and down by two-thirds from a year. There are many scenarios that could occur with refinance activity in the coming months with as new Treasury Chair Janet Yellen ‘seeks to forge a consensus on a new strategy for communicating the Federal Reserve’s intention to keep rates low.*’ * Zumbrun, Joshua, and Craig Torres. "Yellen Seeking New Low-Rate Guidance Can Use Forecasts." Bloomberg.com. Bloomberg, 24 Feb. 2014. Web. 25 Feb. 2014

Buying Foreclosures

I thought this was a very timely and well written article. I was having much of this discussion just last week with one of my sellers upon the successful sale of a home he had purchased at a foreclosure auction.

By Teresa Mears AOL Real Estate

Just a few years ago, buying a foreclosed home was seen as a way to get a bargain. With a glut of foreclosures and few buyers perusing the market, lenders were willing to sell homes at a substantial discount just to get rid of them. Those days are gone. Buying a foreclosure can still be a good move, but you're unlikely to find the same great deals.

In many cities, it's a seller's market for even foreclosed homes, so lenders know they don't have to offer bargains to unload homes. A good foreclosure, like any other good listing, is likely to draw multiple offers. "In many cases it's still right in line with the market," says Andy Asbury, a broker at Better Homes and Gardens Real Estate Area Leaders in Minneapolis. "We don't see just crazy deals. We don't see lenders negotiating all that much off the list price."

For buyers who go in with their eyes open, buying a foreclosed home could still be a good move. But if you fail to do your due diligence, you could end up with a money pit. When real estate professionals talk about foreclosures, they are actually talking about two very different types of sales:

• Buying a home at auction on the courthouse steps -- or the digital equivalent.

• Buying a home that has been taken back by a lender. These properties are also known as REO properties, short for "real estate owned," and are held by banks and various lenders.

While both fall under the foreclosure umbrella, the two types follow different processes from bid to final sale.

Buying at foreclosure auction. In most jurisdictions, buying a property at a foreclosure auction carries substantial risk. The buyer has to bid without seeing inside the home, which makes it difficult to estimate the cost of repairs. Plus, there is no guarantee that the property doesn't have liens, multiple mortgages, code violations or other issues that could make it difficult and expensive to get a clear title. Tenants or the former owner may also still occupy the property, and evicting any occupants will be the responsibility of the buyer.

When buying at a foreclosure auction, you're required to pay the entire purchase price in cash. Typically this payment must be received within 24 hours. If there are problems with the property, you're stuck. A foreclosure auction is no place for amateurs. "When you buy from the courthouse steps, there's a greater risk," Asbury says. "It really is buyer beware."

Most homes go back to the lender at the foreclosure auction because the amount owed is more than the property is worth. The lender is then responsible for paying off liens and clearing the title, as well as evicting the occupants, before putting the property up for sale.

Buying from a lender. Purchasing a foreclosure from a lender is more like buying from an individual, but there are some important differences. For one, there is no seller's disclosure about the property's condition. "You're dealing with a seller that's never been to the property," says Alan Plager, an REO specialist with Berkshire Hathaway HomeServices in Clearwater, Fla.

Most lender-owned properties are in the multiple listing service, and your buyer's agent can make an appointment to show them to you. You can also make your offer contingent on the property being approved for a mortgage and passing with a satisfactory inspection. A thorough inspection is crucial, especially if the property has been vacant for some time. In many cases, needed maintenance may have been put off for years. If you buy a house that requires extensive repairs, you're going to need the cash and the know-how to get the work done.

"If someone didn't pay the mortgage, they didn't upkeep," Plager says. Many foreclosed properties don't have water or electrical service, making it harder to evaluate them during your initial visit. If you're in a place like Minnesota during the winter, it may be colder inside the house than outside, and you'll have no clue how well the furnace works.

"You can't test anything during your initial showings," Asbury says. However, he adds that making quick assessments of the plumbing system and a few other things is possible if the water works during the inspection. Lenders will usually turn the utilities on for an inspection once the home is under contract, but there may be a charge to the buyer.

As with a private seller, you can renegotiate the deal if you uncover serious problems during the inspection, but you won't always find lenders ready to make concessions. If you're seeking a Federal Housing Administration loan, or some other types of loans, your lender will require the house to be up to certain standards. The bank that owns the house may or may not be willing to make those repairs. In some cases, if you want the house, you'll have to pay for the work before you close. In other cases, the lender may fix an issue that's required for financing.

Even if the inspection reveals multiple shortcomings, lenders are unlikely to accept a lowball offer. For one thing, in the current seller's market, there are generally multiple offers on well-located properties. If you don't want the house in its current condition, someone else probably will.

"It seems very rare these days that they're willing to adjust the price," Asbury says. In some cases, that could mean you'd be better off walking away and searching for a more suitable property. For would-be buyers who are struggling to compete with cash offers, foreclosed properties can present a good opportunity. Fannie Mae, Freddie Mac, the Department of Housing and Urban Development and some lenders give owner-occupants the first shot at acquiring properties. Some financing is also available to them.

To get top dollar for their properties, some lenders are making repairs before putting homes up for sale, from carpet and paint to replacing furnaces and air conditioners. In some cases, that means you could find a foreclosure in move-in condition. And you'll probably pay the same price you'd pay for any other house in the same condition.

"You're going to get the property pretty much at fair market value," Plager says. "[Lenders are] just like any other seller. Obviously, they don't want to give it away."

Mortgage Availability Improving

From Realty Times

According to a new survey from Fannie Mae, credit availability is improving. For the first time in over three years, the majority of consumers believe it's easier to get a mortgage.

Doug Duncan, Fannie Mae's chief economist said, "The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month's increase in consumers' intention to buy rather than rent their next home."

The Mortgage Bankers Association (MBA) says consumers are correct - credit availability has increased, particularly in the jumbo and refinance loan markets.

 

Explained Mike Fratatoni, chief economist for the MBA, "The market continues to adapt to the new QM [Qualified Mortgage] regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refi market, where more lenders are offering streamline refinance programs."

But there could be other reasons that credit is more available. Credit reporting agency Transunion announced that the mortgage delinquency rate for the fourth quarter of 2013 was 3.85 percent, down from 5.08 percent.

Delinquencies have been steadily declining over the past two years, while improved home sales and rising prices have allowed many homeowners on the edge of delinquency to sell their homes and get into something more affordable.

Credit has been extraordinarily tight since 2008, as lenders struggled with federal claims of mortgage fraud. For years, lenders raised credit standards beyond what was required to qualify for federally guaranteed loans and loans destined for purchase by the securities industry.

As the government leveled fines and made repayment settlements with many of the big banks, lenders are more willing to make mortgage loans. With the most toxic loans before 2008 foreclosed and disposed, lenders have more confidence in loans generated since them.

In fact, Transunion also reported that more loans were generated to borrowers with less-than-perfect credit in Q4 2013.

"We are on the downward slope of the mortgage delinquency curve, so we expect to continue seeing delinquency rates that have not been seen for several years," said Steve Chaouki, head of financial services for TransUnion.

With job gains growing, relatively low interest rates available and a tight supply of homes insuring equity gains, mortgage delinquencies should continue declining, and buyers should feel more confident in their decision to buy a home in 201

 

Fannie Mae offering cash incentives!

Hey check this out! We do not have a lot of these home sin our area, but we do have a few, let me know if you would like to know more!

WASHINGTON — If you're planning to shop for a home in the next few weeks, here's an early spring buying season come-on that just might save you some money if you qualify.

Fannie Mae, the largest mortgage investor in the country, has a bulging portfolio of houses acquired through foreclosures nationwide. About 31,000 of these properties are listed on its HomePath (www.homepath.com) resale marketing site. To move them quickly out of inventory, Fannie temporarily is offering qualified owner-occupant purchasers — but not investors — cash incentives toward closing costs of 3.5% of the purchase price. But you have to submit your initial offer no later than March 31 and close by May 31.

What sort of houses are we talking about? Visit the site and you'll see. They run the gamut — from a one-bedroom condo in San Diego to a four-bedroom, four-bath single-family home in suburban Montgomery Village, Md. Some states have thousands of HomePath listings online: Florida has nearly 12,000; Illinois, 4,360; Ohio, 2,800; California, more than 2,300; Washington state, nearly 1,800; and Nevada, about 1,400. Asking prices range from $30,000 to $600,000 or more. On a $400,000 house, the 3.5% closing cost incentive would amount to $14,000.

To ensure that buyers who intend to occupy its homes get an opportunity to fully check them out and bid without competition from investment groups offering all-cash deals, Fannie has instituted what it calls a First Look program. It essentially prohibits bids from investors on properties during the first 20 days after listing (30 days in Nevada). After that, investors are free to jump in. Each First Look listing has a countdown clock attached to it that indicates the number of days remaining before bidding is opened to all comers.

The new 3.5% closing cost offer is available only during active First Look periods from mid-February through March, so there's not a lot of time to get involved. Bidders will need to indicate upfront that they want to be considered for a closing-cost discount.

Who is eligible? First, you've got to be a bona fide owner-occupant purchaser and commit to live in the house as a primary residence for at least a year. You'll need to fill out a certification to that effect that can be found on the HomePath site. Properties are not available in all states.

You don't have to be a first-time buyer, though the Fannie program is likely to attract substantial numbers of them. The 3.5% closing cost discount helps with one of the biggest problems faced by first-timers — upfront cash.

As with most home purchases, you'll need to be able to qualify for mortgage financing. Though Fannie may end up owning or securitizing the loan you obtain, it won't be financing you directly. On HomePath purchases, you shop for a mortgage just as you would on any other house. Ideally, you nail down a financing source and get prequalified for mortgage money up to a specific dollar limit at current interest rates. If you've already located a First Look property and qualify, the lender is likely to take the 3.5% closing cost incentive into consideration in evaluating your application.

While you shop on HomePath, however, keep this important factor in mind: These are foreclosed, previously occupied homes. Though some of them are repaired, painted and spiffed up before they are listed, many could use some additional work. They are sold "as is" and that's built into the pricing. Fannie identifies what it calls "improved" properties on the HomePath site — those that have undergone significant repairs — with either the "Home Depot" logo (when repairs have been made by contractors from that company) or a hammer and roof symbol (when repairs have been completed by independent contractors hired by Fannie).

If you can't find the First Look house you want, don't give up. Freddie Mac, the other giant federal mortgage investor, also has thousands of foreclosed homes that it's trying to dispose of — and its own First Look program — at its HomeSteps (www.homesteps.com) marketing site. Though Freddie currently has no closing cost incentive offer, it does provide a $500 allowance toward the purchase of a home warranty policy, and it promotes special mortgage financing options on houses in some areas. If you qualify, that could mean a loan with no mortgage insurance, no appraisal and a 5% maximum down payment.

Definitely worth checking out.

Article courtesy of lattimes.com


 

Who are Homeowners?

Do you think the same statistics would ring true locally?