Are you “On The Fence” About Buying a Home?

• It helps transform the mortgaged-back securities.
  This keeps access to capital for borrowers high and
  interest rates low.

• Conforming/jumbo conforming rates should drop in
  the coming weeks by as much as a percentage point.

• It improves confidence in the stock market allowing
  investors to once again realize profits, which they in
  turn can re-invest in mortgages.

• Credit will flow again bringing new, qualified buyers
  into the market to take advantage of the investment
  opportunities currently available.

• Modified mortgages will allow some homeowners to
  restructure their mortgages and avoid foreclosure.

If you’re on the fence, now is an excellent opportunity to realize
dramatic savings on a home purchase before the market shifts,
and we begin the next ‘UP’ stage of the cycle.

The dynamics of short sales and REO transactions present distinct challenges to REALTORS® and Buyers. 

Short Sales

Short pay transactions or “short sales” are transactions where the seller owes more on his or her home than the home is worth.  The distinct nature of these listings enable a third-party  the lender to intervene in the terms of sale and the lender will dictate after a buyer may have had his offer on that home that the lender will want the seller to counter and
sell the home for more than was originally agreed to by the buyer and the seller.
This is possible, because the lender will have to discount the note, so although the seller has signed a legally binding
contract subject to lender approval of the short sale.

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There is more to a home purchase offer than the price. Ideally, the offer, including any counteroffers, should encompass all the terms and conditions that will apply to the purchase transaction.

In some states, attorneys draft purchase offers. In other states, like California, most residential purchase offers are filled out by real estate agents using pre-printed contracts that were drafted by attorneys. In either case, make sure to read the offer and understand it before it’s presented to the sellers.

In addition to the price and contingencies, the purchase offer should include such specifics as the deposit amount, the closing date, the date the sellers will deliver possession, any personal property such as a washer or dryer that is included, and any real property such as a light fixture that is excluded from the sale. It is best to be as specific as possible. (more̷

One of the sings of an improving real estate market is “cherry picking.” What happens is buyers look for the best property they can find. It has the best location, best amenities, best upgrades, best landscape and most important-
best price. As these properties begin to be priced at a number that corresponds to the buyer’s specific set of parameters, homes start to sell. One by one, the really good deals begin to sell. As these homes begin to sell, other buyers, who waited too long, get nervous and decide they had better purchase also. Once all the “cherries” are gone, we then have the “dogs” that no one wants. They are priced the same as the “cherries,” but are inferior in some way.  As these properties begin to sell, the new market value for the neighborhood is set. This is the new fair market value which guides both buyers and appraisers. After all the “dogs” are sold, sellers who have been on the market for months and years have a decision to make. They must either drop their price to fair market value or take their home off the market. As this process begins, inventory will drop and won’t be replaced very quickly. Many sellers will not want to sell their homes for the lower fair market value. When those properties, owned by sellers who are motivated and are willing to take fair arket value, sell, the real estate market will begin to stabilize. Unless the government does something stupid, we will slowly get back to a normal market where prices are negotiated over 10,000 to 20,000 dollars within the listing price.

There will always be some properties in neighborhoods that will sell for more or less. This stabilization has happened after each of the other cycles in the 1970’s, 1980’s and 1990’s. Always remember the golden rule in real estate, “long term.” No one has ever been hurt by owning their own home for 20 years. That also means you don’t use your home’s equity as a savings account. If you kept the same loan on the property that you had when you purchased it 20 years ago, you’d have equity in your home and te value would be higher. Period.