While many buyers are aware that a mortgage pre-approval letter increases their buying confidence and power, most may not understand exactly why pre-approval is so important. Why should you jump through the application hoops before even beginning your home search?
First, you'll know exactly how much loan you can afford, making your initial home search much easier. Why waste your time looking at homes either out of your reach or well below your financial grasp?
Second, pre-approved buyers stand on solid negotiating ground with sellers. Sellers working with well-qualified buyers are more likely to accept the offer and less likely to stall on terms and conditions.
Notice that the topic of this column is "pre-approval," and not "pre-qualification." What's the difference? Pre-qualification is easy - you provide basic information to a lender, and in a few short minutes, you have an answer. Pre-approval requires strict verification of documentation relating to your employment, credit history, sources of income, etc. It takes more time, but is more accurate and carries more weight.
Understand that pre-approval is not binding, and is still subject to a satisfactory appraisal on the prospective purchase. If your financial situation changes, interest rates rise or fall, or the deadline passes, a recalculation will be necessary; but a little legwork now will pay off handsomely as you approach the finish line on your contract.
Tuesday, June 30, 2009
Wednesday, April 22, 2009
A Portfolio of Commodities
Have you ever thought of a home as a commodity? A commodity can be defined as a raw material or product that can be bought and sold. A home is not a raw material, but it is certainly built out of many, like a box full of wood, steel, cement, glass and copper.
Over the long term, home prices usually rise along with the cost of the commodities it takes for construction. While high inventories of housing may be keeping prices lower right now, the cost of the raw materials that are intrinsically tied to a home's value are rising, and rapidly.
With increasingly higher construction costs on the horizon, buying now is an ideal investment, and a hedge against the rising cost of commodities. Every home is a store of value for all the materials, the land and the labor involved in its construction. So the long-term value of a home is tightly connected to the cost of its production, making it a very different type of investment from stocks or bonds.
Investing in commodities has always been a great way to make lemonade from the economy's lemons. And what better way to buy into the commodities market than by purchasing a home? Sooner or later, home prices will be pushed higher by the rising cost of raw materials, so make your move now!
Over the long term, home prices usually rise along with the cost of the commodities it takes for construction. While high inventories of housing may be keeping prices lower right now, the cost of the raw materials that are intrinsically tied to a home's value are rising, and rapidly.
With increasingly higher construction costs on the horizon, buying now is an ideal investment, and a hedge against the rising cost of commodities. Every home is a store of value for all the materials, the land and the labor involved in its construction. So the long-term value of a home is tightly connected to the cost of its production, making it a very different type of investment from stocks or bonds.
Investing in commodities has always been a great way to make lemonade from the economy's lemons. And what better way to buy into the commodities market than by purchasing a home? Sooner or later, home prices will be pushed higher by the rising cost of raw materials, so make your move now!
Thursday, March 26, 2009
Time For A House Call
A real estate professional recently coined the term "Price Denial Syndrome," a troublesome condition that afflicts sellers having a hard time facing the realities of today's markets. Of course it’s difficult to make a pricing concession, but an overpriced home simply will not sell.
Perhaps the sellers argue that they really need the money, but then they have to ask themselves what they'll do for money if the home doesn't sell. Maybe they figure that they can shoot for the moon now and reduce the price later if they must. However, the longer a property remains unsold, the more likely it is that even more price reductions will follow. Then it’s taken even longer to get a sale at a lower price.
Some sellers might suggest trying a higher price just for the first two weeks, but that's when the interest of serious buyers is always greatest. Those buyers usually look within a certain range, and won't even make an offer at all on an overpriced property.
Most importantly, if the sellers need to buy another home, time is of the essence. If the sale takes too long, they'll be buying at a time when prices and interest rates may begin climbing again.
If you're suffering from PDS, pay attention to the news, review your home's Competitive Market Analysis, and call us in the morning!
Perhaps the sellers argue that they really need the money, but then they have to ask themselves what they'll do for money if the home doesn't sell. Maybe they figure that they can shoot for the moon now and reduce the price later if they must. However, the longer a property remains unsold, the more likely it is that even more price reductions will follow. Then it’s taken even longer to get a sale at a lower price.
Some sellers might suggest trying a higher price just for the first two weeks, but that's when the interest of serious buyers is always greatest. Those buyers usually look within a certain range, and won't even make an offer at all on an overpriced property.
Most importantly, if the sellers need to buy another home, time is of the essence. If the sale takes too long, they'll be buying at a time when prices and interest rates may begin climbing again.
If you're suffering from PDS, pay attention to the news, review your home's Competitive Market Analysis, and call us in the morning!
Tuesday, February 24, 2009
Highlights of the New Homebuyer Tax Credit
1. The maximum credit is 10% of the purchase price or $8,000, whichever is less
2. Credit only applies to first time homebuyers, defined as anyone who has not owned a principal residence in the previous 3 years.
3. Credit applies to first time homebuyers who purchase between January 1, 2009 and December 31, 2009
4. Income limits are $75,000/yr for a single person and $150,000/yr for a married couple.
2. Credit only applies to first time homebuyers, defined as anyone who has not owned a principal residence in the previous 3 years.
3. Credit applies to first time homebuyers who purchase between January 1, 2009 and December 31, 2009
4. Income limits are $75,000/yr for a single person and $150,000/yr for a married couple.
Tuesday, February 17, 2009
Two Ways To Upgrade
Have you ever overdressed for an event? Perhaps you understood the dress to be formal, but when you arrived in your sequin dress or black tuxedo, everyone else was wearing jeans and turtlenecks. You may recall how everyone stared as you entered the room, looking a bit out of place.
That happens to homeowners too, but it's not called overdressing - it's called over-improving. It happens when property owners remodel a home to the point where its new value far exceeds all others in the neighborhood.
Let’s say that your family has grown, and you begin your improvements by adding a wing with two more bedrooms and another bath. You expand to a three-car garage, and install an outdoor deck. In the process, you add $55,000 in improvements to your $100,000 home.
As long as you continue living in the home, that's not a problem. When it's time to sell, however, you'll face an unexpected challenge. You’ve spent $55,000 on improvements, but buyers are unlikely to be impressed as they compare the prices of other homes in the area, and expect yours to be in line.
Before beginning a major project, determine the impact on your home's value. Consider “upgrading” to a larger home vs. remodeling, getting advice from a lender and a real estate agent. When it's time to sell, you'll be glad you did.
That happens to homeowners too, but it's not called overdressing - it's called over-improving. It happens when property owners remodel a home to the point where its new value far exceeds all others in the neighborhood.
Let’s say that your family has grown, and you begin your improvements by adding a wing with two more bedrooms and another bath. You expand to a three-car garage, and install an outdoor deck. In the process, you add $55,000 in improvements to your $100,000 home.
As long as you continue living in the home, that's not a problem. When it's time to sell, however, you'll face an unexpected challenge. You’ve spent $55,000 on improvements, but buyers are unlikely to be impressed as they compare the prices of other homes in the area, and expect yours to be in line.
Before beginning a major project, determine the impact on your home's value. Consider “upgrading” to a larger home vs. remodeling, getting advice from a lender and a real estate agent. When it's time to sell, you'll be glad you did.
Wednesday, January 28, 2009
Low Offers: Prevention Is The Cure
It takes an innovative marketing plan to cause a home to sell, but to attract serious buyers, it must also be priced fairly. What else must be done to successfully sell your home?
Buyers are in search of their dream home. If priced reasonably, they will purchase the home that best reflects their idea of that dream, and it’s the sellers who are in charge of making it happen.
Experience has shown that buyers often reduce their offers by as much as $2 for every $1 in uncompleted repairs. Sellers won't have to face those disappointing offers if attention is given to their home before it is ever shown.
The best method for improving buyer appeal is a "walk-through" by the sellers' real estate agent. The agent plays the part of a prospective buyer, and then suggests upgrades, repairs, and cosmetic improvements.
Then the sellers should complete all the work before the home is placed on the market. Neither a prospective buyer, nor another agent, should ever see the home until it is in 100% marketable condition.
Excuses made at a showing are an open invitation to a reduced price. When a buyer is disappointed, no explanation will suffice to bring the price back up. When selling, ask your agent for advice, and then take action. Buyers will often compete for such a good value.
Wednesday, June 11, 2008
277 New Home Permits So Far This Year
Home building in Midland has been on the rise for the last 8 years. March and May have been the busiest since 2001 with 64 permits issued in each of these months. Building has not been limited to Northwest Midland, nearly as many homes are being built on the East and Southwest side of Midland within the boundaries of Loop 250.
Info from Texas A&M Real Estate Center
~Sandy
Info from Texas A&M Real Estate Center
~Sandy
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