Buyer Information

Weston Village HUD Condo Approval Expires

August 26, 2011 by admin

The Department of Housing and Urban Development (HUD) maintains a list of approved condominiums across the country. A condominium must be on the approved list in order to qualify for federally insured FHA or VA loan products.

As of today 08/26/2011, the list maintained by HUD is reporting that the approval of Weston Village has expired as of 07/31/2011.

FHA loan products have become increasingly popular with buyers who have credit scores that do not meet conventional loan requirements, and who do not the have the ability to come up with a large down payment – with a FHA loan the down payment can be as little as 3.5%. First time home buyers frequently use FHA mortgages in order to obtain financing for their first home.

The inability for a community to provide the option for FHA financing could negatively impact the ability of many buyers who maybe interested in the community to obtain financing. Hopefully Weston Village will be back on the HUD approved list again in the near future.

Pictures – The Way To Lure Potential Buyers To Your Home

August 25, 2011 by admin

Country estate nestled on 8,000 nicely landscaped acres. Cozy interior with 250 rooms, 65 fireplaces, and 135,000 sq feet of living space

Which picture, left or right, evokes the visual grandeur of the country’s largest home, Biltmore Mansion in Asheville, NC ? Which picture would you want to have representing your home? Without a picture the grandest home loses it’s appeal despite the narrative describing the home. Pictures serve as the bait to lure potential visitors to your home. Ensure they represent your home at it’s best.

Over 90% of potential home buyers begin their search for homes on the Internet, and one of the most critical components to a listing as it is presented on the Internet is pictures. Good pictures act as a enticement to potential buyers, and the lack of pictures, or poor quality pictures act as a definite turn off. The opportunity to grab the attention of a buyer is brief, and the initial online presence of your home is very important. If an image does not grab their attention, it is highly unlikely that they will return.

Some common bad practices regarding pictures:

No Pictures At All: It maybe hard to believe but I have seen many listings that have been on the market for a substantial time without any images. I saw one the other day that was on the market over 200 days with no without any pictures. This is the ultimate disservice to a client. A new listing has an Web “shelf life” of less than 3 weeks, after which it has lost it’s freshness and becomes just another listing. The first few weeks must be capitalized upon, and pictures are the driving force behind generating interest. Potential homes of interest are winnowed out on a buyer’s laptop, PC or other connected device based primarily upon the images associated with the home. Pictures for listings should be entered quickly after the listing in entered into the MLS, preferably accompany the listing’s entry. Data feeds from the MLS to syndicated Web sites are generally done once daily. It is important that new listings have images from the start.

Out Of Season Pictures: Believe it or not there some listings in August still show pictures of homes with snow on the ground. Others still show interior pictures with Christmas decorations. I think this is an inexcusable practice for an agent. It shows a gross lack of attention to detail, and ultimately says ” I am lazy”.

Too Many Pictures: The MLS currently allows up to 25 pictures for each listing to be uploaded. When an agent sends listing information to a client from the MLS up to 25 images can been seen. Most other syndicated Web sites only display a subset of the pictures, many for instance only show six. Ten or 12 quality images on the MLS can adequately capture the most important visual elements of a home. When seeing listings with 25 pictures I think most agents really “stretching” to get that many quality pictures. Pictures should act as an visual enticement to stimulate a desire to see the home, too many images may cause a potential buyer to eliminate a home from their “want to see” list. There is no need to show an entire home in pictures.

Out Of Focus Pictures: Some pictures look like the photographer is intentionally shaking the camera in order to create some kind of special effect. Out of focus pictures serve as a distraction, and the focus becomes the bad quality of the picture, instead of a concentration on the image of the home being represented.

Dark Pictures: Many pictures with a bright light source in the background, such as a window, typically turn out too dark in the foreground. The built in light meter of point and shoot cameras is overwhelmed with the bright light source, and the foreground tends to be too dark. Prefocusing on the darker area of the intended subject allows the camera to properly adjust for the more important subject areas of the picture.

Clutter In Pictures: Time should be taken to clear out the subject area of clutter and present the best image of the subject. Kitchen counters should be free of almost all items, refrigerators should be cleared of magnets, notepads, calendars, etc. It is common to see piles of laundry, toys, or just “stuff” in images.

Toilet Pictures: This is an especially common practice which I think is a detraction. Most of the time the seat lid is also up, which must violate some basic Feng Shui principle. Most homes I have seem have toilets, so it is pretty much a given that a home will have one, and they are are really not too different from each other.

Exercise your right to have input regarding the pictures of your home that will be shown to the public. It is a critical part of the marketing of your home in today’s visually centric search process.

There Are Many Losers In A Foreclosure

August 25, 2011 by admin

The effects of a foreclosure are far reaching, and the impact is felt by more than the family who is losing their home. Aside from the very real emotional impact of losing a home to foreclosure, there is significant economic to others as well.

Lender: According to a 2007 study by the The Joint Economic Committee of Congress, foreclosures carry an average cost of $77,935, The costs associated in preventing a foreclosure are estimated at $3,300. Most of estimated expense of $50,000 is shouldered by the lender, who takes title to the home. Standard & Poors estimates the cost of foreclosure at 26% of the loan amount on the property. Lost principal and interest payments, taxes, appraisal costs, insurance, maintenance, and selling expenses are components of this number.

Homeowners: The congressional report put the average cost to homeowners at $7,200 for lost equity, moving expenses, legal fees and the like. The credit score of the owner of a foreclosed property will also take suffer for years to come as a result. This could lead to higher future borrowing costs for the owner.

Local Government: Communities can lose anywhere from a few hundred dollars to more than $30,000 on foreclosed homes. That includes lost property taxes, unpaid utilities, and costs for upkeep of a property.

Neighbors: Particularly for close neighbors, studies show a single foreclosure can lower home value anywhere from 0.6 percent to 1.8 percent. The Center for Responsible Lending put the average neighbor dollar loss at $5,800 to $8,700. The community cost of a foreclosure is not only economic. A buyer’s perception of a neighborhood can suffer as a result, and can lead to lower sale prices.

In 2010 6.4% of Wallingford homes sold were Bank Owned Foreclosures. In comparison 11.8 % of Delaware County homes sold were reported as Foreclosures.

Mortgage Rates At Lowest Level In 50 Years

August 24, 2011 by admin

Freddie Mac released the results of its Primary Mortgage Market Survey® showing mortgage rates, fixed and adjustable, reaching all-time record lows. The 30-year fixed averaged 4.15 percent, breaking the previous record low of 4.17 percent set November 11, 2010.

According to the survey, 30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending August 18, 2011, down from the last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent.

Additionally, 15-year FRM averaged 3.36 percent with an average 0.6 point, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent.

Results also showed that the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08, with an average 0.5 point, down from the previous week when it averaged 3.13 percent. A year ago, the 5-year ARM averaged 3.56 percent.

The one-year Treasury-indexed ARM averaged 2.86 percent with an average 0.6 point, down from the last week when it averaged 2.89 percent. At this time last year, the 1-year ARM averaged 3.53 percent.

Thirty year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011.

The environment of ultra low mortgage rates, lower home prices, and abundant inventory combine to make this an attractive time to buy a home.

Housing Affordability Index Set To Reach New Record High

August 22, 2011 by admin

Housing affordability will be at its highest in a generation this year.

The affordability index is comprised of median home prices, median family income, and the prevailing mortgage rate. An index of 100 implies that a median income family has just enough income to buy a median priced home. An index of 120 implies that a median income family has 20 percent more income than is necessary to buy a median priced home. The index reached an all-time high (since the index was created in 1970) of 174 in 2010. This year, it looks to surpass 180. The rising affordability is a combination of lower home prices, record low mortgage rates, and a slight rise in family income.

In short, there has not been a better home buying opportunity in 40 years.

However, not all people have the necessary confidence to make a major expenditure like a home purchase in an uncertain economic environment. More importantly, the underwriting standards are overly stringent. Those who are currently able to get conforming mortgages have an average credit score of 760. Under normal underwriting standards (and not the lax underwriting of the bubble years), credit scores would be closer to 720 on conforming mortgages. For FHA mortgages, today’s borrowers have an average credit score of 700, compared to historic FHA borrowers who had an average credit score of 660. If the underwriting standards were just to return to normal then there could be an additional 15 to 20 percent increase in home buying activity.

Banks have plentiful cash reserves but are unwilling to lend. They are blaming the regulators, saying extra cash holding is needed in case of another catastrophic economic event and because the banks are uncertain about future regulatory rules. Simply getting the excess cash holdings held by the banks out to the borrowers will be the true, natural stimulus for the economy.

Source: National Association Of Realtors – Economists’ Outlook

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S. Clark Kendus