Real Estate Information Archive

In a seller's market - less inventory available than interested buyers, like most areas of the country are experiencing now - potential home buyers should be ready to make an informed, realistic offer that will stand above the others. There is more to it than simply offering the highest dollar amount. The following suggestions are just a few things to consider on your next house hunting adventure.

Be flexible

Money is often not the sole incentive for a seller to accept your offer. If a seller sees that you are willing to bend compromise on things like the closing date or willingness to overlook relatively minor repairs following the home inspection, he or she will remember you when it comes time to decide on an offer. Other things you can do to show you're serious include offering a sizeable amount of up-front earnest money or have the cash on hand to make a large down payment.

Be ready to buy immediately

Get yourself pre-approved for a home loan before you start actively looking for homes. Bring your preapproval letter with you when you go to open houses or showings. In today's mostly uncertain real estate market, it can take a long time to get approval on a home loan. If you are already approved when you make an offer on a home - even one on which there are multiple offers - yours will immediately jump to the head of the line.

Expect counter offers

If you have a well-informed, thorough knowledge of your financial means when you make an offer on a home, you will know what your limits are when it comes to deciding what concessions you can afford to make if the seller bounces a counter offer back at you. You will be able to quickly determine to what degree you are willing to meet the seller's counter offer terms, such as a higher monthly payment or flexibility when negotiating the myriad contingencies on the closing contract.

Your real estate agent is your best resource when it comes to negotiating with a seller. Before making an offer, talk with a real estate agent. Get the inside scoop on your local market so that you are fully armed and ready to win a bidding war.

Curb appeal is more than just what your home looks like from the curb. It incorporates everything from the landscaping and the exterior color scheme, to the driveway, sidewalks and entryways. Here are four springtime projects that can make your home sparkle like dew in the early morning sunshine.

Landscaping

Impressive landscaping can be as easy as mowing your lawn on a regular basis, watering it, and keeping it clear of sticks, twigs and other organic material. You can also put an attractive face on your home by pruning your shrubbery, planting flowers and keeping it as clutter-free as possible.

Touch-Ups

Over time, paint chips and peels; and siding starts to warp, mold and rot. It's inevitable; however, it can be dealt with easily and, in most cases, inexpensively, with just a small amount of preventative maintenance.

Sandpaper and some elbow grease are typically all that's needed to smooth over peeling paint and paint chips. Once this is accomplished, apply primer and paint for a brand spanking-new exterior.

Roofs and Gutters

Unless they leak, sag, break or fall down, roofs and gutters are easy to overlook or even ignore entirely. Do this at your own peril, homeowner! Truly awesome curb appeal is attained through meticulous attention to just these types of details.

Water is lazy; it will always take the path of least resistance. Instead of trying to flow through a rock, it will simply go around it. Gravity forces water to exploit imperfections in your home, such as cracks, holes and gaps, which can lead it to invade your living quarters.

It might be worth your time (and money) to have a roofing expert take a look and give you some directions repairs and improvements you can make yourself.

Fencing

A fence does more than just protect your lawn from the neighbor's dog's leavings. It impacts your home's curb appeal as much as your landscaping or exterior color scheme.

Unless you plan to replace or remove your entire fence, doing some simple stuff, like adding a fresh coat of paint or blasting it clean with a pressure washer, can yield significant results in a relatively short period of time.

Finally, take a moment and look at your home from the curb. That's right, actually go outside and try to see it with the critical eye of a potential homebuyer. Brave the questioning stares from your neighbors and take your time; examine everything. This should open your eyes to at least some of the obvious places to start your spring home improvements. A little time, effort and, let's be honest, money can save you some of each of these headache-inducing issues in the long run.

After nine months without a positive gain, the Pending Home Sales Index - a forward-looking contract signing indicator - rose 3.4 percent in March, according to the National Association of Realtors® (NAR). This gain, however, must be tempered with the fact that it remains nearly 8 percent lower than the 105.7 it was in March 2013.

NAR's chief economist, Lawrence Yun, attributed much of the increase to the seasonal change in the weather, from winter to spring. Prospective buyers had more of an opportunity to physically go out and look at homes, which has led to more contracts being offered, Yun said. He also indicated that he expects sales activity to continue to rise as more available homes reach the market and more jobs become available to pump more life into the overall economy.

Sales of homes are predicted to trend upward during the months of the forthcoming year, as well as into 2015; however, this year came in on a sour note, meaning the 2014 sales totals will probably not match the 2013 level.

The expectation for 2014's existing-home sales is slightly more than 4.9 million this year, which would fall close to the 5.1 million in 2013. With the available homes for sale continuing to fall short of expectations in much of the United States, however, the national median existing-home price is predicted to rise about 6 or 7 percent in 2014.

As the mortgage industry reinvents itself, you might expect new loan products to arise. However, the energy-efficient mortgage, or EEM, is not a new concept. Although the EEM is an option that has been available through all federal mortgage programs since 1980, that option is seldom used. Industry executives estimate that less than one percent of home loans in America are EEMs.

The purpose of the instrument is to roll the cost of energy-saving home improvements into the cost of the home loan, whether for initial purchase or refinance. The projected amount of savings created by the improvements increases the borrower's debt-to-income ratio used to calculate his loan worthiness. For example, if the energy-efficient improvements were to add $50 monthly to the loan, but the projected savings was $60 per month, the lender would approve the loan.

EEMs are available as conventional, Federal Housing Administration and Veterans Administration loans. Each has slightly different parameters:

1. Conventional mortgages add the annual projected savings to the annual income for calculation purposes, allowing the borrower to qualify for a more expensive home than they would otherwise. The process includes a home-energy rating prior to approval.
2. FHA loans are a bit more complex. The buyer must first meet the general requirements for an FHA loan. Then the loan can be increased by the lesser of the total cost of the improvements plus related report fees, or 115 percent of the median home cost in the area. The total amount saved over the life of the improvements must be greater than their total cost. Funds for the improvements are placed in escrow until after the loan closes.
3. VA loans are available for new and refinancing to qualified veterans with a cap of $3,000 to $6,000.

Unfortunately, calculations of resale price have not historically included energy-saving improvements. This trend is changing as the nation becomes more concerned with global warming. Environmentalists are hoping that green mortgages will attract more borrowers in the future.

Whereas once homeowners had to make a choice between the good looks of natural materials and the easy maintenance of fabricated alternatives, the quality of such materials has improved to the point that the smart shopper can have both looks and convenience. Some of the new products are initially more expensive than their natural counterparts are, but when you factor in their longevity, they actually save you money. Here are six imitations that may make you happier than the originals:

Fiber-cement siding

Made from flexible cement mixed with wood fibers, clapboards and shingles are impervious to rotting and warping. The factory paint has a projected life span of 15 years. The initial cost is about 10 percent less than wood.

Cellular PVC trim

While the product does not require painting, you can add realism to the trim by doing so, but the paint should last about five times longer than on wood. While only warranted for 25 years, it will actually last indefinitely compared to the 10 to 30 years you can expect from pine. The initial cost is about 10 percent higher than wood.

Quartz countertops

Made from quartz chips and resins, cleaning with a sponge is all quartz requires as opposed to annual sealing for natural stone, and is resistant to stains, chips and acid etching. The cost is roughly equivalent to mid-grade granite.

Solid vinyl fencing

Use a simple power wash to clean it. The surface will not require painting for at least 25 years, as opposed to every five years for wood. The cost is about twice what you would pay for cedar, so this product only makes sense if you plan to stay in the home for many years.

Fiberglass entry doors

Fiberglass skins over insulating foam are more energy-efficient than wood. They carry a lifetime warranty, as opposed to five years for wood, and cost 10 to 20 percent less than wood.

Clad windows

Real wood clad in an aluminum skin, they carry a 20-year warranty on the factory paint. They cost about 15 to 20 percent more than plain wood, but do not require the initial paint wood requires, so the cost is almost the same.

As you consider upgrades to your home, consider these exciting alternatives. You may find that you do not have to trade great looks for easy care and you may save money, too.

After falling for three consecutive months, American home re-sales rose in December. Low mortgage interest rates continue to drive the recovery of the real estate market. The National Association of Realtors reported that sales of existing homes reached 4.87 million units in 2013, the strongest sales figures in seven years. The figures were slightly lower than predicted by economists, but overall a good recovery for the year. Sales slowed somewhat near the end of the year.

A sharp rise in mortgage interest rates and price increases have diminished sales figures somewhat as some home buyers cannot meet the higher prices. However, recent indications point to a rise in household formation, increasing demand and encouraging builders to undertake new projects.

Existing home sales declined slightly in February of 2014, but experts blame severe winter weather for a portion of that decline. Limited inventory of existing homes continue to drive solid growth. As job creation continues to rise slowly, so do home sales. The trends for 2014 may be a modest increase, but should remain steady. The median time on the market for all homes in February was 62 days, down slightly from 67 days in January. Of homes sold in February, 34 percent were on the market for less than 30 days. First-time buyers made up 28 percent of February home sales, an increase from 26 percent in January.

When winter finally makes an exit, the snows recede and the sun comes out, a host of chores to put the exterior of the house back in order greets us. The good news is that what seems at first like a lot of work is actually more of an inspection to see how much work we must do. Here is a checklist to help you survey any winter damages and get the actual work out of the way:

1. Check rain gutters and downspouts for loose or leaky areas. Make sure all are debris is cleared away to insure proper drainage.
2. Fill any low areas with compacted soil to minimize water pooling or flooding. Protect your foundations from water damage and eliminate stagnant water, which allows insects to breed.
3. Probe wood trim around the exterior of the house with a screwdriver to locate any loose spots. Make necessary repairs before rain damages the wood.
4. Examine the roof for lost or damaged shingles. Consider the age of the roof to determine whether you need to start a replacement fund. Engage a qualified roofer to inspect the flashing around skylights, vents and chimneys.
5. Check the outside of the chimney for damages. Hire a certified chimney sweep to clean and inspect the inside of the flue. 
6. Move firewood at least two feet from the home and elevate it at least 18 inches off the ground.
7. Inspect concrete slabs for shifting and cracking. Make sure they drain away from the house. Fill cracks with filler or caulk, then power-wash and seal the concrete.
8. Check hoses and faucets for damage from freezing. If you can stop the flow of water from a faucet with your finger, pipes inside the house may need replacement. Contact a certified plumber for an in-depth inspection if you suspect this is the case.
9. Have a qualified HVAC contractor clean and service the air conditioning system and clean the coils. Change all interior filters. Schedule periodic replacement to ensure peak performance.
10. Check lawn equipment to make sure it is ready for use. Make sure it is clean and blades are sharp.

As you inspect the home for damages, keep a careful list to help you prioritize the work and acquire any supplies you need to complete the tasks. When you are finished, go back over your list to make sure you did not miss anything. Now you can enjoy the spring weather!

If you are considering buying a home this year, you have probably heard about some of the changes to mortgage regulations and changes in the marketplace. At this point, you may not be sure what to expect. Here is a general rundown of what you will likely see with respect to home buying, particularly in Oregon, in 2014:

• The number of available homes for sale is dwindling, meaning that the competition for particular homes may increase. Buyers may find it necessary to submit multiple offers before acceptance, especially in the Portland area.
• Interest rates are rising, and while they are still significantly lower than in the past, buyers may feel pressure to act before rate hikes take place. A one percent increase in interest equals an 11 percent decrease in the maximum amount of the loan.
• New mortgage regulations may make it more difficult to qualify for a mortgage loan. Regulations created to protect consumers mean they will be required to prove their ability to maintain mortgage payments. Their debt to income ratio cannot exceed 43 percent in most cases. Self-employed buyers will need to prove they meet this level with two years’ worth of tax returns proving sufficient income in the same business. This can be a challenge since they generally use as many deductions as possible to avoid tax liability.
• Lower FHA loan limits mean that buyers who need to finance properties costing more than $362,250 will be required to seek jumbo loans without FHA assistance and make a 20 percent down payment.
• As interest rates rise, the refinancing market dwindles, which may force lenders to loosen some of their lending standards, however, the new regulations will limit their ability to do this or offer some of the creative financing they have in the past. Lenders are now required to make reasonable determinations as to the ability of the buyer to repay the loan in order to be safe from legal challenges in cases of default.
• As the year progresses, regulations and economic change will probably result in a slowing for price increases.

Your partner in this process is your licensed real estate agent. It is his job to stay on top of all of these changes and help you navigate the process of buying a home.

Many people avoid buying a home during the winter, but there are a number of excellent reasons to start the process before spring. Cold weather means a buyer's market. What you miss in curb appeal you will find at a warm hearth. Here are some important considerations for smart house hunting:

• There are fewer people shopping for homes on the market. The bustle of the holidays and traveling at year-end mean that a lot of people put off the process. This means that when you find a home and submit an offer, it is less likely for the seller to receive a higher bid.
• While inventories may be a bit lower during the holiday season, sellers tend to be very motivated. Homeowners with children do not like to uproot them in the middle of the school year, so if they are selling mid-winter, it is likely due to a job transfer or other compelling reason. Some homes have been on the market for a while and the seller wants to move the sale along. Others want to close the deal for tax purposes. Still others want to complete the sale process so they can start the year without loose ends.
• Because the brokers and lenders have fewer clients, buyers can enjoy more attention and focus on their needs. Lenders sometimes waive fees during traditionally slow periods to encourage buyers to use their services.
• During winter, the systems that serve the house are in full operation. You can tell if the heater is functioning properly, the plumbing is free of leaks and the roof and gutters are doing their jobs. This can prevent a lot of unhappy surprises you might not have discovered until long after purchase. You can tell a lot about the insulation and general comfort of the home when the weather is cold.
• Few investors are searching for homes to flip during the winter months, so you there is less concern of one outbidding you on the home you want. The closer you get to spring, the more this becomes a concern.
• Movers sometimes lower their rates in winter since business is slow. Even small discounts can save you money.

No matter what the season, your real estate agent will be your mentor throughout the process. You can count on his expertise to answer your questions and help you find and purchase the house that will become your new home.

Along with death and taxes, the only thing you can count on in life is change. Perhaps nowhere else in the financial world is this more evident than in the real estate market. Regardless of where you are trying to buy or sell a home, you should prepare yourself for frequent, often unpredictable fluctuations in the market.

For those of us who are not real estate professionals or market, it's important to just remember that when the market slows down, home prices typically drop. Conversely, when the market activity is high, home prices tend to rise.

Remember, every real estate market is different, with different highs and lows, and different reasons for both. As always, your best resource for up-to-date real estate market information is your real estate agent.

Slow Market

Selling a home can be just as stressful and frustrating as buying one, especially when the real estate market refuses to stabilize. Here are some things to help you weather the storm.

When the market begins to slow down, it is tempting as a home seller to lower the asking price of your home. Sometimes this is necessary; however this may not always the best course of action. Even though homes may not be selling as quickly in a slower market, homes that are in good condition still command top dollar. Home buyers entering a slow market have more time to shop, but will still know the value of a well-priced home in good condition.

A relatively slow real estate market can look a lot like a buyer's market; however, it is more often a leveling of buying and selling activity.

Once again, your most reliable source on the actual health of your local real estate market is your real estate agent. Furthermore, an agent will have tools to compare the most recently sold properties to those that are still active on the market.

Active Market

Even if you're in a seller's market, a market with high buying and selling activity, an overpriced home will be recognized as such and remain unsold. Savvy home buyers learn to spot the differences defining a competitive real estate market and an unreasonably priced house. It is in a seller’s best interest to communicate with a real estate agent and ensure their home is well-priced.

Sellers in a developing neighborhood with a lot of new construction taking place should be aware that their home is likely in competition with home builder incentives, such as free appliances or paying buyers' closing costs.

The simplest, easiest and most productive way for buyers to find the best deals in their area is to consult with a real estate agent. It's their job to not only stay on top of the frequent fluctuations in the real estate market, but also to clearly relay that information to clients.

Also, a real estate agent will help you put together a plan, based on what you've said you're looking for, so that you are able to quickly act when you find your best match in a home.