Q.    Are there any positives in this current real estate buyer’s market?

1. There sure are! Think about the whole picture. It always makes good sense to trade up in a buyer’s market. When prices are lower, it’s a one-time shot to get your hands on a bigger chunk of equity. For example, if you sell a $200,000 home at a reduced price of $184,000, you’ve in effect lost $16,000. But, if you immediately turn around & buy a $300,000 home in a different area you will probably come out ahead!  Remember, prices are down in many markets, and interest rates are at historical lows.                                                                       For example: Your Realtor recommends you lower your asking price $5,000 to greatly increase your chance of a sale.  You disagree because you are waiting for a market price increase. So you wait.
Here’s what could very well happen…. The economy is improving; this tends to lead to higher mortgage interest rates.                                                                                                               Say your dream home would require a $200,000 loan, with a current 3.75% interest rate for 30 years. Over the life of the loan you would pay $123,312 in interest.                                        What happens if you delay lowering the sale price and your home takes longer to sell and in the meantime, interest rates rise to 5% ?  You would then pay $186,512 in interest for the life of the loan. That’s an extra $63,200 in interest, which is the difference between a 3.75% & 5%  interest rate over 30 years.

                        Now maybe that $5,000 price reduction doesn’t sound so bad after all!

Good News on Homeownership!

It seems that Americans are continuing to dream of homeownership, at least according to JPMorgan Chase’s recent survey.

A total of 87% of those surveyed said owning a home is something they dream about.
"Owning a home is at the heart of most Americans' dreams," said Kevin Watters, CEO of mortgage banking at JPMorgan Chase. "And people are saving as much as possible to achieve homeownership."

Of those surveyed, 66% believe housing is a good financial investment and 75% see it as a crucial part of raising a family.
"Owning a home will not only give my husband and me pride and roots, but it will also bring pride in my children and respect from my friends and family," said one respondent.

Compared to six months ago, nearly two times as many potential first-time homebuyers are optimistic about being able to put money down on a home over the next six months.

Question & an Answer

Q. My Home is not selling with my current Realtor. You have sold several homes in my area.       Any recommendations?

A. Statistics show that in most current Markets, only the top 8% of the homes are selling, based on Condition, Updating & Price. So the question is, What do I need to do to get my home in the top 8% ?
First off, Since over 90% of the buyers search for their home on the Internet, you must have a powerful home web page that makes your home stand out amongst your competition. Here is an example of a powerful home web page that we use: Click the Norton safe home link:
http://www.coldwellbankeronline.com/ID/2879379

Once you are confident that your home is being marketed to the locations where there are the most prospective buyers, you need to focus on the Top 8% factors.

Condition: Have you kept up with your Home's maintenance? Does it look worn? Need of repair?
Updating: Has your home been updated, remodeled? Does it have the Wow factor?
If you've answered no, or not really to any of these 2 questions, then you have 3 options:
Bring your home up to top condition. (Sorry, but you shouldn't have waited until now)
Update your Home.... new kitchen & baths, etc.
If you do not want to do these factors, then you need to be realistic about your Home price and Lower it!
Unless your home is significantly lower than the competition, whose home is updated and in top condition, it is NOT in the top 8% and it will not sell. You would have to make it well worth the while of a prospective buyer to buy your home over one they can get with the Wow factor!
We see this all the time. If this were a sellers market, then probably the top 50% of the Homes would be selling. But, this is not a sellers market. It is a buyers market.

Remember, when selling, you are in a Price war & a Beauty Contest!
We would be happy to walk through your home and give our opinion on what you need to do to sell your Home and get it into that important top 8%.

Real Estate Q & A

Question: We signed a contract to sell our home contingent on the buyer getting a loan approved and closing by a given date. The buyer did not get the loan and the deal was off.  We started showing the house again but have now found out that the buyers got financing through a different bank and they can close by original deadline. Are we still obligated to close or can we change the contract to better represent our position?

Answer: Whoa. Go back to the part about the "deal was off." Did the buyers agree the transaction was finished? Did they get their deposit back? Or did they simply find a financial bump in the road?   Their offer was fair and acceptable -- otherwise you would not have had a contract. The offer from the   buyers may be the best you'll ever get. Instead of seeking advantage from their difficulty, congratulate them for trying to meet the terms of the agreement and enjoy your check at closing.

 

Worth it or not Worth it?

Good article with short answers about common financial questions.

Jack Otter, Executive Editor of CBS Money Watch, tackles these issues in his book, Worth It… Not Worth It? In an easy-to-digest format, he sheds light on some of the most complicated personal finance decisions.

 1. Borrow for college or don’t go?

“As financially painful as college can be, not going to college is even worse,” Otter writes. So before you sign that loan, a better question might be: How much college can I afford? He suggests considering the earning potential in the student’s chosen field, and emphasizing quality of education over prestige. And if you do borrow, stick to subsidized loans.

2. Use a credit union or a bank?
“Credit unions can do just about everything a bank does, and in almost every instance, they will charge you less and pay you more,” says Otter. On average, credit unions charge lower fees on ATM withdrawals, lower rates on home equity loans and auto loans, and pay higher rates on savings accounts, CDs, and money markets.

3. Date a co-worker or date just about anyone else?

Otter emphasizes that when you’re first starting out, you just shouldn’t go there. There’s too much at stake. But if you’re over 30, it’s a safer bet to at least consider. After all, he says, he met his wife at the office and adds, “a relationship built on common professional interests can be a marvelous thing.”

4. Buy or rent a house?

If you’re ready to settle down, now’s a good time to buy.

5. Fixed rate or adjustable mortgage?
Go with a fixed rate mortgage. With rates this low, Otter says you should lock it in without looking back. “While rates probably won’t rise immediately, we’ve probably seen the lows. Locking in with a fixed rate now could be one of the best financial decisions you ever make.”

6. Buy or lease a car?

Buy a car. Otter’s take on leasing: It’s “like always going to the more expensive restaurant, or making sure you never, ever, pick up an item at the sale prices.” He says you’re essentially paying for the vehicle to depreciate. “To put it bluntly, most people who lease are paying lower monthly payments so they can drive a car they could otherwise not afford. And if they aren’t setting money aside, and insist on a new car every three years, they’re going to get stuck in a leasing cycle because their budget and lifestyle won’t allow them to ever afford to buy one.”
7. Hot mutual fund or a cheap fund?
“Here’s a secret that the financial industry really doesn’t want you to know: The cheaper the mutual fund, the better it is,” writes Otter. He says the lower a mutual fund’s fees are, the better your returns.

8. Cash-back or rewards credit cards?

Generally speaking, Otter says cash-back is the way to go – these cards usually pay back about 1 percent of your purchases. You’ll especially want to avoid rewards cards if you carry a balance. Rewards cards “charge higher interest rates, and you’ll pay far more in interest than you’ll ever get in rewards.”

9. Give kids allowance or pay for chores?

Should you give kids an allowance just for being your children, or have them earn the money through chores? Otter recommends giving a small allowance – between half and twice a child’s age in dollars. You can also consider dividing the allowance up into thirds: one for spending, one for saving, and one for charity. Then, pay for bigger chores – like weeding the garden.

The WOW factor

As we look back on 2012, we see a lot of similar patterns to previous years.

Sure, home prices have dropped. But if the home you are selling has dropped in price, then so has the home you want to buy. If you want to move on, you have to look at the whole picture. Also, consider if your next purchase is in an area that will probably be a better investment than where you are currently located.

Many buyers do not understand this.

It is not what you think your home is worth, it’s what the buyers think it is worth.

If you don’t agree with this, then you shouldn’t be selling your Home.

If you want top dollar and you want to sell your home within a couple months, then your home has to have some WOW factor to it. There is too much competition out there in this buyers market.

Top dollar is defined as the best possible price based on what similar homes have sold for, what buyers are willing to pay and what appraisers think it is worth.

We Sold over 60 homes this year, and the ones that got top dollar were the ones with the WOW factor.  The Homes that were missing this WOW factor, sold only if they were priced thousands and thousands of dollars less. If your home hasn’t been updated, you have to find a buyer willing to do the work, then the price has to be appealing enough for them to make it worth their while.

It may be very expensive to update your home in one shot. Most cannot afford to do this in a short period of time. The bottom line is you have to do some updating to your home every year, so when when you decide to sell, your home will be in WOW factor condition, with very little cost getting it ready for sale.

Ah, Arizona!

Ah, Arizona

The Devil wanted a place on Earth 

Sort of a Summer home

Then he gazed on his earthly kingdom

A place to spend his vacation

Whenever he wanted to roam.

 So he picked Arizona                                                                                                                                                                                                       A place both wretched & rough                                                                                                                                                                       Where climate was to his liking                                                                                                                                                                            And cowboys hard & tough 

He dried up the streams & canyons

And ordered no rain to fall

He dried up the lakes and valleys

Then baked & scorched it all

Then over his barren country

He transplanted shrubs from hell

The cactus, thistle & prickly pear

The climate suited them well

Now the home was much to his liking                                                                                                                                                                      But animal life he had none                                                                                                                                                                                         So he created crawling creatures                                                                                                                                                                     That all mankind would shun

 First he made the rattlesnake                                                                                                                                                                          With its forked poisonous tongue                                                                                                                                                            Taught it to strike & rattle                                                                                                                                                                                  And how to swallow its young

 Then he made scorpions & lizards                                                                                                                                                                And the ugly old horned toad                                                                                                                                                                               He placed spiders of every description                                                                                                                                                     Under rocks by the side of the road

Then he gazed on his earthly kingdom                                                                                                                                                                      As any creator would

He chuckled a little up his sleeve

And admitted it was good

Twas summer now & Satan lay

By a Prickly pear to rest

The sweat rolled off his swarthy brow

So he took off his coat & vest

“By golly,” he finally panted

“I did my job too well,”

“I’m going back where I came from,

Arizona is hotter than hell.”