Housing Market Worries Vs. Housing Market Realities

sb10063363be-001.jpg

Below is a summary of an article written by Lawrence Yun for Realtor Magazine. Yun is Chief Economist & Senior Vice President of Research for the National Association of Realtors.——————————————————————————-

-Turn on the TV this week and you’re likely to hear continued coverage on the decline in the housing market leading many to believe that the problem of loosing money on real estate investments in America is widespread. Not so, according to Lawrence Yun. He says that someone who purchased a property in Las Vegas five years ago would be ahead by $150,000 today, by $200,000 if he purchased in Miami, and approx. $54,000 on average in the US as a whole. According to Yun, the amount of Americans who are suffering  losses only amount to about 1- 2% of homeowners who purchased in a few specific markets that overheated during the boom.  Consumers who invest $10,000 as a down payment on a typically priced home will net  $110,000+ over the course of 10 years. Invest that same $10,000 in stocks and you’ll likely to return only $23,600. Purchasing real estate with the plan of holding on to it for a reasonable period of time continues to be a sound investment and is what creates the staggering difference in average net worth between home owners and renters.

www.brettdavisrealtors.com

Published in: on January 7, 2008 at 2:33 pm Comments (0)

The Importance of Mortgage Pre-Approval and Finding a Legitimate Lender

73581909.jpg

In the past, potential home buyers would often do their house shopping before they secured their financing. This method of putting the “cart before the horse” is not very effective in today’s mortgage market because you are potentially setting yourself up for disappointment if you cannot actually afford to buy the dream home you have selected. So, why not avoid the disappointment by simply getting pre-approved for a mortgage before you start home shopping? Most lenders can pre-qualify you for a mortgage over the phone or even online. The lender will ask basic questions about your financial history and income situation and then estimate how much you will be given for a mortgage. However, it is important to remember that getting pre-qualified is not the same as being pre-approved. For example, a pre-qualified letter is simply an estimate which gives you a “ball park” figure of what a lender will give you for a mortgage. An application is not completed and financial information is not verified so there is still no guarantee on the amount you can borrow. Being pre-approved means you have actually applied for a mortgage by filling out an application, you have received a credit report, and you have verified your income situation. Upon pre-approval you will know exactly how much you can spend on your new home. You also gain more credibility with sellers if you are pre-approved because both of you know exactly how much you can afford to spend on your dream home. So taking the time to get pre-approved with a legitimate lender (a bank, savings and loan, a mortgage broker, etc.) before you start home shopping will make your home buying experience less stressful and more effective. Just ensure that you do find a legitimate lender and try to avoid those who seem disorganized and informal. If a lender cannot provide the right information that is relevant to the current mortgage market, simply look for another reputable lender. 

Published in: on December 17, 2007 at 5:58 pm Comments (0)

How to Hire a Home Inspector

home-magnify.jpg

If you’re purchasing a property and thinking about choosing a home inspector based on price, take a moment to consider the possible consequences. A home will be one the biggest purchases you will ever make, its best to make sure you’re making a sound investment. Hiring a qualified home inspector will help you make a knowledgeable purchase.

Here are some tips for choosing a qualified building inspector:

1) Speak with the inspector to find out what kind of training they have. In Maine, no qualifications are needed to become a home inspector therefore, the more training an inspector has the more qualified for the job they will be.

2) Find out if the home inspector is full time or part time. You should be looking for someone who is up to date on industry standards and preforms inspections on a regular basis.

3) Ask if the Inspector is a member of the Better Business Bureau or other professional organizations. This shows that the inspector is committed to keeping a good standing in the community and  is interested in maintaining a good reputation.

4) Find out how an inspector will report their findings. Verbal reports are generally not recommended. Ideally, the home inspector will provide you with a detailed report with photos and recommendations.

5) Ask your inspector what they won’t include in the report, and decide if you need to hire someone else to cover whats not done, or if there is someone who can do all of the inspections you want.

6) Ask for testimonials from past customers, or ask your Realtor, they can usually connect you with someone who is reliable and well qualified.

www.brettdavisrealtors.com

Published in: on December 13, 2007 at 9:27 pm Comments (0)

Maine Home Construction

eden_lg.jpg

CONTRACTORS ARE NOT LICENCED- Buyer Beware!

While there are a great many competent, ethical home contractors in Maine, it is up to you, the consumer, to find one. Home contractors are not licensed or regulated by the State of Maine. the old saying “Buyer Beware” applies. You should also keep in mind that the lack of state licensing allows the worst contractors to compete for your business alongside the best. The Attorney General’s Consumer Mediation Program ranks home contractors among the top three most complained about business every year.

The Maine Attorney General’s office strongly recommends that you ask any contractor you are considering hiring for several references and that you follow up on them. It is also a good idea to check with your local building supply companies or real estate brokers. They will know the dependable contractors in your area.

Although home construction contractors are not licensed, some building trades are licensed. Plumbers, electricians, oil burner technicians, and installers of mobile and modular homes are licensed in Maine. For more information on these licensed trades, go to www.maine.gov/pfr/pfrhome.htm

BUILDING CODES

While some towns and cities have adopted building codes and enforced them, others have not. We recommend that you talk to your town’s code officials before you begin construction.

WRITTEN CONTRACTS ARE REQUIRED

For all home construction and home improvement projects over $3,000, Maine law requires a written contract with a specific provision that prohibits payment up front of more than one third of the contract price. When a contractor asks you for any money up front, make sure that the money is being used to purchase materials for your project. Ask for receipts and for a lien waiver from subcontractors. A model home construction contract that meets State law can be found in Chapter 18 of the Maine Attorney General’s Consumer Law Guide. Go to www.maine.gov/ag/index.php?r=clg&s=chap18.

BE CAREFUL WITH CONSTRUCTION LOANS

If a lender is financing your construction project, make sure that you know your lender and that you understand how your loan proceeds will be disbursed and how subcontractors will be paid.

HOME CONTRACTOR COMPLAINTS RECEIVED BY THE ATTORNEY GENERAL

You can find out if a particular contractor has been the subject of a consumer complaint that the Attorney General attempted to mediate by contacting the Attorney General’s Consumer Protection Division at 1-800-436-2131 or at consumer.mediation@maine.gov The Better Business Bureau may also have relevant information on companies. Go to www.bosbbb.org or call (207)878-2715. Keep in mind that just because the Attorney General has accepted a complaint for mediation does not necessarily mean the consumer was right and the contractor was wrong.

HOME CONTRACTORS THE STATE HAS SUED

In the recent past the State has successfully sued the following home contractors for poor workmanship or failure to complete jobs:

-CBS Enterprises ( Kimberly Mark Smith & David J. BLais)       

-Frederic Weinschenk of Weinschenk Builders Inc.

-Stephen Lunt of Lakeview Builders, Inc.

-Bob Burns of Better Homes

-Albert Giandrea of AG’s Home Quality Improvements, Inc.

-Al Verdone

-Mikal W. Tuttle of MT Construction, DMi Industries, Inc. & MT Construction, Inc.

YOUR HOME CONSTRUCTION RIGHTS

Chapter 17 of the Maine Attorney General’s Consumer Law Guide explains your rights when constructing or repairing your home. Chapter 18 of the Consumer Law Guide is a model home construction contract that meets the statutory requirements for any home construction contract over $3,000. Go to http://www.maine.gov/ag/index.php?r=clg.

All of the above information must be provided to the consumer by the builder should the contract be for work totaling more than $3,000.

Published in: on December 11, 2007 at 9:02 pm Comments (2)

Maine & National Real Estate Sales Data for October 2007

The following information was provided by the Maine Association of Realtors. The data reflects properties reported as sold in the Multiple Listing Service within the time periods indicated.

South Portland—- Sales of Maine real estate continued to drop in October 2007, while prices for single-familiy, existing homes dipped a slight 1.95 percent. Realtors reported 1,041 sales across Maine last October. Thats down 12.23 percent compared to 1,186 sales during the month of October 2006.

The median sales price for a single-family existing home was $188,500 in October, down slightly from $192,250 one year ago. The median sales price indicates that half of the homes were sold for more and half sold for less.

The National Associaton of Realtors found that nationally, sales of existing single family homes dropped 20.8 percent in October. The national median price of a single family existing home decreased by 6.3 percent in one year to $2 05,700.

Regionally, in the Northeast, sales were down by 12.6 percent. The Regional median sales price rose 1.3 percent to $205,700.

This data backs up the idea that its now more important then ever to price a home appropriatly to the market and to commission it appropriatly. Its also a great time for buyers as there are far more choices and lower prices.

Below are two charts showing statistics for Maine and its 16 counties. The first chart lists statistics for the month of October only, statewide. The second chart compares the number of existing, single-family homes sold (units) and volume (MSP) during the months of August, September and October of 2006 & 2007.

                                                       Statewide October Only Chart

  Units Sold ‘06      Units Sold ‘07    Change       MSP ‘06     MSP ‘07     %Change

         1186                        1041                  -12.23%         $192,250    $188,500      -1.95%

                                                  

          

stats.jpg                                       

 

   

Published in: on December 4, 2007 at 6:21 pm Comments (0)

Types of Deeds

In Real Estate there are 4 types of deeds that are commonly used. Below is a brief explanation of each.

General Warranty Deed: In this type of deed the seller conveys a property with warranties or covenants and is legally bound to these grantees.  A General Warranty Deed provides the most protection to a buyer. Some basic warranties include:

-Covenant of seisin: This basically means that the seller owns the land and has the    right to convey it.

-Covenant against encumbrances: The seller guarantees that the property is free from any liens or encumbrances that are not stated in the deed.

-Covenant of quiet enjoyment:This states that the buyer’s title will be good against any third party attempting to establish title of the property.

-Covenant of further assurance: This means that the grantor will provide any documents or information necessary to make the title good.

A warranty deed does not just cover the time a grantor owned the property, but it extends for the entire life of the property. The grantor of a warranty deed is liable for title problems that occur before and during their ownership.

Special Warranty Deed: This type of deed conveys just two warranties: that the grantor has received title and that  no encumbrances occured during ownership that are not included in the deed. The grantor of this deed is not liable for any problems with the title that have occurred prior to their ownership.

Bargain & Sale Deed:  This type of deed does not grantee against encumbrances on the property. All this deed guarantees is that the grantor holds title. This type of deed is most commonly used in tax sales & foreclosures. The grantor of this deed can not be held liable for any problems that later arise with the property.

Quitclaim Deed:This is the least protective type of deed for a buyer. This deed only conveys whatever interest the grantor has in the property. These types of deeds are typically used to fix defects in the title or to transfer property between family members.

Published in: on November 30, 2007 at 7:36 pm Comments (0)

Points in Real Estate Explained

 

loan1.jpg

If you’re entering into a contract on a home you may be asked or have to pay ”points”. Below is an explanation of what points are, as always we welcome your comments and questions!

 

 What is a Point?

A point is equal to 1% of the new loan amount.

Why do Lenders Charge Points?

Whenever government regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest which would make the real estate loan competitive with other fields of investments, the lender can bring the real estate loan up to those other investments.

Are Points Called Different Names?

Yes. Loan Origination Fee, Commitment Fee, Discount Fee, Warehousing Fee. Funding Fee are some of the more common names used.

Who Pays the Points?’

FHA: Buyer is usually charged with the loan Origination Fee. The Discount Fee can be paid by buyer or seller.

VA: Buyer is usually charged with eh Loan Origination Fee & Funding Fee. Discount Fee must be paid by seller.

Conventional: Points can be paid by the buyer, seller, or split between the two.  This will be stated on the contract of sale!

City/County/State Government Sponsored loans: as published by them.

Do the Number of Points Charged Fluctuate?

Yes. If rates on mortgage loans are lower than other investments,( such as stocks, bonds, etc.) then funds will be drawn away from the mortgage market. Also, when there is heavy demand upon the money market because of business needs, military requirements or other government borrowing, the result is that money for home mortgages becomes scarce and more expensive. When this occurs, more points can be charged. Points balance the market. Points are not set by government regulation but by each lender individually.

Is FHA or VA Financing Unfair to Sellers?

No. Homes can sell faster because more buyers can qualify with the lower down payment requirement, lower interest rate-long term loans with lowest monthly payments. Sellers receive all cash for their equity to reinvest in a new home or other investment. The purpose of these loans is to provide purchasers the opportunity to buy homes with minimal cash investment thus providing a bigger market for sellers.

Are Points Deductible for Income Tax Purposes?

Points on a home mortgage are deductible currently if points are generally charged in the geographical area where the loan is made and to the extent of the number of points generally charged in that area for a  home  loan. If you are in doubt about points being deductible, you should contact your accountant or the person who prepares your tax returns.

Published in: on November 28, 2007 at 2:42 pm Comments (0)

Reasons To Hire a Buyer’s Agent

aa014362.jpg 

If you’re thinking about buying a home, you may be wondering whether or not you should hire a Buyer’s Agent. Buying a home is one of the biggest financial decisions you’ll have to make, are you sure you’re ready to handle the transaction on your own? Below are some great reasons to hire a Buyer’s Agent.

Purchasing a home is a big decision. The average person spends around 1/3 of their income on their home.  When Buyers attempt to “go at it alone” they risk the possibility of making mistakes. A good Buyer’s Agent can mean the difference between a wonderful transaction, and a nightmare.

Access to the Multiple Listing Service (MLS)

The MLS is a powerful resource that all Realtors have access to.  It’s a database of homes and represents approx.  99% of the homes for sale in any given market. The MLS has  evolved into a very precise search engine that allows an agent to enter in search criteria to produce the homes that match those specific parameters. While its true that buyers can use real estate search engines, the information they provide is minimal to what the MLS has and the criteria used for searching is minimal in comparison.

Your Time in Important to You

While driving through neighborhoods is an one way of deciding which locations you prefer, its not very time efficient. Gas prices are going up, and how much time do you really have to spend? A Buyer’s Agent can ask questions to find out what it is you’re looking for and then provide you with a list of homes that are the best match. A buyer’s agent has significant experience finding homes for buyers, and they can help narrow down your choices.

Your Very Own Advocate

Listing Agents have a legally binding agreement with their sellers that require them to have the seller’s best interests in mind at all times. This means, that they have no interest in helping you get a good deal. However, a buyer’s agent is there to help you and only you in the transaction. With a buyer’s agent on your side, you have someone who will make sure you’re getting a fair price, guide you, and advise through the entire transaction.

Negotiating

A Buyer’s Agent can provide you with a Comparable Market Analysis using the MLS’s stored sales data. With this in hand they can help you make an offer that is supported by firm, clear data- allowing you to get the best price possible.

 Experience

How many homes have you purchased? The average person owns 3-5 homes in their lifetime. A Realtor helps with the purchase of 3-5+ homes every month! They have the experience to know what can go wrong, and how to make things go right. Things that may be a deal breaker to the un-represented buyer can actually be dealt with and overcome with an experienced Realtor assisting.

Contacts

There are a lot of people involved in the purchasing process and your Realtor knows who will do the best job. Whether it’s a loan officer, home inspector, title company, or appraiser, your Realtor will put you in touch with someone they trust the transaction with. This is vital for a smooth transaction.  

 They Will Put you at Ease

Purchasing a home is one of the biggest financial decisions you will every make. Knowing you have someone who is looking out for your best interests and is prepared to handle whatever arises can help you sleep easy at night.

Published in: on November 19, 2007 at 5:46 pm Comments (1)
Tags: , , , ,

Tips for Selling Featured On Good Morning America

                   forsale.jpg

This morning Good Morning America featured an interesting story called “GMA Boot Camp: Sell This House!” The article gave several good tips for attracting buyers.  Lately it seems that getting buyers just to look at a home for sale is getting harder and harder, but GMA suggests that a little creativity may just solve the problem! 

Their first suggestion is to make the home stand out from the crowd. (We talked about this in our last post). Its extremely important to make sure your home shines when a buyer looks at it. Things need to be up to date, and interestingly, GMA reports that many buyers check out floors to determine how well a home has been kept up overall.  

Second, GMA says to have a big on-line push. There are a variety for websites out there for advertising your home and print ads just don’t cut it anymore. At Brett Davis Realtors we publish our homes on MLS, BrettDavisRealtors.com, Craigslist.org, MaineToday, YouTube, Realtor.com, Yahoo, Google, RealEstateBook.com, BobVilla.com, Trulia, MSN, BeelSouth, Livingchoices, and the NYTimes.org. We also just created a MySpace Page!

Here’s where the getting creative part comes in, GMA reports seeing a growing number of Garage Sale/Open Houses. The garage sale attracts a large amount of people including some who otherwise, might not have seen your home.

Finally, GMA asks sellers to take a good look at price. Unfortunately, no matter how wonderful your home may be, if there are similar homes on the market offered at a lower price, buyers won’t even bother to visit yours. Buyers know they have choices in today’s market and they are going to be looking for the best value. Ask your real estate agent to find out how many homes like yours are on the market, and what they are currently priced at, then price your home accordingly.

Check out the full article at : http://abcnews.go.com/GMA/TurningPoints/story?id=3855152

Published in: on November 14, 2007 at 2:48 pm Comments (0)

10 Steps to Prepare Your Home for Sale

In a challenging market where home inventory has increased by 100% in just 3 years, getting your home in tip top shape is increasingly important. Your goal should be to make your home appealing to a wide range of shoppers. Follow these 10 simple steps to beat out the competition:

1) De-Clutter     

   Dining Room Before Staging By Kristin       Dining Room After Staging By Kristin                       

                                                                                    

 Pack up all your knickknacks! You may love them but a buyer probably won’t.                 Keep your kitchen counters clean! All bills and receipts should be tucked away in a drawer.                                                                                                                                            Put any personal products you ususally keep on the bathroom counter neatly hidden away under the sink or in a closet.

2) De-Personalize

Limit the amount of family photos hanging on your walls and take down any animal heads you may have mounted

3) Rearrange Bedroom Closets & Kitchen Cabinets

Buyers & agents love to snoop. If all closets & cabinets are organized and neat,  it sends a message to the buyer that you probably take good care of the rest of the home as well.     Some things to consider: hang shirts together all facing the same direction, line up shoes, neatly stack dishes & glasses.  Also, you want a buyer to think that you have plenty of storage, so toss out anything that you don’t need to free up space.

4) Rent a Storage Unit

Living Room Before Staging by Kristin      Living Room After Staging by Kristin

Almost every home shows better with less furniture. Rooms should be clearly defined with just enough furniture for buyers to know it’s purpose. You don’t want home-buyers scratching their head wondering “What is this room used for?” Less furniture will also make the rooms appear larger.

5) Remove & Replace Things You Intend to Keep

If you have a special chandelier hanging over your dining room table or a wood-stove that was once your great grandmother’s, remove it now! If the buyers don’t see it, they won’t want it. Doing this can save you from numerous problems that can arise after the home goes under contract.

6) Make Minor Repairs

Patch holes in walls, fix leaky faucets,  and adjust doors & cabinets so they close properly. Replace burned out light bulbs, & consider a fresh coat of paint, especially if a room has  a mural.

7) Make the House Sparkle

Bedroom Before Staging by Kristin    Bedroom After Staging By Kristin

Wash the windows inside and out, clean any cobwebs hiding in the corners of the ceiling, re-caulk tubs, showers & sinks, polish chrome faucets & mirrors, keep the appliances clean and dust all surfaces. Odors are a big No No so clean your cat box on a regular basis, take out the trash often, and fa-breeze the furniture your pets love most. Sellers may not even realize there’s a smell if they’ve gotten used to it themselves.

9) Be Objective

Take a look at every room & imagine how your home will look to a prospective buyer. Try to take the emotions out of it and ask yourself, is this home really worth what I’m asking? How does it compare to other homes on the market right now?

10) Curb appeal

This is the most important part of selling your home!  If you can’t get a buyer into your home you’ll have 0% chance of selling it. Keep the sidewalks & walkways cleared, mow the lawn, trim the bushes, paint faded window trim & siding, plant flowers and make sure your exterior lights are working for early evening drive-bys or showings.

Staging your home can make all the difference in the time your home is on the market and the price you’ll actually get. If your not quite sure where to begin, consider hiring a professional.

We Recommend: Home Charmers’s Kristin McClellan. Check out her website: www.HomeCharmers.net  or give her a call at 207-899-1239.

Published in: on November 13, 2007 at 6:58 pm Comments (0)
Tags: , , ,
Newer Entries »