February Pending Home Sales Rise

February Pending Home Sales Rise
Pending home sales increased in February, according to the National Association of REALTORS®.  Pending home sales rose 2.1 percent  in February based on contracts signed in February.

Lawrence Yun, NAR chief economist, says “Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer term performance,” he said. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit.”

Pending home sales in the South increased 2.7 percent.  “We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation, and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.

Source: NAR

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6 Changes in Real Estate for 2011

6 Changes in Real Estate for 2011

We will see some definite changes in real estate during 2011.  Some good, some bad for sellers.  Some good, some bad for buyers.  As the economy begins to improve due to consumer confidence, the real estate market will rebound.  It always does.  Here are some of the changes we can look forward to this year:

1.      Higher interest rates.  Yes, they couldn’t stay at historic lows forever.  After reaching lows around 3.5% in 2010, the interest rates for borrowing money to purchase a home can only go up.  Is it possible to see rates up around 8%?  Possible!  Expect them to definitely get up to at least 6%.  This means it will cost buyers more to buy a home.  Buyers need to get out and buy a home sooner, than later.

2.      Higher down payment requirements.  With the devastating loan programs available during the early to mid 2000’s, and now the large amount of FHA backed loans, expect down payment requirements for buyers to increase.  Even FHA loans may increase their low down payment requirement (currently at 3.5%).  Conventional loans will continue to push for 20% down as lenders look for more stable investments.

3.      Lower backing of large loans.  Again, lenders will be looking for smarter, more stable investments and will be funding less of the jumbo loans.  Plus, current buyers are now looking for smaller, lower priced, homes.  It’s a trend that will be around for a while.

4.      Fewer fixed rate loans.  As interest rates can only go up, and lending requirements continue to be too tight, expect to see lenders open up to more adjustable rate mortgages.

5.      Fewer homeowners.  Reports are already out that home ownership across the country is lower.  Was sitting around 69%, now at 66%.  Possibly get down to 62%.  Less buyers can get loans, plus certain demographics, that are growing in percentage of the population, have a history of less home ownership.  Owning a home is still the American dream, increases the net worth of owners, provides exceptional tax benefits, and increases community involvement.  And don’t forget it is still one of the most valuable investments available.  Home ownership must continue to be a priority for the economic health of our country.

6.      Improved stability.  The country’s economy is already more stable than we saw in 2010.  We will see how the unrest in other parts of the world will affect our economy, but volatility should be less.  Due to the dramatic changes put in place over the past year or so, we should experience better stability for all.

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Beautiful and Elegant home at 4184 Royal Oak Cir Benton, AR 72015

via exite-listings.com

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Costs to buy a home are going up!

Costs to buy a home are going up!

Effective April 18^th – FHA Mortgage Insurance Premiums (MIP) will have another increase from .90 to 1.15%.  That is a 30% increase.  This means an increase in the borrower’s monthly payment!  If you are thinking of buying, we need to have an FHA case number by 4/18/11 to be able to use the lower PMI.  After that date, the fees go up.  Looking to buy, call me asap and lets find one while the fees are low.

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First-Time Home Buyers Prepare for Best Buyer's Market in Recent History

First-Time Home Buyers Prepare for Best Buyer's Market in Recent History

Affordable housing prices, ample inventories, and historically low interest rates signal ‘buyer’s market’ for first-time buyers, which represents 50% of all transactions .   To help first-time buyers know if they’re ready to look for the home of their dreams as we head into this year’s home-buying season, the experts at www.move.com have created a ‘reality checklist’ designed to help them decide if the time is right.

Get your financial house in order
Before you decide to buy a home, it’s essential to make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn’t know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it’s important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don’t fall in love with a house you can’t buy
Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers. Look for special loans available from FHA and government sponsored loans for first-time home buyers that reduce the amount of money required to get into a home.

Learn the lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home-buying. Here are a few key terms from MortgageMatch.com to add to your vocabulary:

Bait rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.

Basis point: A term used in the mortgage industry which simply means 1/100th of 1%.

Closing costs: The fees required to process and close your loan. They’re a cash obligation running from 3-5% of the purchase price. Motivated sellers might pay a portion of these costs.

FHA: Federal Housing Administration, the Federal Government Agency that oversees the U.S. Housing market. FHA Loans are loans insured by the Dept. of Housing and Urban Development.

FRM and ARM: A Fixed-Rate Mortgage Loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are Adjustable-Rate Mortgages with variable interest rates that fluctuate based on an agreed-upon index.

GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.

TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.

Lis pendens: An official notice that there is a pending lawsuit over real estate.

Per Diem interest: Interest you pay per day, from the day you close to the last day of the month.

Underwriting/underwriting fees: Underwriting is a process the lender performs to qualify a borrower for a loan and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.

Warranty deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.

Mortgage Knowledge
While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac. “Buyers who prepare themselves financially before they start looking for a home will have a better chance of succeeding,” says Sue Stewart, senior vice president for Move, Inc. “If you want to land the best mortgage that fits your needs, start early, educate yourself on your financial situation, get your documentation together and find a lender you trust.”

Find a REALTOR® and go shopping
For those ready to buy, REALTOR.com® has the tools and tips to help you find a REALTOR® and, ultimately, the right home. Finding a licensed real estate professional in your area will make the process smoother and easier to understand. Once you find an agent, share your realistic budget and what you’re looking for in a home. Stay in constant contact with your agent and look for homes whenever you have a spare moment.

First-time home buyer resources
For more tips designed to help the first-time buyer navigate the home buying process, the experts at Move have provided an abundance of helpful information that’s just one click away:
-Reality checklist – Are you sure you’re ready to buy? Here’s how to know.
-How-to Guide: Buying Your First Home – Everything you need to know about buying a home
-Get Prequalified Now – Get prequalified for a mortgage before you begin shopping
-Realtor.com Blogs– Connect with REALTORS® to help you navigate the market
-MortgageMatch.com News – Answers questions about finances and mortgages
-Move.com Home Finance – Equips first-time buyers with tools, guides, advice, and more

If now isn’t the right time, prepare for your future purchase
If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.

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Interest Rates are Low!

TODAY - 30 YEAR FIXED MORTGAGE:

CONVENTIONAL – 4.5%

VA - 4.25%

FHA - 4.25%

RD – 4.5%

VA, FHA, AND CONVENTIONAL ARE 3.75% TODAY FOR 15 YEAR MORTGAGES! 

Looking to purchase?  These rates mean it cost you less per month!

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What Buyers Want in Homes Today

What Buyers Want in Homes Today
Buyers have a long list of what they want when home shopping, but one of their biggest desires: A good deal. "And no matter where a seller prices their property, they're looking to negotiate," says Patricia Szot, president of the MetroTex Association of REALTORS®.

But that’s not all they want. Bankrate.com recently asked real estate professionals to chime in on the top desires of their buyers when home shopping. Here are four things that made the list of top home buyer preferences:

1. Homes that are in good condition. "There's not a lot of flexibility in that," says Ron Phipps, president of the National Association of REALTORS®. Many buyers now take the attitude: "I'd rather spend the money getting into the house" and not have to spend more money later, Phipps says. One of the major reasons is that "buyers have limited amounts of cash," he adds. "Even if they want to do a fixer-upper, they don't have the money to do it."

2. A bargain with incentives. Buyers are looking for a good deal, even when considering bank-owned properties, says Joan Pratt, real estate broker with RE/MAX Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures and they want them to look like they're owner-occupied," she says. "They don't want to paint. They don't want to put carpet in. They don't want to clean."

And they aren’t only asking for a low price but they also want incentives to buy too. As such, sellers are offering everything from gift cards for new furniture to paint to financial assistance at closing.

3. Outdoor living areas. Homes with screen porches, outdoor kitchens, two-way fireplaces are becoming increasingly competitive in the marketplace as more buyers say they want more outdoor living space.

4. Open kitchens. "The wall between the kitchen and the family room is evaporating," Phipps says. "The kitchen is becoming part of the gathering space.” (See Buyers Want Cozy, Connected Kitchens)

Source: “9 Items Homebuyers Desire in 2011,” Bankrate.com (March 2011)

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