10 Things to Take the Trauma Out of Homebuying - Installment 1

You a first-time buyer, or perhaps it's just been awhile since you've been in the market. Buying a home is one of the largest financial transactions you will likely undertake in your life. Knowing this can create a cloud of fear and hesitation in your mind and around the transaction; it is only natural.

How do you work through it and fulfill your plans to reach your goal of homeownership?

Consider these points below to help focus your search and set your goals within your financial plan for 2010.


1. The Inside Scoop to Hiring a REALTOR

Find a REALTOR that will represent you as a Buyer, and consider a Buyer's Representative contract to align your interests; The Argument for a Buyer's Representative Agreement Contract

In Idaho, without a Buyer's Rep Contract (Buyer Agency), your information does not need to be held confidential by your agent in negotiating...which can certainly work against you in the wrong situation! It guarantees the Buyer their personal information will be held confidential, surviving the transaction itself, and allows the REALTOR to negotiate on behalf of the Buyer. For example, when the REALTOR presents an offer to a Seller without a Buyer’s Rep in place, if the Seller’s Agent asks, “Can they offer more?” and the Agent knows they can and their circumstances, the Agent can respond, “Yes, I believe so, they have just received a large inheritance!” This obviously does not help the Buyer in negotiating! (More details of the Agency relationships in Idaho are in the Agency Disclosure Brochure, which may be found on my website here.)

Have you been in touch with a REALTOR and wondered why they stopped communicating with you? It may be they will not work without a Buyer's Rep contract in place. In addition to protecting the Buyer, the Buyer’s Rep contract also assures the REALTOR that the Buyer has committed to working with them, and is not still shopping other Agents or working with more than one. When an Agent puts the time into finding and showing homes to a Buyer and advising them along the way, the Agent is not going to be compensated for his/her time unless a transaction closes.

The Buyers Rep also sets out a clear set of expectations for both parties. If either party is dissatisfied with the service, typically either party may cancel the contract in writing. Confirm with your REALTOR that they have and support this policy.


Will I have to pay my Buyer's Agent?

If the home you are buying is listed in the MLS, the Buyer's Agent's commission is being paid by the Seller; therein, FREE to you, the Buyer. Sellers agree to pay this fee because this assures the Seller that the Buyer is represented, will be appropriately advised and pre-qualified, and once an offer is accepted it will be less likely to fall through as all the appropriate steps are being taken along the way. It also reassures them that the people who come into their home are “real” potential Buyers, that the Sellers are not taking the time to clean and prepare their home (disrupting their schedules) for a showing that is in fact just a curious looky-loo. Even For Sale by Owners are almost always willing to pay a Buyer’s Agent, as often they aren’t educated about the entire process anyway, and do not know the laws about what they are required to disclose about their home, etc, where to find forms, etc. 

Check for any designations the REALTOR has earned.


For example, are they an Accredited Buyer’s Representative (ABR)? Designations are additional education pursued by the REALTOR beyond the minimum continuing education credits required by the State of Idaho. The quality of their knowledge and education is an asset to you!


Consider your personality and your comunication style
 
Be sure you find a REALTOR with whom you are compatible. Homebuying is not only a big financial commitment, but also an emotional one. Do you prefer frequent phonecalls? Are you email and text only? Are you a numbers and charts person?
 
It’s critical that the agent you chose is both skilled and a good fit with your personality and that you bond with your agent in a way that you feel you can trust them. Remember, your agent has guided many transactions in his/her career, and will likely have some insight into the transaction options for you along the way.
 
NEXT: The Right Time to Buy?

Refinancing Drives Mortgage Activity

reposted from realtor.org/realtormag
Daily Real Estate News | December 9, 2009

Refinancing Drives Mortgage Activity

Mortgage activity rose last week to the highest level in about two months, mainly from borrowers locking in low mortgage rates by refinancing, the Mortgage Bankers Association said on Wednesday.

Nearly three of every four loan requests last week was for a refinancing rather than a purchase, the industry group said. Total mortgage applications, based on the group's seasonally adjusted market index, rose 8.5 percent to 665.6, the highest since early October.

Demand for loans to buy a home increased by 4.0 percent to 241.5, the highest since the last week of October, while refinancing applications jumped 11.1 percent to 3,185.9 last week to a two-month high, the industry group's indexes showed.

Average 30-year mortgage rates rose 0.09 percentage point to 4.88 percent but haven't moved much from all-time lows.The rate was down from 5.44 percent a year ago and compared with a record low of 4.61 percent set in March, according to the Mortgage Bankers Association.

Source: Reuters, Mortgage Bankers Association (12/9/2009)

New Homebuyer "Move-up" Tax Credit

Do you currently own your home? Have you been considering taking advantage of the lower pricing in the local market and "moving up" to a larger space?

> IT IS TRUE: a larger home is less expensive today that it was 2 years ago.

Have you owned your current home as your primary residence for at least 5 years?

If the answer to all of the above is 'yes', then you may qualify for the NEW tax credit! Not heard of it? As part of the extended first-time buyer credit that passed last month, the homebuyer credit has been expanded to include "move up" buyers that have been in their home at least 5 years. This tax credit is up to $6500 and is also refundable, meaning if you were to file your taxes after purchasing a new home and have a refund of $200 owed to you, you would with this credit have a refund of and additional $6500....in otherwords a $6700 refund!

Certainly, this tax credit alone is not a reason to sell your home and buy a new one, as there are transaction costs involved in buying and selling which are likely above $6500. HOWEVER, if you are considering trading up anyway to take advantage of market pricing, certainly it is worth getting it done in time to use this credit to offset some of these costs.

You have only until April 30th to be in contract on your new home to qualify. Not to sound dire, but while considering this, please also consider that the first offer you make on a home often does not go through! If you were to make your first offer on a home on April 20th and it was not accepted by the Seller, you may not find another home that satisfies your needs in time to qualify for this credit! Please do not leave yourself in a time pinch and "setttling" for your next home just to qualify.

PLAN AHEAD! Start today by contacting your tax advisor and me, your REALTOR!

View the document on my website for more details from the National Association of REALTORS.

Thinking of a friend or relative that may wish to take advantage of the tax credit? I am pleased to offer no-obligation, free consultations...please pass along my information and have them contact me today!

The worst they can say is 'no'....but it might be just what they need!

Local Mortgage Rates

ATTN POTENTIAL SE IDAHO BUYERS:
I've been seeing rates locally the last week or so at 4.75% for a conventional 30-yr loan and 5.0% VA.

While rates are not predictable, I think it's safe to say these won't last long! If you are thinking of buying, please get pre-qualified today! If you would like a lender referral, please contact me immediately!

Bonneville Co 3Q09 Average Sales Price

Market Update:

The chart on the right depicts the average sales price in Bonneville Co for Single Family Residences from 2005 - 3Q 2009.

As you can see, we are currently trending around 2005-2006 sales price levels, down significantly from 2007 and 2008. Year-over-year, 2009 was down 5% in the first quarter over the same period in 2008, and down 11% in both 2Q and 3Q, over 2Q and 3Q 2008, respectively. The 3Q09 average sales price was $169,900 vs. 2008's $190,195 and 2007's $186,417 in the same period.

Are we leveling off? Perhaps. Yet we are now in the fourth quarter, and as you can see in the previous post, our selling volume is historically down in the fourth quarter of each year. Even with slower sales, in the past we have not lost market value in the properties that do complete their sale in the fourth quarter, with the exception of last year. Will 4Q2009 loose value from 3Q2009? Unfortunately, it is very likely.

An additional factor to this which has yet to be reflected completely is effect of the First-Time Homebuyer Tax Credit. Typically, first-time buyers are shopping in a price range at or below average sales prices. If the bulk of the November volume proves to be in the sub-$169,900 range, it could pull the averages down as well.

Stay tuned....

Bonneville County 3Q Residential Closed Sales

Market Update:

The graph to the right depicts Closed Sales Volume for single family homes in all price ranges in Bonneville County. 2009 is purple, past years to the right.

As you can see, total closed sales volume is down from 2008 year-over-year, which was down from 2007. In fact, volume first quarter 2009 was down in sales 28% from 1Q 2008. 3Q 2009 is only down 6% from 3Q 2008....does this mean we are picking up steam? Only time will tell.

I will be posting more of these graphs in coming weeks. Stay tuned!

Data source: Snake River MLS, closed sales, Bonneville County

Tax Credit Update-Bill Passes!

The House has also passed the tax credit extension by a vote of 403-12! The President is signing the bill tomorrow, Friday.

The $8000 first-time buyer credit is extended, and a "move-up" provision for homeowners who have been in their home as a primary residence for 5 consecutive years of the last 8 years can qualify for $6500. All purchases must be in contract by April 30, 2010 and close by July 1, 2010.

Don't miss out on this one! Call me today to learn how this can benfit you!

Tax Credit Update

The Senate has voted 98-0 to pass the extension of the First-Time Homebuyer Tax Credit. Now on to the House...which should fast-track it...possibly to the President by Friday!

The Tax Credit is attached to the Unemployment Bill and includes the provision to extend a smaller credit to move-up buyers....more as it is finalized...stay tuned!

Legend Realty

News Update: For those of you that have not yet heard or seen the news, I am pleased to announce that I am now with Legend Realty in Idaho Falls!

What does this mean for my friends, customers and clients? Same great agent, same personal service, new, smaller, locally-owned agency!

Please update your address books; my new contact info is:

Chris@IFListings.com
208-522-2323 office
1570 Midway Ave
Idaho Falls, ID 83406

I look forward to being in touch!
Chris

Why Use a Buyer's Agent?

Perhaps this is a question more often asked at times when it's a Buyers market, when the pickin's are thought to be easy. Still, even then there are numerous reasons to have a professional working specifically for you and your interests. And in today's market? Maybe more reasons than ever to help you navigate the waters.

As a Buyer especially, there is not only no reason to not use a Buyer's Agent, but there are many worthy GOOD reasons TO USE a Buyer's Agent. Not the least of which is that the bulk of the time, the service is free to the Buyer.

Buyer's Agents will not only write offers on your behalf, but should offer market statistics to offer comfort and peace of mind that you are not paying too much. They can give the Buyer an insight to the way the Seller views his property in the marketplace and what kind of offer the Seller will likely accept. They will help determine future saleability of the property. They are authorized by you to negotiate on your behalf and to keep your information confidential. And most people don't realize it, but they can even work for you in the purchase of a For Sale By Owner property.

In fact, even with a FSBO, most Sellers will agree to pay the Buyer's Agent commission, so there is still no cost to the Buyer for these services. And when purchasing a FSBO property, these services may be even more important. For example, do you know what minimum property disclosures are required by Idaho Law for Sellers disclose to Buyers? How will you collect the disclosures if not offered? How will you present and negotiate an offer? What about earnest money the Seller requests - how will it be handled in a dispute?

Buyer's Agents can also refer you to vendors you will need to utilize in order to close the transaction. This is especially important in the procurement of financing. With all the almost weekly changes in financing, it can be overwhelming to find a lender that works best for you, and also has a reputation for closing the deal. Your agent will have two or three people that they work with regularly and can refer you to with confidence.

A quick web search turns up many results for Buyer's Agency. Here is one article from about.com with some tips for Buyers, and Why hire an agent. http://homebuying.about.com/od/buyingahome/qt/071907-buyagt.htm

Happy Hunting!

Internet Real Estate Searches

Happy Monday, everyone, and Happy Martin Luther King, Jr day!

Some of you are at work today, some at home because your kids don't have school, and some of you are lucky enough to have the day off of work yourselves! And if you are like me, I'm guessing at least one hour of your day will be spent crawling around the web, reading headlines, soaking up information in anticipation of our historic Presidential inagural tomorrow, and even possibly searching real estate listings.

If you should find yourself in the latter category, you might wish to check out this article from usnews.com - The Top 5 Blunders of Internet Home Buying. Obviously, merely by my presence here I am a huge fan and user of the internet for Real Estate reasons. And I even began my own search for my first home purchase on the internet - back in Chicago in 1997! I remember my great frustration that more information was not available online at the time, and happily more information is out there now. Almost too much, really.

It is easy to become distracted, lose focus, forget your original needs and reasons you are looking to make a move, be taken in by less-than-honest folks because it seems like a "good deal." And while you should always research on your own to put you in a position to be able to ask the right questions and know if the answer seems logical or not, there is certainly no reason to think you must go it alone.

So if you have an extra 3 minutes, you might wish to read the article. Be sure you are using the strength of the internet to your full advantage, and not mistakenly thinking you are while in fact you are missing something.

Until next time...happy hunting!

Happy New Year!

So here we are, another new year! Chances are, most of us have on our list of New Year's Resolutions something along the lines of "spend less money" or "save more money." And as much as we all need to save more money, it probably starts with spending less!

The national downward trend in housing values and sales has finally hit our area, noticably about 3rd Q 2007. And while our values have fallen from slight appreciation to about flat in most slices of the market, it is no where near where the worst markets in the country were last year (some down 30% in values!).

Still, even our unemployment stats in Idaho have been seen as rising lately, as reported in the local media (http://www.localnews8.com/Global/story.asp?s=9649813). Even the Idaho Falls area reported unemployments rates rising in Dec to 4.8% from 3.5% in Nov (http://labor.idaho.gov/news/PressReleases/tabid/1953/ctl/PressRelease/mid/2527/itemid/2062/Default.aspx).

What does this mean for the average citizen? Tightening the belt, no doubt! Gas prices have fallen well below their highs of last summer, but how else can we save money? Here is an areticle I found on Bankrate.com, 100 Quick Tips to Help Save you Cash (http://www.bankrate.com/brm/news/FinancialForecast/20081229-100-tips-for-2009-a1.asp). Some of these are larger efforts, but some are quite easy. Paying extra for 3-way calling? Ever actually used it?

Happy reading, and good luck!