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Good Info - Good Decisions
While low inventory is certainly challenging buyers, not having a clear understanding of mortgage financing is also causing issues. By having good information, they are able to make better decisions as well as compete favorably.
Most buyers don’t realize how the mortgage rate is determined for a borrower. While annual income is important, a good credit score, low debt-to-income ratio, loan-to-value ratio and ability to repay the loan are vital concerns.
A variety of myths seem to permeate the market such as rates are set and released once a day; FHA loans are for first-time buyers only; pre-qualification commits the lender; lender fees are not negotiable and adjustable rate mortgages always go up.
Misunderstanding of actual mortgage practices may be a contributing factor to why more buyers are not taking advantage of what are still historically low mortgage rates.
While getting solid information about mortgages and being pre-approved from a lender are very important, it is only one step in the home buying process. Success in buying a home in today’s market should begin with a real estate professional who will coordinate all the different parts of the transaction including mortgage, title, insurance, inspections.
What Can You Expect?
Businesses must treat customers fairly if they expect to do business with them again or get recommendations to their friends. Customers of stores like Nordstrom’s understand that a salesperson is an employee and represents the company.
The line becomes less clear in some industries, especially ones that involve real estate. Agency is a legal relationship authorizing a person to act for or in the place of another. It involves responsibilities that exceed treating a person fairly.
The duties a buyer or seller can expect to receive from a Realtor® or broker include but are not limited to honesty, accountability, full disclosure, representation and reasonable skill and care. Buyers and sellers might additionally expect representation, obedience, loyalty and confidentiality. State laws can differ on specific duties.
Mortgage and title officers are limited in their duties to the buyer to honesty and accountability and specific requirements under the federal Real Estate Settlement and Procedures Act.
A special relationship with a Realtor® makes it advantageous to have them coordinate efforts with the other professionals in the home buying process. Since most buyers’ and sellers’ transactions are infrequent, the agent can bring valuable experience to the transaction.
Every buyer and seller should discuss the level of service they expect from the real estate professional they work with. Another good question is what happens if the purchase and sale are within the same company.
Adam Bazzell, Realtor®
Must Be This Tall To Ride
Surely, you remember being a child at an amusement park when after having stood in line with your friends and family, waiting to get on a terrific ride, you discovered the sign that read, “you must be this tall to ride.”
Not only was it disappointing, it was slightly embarrassing. You never want to go through that again.
A remarkably similar situation occurs when people are buying a home. After finding the right home and negotiating the contract, they find out that they don’t measure up financially. It’s not something that anyone wants to go through if they have a choice.
Regardless of what you think you know, if you’re buying a home with a loan, you need to physically visit with a trusted mortgage professional before you get serious.
- You’ll find out your credit score which will directly affect the mortgage rate you’ll pay.
- You might discover blemishes on your credit that possibly can be corrected.
- You’ll even get a pre-approval letter that you can submit with an offer which could dramatically affect your negotiations in the current competitive market.
Adam Bazzell, Realtor
Indecision May Cost More
“More has been lost due to indecision than was ever lost to making the wrong decision.” Interest rates have as much effect on housing costs as price and when they are both trending upward, it can be very expensive to wait.
There can be some legitimate reasons for postponing a purchase such as needing to save the down payment, improve your credit or waiting to find out about a possible transfer. The problem is that prices and interest rates could, and very likely will, go up in the future.
If the price of $250,000 home went up 5% and the interest rate went from 4.5% to 5.25%, the payments would increase by $176.42. The additional cost over a seven-year period would be close to $15,000.
The questions that indecisive buyers need to ask themselves is “how am I going to feel knowing that if I had not waited, I could have been living in the home for less money?” and “What would I have spent the money on if I didn’t have to make the larger payment?”
Feel free to reach out to me at anytime and I will be more than happy to be of service!
Spring 2017 Emerald Coast Home Price Update
Friends and Clients —
If you are looking to sell your home, then three recent developments make this spring a unique moment to do so quickly and at a top price.
First, mortgage rates have stabilized.
From a low of 3.41% last July, the 30-year fixed mortgage rate spiked up after the election and reached a high of 4.31% in December.
However, rates have stabilized over the past few months, and despite the increase, they are still near historical lows.
Second, jobs are up.
The U.S. Bureau of Labor Statistics reports 235,000 new jobs in February and 2.3 million over the past year. This reflects continuing growth in consumer and business confidence over recent months.
Third, housing inventory is at a record low.
February saw a 17.9% year-over-year drop in the number of homes on the market. This is the 100th consecutive month of year-over-year declines, going back to October 2008.
So what do these three developments mean for you?
First, if you’re looking to sell your house, you may be able to do so quickly.
Demand for homes is strong and will continue to get even stronger due to the growth in jobs and the low and stable mortgage rates.
The statistics bear this out: homes sold within an average 68 days this February compared to 75 days in February 2016.
Second, it means you may expect to sell your home at a top price.
Because of strong demand and low inventory, prices continue to increase. On a national level, home prices rose 6% year-over-year in February.
In short, this spring is a fantastic time to sell your home if you’ve been considering it for a while.
In case you're curious about how much your home is worth in the current market, check out the link below:
And what if you're looking to buy a home?
The current low mortgage rates are definitely worth taking advantage of, as they allow you to afford a more luxurious home.
Several amazing homes have recently come on the market around Emerald Coast. To see all the homes that are available right now, take a look at this link below:
Whether you’re selling or buying this spring, just give me a call or text at 850-499-8464 if you have any questions. I'm here to help, and I can give you more detailed information about the situation on the ground.
Have an amazing day,
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The data relating to real estate for sale on this web site comes from the participating brokers of the Emerald Coast Association of REALTORS® Multiple Information Service.
Information Is Believed To Be Reliable But Not Guaranteed.
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