Sep 30, 2009

The Reluctant Landlords

By M.P. McQueen

With housing prices still in the dumps, many are finding themselves in the uncomfortable position of landlord.

Some have been forced to relocate for a job and can't sell their houses. Others have moved, but are holding on to their previous homes hoping for prices to rebound before selling. Many are finding that rent checks don't come close to covering their mortgage payments.

Sep 27, 2009

Is Buying Within Your Budget?

By Jean Chatzky

Like everything in life, there are pros and cons to consider in buying a home.

Sep 23, 2009

Impact of Interest Rate

With interest rates hovering around 5% all season, now is a great time to remind buyers that not only is 5% a historically low interest rate, but that it won’t be around forever.

Buyers sitting undecided about buying a home today because they believe home prices may continue to go down should give equal consideration to their interest rate. It is critical for buyers to keep in mind how their interest rate affects affordability – that is, what price range they can afford to buy in.

The lower the interest rate, the more home a buyer can afford:

5% = $266,000 purchase price
5.5% = $253,000 purchase price
6% = $241,000 purchase price
6.5% = $230,000 purchase price
7% = $220,000 purchase price

Example Buyer is interested in purchasing a $260,000 home today at 5%. Buyer delays making a purchase decision to see if home prices will drop more. However, in this market at this price range, prices are slightly increasing – multiple offers are now commonplace for affordable homes in the $200s.

Weeks pass and now interest rates are in the mid 6s. Buyer can no longer afford to buy this home - at 6.5%, buyer can afford up to $230,000 - the house they love is now out of their reach.

This calculation assumes $100,000 annual household income and 3.5% cash down.

Sep 20, 2009

Home Inspections 101

For any home a buyer is considering buying, it is strongly recommended that they get the home thoroughly inspected. This a cost to the buyer and is paid out of their pocket when the service is completed. Home inspections typically take place within a week of going under contract.

General Home Inspection Is a visual inspection of the home and its major components to identify unsafe conditions and items that are not functioning properly. The home inspector will provide buyer a written report of findings and recommendations for any repairs. Paid to a home inspector once the home is under contract. Cost is typically $200 to $300.

Termite Inspection Is a visual inspection of the home to identify the presence of wood destroying organisms (WDO) and conditions that could lead to future infestation. The termite inspector will provide buyer a written report of findings and recommendations for any repairs. Form NPCA-33 (a “termite letter”) is required by buyer’s lender. Paid to a termite inspector once the home is under contract. Cost is typically $100 to $150.

Mold Inspection Is a visual inspection of the home to identify the presence of mold. The presence of mold in a home is a known health concern. Paid to a mold inspector once the home is under contract. Cost is typically $125 to $175.

Some service providers can provide a “package deal” to provide all three inspections – home, termite and mold – for one flat fee. Cost is typically $300 to $400.

Sep 16, 2009

Benefits of Rate Lock

Interest rates are at historical lows today, but no one can say for certain what rates will be at the end of the week, next week or next month. Interest rates can and do rise, so to eliminate a buyer’s risk of market volatility, buyers should consider locking in their interest rate before close.

Rate locking is optional and at the discretion of the buyer. However, I believe it’s prudent to lock in as soon as possible in the loan application process. The home buying process is full of so many moving parts and variables up until the day of close. Solidifying a critical component such as interest rate is just one less thing to worry about.

Sep 12, 2009

Time Running Out On Short Sales

For a first-time home buyer who wants to take advantage of the $8,000 tax credit, steer clear of short sales - there simply isn't adequate time to pursue this kind of home and close by the Nov 30 deadline.

Short sale homes take a considerable amount of time to close. There is a significant wait time in receiving a response on any offer, then even more time involved in actually closing on the home. Total wait time is unique to each home, but typically is several weeks to a few months.


As a smart alternative, focus on bank-owned homes or ‘traditional’ homes that can respond in a timely manner and can close within 30 to 60 days. You can then be certain that you will be able to take advantage of the $8,000 tax credit available to you as a first time home buyer.

Sep 7, 2009

Buying Incentives

How to stand out from the other 40 homes comparable to yours and snag a buyer? Consider offering a buying incentive – it could be just the ticket to make a buyer choose your home over the competition.

Closing Cost Assistance Closing cost assistance is the most appealing, practical incentive to buyers and will make your home stand out. With this incentive, your home will receive more showings and will ultimately sell faster. Closing costs on the buyer’s side are costly and offering assistance, say $2,500 or $5,000 at closing will catch the eye of every buyer.

Buy Down Interest Rate Buying down the interest rate on a buyer’s mortgage is an enormous incentive and provides long-term value and benefits to a buyer. Your buyer will enjoy significant savings per month in their monthly housing payment. One percentage point on a $200,000 loan is a one-time cost of $2,000 to the seller paid at closing and a monthly savings of $120 to the buyer for the life of their loan.

Pay HOA Paying HOA dues for the buyer for a fixed period of time, say six months or 12 months is a great value to buyers. This helps your buyer cover a new monthly expense for a period of time and allows them a little breathing room after closing to get back on their feet financially.

Bonus To Buyer’s Agent Another way to stand out in a market swamped with inventory is to incent the buyer’s agent. A $1,000 or $1,500 bonus to the buyer’s agent at closing will generate increased showings of your home, which will ultimately sell your home faster. If there are ten comparable homes available, but only time to view five of them, offering a bonus to the buyer’s agent is sure to get your home selected for viewing.

Sep 3, 2009

Boost Your Salability

Looking for ideas for some quick and inexpensive home improvements while your home is on the market? These improvements get the most notice and are most appealing to buyers viewing your home.

Curb Appeal A dirty and time-consuming job, but well worth the effort. Weeding, pruning, trimming, new mulch, transferring overgrown plants to larger locations, fresh plants and flowers are simple, quick ways to create instant impact from the moment buyers lay eyes on your home.

Paint Another time-consuming, but inexpensive improvement that will instantly improve the look and feel of any room. A freshly painted room will be noticed by every buyer. Also, wallpaper and wallpaper borders can be removed quickly and at no cost.

Organization Nobody has ever complained about too much organization and storage in a home. Check out the home organization aisle at any home improvement store – there’s an inexpensive, easy to install organizational product for any need from groceries to laundry and toys to pots/pans.


Ceiling Fans I’ve never met a buyer who didn’t love ceiling fans. Ceiling fans are typically the first thing a buyer will notice when entering a room - they’re practical and provide comfort in a home. Ceiling fans are available in every size, shape and style within every budget from $50 on up.