Facebook Dangers in Buying a House

You’re a Towson homebuyer, and you’re very excited about the house you saw yesterday.

You post on facebook about how you think you may have found the house of your dreams.

20 people comment, congratulating you.

Two happen to be friends with the seller’s listing agent.

That person (the seller’s listing agent) sees their comments.

You, Mr. Towson Homebuyer have just lost your negotiating power with the seller, because the seller now knows just how badly you want the house.

What many people don’t understand about Facebook and other social networking sites, is that what you may think is private can end up not being so. Whatever you put out there, even if just for your “friends”‘ or “family” can end up in someone’s hands that you didn’t intend. Many times it won’t affect you, but in situations such as buying or selling a house, it truly can.

So when you see that house of your dreams, try to keep it in or call your friends until you’ve settled, and the house is yours. It will be even more exciting then — and it will be YOURS!

For more advice and professional service buying a Towson house, contact me. I’d be thrilled to help!

This Month in Real Estate June 2011

This Month in Real Estate for June 2011 has just been released!

First, Jay Papasan discusses the numbers:

Home sales remained steady in May at a pace of 5.1 million home sales for the past 12 months. The median home sales price is up to $164,000 from last month. The average rate for a 30 year fixed rate mortgage, according to Freddie Mac, was about 4.6%

This month’s top story revolves around repairs sellers usually make prior to selling, which include roof repairs, plumbing, electrical, and HVAC, many issues of which come up on the buyer’s home inspection.

Bryon Ellington discusses more about the home inspection process, and the benefits to buyers of having one:

1) Find out if there are structural problems with the house.

2) “DON’T SWEAT THE SMALL STUFF”. He notes, and he is very right, that it is the home inspector’s job to write everything down that he or she finds.

3) If there is a big issue in the inspection report, consider bringing in a specialist, who will know more about that particular problem (and just how big it may be — or NOT be!)

Keep in mind that the issues found during an inspection may very well be a surprise to the seller too. Try to work together to solve the problems, as in the long run, the goal is for you, the buyer, to buy the house, and the seller to sell it.

Also remember, that no house is perfect!

Contact me for more information on buying a home in Towson, and how important a home inspection may be to your home buying process!

This Month in Real Estate May 2011

This Month in Real Estate for May 2011 is out!

Jay Papasan first addresses the numbers, with both home sales and median price being up over last month. Freddie Mac’s data showed that the average rate for a 30 year fixed mortgage was 4.8%.

Jay then discusses research about the one thing you can do to make sure your house sells for more money.

What is that one thing? STAGING.

Data shows that spending $250 staging a $200,000 home can result in a sales price 2% higher than those that do not. Currently only 1 in 3 sellers stage their homes. Why staging can be important and help get buyers into your home was also discussed in This Month in Real Estate March 2011.

Bryon Ellington discusses what improvements may be necessary and what may not when selling your home.

Things to note:

1. Improvements to your home may not result in full return when you resell your house. In general, the only thing that got the highest return was replacing your front door — and that was only at 85% of its’ initial cost.
2. Though improvements may help a buyer to choose your house over another, it doesn’t mean that they will offer more money.
3. The price of the home matters the most to a buyer.

What this tells me is that Towson houses for sale need to be priced right to bring buyers to the house. Once it is priced right, they may come in to your home and see your great improvements — but don’t expect them to pay extra for those improvements!

This Month in Real Estate April 2011

This Month in Real Estate for April 2011 is out!

First, Jay Papasan discusses the numbers. The current national average for a mortgage rate is 4.8%, according to Freddie Mac.

Then he discusses how much time you should spend with an agent before looking at homes.

The first step should be a buyer consultation, that should last an hour to hour & 1/2. Part of the goal of the buyer consultation is to be able to view the least amount of homes possible to find a perfect match. Much of this is due to the consultation and how much is learned by the agent, and the buyer, about what they really need and want in a home.

Bryon Ellington talks about the important things in buying your first home:

• Get an expert guide. (A professional real estate agent!)
• Which is more important? Location or size?
• What are the benefits of buying a fixer-upper versus a home in good condition? (My additional thought: Does your loan type ALLOW you to buy a fixer-upper?)
• How do you maximize home value appreciation?
• Is neighborhood stability a priority?
• What features and amenities offer the best resale value?

If you are considering buying a home in Towson, contact me so my team can work with you and help make the process as smooth as possible!

Housing Prices Expected to Rise 3-5% in 2010

A recent statement by John Paulson of Paulson & Co, Inc. shows that housing prices are expected to rise 3-5% in 2010.

CNBC published an article with quotes from the group’s owner, who tracks home prices in California, and notes that what happens in the state tends to trend about six months later in the rest of the country’s housing markets.

He also expects prices to rise another 8-12% in 2011.

He stated that home ownership is the most affordable it has been in over 50 years, and that it is 60% more affordable now than at its’ peak.

What does this mean?

For Towson homebuyers, NOW IS THE TIME TO BUY!

Happy New Year 2010 Towson Real Estate Market Thoughts

As I sit here and reflect on 2009 and enjoy the beginning of 2010, I am reminded at what a new year can bring.

There is always a sense of excitement — that a new year can mean great things.

What will happen in the Towson real estate market? Will it rise? Will it fall? Will it stay at its’ teetering stabilization point that it has been in? I think we will remain about where we are — I don’t foresee a jump, but I think our neighborhoods are strong and prices will remain strong.

What about the real estate market in general? A few economists, like the National Association of REALTORS (R) economist, think there will be about a 10% increase.

I tend to be cautious in my optimism, and think we still have a large number of short sales and foreclosures coming down the pike in 2010, which will drop values lower, or keep them at the lower prices we are seeing now. I truly don’t foresee a real true recovery until 2012.

What does this mean for Towson sellers? That your homes are still worth a great amount because our area has been stabilized. That being said, they are not worth what they were even two years ago, so you can’t think about those prices when considering selling your home.

What does this mean for Towson homebuyers? BUY! It is a GREAT time! Interest rates are still very low, and prices are much lower than they have been in years.

For a true value estimation of a Towson home as a homebuyer or seller, or to find if this is the right time for you to move, please contact me – I am happy to help!

New Fannie Mae Credit Score and Debt Ratio Requirements for Conforming Loans

Beginning December 12, 2009, Fannie Mae will have new requirements on credit scores and debt ratios for all of their conventional loans.

Prior to this change, the lowest credit score a borrower could have for this type of loan was 580. The new lowest score is 620. This is not negotiable, even if you are putting 20% down!

The other change is that the maximum debt ratio for this same 20% down borrower cannot be more than 45% of their income in order to qualify for the loan. Again, this is not negotiable.

Fannie Mae is a government controlled finance company who provides many of the mortgages offered to buyers through lending institutions. Part of the reason that these new requirements cannot be changed is that it uses an automated system to qualify or reject, so it is not a human making those decisions.

Fannie Mae made these determinations after studying what types of borrowers have been most defaulting on their loans. In this Reuters article, spokesperson Brian Faith had this to say:

“Loans to people with credit scores below 620 fell seriously behind at a rate approximately nine times higher than other loans purchased in the same period, Fannie Mae spokesman Brian Faith said. Loans taken out by borrowers with lots of debt also suffer higher levels of serious delinquency, he said.”

So what does this mean for the Towson homebuyer? If you are getting a conventional loan, you must have at least a 620 credit score and only 45% debt-to-income ratio.

Please note this does NOT affect FHA home loans or loans not provided by Fannie Mae, though as T. Jeremy Loomis of Wells Fargo Home Mortgage notes, Freddie Mac tends to follow Fannie Mae’s policies very quickly, so he expects to see these changes come through there soon, with most other institutions following their lead.

I want to thank Jeremy for this information, as he provided this to a large group of REALTORS(R) in his Continuing Education Course at the Greater Baltimore Board of REALTORS(R) earlier this week. Please also note, many lending institutions have already instituted this new policy to be in compliance for loans closing after December 12, 2009.