You might have caught wind of Fannie Mae’s Announcement 07-22 dated December 5, 2007. That announcement established some new guidelines for lending in a “down market”, the most impactive of which is the requirement for an additional 5% down in such a market. Example: the requirement will mean that a 100% loan (no money down) would then require 5% down. It only applies to loans with application dates on, or after, January 15, 2008, and only in down markets.
The guidelines require the lender to get the additional 5% if the appraiser notes in the appraisal that they are in a down market. If the appraiser does not make such a notation, “Fannie Mae strongly urges lenders to implement processes and apply supplement sources and tools to validate current housing trends and not rely solely on the information reflected in the appraisal.” The lenders and appraisers can use the following services: Standard & Poor's - S&P/Case-Shiller® Home Price Indices ,
Office of Federal Housing Enterprise Oversight (OFHEO) , and National Association of REALTORS (NAR) . There are other subscription/fee based services that they may use.
Also being implemented by some lenders is risk based pricing for conventional products. In such a situation borrowers with credit scores below 620 (or missing score – no credit established) would pay an additional 2 points. Credit scores of 620-639 an additional 1.75 points, 640-659 an additional 1.25 points, 660-679 and additional .75 point. This is, of course, in addition to the normal punitive points and higher loan rate related to the lower credit score.
Our Advice: Recent conversation with an active local lender revealed that we are not locally in a “declining market”. There are areas so identified across the nation, but nothing in our service area. Of course, this can change, we certainly have had a drop in our prices, and we have been told that some lenders are already treating our market as if it were in a “down” status, requiring the additional down of their borrowers. If you have limited funds for a down payment and are trying to time the market drop, we suggest that you act now to make sure that you can buy a home.
If our area achieves a “declining market” status and you are caught with the requirement of additional down payment funds that you don’t have, you might have to wait until the market starts rising again to buy your home. As the market rises the money you might have saved will certainly be lost – maybe forever if you are priced out of the market as we have seen in the past. We anticipate that the market will bounce high and fast when it turns – timing is the only question. Control your own destiny and get on with your life.
Save money and maintain a good credit score. Lenders still want to make loans – they are just exercising better discretion on who they make loans to than they have in recent years. Make yourself a desirable borrower and you, too, will enjoy the American Dream.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com of www.carsonvalleyremax.com , 775-781-5472. Email us at CarsonValleyLand@hotmail.com .
Showing posts with label declining market. Show all posts
Showing posts with label declining market. Show all posts
Wednesday, January 9, 2008
Wednesday, September 19, 2007
Decluttered and Lowered Price
Decluttered and Lowered Price
We have packed the clutter and reduced our price and still don’t have action … now what?
Congratulations! By packing your clutter and reducing your price you have made your home market ready – a great first step. Now you need to look with a critical eye at what you are truly offering. Buyers are looking at a lot of property these days. Some will look at ten homes in a day, whereas just two years ago they might not have had ten to select from in total. How do you really stack up?
Did you simply box up the knickknacks, or are you decluttering the entire home and garage? With the majority of your prospective Buyers being visual personality types it is important that you eliminate what they will deem a “visual nightmare”. Cobwebs inside and out, pet “landmines” in the backyard, dirty dishes and clothes, peeling trim paint, must/mold/smoke odors … all must be addressed unless you are priced such that you substantially compensate the Buyer for these deficiencies far beyond the actual cost, or perceived cost, to mitigate them. Most often you won’t have the opportunity to negotiate these deficiencies with the Buyer – they will select another property. If you do, you will usually end up paying dearly for your lack of preparing your home for market. It is best to prepare in advance.
Regarding the price – did you merely take it from 10% over to 3% over market? Are you the very best thing out there for what you are offering, or do you need to adjust it further to compete with properties that are actually offering more for the money, or are in better condition? Buyers are incredibly price-conscious these days … sometimes to their own detriment as it is causing them at times to not act, or to not buy the home they want if they don’t get a pre-conceived discount from the List Price, regardless of how well the property is priced. Be price smart if you are committed to selling in this Market.
Our Advice: Unless your potential Buyer has a specific reason to buy your home, i.e.- their child lives next door, they want to ride their horses on the BLM land next door, your 20 foot ceilings will accommodate the Christmas tree they want, etc., you must continually monitor the competition. Remember, the other homes for sale are your competitors, and they, too, want to sell. They are watching you! They will seek advantage so they, too, can get on with their lives. You and your agent should be watching the market on a regular basis, several times a week. Also, pick up the little things around the place – consciously, or subconsciously, the Buyers will notice what you do … or don’t do. As you know, you never get a second chance at a first impression so make sure your first one counts! With few showings it is important to make each one count.
If you want to sell don’t wait to get your property perfect – get it on the market and start working on it. Your agent will work with you on what is truly important to accomplish before having any market exposure, and what will help to give you an edge as you gain market momentum.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , www.experienceispriceless.blogspot.com or email us directly at carsonvalleyland@hotmail.com 775-781-5472.
We have packed the clutter and reduced our price and still don’t have action … now what?
Congratulations! By packing your clutter and reducing your price you have made your home market ready – a great first step. Now you need to look with a critical eye at what you are truly offering. Buyers are looking at a lot of property these days. Some will look at ten homes in a day, whereas just two years ago they might not have had ten to select from in total. How do you really stack up?
Did you simply box up the knickknacks, or are you decluttering the entire home and garage? With the majority of your prospective Buyers being visual personality types it is important that you eliminate what they will deem a “visual nightmare”. Cobwebs inside and out, pet “landmines” in the backyard, dirty dishes and clothes, peeling trim paint, must/mold/smoke odors … all must be addressed unless you are priced such that you substantially compensate the Buyer for these deficiencies far beyond the actual cost, or perceived cost, to mitigate them. Most often you won’t have the opportunity to negotiate these deficiencies with the Buyer – they will select another property. If you do, you will usually end up paying dearly for your lack of preparing your home for market. It is best to prepare in advance.
Regarding the price – did you merely take it from 10% over to 3% over market? Are you the very best thing out there for what you are offering, or do you need to adjust it further to compete with properties that are actually offering more for the money, or are in better condition? Buyers are incredibly price-conscious these days … sometimes to their own detriment as it is causing them at times to not act, or to not buy the home they want if they don’t get a pre-conceived discount from the List Price, regardless of how well the property is priced. Be price smart if you are committed to selling in this Market.
Our Advice: Unless your potential Buyer has a specific reason to buy your home, i.e.- their child lives next door, they want to ride their horses on the BLM land next door, your 20 foot ceilings will accommodate the Christmas tree they want, etc., you must continually monitor the competition. Remember, the other homes for sale are your competitors, and they, too, want to sell. They are watching you! They will seek advantage so they, too, can get on with their lives. You and your agent should be watching the market on a regular basis, several times a week. Also, pick up the little things around the place – consciously, or subconsciously, the Buyers will notice what you do … or don’t do. As you know, you never get a second chance at a first impression so make sure your first one counts! With few showings it is important to make each one count.
If you want to sell don’t wait to get your property perfect – get it on the market and start working on it. Your agent will work with you on what is truly important to accomplish before having any market exposure, and what will help to give you an edge as you gain market momentum.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , www.experienceispriceless.blogspot.com or email us directly at carsonvalleyland@hotmail.com 775-781-5472.
Wednesday, August 8, 2007
Selling Smart in Today's Market
How in the world can we be smart in today’s market?
Everyone wants to be smart in their real estate moves. Really, most just don’t want to be dumb. Unfortunately, many are now considering non-action for action and are hiding behind the mantra of, “We’re not going to give it away!”
It isn’t that kind of market, folks. Consider what the Chief Executive of Countrywide Financial, Angelo Mozilo, the Largest U.S. mortgage underwriter, said on July 25th, “No one saw the deterioration of real estate values coming.” He went on to say, “The Company is seeing home price depreciation at levels not seen since the Great Depression.” If you still can’t adjust your expectations to reality, or if you are wondering why you weren’t told about this think about the above statements. The number one man of the largest mortgage company in the nation says they didn’t see it coming. Don’t fault yourself, or your agent – take action now.
We’ve recently seen amazing Seller resistance to price adjustments in all market segments. It has been frustrating for agents offering professional insight and perspective to Sellers in denial. The results are numerous agent “firings” of customers. This is when they give back the listing because they feel they can’t get the job done at the List Price in today’s market. Given that Mr. Mozilo thinks it will be mid-2008 or even 2009 before things come back, it is important to evaluate your situation with brutal honesty. Listen to your agent.
Our Advice: Quit worrying about what your property was worth in 2005 – that was then. Don’t scheme about how you can take advantage of an unsuspecting out-of-state Buyer – Buyers are smarter now and nobody pays too much in this market. If you have an opportunity to replace your residence with something equally affected by the market as your present property – sell and buy and get on with your life. If you have health or family issues that are affecting your need or desire to sell – price it right and get on with your life, prioritize right between money/health/family and your decision should be easy. Don’t try to fool your agent into believing your value story – if they believe you then you haven’t selected the right agent to work for you. Your agent must take a risk right now. Your agent must tell you what you don’t want to hear … the Truth. The risk of disappointing you now greatly outweighs the risk of really disappointing you in six months. The good ones will take that risk to serve you professionally – it’s up to you to listen and take action.
Property is selling … at interesting prices. Yours can sell – when you remove the blinders and have an honest look at where you fit in today’s market. Buyers are “pricing forward” in their offers – something Sellers were doing not too long ago in the other direction. If you don’t have to sell now … don’t!
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com, 775-781-5472.
Everyone wants to be smart in their real estate moves. Really, most just don’t want to be dumb. Unfortunately, many are now considering non-action for action and are hiding behind the mantra of, “We’re not going to give it away!”
It isn’t that kind of market, folks. Consider what the Chief Executive of Countrywide Financial, Angelo Mozilo, the Largest U.S. mortgage underwriter, said on July 25th, “No one saw the deterioration of real estate values coming.” He went on to say, “The Company is seeing home price depreciation at levels not seen since the Great Depression.” If you still can’t adjust your expectations to reality, or if you are wondering why you weren’t told about this think about the above statements. The number one man of the largest mortgage company in the nation says they didn’t see it coming. Don’t fault yourself, or your agent – take action now.
We’ve recently seen amazing Seller resistance to price adjustments in all market segments. It has been frustrating for agents offering professional insight and perspective to Sellers in denial. The results are numerous agent “firings” of customers. This is when they give back the listing because they feel they can’t get the job done at the List Price in today’s market. Given that Mr. Mozilo thinks it will be mid-2008 or even 2009 before things come back, it is important to evaluate your situation with brutal honesty. Listen to your agent.
Our Advice: Quit worrying about what your property was worth in 2005 – that was then. Don’t scheme about how you can take advantage of an unsuspecting out-of-state Buyer – Buyers are smarter now and nobody pays too much in this market. If you have an opportunity to replace your residence with something equally affected by the market as your present property – sell and buy and get on with your life. If you have health or family issues that are affecting your need or desire to sell – price it right and get on with your life, prioritize right between money/health/family and your decision should be easy. Don’t try to fool your agent into believing your value story – if they believe you then you haven’t selected the right agent to work for you. Your agent must take a risk right now. Your agent must tell you what you don’t want to hear … the Truth. The risk of disappointing you now greatly outweighs the risk of really disappointing you in six months. The good ones will take that risk to serve you professionally – it’s up to you to listen and take action.
Property is selling … at interesting prices. Yours can sell – when you remove the blinders and have an honest look at where you fit in today’s market. Buyers are “pricing forward” in their offers – something Sellers were doing not too long ago in the other direction. If you don’t have to sell now … don’t!
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com, 775-781-5472.
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