For Buyers
What You Pay FHA is Going Up!
March 29th, 2012 categories: For Buyers
In today’s real estate market a lot of borrowers buy homes using mortgages backed by FHA insurance.
The good news is that FHA offers some of the best terms for greater Cincinnati’s cash strapped buyers and requires just a 3.5% down payment. FHA doesn’t actually lend money to buyers- it acts as insurer to lenders protecting them against losses if conforming loans are properly handled- but end up going bad because the borrower cannot/won’t make payments. And, without a doubt, today’s fragile real estate market is a living example of lenders making bad decisions about loans and mortgage insurance companies going belly up trying to cover all the losses.
FHA is a government backed mortgage insurance program which is paid for by tax payers. (you and me) To reduce the risk, on April 9th, FHA will raise the up front premium buyers pay by 0.75% to 1.75% . Plus borrowers will continue to pay annual insurance premiums and based on the amount borrowed and down payment – the fees range from 1.1% to 1.5%.
What does this mean to the average buyer in greater Cincinnati? Well the answer varies based on the amount borrowed- but if you borrowed $150,000, 30 year fixed FHA loan after having put 5% down- your monthly payment will increase by approximately $20.
In the big picture, hiking the FHA mortgage insurance premiums is the easiest way for lawmakers in Washington to protect taxpayers (you and me) from footing future expenses if FHA borrowers default on loans. What do you think?
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Looking for New Home Construction Around Cincinnati?
March 23rd, 2012 categories: For Buyers, Informational
Built by Jack H Wieland Builders
A sure sign of spring is tulips and new construction appearing around greater Cincinnati.
In the “old days” prior to the housing slump, Cincinnati has a load of newly constructed spec homes for buyers to view and purchase. A “spec home” was built with no contract and the builder was hopeful that somebody would write a contract and close on it- allowing the builder to use that money to build another “spec home”. As the greater Cincinnati real estate market shrunk builders didn’t have enough cash or capital to continue building spec homes. Even the wildly successful Homearama and Citirama shows were scaled back. But now, new construction starts seem to be on the upswing and buyers now have a chance to buy a new home or condo and move in within a short time frame.
According to the Multiple Listing Service of Greater Cincinnati 949 newly built (or to be built) properties are listed for sale within the 4 county area. Listings are for 740 single family homes and 249 condos. Since January 0f 2012 69 new construction homes and 40 condos have sold/closed within our real estate market and as buyers begin to really get serious about buying-it’s safe to say more new construction will pop up wherever land is available for building.
Why would anybody buy or build a new home when there are so many resales available?
Well lots of people like the “scent and feel” of newly built. The ability to select paint and woodwork colors and stains, kitchen and bathroom cabinets and counter tops and types and colors of flooring appeals to lots of buyers. However along with the new comes the fun (if you enjoy this type of fun) of landscaping, hanging drapes/blinds, customizing closets and storage areas and more. Buyers of new construction need to understand that along with newly built unknown problems can occur. Most builders offer a guarantee but don’t expect any area builder to come out each week to repair nail pops or other minor issues. When moving into a new home it’s best to wait before doing expensive interior painting or papering. All new homes and condos need time to settle and there’s no point thinking that any new home- no matter what the price range- won’t have a few tweaks needed during the first year.
Need help finding the right home- I can help!
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Don’t Take it for Granite!
March 3rd, 2012 categories: Cincinnati Ohio, For Buyers
A commonly heard request from today’s home buyers in greater Cincinnati- it (“it” being a home or a condo) must have granite counter tops, 3 car garage, wooded lot and at least 4 bedrooms and not cost more than $250,000.
Really?
Real Estate buyers are so totally under the influence of television shows touting the do’s and don’ts of “getting a deal”….that they often don’t even look at the best properties.
It’s time for a quick lesson in the art of buying real estate…some items on your list are “fixables” and some are not. So using the requirements above -only 7 properties listed in the 4 county area priced between $230,000-$260,000. Not much for somebody thinking they need to look at 50 properties before making a decision. However if you remove the requirement for granite counter tops- something I refer to as a fixable- the inventory almost doubles to 13 properties.
It’s true money can fix anything but realistically when shopping for real estate, items such as carpet, paint, counter tops, decking material and fixtures are easily personalized.
It’s much more costly to add the space to a garage, increase the number of bedrooms or plant enough trees to cover a treeless lot.
As buyers in today’s greater Cincinnati real estate market learn how to leverage your buying power by adjusting, not lowering, your requirements. You may be surprised at how many more properties pop up on your viewing list.
Bottom line don’t get taken for granted by restricting your real estate options to “must haves” and be willing to look at “fixables”.
Still not sure- call and I will be glad to help.
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Sources for Residential Mortgages
February 16th, 2012 categories: For Buyers
From Steven Robert:
Major sources of residential mortgage loans
Owning a home is a long-cherished dream of many of you. But, many of you can not afford to pay the entire value of the home at one go. So, it makes great sense to take out a residential mortgage loan. A large variety of residential mortgage loans are offered by different categories of lenders. It is highly recommended that before opting a residential mortgage loan, you must conduct a thorough research on the different loans available at the market place. Mortgage rates also vary widely. So, you need to take note of this aspect too. You can get to know about different mortgage loans along with the rates through online search. Again, in order to select the right kind of mortgage loan, you can take the help of a mortgage professional. After analyzing your specific case, a mortgage lender can offer you the most suitable mortgage loan. Anyways, here we concentrate on different sources of mortgage loans available at the market place.
Brokers
Mortgage brokers play a crucial role in the mortgage market. According to data provided by a reliable source, mortgage brokers account for more than 50% of the mortgage loans in the market. This is mainly because of the reason that the mortgage brokers have well established network with large number of mortgage lenders. On an average, a typical mortgage broker has close connection with more than 200 mortgage lenders. Given its well established network, a mortgage broker can easily suggest you the best mortgage deal. But, all is not well in respect to mortgage brokers. Some unethical mortgage brokers also operate in the market. If you select such an unethical mortgage broker, chances are there that that broker may suggest you such a mortgage deal from which it derives maximum amount of commission and at the same time, the product offered by the mortgage broker may not fulfill your requirements. So, it is highly important to select a genuine mortgage broker.
Commercial Banks
Presently, commercial banks also play a vital role in the mortgage industry. In recent times, many reputed commercial banks have forayed into the lucrative mortgage business. Along with their traditional banking business, these banks are also doing mortgage business. Importantly, mortgage rates offered by these banks are quite attractive. Chances are there that you may find a commercial bank in your locality which is also into mortgage business. In case you have saving or current account with that bank, you may also get discount in the mortgage loan. Before making the final decision regarding the purchase of a mortgage loan, explore this option too.
Credit Unions
Another important source of residential mortgage loan is the custom customs unions. These are community organizations formed by the like minded people. One important feature of the mortgage loans offered by these organizations is that the mortgage rates are very competitive. However, in order to become eligible for a residential mortgage loan, you need to however fulfill certain eligibility criteria.
These are the main sources of mortgage loans available at the market place. Apart from these, there are few other sources from which you can take out a home mortgage loan.
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Cincinnati Real Estate Offer and Counter Offer
January 23rd, 2012 categories: For Buyers, For Sellers
How would you like to walk up to your favorite piece of real estate, point at it, then somebody would it scoop up, wrap in a bag, weigh it and tell you what you owed?
Buying real estate would be as easy as buying candy!
Many of today’s real estate buyers and sellers throughout greater Cincinnati are expressing frustration about the entire process and, as an agent, I’d have to agree. Pages and pages of paperwork, confusion how the process works (or doesn’t work), short sales, foreclosures, lender requirements and the list goes on and on. Most agents I know sit down and discuss the process with both their buyers and sellers prior to ever listing or purchasing a property..but somewhere in the excitement lots of people show symptoms of what I call “selective amnesia”. Also known as – we only remember what we want to remember. Sound familiar? I’m not making fun of people with selective amnesia- at times- we all suffer from it. We just need to recognize the stumbling blocks in the real estate buying/selling process and prepare in advance.
One of the most misunderstood steps in the real estate process seems to be making offers and handling counter offers.
For some reasons buyers, sellers and some agents react very personally to offers. Of course, if you’re the seller and the offer is 30% lower than list price, the offer may seem like a personal insult.However I can honestly say that in all the years I’ve never heard a buyer or seller actually say their goal was to upset the other side by making a “low ball offer”. The best way to the “sting out of a low offer” is to take the offer as a “knock on the door” which requires a some type of response or “counter offer” from you. Responses on price can range from full price counter- which sends a signal that if the other party is serious they need to make a better offer. Or the counter offer could be as simple as a slight reduction in price. There are a number of ways of responding and the bottom line is you need to respond and keep negotiating with the goal of coming to an agreement.
Many times buyers and sellers can agree on price but hit a road block when it comes to occupancy, personal property and other miscellaneous things. As for personal items, I’m not an attorney, but I strongly discourage buyers or sellers from adding pool tables, lawn mowers, flat screen tv’s and surround sound systems (and whatever else you can think of) to the contract. This is a real estate deal and appraisers don’t like handling personal property and many deals go south because the buyer or seller gets so attached to $400 item and forgets the bigger goal of buying the $260,000 item. Problems with occupancy, closing dates, inspections are usually resolved with simple communications. Sellers who cannot vacate at closing because of: arrival of new baby, school schedules, next house isn’t built yet- should include a viable alternative in the counter offer. Staying in the house after closing rent free for 90 days is not a viable counter offer! However setting a time frame and paying to stay usually is a win win for both sides- so think about presenting alternatives that might work for both parties.
And one final thought about offers and counter offers- and I need to disclose I’m from the old school- any changes to contract is a counter offer. Sometimes I hear that a contract has been accepted but when the actual contract arrives, the dates, items of personal property or a request for a home warranty have been changed. That’s not an accepted contract- that’s a counter offer and the other party needs to initial/sign and date it before it’s a done deal.
Many years ago (in another life) I had the opportunity to take several courses on negotiation and the most important thing I learned was that the best negotiations happen when neither party walks away thinking they got everything they wanted- in short -no slam dunks.
Offers and counter offers in real estate are really all about give and take.
Now I’m wondering, if I knew then what I know now, if years ago I could have countered and made a better deal with the guy behind the candy counter? What do you think?
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