How much do you spend on a house payment?

October 10th, 2014

What percent of your income goes to pay rent? Is it 10% or 20% or 30% or more? How does that compare to a house payment? Your house payment depends on the price of your house and mortgage amount. There is a wide range of prices for the same size house depending on where you live. Coastal areas and the Northeast are much higher then the Midwest and South. Affordable housing and a good job market tends to attract younger workers. Demographic researchers describe those born between 1977 and 1992 as ‘Millennials’.  The ‘millenials’ population in certain markets keep increasing. Jobs and affordable housing are key reasons. Here are a few of the affordable places to live:

Metro area Payment/Income Home price Income
Augusta,GA 10.52% $64,100 $37,561
Fayetteville, NC 13.14% $97,500 $45,742
Atlanta, GA 13.98% $111,600 $49,200
Jacksonville, FL 13.99% $99,000 $43,621
Philadelphia, PA 14.06% $81,675 $35,801
Baltimore, MD 14.35% $90,000 $38,655
Little Rock, AR 14.81% $122,000 $50,768
Columbus, OH 15.26% $125,000 $50,502
Omaha, NE 15.35% $128,000 $51,392
Milwaukee, WI 15.62% $108,000 $42,611

Your buyer needs a job

October 7th, 2014

well, there is good news on this front. 4.84 million job openings are available right now. That is the highest number since January, 2001, according to the U.S. Department of Labor. Workers moving to your area to get a new job means motivated buyers. Workers getting new jobs for higher pay means they can afford to buy a larger home. For those buyers getting new jobs, they better hurry to lock in the low mortgage interest rates. The Federal Reserve has kept rates very low for a very long time for only one reason. They want unemployed workers to get jobs. Lowering the unemployment rate has been their main reason for keeping rates low. Improvement over the past six months now has the national unemployment rate at 5.9% (lowest since July, 2008). This has opened the window for mortgage rates to rise. We have said many times, once rates start to rise, they will rise very quickly.

‘Comps’ problem is slowly going away

September 25th, 2014

Comps - short for comparable sales in the real estate industry.  For the past few years as real estate sales and sales prices have improved, getting your house to appraise for the sales price has been a problem. Comps used by appraisers were hard to find, since sales from 2009 and 2012 had been minimal. Plus those sales quite often were bank foreclosures or short sales and the prices depressed. Now, we are finally seeing a comeback of sales prices for the appraisers to use. This problem is going away. Good news yesterday from the home builders. Not only were their sales up 18% from July and 33% above one year ago sales. Most importantly, the sale prices increased 2% from July and over 10% from one year ago. These sales all help when getting your property sale to appraise. Federal Reserve manufactured low mortgage rates mean nothing if your house does not appraise. We look forward to these trends continuing as the real estate industry continues to improve.

FSBO Appraisals

Want a faster, smoother closing? use a Credit Union

September 17th, 2014

Credit Unions are not-for-profit organizations that are owned by their membership. Using a credit union, as opposed to a publicly owned/traded, for profit bank, your money is federally insured through: the National Credit Union Share Insurance Fund (NCUSIF).  Over the years I have found credit unions easier to deal with since you have a real person to talk with and they make their own decisions. With the large banks, the person you talk with always has to check with someone else. We recommend you meet with a local credit union, get their information and have it ready for your prospective buyer. I find their interest rates, closing costs, and closing time are all superior to the large banks.

FSBO Credit

Happy Labor Day

August 29th, 2014

You work hard for your money, right? Let’s celebrate Labor Day by saving some of that hard earned money! How about $30 off any new #FSBO property listing? Use code laborday30 at checkout online - http://www.fsbo.com/ Expires 9/2/14 and valid only on new property listings.

FSBo Labor Day

selling FSBO is like a job interview

August 17th, 2014

Have you been on a job interview lately? or are you in the position of interviewing new applicants for a job? Either way you know what is expected and you know what makes a difference. Here is our thoughts: a. plan and be prepared b. look sharp c. be sharp d. expect the unexpected e. present your strength f. ask questions. This list could go on and on. Let’s look at these and compare them selling your property:

Plan and be prepared: job applicants research the company they have an interview with. Buyers do research (mainly online) of your house and neighborhood before actually contacting you. You need to do your own research to see what is online. Google your street address is a good start.

Look sharp: what to wear and how to look is the first item on most lists when going on an interview. You need to know what your house needs to look like prior to buyers coming by. We highly recommend going out to the street and taking a photo. Then get on the front porch and take a photo of the front door. Once in the house, take a photo of the first room you see. Study your photos. These make the first impression for the buyer and if they don’t look good, the buyer will turn around and walk out.

Be sharp: be ready to answer questions and be knowledgeable of the topics discussed. With your property, be ready to answer questions regarding schools, shopping, home repairs done recently, etc.

FSBO Job Interview

Expect the unexpected: When being interviewed and you are asked a question that you do not know the answer. What do you do? Obviously do not guess, be honest with a reply like: ‘I will surely learn the answer’ or ‘I can research and I will have the answer’. With home buyers they may ask about ’school bus information’ or ‘handicap questions’ or ‘mold, radon or termite items’. Same thing, assure them you can research and have the answer for them.

Present your strength: What is the number one reason you should be hired for the job? With your property, what is the number one reason to buy your house? For each buyer it may be different and you need to find out as quickly as possible. Is it the right school district? Is it the size of the master bedroom or formal dining room? Is it the flat backyard? Is the the price versus the others for sale in your neighborhood?

Ask questions: Interviewing is a two way street. Not only does the employee need to fit the job requirements, the employee must also fit the needs of the applicant. With the home buyer, you should be asking them about: financing ability, occupancy, motivation for buying in your area, etc.

Know what is needed and you can do it ‘FSBO’

Interest rates remain low, here’s why

August 8th, 2014

Simple economics: ‘demand outweighs supply’. Bonds/mortgages pay interest to the owners. Investor demand to own these interest rate instruments is greater then the supply. I have blogged many times over the past few years about the purchasing of bonds/mortgages by the Federal Reserve, foreign investors, pension funds, etc. While the supply keeps increasing, the demand increases even more. Every time you see headlines in the news talking about weakening economies in Europe, China, Russia, etc, investors in those regions rush to buy US bonds/mortgages. Every time the headlines talk about fighting in many countries around the world, those people with money in those countries buy US bonds/mortgages. Even as our Federal Government, corporations, students and individuals keep borrowing more, the worlds investors have more interest in buying. When does this reverse? How does this trend end? You’ll know one year after it ends. You will not know the exact day or month. You will look in the rear view mirror and say ‘Hey, interest rates are much higher and the trend started a year ago’. So called experts can make their predictions, but like myself, they have been wrong for the past two years. All I know is that this is still a great time to look in those rates, in a year from now you may be looking in the rear view mirror.

Closing costs average $2500 or more

August 5th, 2014

Thinking of buying a new home with the help of a mortgage company. That’s the way most people buy. There is a cost involved with buying a new home. Doing some homework prior to buying will save you time and money. The closing cost you pay to the mortgage company is just one of the pieces to the puzzle of buying. The less your down payment is the more your closing costs are. A recent study done by Bankrate.com shows an average of $2500 in closing cost when putting 20% down and getting a $200,000 mortgage. This varies from state to state, see chart below. When putting less then 20% down, the closing costs go up plus the interest rate you pay goes up. If you are getting a no money down VA loan or a 3.5% down FHA loan, the closing cost jump as does the interest rate. This has not changed in 50 years. The fact that the more you have for down payment the less you pay. While your goal is to first buy a home, your next goal is to get the payment & costs as low as possible. The end goal is to pay it off prior to retirement.


1

Texas

$2,280 $766 $3,046
2 Alaska $2,195 $703 $2,897

3

New York

$2,109 $783 $2,892
4 Hawaii $2,009 $799 $2,808
5 Wisconsin $2,035 $671 $2,706

6

Nebraska

$1,975 $679 $2,654
7 Vermont $1,979 $670 $2,649
8 Florida $1,982 $666 $2,648
9 New Hampshire $1,975 $666 $2,641
10 New Jersey $1,891 $733 $2,625

11

Alabama

$1,967 $646 $2,613
12 North Carolina $1,887 $714 $2,602
13 North Dakota $1,936 $663 $2,599
14 Kansas $1,956 $625 $2,582
15 Louisiana $1,928 $652 $2,580
16 Rhode Island $1,931 $645 $2,576
17 Massachusetts $1,871 $693 $2,564
18 South Dakota $1,940 $623 $2,563
19 Mississippi $1,931 $629 $2,560
20 Oregon $1,896 $663 $2,559
21 Connecticut $1,885 $670 $2,555
22 California $1,881 $661 $2,542

23

Utah

$1,889 $648 $2,537
24 Wyoming $1,890 $628 $2,518
25 West Virginia $1,805 $711 $2,516
25 Delaware $1,771 $745 $2,516
25 New Mexico $1,761 $755 $2,516
28 Pennsylvania $1,907 $603 $2,511
29 Oklahoma $1,908 $591 $2,498
30 Maine $1,854 $643 $2,497
31 South Carolina $1,786 $708 $2,494
32 Montana $1,796 $695 $2,491
33 Illinois $1,841 $640 $2,481
34 Virginia $1,840 $639 $2,479
35 Iowa $1,773 $675 $2,448
36 Idaho $1,800 $641 $2,440
36 Indiana $1,796 $644 $2,440
38 Minnesota $1,836 $619 $2,436
39 Colorado $1,817 $619 $2,436

40

Washington

$1,830 $605 $2,435
40 Michigan $1,835 $600 $2,435
42 Georgia $1,766 $667 $2,433
43 Kentucky $1,790 $640 $2,430
44 Arizona $1,810 $615 $2,425
45 Arkansas $1,815 $605 $2,420
46 Maryland $1,836 $568 $2,404
47 District of Columbia $1,791 $612 $2,402
48 Ohio $1,707 $685 $2,392
49 Missouri $1,749 $638 $2,387
50 Tennessee $1,746 $620 $2,366
51 Nevada $1,570 $695 $2,265

Zillow should zestimate itself

July 29th, 2014

Is your house worth 4 times the value of just two years ago? Has Zillow indicated your zestimate is 4 times what is was two years ago? Probably not. You are probably very happy if the value is back to it’s peak in 2007. Well, for some reason, investors think both Zillow.com and Trulia.com are worth 4 times as much as two years ago. In Zillows case, with sales of $300 million and zero profit, the company is now valued at $6 billion and Trulia never having a profit is valued at $2.4 billion. For Zillow to buy Trulia, it will just take paper, that is paper stock. No cash or other value. For revenues to increase they both count on real estate agents to spend more money advertising. As they both move towards agents helping with revenue and profit, they slowly move away from the ‘for sale by owners’. This should strengthen those that help FSBO’s, such as; FSBO.com.  Zillow should look at itself and come up with a true ‘Zestimate’.

Health of Real Estate market improves

July 17th, 2014

The real estate market has been improving yearly since the depths of the financial crisis six years ago. Sales and market values keep going up. Foreclosures keep going down. This weeks headline “Foreclosure activity hits lowest in eight years” with the number of new foreclosure filings dropping again. Remember just 24 months ago, most areas had foreclosed properties sitting on the market for sale, with the prices dropping, which held down your areas real estate market. Look around today, they are mostly gone or none existent. Mortgage rates are still below historical norms and banks are now getting more lenient. The only thing holding back future sales is lack of inventory. Many owners that have refinanced at very low interest rates are staying put. Why walk away from a really low mortgage payment? Many buyers still have a problem qualifying for a new mortgage because of credit score problems. Looking out the next 24 months, more of the same, except interest rates will move up.