Real Estate Information Archive

Selling a house is one of the biggest decisions that homeowners will ever make. Numerous factors are involved in the successful sale of a home. Choices such as selecting an agent, preparing the home, timing, and price all play a major role in a positive experience for homeowners, buyers, and real estate professionals.

The one decision most homeowners wrestle with is deciding on a sales price. Pricing your home to sell involves careful planning, looking at the market, and accessing the condition of your home. Many things are taken into consideration before deciding on a price.

Location

Being aware of your home’s location will provide additional insight into the pricing of your property. Things like power plants, busy roads, and a less than desirable view may all make your sale price lower, while benefits such as neighborhood parks, easy access to shopping, and beautiful views drive prices up.

Staging

Planting flowers, painting, and purchasing new throw pillows may seem insignificant, but these small changes can actually add up to thousands of extra dollars in a home's sale. Presenting a house in the best possible light is important. Creating an environment that is warm and inviting, and that prospective buyers can see themselves in, is the key to selling a house.

Comparative Market Analysis

Given all of these factors, one of the tools that a real estate agent will use to help determine a home's value is a comparative market analysis. This CMA can vary from a short document to one laden with details, but they all have basic things in common. All of them will look at the active listings, pending listings, and sold listings. Additionally, they may look at items such as properties withdrawn from the market and expired listings. A CMA is going to compare your home to other homes with the same square footage and amenities. This information will assist your real estate agent in pricing your home to sell.

When it comes time to sell your home, allow the real estate professionals at Prudential Ambassador Real Estate assist you through every step of the process. With years of superior service and satisfied customers, we are prepared to find the right buyers for your house and to help you find the home of your dreams.

Mortgage rates are on the rise according to some news sources. Reports are that the average rates on a 15-year fixed mortgage escalated above the three percent mark in late May. This was the first occurrence in more than a year, but many feel this rise in interest rates is only the beginning.

Freddie Mac reported that the average rate on a 15-year mortgage was 3.03% at the end of May. This was an increase from an all-time low rate of 2.56%. 30-year mortgages saw rates rise from 3.3% in early May to 3.91% at the end of that month. According to Doug Duncan, a chief economist with Fannie Mae, mortgage rates are unlikely to ever be that low again.

One of the reasons for record low rates was that the Federal Reserve had been purchasing around $85 billion a month in mortgage-backed securities and treasury bonds. This resulted in mortgage lenders being able to offer their loans at record low interest rates while still making a hefty profit. The Federal Reserve never intended these rates to carry on indefinitely, but rather were to taper off later this year. That timeframe has since been moved up to late summer or early fall.

Although mortgage rates have risen somewhat, they have nonetheless stayed low enough to help stimulate an increase in home purchases during 2012. In addition, home sales and market values have both increased across the country during the past two months.

Since mortgage rates are on the rise, potential buyers should strongly consider whether or not to take advantage of these lower rates. There are numerous advantages to purchasing now, and many people could find it in their best interest to go ahead and invest in the American dream of home ownership.

In any kind of market, whether slow or hopping, it is vitally important to show your house at its best. Home staging won't necessarily get a seller a better price, but it just might generate a faster sale. Staging the property means creating a great first impression and helping the buyer to envision it as "home". Here is how you can make some big changes, with little or no investment, in order to make your house stand out from the rest:

Curb appeal is important!

1. Take a look at the outside of the house from a distance. Look carefully for unsightly issues - from weeds to spider webs. Make sure all dirt and debris are swept or washed away. Put bicycles, tools and toys in the garage and out of sight.
2. Manicure the lawn. Make sure all the edges are clipped cleanly. Trim all hedges.
3. Use plants to brighten the environment. Flats of bedding flowers are an inexpensive way to add color to a garden. Even in winter, evergreens in urns can create a welcoming appeal at the front door.
4. If painting the exterior is out of the question, a good power wash will make a dramatic change to the outside walls. Don't neglect doors and windows.
5. Buy a new welcome mat, and polish doorknobs and hardware.

Move to the inside

1. Eliminate personal items. Looking at someone else's family photos on the wall won’t help make the buyer feel welcome. Get a jump on packing by putting all your personal effects away.
2. Clear the kitchen. Getting rid of all the clutter will make the kitchen appear larger and brighter. Countertops should be clear and sparkling.
3. Clear the bathroom. Use a basket, and place all necessary personal items that normally reside in the open, under the sink. Make sure towels are clean and fresh.
4. Minimize furniture to make rooms feel less crowded. Move unnecessary items to storage to create an airy feeling in each room.
5. Patch and paint the walls. Nail holes from all the photos that used to reside there are not attractive, and a fresh coat of neutral paint will make the entire house look newer.
6. Clean everything until the house sparkles. Make sure there are no unpleasant odors. Air fresheners for air filters will waft pleasant smells throughout the house with no visible source.

Home staging is very much like dressing well for a job interview. Dressing well won't guarantee you land the job, but dressing poorly will definitely dampen your chances.

With the barrage of information coming at first time home buyers from all directions, it's no wonder they often feel frustrated and confused when it comes to types of home mortgages and loans. Fortunately, many of the exotic loan types that surfaced before the housing market tumbled have been eliminated, and the buyer is left with fewer difficult or confusing choices. The remaining loan possibilities will be based upon the buyers need, credit history and resources. The first choice the buyer will face is whether to go with a fixed or variable interest rate. The second choice involves whether the loan will be conventional or government-backed. Here are some of the contributing details:

Fixed Rate

With this option the payment will be the same for the life of the loan. Although prime rates rise and fall, the mortgage payments and consumer rates will always remain the same. This certainly makes it easier to budget, and if the prime rate falls dramatically, it is possible to re-finance, although that means a new loan with new closing costs and possibly appraisal costs. Fixed rate loans are available for various time frames, but the most common are 15 and 30 year periods. This may be the best choice if the buyer intends to stay in the home for several years.

Adjustable-Rate Mortgages, or ARMs

These begin at a set rate and then adjust periodically at pre-determined intervals. They are generally easier to obtain than fixed rates, and often offer lower interest rates than fixed rates in order to attract buyers. These factors make this loan type popular with buyers that intend to sell in a few years. The downside is that the rate will most often increase, possibly by as much as six percent. ARMs come in several packages.

Conventional Mortgages

These types of Home Mortgages and Loans are created in the private sector, usually from a bank, with no government backing and are known as conventional loans.

Government-backed Loans

This loan will be created in the private sector, but insured by a government agency such as the Veterans Administration or the Department of Housing and Urban Development. These loans include Veterans Administration loans, Federal Housing Administration loans, and USDA loans.

The most important thing to remember is - ask questions, and make sure they are all answered fully. A reputable real estate agent is happy to review any concerns the buyer has, and can always recommend a local, reliable lender or broker. Communities across the country are sponsoring first-time home buyer classes to help buyers understand the process.

Buying a home can be a time of both anxiety and excitement. Home buyers that know about the terminology associated with home ownership have a better chance of fending off some of that anxiety. Pre-approval and pre-qualification are two of the most confusing terms when buying a home. Knowing the difference between pre-approval vs. pre-qualified allows buyers to understand what their agreement with the financial institution is, as well as what kind of house they can afford.

Pre-qualification

This step simply involves looking at the buyer's finances and estimating how much they can afford to spend on a house. Items like income, assets, down payment, and debts are taken into consideration. There is no commitment involved with a pre-qualification. The buyers are not obligated to purchase a home, and the financial institution is not obligated to give the buyers a loan. Pre-qualification does not include an in-depth look at the buyer's finances or an evaluation of their credit report. It simply lets the buyers know if home ownership is an option and the range of prices they can look at. Pre-qualification is a relatively short process and there is usually no cost to the buyer.

Pre-approval

When trying to look ahead at your loan options, pre-approval takes pre-qualification a step further. In this step, the lender does an extensive evaluation of the buyer's financial history, including their credit report. Instead of just telling the lender what their income, assets, and debts are, buyers are required to provide some documentation. Payroll records, bank statements, and other records are often required to proceed with a pre-approval. A pre-approval usually includes an application fee and is a tentative agreement from a lender stating that the buyer will be given mortgage financing. It is important to understand that a pre-approval is not a mortgage guarantee. A mortgage application is only guaranteed after a title search, appraisal, and other financial verifications are established. Since the pre-approval already takes many financial situations into consideration, the pre-approval status is very attractive to sellers. In situations where multiple offers are presented, buyers with pre-approval will often get selected over buyers that haven't established financing.

There are advantages to completing both of these steps, and it is important to remember that buyers always have the option of choosing a different lender. Just because one lender performed a pre-qualification does not mean that the buyer has to continue with that lender for the pre-approval and mortgage. Shopping around sometimes reveals better interest rates or a lender that better represents the buyer's wishes and communication style.

It is also important to note that the terms pre-approval and pre-qualification sometimes get interchanged by either lenders or other real estate professionals. Knowing the difference between pre-approval vs. pre-qualified can help buyers take control of their home ownership situation.

The Federal Housing Administration has been insuring U.S. mortgage loans since 1934. The insurance helps protect lenders against loss by providing claims to lenders in the event an FHA-insured homeowner defaults on a loan. Though it makes the payments to lenders, the program is really provided for the benefit of American homebuyers.

The FHA program helps extend the American dream of owning a house to lower income Americans and people who could not otherwise meet traditional lending requirements. Instead of requiring 20% down, FHA qualified buyers can purchase a new home with 3.5% down. Homebuyers must qualify for the program, however, and they – not the lenders – pay for the insurance as part of their monthly mortgage payments.

The program worked well throughout history and made it possible for millions of Americans to purchase their own homes. The premiums paid by FHA borrowers were added to the program’s reserves, and those reserves were then used to pay lenders in the event a borrower defaulted on a loan. Unfortunately, the unprecedented number of defaults that occurred from 2000 to 2009 greatly reduced the FHA’s reserves and led to a number of significant changes that went into effect on April 1, 2013. Specifically, the program’s down payment requirements, annual insurance premiums, and eligibility requirements changed.

Beginning in April 2013, buyers who obtain loans above $625,500 will be required to put 5% down, instead of 3.5%. Annual mortgage insurance premiums will go up by 0.10% for loans under $625,500 and by 0.05% for loans above $625,500. Borrowers with credit scores below 620 will also be required to have a debt-to-income ratio of at least 43%. Additionally, fixed-rate “Standard” reverse mortgages will no longer qualify for FHA insurance.

Additional changes are scheduled to take effect in June. Beginning on June 3, 2013, payment of the required mortgage insurance will extend from a period of five years to the life of the loan in most cases. This change, while small, means buyers will end up paying significantly more to take out an FHA-insured loan in June 2013 and beyond than they paid in the past. Thankfully, there’s still time to obtain an FHA loan before the final change takes effect.