September Real Estate Newsletter

 

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September 2010
Why it’s still beneficial to own your own home For decades, homeownership has been a key part of the American dream. Recently, however, some media outlets, academics and others have questioned this notion. However, here are some reasons why homeownership is still valuable: Homeownership strengthens communities. Homeowners generally stay in their homes longer than renters. This helps prevent crime, fosters a better school system and generally makes for more secure, established and attractive neighborhoods. Financially, owning a home is one of the best ways to build long-term wealth, by building equity in your home and allowing you to deduct mortgage interest on your federal income taxes. Some homeowners even consider their home a forced savings account. Renting can cost less in the short term. But like the cost of most things, rental rates generally increase over time, with typical increases of about 7 percent per year. For homeowners with a fixed-rate mortgage, their monthly payment will be fixed for the life of the loan. All real estate is local. With local home prices and mortgage interest rates at historically low levels today, even those who advocate renting acknowledge that Southern Nevada is one of the places where you now have a strong financial incentive to buy a home – even without a tax credit. That being said, owning a home is a responsibility. It’s not for everyone. If you’re thinking about buying or renting a home, contact me so that I can help you evaluate your options. Tips for Buying in a Tight Market   Increase your chances of getting your dream house in a competitive housing market, and lower your chances of losing out to another buyer. 1. Get prequalified for a mortgage. You’ll be able to make a firm commitment to buy and your offer will be more desirable to the seller. 2. Stay in close contact with your real estate agent to find out about the newest listings. Be ready to see a house as soon as it goes on the market – if it’s a great home, it will go fast. 3. Scout out new listings yourself. Look at Web sites such as REALTOR.com, browse your local newspaper’s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and the name of the listing agent. I will schedule a showing. 4. Be ready to make a decision. Spend a lot of time in advance deciding what you must have in a home so you won’t be unsure when you have the chance to make an offer. 5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don’t go too low to get a deal. In a tight market, you’ll lose out. 6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. 7. Don’t get caught in a buying frenzy. Just because there’s competition doesn’t mean you should just buy it. And even though you want to make your offer attractive, don’t neglect inspections that help ensure that your house is sound. Source: NAR Sellers: 5 Questions to Ask When Reviewing an Offer You made the decision to list your home with a REALTOR®. You worked hard to get the house in tip-top shape, the curb appeal shines, and you’ve priced it well. Some might say that’s the easy part. When an offer comes in, your agent will review it with you. It’s important that you read and understand all of its terms – not just the purchase price. Here are five things to keep in mind when reviewing offers to help you choose the one that’s best for you. 1. What contingencies are involved? A contingency is something that has to happen before the contract is fully enforceable against the buyer and seller. If a contingency is not met, the party benefited by that contingency can walk away. Common examples include the buyer seeking a mortgage loan to purchase the home; selling the buyer’s current home; conducting inspections; and in a short sale, approval of the seller’s lender. 2. What’s the bottom line? Can you afford to cover everything the buyer is asking for? Your agent can provide you with a “net sheet” that takes all of the financial terms – such as requests for closing costs and repairs – and calculates what the net proceeds will be, based on the offer price. This is especially important for owners who are short selling their homes. 3. What timeframes are involved? Be available for your agent to present offers. Every offer has an expiration date, and it’s important to meet that expiration date or get an extension if you need more time to review the offer. When is the buyer proposing to close escrow? How long is the buyer asking for due diligence? The purchase agreement will have a “time is of the essence” clause, so it’s important to pay attention to all contractual deadlines. 4. What is most important? This is a question that only you as the seller can answer. If maximizing proceeds is most important, you’re more likely to stand firm on your financial terms, whereas if a quick closing date is most important, then you may be willing to compromise in other areas. 5. What are my options? The seller always has the right to accept, reject or counter every offer that’s made on the property. Selling a home can be a very emotional time for a homeowner. It’s important to stay flexible, look at it as the business transaction it is, and for each provision in the offer decide whether it’s a deal breaker or if you’d be willing to compromise. Working through the offer with your agent, decide what course is best for you. Sales Statistics   Type of Property Median List Price Traditional 224,900 REO/Bank owned 137,000 Short Sale 135,000   Type of Property   Median Sale Price Diff Percentage Traditional   170,000 54,900 76% REO/Bank Owned   122,000 15,000 89% Short Sale   135,000 0 100%   Comparing the above charts for Median List Price vs. Median Sales Price for Traditional, REO/Bank Owned and Short Sales we see that the traditional listings are selling at a very high percentage (78%) of the average list price and the average list price is much higher ($224,900) than either REO or Short Sale properties. The REO and Short Sale average List Price are almost the same, but the average Sale Price for REO properties is lower. It is interesting that the Short Sales properties’ Median List Price is the same as the Median Sale Price. Email me at danya@buyvegashouses.com or call me at (702) 256-4900 for more information regarding the market.	Brought to you by… Danya K. Gresham Coldwell Banker Wardley RE (702) 256-4900 Click for Website Click to Email Pending Home Sales Rise Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.” Why Use a REALTOR®? The REALTOR® mark shows that your real estate agent is a member of the National Association of REALTORS® and adheres to a strict Code of Ethics. There are many reasons to use a REALTOR® to help you buy or sell a home. Here’s one: A REALTOR® can give you up-to-date information on what is happening your local marketplace and the price, financing, terms and condition of competing properties. For information on choosing and using a REALTOR®, click here. Fight Foreclosure Fraud Foreclosure fraud has become epidemic in Nevada, and there are some red flags you should be aware of before you seek assistance. Be suspicious of anyone that: Guarantees to stop foreclosure; Tells you to make payments to them; Pressures you to sign or pay; Offers to fill out paper work; Tells you NOT to contact your lender; Tells you foreclosure ‘scams’ aren’t real; or Wants to charge you up-front. There are reputable groups who can help and you will not be charged for their services. So before you do anything, stop and call 702-229-HOME or 877-448-4692 to find a local HUD-approved housing counseling agency. Also visit www.fightfraud.nv.gov. Source: Nevada Foreclosure Prevention Taskforce Tips for Lowering Homeowner’s Insurance Costs 1. Review the Comprehensive Loss Underwriting Exchange (CLUE) report on the property you’re interested in buying. CLUE reports detail the property’s claims history for the most recent five years, which insurers may use to deny coverage. Make the sale contingent on a home inspection to ensure that problems identified in the CLUE report have been repaired. 2. Seek insurance coverage as soon as your offer is approved. You must obtain insurance to buy. And you don’t want to be told at closing that the insurer has denied your coverage. 3. Maintain good credit. Insurers often use credit-based insurance scores to determine premiums. 4. Buy your home owners and auto policies from the same company and you’ll usually qualify for savings. But make sure the discount really yields the lowest price. 5. Raise your deductible. If you can afford to pay more toward a loss that occurs, your premiums will be lower. Avoid making claims under $1,000. 6. Ask about other discounts. For example, retirees who tend to be home more than full-time workers may qualify for a discount on theft insurance. You also may be able to obtain discounts for having smoke detectors, a burglar alarm, or dead-bolt locks. 7. Seek group discounts. If you belong to any groups, such as associations or alumni organizations, they may have deals on insurance coverage. 8. Review your policy limits and the value of your home and possessions annually. Some items depreciate and may not need as much coverage. 9. Be sure you insure your house for the correct amount. Remember, you’re covering replacement cost, not market value. Source: NAR Mortgage Calculator

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