Now Is A Great Time To Buy A Home

If you’re ready to buy a home and can afford it, now is a great time to buy. Mortgage interest rates remain very low. In many areas, buyers have a lot of inventory from which to choose and long-term homeownership continues to be one of the best ways for the typical American to build wealth.

Don’t let all of the negative media attention about the “mortgage meltdown” keep you from pursuing your homeownership dream. Mortgage industry woes are primarily limited to subprime loans and other types of creative and comparatively risky financing products. While the mortgage industry stalled briefly to reconsider its more exotic loans, there is plenty of conventional financing available for qualified homebuyers. Interest rates remain at historically low levels – still less than 7% for the typical, 30-year fixed-rate mortgage.

Indeed, the market has changed. It’s gone from a frenzied seller’s market to calmer buyer’s market. In fact, buyers haven’t seen a market this strong in years. When the national median home price dropped for the first time on record, the decline made huge albeit misleading headlines. For starters, there is no such thing as a national real estate market. All real estate markets are local and driven by local factors that include the local economy, housing supply and demand factors and other attributes like geography.

The slight decline followed years of unprecedented steep home price appreciation and the reality is that only a handful of markets experienced price declines. Corrections in markets that experienced exorbitant home price appreciation were expected and signal good news for buyers. According to 2007 third-quarter National Association of REALTORS® (NAR) statistics, the vast majority of the nation’s metropolitan areas showed rising or stable home prices with most areas experiencing modest gains.

Right now there are many homes from which to choose and in most areas buyers don’t have to deal with the harried and hurried competition of multiple bids. The changing market has also changed the inventory landscape to include fewer speculative sellers and a larger share of serious and motivated sellers.

Prospective homebuyers have some time to shop inventory and thoroughly compare home types and prices, amenities, neighborhoods, commutes and other important real estate-related features. And buyers have stronger price negotiation power as sellers compete for their attention by offering concessions or other incentives.

While all real estate markets have ups and downs, Americans continue to consistently build wealth through homeownership. According to the NAR:

· One average, the value of a home doubles every 10 years. During the past three decades, home values have increased an average of 6.6% per year.

· The average homeowner today has 36 times the wealth of the average renter. Homeowners are essentially paying themselves when they pay their mortgages and this means they’re building equity. Homeowners also benefit from some real estate-related tax write-offs like mortgage interest.

· Sixty percent of the average homeowner’s wealth is their home’s equity. For homeowners who’re in their homes for the long-term, home equity typically is their single largest source of wealth.

Because every market is different, it’s a good idea for potential homebuyers to contact a local real estate specialist to learn more about what’s happening in his or her community and real estate market. The bottom line in real estate doesn’t change – if you’re ready to buy and can afford to make a long-term homeownership commitment, it’s always a good time to buy!

Prudential Olympia, REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.

Stronger Home Warrantees on the Horizon?

More protection for house buyers sought

Brad Shannon

Stymied by the builders lobby a year ago, consumer advocates at the Capitol are taking a new approach to winning warranty protection for homeowners who buy shoddily built homes.

The approach, which Rep. Pat Lantz aired this week in a House Judiciary Committee meeting, builds on legislation already on the books to protect purchasers of condo units. It includes a four- to six-year warranty against defects for single-family homes and duplexes, and it gives builders a chance to "cure" or fix flaws before a buyer can sue.

Sen. Brian Weinstein, the Mercer Island Democrat who had pushed for a law making contractors negligent for shoddy work just as lawyers or doctors are, said he likes the new approach.

"Hers is an easier sell," Weinstein said of Lantz's approach, which might have more political appeal. "The argument is why shouldn't the buyer of a new home have the same rights as the buyer of a condo?"

Lantz was preparing to bring the measure to a critical vote today in the House Judiciary Committee, which she leads. Friday is the deadline for keeping bills alive by passing them out of committee.

Builders who belong to the Building Industry Association of Washington and contractors' insurers are not convinced. They insisted in testimony Tuesday evening on Substitute Senate Bill 6385 that Lantz's amendment could add costs for homebuilders, especially small outfits, while burdening an industry in hard times.

They also questioned whether the legislation tailored in 2004-05 to deal with problems in the condo industry really fit the residential housing market — including requirements for inspections and arbitration, which are costly unless spread out across dozens or hundreds of units, as they are on condo projects.

Olympia builder Daimon Doyle testified that bad contractors make up perhaps 2 percent of the profession.

Doyle said the legislation could have a "devastating effect" on his insurance rates, and Amy Brackbury of BIAW warned it could undo work of several years to bring predictability to the insurance market for builders, driving up rates and home costs.

Using similar arguments, the BIAW and others persuaded House Speaker Frank Chopp, D-Seattle, to kill last year's warranty proposal that could have protected homeowners for up to 10 years for some defects.

Chopp is not saying what approach he will take this time. He referred questions Wednesday to Rep. Mark Ericks, a Bothell Democrat who is pushing for a bill to require a study of the industry and passage of a licensing requirement in 2009 for contractors.

Ericks said he doesn't have an opinion about Lantz's bill but is focused on getting the Senate to pass his measure, House Bill 3349. It would have the Department of Licensing study the need for contractor licensing and bring back recommendations to the Legislature for a bill he is sure would pass in 2009.

Olympia homeowner Karen Veldheer testified Tuesday in favor of the statutory warranty proposal, letting homeowners sue for damages if builders don't correct shoddy work. Veldheer said her family received a builder warranty as part of the sales agreement — "take it or leave it" — but the builder warranty was not helpful for recovering costs of repairs to her water-damaged house foundation in west Olympia.

King County attorney Sandy Levy said most homeowners have no meaningful rights in disputes with builders over construction defects.

"This bill will be very good to good builders, and very detrimental to bad builders," he said.

Levy argued for giving homeowners a longer period to discover major underlying defects such as foundation problems, and he said that if builders want mediation and arbitration to resolve disputes, they should pay for them. He also said he would favor more accountability to home inspectors.

The Olympian, Olympia WA, February 28, 2008

Featured Home: Charming, Private Mini-Farm

Absolutely charming mini farm on just over 8 acres with 2 double car garages. Home is loaded with old world charm with beautiful wood floors just refinished, new bathroom, great fireplace, office area, upper floor is large master, lots of nooks and built ins. Full basement is unfinished.

New roof and some new windows. Beautiful property with fruit trees, pasture area, very private- home sits way back from Johnson Point Road.

MLS#: 27151325
Bedrooms: 2
Baths: 1.5
Square Feet: 1428
Built in 1926
Price: $395,000



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Roberta Rudnick
Phone: 360-791-0688
Email: robertae@orcalink.com
www.olympiahomesearch.com

Prudential Olympia, REALTORS®
2630 Martin Way
Olympia, WA 98506

Relief for Strained Mortgage Holders?

President Bush today announced modest steps to deal with an alarming rise in mortgage defaults that have contributed to turbulent financial markets in recent weeks.

One of the Bush proposals, which FHA officials said would take effect immediately, would allow an estimated 60,000 homeowners who have fallen behind on payments because their mortgages have reset, to refinance with FHA-insured loans. FHA does not now insure refinanced loans from borrowers who are currently delinquent.

"This means that many families who are struggling now will be able to refinance their loans, meet their monthly payments and keep their homes," Bush said.

Bush also said he would support legislation currently pending in Congress to temporarily change tax law to let homeowners avoid paying taxes on forgiven debt in loans being restructured by financial institutions.

Read the full transcript of Bush's remarks.

The ABC’s of Real Estate Closing Costs

You’ve found your dream home, the seller has accepted your offer, your loan has been approved and you’re eager to move into your new home. But before you get the key, there’s one more step—the closing.Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering. As a buyer, you will sign what seems like endless piles of documents and will have to present a sizable check for the down payment and various closing costs. It’s the fees associated with the closing that many times remains a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for. As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Although many of the fees may vary by locality, here are some common fees:

• Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.
  
  
• Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
  
  
• Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage.
  
  
• Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.
  
  
• Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
  
  
• PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
  
  
• Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
  
  
• Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance. At least one year advance plus two months worth of homeowner’s insurance premium will be collected. In addition, taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If 6 months have passed, 8 months of taxes will be collected.)
  
  
• Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.

Make sure you consult a real estate professional in your area to find out which fees—and how much—you will be expected to pay during the closing of you prospective home. Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay all of the settlement costs.

Prudential Olympia, REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.

Deciphering Real Estate Jargon

As with all industries, real estate professionals have developed a lingo and acronyms to help them communicate with each other more easily. For the first-time homebuyer (and even some veterans), making sense of property listings can sometimes leave you feeling like you’re deciphering the DaVinci Code.
Let’s take a look at a sample real estate listing:

2,500 sf on a c-d-s, 2BR, 2.5BA, CA, spac grt rm w/ wbfp, grmet kit, det gar

Looks a lot like alphabet soup. However, using this type of abbreviated property description saves valuable advertising space. Some abbreviations you’ll probably encounters are:

• AC or A/C: air conditioning
• BA: bathroom
• BR: bedroom
• CA: central air
• C-D-S: cul de sac
• DET: detached
• DK: deck
• EIK: eat-in kitchen
• F/FIN BSMT: finished basement
• FDR: formal dining room
• FP, frplc: fireplace
• GAR: garage
• GRMT KIT: gourmet kitchen
• GRT RM: great room
• HDW, HWF, Hdwd: hardwood floors
• HOA: home owners association
• LR: living room
• KIT: kitchen
• OFC: office
• PVT: private
• SF: square feet
• SPAC: spacious
• VW, VU: view
• WBFP: wood-burning fireplace

In addition to the abbreviations in property listings, here are a few other common terms you should become familiar with.

FSBO—For Sale By Owner. This term refers to a property which the homeowner is trying to sell independent of a real estate professional.

MLS—Multiple Listing Service. MLSs are comprised of a group of real estate brokers who have agreed to share their property listings. This listing is then provided to the group through a database or directory. If you are buying your home, this is the service that your sales professional will use to search for potential homes for you to purchase. If you are selling your property, your real estate professional can list your home through the MLS. For-Sale-By-Owner (FSBO) properties are typically not listed through the MLS.

CMA—Comparative Marketing Analysis. This analysis is an informal assessment of a property’s market value. This is one of the tools your real estate professional can use to help you determine a reasonable listing price. Usually, the CMA compares your property with similar properties that have sold in your area within a certain time frame. Besides purchase price, some of the information typically listed is the number of bedrooms and baths, approximate square footage, size of major rooms, amenities such as fireplaces and pools, age of the home, and property taxes.

During the real estate process, you’ll more than likely come across more acronyms and lingo. Make sure you ask your real estate professional to explain any terms you are unfamiliar with so that you are not in for any surprises.

By the way, the listing above was a 2,500 square-feet home on a cul-de-sac, with two bedrooms and two and a half baths, central air, a spacious great room with a wood-burning fireplace, and a gourmet kitchen and detached garage.

Prudential Olympia, REALTORS is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. Equal Housing Opportunity.