Category Archives: Home buying process

What Happens If Mortgage Interest Rates Increase

Posted on 08/08/2011 | Leave a comment

What a week we had last week in the stock market, and with the S&P downgrade, this week is likely to be just as disconcerting since Moody’s just announced they are watching this Administration’s actions carefully as well. The full ramifications for us “average citizens” is yet to be determined, however, there is concern that interest rates might rise for mortgages, car loans and credit cards.

What difference can a mortgage rate rise mean to you?

The average interest rate for a 30-yr fixed loan in June 2011 was 4.5%. If that average increases only 1.4% (to 6.5% interest) that can equal a 25% increase to your payment amount or it can mean that you’ll have to shop for a lower priced home if maintaining a certain mortgage amount is critical to you being approved for the loan.

Homeowners, who have a home for sale, may want to consider lowering their price to get their home in contract now, so they can buy at the lower interest rates we have now. A price decrease on your current home may cost you less than the interest rate increase on your next home.

**Impact of Mortgage Payment for 3 Home Prices @ two interest rates**
	$200,000	$300,000	$400,000
Loan @ 20% down	$160,000	$240,000	$320,000
4.5% rate	$811.20	$1,216.80	$1,516.80
6.5% rate	$1,011.20	$1,516.80	$2,022.40
Extra Paid/Yr	$2,400	$3,600	$4,800
Extra Paid/5 Yrs	$12,000	$18,000	$24,000

Now’s a good time to buy

OK, you often hear that phrase from Realtors® and from the National Association of Realtors® TV ads. If you doubt it, take a look at this chart of the mortgage rates since 1972. Notice that the average rate for 1972-2010 was 8.92%. Think about how much more home you can purchase at today’s current rates vs how much you might have to drop down in price if rates were to return to the nearly 9% average rate. I’ve purchased homes in ’72, ’76, ’85, ’95, and ’97 so I know what a difference the higher rates can mean.

Click to enlarge

If you want to see if you can afford to buy now, call Pam Mahon, Home Mortgage Consultant with Real Living Mortgage at 614-273-6366. She’ll walk you through your options to tell you what price of home you can be approved to buy.

Other news you need …

As Washington tries to work us out of this mess, keep a watch on their discussions about cutting the mortgage interest deduction (often referred to as MID) that we currently can take on on Fed Tax Forms. Some politicians want it to be eliminated completely while others suggest elimination only on more expensive homes ($500,000 has been bantered about). “Washington-speak” may call that a “loophole”, but it’s a tax increase for us citizens. The National Association of Realtors® is working hard to fight this elimination because it removes even more money from people’s wallets.

Copyright © 2011. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.

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Posted in Buyers, Central Ohio, Home buying process, Home prices, Home selling process, Homes, Sellers

Tagged central ohio real estate market news, historical mortgage rates, mortgage interest deduction, rise in interest rates impact on home buying

10-Yrs of Home Sales Show That It’s A Buyer’s Market

Posted on 06/21/2011 | Leave a comment

Yesterday I posted a graph showing the average prices of homes sold the past 10 years. Today I’ve prepared a graph showing the NUMBER OF HOMES SOLD in that same time period. This chart illustrates why there is so much concern about the real estate market and the need to improve the sales because the real estate industry supports jobs for many related industries.

2002-2011 # Homes Sold Jan May in central Ohio

Click to enlarge, then click again

You’ve probably heard Realtors® say that there are fewer buyers than there were in the early part of the 2000 decade. This chart certainly illustrates that. The bump-up in 2010 was due to the $8000 Gov’t tax credit for 1st time home buyers. Buyers had to be in-contract by the end of April to take advantage of that tax credit. Some of those contracts would have closed in May, thus driving up the sales for the Jan-May period.

Prices and interest rates have been declining in recent years, which should drive up the demand, but that’s not happening. The financial institutions began eliminating 100% financing and established tougher criteria for buyers to meet when seeking mortgages. Buyers had to begin having some down payment money and better credit scores. You can see this effect with the declines after 2007. This financing change impacted 1st time buyers the most and that’s likely why Hilliard and Westerville sales have declined so visibly as both suburbs are popular with 1st time buyers due to the average price of the homes. (See yesterday’s chart)

What should your take-away be from this chart’s info?

Buyers: If you have the funds, it REALLY IS a good time to buy.
Sellers: Competition is stiff so your home needs to be priced right and in top condition to appeal to the few buyers that are shopping.

View same data for AVERAGE PRICE OF HOMES SOLD

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Posted in Buyers, Central Ohio, Delaware County, Delaware Ohio, Dublin Ohio, Franklin County, Hilliard Ohio, Home buying process, Homes, Housing stats, Lewis Center Ohio, Powell Ohio, Schools, Worthington Ohio

Tagged Big Walnut school district, Buckeye Valley school district, central ohio real estate market news, Delaware school district, dubl, Hilliard school district, homes sold in central ohio, housing trends, Marysville school district, Olentangy school district, Westerville school district, Worthington school district

Home buyers – know what conveys & what doesn’t

Posted on 03/20/2011 | Leave a comment

Does he/she convey?

Since home buyers are out shopping for their next home now, it seems a good time to put up this reminder on what constitutes a fixture and what doesn’t. A fixture is anything attached to the home. Some people say that if it takes a screwdriver to remove it, it is a fixture. There are some exceptions to this, so ask your real estate agent whether the item should be further identified in the Purchase Offer to eliminate confusion.

First of all, you may hear the term “conveys with the property”. That’s a legal way of saying it “stays”. Some things are considered fixtures even though they aren’t actually attached to the home. *

Of course, the garage door opener is attached and is a fixture, but the remotes in your car are considered a fixture because they are required to make the opener operate.
Similar to the garage door opener, the transmitter on the dog’s collar that goes with the buried electronic pet fence is a fixture as well.
TV’s that sit in a bracket that is attached to a wall MAY or MAY NOT be a fixture. There is still debate on this. Some brackets only fit certain TV’s thus may make the TV a fixture. Other brackets may be able to hold any TV. Your agent can guide you on this issue. You may want to ask for the TV in the Offer, or you may request that both the TV & the bracket be removed and the holes repaired.
If the home has a fence, read this fence article that I wrote previously. The home may or may not own the fence.
Some electric ranges are built-in but many are merely a free-standing range. Same with refrigerators. If you want to ensure those appliances stay, then identify** and specify them in the Offer.
Curtain rods are considered a fixture because they are screwed into the wall, however, the fabric wallcovering that is hanging on the rod is not. There can be exceptions to this if the drapes were custom-made for a specific window. Again, your agent can guide you here based on the uniqueness of the window … and whether you want the drapes to stay or go.

In our Columbus Board of Realtors Purchase Contract there is a section that identifies common fixtures, with space for you to add your own list. Just below the fixture section, is an exception section. This is where you identify items you want to make sure are removed, i.e. don’t stay. Hot tubs, swingsets, playgyms, trampolines are often identified for removal if the buyer doesn’t need or want them. Even though the Purchase Contract states that all personal property must be removed by the time the buyer takes possession, sometimes sellers try to fudge on this, so if you don’t want that hot tub w/the yucky green water, put it in the Offer that it’s to go away.

Bottom line, before writing an offer, go through the home carefully to make a list of items that you want to make sure either stay or go if they’re not addressed in the standard Contract language.

* This info applies only here in central Ohio. Other areas may do things differently. Ask your agent what your local customs are.

** Record brand, model and perhaps take a photo to prevent the seller from substituting.

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Posted in Buyers, Central Ohio, Home buying process, Homes

Tagged central ohio real estate market news, real estate fixtures, what items convey with the home, writing a home purchase offer

Are you a client or a file?

Posted on 03/08/2011 | Leave a comment

manila files As real estate agents, we usually refer to our clients as ‘clients’ in order to protect their identity. Frequently we may say ‘my buyers’ or ‘my sellers’ … again protecting their identity. Once they go into contract, we may personalize it somewhat and refer to them as ‘The Smith’s’ to the coop agent as we move through the transaction.

Recently I heard a member of a real estate team refer to their client as “that FILE” … as in, Susie is handling “that FILE” now. This team moves their “FILE” along like a conveyor belt in a factory assembly line depending on what stage of the transaction the FILE is in.

The more I thought about it, the more bothered I was. By calling their client a “FILE”, they had removed all humanness. How cold! Now, if the team member had said “Susie is handling that client’s FILE now”, that would be a more acceptable statement, but that’s not what was said. Using the term FILE, their mentality is that they are working with a ‘process’ not a person.

Do you think they care about the client’s emotions? or their anxieties? or their excitement of the new promotion? I’ll bet they’ve never given a hug in the FILE’s kitchen as the FILE packs up 30 years of memories after the death of a spouse. They probably haven’t consoled the FILE if they were having to move due to a divorce. They may not have celebrated with the FILE when able to move to a larger home due to a well-deserved promotion. In fact, it’s doubtful the team members have even been in the FILE’s home.

Real estate agents are self-employed businesses, free to set up our business as we please (as long as it meets our laws). Some choose to become the mega-agent who has FILES. Some choose to become the agent who gets hugs from past clients when shopping at Giant Eagle. Life is too short to be anything but in the latter group.

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Posted in Buyers, Central Ohio, Home buying process, Home selling process, Homes, Homes for sale, Sellers

Tagged central ohio real estate market news, what do you call your clients

10-Year Review of Average Home Prices for Central Ohio

Posted on 01/04/2011 | Leave a comment

It’s a new year and that means it’s time to take a look at how home sales – specifically average prices – did in 2010. Did they continue to slide down or have they turned the corner?

As usual, I calculate average prices by school district because that provides a more accurate review than if zip codes or cities were to be used. Zips and city boundaries sometimes cross school and county boundaries, thus, making them inaccurate.

The chart below shows average prices for Jan-Dec for single-family homes only. No condos included. You’ll notice that most districts improved their average home price for 2010. 2004-2005 still seems to be the benchmark years where people who purchased their home on or after those years may need to sell their home for less than they paid.

2001-2010 Avg Prices homes sold for Jan-Dec in central Ohio

Click to enlarge chart, then click again

If you have any questions on your specific home, give me a call at 614-825-8860 or email me by clicking on the icon in the right column.

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Posted in Buyers, Central Ohio, Delaware County, Delaware Ohio, Dublin Ohio, Franklin County, Galena Ohio, Hilliard Ohio, Home buying process, Home prices, Home selling process, Homes, Housing stats, Lewis Center Ohio, Powell Ohio, Sellers, Worthington Ohio

Tagged 10 yrs average home prices, central ohio real estate market news

Ranch homes are making a come-back

Posted on 12/27/2010 | Leave a comment

It’s probably due to the baby-boomer generation growing up and dare we say – older - but according to a recent article in the New York Times, one-story homes are returning to favor. Our knee and hip joints are beginning to make noises as we walk, and climbing stairs is getting a little more tenuous.

One of my listings is perfect for the boomers who want one-story living, reduced lawn care but a home large enough to have kids home for family gatherings. It’s a patio home in the prestigious Wedgewood golfing community.

One-level living: All the key rooms are on one floor. However, there are two finished rooms plus two large storage areas in the lower level.

2BR’s & Office or 3BR’s: The front BR really makes an ideal office with its large window overlooking the landscaped front. One of its doors opens to the foyer, making it ideal for a home office. The owner’s suite is located to the back with a door to the screened porch. It also has a hall door that totally keeps it private from the guest BR.

Living areas: The living room, dining room and kitchen are sized well for entertaining but not so large as to be inconvenient for daily living. The dining room opens to the screened porch for summer meals. The living room opens to a nice deck for relaxing. A raised tray ceiling, gas fireplace and open stair rail add to the comfortable ambiance.

Downsized lawn: Since it is a patio home, the yard is smaller than one you might find in a regular subdivision. Generally, buyers choose patio homes (sometimes called cluster homes) because they don’t want to downsize the home … just the amount of lawn care. Often they will go together to hire landscape companies to mow and plow snow. They view this as a preference to “going the condo route”.