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April, 2000 Newsletter

The Home Buyer's Information Center Newsletter

+++++++++++ April 14, 2000 +++++++++++++++++++

Mortgage Rate Update: A Breather?
Recent Site Updates: Housing Needs and Wants Scorecard
This Month's Tip: Balancing Needs and Wants

Welcome to the April edition of the Home Buyer's
Information Newsletter. We are entering what is
traditionally the most active time of the annual
housing market, the spring and early summer, which
generally means higher inventory levels (more homes
from which to choose) as well as higher levels of
buyer activity. You may find more competition, but
you will also have more choices. Keep in mind that
at this time of the year the old adage holds even
more true: Good homes priced correctly sell quickly
while the overpriced and less desirable homes sit
on the market.

Mortgage Rate Update: A Breather?
Mortgage rates showed a tiny bit of softening in early
April, with 30 year fixed rates averaging at just
about the 8.00% level. This may be a temporary
breather, though, with the prospect for interest rates
in general--especially short term rates--tending toward
the upward movement. Economic figures released on April 13
and 14 indicate that inflationary pressures are still very
alive, raising the prospects for the Fed boosting rates when
they meet in May.
Additional mortgage
information, hints and questions
can always be found at on the site.


Recent Site Updates: Housing Needs and Wants Scorecard
A number of users have asked for a printable sheet
where they can make notations of items that they
need in a home and compare how an individual home
matches up. You can find it at:
Needs and Wants Scorecard
It goes hand-in-hand with this month's tip,
"Balancing Needs and Wants" below.

Lending Tree Mortgages
LendingTree Mortgage In this volatile financial and interest rate
environment getting as many loan comparisons as
possible is crucial. At Lending Tree you can submit
one simple application and within a few business days
get up to 4 bona-fide offers from lenders competing for your business.
Get more information here.


This Month's Tip: Balancing Needs and Wants
Would you like a simple house buying tip that can
save you hundreds, thousands or perhaps tens of
thousands of dollars? Get a good grip on what you
NEED in a home and what you WANT in a home and the
DIFFERENCES in needs and wants. Sounds easy and
obvious, but many home buyers confuse the two and
end up with either the wrong house, spending too
much money on the home they buy, or worse, both.

The first step is to understand that there is a
clear difference between what you need in a home
and what you want--even if the distinction sometimes
gets a little hazy. Real Estate Agents can tell
many stories about buyers, when asked what they
need in a home, who reply with something like
"3 bedrooms, 2 full baths, an extra bedroom or an
office, a garage, vaulted ceilings in the great
room, skylights and a white kitchen." See the mix
of needs (most likely the 3 bedrooms, the 2 baths,
the office/bedroom and perhaps the garage) and
the wants (the vaulted ceilings, skylights and
the white kitchen) in the response? For many of
us, there is no distinction--all of the above are
perceived to be NEEDS.

"Well," you may say, "what's the big deal? What I
WANT is as important as what I NEED!" It may appear
that way, but it helps to understand the possible
consequences of putting too much concentration on
the WANTS.

You Can Pay Too Much
The first, and most expensive consequence is that
those who pay too much attention to what they want
usually tend to pay too much for their homes. There
are a few reasons for this. First, those wants--
usually amenities--translate into cash. It simply
costs more money to build a home with added features
and sellers want to recoup their investment. Second,
as the number and extent of your wants increase, the
number of available home choices decrease, meaning
supply and demand come into play. The fewer the
choices, the more likely you will pay more. Third,
the more "exact" you want a home based on your wants,
the longer it usually takes to find it. The downside
of that situation is that while you wait to find the
perfect home, prices (and often interest rates)
continue to rise. You don't get more home by waiting,
you just pay more for it.

Resale Problems
The more you "tailor" the home you buy to your own
particular wants, the more likely the home will not
match a future buyer's wants (and perhaps even their
needs). This is particularly true in custom built
homes where buyers will build a home specifically to
their own tastes, only to find at resale time that
the pool of buyers with the same tastes is very
small. Less available buyers usually equates to
lower sale prices and longer marketing times.

Today's WANT May Become Tomorrows "So What?"
Especially in today's rapidly evolving society, what
may seem to be a "must have" can become a "don't
need" in a short amount of time. The wonderful
outdoor spa that cost an additional $5000 (and nearly
$40 a month in added payment!) loses its glow when
it goes unused for weeks or months at a time...by
buyers who insisted they would use it a great deal.

In summary, those items that are necessary for safe
and comfortable living are needs. Examples are the
number of bedrooms and baths, location convenient to
work and services, a safe neighborhood. Wants are the
"extras" that you desire IF they fit easily into your
budget, such as gas fireplaces, screened porches,
berber carpet, island kitchens. Your life CAN go on
without them!

You'll find additional information on the site
regarding analyzing your needs at wants at:
Your Needs and Wants

As always, if you have suggestions for improving the
site, or topics you would like to see addressed in
this newsletter (or, if you have used the Home Buyer's
Information Center to successfully purchase a home),
drop us a quick line or access our feedback page.

Have a great April and good luck in your home buying

The Team at the Home Buyer's Information Center

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