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August, 2011 Newsletter

+++++++++++ August 1, 2011 +++++++++++++++++++

CONTENTS:

Introduction: Existing and New Sales Decline
Mortgage Rate Update: Mortgage Rates Steady
This Month's Tip: Utilize a Pro
++++++++++++++++++++++++++++++++++++++++++++

Introduction: Existing and New Sales Decline

Welcome to the August edition of the Home Buyer's Newsletter.
Existing-home sales eased in June as contract cancellations spiked
unexpectedly, although prices were up slightly, according to the
National Association of Realtors®.

Sales gains in the Midwest and South were offset by declines in
the Northeast and West. Single-family home sales were stable while
the condo sector weakened.

Total existing-home sales, which are completed transactions that
include single-family, townhomes, condominiums and co-ops, declined
0.8 percent to a seasonally adjusted annual rate of 4.77 million in
June from 4.81 million in May, and remain 8.8 percent below the 5.23
million unit level in June 2010, which was the scheduled closing
deadline for the home buyer tax credit.

Lawrence Yun, NAR chief economist, said this is an uneven recovery.
“Home sales had been trending up without a tax stimulus, but a variety
of issues are weighing on the market including an unusual spike in
contract cancellations in the past month,” he said. “The underlying
reason for elevated cancellations is unclear, but with problems
including tight credit and low appraisals, 16 percent of NAR members
report a sales contract was cancelled in June, up from 4 percent in May,
which stands out in contrast with the pattern over the past year.”

Yun cited other factors in the sales performance. “Pending home sales
were down in April but up in May, so we may be seeing some of that mix
in closed sales for June. However, economic uncertainty and the federal
budget debacle may be causing hesitation among some consumers or lenders.”

In new home activity, sales of new single-family houses in June 2011 were
at a seasonally adjusted annual rate of 312,000, according to
estimates released jointly on July 26th by the U.S. Census Bureau and the
Department of Housing and Urban Development.

This is 1.0 percent (±12.5%) below the revised May rate of 315,000, but
is 1.6 percent (±14.1%) above the June 2010 estimate of 307,000.

The median sales price of new houses sold in June 2011 was $235,200;
the average sales price was $269,000. The seasonally adjusted estimate of
new houses for sale at the end of June was 164,000. This represents a supply of
6.3 months at the current sales rate.

+++++++++++++++++++++++++++++++++++++++++++++

Mortgage Rate Update: Mortgage Rates Steady

Mortgage rates remained fairly stable during the month of July even with
a good deal of economic uncertainty swirling around the market. 30-year
fixed-rate mortgages averaged 4.55% at the end of the month according to
mortage company Freddie Mac. These rates began the month at an average of
4.51%. In 15-year fixed-rate mortgages, the averages eased slightly, from
3.69% at the onset of the month to 3.66% in the period that ended July 28th.
For current average mortgage rates, see the
rates page.

For more information on mortgages, visit the
Mortgage Section
++++++++++++++++++++++++++++++++++++++++++++++

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+++++++++++++++++++++++++++++++++++++++++++++

This Month's Tip: Utilize a Pro

One thing that purchasing a home is NOT is a solitary experience.
Even those who purchase a home without an Agent and pay cash
cannot do the whole process alone. For the vast majority of us
that will use an Agent and need a mortgage, building a strong
team of professionals not only smooths the process but can also
save money. And, the stronger your team, the more likely
that your home buying experience will a successful one.

REAL ESTATE AGENTS

Probably the most important team member--and the one
that will have the most effect--is your Agent. Not only
will the Agent be your conduit to available properties
and your aide in negotiation, they can also coordinate
the activites of other team members such as the home
inspector and the closing or settlement agent. A good
Agent can be worth their weight in gold, but a bad Agent
can create more problems than they solve.

If this is not your first home purchase, you may consider
attempting the transaction on your own, but for first time
buyers it is highly recommended by most experts that
you find a capable Agent and use them fully. Not only
will you have access to many more properties (those
who do it "on their own" are limited to those homes for
sale by owner--generally less than 20% of the market)
you'll have someown who can help guide you in the
right direction. In the vast majority of cases, the cost to
you will be nothing--since you will be looking at homes
listed by other Agents, the commission is paid by the
seller of the property you buy. With an effective Agent,
it is not a bad price to pay (nothing) for someone who
can assist you at almost every step of the transaction,
especially in selection of properties and negotiation of
selling prices.

Some Tips on Selecting an Agent:
* Choose someone who is very familiar with the housing
areas (both location and price) in which you are interested.
* Concentrate on Agents who do a large percentage of
their business with buyers, rather than sellers.
More information on the site:
Finding and Evaluating Agents


MORTGAGE LENDERS

Your satisfaction (or your aggravation) in the whole
process of buying a home has a great deal to do with
your relationship with your lender. If the application,
processing and underwriting (the final approval) go
smoothly, it can be a wonderful and exciting process.
Hit some snags and bumps in the road, though, and
it can quickly become a stressfull nightmare!

Whether you handle the mortgage process online or
offline, there are a few qualities that make the lender
a strong and effective member of your team:
* Up-to-date on the latest programs and rates
* Easy to contact
* Busy enough to be sucessful but not too busy to
keep in touch with you
* On top of their game-plan: Quick to answer questions
and handle problems

You can help your lender be effective if you quickly follow
up on the items and documentation they will need--pay
stubs, letters, verifications and the such. The best
mortgage lender in the world can't be an asset if they
don't have the tools they need from you.
More information on the site:
Mortgage Hints and Tips


HOME INSPECTORS

The right home inspector can save you from buying
a defective house, point out potential problems in
the future and even give you valuable maintenance
hints. The wrong home inspector can make your life
miserable, let alone cost you a bundle of money.

Don't be cheap: A $250 inspection that looks at 40
components of a house is a much better value than a
$195 one that inspects only 10 items.

Don't let an amateur handle it: A "friend of a friend who
used to be a contractor" is probably an awful choice.
Hire a professional home inspector.

Look for experience: An inspector that does 200
inspections a year just naturally is more experienced
than one who does 25. They've seen more variables.

Ask for certifications: A home inspector should be
affiliated with a professional organization such as ASHI
(The American Society of Home Inspectors). If you are
using a contractor (be careful that they are not inspecting
to find themselves contracting work) they should be
Class A (or its equivalent) certified.
More information on the site:
Finding and Evaluating Inspectors


CLOSING AGENTS

Closing and settlement procedures will vary a good deal,
depending on what is customary in your area. You'll find
that even the terminology will differ--in some areas the
procedure of finalizing a home purchase is a closing,
in others, settlement and in others, escrow. In some
states in the U.S., closings must be handled by
Attorneys while in other areas, title companies handle
the transaction.

No matter what it is called or what specifics are required,
the closing agent is the last (and extremely important)
member of the team. Sometimes it seems as though
all closings have snafus and delays, but an ineffective
closing agent can create a real quagmire for a buyer,
severly delaying or even torpedoing a closing.

Get good, solid information before you choose a closing
agent. A couple of sources for recommendations for a
closing agent would be friends and relatives who have
recently closed on a home, as well as your Real Estate
Agent, who will likely have a list of several closing
agents in the area.

SUMMING UP

The little time you may spend evaluating and choosing
the members of your team can save you an enormous
amount of time, and, perhaps, a considerable amount of
money. Many of the mistakes made when buying a home
can be directly attributed to bad choices in the selection
of those who can give you assitance.

Next Month's Tip: Take Advantage

++++++++++++++++++++++++++++++++++++++++++++++

The Home Buying Checklist

Many of our visitors have said that one of the most valuable
aspects of the Home Buyer's Information Center is the
Buying Checklist, where they can make sure that all
the bases have been touched.
You can find the checklist
here
.

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
here.

A special thanks to all those who have written to let us know
that they have found the Home Buyer's Information Center a
helpful resource in their buying process.

Have a great month and good luck in all your endeavors!

The Team at the Home Buyer's Information Center

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