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February, 2005 Newsletter


+++++++++++ February 1, 2005 +++++++++++++++++++

CONTENTS:
Introduction: Existing Home Sales Decline, New Home Sales Stable
Mortgage Rate Update: Rates Decline Slightly
This Month's Tip: Offers and Contracts: Protecting Your Interests
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Introduction:Welcome to the February edition of the Home Buyer's
Newsletter, brought to you by the Home Buyer's Information Center.
The Home Buyer's Information Center
Existing-home sales slipped 3.3 percent in December to a seasonally
adjusted annual rate of 6.69 million units from a downwardly revised
level of 6.92 million units in November, which was tied with June 2004
for the highest on record. Last month's sales activity was 5.0 percent
higher than the 6.37-million unit level in December 2003 and was the
sixth-highest monthly pace on record.

David Lereah, NAR's chief economist, said a decline was expected in
December. "Our sense was that November sales were the peak for
the current housing cycle, but activity remains strong," he said.
The national median existing-home price was $188,900 in December,
up 8.1 percent from December 2003 when the median price was
$174,800. The median is a typical market price where half of the
homes sold for more and half sold for less.

For all of 2004, the median price was $184,100, up 8.3 percent
from a median of $170,000 in 2003. This is the strongest annual
increase since 1980 when the median price rose 11.7 percent.

On the new home front, sales of new one-family houses in December
2004 were at a seasonally adjusted annual rate of 1,098,000, according to
estimates released jointly on January 31st by the U.S. Census Bureau
and the U.S. Department of Housing and Urban Development.
This is 0.1 percent (±9.4%) above the revised November rate of
1,097,000, but is 2.0 percent (±10.6%) below the December
2003 estimate of 1,120,000.

The median sales price of new houses sold in December 2004
was $222,000; the average sales price was $276,600. The
seasonally adjusted estimate of new houses for sale at the end of
December was 432,000. This represents a supply of 4.8
months at the current sales rate.

In 2004, there were 1,183,000 houses sold compared with
1,086,000 houses sold during 2003, establishing a new record.
This is an increase of 8.9 percent (±3.0%).

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Mortgage Rate Update: Rates Decline Slightly

Mortgage rates showed a slight decline in the month of
January. According to Mortgage Company Freddie Mac,
30-year fixed rate mortgages ended the month averaging
5.66%, after beginning the month at an average of 5.77%.
The story was similar with 15-year fixed-rate mortgages,
which began the month averaging 5.21% and ended January
at an average of 5.14%. Although short-term interest rates
(which affect adjustable-rate mortgages) have seen a number
of increases in the last few months, longer term mortgages
have remained relatively stable.

For current average mortgage rates, see:
Mortgage Rates
For more information on mortgages, visit the Mortgage
Section at:
Mortgages

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Sponsor: LendingTree

Mortgage rates are still at historical lows. Getting the best rate for your
mortgage means getting the most information you can. LendingTree
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competing for your business. When banks compete, you win!
See links to LendingTree and other resources at our Mortgage
Loan Center:
Mortgage Loans

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

This Month's Tip: Offers and Contracts: Protecting Your Interests

Buying a home is usually the largest purchase of a lifetime, so it is
crucial that you understand the legal workings of the transaction before you
begin to negotiate a purchase. The most basic (and important) legal
document involved in buying a home is the Contract for Sale. This
document may go b different names, for example "Agreement to Purchase"
or "Real Property Purchase Agreement" but the intent is the same: A legal
(and binding on both seller and buyer) agreement for the sale of a
specific home.

It is important to understand that the process of making an offer on a particular
property and contracting to purchase itare 2 sides of the same coin. Buyers
will occasionally make the misconception that they can "make an offer" on a
home to see what the seller would be willing to accept without making a final
committment to purchase the home. This can lead to a nasty surprise for the
buyers since their offer, if accepted by the seller usually becomes a legally
enforcable Contract for Sale. It is to the buyer's best interest, then, to be
keenly aware of any and all possible consequences BEFORE they embark
on an offer.

Some of the questions buyers should ask themselves prior to an offer:

1) Is this the right home for us? Since we may become the owner of
this particular home, are we completely happy with its location, condition,
style, etc. If it is not precisely what we are looking for in a home, can we
make modifications in the future that will make it acceptable?

2) Are our interests protected? Does the offer contain a contingency
for a whole-house inspection (and a report) that is acceptable to us?
Is there a contingency for a mortgage approval that is acceptable (and
affordable) to us? Are both we and the sellers completely clear on what
is, and is not, included in the sale. Is everyone--buyers, sellers and
Agents--completely clear on who is representing buyer and seller.

As mentioned above, since an offer becomes a contract upon acceptance
of the seller, before you make any offer, it is a good idea to familiarize
yourself with the proper components, including:

* An exact description of what you are buying, both in street
address and legal description.
* The selling price that you are offering
* Exactly what is to be included in your offer, including,
for example, refrigerators, air conditioners, etc. Do not
assume that if an item is IN the house it will be included
in the price.
* Any concessions--such as closing costs--that you want the
seller to make.
* Any contingencies to the contract. Examples would be
"subject to a whole house inspection acceptable to the
purchaser" (as well as who will pay if defects are found)
and "subject to purchaser obtaining a mortgage in the amount
of $XXXXX with an interest rate of no more than X.XX%"
* Exact date and place where the buyer's settlement
(closing) is to take place.
* Any other item or contingency that is of importance to
the purchaser and would affect the desirability of the
property.
* Clear definitions of representation by any and all Real
Estate Agents involved in the transaction.

Next Month's Topic: Home Owner Associations

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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:
Home Buyer's Checklist

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:
Home Buyer's Information Center Feedback

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 your home buying process!

The Team at the Home Buyer's Information Center

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