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July, 2000 Newsletter

+++++++++++ July 12, 2000 +++++++++++++++++++

CONTENTS:
Introduction
Mortgage Rate Update: More Stability
Recent Site Updates: Dealing With Rate Hikes
This Month's Tip: Buying With Resale in Mind
++++++++++++++++++++++++++++++++++++++++++++
Introduction

Welcome to the July edition of the Home Buyer's
Information Newsletter. Although mid-summer is
often a quiet time on the homebuying front, this
year appears to be a little different, with
activity level remaining at a reasonably strong
pace, due mainly to the stability, at least for now,
in the mortgage market (see next story). Housing
inventory shortages are not as common as they have
been and bidding wars have subsided a bit in some
areas, but quality homes that are reasonably priced
are still selling quickly.

+++++++++++++++++++++++++++++++++++++++++++++
Mortgage Rate Update: More Stability
We've now seen nearly 2 months without a large swing
in mortgage interest rates (an unusual occurrence
recently!) 30 year fixed rates in the U.S. are fairly
stable in the 8% range. In Canada, 3 year fixed rates
are generally in the 8.10% range. Most analysts see
this stability being maintained until the next Federal
Reserve Board meeting, on August 22, barring any negative
economic news prior to that time. Although this may give
buyers a bit of breathing room, it is wise to keep an
eye on the situation, since those factors that affect
mortgage interest rates can change very quickly
(as we have seen several times in the last year or so).

For more information on mortgages, visit the recently
expanded
Mortgage Section
++++++++++++++++++++++++++++++++++++++++++++++
Recent Site Updates: Dealing With Rate Increases

Although the current mortgage market is reasonably
stable, this has not always been the case this
year, where volatility has ruled. This is a situation
that will likely return in the future. You can get some
hints and tips on dealing with rising interest rates
on the site.

You can always find out "
Whats New" at the Home Buyer's
Information Center.

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

This Month's Tip: Buying With Resale in Mind

When you buy a home there are but a few certainties--
real estate taxes, homeowners' insurance and the fact that
someday the home will need to be sold. The sale of your
home may occur a few years or many years in the future,
but sooner or later the home you buy will be back on the
market. One of your major considerations then, when you
BUY a home is an awareness of its eventual sale. A mistake
made in the buying process is a potential time bomb that
doesn't get activited until resale time. And it can be a
very expensive one.

Much of the consideration concerning resale has to do with
the length of time you plan to be in the home. The shorter
your expected ownership time, the more concerned you must be
with resale factors. The longer your expected occupancy, the
more leeway you will have with these factors (but only
because normal price appreciation will ease the pain--a
mistake when you buy a home will still cost you money!)

One important consideration is the fact that there are always
times of market variances--when some real estate markets are
active ("hot markets") and others not nearly so ("cold
markets"). It is important to remember that the most recent
market conditions (the year 1999 and thus far in the year 2000)
are by no means normal. Don't be deluded into thinking
that since many homes in today's market sell within days--and
sometimes hours--of being listed, that this is the norm. An
average market (as we saw less than 4 years ago) means that
most homes (even the most desirable) generally are on the market
in the 90 day range. In slower markets (such as the early 1990's
in most of the U.S. and Canada), market times of 6 months are
not at all unusual (again, for desirable homes) and a specialized
home in such a slow market can take a year, or more, to sell.

To have a home that has good resale potential, you must consider
a few traits common to homes that are easy to sell and avoid
those that are often present in homes that are difficult to sell.
In this scenario, more positive features equal more potential
buyers for the home. Homes with more negative features tend to
eliminate potential buyers.

POSITIVE FEATURES: What Makes a House Easy To Sell

Location
You've probably heard "location, location, location" in response
to the question "what are the 3 most important factors in Real
Estate?" Homes that fit this description are located not only
in desirable (meaning well-kept and visually attractive) areas
but also neighborhoods that are convenient to necessary services
such as schools, shopping and employment centers. Being 40 miles
from the city center may be just what you want, but future buyers
may have little or no desire to deal with long commute times or
having long distances to drive to reach needed services. In fact,
many areas of the U.S. and Canada have seen trends back toward
central city areas as buyers seek to avoid long hours behind the
wheel.

Stability
In general, a neighborhood that has shown a history of stability
over the years will usually be more desirable than those that have
shown swings--either up or down--in desirability (and value). The
"hot area" of today can quickly lose its appeal when buyers become
fickle or decide that the premium in price to live there is just
not worth it. Other areas can become desirable, then
undesirable and back to desirable again, all in the matter of a
decade or less. When buying in these areas, you run the risk
of getting caught trying to sell in a downward swing. You will
likely do much better by purchasing in a more stable area.

Pricing
You've probably heard this adage before, but it bears repeating:
Buy homes that are priced at the median (or less) of the
surrounding neighborhood. The average market value of the area
will help to maintain your property value as well as make it
more desirable to those buyers who have heard the same adage!

Adaptability
Often times, the easiest homes to sell are those that are very
adaptable, since they will appeal to a wider range of
potential buyers. For example, it is better to have a room in the
home that would work as either a den/home office OR a bedroom
rather than one that would only work for a single purpose. Space
for future expansion, if needed, can also enhance a home's
appeal.


NEGATIVE FEATURES: What Makes a House Hard to Sell

Over-personalization
Everyone wants to make their home as comfortable and appealing
to their own tastes a possible, but it is easy to go overboard
here. This applies both to style (which is almost impossible
to correct at resale time) and decorating (which can be
neutralized if you throw enough money at it). Here, moderation
is best for future resale value.

Too large or too expensive for the area
A home that is "out of whack" with the surrounding neighborhood
will almost always be difficult to sell. You may feel like the
Lord of the Manor when you live there, but most buyers would
prefer to buy in an area where the surrounding homes are more
similar to their own.

Amenities
Extra money spent for expensive amenities is rarely recouped,
meaning that you will either have to sell the house for less
money than you planned or, if you insist on getting a return
on your investment from the amenities, you will limit your
potential market appreciably, since the home will likely be
priced higher than those in will be in competition with.

Isolated
Your desire to live "in the middle of nowhere" may be perfect
for your needs, but consider the fact that the majority of buyers
will prefer to live in a community rather than in isolation. Yes,
there always WILL be a buyer who has the same tastes as you do,
but locating them may be like finding a needle in YOUR haystack.

SUMMING UP. It is actually quite simple. What makes a good house
to SELL almost always makes the best house to BUY.

Further information and resources on the site

Determining your needs and wants

Familiarizing yourself with home prices

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

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.

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!

The Team at the Home Buyer's Information Center

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