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July, 2002 Newsletter

+++++++++++ July 1, 2002 +++++++++++++++++++

CONTENTS:
Introduction: Sales Stay Strong
Mortgage Rate Update: Rates Near 30 Year Low
This Month's Tip: The Final Walk-Through
++++++++++++++++++++++++++++++++++++++++++++
Introduction

Welcome to the July edition of the Home Buyer's
Information Newsletter.
Existing single-family home sales were essentially unchanged
in May and remained at historically high levels, according to the
National Association of Realtors®.

Existing-home sales slipped 0.3 percent to a seasonally adjusted
annual rate of 5.75 million units in May from a level of 5.77 million
units in April, which was the third-highest sales pace since record
keeping began in 1968. Last month's sales activity was the fourth
highest on record and was 6.5 percent above the 5.40-million unit
pace in May 2001.

Sales of new one-family houses in May 2002 were at a seasonally
adjusted annual rate of 1,028,000, according to estimates released
on June 26th by the U.S. Census Bureau and the U.S. Department
of Housing and Urban Development. This is 8.1 percent (±11.8%)
above the revised April rate of 951,000 and is 16.3 percent (±10.7%)
above the May 2001 estimate of 884,000.

+++++++++++++++++++++++++++++++++++++++++++++
Mortgage Rate Update: Rates Near 30 Year Low

U.S. mortgage rates continued their decline in the month of June,
closing in on a 30 year low last seen in November. According to
mortgage company Freddie Mac, 30-year fixed ratees averaged
6.55% in the week ending June 28th. 15-year fixed rates also fell,
averaging 5.99% in the same period. (These average rates do not
include points paid to the lender).

Will rates decline further? Should you wait?

Although there very well may be a bit more of a decline in rates,
one problem with waiting is the rapid price apprecation of housing
in the U.S.--in many areas averaging 1% or more a month. Waiting
2 months for a 1/8% decline in rates could cost you $4000 on a
$200,000 home due to price increases.

We are of the belief that this level of price appreciation will not go on
forever, but do not see a cooling in increases until the mortgage rate
picture begins to change--meaning that rates are on the rise. If that
happens, a buyer gets the double-whammy of a higher mortgage
rate paying for a higher priced house.
For current average mortgage rates, see:
Mortgage Rates
For more information on mortgages, visit the Mortgage
Section at:
Mortgage Information

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

Sponsor: IPlace Credit Reports

Most experts recommend that one of your very first steps
on the road to buying a house is to secure an up-to-date
copy of your personal credit report.
IPlace.com, the largest supplier of credit reports
on the Internet, has a number of options to quickly
get a copy of your report. You can get a single
report, your credit score, a full 3-bureau report or
even a free copy of your credit report, quickly and
easily. See more information at:
Sources of Credit Reports

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

This Month's Tip: The Final Walk-Through

Shortly before your settlement/closing day, it is
important that a buyer make a final inspection of
the property they are purchasing. This "final
walk-through" is generally the last opportunity to
make certain that the home that you are going to
take possession of is in the same condition as it
was when you contracted to purchase.

Since anywhere from 30 to 90 days will have passed
from the time of contract acceptance until the
closing date, there is plenty of time for changes
to have occurred in the property. For example, the
expensive chandelier in the dining room may have
been replaced with a cheap substitute. Or, when the
seller was moving furniture out of the house, they
may have put a long scrape in the wall in the
entryway. Since the home you have contracted to
buy would then not be the same home with these
changes, the buyer must be certain to protect
their interests.

A final walk-through is designed to be a protection
for the buyer to uncover changes or defects that have
occurred SINCE THE TIME OF CONTRACT ACCEPTANCE.
It is not a final chance to reopen negotiations or to attempt
to wrangle further concessions from the seller. For
example, if one of the bedrooms was painted an ugly
hot pink when the buyer saw and contracted to purchase
the home, the final walk-through is not an opportunity
to strong-arm the seller into a paint job. If the
dishwasher was inoperative at the time of the contract
and was noted in the whole house inspection, the walk-
through does not give the buyer the chance to demand a
new dishwasher. If, however the dishwasher was
working fine at contract and inspection time and is now
non-functioning, the buyer DOES have the right to
demand repair.

The final walk-through should be done as close to the
settlement/closing date as possible. Ideally, it should
be done on the morning of settlement, preferably after
the seller has moved out. This is to minimize any
problems arising between the time of the walk-through
and the time of possession immediately after settlement.

In preparation for the walk-through, it is essential
that a buyer carefully review the entire purchase
contract--and any addendums--to be certain of all
important provisions. For example, if the contract
states "Seller to replace 2 boards on rear deck of
house," a note will need to be made to check that
the work has been done. If the contract stipulates
"Refrigerator to convey to buyer," it is important
to make certain that the refigerator is still there!

The Agent--or a representative of the Agent--will
generally accompany a buyer on the walk-through. This
way, any problems that arise can be noted immediately
and the seller can be notified. If the problem is an
oversight, then it can be corrected immediately. If
the problem, however, is more involved, action can be
initiated and resolved prior to settlement.

Summing Up: Hints and Tips

+ Take some time to do your preparation: Review the
complete purchase contract (especially any home
inspection addendums) and make notes for ALL items
you need to check.

+ Keep your emotions in check. The walk-through is
the time to protect your interests, not to make decisions
on what color you want to paint the baby's room or how
your furniture will be arranged.

+ If a problem cannot be fully dealt with prior to
settlement, make arrangements to either delay the
settlement (be careful, though, here, since delaying
can affect important items such as mortgage lock-ins
or contractual obligations) or have an amount equal
to the amount of the repair put into escrow. For
example, if a new dishwasher is needed and the seller
cannot arrange to have it installed by the time of
settlement, the closing agent would put the cost of
a new dishwasher (say $500) into an escrow account.
If the seller installs the dishwasher, the $500 escrow
amount would then transfer to the seller. If the
dishwasher is NOT installed within an agreed time
frame, the $500 escrow would transfer to the buyer,
who would then purchase their own appliance.

For more information on Walk-throughs, including a
checklist in Adobe Acrobat (PDF) format, see the section
on the site devoted to that subject:
Walk-throughs


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:
Email Us
or access our feedback page at:
HomeBuyers 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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