The Help Buyers Need to Navigate Increasingly Tight Market


Spring is traditionally a favorable time of year for home buyers; however, with a limited number of homes available for purchase, sales nationwide are slowing. According to the National Association of Realtors® housing inventories are near decade lows, and are continuing to pressure home prices.

Recent data shows there is more demand than supply in the current market, which means conditions broadly favor sellers. Meanwhile, buyers are out there looking to purchase homes. Buyer traffic is 25 percent above a year ago and sellers are reportedly receiving multiple bids. The good news for buyers is home construction is rising and low mortgage rates are keeping housing affordable. However, underwriting standards remain excessively tight.

NAR data shows that total housing inventory at the end of March is 1.93 million existing homes available for sale, which represents a 4.7-month supply at the current sales pace. NAR Chief Economist Lawrence Yun stressed the need for a housing supply of over 6 months to have a generally balanced market between buyers and sellers. The current supply of homes for sale is 17 percent below year-ago levels, according to NAR data, and homes are also selling much faster. The typical home sold in March was on the market for one month less than it took to sell a year ago. The median time on market for all homes was 62 days in March down from 74 days in February.

Despite these conditions, homeownership remains desirable to many renters.  The benefits of homeownership are still very evident and opportunities for buyers exist. Just because the current market tends to favor sellers doesn’t mean buyers can’t still find their dream home.

There are several tips for buyers in today’s market. First, before you start looking at potential homes, know your budget. Lenders will evaluate your income, savings and credit history to qualify and approve you for a mortgage.  Antoher tip is identifying neighborhoods of interest. Also, think about what you need and want in a home, whether it’s a certain number of bedrooms, a small yard, or a garage. Once you have a good idea about what you’re looking for, it’s easier to know it when you see it.

When homes are selling quickly it’s important for buyers to visit the home as close to when it goes on the market as possible. Open houses are also a great way to see a lot of houses in a short amount of time. Buyers can get a good sense of what’s available in the area and what their budget can afford.

Most importantly, start working with a Realtor®. Whether you are buying or selling a home, using a Realtor® is a smart move. Realtors® understand their local markets and can negotiate on your behalf. Buying and selling a home is one of life’s biggest decisions and a Realtor® can guide you through the process.

Whether you’re ready to buy or looking to sell, consumers can find tips and advice for making the most of their open house experience at http://inr.synapticdigital.com/nar/openhouses/.

13 Tips for Selling Your Home in Winter

January 2013 Blog 1

Selling your home in the middle of winter poses additional challenges. The lawn is brown, the weather is usually bad and you have less time to show it off during daylight hours. Staging your home—the concept of showing your house at its best—becomes even more important in the winter. Here are 13 tips to help you maximize your home’s appearance and minimize the effects of the winter season.

Keep snow and ice at bay

If potential buyers can’t get to your house easily, your house won’t sell. That means keeping walkways and driveways free from ice and snow. If you’re away frequently or live in an area that’s subject to bad weather, it can pay to hire a service to regularly salt or shovel the driveway and sidewalks.

Warm it up

If you’re showing your home during the winter, think “warm, cozy and homey.” Before buyers come through, adjust the thermostat to a warmer temperature to make it feel welcoming.  Remember, if buyers come into your home and are cold and uncomfortable, they won’t stay long!

Take advantage of natural light

Encourage house showings during the high-daylight hours. Make the most of the light you do have. Have the curtains and blinds cleaned and open them as wide as possible during daytime showings. Clean all lamps and built-in fixtures, and replace the bulbs with the highest wattage they will safely accommodate. Before you show your house, turn on all the lights.

Get the windows washed

Windows are one thing that many sellers don’t even consider. In winter, that strong southern light can reveal grime and make it look like your home hasn’t been well maintained.

Play music softly in the background

To create a little atmosphere, tune the radio to the local classical station. Turn it down so that you can barely hear it in the background. People tend to stay around and look a little longer when soft classical music is playing.

Make it comfortable and cozy

Set the scene and help the buyers see themselves living happily in your house. Consider things such as putting a warm throw on the sofa or folding back the thick comforter on the bed. Tap into the simple things that make you feel like you’re at home.

Emphasize winter positives

If your home is on a bus route or some other vital route that means it’s plowed or de-iced regularly in bad weather, be sure to mention that to the buyers.

Set up timers

You want your home to look warm and welcoming whenever prospective buyers drive past, but you’re not home all the time. So put indoor and outdoor lights on timers.

Make it festive

Even if you’re not actually going to be present at the showing, greet your buyers as if they were going to be guests at a party. Set up the dinner table with the good china and silver. Have a plate of cookies for your guests, some warm cider or even chilled bottles of water.

Give the home a nice aroma

The No. 1 favorite aroma is chocolate-chip cookies. Just about everybody likes that smell. Other popular scents include: cinnamon rolls, freshly baked bread, apple pie, apple cider or anything with vanilla, cinnamon or yeast. But don’t overdo it. Scented candles in every room or those plug-in air fresheners can leave buyers wondering what you’re trying to mask. Watch the bad smells too. Pet odors, smoke and mustiness can cling to curtains and carpets. Ask your real-estate agent or a friend to give a sniff test. Then clean the house, air it out and replace drapes, carpets or rugs before you show it.

Protect your investment

Some sellers (or their agents) will ask buyers to either remove shoes or slip on paper “booties” over their footwear before touring the house. Many buyers like that because it indicates a pride of ownership and meticulousness that resonates with them.

Use the season to your advantage

Although the holidays are over, you can still use winter wreaths and dried arrangements around the door to spark interest. In the winter, with the leaves off the trees, you might also have a nice view that isn’t as evident in the spring and summer months.

 Consider the area

In some parts of the country, such as ski areas or warmer regions where the snowbirds flock, winter can actually be a selling point, so use it to your advantage.

First-time buyer’s guide

Buying a home for the first time can be quite the experience. Whether it’s choosing the right location, establishing a proper budget or even choosing the right real estate agent, it can all be a bit much. Fortunately, local REALTORS® are available to help guide new home buyers through the tricky and sometimes tedious process.  

Step number one, before even looking for a dream home, is to get prequalified for a mortgage. Prequalifying shows the REALTORS® and the rest of the market that this is a serious hunt for a house. Check on credit scores, current budget and long-term goals before applying for prequalification.  

First-time home buyers also face an uneasy road when it comes to location. Many may be in a new town or are moving from a rental property. While they may understand mortgage payments, this may be their first time with insurance, upkeep and everything that comes with actually owning a house.   

Deciding where a long-term investment will pay off is key. Is it the up and coming neighborhood, or a long-standing traditional neighborhood? A REALTOR® will listen to the needs of the buyer and knows the city inside and out, which allows them to find the right home.   

Check out more great tips from REALTORS® by contacting your REALTOR today.

Home Buyers Can Expect Higher FHA Fees

Home buyers who use a Federal Housing Administration-insured mortgage to purchase a home will soon be paying higher fees. In an effort to recoup some of its depleted reserves, which have suffered in recent years, and to encourage a return of more private capital to the housing market, the FHA will increase two types of fees that borrowers must pay.  

Beginning April 1, FHA will increase the annual mortgage insurance premium for all loans, bringing the total cost from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, jumbo loan premiums (loans over $625,500) will see an additional increase of 0.25 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount. FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount. These new fees will also apply to homeowners who want to refinance their mortgage. 

Greater Louisville Association of Realtors® says that Realtors® are opposed to increasing any barriers to homeownership and the increased fees are an unfortunate result of the struggling housing market. “FHA has been and remains a critical tool in restoring the health of the housing market, and ensuring its safety and soundness is essential,” said Louise Miller, President of the Greater Louisville Association of Realtors®. “However, once the Mutual Mortgage Insurance Fund is stabilized, FHA should reduce premiums commensurate with risk.”

 The impact of the new fees would mean a higher monthly payment of approximately $14 per month for a typical borrower. For example, a buyer with a 3.5 percent down payment with a mortgage of $150,000 can now expect to pay an upfront mortgage premium of $2,625 compared to a previous premium of $1,725, which most people would wrap into their total mortgage amount.  

FHA has insured more than 37 million mortgages since its inception in 1934. Many first-time home buyers rely on FHA-insured loans to purchase a home, which only require 3.5 percent down payment and often have less stringent credit requirements. The National Association of Realtors® estimates that one-third of recent buyers purchased their homes with an FHA-insured mortgage.  

In recent years FHA’s reserves have suffered from the rising number of homeowners who have defaulted on their mortgages, as well as a continuing decline in home values. FHA maintains two reserve funds. The first provides reserves to cover each mortgage that’s insured for 30 years; the second is a congressionally required 2 percent reserve, which FHA draws on first to cover loses.  

The FHA expects to bring in about $1.25 billion through September 2013 with the increased fees. FHA also expects to receive an additional $1 billion from the recent $26 billion settlement among 49 attorneys general, the Obama administration and five of the biggest mortgage servicers.  

“FHA has long played a critical role in the nation’s housing finance system,” said Miller. “It has always been a leader in insuring safe, low down payment mortgages to responsible, qualified borrowers. It’s a shame the ongoing housing crisis has caused FHA to increase their fees, but Realtors® are confident that the market will recover and FHA’s reserves will stabilize.”

$8K Credit for 1st-Time Homebuyers

Home Buyers

Thousands of dollars in tax credits are waiting for 1st time homebuyers.  It’s like getting the house of your dreams at a big discount!

First-time homebuyers may be eligible for a large federal tax credit on homes bought in 2009 or early 2010.  If you haven’t owned a home in 3 years, you are considered a 1st-time buyer. Sign a binding contract by April 30, 2010, and you are eligible for a tax credit worth either $8,000 or 10% of the value of the house, whichever is less.   

The closing for 1st-time buyers can take place as late as June 30, 2010.  The 1st-time homebuyer credit is refundable, so you can get it even if you owe no federal tax.  However, there is an income-based phase-out beginning with joint filers with an income of $150,000 and $75,000 for single filers. The 2008 tax credit was really an interest-free loan that had to be paid back over 15 years, unlike the current credit.  This is a better deal.  Your REALTOR can help you figure out if you might be eligible for the new tax credit, but you need to hurry to find the perfect home by April 30.  Learn more about the Federal Tax Credit.