June 2009

Found 14 blog entries for June 2009.

DANGER! What you need to do to win in Real Estate.

About 2 years ago, I had a buyer come to me and say he wanted to buy a million dollar home. Based on my knowledge of the market I suggested that he wait. He waited.
He later told me, “Dave you were right….the cost of a million dollar home did exactly what you said it would do.” He was glad he listened.

Today, I hear people say, “I am going to wait” but the situation has changed. There’s a huge difference between 2 years ago and today. The Demand is different, there is huge variance in different price ranges, and interest rates 2 years ago were not nearly as low as they have been this year. Waiting was smart 2 years ago, waiting today can be costly.

There are 3 main reasons why waiting right now is

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About 2 years ago, I had a buyer come to me and say he wanted to buy a million dollar home. Based on my knowledge of the market I suggested that he wait. He waited.
He later told me, “Dave you were right....the cost of a million dollar home did exactly what you said it would do.” He was glad he listened.

Today, I hear people say, “I am going to wait” but the situation has changed. There’s a huge difference between 2 years ago and today. The Demand is different, there is huge variance in different price ranges, and interest rates 2 years ago were not nearly as low as they have been this year. Waiting was smart 2 years ago, waiting today can be costly.

There are 3 main reasons why waiting right now is financially dangerous.

1. Demand. Today demand

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Will you be able to get a loan next year?

Loan products keep dying.

They have been dying for the past 2 years and are vanishing even more lately. Last year we saw banks going out of business right before loans were scheduled to close. Subprime loans disappeared last year. And now in the past 6 months I have watched banks reduce people’s credit lines to the amount they owe! Why are they doing this? They are trying to eliminate risk.

Loan Risks have Increased: According to KSL news, in a recent article, http://www.ksl.com/?nid=148&sid=6921232 FHA risk has increased 8 fold.

Relocation Industry is having new loan problems

Fanniemae has changed their policies to not allow trailing incomes. In the past, when a family relocated Fanniemae

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Loan products keep dying.

They have been dying for the past 2 years and are vanishing even more lately. Last year we saw banks going out of business right before loans were scheduled to close. Subprime loans disappeared last year. And now in the past 6 months I have watched banks reduce people's credit lines to the amount they owe! Why are they doing this? They are trying to eliminate risk.

Loan Risks have Increased: According to KSL news, in a recent article, http://www.ksl.com/?nid=148&sid=6921232 FHA risk has increased 8 fold.

Relocation Industry is having new loan problems

Fanniemae has changed their policies to not allow trailing incomes. In the past, when a family relocated Fanniemae would recognize income from a spouse that didn’t have

598 Views, 0 Comments

The Cost of Waiting for a lower Price

Utah was ranked 5th nationally for foreclosures last month. With so many foreclosures and short-sales on the market everyone is waiting to get a home at a low price. Sitting on the sidelines and waiting for prices to drop has its own costs. Purchasing a home is more complicated than simply finding the lowest price. Your monthly payment will be determined not only by the amount of money you borrow, but by the interest rate you borrow it at. The interest rate can easily counteract the benefit of waiting for a lower price. Interest rates are currently low, but how long does it take for that to change?

Negotiating for a deal on one of these properties can take a lot of time. When the perfectly priced home arrives on

771 Views, 0 Comments

The Cost of Waiting for a lower Price

Utah was ranked 5th nationally for foreclosures last month. With so many foreclosures and short-sales on the market everyone is waiting to get a home at a low price. Sitting on the sidelines and waiting for prices to drop has its own costs. Purchasing a home is more complicated than simply finding the lowest price. Your monthly payment will be determined not only by the amount of money you borrow, but by the interest rate you borrow it at. The interest rate can easily counteract the benefit of waiting for a lower price. Interest rates are currently low, but how long does it take for that to change?

Negotiating for a deal on one of these properties can take a lot of time. When the perfectly priced home arrives on

784 Views, 0 Comments

Buzz! There’s a buzz in the air

The news says the market is picking up in real estate and even people in the local industry say business is growing again. Why are they saying this? They are saying this because home sales have been going up nation wide! But, why wouldn’t they? With homes in Phoenix selling for $50,000, and other great deals to cultivate the market, the ground is fertile for growth!

Lenders claim it has picked up. If you talk to a mortgage person they should say they are busier than ever. Why? Because mortgage rates have not been this low in decades. It is history in the making for low interest rates. People are refinancing, or trying to, in record numbers. Lenders are swamped, but this is only temporarily. Either the number of

538 Views, 0 Comments

Buzz! There's a buzz in the air.

The news says the market is picking up in real estate and even people in the local industry say business is growing again. Why are they saying this? They are saying this because home sales have been going up nation wide! But, why wouldn't they? With homes in Phoenix selling for $50,000, and other great deals to cultivate the market, the ground is fertile for growth!

Lenders claim it has picked up. If you talk to a mortgage person they should say they are busier than ever. Why? Because mortgage rates have not been this low in decades. It is history in the making for low interest rates. People are refinancing, or trying to, in record numbers. Lenders are swamped, but this is only temporarily. Either the number of hopeful

606 Views, 0 Comments

“What? My Home Price went up because I didn’t use an agent?” The buyer’s Ceteris Paribus Paradox!

Recently I had a buyer call our office wanting to see a home. We showed him the home and when it was time to write an offer he expressed that he didn’t want to be represented. When his offer was submitted the bank countered back with a price 3% higher than a buyer who was represented by an agent. What?! Really?! The buyer with no agent was countered 3% higher? Why would this happen?

3 Reasons why prices go up when you don’t have an agent.

Economists have a term called ceteris paribus. This term used to drive me crazy in economics classes. It means that all other factors remain the same. This drove me crazy because they use the term every time they change

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"What? My Home Price went up because I didn't use an agent?" The buyer's Ceteris Paribus Paradox!

Recently I had a buyer call our office wanting to see a home. We showed him the home and when it was time to write an offer he expressed that he didn't want to be represented. When his offer was submitted the bank countered back with a price 3% higher than a buyer who was represented by an agent. What?! Really?! The buyer with no agent was countered 3% higher? Why would this happen?

3 Reasons why prices go up when you don't have an agent.

Economists have a term called ceteris paribus. This term used to drive me crazy in economics classes. It means that all other factors remain the same. This drove me crazy because they use the term every time they change one

556 Views, 0 Comments