Is now a good time to sell my home in Colorado Springs? 

Is now a good time to buy a home in Colorado Springs?

Here's what we think: 

2012
Facts:	Loss/Benefit for sellers:	Loss/Benefit for buyers:
Active listings are down almost 10,000 from 2012	Less competition on the active market	Less to choose from
Sales are up 708 units	Folks are buying more than last year, giving a better chance of sale	More full price & multiple offers
50%+ increase in building permits	New builder competition for the resale market	More new homes and revitalization of newer communities
Average sales price was up nearly 5%	Building equity in your home & supports a higher sales price	The market has hit bottom, and is on its way back up
The hot pricing point is $250,000 and under	If your home is worth 250k or less, you’re on the upside of the curve, and have a better chance of sale.	If this is your price range, you’ll have more full-price and multiple offer situations
Interest rates are super low	Buyers can borrow more money to support higher prices	Buy more house for the money
2013
Forecast:	Loss/Benefit for sellers:	Loss/Benefit for buyers:
Homes under contract to hit the highest mark in the past 5 years!	Better chance of sale	More competition for existing homes
Sales prices will increase around 5%	Builds equity & allows higher pricing	Less house for the same amount of $, than last year
Building permits will continue to rise	Tough builder competition for re-sales, more dust, but filling in vacant lots in existing subdivisions	More new builds to choose from but there may be a delay in construction completion
Homes coming to market will increase	More competition, so your house must be able to compete (look & smell good)	There will be more home in tip-top shape to choose from
High price ranges will see more activity	If your home is valued over $250k, this is welcoming news!	We appear to have hit the bottom of the market, and are now on our way back up-hurry!
Mortgage rates will probably begin to rise with uptick in market conditions	This will limit the number of qualified buyers	As the rate rises, buying power decreases

This info is based on the ERA Shields stat pack data through 12/31/12

Call or visit for more information:  719.576.3600 or www.MotherDaughterRealEstate.com

What is an appraisal and why do I have to get one to buy a house?

What is an appraisal, and why do I have to get one to buy a house?

In Colorado real estate, it’s usually like this…

What is an appraisal?  The buyer usually has to borrow money to buy a house, so the financial institution (lender) that is making the loan submits a request to a third party, called an appraisal management company. They then randomly selects a Colorado licensed appraiser to review similar houses that have sold in the past 6 months.  This person then puts together a report (appraisal) with their comparison findings, and submits it to the lender.

Why do I need an appraisal?  You need an appraisal because you are borrowing money, and your lender wants to be sure the house is worth the money they're lending you to buy it.  Then, if you stop making your house payments, the lender will be able to re-sell the house to get their money back.

Who orders the appraisal?  The financial institution lending the money to the buyer.

Who pays for it?  The buyer typically pays for the appraisal (which is around $350-$450 for single-family residential), because it’s for the buyers’ benefit.  If the seller contractually agrees to pay all the buyers’ closing costs (including appraisal), the buyer still has to pay for it up front, and then will be reimbursed at the closing.

How and when do I pay for it?  Your loan officer will usually accept credit card over the phone, or you can pay by check. It is ordered as soon as possible, but usually following inspection resolution so that the buyer doesn't spend money on an appraisal, only to have the contract fall apart due to inspection issues.

What if the house doesn’t appraise?  Then the seller does not have to sell, the buyer does not have to buy, and lender will not loan money above the appraised value.  For this reason, the buyer and/or seller, if they choose to continue forward, will have to come up with the difference in cash. 

 If it doesn’t appraise, do I get my money back?  No.

How is a VA appraisal different?  VA appraisals tend to be a bit more rigorous, with more emphasis on the property condition as it relates to safety.  They may make requirements of repairs to the property (by whom is negotiable), which will have to be completed prior to closing and are subject to a $75 re-inspection fee.  A VA appraisal also runs with the property for 6 months, even if the original buyer backs out.  This can be problematic to the seller if the appraisal is less than what they are asking for the home, and a new buyer wants to obtain a VA loan within that time frame.  

Is an appraisal the same thing as an inspection?  No.  You (or your agent) hire and/or control the inspection process.  During inspection you have the opportunity to thoroughly examine major components of the house (i.e. furnace, roof, etc.) for defects or safety issues.  An appraisal is ordered by the lender to ascertain value.

*This is why we highly recommend obtaining a real estate professional (or two, like usJ) to represent you.  They will be familiar with the market, and will do detailed studies to ensure the value of the home you’re buying or selling is where it should be.

For more information, please contact Tammy or Gayle of

719.576.3600 office/ gcaldwell@erashields.com or tammy@erashields.com

www.MotherDaughterRealEstate.com

Should I buy a house now?

This is a great post:

Why Buy Now … Buying Power!

For home buyers with a long-term housing plan, today's mortgage rates are an incredible value as compared to even February of last year.  Last February, the 30-year fixed rate mortgage averaged 5.05 percent nationwide and today you are around 4.00 percent. If you are one of the many that have waited, you will have saved 13% on your mortgage payment. Take a look at the math :

February 2011 : $539.88 principal + interest for every $100,000 borrowed

February 2012 : $477.42 principal + interest for every $100,000 borrowed

That's $62.06 monthly savings for every $100,000 borrowed.

Same Mortgage Payment ~ 77% More Home

 When you buy a home, you think in terms of "monthly budget" and that's why mortgage rates are critical to home affordability. Your purchasing power is a direct reflection of the mortgage rates of the day. As mortgage rates rise, purchasing power falls. As rates dip, purchasing power rises.  This is why your mortgage dollar goes so much farther today as compared to 20 years ago -- mortgage rates are scraping rock-bottom in 2012 at levels that were previously unthinkable to economists. 

Let's say you have a monthly budget of $1,700 for your mortgage.

In 1991, a $1,700 mortgage payment gets you a loan size of $200,000

In 2011, a $1,700 mortgage payment gets you a loan size of $353,000

In other words, in 2012, for the same monthly payment, you can borrow 77% more from the bank than you could in 1991. Talk about a great deal!   

While property values rose, the affordability index dropped. With rates low and property values stabilizing, this becomes as close to the “perfect time” to buy as we can accurately estimate. No one knows when the bottom or top of any market comes until after it is long gone. Whether we are moving up, down, or laterally the forecasts say that now is the time.

Jim Harmelink

ERA Mortgage
NMLS# 283201
Office: (719)535-7405
Toll Free:(866)820-5526
Fax: (719)535-7393
Mobile: (719)651-0291http://jimharmelink.eramortgage.com/