Home homebuyer april08

homebuyer april08

April, 2008 Newsletter

+++++++++++ April 1, 2008 +++++++++++++++++++

Introduction: Existing Sales Up, New Sales Down
Mortgage Rate Update: Volatile Month for Rates
This Month’s Tip: Understanding Representation

Introduction: Welcome to the April edition of the Home Buyer’s Newsletter.

Sales of existing homes increased in February and remain within a fairly stable range, according to the National  Association of Realtors®.

Existing-home sales – including single-family, townhomes,  condominiums and co-ops – rose 2.9 percent to a seasonally  adjusted annual rate of 5.03 million units in February  from a pace of 4.89 million in January, but remain 23.8  percent below the 6.60 million-unit level in February 2007.  The sales pace has been in a fairly narrow range since last September.

Lawrence Yun, NAR chief economist, said the gain is encouraging.  “We’re not expecting a notable gain in existing-home sales until  the second half of this year, but the improvement is another sign  that the market is stabilizing,” he said. “Buyers taking advantage  of higher loan limits for both FHA and conventional mortgages will  unleash some pent-up demand. As inventories are drawn down,  prices in many markets should go positive later this year.”

The national median existing-home price for all housing  types was $195,900 in February, down 8.2 percent from a year  earlier when the median was $213,500. Because the slowdown  in sales from a year ago is greater in high-cost areas, there  is a downward pull to the national median with relatively fewer  sales in higher priced markets.

This downward pull on the national median is most likely attributed to the greater slowdown in sales from a year ago in high cost areas.

In new home sales, Sales of new one-family houses in February 2008  were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly on March 26th by the U.S. Census Bureau  and the Department of Housing and Urban Development. This is 1.8 percent below the revised January rate of 601,000 and is 29.8 percent below  the February 2007 estimate of 840,000.

The median sales price of new houses sold in February 2008 was $244,100;  the average sales price was $296,400. The seasonally adjusted estimate of  new houses for sale at the end of February was 471,000. This represents a  supply of 9.8 months at the current sales rate.

Mortgage Rate Update: Volatile Month for Rates

In one of the most volatile months in recent memory, mortgage rates jumped all over the map during the month of March. According to mortgage company Freddie Mac, 30-year fixed-rate mortgages averaged between  5.85% in the period that ended on March 27 and 6.24%  at the end of February, a large swing for a 30-day period with rates both rising and falling during the month.  15-year fixed rate mortgage rate activity was also fairly active, ranging between an average of 5.72% and 5.34%.

This volatility is due to a number of factors, the largest of which is the fact that there is no real agreement on where the economy is headed in the near term. It seems that virtually every day an economic report is issued which, to some degree, conflicts with a report that was released only a few days or weeks earlier. Going forward, many analysts forecast the volatility to continue, with no clear trend apparent.

For more information on mortgages, visit the Mortgage Section

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This Month’s Tip: Understanding Representation

For most home buyers, the process is not a solitary one. There will be a number of professionals who will assist in the purchase of a home. It is important to understand, then, what each of these “assistants” will be responsible for and, most importantly, how they represent the buyer. To misunderstand the role that each plays may leave a buyer open to disapointment at the least, and subject to major snags at the worst.

Probably the most important representative of your interests will be your Real Estate Agent. Although the scope of representation will vary a bit from area to area, at a  minimum, an Agent will need to designate who they will  represent: buyer, seller or both. Do not assume that,  as a buyer,an Agent will automatically represent your   interests exclusively. In general, the opposite is  true, meaning that an Agent, by default, will represent  the seller, even if they have been working directly with the buyer. In the majority of areas, however,  the existence of “Buyer Agency” allows an Agent to represent your interests as a purchaser.

If you have a Buyer Agency agreement with an Agent, it means that your interests will be paramount. This means, for  example, that this Agent would not be able to reveal any information about you to the seller unless you authorize it (the most common instance of this would be the amount that you would be willing to pay for a property in the negotiating process).

You will likely have dealings with mortgage professionals if a portion of the home cost involves a loan. Unlike the agency relationship involved with Real Estate Agents, the relationships with mortgage professionals are not regulated by law. Although a mortgage officer or broker may well look out for your interests, there is not a fiduciary relationship involved, meaning they are not legally bound to represent you. It is important, therefore, to be very aware of the specifics of any and all loan applications, documents and requirements.

In regards to settlements and closing, if you are represented by an Attorney, there will be a legal relationship of  representation involved. Your interests should be of primary importance, meaning that you will have a level of protection regarding contracts, deeds and the like. In most cases, there will be title searches (and insurance) that will protect your rights in the property you are purchasing. If you are using a source other than an Attorney for your settlement, it is important to determine exactly what level of representation is involved with your closing agent.

Summing Up

Do not simply assume that because a professional is working WITH you that they are automatically a representative FOR you. Clear up any misconceptions in advance so as to not have a nasty surprise at the eleventh hour.

Next Month’s Tip: Buying With Common Sense

The Home Buying Checklist

Many of our visitors have said that one of the most valuable aspects of the Home Buyer’s Information Center is the Buying Checklist, where they can make sure that all the bases have been touched. You can find the checklist here.

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.

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 all your endeavors!

The Team at the Home Buyer’s Information Center