August, 2000 Newsletter
+++++++++++ August 10, 2000 +++++++++++++++++++
Mortgage Rate Update: Steady as She Goes
Recent Site Updates: New Search Function
This Month’s Tip: Buying a Home Online
Welcome to the August edition of the Home Buyer’s Information Newsletter. So far this summer, home buying activity has been quite a bit stronger than had been forecast. New home sales were down a bit, but sales of existing homes continue to be stronger than anticipated. Although interest rates are still higher than they were a year ago, they have stabilized recently and many buyers have decided to make a move now, rather than to wait and run the risk of facing rates on an upswing.
Mortgage Rate Update: Steady as She Goes
Early August has found rates for 30 year fixed mortgages steady in the 8% range or a bit less. This is good news for those that have been in a wait-and-see mode, but we have seen reports from a number of analysts who are recommending that now is a good time to lock in. Plus, we have seen no evidence of stabilization in housing market prices (they keep headed in one direction–up) which means that even if there is a bit of savings in interest rate, all of that and more could be given back in price increases. You can always refinance a mortgage if rates go down, but if you pay more for a home because of waiting, that money is gone forever! For more information on mortgages, visit the Mortgage Section.
Recent Site Updates: Search Function
As the Home Buyer’s Information Center continues to grow, the amount of information available increases. With this in mind, we have added a search function on the home page. Hint: For best results, when you are searching for a concept (for example “closing costs” use quotes (” “) in your search. You can always find out “Whats New” at the Home Buyer’s Information Center.
One of the first tasks involved with buying a home is getting your finances and budget in order. An important component of that process should be an analysis of your credit report. You can get a free copy of your credit report (plus a free 30 day trial of their Credit Check Monitoring service) from ConsumerInfo.com. You can
get your free credit report here.
This Month’s Tip: Buying a Home Online
There is little doubt that the Internet has had a major effect on the Real Estate Industry in the last few years. Information that was previously unavailable to consumers (such as Multiple Listing information) is now freely available online. Mortgage comparisons, a process that once took many hours of hard work, now can be accomplished in a matter of minutes.
Like much that is involved with the Internet, though, home buying online has the potential for both a very efficient process (a time saver) but also an inefficiency trap (a time waster). There are some home buying processes that are ideally suited for the web, and others that can’t (or probably shouldn’t) be there. Buying a book or CD online is a pretty straightforward process–you get the information you need and click “BUY” to purchase it. Buying a home, due to the level of information needed, is something entirely different. Recent statistics from the National Association of Realtors found that although 37% of home buyers used the web to search for homes, only a tiny 4% actually found the home they eventually bought on the Internet.
Understanding what you can do–and be effective at–on the Internet and what you can’t do–or be effective with–will help to simplify the process.
WHAT YOU CAN DO ONLINE
Get Information on the Process
We’re biased, we admit, but we believe that The Home Buyer’s Information Center has the largest collection of information and tools that can assist the home buyer. Our checklists, information sources and resource links can simplify the home buying process (and take much of the fear out of it!)
The availability of detailed information online has probably saved consumers tens of millions of dollars over the last few years. Where it once was commonplace to deal with a single source (for example, a lender) and accept whatever was offered, it is now possible to get comparisons quickly and easily from the comfort of your home or office. More comparisons equates to more competition for your business and generally a better price.
Locate an Agent
This is especially helpful if you are buying your first home and do not have contacts in the Real Estate industry or if you are relocating to a new area. Many Agents (and most Real Estate offices) maintain their own web sites, which can give you information on service area, experience and philosophy. A good Agent is worth their weight in gold for finding and evaluating available homes.
IMPORTANT NOTE: If you approach the process backwards (meaning that you find an Agent by locating a property first) the Agent that you will find will represent the seller, not you.
Finding and Selecting an Agent
Get Pricing Information
Prior to the popularity of the Internet, getting pricing information (previous and current sale prices and statistics) involved a long and drawn-out process at the local courthouse, searching for records. Now, in most states, consumers have access to the same information available to Agents. If you have a specific house address, you can find out prior sales prices as well as county assessments and comparable sale prices in the neighborhood.
WHAT YOU CAN’T DO ONLINE
Tour a Home
Yes, there are “virtual tours” and videos that are sometimes available online, but there are a couple of problems with their application. First, they often take an eternity to download and view. Second, the view is a biased one–you only get to see what the seller WANTS you to see. A home is more than a collection of pictures. It is a combination of setting, location and more than anything else, “feel.” Your time is usually better spent actually looking at homes than wasted on watching poor quality video presentations or “walk arounds.” If you are represented by a Buyer’s Agent, they often can get you more of a feel of a property than a few pictures would ever be able to do.
Finalize the Mortgage
Although much of the mortgage process (comparisons, pre-approvals and applications) can be done online, you’ll still need ink and paper for at least the final mortgage commitment letter.
Settlement and Closing
The U.S. Congress recently passed the Digital Signature bill, which allows, with certain safeguards, online “signatures” to carry the same validity as a penned signature. Digital Signatures as part of normal practice, though, is probably a couple of years away. For now, you will still need to close and settle your home purchase in person–which is probably a good thing since you will have more opportunity for questions and clarification should you need it.
Don’t overestimate what can be done online. Buying your home is not like buying a book, trading stock or even purchasing a high ticket item like an automobile (where all new cars of a certain make and model are exactly the same). A house is an investment that becomes part of your personality–it has to have the right feel as much as have the right numbers. Take advantage of the many resources that are available online, but when it comes time to make real housing choices, get out and enjoy the process. It truly can be an exciting experience!
Further information and resources
Determining Your Needs and Wants
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 or access our feedback page.
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 of August!
The Team at the Home Buyer’s Information Center