Home homebuyer aug11

homebuyer aug11

August, 2011 Newsletter

+++++++++++ August 1, 2011 +++++++++++++++++++

Introduction: Existing and New Sales Decline
Mortgage Rate Update: Mortgage Rates Steady
This Month’s Tip: Utilize a Pro

Introduction: Existing and New Sales Decline

Welcome to the August edition of the Home Buyer’s Newsletter. Existing-home sales eased in June as contract cancellations spiked unexpectedly, although prices were up slightly, according to the National Association of Realtors®. Sales gains in the Midwest and South were offset by declines in the Northeast and West. Single-family home sales were stable while the condo sector weakened.

Total existing-home sales, which are completed transactions that include single-family, town homes, condominiums and co-ops, declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June from 4.81 million in May, and remain 8.8 percent below the 5.23 million unit level in June 2010, which was the scheduled closing deadline for the home buyer tax credit.

Lawrence Yun, NAR chief economist, said this is an uneven recovery. “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” he said. “The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year.”

Yun cited other factors in the sales performance. “Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”

In new home activity, sales of new single-family houses in June 2011 were at a seasonally adjusted annual rate of 312,000, according to estimates released jointly on July 26th by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 1.0 percent (±12.5%) below the revised May rate of 315,000, but is 1.6 percent (±14.1%) above the June 2010 estimate of 307,000.

The median sales price of new houses sold in June 2011 was $235,200; the average sales price was $269,000. The seasonally adjusted estimate of new houses for sale at the end of June was 164,000. This represents a supply of 6.3 months at the current sales rate.

Mortgage Rate Update: Mortgage Rates Steady

Mortgage rates remained fairly stable during the month of July even with a good deal of economic uncertainty swirling around the market. 30-year fixed-rate mortgages averaged 4.55% at the end of the month according to mortage company Freddie Mac. These rates began the month at an average of 4.51%. In 15-year fixed-rate mortgages, the averages eased slightly, from 3.69% at the onset of the month to 3.66% in the period that ended July 28th. For current average mortgage rates, see the rates page.

For more information on mortgages, visit the Mortgage Section

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This Month’s Tip: Utilize a Pro

One thing that purchasing a home is NOT is a solitary experience. Even those who purchase a home without an Agent and pay cash cannot do the whole process alone. For the vast majority of us that will use an Agent and need a mortgage, building a strong team of professionals not only smooths the process but can also save money. And, the stronger your team, the more likely that your home buying experience will a successful one.


Probably the most important team member–and the one
that will have the most effect–is your Agent. Not only will the Agent be your conduit to available propertie and your aide in negotiation, they can also coordinate the activites of other team members such as the home inspector and the closing or settlement agent. A good Agent can be worth their weight in gold, but a bad Agent can create more problems than they solve.

If this is not your first home purchase, you may consider attempting the transaction on your own, but for first time buyers it is highly recommended by most experts that you find a capable Agent and use them fully. Not only will you have access to many more properties (those who do it “on their own” are limited to those homes for sale by owner–generally less than 20% of the market) you’ll have some own who can help guide you in the right direction. In the vast majority of cases, the cost to you will be nothing–since you will be looking at homes listed by other Agents, the commission is paid by the seller of the property you buy. With an effective Agent, it is not a bad price to pay (nothing) for someone who can assist you at almost every step of the transaction, especially in selection of properties and negotiation of selling prices.

Some Tips on Selecting an Agent:

* Choose someone who is very familiar with the housing areas (both location and price) in which you are interested.
* Concentrate on Agents who do a large percentage of their business with buyers, rather than sellers. More information on the site: Finding and Evaluating Agents


Your satisfaction (or your aggravation) in the whole
process of buying a home has a great deal to do with your relationship with your lender. If the application, processing and underwriting (the final approval) go smoothly, it can be a wonderful and exciting process. Hit some snags and bumps in the road, though, and it can quickly become a stressfull nightmare!

Whether you handle the mortgage process online or offline, there are a few qualities that make the lender a strong and effective member of your team:
* Up-to-date on the latest programs and rates
* Easy to contact
* Busy enough to be sucessful but not too busy to keep in touch with you
* On top of their game-plan: Quick to answer questions and handle problems

You can help your lender be effective if you quickly follow up on the items and documentation they will need–pay stubs, letters, verifications and the such. The best mortgage lender in the world can’t be an asset if they don’t have the tools they need from you. More information on the site: Mortgage Hints and Tips


The right home inspector can save you from buying a defective house, point out potential problems in the future and even give you valuable maintenance hints. The wrong home inspector can make your life miserable, let alone cost you a bundle of money.

Don’t be cheap: A $250 inspection that looks at 40 components of a house is a much better value than a $195 one that inspects only 10 items.

Don’t let an amateur handle it: A “friend of a friend who used to be a contractor” is probably an awful choice. Hire a professional home inspector.

Look for experience: An inspector that does 200 inspections a year just naturally is more experienced than one who does 25. They’ve seen more variables.

Ask for certifications: A home inspector should be affiliated with a professional organization such as ASHI (The American Society of Home Inspectors). If you are using a contractor (be careful that they are not inspectin to find themselves contracting work) they should be Class A (or its equivalent) certified. More information on the site: Finding and Evaluating Inspectors


Closing and settlement procedures will vary a good deal, depending on what is customary in your area. You’ll find that even the terminology will differ–in some areas the procedure of finalizing a home purchase is a closing, in others, settlement and in others, escrow. In some states in the U.S., closings must be handled by Attorneys while in other areas, title companies handle the transaction.

No matter what it is called or what specifics are required, the closing agent is the last (and extremely important) member of the team. Sometimes it seems as thoug all closings have snafus and delays, but an ineffective closing agent can create a real quagmire for a buyer, severly delaying or even torpedoing a closing.

Get good, solid information before you choose a closing agent. A couple of sources for recommendations for a closing agent would be friends and relatives who have recently closed on a home, as well as your Real Estate Agent, who will likely have a list of several closing agents in the area.


The little time you may spend evaluating and choosing
the members of your team can save you an enormous amount of time, and, perhaps, a considerable amount of money. Many of the mistakes made when buying a home can be directly attributed to bad choices in the selection of those who can give you assitance.

Next Month’s Tip: Take Advantage

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