Time to Make Lemonade

When one hears the word "foreclosure," images are conjured of families unable to meet their loan commitments, and forced to consider unpleasant options. However, it's not only homeowners that suffer from a foreclosure. Renters can be "out on the street" if their landlord defaults on mortgage payments.

A report from the Mortgage Bankers Association states that nearly 20% of recent foreclosures have been against investors who did not live in the property, and even tenants in good standing face having to vacate the premises if they're renting one of these properties.

Why mention this gloom and doom scenario? Because home values have declined, and buyers are seeing the best deals in many years. While unpleasant for sellers, price declines increase affordability for buyers, so if you've been renting, now is a fantastic time to turn that monthly payment into equity.

Interest rates have inched up, but still-historically low rates combined with very affordable housing yield a formula that should put you in a home that you own for the same amount you are now paying for rent. Not to mention that at a lower purchase price, you'll enjoy some great appreciation over the coming years.

Just because you're renting now, you’re not necessarily safe from suffering the consequences of a foreclosure. Take matters into your own hands and buy yourself some peace of mind.

No "Chicken Little"

If you're a homeowner, what do falling prices mean to you? You might assume that it's a bad time to sell. But guess what? It could mean it’s the perfect time to buy the home of your dreams!

Do the math, and you see that market downturns can actually work in your favor. Homes are listing at prices that are truly affordable. If you’ve already built equity in your current home, you could parlay that into the purchase of a terrific property.

When prices do rise again, and you know they will, you will have made an excellent investment for the future. If the home you really want was previously offered at $500,000 but the price has fallen - let's say 20% to $400,000 – that’s a sweet deal, even if your own home has lost some value.

In any home purchase, there are usually some concessions: location, style of architecture, or any number of features. If you made some concessions when you bought your current property, and you can replace the negatives with the positive features you’ve found in another home, now is the time to make your move!

Once the market turns around - and again, you know it will - you'll find your appreciation will be greater in the new, larger home. It's an upgrade at an opportune time that makes good investment sense.

Three Possible Choices

There are many factors that affect how you'll price your home when you're ready to sell. In spite of market conditions, interest rates, and so on, every transaction is unique. So you should seek the assistance of an agent and prepare yourself and your home well in advance of placing the For Sale sign out front.

Sometimes a home will have three different possible prices: the price the sellers want to net, the price the buyers would like to offer, and the final sales price agreed upon by both parties. Your home's ultimate value is determined by other local sale prices, which are often a product of supply and demand.

The asking price or the offered price are not the whole story, however. While an offer of $200,000 doesn't seem to appear as good as an offer of $210,000, pay close attention to the terms attached to that higher offer. If the buyers also want you to offset closing costs and deduct for a decorating allowance, the "clean" offer of $200,000 might actually put more money in your pocket.

It's wise to seek representation and assistance with pricing, marketing, negotiation and closing. Put a real estate agent with local experience to work for you. Once armed with the facts relating to terms and conditions of local sales, you can move forward with confidence in your listing.

My home isn't selling: Now what do I do?

By Eric Gnau

Real Estate Associate

Cora Bett Thomas Realty

Hardly a day passes that you don't hear something about the sluggish condition of the U.S. housing market. People often tell me that homes just aren't selling. However, that is not entirely true, at least not here. Homes are selling.

Now it is true that there is a larger than usual inventory of homes on the market and that the average days-on-market (DOM) statistic has increased. But homes are selling, just at a slower pace than the breakneck speed of 2005 and a portion of 2006.

For the 12-month period ending Feb. 25, 2008, the Beaufort Multiple Listing Service reported that 862 homes were sold, at an average price of $311,000 totaling more than $268,000,000.But these statistics are little consolation to the homeowner who has had his home on the market for an extended period of time.

Read More... as seen in The Beaufort Gazette

READY FOR SOME GOOD NEWS?

Some financial experts have labeled 2007’s market as the "roulette economy." As we all know, whatever goes up must come down, but the nice thing about real estate is that whatever goes down always comes back upward again (much like stocks work).

A healthier market is anticipated in 2008, as Wall Street cleans up the lending mess and the pressure cooker of home demand releases its top. While the national average of home prices declined between one and two percent in 2007, that's peanuts compared to how much homes appreciated in the previous years. And many markets are appreciating still.

Keep in mind that “national” statistics for real estate mean about as much as a forecasted high temperature for the entire nation. Consumers get skittish when they hear that 40% of foreclosures are due to doubtful subprime loans, but it's important to put that in perspective, because those loans only constitute about 10% of all mortgages.

As the lending industry stabilizes and interest rates rise only slightly, buyers who are ready to purchase will discover that housing is still the best investment out there. Ask a real estate agent to monitor new listings, selling times and final sales prices, and then to advise you when conditions are right to either buy or sell. 2008 should be a year of opportunity in the real estate industry.