Connecticut Mortgage Rates and Financing Update November 25, 2011

Nearly one quarter of October home sales are attributable to investors. Spurred by a strong demand for rental housing and low property prices, investors are buying more houses according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.  

The report says that investor purchases represented 22.3 percent of closed transactions for the month of October, the third straight month that investors have held a share greater than 20 percent.  The October figure is considerably higher than the 18 percent investor share reported earlier this week by the National Association of Realtors®.

Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers).

Average house prices are 8% undervalued relative to rents, and 22% undervalued relative to income.  Some 4 million foreclosed homes could come onto America’s market, which may hold down prices.  Lower interest rates for mortgages usually justify higher prices because buyers can take out bigger mortgages, but low rates need to be balanced against the fact that tighter credit conditions make it harder for home buyers to get mortgages. 

Today's Mortgage Rates

30 year fixed - 3.875% + 0% cost points for rate
20 year fixed - 3.750% + 0 % points for rate
15 year fixed - 3.250% +  0% points for rate
10 year fixed - 2.99%  + 0%  points for rate
5/1 ARM - 2.50%  +0 points for rate
7/1 ARM - 2.750 %  + 0 points for rate
10/1 ARM 3.250% + 0 points for rate

FHA/VA
30 year fixed - 3.875% with +0 % points for rate
5/1 ARM - 2.75%  with + 0 points for rate
7/1 ARM - 3.25 with +  .625 % CREDIT  point for rate

Jumbo - over 576,000 (in Fairfield County, CT)   to 2,000,000
30 year fixed - 4.625  % with 0 points  for rate
15 year fixed - 4.125% with +.250% points for rate
5/1 ARM - 3.375% - 0 points for rate
7/1 ARM - 3.875 % - 0 points for rate
10/1 ARM - 4.375% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

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Get The Seller to Pay Your Closing Costs on Your Connecticut Home

Tip of The Week:  The Seller can give a credit for the Buyer’s actual costs, but the credit cannot exceed those costs. Additionally, the amount of that credit depends upon the type of loan program that the Buyer has chosen. Here are some examples:

FHA LOANS:   
• The Buyer must put down a minimum of 3.5% of the purchase price. 
• The Seller can contribute a credit toward closing costs for the Buyer. 
• The Buyer is limited by law to a six (6%) percent cap on contributions from the Seller and those contributions must be put towards "actual costs" of the loan. 
• See the link from US Department of Housing and Urban Development on buying a home by clicking here.

VA LOANS:   
• There is no down payment minimum for a VA type loan.  The Seller’s contribution or “concession” is limited to a four (4%) percent cap.   
• Please notice that with a VA loan the Buyer is not allowed to pay for the termite report, the Seller must pay for this directly.     
• See the link from the Department of Veterans Affairs by clicking here.

CONVENTIONAL LOANS:  
• When a Buyer is getting a conventional type loan and putting less than 10% down, the Buyers are limited to three (3%) percent cap on contributions from the Seller.
• Again those contributions or credits must be put towards “actual costs” of the loan.

Remember, There are numerous types of loan programs -- so please make sure you have consulted a loan professional before having your agent ask the seller for a credit toward closing costs.

The weekly Tip-of-the-Week* is supplied by Only Closings --

a law firm devoted to real estate closings.

      - Our closing staff is made up of seasoned, experienced real estate attorneys.
      - Close where it is most convenient for the client (home, office, job or bank)
      - Very competitive closing fee and no hidden fees!
      - No fee consultations.
      - Personalized, responsive service from all of our attorneys and paralegals

  To learn more about Only Closings and how they can help you quickly close a property transaction, call them at 203-563-9677 or visit them online at www.OnlyClosings.com

*The content within the "Tip-of-the-Week" is strictly for informational purposes and not intended to be interpreted and/or used as legal advice. Only Closings and OnlyClosings.com is a service provided by Tamara L. Peterson Attorney at Law LLC.

Buyers and Sellers- How to Prevent a Failed Building Inspection on Your Home

Nobody's too happy when the house doesn't pass a building inspection.  In fact, everyone has to start from square one all over again....The seller, the buyer, and both agents that are involved. Everybody begins their tasks all over again- and that should ALMOST NEVER be the case.
 
A failed inspection would only occur rarely in the market if agents educated their clients during the process.

It is extremely rare  that my clients have had to endure a failed building inspection, and that's whether I represent the seller or buyer- and I have sold hundreds of properties. ....So what makes such a big difference for my clients as opposed  to everyone else?

Education and disclosure. Those two factors will prevent over 99 percent of failed inspections.

Education:

For Buyers: Look closely at the home before you place an offer in on it. My buyer clients get a kick out of looking at houses with me, because I perform mini-inspections as we look at homes, and educate my buyers as to what potential problems there may be if any. I knock on tiles, stomp on the floors, and poke wood that looks like it needs poking.  I am not a building inspector, and do not have that specialized knowledge, but I have attended EVERY home inspection for EVERY home that I have ever sold. If some knowledge hasn't rubbed off on me to impart to my clients, then I wouldn't belong in the business. A couple of very good things result out of this practice- One, if the house doesn't pass my mini-inspection, there is no need to put an offer in on the home and spend money for an inspection that won't end up on a positive note, or, Two- the buyers make their offer knowing that there are some issues that will need to be addressed and are not blindsided by the building inspection.

For Sellers: When you decide to put your home on the market, you  pretty much have a good idea as to whether there may be issues, which could or would break a sale. Tell Your Realtor!  Once you are lucky enough to have a sale, you don't want to needlessly lose it. As a listing agent, I do that same mini-building inspection that I do for buyers when I list your home, and try to find the most common deal-breaker issues that may arise so that we can address them prior to putting the home on the market.  If I see something that looks like a specialist is needed, I'll say so. It's much easier to fix it now rather than fix it later, AND risk a sale because of it.

Disclosure

For Buyers: When buyers disclose found issues prior to the formal building inspection and adjust their offering price because of it, sellers are more likely to accept that offer given that they would have to address items with any future buyer as well. It gives the owner some peace of mind that they won't be nickeled and dimed at time of inspection, which seems to be a common occurrence these days. ( I do not subscribe to the last minute nickel and dime tactics. )

For Sellers: Disclose your known issues, or your suspected issues. By the way, it is the law. Besides that, the little items that wouldn't normally mean a thing to buyers become amplified when there are bigger issues to address, and  they can feel like there might be a lot of hidden problems that the inspector hasn't even found. What happens then is the proverbial straw that breaks the camel's back, and it's hard to keep the deal together or even renegotiate if that's the case.

If buyers have a good idea what they are getting into right from the get go, they are less likely to "walk" after a poor inspection report. They will already be aware of most of the issues. If sellers feel that the buyers have been honest with them, they are more likely to negotiate, or renogiate as the case may be.

Simply put, your agent has to have well rounded skills- marketing, negotiating, and good solid knowledge of a home and its components. You deserve nothing but the best.

When you're ready to buy or sell, contact me. It's my job to keep everything running smoothly, and especially when it gets rough- without worrying you about it unless absolutely necessary.

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The Top Fifteen Most Common CT Home Seller FAQS

If you have sold a home at one point in your lifetime, you already know that the process is a complex transaction that requires a number of individuals to work together to produce a favorable end result. If it's your first time selling a home, you are bound to have a number of questions about the process, just as you probably had when you were buying.

What is the difference between a CMA and an appraisal?

A REALTOR performs a CMA (Comparable Market Analysis),  which includes data  that compares a variety of active listings, pending listings  and sold listings within the past six months in order to arrive at a price range. An Appraiser performs much the same research as an agent, however he/she is also required to use a standardized form, which holds more information than most CMA's. See this article on CMA's and Appraisals.

Should I include negotiating room in the list price?

Your market analysis should be very clear as to what the sales price to list price averages are for your home, your neighborhood and your area. When an agent arrives at a price range, whatever negotiating room there is or isn't is included in that number. Adding " a little play" only makes your home appear to be overpriced as it will be in a different price range of homes that offer more value for the money than yours. As a result, your home cannot compete with a higher range properties, will appear overpriced, and make it that much harder to attract an offer.

What type of issues must a home seller disclose?

Pursuant to P.A. 95-311, Sellers must complete a Connecticut Residential Property Condition Disclosure, which identifies the current condition and history of all physical aspects of the home, as well as a  Lead-Based Paint Disclosure. When selling your home, you (the Seller) and your broker (if you have one) are responsible for disclosing any known issues that could materially affect its value.

When is the best time to sell my house?

The best time to sell is when you are ready, or when you must sell for one reason or another. Property sells throughout the year, and market time and saleability is mostly a function of supply and demand. The time of year you choose to sell can make a difference in the amount of time it takes and the final selling price.  The spring market begins in late January and continues through May. There is another surge in activity in September and October.  Timing is strategic and you may just be better off listing your home when the competition is not so fierce as it is in the spring market. Just something to consider.

Should I sell my home first or wait until I find another home?

The answer truly depends on your personal situation, as well as the condition of the local housing market, as there are advantages and disadvantages to each. If you  sell first, you maximize your negotiating position, and eliminate any need or possibilty of carrying two mortgages at once. A good safeguard to minimizing stress is to include a delayed closing contingency clause in your contract so that you can find another home with little or no pressure.

If you make an offer to buy a home without having your home under deposit first, you may be tempted to sell your existing home quickly, even at a lower price. If you are currently in a "buyers market", the odds of selling your home in time  to purchase the new one are not that favorable, and you may end up being disappointed. The only advantage of buying first is you can shop carefully for the right home and feel comfortable with your decision before putting your current home on the market.

How do I get my home to sell faster?

There are number of reasons why your home  will sell faster than others.  The most important factors are condition and price. Your home will sell most quickly when it has been well maintained and priced competitively to other houses selling in the area,  and is in a healthy real estate market.

Does my home need to be staged, and if so, how much does it cost?

Staging your home for sale is in effect, presenting an enhanced image of your home to attract more buyers. Most experts agree that the main living areas sell a home, so it is important to focus on your  living room, dining room, and family room, as well as any room that the future homeowner may find difficult to furnish or decorate.

Each home is different but basic staging principles are the same for all. Very few homes need to be staged to any extreme whereas a professional (and paid) stager is necessary. A good agent will tell you what needs to be done in order to effect a sale. The quick advice on staging?  De-clutter, de-personalize, distract any negatives, and neutralize your home with your agent's guidance.

What if I am "upside down" and won't have enough money to pay off the bank and sell my home?

This is what we call a short sale, and you are not alone. The banks do tend to want to work with you on this, and your agent should have some specialized knowledge and experience working with lenders for these circumstances. You will need to contact your bank and discuss this with them, and authorize your agent to be able to speak and negotiate on your behalf. The bank really does not want any more inventory, and although this process takes time, it is also well worth it.  

How do I compete with foreclosures? 

If your home is in fine repair, and generally in good condition, you need not worry about foreclosed homes as much as the media tends to think that you do.  Buyers see your home as one  that's ready to move into and in good condition.  It’s worth more to them- they don't want to do any work. Repossessed homes truly compete only with homes with deferred maintenance. The overwhelming majority of foreclosure properties are in need of major repairs, appliance replacement, HVAC systems and other structural components.  New lenders generally will not grant a mortgage on these homes unless the work is completed, and the banks are selling these properties as-is, which means that the buyer must complete repairs before the loan is granted. While foreclosures make great bargains for cash buyers who want to rehab them, they really are not for the general buying public.

What if I get a better offer after I’ve already accepted one? –

If you have signed a purchase contract accepting an offer, you are bound by its terms.  If the buyer defaults on one contingency, doesn’t follow through properly, or tries to renegotiate, you may have your way out. You can always ask the buyer if they would agree to walk away, or pay them to step away. Speak with your attorney as to the ways in which the contract can be legally cancelled so that you may accept another offer. See this helpful article on changing your mind after an offer has been accepted.

What are the most common contingencies in a purchase agreement?

A contingency is a stipulation to an agreement. Sales contracts typically contain several "contingency" clauses, or stipulations that the sale is subject to. The two most common contingencies are for financing- that is where the home purchase is contingent upon whether or not the buyer can secure a loan from a lender, and an Inspection Contingency, where the buyer has the right to have the property inspected for any problems that are unknown, or may have not been disclosed. If significant issues arise, the purchase offer could be rescinded or renegotiated.

Do I need to make repairs in order to sell my home? 

Sometimes a buyer might request a repair in their initial offer. More often than not, buyers may request repairs based upon the outcome of the building inspection.  Remember, this is all part of negotiating. just like the purchase price  Sometimes the lender will require some repairs in order for the buyer to obtain loan approval, but you can still negotiate who pays for them.    

Do I need to hire an agent?  

The overwhelming majority of home sellers hire REALTOR’s to list and sell their homes. Those who do not are known as For Sale By Owners, or FSBOs (pronounced FizzBo's). They market, negotiate, and sell their homes without agent assistance. Although there are a small number of  successful FSBO's, most of those sales are to family members or friends. Especially in a buyers market,  it is not the right route to go, considering all of the access agents have to whatever buyers are out there, and have knowledge of the legal ramifications for non-disclosure, misrepresentation, and the like. Ultimately, most FSBOs eventually hire an agent because the agent will handle all the details and minutia that a successful home sale requires – including the contract, forms, and disclosure statements – and expose the home to the widest range of prospective buyers through the local Multiple Listing Service  and the most visited national home search sites.

Is the commission negotiable?

Yes. Commissions are negotiable by law, and can vary depending on service, customer needs, and company policy. In general, agents charge between 4 percent and 8 percent for full service.

What costs are incurred when selling my home, and when are they due?

Paid at closing from proceeds are the real estate commission, (if you hire an agency to sell). Transfer  tax for the sale to the town and state, and prorated costs for your share of annual expenses, such as property taxes, homeowner association fees, utilties

Payable  prior to your home's sale and durring the process are advertising costs, marketing materials, and other fees if you sell the home yourself, repairs- if any are needed in order to effect a sale, and initial attorney's fees  and/or other professionals as needed.

One thing for sure, the more experienced the agent, the smoother the transaction is going to be.  With 27 years  of experience, I have assisted home sellers in the most difficult of markets, and with  the most difficult of buyers on the other side. No one likes to think about any of the negativity that can occur during such an emotional transaction. Be prepared for the bizarre to happen, because  it does more frequently than you can imagine. When you are ready to sell your home, you deserve the best representation available to you, so just contact me when you're ready. I'm up for all kinds of challenges, so bring it on if you have it!

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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